Health Care Business Group Joaquin Delgado, Executive Vice President December 17, 2013 2013 3M. All Rights Reserved.
2 3M CONFIDENTIAL 2013 3M. All Rights Reserved.
Saving and improving lives around the world Number of deaths per year in U.S. from preventable hospital infections 87,000 People who suffer from asthma, and many breathe easier with 3M inhalers 150 million 3 million 300+ million Healthy and beautiful smiles, thanks to 3M dental restoratives & orthodontic solutions 100+ million 3M technologybased solutions improve health outcomes and reduce costs People die each year from food poisoning People who suffer from diabetes and other chronic illnesses; many helped by our solutions that help protect & restore skin integrity 3 Investor 2014 3M Meeting Outlook Meeting, December December 17, 201317, 2013
Agenda Business Overview and Market Landscape Strategic Playbook Developed and Developing Markets Opportunities Our Technologies & Portfolio 4 Investor 2014 3M Meeting Outlook Meeting, December December 17, 201317, 2013
3M Health Care Businesses Preventing Healthcare Associated Infections Innovating for Wound and Skin Care and Vascular Access Securement Improving Healthcare Efficiency, Quality and Reimbursement Making Smiles Healthy and Beautiful Customizing Pharmaceutical Drug Delivery Solutions Monitoring Food Safety Infection Prevention Critical & Chronic Care Health Information Systems Oral Care Drug Delivery Systems Food Safety A synergistic portfolio with breadth and depth across the healthcare industry 5 Investor 2014 3M Meeting Outlook Meeting, December December 17, 201317, 2013
The Health Care Business generates solid and consistent profitable growth $6.0 $4.0 $2.0 Sales CAGR of 5% $B $5.0 $5.1 $5.4 $4.3 $4.3 $4.5 Drug Delivery 9% Health Info Sys 11% Sales by Business 2013e Food Safety 5% Infection Prevention 29% $0.0 2008 2009 2010 2011 2012 2013e Critical & Chronic Care 21% Oral Care 25% $2.0 $B Operating Income CAGR of 7% Sales by Geography 2013e LAC 11% $1.0 $1.2 $1.3 $1.4 $1.5 $1.6 $1.7 APAC 16% U.S. 43% $0.0 2008 2009 2010 2011 2012 2013e Europe 30% 78% Developed Economies; 22% Developing 6 Investor 2014 3M Meeting Outlook Meeting, December December 17, 201317, 2013
3M Health Care Business Group portfolio strengths and synergies Technology Platforms Business Group Divisions Brand Food Safety Health Information Systems Medical Oral Care Supply Chain Drug Delivery Systems Global Presence Leveraging 3M s core strengths to provide total solutions for the healthcare industry 7 Investor 2014 3M Meeting Outlook Meeting, December December 17, 201317, 2013
Healthcare is a large, global growth opportunity Large, Growing Global Healthcare Market Global Market Penetration Opportunity $383B $92B $5B $7T Developed Countries Developing Countries 3M Sales Healthcare Addressable Market *Source: Medical etrack and Espicom 2012 $USD 2013-2017 Growth WW Expenditures $7.0T 4.6% Developed Countries Expenditures Developing Countries Expenditures $5.4T 2.9% $1.6T 9.8% and we are uniquely positioned to gain market share in both Developed and Developing countries 8 Investor 2014 3M Meeting Outlook Meeting, December December 17, 201317, 2013
The Healthcare landscape Key Mega Trends Increased demand for access to Healthcare around the world People living longer Increased incidence of chronic diseases Use of comprehensive health data becoming more ubiquitous Advances in biologics and regenerative medicine Global Forces Shaping the Market More Access Improved Quality & Better Clinical Outcomes Healthcare Delivery at Lower Cost Solutions-based Technology Development Industry Success Enablers Prevention Digitization Shift to Lower Cost Delivery Sites Evidence-Based Solutions 9 Investor 2014 3M Meeting Outlook Meeting, December December 17, 201317, 2013
Business Overview and Market Landscape Strategic Playbook Developed and Developing Markets Opportunities Our Technologies & Portfolio 10 Investor 2014 3M Meeting Outlook Meeting, December December 17, 201317, 2013
3M Health Care Business Group strategic playbook 3M Strategies Playbook Expand Relevance to our Customers and our Presence in the Marketplace Gain Profitable Market Share and Accelerate Market Penetration Everywhere Accelerate growth in developing countries Gain profitable market share in developed countries Growth Invest in Innovation: Invigorate Existing Market Opportunities and Focus on Emerging Megatrends People & Capabilities R&D Invest in Innovation, Market Coverage and Localization Build High Performing and Diverse Global Talent Portfolio Prioritize Platforms and Geographies Intensify Capabilities to Achieve Regional Self-Sufficiency Drive Consistent Superior Levels of Operational Excellence Operational Excellence Liberate Funds for Investment 11 Investor 2014 3M Meeting Outlook Meeting, December December 17, 201317, 2013
Business Overview and Market Landscape Strategic Playbook Developed and Developing Markets Opportunities Our Technologies & Portfolio 12 Investor 2014 3M Meeting Outlook Meeting, December December 17, 201317, 2013
Gaining profitable market share in developed countries Priorities Key Platforms to Maximize Customer Relevancy Medical Health Info. Systems Oral Care Drug Delivery Food Safety Expand Coverage Across the Continuum of Care Align Portfolio to Targeted Care Delivery Points Vascular Access Skin Integrity Advanced Wound Care 360 Encompass TM Procedure-Based Solutions Digital Materials Prevention Inhalation Drug Delivery Molecular Detection Systems Increase Number of New-to-the-World Products Securement Patient Warming Healthcare Analytics Digital Ortho Clarity TM Ceramics Transdermal Drug Delivery Hygiene Monitoring Sterilization Incognito TM 13 Investor 2014 3M Meeting Outlook Meeting, December December 17, 201317, 2013
Expanding coverage across the continuum of care (USA) Hospital Surgery Center Wound Clinic Long-term Acute Care Physician Office Extended Care Home Health Oral Care 100% 3M USA Penetration Rates 80% 60% 40% 20% 0% 3M Penetration Rate Addressable Market Opportunity Upside in the USA and significant opportunity to expand into other developed markets 14 Investor 2014 3M Meeting Outlook Meeting, December December 17, 201317, 2013
Building growth faster and more productively in developing countries Expand Coverage Advance Standards of Care Tailor Portfolio Invest in Commercialization Competencies Targeted expansion to increase sales coverage Active participation in advancing healthcare standards Expand local laboratory and manufacturing capabilities Enhance competence in sales, marketing, clinical and regulatory areas Continue to strengthen our commercialization and market development capabilities 15 Investor 2014 3M Meeting Outlook Meeting, December December 17, 201317, 2013
Developing markets strategy produces results China 15% growth Local Lab Increasing R&D and technical service competencies Developing localized and new-to-theworld products Localizing clinical research Local Manufacturing Medical products plant Orthodontic products plant Brazil 21% growth Increasing R&D and technical service competencies Expanding R&D capabilities to enhance localized product pipeline Localizing clinical research Oral Care products plant Medical products plant Growth rates are Sept YTD Organic Local Currency 16 Investor 2014 3M Meeting Outlook Meeting, December December 17, 201317, 2013
Business Overview and Market Landscape Strategic Playbook Developed and Developing Markets Opportunities Our Technologies & Portfolio 17 Investor 2014 3M Meeting Outlook Meeting, December December 17, 201317, 2013
Tailoring our new product development strategy Developed Countries: Innovation Developing Countries: Penetration 2013 2017 2013 2017 Shift innovation pipeline towards Adjacent and Transformational Products Localize core portfolio and advance new-to-the market local product development Transformational Products Replacement New Products New-to-Market Products Product Localization 18 Investor 2014 3M Meeting Outlook Meeting, December December 17, 201317, 2013
Healthcare Megatrends 3M Technologies Healthcare megatrends and 3M technologies drive innovation Increased demand for access to Healthcare around the world Earlier detection of pathogens in Healthcare facilities and food streams People living longer Increased incidence of chronic diseases Preventing harmful and costly Healthcare associated infections Use of comprehensive health data becoming more ubiquitous Advances in biologics and regenerative medicine Providing cost-effective therapeutic solutions in critical and chronic care Digitization of information to improve accuracy and compliance, and make better decisions 19 Investor 2014 3M Meeting Outlook Meeting, December December 17, 201317, 2013
High impact R&D programs: creating the future Detection Prevention Intervention Digitization Novel Food Safety Detection Technologies In-Office Preventive Dental Care Biologic Wound Care Integrated Oral Digital Technologies Toxins, Allergens, and Residues Market opportunity >$700M New materials and devices to identify and prevent oral conditions Market opportunity >$150M Bio-active wound closure, accelerated healing Market opportunity $650M Transform analogue procedures to digital Market opportunity $750M Enabling Novel Surgical Solutions Healthcare Data Analytics Assisting surgeons in open and minimally invasive procedures Market opportunity $500M Improve quality and mitigate risk in care delivery Market opportunity $3.7B 20 Investor 2014 3M Meeting Outlook Meeting, December December 17, 201317, 2013
Acquisitions have been important to Healthcare s success Code 3 Corporation (Health Information) (Dental products) (Orthodontic products for developing markets) (Computer-assisted coding) 1987 2000 2006 2007 2010 2012 (Orthodontic products) (Microbiological food safety testing) (Patient warming) Combining acquisitions with organic innovation to expand the breadth and depth our portfolio 21 Investor 2014 3M Meeting Outlook Meeting, December December 17, 201317, 2013
We acquired Arizant Healthcare in 2010 Acquisition combined with 3M capabilities drives profitable, global growth Forced Air Patient Warming Gown Forced Air Warming Blankets Fluid Warming Multiple new products launches since acquisition and strong future pipeline Expanding solutions beyond traditional operating room setting Expanding the business across 3M s footprint; products now sold in 70+ countries versus 36 countries when acquired Core Temperature Monitoring New product launch since acquisition 2013e Local Currency Growth % Developed Countries Developing Countries 6% 15% Exceeding original growth forecast Delivering savings Revenue synergies taking hold 22 Investor 2014 3M Meeting Outlook Meeting, December December 17, 201317, 2013
3M is well positioned to thrive in a dynamic healthcare market Attractive portfolio Global footprint Arsenal of leading technologies Growth funded by operational excellence An inspired, dedicated team Improving Every Life each and every day 23 Investor 2014 3M Meeting Outlook Meeting, December December 17, 201317, 2013
2013 3M. All Rights Reserved.