30 years of 3M in India · 10 August 2018© 3M . All Rights Reserved. 3M Confidential. Economic Outlook 3M’s play in Key Sectors

. All Rights Reserved.10 August 2018© 3M 3M Confidential.

30 years of 3M in India


Transformational Growth Rooted in Values

3M India Annual General Meeting10th August 2018


“This presentation is meant for the

current audience and discussion only.

This presentation may contain statements

about business prospects & market

conditions that may involve substantial

risks and uncertainties.

You are cautioned not to place undue

reliance on these statements. Forecasts

and hypothetical examples are subject to

uncertainty & contingencies. Past

performance is not a reliable indication of

future performance.”

Safe Harbour Statement


Economic Outlook3M’s play in Key Sectors


Mega Trends Drive Our Economy & Sectors We Play In

Automotive Manufacturing

Healthcare Infrastructure & Construction

Power & Electronics

Retail

Make in India Digital India

Urban Development Infrastructure

Demographic Dividend Rising Disposable Income

. All Rights Reserved.10 August 2018© 3M 3M Confidential. 6. All Rights Reserved.10 August 2018© 3M 3M Confidential.

India FY 2017-18: A dynamic year of change & progress

6th largest economy

GST

100th rank in ease of doing business

Auto Electrification

NPA/Bankruptcy code

Strengthening commodity prices


India: A Sizable Growth Economy

When 3M India was founded in 1988, India’s GDP was less than half of the 10th highest country globally. China had not yet entered the Top 10

India enters Top 10 list for global economies. China is already in second position.

One year after reaching the Top 10 Club, India’s growth momentum picks up.

India picks up growth momentum. First majority government in over 20 years. Government investment in infrastructure paces up

India is solidly the fastest growing large economy with a real GDP growth of 7.4%.

India displaces France as world’s6th largest economy

France

India

UK

GDP 2018


India: An Exciting Future Lies Ahead

Global Recognition Investment Ready Population Tailwinds Future Forward Policy Stability

India in top 100 countries for World Bank “Ease of Business.” GDP growth forecast~ 7.5%, Structural reforms leading to transparency

Infrastructure reform set to increase FDI as global partners set their eyes on India.

Working population increasing, consumption on the rise. Demographic dividend set to pay off(1/6 world population)

Global technology giants & local players adapting to win through new products & services. Largest data consumer in the world

Expectation of execution focus rather than new reforms as the economy strengthens until the 2019 general electionFinetuning to address feedback


Sectoral Highlights: Infrastructure

India Infrastructure Investment

22KM

/day 2016-17 Fiscal

45*KM

/day 2018-19 Fiscal

3M India’s play in the sector

Expressways: 12 for 2019 ($15B)

Waterways: 10 by Dec 2018 ($2B)

National Sagarmala Project: develop 7500km

coastline/14,500 navigable waterways ($120B)

Goldman Sachs: India to invest $1.7T by 2020 to meet road infra needs

Regulatory Excellence* Forecast

Make in India for India

Coverage & Penetration


Source: BMI

8.2T 19T

2X %GDP: Public Spending on healthcare (1.2%-2.3%)

Total Market

Medical insurance penetration to double to 41% of population through “Ayushman Bharat”

2017 to 2023:

India Health Care Industry 3M India’s play in the sector

Sectoral Highlights: Healthcare

Insurance company guidelines driving NABH accreditation

Business ModelInnovation

Differentiated product basket

Skill Development


Source: https://www.india-briefing.com/news/india-automobile-industry-increasing-investment-opportunity-13360.html/

4thlargest passenger vehicle producer

5th largest automobile producer

Fastest vehicle production growth in the world (8.3% CAGR 2017-22)

7.1% makeup of India GDP, 49% Manufacturing GDP

Annual Production of ~24M vehicles, Employing >29M people

(directly & indirectly)

India Automotive Industry

Sectoral Highlights: Automotive


Regulatory readysolutions

Make in Indiafor India

Mega TrendBased Solutions


Source: Mint, New Indian Express, Hindustan Times, Forbes India

9+% growth in HH expenditures (last three years), 30% into grocery basket

Amazon has committed >$5B investment in India, listing >40M

local products

Larger household size (4.9 avg.) hides prosperity in households vs

individuals

Indian Consumers

267M

Today

>500M

By 2025

Middle Income GroupPopulation

Sectoral Highlights: Consumer


Portfolio Expansion

Brand & eCommerce

Air Quality


At the forefront of Performance & Impact


Wide Recognition From Industry & Publications

Outlook BusinessAmong Outlook Business List of High

Performance Companies for 2nd consecutive year for stock return over sensex for last 5

years

Frost & SullivanAftermarket Business Leadership Award

Forbes India Among India’s Super 50

Companies in 2017 for Overall Performance

Frost & SullivanGold certificate for

Manufacturing Excellence

CIINational level appreciation

for Energy ExcellenceLean Kaizen Awards


Winning National Award in Corporate Excellence“Business Standard - Star Multinational Company of the Year”


Audhyogik Surakasha Rath Initiative3M and DGFASLI, Ministry of Labor & EmploymentLeading the drive for a Safety Culture in Indian Industries

What’s good for India is good for 3MStrategic Government Partnerships : Industrial Safety

National Awareness Campaign on Workplace Safety in partnership with Central Ministry of Labor across 29 states aiming to touching 1 million workers in 3 years

Travelled 29,000 km across 12 states and covered 60,000+ workers so far

Industry specific training modules and 3M expertise in safety education, transforming lives through safety awareness


3M and Healthcare Sector Skill Council Skill Upgradation of healthcare professionals in India

What’s good for India is good for 3MStrategic Government Partnerships : Healthcare Skills Development

Supporting Skills India Mission through curriculum development and training

Building expertise among healthcare professionals to reduce overall post-operative infections

Standard processes & procedures in infection control and patient care

Training Central Sterile Services Department personnel across India


Driving Innovation through Mentoring Support for Start-ups

What’s good for India is good for 3MStrategic Government Partnerships : Govt. of Karnataka & Bhopal Smart Cities Dev. Corporation

MOUs with Karnataka Start-up Mission and Bhopal Smart Cities Corporation Limited Incubation Center – BNEST

Mentoring Support in areas like product commercialization, stage gate discipline, pricing analysis, business model, accelerating product launch etc.

Pro bono services by 3M specialists


New investments: Driving Design for Innovation & Growth 4th 3M Design Center launched in India

Wining with Design and Collaborative Creativity

The new Design Center is the creative hub for the company and our customers where Design inspires and enables innovation, brand experience and the creation of meaningful customer solutions

Experiential center to drive the limits of design through new materials and new capabilities


New investments: New Manufacturing Lines Driving Growth

Capital investments under implementation & in the pipeline to strengthen manufacturing capability supporting growth, productivity and service

New Acoustics Line Black out films localization

Interam Conversion Automatic converting Log roll slitter Liquid line expansion


Zero Lost Time Accidents

Zero Level 2 Fires & Spills

All of our plants received 3M Corporate recognition: CEO Safety Award

Safety Awareness efforts through School outreach, Employee Children & Industry Connect

Our Commitment to Health and SafetyContinuing to raise safety standards & reinforcing our commitment to leadership in safety and health


Committed to Reducing our Environmental Footprint

The Sustainability Goals we are pursuing reflect a heightened commitment to going beyond compliance and thinking holistically about how our operations and products affect the world and every life in it and helping our customers achieve their goals

29% reduction(Kg/MT of production)

Waste

Energy

Water

30% reduction(MMTU/ MT of production)

58% reduction(KL/ MT of production)

Base Year 2015


Creating Meaningful ImpactEmbracing our communities through meaningful partnerships & Employee Engagement

100% of CSR Budget spent in FY18

Education & Skills Community Sustainability

1.6 2.053.6

5.6

7.7

2014-2015 2015-2016 2016-2017 2017-2018 2018-2019

CSR Budget (Rs in Crore)


3M – Our Heritage & GlobalCapabilities


116 Years Strong - Our Global Brand and Innovation engine

Recognized as a World's Most Ethical Company® five years in a row (2014-18)

Global Sales

$31.7 Billion

Net income

$4.9 Billion

R&D investment

$1.9 Billion

Recognized by Dow Jones Sustainability Index for 18th

consecutive year

Patents

113,000


Powering the Future with Science & Domain Expertise

Dr. Jayshree Seth3M Chief Science AdvocateMaking Science more accessible and promoting STEM Careers

Powering the future of Auto Electrification

Championing Science & STEM

Uniquely Positioned to Drive Growth

Bringing the benefits of a connected world to Industrial Safety

Advancing wound care & improving patient experience


Market Differentiated Performance in India


Leadership During GST Transition

We achieved 100% Compliance and 100% Readiness for the National GST Roll out with industry leading practices and a commitment to sharing knowledge with channel partners and vendors


Sales

15841762

1854

2242

25072624

FY '13 FY '14 FY '15 FY '16 FY '17 FY '18

A Strong Year Reinforcing our track record of Proven Performance

CAGR 10.6%

INR Cr

ProfitsINR Cr

Strong and solid growth in the past 4 years

Prioritized initiatives to mirror external environment

Mitigating external headwinds

Strong operational discipline to drive financial performance

5243

108

194

238

310

FY '13 FY '14 FY '15 FY '16 FY '17 FY '18

CAGR 42.9%


FY 2018 Highlights

Sales Growth

Double digit adjusted for GST

+4.99%

Total revenue

INR 2624 Cr

Earnings per share

+29% YOY

Rs. 276

Profit before tax

INR 480 Cr

Profit before tax

+ 29.7% YOY

18.3%

Profit After Tax

INR 310 Cr

EBIDTA 19.9%


Differentiated stock performance

3M

Source: economictimes.com5000

7000

9000

11000

13000

15000

17000

19000

21000

23000

25000

3M Share Price NSE Index

NIFTY29.3%

3M53.1%

Source: NSE India Ltd

(2016-18)

(2016-18)

3M Stock performance vs Index

NIFTY


-54.9%

-7.8% -7.7%

0.0% 3.1% 6.1% 6.3%10.7%

13.9% 16.3%21.3%

29.7%

FY 18 Profit before Tax Growth %

Strong Revenue & Profit Growth Performance vs Industry Peers

Leveraging portfolio diversity & driving operational excellencein a rapidly changing environment

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3M

In

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Source: Bombay Stock Exchange

-12.8%

-7.3%

-4.4%

-1.6% -0.7%

0.3%2.2%

4.0% 4.4% 4.7% 5.6%

9.4%

FY 18 Revenue Growth %

. All Rights Reserved.10 August 2018© 3M 3M Confidential. 33. All Rights Reserved.© 3M 3M Confidential.2017

Key Drivers of Success in FY 2017-18Driven by a growth mindset

Customer Centricity

From customer scorecards to bringing 3M science to life into our customers’ world, our commitment continues to drive innovation with customers at its center

Investing in Innovation

Our customers across key growth segments – automotive, healthcare, infrastructure and retail are benefiting from new applications of our science to improve lives.



Growth through Nation-Building Opportunities

Strategic partnerships with Government, delivering value and participating in nation-building initiatives help expand our relevance and reach.

Geographical Penetration

Our pursuit of bolder opportunities has taken our brand deeper into India, reaching new demand centers impacting lives in cities such as Mumbai, Delhi, Kolkata etc.



Operational Excellence & Diligence Commitment to Compliance

Compliance is non negotiable. In addition to ensuring we are adhering strictly to regulatory and compliance requirements, our Code of Conduct helps anchor our business practices, our interactions externally and internally and our culture

We relentlessly drove the health of business ensuring focus and attention on key parameters impacting P&L and Balance Sheet health

COGS Improvement

Sales Productivity

improvement

10%4.68%Vendor ranking

from nation’s largest car

maker

# 1


Positive Performance across businesses

Revenue Growth

Profit Growth

Key Actions

1.5% 7.5% 7.4% 9.7% 15.7%

31.7% 49.4% 73.1% 36.8% -7.2%

Industrial Healthcare Safety & Graphics Consumer Energy

Innovation & Localization

Customer relationships and

coverage

Portfolio & Regulatory leadership

Portfolio, Channels & Brand

Projects & Applications


Acquisition of 3M Electro & Communications Pvt. Ltd


3M E&C - FY 2018 Highlights

Sales Growth (5 year CAGR)

+ 6.4%

Total revenue

INR 203 Cr

Profit before tax

17.1%

Profit after tax

INR 22.8 Cr

COGS

720 bps improvement

52.3%

Profit before tax

INR 34.8 CrRevenues from discontinued operations ~ INR 43 Cr

Per audited financials for FY 17-18

15.4% YOY


3M Electro & Communications – A Strong Asset With A Strong Brand

Integrated Facilities in Pimpri Differentiated Technology Platforms

Designated global “Center of Excellence” for Heat Shrink platform. Key technologies - Cable Jointing, Heat Shrink & Cold Shrink, Compounding, Extrusion, Expansion, Rubber & Plastic Molding, Kitting, Electrical and Electronics assembly

Integrated research, manufacturing & warehousing facilities in Pimpri, Pune with a 19,000 sqm footprint and 169 employees. Additionally operating out of four warehouses and 2 import hubs


Product Overview: Strong Product Line & Brand

Electrical Accessories Electronics Materials Filtration Solutions

Power cable accessories for various voltage classes

Electrical and electronic specialty insulating tapes, MRO tapes

Asset tracking using locating & marking products

Electronic coatings

Engineering fluids for immersion cooling

Connectors, cables, cable assemblies, sockets and embedded capacitance materials for electronic manufacturing

HCP, DNA & bioburden removal; MaB yield improvement filters

RO & Drinking Water Systems

Residential Water Purification Systems


Financial Strength

Balance Sheet (INR Lac) Mar 31, 2018

Share Capital 50

Reserves & Surplus 11,425

Non Current Liabilities 238

Current Liabilities 5,811

Total 17,524

Non Current Assets

Fixed Assets 2,416

Other Non Current Assets 2,246

Current Assets 12,862

Total 17,524

Inventory ratio

10.1

Return on Capital Employed

30.3%

Current Ratio

2.2

Fixed Asset Turnover Ratio

8.5

Receivables Ratio

5.3


Transaction Overview

Offer Price

Accepted offer to acquire all of 3M E&C Pvt. Ltd shares for value not exceeding Rs.11,816 per share (500K shares)

Deal Value

Deal value not to exceed Rs. 590 Crores

Financing

100% internally financedNo impact expected to fund ongoing working capital needs

Expected to complete transaction by Sept/ Oct 2018

Close

Transaction supported by independent valuation analysis as undertaken by independent chartered accountants -Bansi Mehta & Co. Confirmatory valuation also conducted by Deloitte Touche Tohmatsu India LLP with consistent valuation outcome.


Integration Path

High Synergies & Low Integration Costs

Q2 FY19 FY 2020 FY 2021 FY 2021+

Share Acquisition Operational Integration Legal Entity Integration

• 3M E&C becomes a wholly owned subsidiary of 3M India Limited

• Under common senior leadership

• Organization structure aligned

• Sharing of services, manufacturing & supply chain infrastructure

• Legal entity structure remains

• Assignment of contracts

• Realize full operational and corporate structural synergies

• Entity merger


Big Bold Vision Winning in India


Imagine….Enhancing home hygiene & aesthetics in 250M households

From damage free enhanced interiors and décor with Command hooks & strips to an anti-bacterial range of home cleaning tools


Imagine….Quieter rides and mindful journeys for 25M cars on the road

With 3M India’s cutting edge technology in Acoustics and Noise, Vibration, Harshness reduction enabling quieter rides for vehicles.


Imagine….Reliable energy and efficient transmission for the 3rd largest producer of electricity in the world

Enhancing confidence and reducing failures through 3M’s Heat Shrink & Cold shrink technologies across voltage classes for distribution networks


Imagine…. An India where 50 million construction workers return home safe every night

Partnering with State Governments providing Customized Safety Kits for different construction skills as well as training & education


Imagine….Futuristic architectural facades dotting all our city skylines

Partnering with leading architects in India creating next gen buildings and workplaces Young nation – Young aspirations (3M™ Dichroic Films)


Imagine….Smart and Reliable commuting with protected and aesthetic metro-rail coaches in over 10 cities

3M Fire protection solutions keep commuters protected while 3MTM Graphic films enhance passenger experience and generate Non-fare revenue


3M™ Locators and Markers are helping India’s largest mobile phone network identify & track underground assets, amidst the maze of optic fibers running across the country

Imagine….Telecom & City Utility Networks mapped across the country & located with 3M technology


3M™ Road Safety solutions and Smart Solutions are using science to make India’s highways safer, driving towards a target of Zero deaths for its citizens

Imagine….Assuring safety on every single highway in India, over 400,000 KMs in all


Imagine….Bringing India’s stories to life in 150 museums across India

Sustainable 3M Print Film wrapping the walls of India’s first Madame Tussaud’s Wax museum and delivering celebrity experience


Long lasting, non-corrosive 3M adhesive solution bonding RFID tracking tags with each panel of the statue

Imagine….A new look IndiaWith our own iconic wonders for the world to see


3M India Ready & Poised to lead India’s growth story

Big, bold, bright trajectory: Delivering value to our shareholders through investment in Brand, market differentiated profitable growth as a value partner for our customers and preferred

employer to our employees

*3M Sales $/$100M Nominal GDP

3M India Sales Entitlement v Plan

2018 2023

Plan Entitlement

GDP Sales Penetration*

(2017)

585

359

368

290

173201

Aligned to mega trends and tail wind sectors

Anchored on “Customer First” philosophy

Driving design, innovation and application development for India

Covering the demand centers through geographical penetration

Building talent and investment to match business expectations

Setting the benchmark for ethics & compliance


An Ethical Corporation is a Sustainable Corporation

Founding member of the South Asia Business Ethics Leadership Alliance (BELA SA)


ಧನ್ಯವಾದಗಳುधन्यवाद

Thank You

Documents

30 years of 3M in India · 10 August 2018© 3M . All Rights Reserved. 3M Confidential. Economic Outlook 3M’s play in Key Sectors