Maintaining Growth Momentum

Electro & Communications Business

“Maintaining
the Growth
Momentum”

Joe Harlan,
Executive Vice President

3M Investor Meeting 2006 © 3M 2006 All Rights Reserved

ECB Key Financial Data
Sales Operating Income
$500
$3.0
$Billions & YOY % Chg $Millions & YOY % Chg $447
$2.3 +42%
$2.2 $400
$2.1
+5% $316
+6%
$2.0
+3% $266
$300
+19%
+12%*
$200
$1.0 $127
$0.6
$100
+33%
+8%
$0
$0.0
2003 2004 2005 Q1 2006
2003 2004 2005 Q1 2006

LC Growth -.7% 2.7% 4.2% 10.6% OI Margin 12.7% 14.2% 19.2% 21.0%

2005 Sales By Geographic Area
U.S. 27%
Europe 22%

LAC 10%

*2002 estimated stock options, not restated.
APAC 41%

ECB Has Had A Wild Ride…
ECB Revenues
$2,700
Projecting
(1
Sustainable
$2,536
0%
)C Growth of 5-8%
AG R
AG
$2,400 $2,333
%C
R 5
$US in Millions

$2,223 $2,224

$2,101
$2,100 $2,034

$1,800

$1,500
2000 2001 2002 2003 2004 2005
OI% 16% 9% 13 % 13 % 14 % 19 %

…And Future Growth is Sustainable
Solid core portfolio…margins sustainable International opportunities abound
Customer intimacy stronger than ever Expanding footprint in adjacent markets
Effective “Go-to-Market” structure Service as a differentiator

ECB Positioned For Continued Growth

ECB Portfolio Footprint
Balanced Platform Portfolio…
Characteristics
23% Integrated materials science & processing
28%
technologies
Participating in “hot” markets
– Infrastructure build / upgrades
– Electronics boom
Electronics
Go-to-Market via OEM, channel pull / push &
19% 30%
“Bench-to-Bench” selling (ODM, CM’s)

…And Balanced Proportionately to Global Opportunities
US Strong positions in expanding / upgrading
27% APAC infrastructure (Europe, LAC, APAC)
41%
Asia driven by Electronics…EE Emerging
Servicing transnational customers globally
LAC
10%
Growth Across Multiple Platforms & Geographies
EUR
22%

Electrical Markets
Applications
Power Generation Transmission Distribution

Solutions

Terminals
Electrical Tapes
Terminating & Splicing Cold Shrink

Key Capabilities
Med- / High-Voltage splices & terminations EMI / RFI shielding & insulating material
Vinyl electrical tapes Strong brand & reputation in electrical utility
industry
Electrical connectors


Communications Markets
Applications
C e n tr a l C e n tra l
C am pus O ffic e O ffic e
C u s to m e r
P r e m is e s

Solutions

Central Office Connectivity Copper Aerial Closure
Copper Splicing
Modules & Connectors
Copper Fiber Optic
Structured DSL Test
Structured
Cabling Equipment
Cabling Fiber Optic Closures Fiber Optic Splices

Key Capabilities
Electrical interconnect Specialty optical fibers – GGP
Fiber optics cabling & connector expertise – Environmentally stable cabinets
Fiber management Strong brand & reputation in telecom industry


Electronics Solutions
Applications

Solutions

High Speed
Carrier & Cover
Backplane Fiber Optic
Flex Circuits Backplane
Tape
Inkjet Cartridge Solutions Solutions Assemblies

Key Capabilities
Flexible fine-pitch interconnect Embedded capacitance
High-performance electronic substrate Component transport & testing
materials Static control & protection


Electronics Materials
Applications

Solutions

Tapes & Bonding
Thermally
Gaskets &
Films
Chemicals & Conductive
Adhesives
Semiconductor Materials
Gasses Materials

Key Capabilities
Specialty fluids & gases Plastic bonding & hot melt solutions
Sintered & fixed abrasives Form-in-Place gaskets
Battery materials Thermal management


Platform Capabilities
Electrical Electronics
Communications
Powe r G eneration Transmission Distribution
Cen tral Cen tral
Cam p us
Transformers Transformers
O ffi ce Offi ce C usto m er
P rem is es

Med- / High-Voltage splices World-class telecom test Flexible fine-pitch
& terminations equipment interconnect
Vinyl electrical tapes Electrical interconnect Embedded capacitance
Electrical connectors Fiber optics cabling & High-performance electronic
connector expertise – substrate materials
EMI / RFI shielding &
fiber management
insulating material Component transport / testing
Specialty optical fibers – GGP
Strong brand and reputation Specialty fluids / gases
in electrical utility industry Environmentally stable
Sintered & fixed abrasives
cabinets
Strong channel presence
Battery materials
Strong brand & reputation in
Plastic bonding and hot melt
telecom industry
solutions
Strong channel presence
Form-in-Place gaskets
Thermal mgmt

An Integrated Platform With Differentiated Materials & Solutions

ECB Market Dynamics
Characteristics 3M Response
Customers Move Fast Clear “Line of Sight” From Customer –
Intimate Dedicated Technology Interface

New Technology Drives the Market “Bench-to-Bench” Relationships Enable
Leading Edge Position on Multi-
– Business is Bi-Modal
Generational Applications and Process
– Short Life Cycle
Technologies
– Fast Commoditization

Customers are Geographically Indifferent Leverage 3M Global Subsidiaries and
Networks…Invest Where Customers Reside
– Spec – Design – Source – Mfg – End-User
Can be Different Geographies

Major Growth Areas Shift Rapidly Ability to React Fast Globally, Without
Barriers
– Between and w/in in Geographies

Continuous Cost-Down Mindset Intense Productivity Without Service
Compromise

Positioned to Serve What, When & Where the Customer Wants

ECB Positioned For Continued Growth…

Go-to-Market Structure
– Market-Focused / Customer-Centric

Differentiated Technologies Yield Differentiated New Products

Aggressive International Expansion

Adjacent Markets & Complementary Acquisitions

Service as a Differentiator

Competitiveness / Culture


ECB Market-Focused / Customer Centric
3M Electronics Go-to-Market Structure…
Customer

Key Accounts
Marketing Sales

Segment Markets Semi-Conductor / Regional
Components
Operations Transnational
Assembly
Tech Applications Global
Distribution /
e-Productivity
Channel

Platform Technologies

CMD EMMD ESD EMD D&G IB SS&PS

One Face to the Customer…Supported by Multiple Technology Platforms

ECB Market-Focused / Customer Centric
3M Electronics Example…
Semi-
Market Hard Disc Mobile
Display Printers
conductor Drive Handheld
Segments

Customers Samsung Seagate Motorola Philips HP
NEC Maxtor Nokia LG Lexmark
Toshiba W. Digital Samsung Samsung Samsung
Hitachi Hitachi NEC Sharp Canon
Intel Fujitsu Panasonic Toshiba Brother
Philips Toshiba Sharp Matsushita Epson
Freescale HGST Sony / Ericsson Sanyo Olivetti
IBM Siemens Epson Kodak
Philips Hitachi Dell
Running with the Winners
Many Are Transnational
Replicating Success Globally

ECB – Covering The Transnationals
Mobile Phone OEM
Design ODMs / Manufacturing Customers
Design
Centers Converters
Centers
Chicago Flextronics Brazil Everywhere!
Foxconn India
Helsinki
Brady Hungary
Copenhagen
Stokvis China
Seoul
M&C Korea
Beijing
Tokyo
3M Subsidiary Network
Exemplary Project
Design Contract Tier 1 Converter
Center Mfg. Supplier
3M Product Sales
1183 Copper
U.S China / Korea China
Foil Tape
Brazil
Application
LCD Shielding
Each Specification Requires
Global Coordination

Coordination Driven By Subsidiary Reach
Norway l Swedenl
Finlandl
Polandl
Denmark s
l
Czech Republic
l
Germany
l sn Switzerland s
l
Netherlands
Puerto Rico
l
Canada l s n Austria s
l
lsn
T rinidad & T obago
Belgium Hungary l
ls
United States l sn
l sn Russial
United Kingdom
lsn Greecel s
Ireland
l T urkeyl
France
l sn Chinal s
Koreal s n

Japan s n
l
Mexico Pakistan
l
lsn
Jamaica T aiwan s n
l
ls
Hong Kong s n
l
Guatemala
ls Vietnaml
El Salvador
Saudi Arabia Philippines s n
l
l l
United Arab
Costa Rica T hailand s n
l
Emiratesl
ls Israeli
Portugal Indial s
ls l
Dominican Republic
Morocco Egypt Malaysia sl
ls
l l Sri Lankal
Indonesia s
l
Italy
Panama
lsn
l Spain
Brazil New Zealand s n
l
Singapore
Ecuador lsn
ls Kenya lsn
ls l
Colombia Australia s n
l
Zimbabwe
Uruguay
ls Peru ls
l
Chile
ls South Africa
ls Argentina lsn
Key Venezuela l s n
l sn
l Sales and Mar keting
s Manufacturing/Converting (42 R egions)
n Research and D evelopment

3M Subsidiary Network Effective Globally & at Home

Consistent Process for “Go-to-Market”
Prospects Forwarded to New Products Flow
Served Markets Cross-Functional Teams Through NPI System
Ideas
Communications Sales Market
Concept
Electrical Mfg. Tech. Feasibility
+
+ Development
Electronics Materials
Scale-up
CTC
Launch
+
Laboratory

VOC dictates NPI
• Key account focus Apply Intellectual
• Replicate to key accounts
• Find the “pain points” Capital to
• Multi-Generational Presence
Opportunities
• Develop prospects

Just Do It!

Success Depends Upon Global Boundaryless Teamwork

Mobile Handheld
Mobile Hand-held Served by Multiple Divisions/Geographies…
Custom Bumpons Double-Coated Tapes
…With Huge
EMI/RFI Shielding
Double-Coated Tapes
Opportunities!
EMI/RFI Absorbing
G-Sheet
Bonding
800MM cell phones
Films
Protective Tape
produced each year
Optically Clear Plastic
Adhesive Bonding
Adhesive

3M sales for these
Display Enhancement Materials
applications currently
Electronic Micro Coaxial Interconnect
~ $400MM
Switch
Adhesives Flexible Circuits
Novec
Fluids Anisotropic Conductive Films

Entitlement is
Memory Card Thermal Interface Materials
Connector
>$7 / Unit
Labels
Bonding
Films
Water Contact Indicator Tape

Earning Content & Avoiding Commoditization
with Value-Add, Customized, Differentiated Technology Solutions

3M Hard Disk Drive Applications
Noise and Vibration Damping Solutions
1

Contamination Removal Products
2

Abrasives
3

Interconnects (Flex & Fixed)
4

Tapes and Seals
5

Labels
6 4

Adhesives
7

> $100MM 3
Business in 2006

Customer Intimacy at “Bench-to-Bench” Keeps us in the Game…
Substantial Content in HDDs Across the World

ECB Positioned for Continued Growth…

Go-to-Market Structure
– Market-Focused / Customer-Centric

Differentiated Technologies Yield Differentiated New Products

Aggressive International Expansion

Adjacent Markets & Complementary Acquisitions

Service as a Differentiator

Competitiveness / Culture


ECB Key Technologies
ESD EMMD
Flex Circuits FC Fluids
Component Interconnect
Transport IDCs
Interconnect Microabrasives
IDCs
Anisotropic
Conductive
Adhesives

CMD
EMD
Fiber Optics
Coldshrink
Connectors
Adhesives and
High Density
PVC tapes
IDCs
Liquid Resins
Test & Msmt
Diagnostics ---


3M Technology Platforms
Ad Rf
New Technology
Am Bi
for New Products Reclosable
Advanced Biotech
Adhesives
Fasteners
Materials

Existing
Pe
Ab Dd Mr Rp
Technology Base Predictive
Drug Micro- Radiation
Abrasives Engineering
Delivery replication Processing
& Modeling

Ac Dm Nt Nm Pm Sm
Acoustics Display Nano Nonwoven Polymer Melt Specialty
Processing
Materials Technology Materials Materials

Po
As Do Fi Fs Is Md Mi Pc Su
Porous
Application Dental & Films Filtration, Microbial Precision Surface
Integrated Medical Materials &
Software Orthodontic Separation, Systems Detection Coating Modification
Data Mgmt Membranes
Materials Purification Design & Control

Ce Ep Fl Im Me Mo Pd Pr Wo
Lm
Ceramics Electronic Fluoro- Imaging Metal Molding Particle & Process Wound
Light
Packaging materials Matrix Dispersion Design & Mgmt
Mgmt
Composites Processing Control

Vp
Cp Fc Fo Ip Pp Vacuum
Chemical Flexible Fiber Inks & Precision
Processing
Power Converting/P Optics Pigments Processing
Sources ackaging

More than 20 of 3M’s Key TechnologiesAll Rights Reserved in ECB
© 3M 2006 Leveraged
3M Investor Meeting 2006

ECB New Product Sales
1-Year New Products 4-Year New Products

500 $468
$125
400 %
$344 6
+3
($ Millions)

$303
300 +14 % $91
$76
200

100

0
2004 2005 2006
4-Yr NPI % to Sales 14% 15% 19%

New Product Momentum Increasing…
Customer Intimacy Stronger than Ever
“Go-to-Market” Structure
Lab Capabilities Drive Unique Solutions

Differentiated Products Drive Growth

New Products Driving Growth
Electrical Markets Example
New Product Sales Revenue Growth
120 14%
$109
12%
12%
100
10%

Revenue Growth
10%
NPI Sales ($MM)

10%
80
$78 8%
$67
60 6%
6%
40
4%
2% $27
20 2%
$4
0 0%
2002 2003 2004 2005 2006
# of New Product Families 2 6 15 25 37

New Products a Key Component of Electrical Platform Rebirth

ECB OUS Growth
ECB’s Largest Platform for Growth…
%
7%
14

R= 5%
=

AG =
C
R

GR
AG

CA
C

1%
=1
GR %
CA 9
=3 %
R=7
GR CAG
CA

Jap an C hina Ko re a SEA EE LAC

20 01 200 2 2 003 20 04 20 05

…And Momentum is Building
Moving Assets Closer to the Customer
Accelerating Lab Presence & Scale…Yielding IP Foothold
Establishing “Centers of Excellence” Close to Customers

ECB Revenue is 74% OUS…and Growing

Assets Close To The Customer
Human Capital
International CapEx
760
800
$73
80
+33% 165
570
70 600
105
$50
60 190
$46 400
$ Millions

143
50
40 405
$28 200 322
$22
30
20 0
10 2005 2006
0
Lab Mktg Mfg
2002 2003 2004 2005 2006

Electrical: Vinyl Coaters in Taiwan & China, Bolstering lab resources / expertise in APAC,
Lab capabilities in APAC / Europe Europe & LAC
Communication: NPI capabilities in APAC, Transferred 2 Electronics units to Asia
Europe & Latin America
Aligning 3M Electronics “Go-to-Market” across
Electronics: Expanding capacity & the world (U.S. sales force 7 1)
capability in Japan, Singapore, China,
Geographical adds to support transnationals
Taiwan, Hong Kong

Driving Asset Shift…CapEx & People

ECB Global Technology Centers
Electronics Electronics
ECB Communications Electrical
Materials
Solutions
Neuss,
Germany
Antwerp,
St. Paul,
Belgium
MN
Pontchateau,
France
Austin,
Sagamihara,
TX
Cluses, Japan
France
Italy Seoul,
South Korea
Shanghai,
Columbia,
China
MO
Eau Claire, China
WI

Singapore
Brazil
Brazil

Achieving Global Technical Presence

Protecting Our Investment
Lab Investments are Paying Off…
Patent Filings
Records of Invention
184
278 2 3%
8%
257 149
7%
240
80
2 2%
122 2 1%
156 66
17%
133 OUS
19% 2 7%
112 52
US

2004 2005 2006 2004 2005 2006
ROI Yield 51% 68% 66%

…In Quantity AND Quality
Patent & ROI Activity Gaining Traction OUS
Quality of ROIs Increasing…51% 66% Patents
People Adds Building Capabilities for Growth in ’06 and Beyond

Locally Developing & Securing Unique Technologies

ECB Centers of Excellence
EMI/EMC Battery Anode
Transmission Cable Acc.
Transport
PSA

Cleaning
CMD-OSP Chemicals

Interconnect
PSA

FTTx
Abrasives
OEM Tape Battery
Matls
Static Semicon
eCabinet
Semicon & Packaging
Global

Regional
Flex FIPG

Enables Sustained Growth…Close to the Customer

Communications Network Security System
Network Application Product
Signaling & Comm. Module Manhole Sensor
Control Management
Unit System

Software
Cabinets

RFID
Transponder
Manholes

Technology Provides Unique Capability to Remotely Supervise Access
Monitoring of Cabinets, Manholes & Remote Stations
Critical for Telco Infrastructure Security
Driven by Strong Intimacy at Deutsche Telekom

Replicable to Other Regions…$15MM at Deutsche Telekom Alone

Electrical High-Voltage Cable Accessories
69/72 kV Termination

3M Proposed
Existing Solution
• Three Parts
• 72 Parts
• Minimal Labor
• High labor

Market segment is cable accessory products for 69+kV and 110+kV
Opportunity to expand upon existing position in medium-voltage accessories
Six Sigma identified customer pain points and new application for
cold-shrink technology

Voice of Customer Dictates New Product Offerings

Medical Flex Application
Flexible Circuits

Medical Devices are Moving Towards Microelectronics
Interconnects for Cardiac Implants, Glucose Sensors, Ultrasound, X-ray, etc.
Leveraging Acquisition of Siemens Flex to Accelerate Penetration of Medical
Imaging Market

Flex Technology Know-How, Combined with Strategic Acquisition

Lithium Ion Battery
Separators
Aluminum
Case

Negative
Positive Electrode
Electrode

Market for Lithium Ion Batteries is Moving to higher voltage…Need Safer,
High-Performance Batteries
Lithium Ion Materials is a $1.2 Billion Market
3M Has Materials for Advanced Cathodes & Anodes, as well as Electrolyte
Salts & Solutions

Strong Technology & IP…Potential to be a Big Player

Selective M&A
Moving Towards Complementary Acquisitions…
Electronics Material Electrical
Low-Voltage
Battery Materials
Printer / Display Flex Accessories & Tapes
“Strong IP”
“Strong IP” “Strong Brand /
Core Channel”

Adj. Battery Transmission Cable
Medical Flex
Components Accessories
Markets Applications

Siemens Flex Jese Chem High-Voltage
(“Specialized
(“Specialized (“Specialized
M&A
Technology”) Technology”) Technology”)

End Game Battery Production Full Line Transmission
Full Line Medical
(Lithium Ion) Cable Accessories
Penetration

Migrating to Markets Where We Add Value

ECB Service & Sales
98% 25%
% On-Time & In-Full
20%
Step-Change

YOY Sales Growth
93%
15%
Improvement
in Service and 10%
88%
Sales 5%
83% 0%

(5%)
78%
(10%)

73% (15%)
Dec Dec
’03 ’05
ECB Service ECB Sales Growth

1/3 of 2005 Growth due to Improved Service
20-Point Improvement (75% in Dec ’03 95% in Aug ’05)
Consistently Topping 90%...More to do
Customer Testimonials Validate Favorable Impact

Service Now a Positive Differentiator

Competitiveness
Continued Focus on Productivity…
6-Sigma Margin Impact Sourcing Savings
200 50
$41
$38
$177 40 $34
180 $173
$ Millions

$ Millions
30
160
$150
20
140
10

120 0
2004 2005 2006 2004 2005 2006
% of Sales 6.7% 7.4% 7.2% % of Buy 8% 8% 6%

Six Sigma Continues to Drive Both Savings and Growth
Productivity Ingrained in ECB Culture
Sourcing Benefits Continue Despite Headwinds

Partnering with Vendors to Respond
to Continuous Cost-Down Market Dynamics

Incentivizing Growth
Compensation Changes to
…And Recognizing the Winners
Drive Borderless Growth…
Electronics Example:
ICP ICP
Revenue Design 2006 Revenue IATD
US
25%
10%

Other US ECB
50% 50% 75%
Other
90%
Reps Paid on ECB Sales Only,
BEFORE:
10% Variable, Capped
Revenue Geography ≠ Spec Geography
Reps Paid on Total Electronics
NOW:
Dynamics Require “Feet on the Street” 25% Variable
– Spec in U.S., Japan & Europe 2X Kicker @ 101% of Plan
3X Kicker @ 120% of Plan
– Value capture in Asia
NO CAP!
Implication: Pay Sales Reps for
Not Perfect…but Positive Trend
Global Revenue Generation

Changing Cultural Paradigms…
Pay for Global Impacts with Differentiated Contributions

Summary
ECB Portfolio Stronger than Ever…Now Positioned for Offense
Maintained Brand/Reputation, Channel Relationships & Customer Intimacy

All Businesses Contributing…Strong Core Portfolio

Effective “Go-to-Market” Structure

Differentiated Technologies / Solutions

Accelerating International Presence…Opportunities Abound

Productivity Expertise without Service Compromise

A Culture Devoted to the “Growth Mission”

ECB Well Positioned for Sustainable Growth

Maintaining Growth Momentum

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