Investors Conference March 17, 2011 Executing the 3M Playbook in the Food Safety Market Francine Savage Safety of the Food Supply - a Worldwide Problem Food recalls are an everyday event: 3 million people die each year from food- and water-borne illnesses Each year, in the United States alone: 48 million people get sick 128,000 are hospitalized 3,000 die from food-borne illnesses SOURCE: FAO, EMPRESS, CDC 2 1
Major Global Trends Show Safety a Growing Concern Enhanced Food Safety Legislation Around the Globe Shifting Consumer Diets Globalization of Food Trade Increased Public Awareness Growing Consumption of Meat & Dairy in Developing Economies 3 Health Care Portfolio Evolution $0B $4B 2006 Medical Dental Ortho HIS Pharma DDS Divested Branded Pharma in 2006 2007 Medical Dental Ortho HIS DDS Replaced Branded Pharma Revenues 1 year later Infection Skin & Wound 2008 Dental Ortho HIS DDS Prevention Care Food Reconfigured for Growth Focused on Five Highly Attractive Segments Medical, Food Safety, Oral Care, Information Systems, Pharmaceutical Delivery Leading Positions, Brands and Winning Technologies Diversification Creates Stability 4 Renewed Focus for Significant New Growth Opportunity in Food Safety 2
Playing Bigger in a Much Larger, Rapidly Growing Market Detection $9B Intervention $17B Aseptic Packaging Reaction Sterilization $1B Diagnostic Testing Equipment Service Water Testing Preservatives & Antimicrobials Prior 3M Focus RFID/Time & Temperature Lab Supplies Food Microbiology Testing Monitoring Cleaning & $1.5 B Sanitization ~ 5% CAGR $26+ Billion Market 5 Pursuing Accelerated Growth in a Much Larger Market Food Safety Business Profile $Million $500 5 $400 4 $300 3 $200 2 $100 1 $0 0 Historical & Projected Sales Growth 16% CAGR 22% CAGR 2005 2010 2015e 2010 Sales By Geography APAC 23% Europe 19% LAC 20% U.S. 38% Major Products/Technologies Rapid Method Testing Solutions (Indicators & Pathogens) Hygiene Monitoring Solutions End Product Screening Solutions Sample Handling Supplies & Media 6 Accelerating Growth via Increased Focus, Investment, and Strong Global Team 3
Serving Major Food and Beverage Companies 7 Helping Our Customers Provide Safe Food and Protect Their Valuable Brands 3M Petrifilm: The Leading Brand in Indicator Testing Unit Volume Growth US Int l 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 8 Innovation Still Growing Strong After 27 Years 4
Leveraging M&A to Expand Portfolio: Biotrace 3M Sample Handling & Media Supplies 3M Clean-Trace Hygiene Monitoring System 3M Tecra Pathogen & Toxin Tests 3M Microbial Luminescence System 9 Augmenting Organic Growth with Acquisitions to Expand Solution Offering 3M Food Safety Solution Portfolio Awarded Corporate Excellence in Food Safety & Quality (IAFP - 2008) Quality Indicator Testing Hygiene Monitoring Sample Handling / Media 3M Petrifilm Plates 3M Clean -Trace Hygiene Monitoring Tests 3M Sample Handling Supplies Pathogen & Toxin Testing End Product Screening 3M Tecra Pathogen Tests 3M Microbial Luminescence System 10 Broad Portfolio of Solutions Recognized Industry Leader 5
Food Diagnostic Testing Today Complex, Time Consuming and Costly Process 5 10 Days to Complete the Process, Depending on Test Type Prep Work Area Prepare Sample Perform Test Advanced hygiene monitoring solutions Key Areas of Opportunity for 3M: In process prevention solutions Faster sample preparation Simpler indicator and pathogen testing solutions Broader range of test solutions 11 Bringing New Innovations to Provide Faster, Easier, More Cost-Effective Solutions Reaching Deeper Into 3M s Core Technologies Ab Abrasives Abrasives Bi Biotech Biotech Core 3M Food Safety Technologies Expanded 3M Food Safety Technologies Pm Polymer Melt Processing Sm Specialty Materials Ac Acoustics Ad Adhesives Adhesives Am Advanced Materials An Analytical As Application Software Ce Ceramics Dd Drug Delivery Di Display Do Dental & Orthodontic Materials Ec Energy Components Em Electronic Materials Fc Flexible Converting & Packaging Fe Flexible Electronics Fi Films Films Fl Fs Filtration, Separation, Filtration, Separation, Purification Purification, Purification Im Imaging Imaging In Is Integrated Integrated Systems & Systems Design & Design Lm Light Mgmt Light Mgmt Md Medical Data Mgmt Me Metal Matrix Composites Mf Mechanical Fasteners Mi Microbial Detection Microbial & Detection Control Control Mo Molding Mr Fluoromaterials Fluoromaterials Inspection Inspection & Measurement Measurement Microreplication Nt Nw Nonwoven Materials Op Nanotechnology Optoelectronics Pd Particle & Dispersion Processing Pe Predictive Engineering & Modeling Po Porous Materials Porous & Membranes Materials & Membranes Pp Precision Processing Pr Process Design & Control Rp Radiation Processing Se Sensors Sensors Su Surface Modification Tt Track and Trace Vp Vapor Processing We Accelerated Weathering Wo Wound Mgmt 12 Accessing 3M s Full Arsenal of Technologies to Address Market Needs 6
Accelerated R&D Investments Already Paying Off R&D Investment 120 100 80 Filings & Submissions 60 40 20 Inventor Submissions Patents 2006 2007 2008 2009 2010 0 2006 2007 2008 2009 2010 13 Building a Long-Term Growth Engine via Increased R&D Investment New 3M Pathogen Detection System Key Features: Faster time-to-result Fewer and simpler steps Cost effective solution Very small footprint Addresses broad array of pathogens Launching Mid-Year 2011 14 $400 $500 Million Market Opportunity 7
Driving Accelerated Growth in International Japan: Localization China: Key Account Intimacy Colombia: Customer Technical Center Thailand: Energized Teams 15 Food Safety is a Truly Global Business 3M s Global Footprint is a Competitive Advantage 2010 Growth in Developed and Developing Countries Korea Brazil Colombia Thailand Australia Canada Japan N. Zealand Argentina Mexico China US Philippines UK/Ireland Developed Developing % Growth 0 0.2 10 0.4 20 0.6 30 40 0.8 50 1 1.2 60 16 Outpacing Market Growth in Both Developed and Developing Economies 8
Delivering Solutions at All Pyramid Levels Segment Size / 5 Year CAGR ~ $500M / 7% Tier A - Premium Seeks productivity gains Developed economies Early adopters Indicator Testing Expansion ~ $600M / 5% Tier B - Convenience Seeks simplicity, ease-of-use Reliability, approvals are important Exporting food processors ~ $700M / 3% Tier C - Basic Cost conscious Basic features Developing economies 17 Expanding 2010-2011 3M Footprint and Addressing Customer Needs 2012-2015 at All Levels Localized Product Development/Manufacturing Petriflm Reader Basic (Japan) Pipette Swab (Korea) Antibiotic Detection Reader (Korea) Diluent Buffer (Korea) 18 Decentralized R&D to Address Local Market Needs and Drive Penetration 9
Summary: Food Safety Positioned for Growth Large, Rapidly Growing Market Urgent Global Need 3M Technology and International Reach = Strong Position Delivering Accelerated Growth via Classic 3M Strategies: Innovative new products International penetration Delivering at all levels of the pyramid Supplementing organic growth with selective M&A Team Committed to Delivering Double-Digit, Profitable Growth 19 10