© 3m 2011. all rights reserved. focus on growth 1 3m canada review brian young president and...

© 3M 2011. All Rights Reserved.

Focus on Growth1

3M Canada ReviewBrian YoungPresident and General Manager

With a

© 3M 2012 All Rights Reserved.

2

Morning Agenda

7:30 a.m. – 8:30 a.m.

3M Canada OverviewBrian Young

8:30 a.m.

Business ServicesBritta Lesaux

9:00 a.m.

ManufacturingJim Brock

9:30 a.m.

R&DRandy Frank

10:00: a.m.• Break• Depart for meeting with Ontario

Premier Dalton McGuinty• George• HC• Brian

• Lunch 12:00 – 12:45 p.m.• Private Dining Room• Resume 12:45 p.m

Afternoon Agenda

Wrap-up: 4:30 p.m. │ Depart to Airport: 5:00 p.m.

1:30 p.m. – 4:45 p.m. Big B Review

2:00Martha BennettCOB

2:45Tim BrownHealth Care

3:15Richard ChartrandD&G

4:15Kevin HigginsI&TB

3:45John KosnikECB

1:30Bill BoyceSS&PS

11:30 a.m.

CMPAChip Allan

12: 45 p.m.

Human Capital PlanJanette Batten

Break 2:30 p.m. – 2:45 p.m.


3

3M Canada

90% Imported

Market Focused

1,100 Employees

Domestic Business2011 Sales - $860 M

90% Exported

800 Employees

$1.1 BillionSVOP

Interco. Business2011 Sales - $728 M

Growth and Operational Excellence


4

Highlights

OI Vs OP – 4 for 4 in 2011 – 12 for 12 in last 3 years Generation of Cash, repatriated $149 Million Implementation of the Tax change (estimate ~$15M savings to the company) Business Services Organization formed Infection Prevention and Skin & Wound Care awarded 5-year $70 M HealthPRO contract M61 Military Program Recognition as one of “50 Most Engaged Workplaces (Top 7) Excellent Brand Reputation Survey Results Two Global Marketing Excellence Awards NPVI Progress – 26.6%/$28 Million Manufacturing offsets about $10m of RM headwinds World Class Compliance and EHS performance


5

3M Canada Track Record

12 Consecutive Quarters – 17/18


6

Canada’s Economic Outlook

Strengths and Challenges

1.8% 4.5%2012 GDP Resource Rich

Export Dependency

Healthcare Economics

Financial Stability

2012 IPI

Source: Global Insights January 2012


7

GDP/IPI Trends and Outlook


8

2012 Operating Plan

Accelerated Growth

Continued Margin Expansion +0.7%

SG&A Ratios down 1%

CI% up 2%, good leverage

Continued tax drop

US$000

Q1 Q2 Q3 Q4 TYNet Sales 206,875 223,925 220,179 218,148 869,127 % Org Volume 6.6% 5.5% 5.4% 3.9% 5.3% % Net Acq and Div 0.2% 0.0% 0.0% 0.0% 0.1% % Price 0.5% 0.6% 0.5% 0.5% 0.5% % LC Growth 7.3% 6.1% 5.8% 4.3% 5.9% % Transl -5.1% -6.1% -4.2% -3.6% -4.7% % Total 2.2% 0.0% 1.7% 0.7% 1.1%

Gross Margin 110,513 122,665 117,950 112,303 463,430 % to Sales 53.4% 54.8% 53.6% 51.5% 53.3%

R & D 10,575 10,759 10,819 10,795 42,948 % to Sales 5.1% 4.8% 4.9% 4.9% 4.9%

S G & A 44,184 47,112 44,322 43,889 179,508 % to Sales 21.4% 21.0% 20.1% 20.1% 20.7%

All Other 2,053 1,180 1,153 1,093 5,479 % to Sales 1.0% 0.5% 0.5% 0.5% 0.6%

Contribution Income 53,700 63,614 61,656 56,525 235,496 % to Sales 26.0% 28.4% 28.0% 25.9% 27.1% % Change 10.8% 1.2% 15.3% 7.1% 8.2%

Contribution Tax Expense 15,579 18,605 17,868 16,380 68,433Contribution Tax Rate 29.0% 29.2% 29.0% 29.0% 29.1%

Contribution Net Income 38,122 45,009 43,788 40,145 167,063 % to Sales 18.4% 20.1% 19.9% 18.4% 19.2% % Change 20.2% 5.1% 16.5% 8.6% 12.1%

2012Operating Plan

Continued operational focus balanced with growth to secure OP +


9

Managing the Balance

Leadership

Domestic

Intercompany

Operational

Strategic

Growth

Operational Excellence

Gas

Brake

Risk

Reward


A Balanced Strategy – Growth and Operational Excellence

GrowthProtect and

Grow the CoreHigh Priority Markets

Customer Focus The “Big” 3M Brand Building

Pyramid Management Alignment

Competitiveness

Operational Excellence

Human Capital Plan

Inventory Management Sourcing

Lean Six Sigma

Business Execution

Gross MarginsNPI Performance

Shared Services

Tax

Innovation New Products

10

Transformational Leadership &Engaged Employees

Deliver Operationally/Manage Strategically


11

Full Alignment

3 Top

–Level Improvem

ent Priorities

2

Annual

Strategic Objective

s

1 Long

Term “Breakthrough”

Strategic Objectives

1

Targets to

Improve

KEY POINT: This simply shows that BEP is the “Execution Process” for the Strategies (assures that we are working on what will get us to both short and long-term goals)


12

3M Canada X-Matrix

3 Top –

Level Improvement

Priorities2 Annual Strategic

Objectives 1 Long Term

“Breakthrough” Strategic Objectives

4 Targets to

Improve

Deliver Operationally/Manage Strategically

KEY POINT: BEP is HOW the team will manage its execution to Deliver Results!(Executives don’t need to see the details to appreciate that they employ this process)


13

3M Canada X-Matrix

13

A Leader in Prioritized Markets

$500 MM Sales from New Products

Benchmark for Marketing Excellence

Healthy Organization for the Future

World Class Operational Excellence

1 Long Term

“Breakthrough” Strategic Objectives

Breaking the X-Matrix into components is useful to clearly articulate your message


14

3M Canada X MatrixAnnual Strategic Objectives

Top Level Priorities

Targets to Improve

- $252 M Total

This demonstrates how your X-matrix Flows, connecting Annual Objectives to the IMPROVEMENT Objectives and Targets

The message here is that while many things are measured and important in running the Subsidiary, these are the MOST IMPORTANT elements to execute, THIS YEAR.


15

3M Canada X-MatrixGrowth from Strategic Accounts at Financial & Operational Milestones ($167.4M Total)

Execute a Quality Input Plan that Strengthens Customer Loyalty from 55% to 65%

Execute Growth Plans for Priority Markets ($80M Total)

Hoppering and tracking of A&A and hoppering of Alternative Business Models

Execute Key Growth Opportunities over $1M ($56M Total)

Execute Sales Excellence Plan

Improve rigor of NPI process for "Imported" Products & achieve NPVI target ($180M Import)

Achieve New Product Dev. Milestones & Success for Local new products ($72M Local))

Develop and Execute Strategic Business Development for Growth

Execute Marketing Excellence Plan

Gross Margin Improvement Plan from 52.6% to 53.3%

Execute Human Capital Plan and Align Resources to Priorities

Execute Employee Engagement and Performance Culture, incl. the new building

Leverage Bus Services to Drive Productivity, Consistency & Quality of Services (31,000 hrs in productivity)

Strengthen Business Execution and Strategic Planning through BEP Roles

Meet our Customer Service & Inventory Targets (>93%, D&E = 2%, SDE=5%, YE Turns = 11.75)

Deliver LSS Cost & Cash & Value Stream Objectives ($12.8MM, $3.9MM, VS=$1.2MM productivity)

Make Variance and Factory Cost Plan (Dom. & Interco) ($0 variance for year)

Indirect Spending Reduction of $11MM from 2011

Biz Conduct, Regulatory Compliance & World Class Safety

Execute Growth Plans for Priority Markets ($80M Total)

Achieve New Product Development Milestones & Success for Local New Products – ($72M Local)


Leverage Business Services to Drive Productivity, Competency and Quality of Services (31,000 hrs.)

Business Conduct, Regulatory Compliance and World Class Safety

Growth from Strategic Accounts at Financial & Operational Milestones ($167.4M Total)

Execute Employee Engagement and Performance Culture


4 Targets to

Improve

NOTE: Highlighting the VITAL FEW, among the finite list of Targets to Improve


16



17


A3 Highlights - Owner – Blair Fantillo

Culture of Compliance and Pro-active Leadership Continued implementation of Anti-Bribery Program 100% Completion of On-Line Compliance Courses Education and Training Maintain and Improve Operational EHS Scorecards SOX and GFS Compliance Improve Communication Process for Acquisitions

Delivering the Big 3MZero Unsatisfactory Audits and Zero Past Due Issues


18

Delivering the Big 3M

Growth from Strategic Accounts at Financial and Operational Milestones


19

Delivering the Big 3M

Growth from Strategic Accounts and Financial and Operational Milestones

A3 Highlights – Owner – Brian Young

A3s for all 12 Strategic Accounts Total 2012 Sales - $ 167 MM Industry consolidation continues to elevate the strategic

importance of key account relationships The breadth of 3M's cross divisional product offering is a key

differentiating factor Improve communication and co-operation to leverage “Big 3M”

with strategic accounts. Monthly MOC review

As with the last slide, it is generally good to show the A3 briefly in the background – but go quickly to the KEY points of your ACTION PLAN of the A3. You are conveying to the executives that you have a plan and disciplined approach as to HOW your will achieve the objective.


20

Execute Growth Plans for Priority Markets


21

3M Canada Corporately Funded Priority Markets

Mining

Construction

Oil and Gas

Corporate Wide Initiatives


22

1 Identify the Market2 Funding

Investments3 Talent 4 Align

Technical Resources

5 Key Account Alignment6 Product

Development

Oil and GasWorld’s 5th largest energy producer 3.3 million barrels per day of oil produced1.8 million barrels per day of oil from

oil sands production3rd largest producer of natural gas in the world580,000 kilometres of pipeline in Canada$200B of new O&G Oil Sands projects in next 10 yearsOpportunities in Construction and Operations

Identify the Market


23


Investments3 Talent 4 Key Account

Alignment5 Align

Technical Rexources

6 Product Development

Funding Investments

3M Canada Sales

Funded by Sales% Not Big B Benefit


24



Alignment5 Align

Technical Resources


Talent

Advertise Nationally

Hire

Train Locally

using S5s1-2 mths

Relocate to Ft. Mc

Site access using

existing resources

3-5 yrs in Ft. Mc

Train replacement

Relocate anywhere in Canada

Recruitment• Hire industry expertise

Positioning• Locate close to customer – Fort McMurray

Retention• Unique compensation• Flight ‘home’ 1 time per year• Housing allowance• Relocation to another Canadian city with 3M position after commitment • 4X4 Pickups for rough terrain

Alex Isings O&G EBO Leader2 yrs O&G

Monty Malik O&G Tech. Leader

5 yrs O&G

Darrell UchachCPP BD

15 yrs O&G

Open3M PI Sales

Scott GardnerOH/FPS

7 yrs O&G

Yatin PanditEAMD/EPC BD

15 yrs O&G

Chris GatfieldULWP/Dyneon BD

6 yrs O&G

Kam WuHP Coatings PD

5 yrs O&G

Teresa PenaADE

6 yrs O&G

Phil MarentetteEMD/T&T TS

2 yrs O&G

Jennifer MolnarOH&ES TS3 yrs O&G

Edgar BoadaHP Coatings ADE

10 yrs O&G

Tyrel PowerEMD/CPP1 yr O&G

Tina BhelaOHES

15 yrs O&G

Ft Mc Based Team




5 yrs O&G


5 yrs O&G


15 yrs O&G


15 yrs O&G

Open3M PI Sales

Open3M PI Sales

Scott GardnerOH/FPS

7 yrs O&G

Scott GardnerOH/FPS

7 yrs O&G


15 yrs O&G


15 yrs O&G


6 yrs O&G


6 yrs O&G


5 yrs O&G


5 yrs O&G

Teresa PenaADE

6 yrs O&G

Teresa PenaADE

6 yrs O&G


2 yrs O&G


2 yrs O&G




10 yrs O&G


10 yrs O&G



Tina BhelaOHES

15 yrs O&G

Tina BhelaOHES

15 yrs O&G

Ft Mc Based Team

Ft Mc Based Team


25



Alignment5 Align

Technical Resources


Key Account Alignment

Industry HQs in Calgary

Key Account Focus – Supplier Agreements


26



Alignment5 Align

Technical Resources


Align Technical Resources

Monty Malik

Application engineering and product development laboratory in Calgary



5 yrs O&G


15 yrs O&G

Open3M PI Sales

Scott GardnerOH/FPS

7 yrs O&G


15 yrs O&G


6 yrs O&G


5 yrs O&G

Teresa PenaADE

6 yrs O&G


2 yrs O&G



10 yrs O&G


Tina BhelaOHES

15 yrs O&G

Ft Mc Based Team




5 yrs O&G


5 yrs O&G


15 yrs O&G


15 yrs O&G

Open3M PI Sales

Open3M PI Sales

Scott GardnerOH/FPS

7 yrs O&G

Scott GardnerOH/FPS

7 yrs O&G


15 yrs O&G


15 yrs O&G


6 yrs O&G


6 yrs O&G


5 yrs O&G


5 yrs O&G

Teresa PenaADE

6 yrs O&G

Teresa PenaADE

6 yrs O&G


2 yrs O&G


2 yrs O&G




10 yrs O&G


10 yrs O&G



Tina BhelaOHES

15 yrs O&G

Tina BhelaOHES

15 yrs O&G

Ft Mc Based Team

Ft Mc Based Team


27



Alignment5 Align

Technical Resources


Product Application and Development

Enhanced Abrasion Resistant Liner

E-Mat Applications

Ultra Light Weight Proppant

Nano Release Coatings


28

3M Canada Oil and Gas Markets

Self Sustaining – Integration into Big B

Oil and Gas Sales and Forecast

17.2

44.7

57.6

23.4

29.0 30.0

27.8

32.5

36.5

41.0

49.053.0

0

10

20

30

40

50

60

70

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Year

Sal

es ($

Mill

ions

)

Sales

Forecast

Glass Bubble Sales

4515

168713991336

585

450

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

2006 2007 2008 2009 2010 2011

Year

Sales

($ 00

0) Sales

Oil& Gas Sales Forecast

Glass Bubble Sales 7Integrate into

Big Business


29

3M Canada Priority Markets

Oil &Gas

2009 2011

39,256 $40,989

Construction$11,000 $14,000

Mining

$23,007 $25,647

$000 CAD 3 Year CAGR

10.72%

28.81%

89.73%

2010 2012 F

$35,522

$7,826

$19,998

$30,200

$2,050

$12,000


30



31

Achieve New Product Development Milestones & Success for Local New Products


32

Interactive Marketing Excellence

Marketing Competency Development

Marketing Competency Development

Core Marketing

Management

Marketing Planning & Analytics

Strategic Business Development


Business ExecutionProcess

Global Local



33

A3 Highlights – Owner – Chip Allan• Central team focused on new product and business development

•Accelerated NPI in Priority Markets•White Space Exploration & Opportunity Definition•Incubate high potential projects•Strategic consulting & project management

• Develop a formalized path for marketing and business leadership.• New career path for high potential marketing professionals• Opportunity to get broad exposure to the breadth and depth of 3M.• Regular exposure to senior leadership• Entry point to attract and recruit strong external talent in marketing.• Help to achieve internal expectations for Marketing Excellence

Strategic Business DevelopmentStrategic Business

Development

Strategic Business

Development

Another Example – If you want to show an A3, do it briefly in the background – but go quickly to the KEY points of your ACTION PLAN of the A3. You are conveying to the executives that you have a plan and disciplined approach as to HOW your will achieve the objective.


34

SBDL Department Approach Prospecting and supporting relevant growth opportunities for 3M Canada

OUTSIDE IN1. Strategic opportunity

assessment of current and future BIG market spaces with high value growth.

2. “Connect the Dots” to map out technology solutions (internal & external).

3. Work with the Divisions to scope and bring it forward.


35


In 2011, 34 projects were entered into SBD hopper and ranked• 16 NPI projects• 15 market research/new market model projects• 3 integrations

13 projects were completed in 2011 • 7 launched and 6 killed

– Projects Launched– Lymphedema │ Arizant │Original Wraps │ Bovine Mastitis │ Specified Construction – Building

Envelope (Air Barrier). 12 active projects in 2012

– Algae-Biofuels │ Abrasives Leadership │ Patient Bathing │ Own the Floor │ Data Centers │ Mobile Workers │ Retail Home Health │ Government Sales │ Shelter Grade Thinsulate │ Water Infrastructure

Rejuvenate the SBD Hopper

Strategic Business

Development

Strategic Business

Development


36

LeadersLeadersof theof the

QQ

Execute Employee Engagement and Performance Culture


37

Summary

Strong track record of operational excellence Disciplined approach to Human Capital Planning Consistent quarter-to-quarter, year-to-year performance Strong compliance orientation Traction with new products World class manufacturing performance Growth focused

Centralizing, Optimizing, Standardizing For Lean Business

© 3m 2011. all rights reserved. focus on growth 1 3m canada review brian young president and...

Documents

operational excellence

outlook slide

operational focus

ehs performance slide

secure op slide

employees domestic business

balanced strategy growth

canada overview brian