Consumer Business Group

Transcription

1 Consumer Business Group Michael G. Vale Executive Vice President 3M Investor Day March 29, 2016

2 Agenda Business overview External market context International growth opportunity Operating model for success Driving the 3M value creation levers 1. Portfolio Management 2. Investing in Innovation 3. Business Transformation 2

3 Our Vision 3M Technology Advancing Every Company 3M Products Enhancing Every Home 3M Innovation Improving Every Life Consumer Business Strategic Intent Bringing 3M Brands into the Daily Lives of Consumers Enabling Everyday Ingenuity Turn Your Thoughts into Action Clean Feels Good Unleash What s Possible Make Every Breath Count Pull Off a Better Paint Job Serious About Healing 3

4 A strong business becoming stronger Strong and sustainable organic growth at attractive margins A leading portfolio of category-defining brands, with breadth of presence across channels and geographies Attractive growth opportunities globally and in new market adjacencies New product momentum is growing as we continue to expand and refresh our portfolio Investing to drive long-term success, funded via portfolio prioritization and operational excellence Portfolio Management Investing in Innovation Business Transformation 4

5 Consumer Business Group 2015 Sales $4.4 billion; Operating Income Margin 23.7% Home Improvement $1.6B Stationery & Office $1.4B Home Care $1.0B Consumer Health Care $0.4B 5

6 Competing in large, global and growing markets Household cleaning $16B Hardware $13B Office Supplies $10B Air quality $5B Paint accessories $3B Personal wound care $3B Education supplies $3B Active wellness $2B Source: Euromonitor International, Global Insight, BCC Research, Grand View Research, 3M internal analysis 6

7 Consumer markets combine stability with change Expanding middle class Employment growth Urbanization and home ownership Retail expansion and modernization Digital and mobile proliferation Channel consolidation Advanced analytics ecommerce acceleration Insights-driven innovation Disruptive new platforms Customer First House Brands Convenience-driven store formats and services Brand authenticity New skill sets 7

8 Our model brings 3M technology to consumers globally Consumers + Technologies + Brands Channels Shoppers Global Mass / Club / Grocery z e Home Centers Ab A Nw Fs, W Ad Fi Nt Mi Purification Mr Office Super Stores Key Account Drug World-class consumer talent Sustainable business practices Operational excellence 8

9 Our international opportunity is significant 3M Consumer Sales A path to 2X international scale Established position Intl 45% US 55% Population growth Young demographic Rising income Japan Korea Canada Taiwan Growing low-to-mid single digit Low penetration ANZ Emerging position Brazil China Thailand LA&C EMEA APAC Median age 29 Median age 29 Median age 31 India Indonesia Growing mid-to-high single digit Turkey Mexico 9

10 Our plan to build scale, win internationally 1. Build out the core 2. Accelerate in key channels Mass retail presence Office B2B channels Pharmacy channel Home improvement ecommerce Standardized branding Regional brand campaigns Regional new product launches Common core portfolio Regional manufacturing and supply chain 10

11 Using the value creation levers for efficient growth Portfolio Management Investing in Innovation Business Transformation 11

12 Relative Strategic Attractiveness Relative Strategic Attractiveness We continue to actively manage the Consumer portfolio Growing 3.4% CAGR in local currency Relative Financial Attractiveness Relative Financial Attractiveness Sales $4.4B, OI 22% Sales $4.4B, OI 24% Product Geography R&D Brand consolidation Supply chain 12

13 Commercialization Driving innovation, commercialization for efficient growth Demographic shift Promotional effectiveness New product launch Expand distribution Effective product refresh Innovation Win the shelf Brand building 13

14 Extending 3M technology effectively into consumer segments We leverage technology across businesses and in combination Ad Adhesives Fi Films Pp Precision Processing Mo Molding Industrial tape Painter s tape Super sticky notes Hanging hooks Ad Adhesives Mr Microreplication Commercial graphics film Personalization Dry erase film Nw Nonwoven Materials Sm Specialty Materials Ab Abrasives Fs Filtration, Separation Floor pads Disposable respirators Scouring pads Furnace filters Wo Wound Mgmt Ad Adhesives Securement dressings Hospital care Waterproof bandages Sensitive skin tape 14

15 Building category leadership across multiple segments Defining the category Refreshing the category Expanding the category Post-it Notes Command Picture Hanging Post-it Pop Up Notes Command Clear Post-it Super Sticky Command Outdoor ScotchBlue Painter s Tape Scotch-Brite Sponges ScotchBlue Exterior Scotch-Brite Non-Scratch ScotchBlue Platinum Scotch-Brite Extreme Scouring Continuing to expand new product growth through 2020 and beyond 15

16 Insights and design capability building to scale Growing insights capability to build deeper connections Scaling design capabilities to add impact to innovation i2i Process Inspiration on a budget Can t afford to get sick 16

17 Combined with technology, innovating the category ACE Water-Resistant Wrist Brace: Premium brace for function and comfort From insights to unique solutions Understanding chronic pain Injury rates Ethnography Activities I can t do wearing old brace Qualitative concept tests Unique solution for unmet need 17

18 Embedding our brands in consumers lives with technology Command Metal Bath: Premium bath accessories to organize and maximize your space Out of shower In shower 18

19 Brand clarity and discipline to connect with consumers We exist to help people make their mark in the world. We exist to set the stage for a brighter home life. Scotch-Brite Brand Guidelines 2016 We exist to help you fearlessly change your space. Command Brand Guidelines 2016 We exist to help people in their quest to live life fully. 19

20 Creating multiple brand connection points View video Visit a store Online search Discuss product Recognize need Discuss product online Send mobile pic Purchase product Interact with rich media ad Read review See TV ads Read social media Customize a product 20

21 Our retail partners are also evolving their models We are evolving with them to compete and win Pure-play ecommerce Omni channel Bricks & mortar Limitless product assortments Global reach with limited capex Dynamic promotional and pricing analytics Open for business 24/7 anywhere Logistics and supply chain Physical presence Simplified returns process Immediate customer purchase gratification 21

22 Millions Building scale and capability across ecommerce platforms ecommerce sales forecast ecommerce strategic imperatives $1,000 $750 Online portfolio selection Digital content development Blank Walls Be Gone $500 Demand generation Supply chain excellence $250 $ Key account partnership Global acceleration Total $800+ million in sales by

23 Business Transformation: Evolving for efficient growth Front and back office optimization Manufacturing and supply chain footprint Regionalization of the model Organization of the future 23

24 A strong business becoming stronger Strong and sustainable organic growth at attractive margins A leading portfolio of category-defining brands, with breadth of presence across channels and geographies Attractive growth opportunities globally and in new market adjacencies New product momentum is growing as we continue to expand and refresh our portfolio Investing to drive long-term success, funded via portfolio prioritization and operational excellence Portfolio Management Investing in Innovation Business Transformation 24