2019 Fourth Quarter Business Review and 2020 Outlook - (Unaudited) January 28, 2020

 
2019 Fourth Quarter Business Review and 2020 Outlook - (Unaudited) January 28, 2020
2019 Fourth Quarter
Business Review
and 2020 Outlook

(Unaudited)

January 28, 2020
2019 Fourth Quarter Business Review and 2020 Outlook - (Unaudited) January 28, 2020
2020 Earnings Calls

                                       Q1: April 28
                                       Q2: July 28
                                       Q3: October 27

27 January
     © 3M 2020. All Rights Reserved.                         2
2019 Fourth Quarter Business Review and 2020 Outlook - (Unaudited) January 28, 2020
Forward looking statement
     This presentation contains forward-looking information about 3M's financial results and estimates and business prospects that involve substantial risks and
     uncertainties. You can identify these statements by the use of words such as "anticipate," "estimate," "expect," "aim," "project," "intend," "plan," "believe," "will,"
     "should," "could," "target," "forecast" and other words and terms of similar meaning in connection with any discussion of future operating or financial performance
     or business plans or prospects. Among the factors that could cause actual results to differ materially are the following: (1) worldwide economic, political, regulatory,
     capital markets and other external conditions and other factors beyond the Company's control, including natural and other disasters or climate change affecting the
     operations of the Company or its customers and suppliers; (2) the Company's credit ratings and its cost of capital; (3) competitive conditions and customer
     preferences; (4) foreign currency exchange rates and fluctuations in those rates; (5) the timing and market acceptance of new product offerings; (6) the availability
     and cost of purchased components, compounds, raw materials and energy (including oil and natural gas and their derivatives) due to shortages, increased demand
     or supply interruptions (including those caused by natural and other disasters and other events); (7) the impact of acquisitions, strategic alliances, divestitures, and
     other unusual events resulting from portfolio management actions and other evolving business strategies, and possible organizational restructuring; (8) operational
     execution, including scenarios where the Company generates fewer productivity improvements than estimated; (9) unanticipated problems or delays with the
     phased implementation of a global enterprise resource planning (ERP) system, or security breaches and other disruptions to the Company's information technology
     infrastructure; (10) financial market risks that may affect the Company’s funding obligations under defined benefit pension and postretirement plans; and (11) legal
     proceedings, including significant developments that could occur in the legal and regulatory proceedings described in the Company's Annual Report on Form 10-K
     for the year ended Dec. 31, 2018, and any subsequent quarterly reports on Form 10-Q (the “Reports”). Changes in such assumptions or factors could produce
     significantly different results. A further description of these factors is located in the Reports under "Cautionary Note Concerning Factors That May Affect Future
     Results" and "Risk Factors" in Part I, Items 1 and 1A (Annual Report) and in Part I, Item 2 and Part II, Item 1A (Quarterly Reports). The information contained in this
     presentation is as of the date indicated. The Company assumes no obligation to update any forward-looking statements contained in this presentation as a result of
     new information or future events or developments.

     Note on non-GAAP financial measures
     This presentation refers to certain non-GAAP financial measures including free cash flow, free cash flow conversion, return on invested capital (ROIC), and various
     measures that adjust for the impacts of significant litigation-related charges, measurement period adjustments to the accounting for the enactment of the Tax Cuts
     and Jobs Act (TCJA) and the 2019 loss on deconsolidation of the Company’s Venezuelan subsidiary. These non-GAAP measures are not in accordance with, nor
     are they a substitute for, GAAP measures. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be
     found in the appendix to this presentation.

27 January
     © 3M 2020 . All Rights Reserved.                                                                                                                                           3
2019 Fourth Quarter Business Review and 2020 Outlook - (Unaudited) January 28, 2020
Today’s messages

     • Q4 performance in-line with expectations; solid margins and strong free cash flow

     • Advancing Transformation journey with new global operating model

     • Leading in sustainability and environmental stewardship; proactively managing PFAS

     • Expecting return to sales and earnings growth in 2020

27 January
     © 3M 2020 . All Rights Reserved.                                                       4
2019 Fourth Quarter Business Review and 2020 Outlook - (Unaudited) January 28, 2020
Q4 2019 summary

                                                             Sales of $8.1B, up 2.1% year-on-year

          -2.6%                         Organic local-
                                        currency growth
                                                             • Organic growth in-line with expectations
                                                             • Continued softness in automotive and electronics end-
          year-on-year                                          markets

                                                             Adjusted EPS of $1.95 vs. $2.31 last year

         $1.95                          Adjusted earnings
                                        per share
                                                             • Q4 2019 includes global organizational restructuring:
                                                                 • Pre-tax charge of $134 million, or -$0.20 per share,
         -15.6% year-on-year                                        not in prior guidance

                                                             Adjusted operating margins of 19.0% vs. 22.4% last year
          19.0%                         Adjusted operating
                                        margin
                                                             • Q4 2019 includes:
                                                                 • Global organizational restructuring impact of -170 bps
          -3.4% ppts year-on-year
                                                                 • Acelity acquisition impact of -140 bps

27 January
     © 3M 2020 . All Rights Reserved.                                                                                     5
2019 Fourth Quarter Business Review and 2020 Outlook - (Unaudited) January 28, 2020
New global operating model and streamlined structure
     Next step in transformation to improve growth and operational efficiency

                                          3M Business Group-Led Global Operating Model

      Strengthening                          Enabling more        Empowering        Streamlining and       Leveraging
    customer alignment                     powerful innovation     our people          simplifying      knowledge globally

                          Realigning functions globally, including new Enterprise Operations (manufacturing,
                             supply chain and customer operations) and Corporate Affairs organizations

                                             Q4 2019 pre-tax restructuring charge of $134 million;
                                   annualized pre-tax benefit of $110-120 million, with $40-50 million in 2020

27 January
     © 3M 2020 . All Rights Reserved.                                                                                    6
2019 Fourth Quarter Business Review and 2020 Outlook - (Unaudited) January 28, 2020
Leading in sustainability and proactively managing PFAS

     •     Guided by the principles of sound science, corporate responsibility and transparency

     •     Q4 significant PFAS litigation-related charge of $214M, or $0.29 per share

            •     Manufacturing and disposal sites

                    •     Updated assessment of environmental matters and litigation re: historical PFAS manufacturing sites

                    •     Expanded evaluation of other 3M sites that may have used certain PFAS material and locations at which
                          they were disposed

            •     Other PFAS-related environmental litigation

                    •     Updated evaluation of customer-related PFAS litigation based on continued, productive settlement
                          discussions with multiple parties

                    •     As previously disclosed, 3M has been engaged in mediation and resolution negotiations in multiple cases

     •      Cooperating with relevant federal, state and local agencies, and communities

     •      Strong team actively managing environmental stewardship

27 January
     © 3M 2020 . All Rights Reserved.                                                                                               7
2019 Fourth Quarter Business Review and 2020 Outlook - (Unaudited) January 28, 2020
Q4 2019 sales recap
     (year-on-year)

                                                           Organic local-currency growth by area:

          $8.1B                         Net sales
                                                            • U.S. -2.9%
                                                            • Asia Pacific -2.7%
          +2.1% year-on-year
                                                                     Japan -6.9%
                                                                     China/Hong Kong +0.8%
          -2.6%                         Organic local-      • Europe/Middle East/Africa -2.7%
          year-on-year                  currency growth     • Latin America/Canada flat
          volume -3.4%, price +0.8%
                                                                     Canada +2.6%
                                                                     Mexico -5.7%

          +5.1%                         Acquisitions/
                                        divestitures
                                                                     Brazil +5.8%
          year-on-year
                                                           Foreign-currency translation:
                                                            • Euro -3%, RMB -1%, Yen +3%, Real -6%

          -0.4%                         Foreign currency
                                        translation
          year-on-year

27 January
     © 3M 2020 . All Rights Reserved.                                                                8
2019 Fourth Quarter Business Review and 2020 Outlook - (Unaudited) January 28, 2020
Q4 2019 P&L
                                                       Operating income margin reconciliation:
                                                        Q4 2018                               22.4%

          $8.1B                         Net sales       Organic volume/
                                                        productivity and other
                                                                                                -1.1%
                                                                                                            Lower organic volumes; penalties
                                                                                                            from lower manufacturing and
                                                                                                            inventory absorption; benefit from
          +2.1% year-on-year
                                                                                                            Q2 2019 restructuring/other actions
                                                        Acquisitions/divestitures*              -1.4%       Acelity acquisition -1.4%
                                        Adjusted
          $1.5B                         operating       Price/raw material                     +0.7%
                                                                                                            Selling price benefits and lower raw
                                                                                                            material costs
          -13.7% year-on-year           income          FX                                      +0.1%       Net of hedge impact
                                                        Organizational                                      Restructuring pre-tax charge of
                                                                                                -1.7%
                                                        realignment                                         $134M

          $1.1B                         Adjusted net
                                        income
                                                        Q4 2019 adjusted
                                                        Significant litigation-
                                                                                               19.0%
          -15.6% year-on-year                                                                   -2.7%       Pre-tax charge of $214M
                                                        related charges
                                                        Q4 2019                                16.3%
                                                       * Includes net impact from acquisitions, lower gains on divestiture, net of related actions, and lost
                                                         income from divested businesses.

27 January
     © 3M 2020 . All Rights Reserved.                                                                                                                     9
2019 Fourth Quarter Business Review and 2020 Outlook - (Unaudited) January 28, 2020
Q4 2019 EPS
                                                  Q4 2018 GAAP EPS                           $2.27
                                                                                                          TCJA transition tax adjustment -$0.07 per share; Q1 18
                                                  Tax adjustments                           +$0.04
                                                                                                          legal settlement +$0.11 per share
                                                  Q4 2018 adjusted EPS                       $2.31
                                                                                                          Q4 2019 organic growth of -2.6%; penalties from lower
                            Adjusted earnings     Organic growth/
                                                                                             -$0.13       manufacturing and inventory absorption; benefit from
                                                  productivity/other
                            per share:                                                                    Q2 2019 restructuring/other actions
                                                    +9.0%
                           $1.95
                                                  Acquisitions/divestitures                  -$0.11       Acelity acquisition -$0.10 per share
                                                  Organizational realignment                 -$0.20       Restructuring pre-tax charge of $134M
                                                  Tax rate*                                 +$0.05        Adjusted tax rate Q4 2019: 20.3% vs. Q4 2018: 20.5%
                           -15.6% year-on-year
                                                  Shares outstanding                        +$0.03        Average diluted shares down -1.7%
                                                  Q4 2019 adjusted EPS                       $1.95
                                                  Significant litigation-related
                                                                                             -$0.29       Pre-tax charge of $214M
                                                  charges
                                                  Q4 2019 GAAP EPS                           $1.66
                                                 *The effect of income taxes on items that had specific tax rates are reflected within their respective impacts in the table above.

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Q4 2019 cash flow

                                                         Free cash flow of $1.8B, up 4% year-on-year

          $1.8B
                                                          • FY $5.4B, up 10% year-on-year
                                        Free cash flow
                                                         Free cash flow conversion of 186%
                                                          • +27 ppt benefit from significant litigation-related charges
                                                          • FY 2019: 118% conversion

          $828M                         Dividends
                                                         Capital expenditures:
                                                          • Q4 2019: $538M, up $7M year-on-year
                                                          • FY 2019: $1.7B

                                        Gross share
          $164M                         repurchases
                                                         Returned $1.0B to shareholders via dividends and gross
                                                         share repurchases in Q4
                                                          • FY 2019 cash to shareholders: $4.7B

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Q4 Business Group performance
                                        Sales     Operating
                                        Organic    Margin
                                        growth      change
                                                                                                          Commentary
                                                               •   Organic sales increased in personal safety and roofing granules while the remaining businesses
       Safety &                         $2.8B     20.9%            declined
       Industrial                       -2.8%      -1.8 ppts   •   Operating margins impacted by sales decline; manufacturing/inventory reductions; and Q4
                                                                   restructuring impact of -1.4 ppts

                                                               •   Organic sales increased in transportation safety while the remaining businesses declined
       Transportation                   $2.3B     20.8%
                                                               •   Operating margins impacted by sales declines; manufacturing/inventory reductions; and Q4
       & Electronics                    -5.9%      -3.7 ppts       restructuring impact of -1.0 ppts

                                                               •   Organic sales grew in food safety, health information systems, drug delivery and medical solutions;
       Health                           $2.1B      21.3%           declined in separation and purification, and oral care
       Care                             -0.2%      -6.7 ppts   •   Operating margins impacted by Acelity and M*Modal acquisitions impact of -7.2 ppts; inventory
                                                                   reductions; Q4 restructuring impact of -0.5 ppts; and investments in priority growth platforms

                                                               •   Organic sales increased in home improvement and home care; declined in stationery and office, and
       Consumer
                                        $1.3B     23.4%            consumer health care
                                        +0.2%      +3.0 ppts   •   Operating margins benefitted by past portfolio and footprint actions

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2019 full-year performance
                                                            Adjusted EPS of $9.10, includes:

         -1.5%                          Organic local-
                                        currency growth
                                                             • Gas and flame detection divestiture gain of +$0.21

                                                            Sales decline of 1.9%
         year-on-year
                                                             • Organic local-currency growth -1.5%
                                                             • Acquisitions, net of divestitures +1.3%
                                                             • Foreign currency translation -1.7%
         $9.10                          Adjusted earnings
                                        per share
                                                            Free cash flow of $5.4B (all-time record), up 10% year-on-year
         -13.0% year-on-year
                                                            Free cash flow conversion of 118%, includes +9 ppts net impact from
                                                            significant litigation-related charges; Venezuela deconsolidation; and
                                                            gas and flame detection business divestiture gain
                                        Return on
         17.5%                          invested capital
                                                            Return on invested capital of 17.5%, includes -2 ppts net impact from
                                                            significant litigation-related charges; Venezuela deconsolidation; and
                                                            gas and flame detection business divestiture gain; and -3 ppts impact
                                                            from acquisitions

                                                            Returned $4.7 billion to shareholders via dividends and gross share

         118%                           Free cash flow
                                        conversion
                                                            repurchases; 61st consecutive year of annual dividend increases

                                                            See appendix for reconciliation of FY 2019 free cash flow conversion and ROIC

27 January
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Delivering on our four priorities in 2019
     Positioning 3M for long-term growth and value creation

  Portfolio                             Transformation               Innovation                    People & Culture
  Realigned business groups             Realigned global             Accelerating investments in   Deepening commitment to
  around four “go-to-market”            organizational structure     Priority Growth Platforms;    sustainability, diversity and
  business models                       around business group “go-   full-year organic growth of   inclusion
                                        to-market” models            10%
  Strengthened Health Care                                                                         Ethisphere – World’s Most
  with Acelity and M*Modal              Established Enterprise       Supports organic growth,      Ethical Companies®; 6th
  acquisitions; and pending             Operations and Corporate     and premium operating         consecutive year
  divestiture of drug delivery          Affairs organizations        margins and ROIC

27 January
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2020 planning estimates
     Forecasting a return to sales and earnings growth
                                                                                                  2020 GAAP EPS of $9.30 to $9.75, up 19% to 25% year-on-year
        Organic local-                               Earnings per share
        currency growth                                                                           2019 GAAP EPS of $7.81, which includes:
                                                                                                   •   Significant litigation related charges of -$1.01
                           Flat to                                  $9.30 to                       •   Deconsolidation of Venezuela of -$0.28
                                                                                                   •   Gas and flame detection business divestiture gain of +$0.21
                           +2%                                      $9.75
                                                                                                  Sales growth of +3% to +5%:
                                                                                                   • Organic local-currency growth flat to +2%
                                                                                                   • Acquisitions, net of divestitures +3%
        Return on                                    Free cash
                                                                                                   • Foreign currency translation flat
        invested capital                             flow conversion
                                                                                                  Capital allocation:
                           18% to                                   95% to                         • Capex of $1.6B to $1.8B
                                                                                                   • Share repurchase: ~$1B
                           21%                                      105%                           • Pension contribution $0.1B to $0.2B

     Refer to appendix for the definition and calculation of ROIC and free cash flow conversion
     Above planning estimates do not reflect pending drug delivery business divestiture

27 January
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Q&A Participants

                                           Mike Roman               Nick Gangestad            Bruce Jermeland
                                            Chairman and          Senior Vice President and      Vice President,
                                        Chief Executive Officer    Chief Financial Officer     Investor Relations

27 January
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Appendix
Q4 2019 sales recap
                                         U.S.    APAC    EMEA    LA/C
         Organic volume                 -4.6%    -2.0%   -4.2%   -0.2%
         Price                          +1.7%    -0.7%   +1.5%   +0.2%
         Organic local-currency         -2.9%    -2.7%   -2.7%    Flat
         Acquisitions/Divestitures      +10.3%   +0.9%   +2.2%   +2.8%
         FX                              ----    +0.1%   -1.5%   -1.6%
         Total growth                   +7.4%    -1.7%   -2.0%   +1.2%

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Q4 Income Statement
                                         Q4       Q4
         ($M)                           2018     2019     Change
         Sales                          $7,945   $8,111   +2.1%
         Gross profit                   $3,885   $3,786   -2.5%
         % to sales                     48.9%    46.6%    -2.3 pts

         SG&A                           $1,682   $1,940   +15.3%
         % to sales                     21.2%    23.9%    +2.7 pts

         R&D & related                  $437      $521    +19.3%
         % to sales                      5.5%     6.4%    +0.9 pts

         Gain on sale of businesses      ($17)    ---       ---
         % to sales                     (0.2%)     ---    +0.2 pts

         Operating income               $1,783   $1,325   -25.7%
         % to sales                     22.4%    16.3%    -6.1 pts

         Net income                     $1,347   $969     -28.1%
         GAAP earnings per share        $2.27    $1.66    -26.9%

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Q4 2019 business segment information
                                                                                                           Organic local-currency                                       Operating
         ($M)                              Net Sales                 Q4 2019 Sales Growth                   by Geographic Area               Operating Income            Margin
                                                             Organic                      Total
                                         Q4        Q4         local-                      Sales     United      Asia                       Q4       Q4      Percent    Q4      Q4
         Business groups                2018      2019       currency     FX     M&A     change     States     Pacific   LA/C   EMEA      2018     2019     Change    2018    2019

         Safety & Industrial            $2,952    $2,811      -2.8%      -0.6%   -1.4%      -4.8%    -4%        -2%       1%        -4%    $670     $586     -12.4%   22.7%   20.9%

         Transportation &
                                        $2,441   $2,290       -5.9%      -0.3%   0.0%       -6.2%    -11%       -4%      -7%        -5%    $598     $475    -20.5%    24.5%   20.8%
         Electronics

         Health Care                    $1,708    $2,141      -0.2%      -0.4%   26.0%      25.4%    -1%        0%       2%         1%     $478     $457     -4.6%    28.0%   21.3%

         Consumer                       $1,267   $1,268       0.2%       -0.2%   0.0%       0.0%     1%         -2%      4%         -1%    $260     $296     14.4%    20.4%   23.4%

         Corporate and
                                           $3          $12                                                                                ($116)   ($385)
         Unallocated
         Elimination of
                                        ($426)    ($411)                                                                                  ($107)   ($104)
         Dual Credit

         Total                          $7,945    $8,111      -2.6%      -0.4%   5.1%       2.1%    -2.9%      -2.7%     0.0%   -2.7%     $1,783   $1,325   -25.7%    22.4%   16.3%

         Effective second quarter of 2019, 3M made certain business segment reporting changes. Those changes are reflected in the segment reporting data above.
         Refer to 3M’s January 28, 2020 press release for full details.
          Organic local-currency = organic volume + price

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Q4 sales by division
         ($M)                                                      Net Sales           ($M)                                     Net Sales
         Business groups                                        Q4 2018     Q4 2019    Business groups                      Q4 2018     Q4 2019
         Abrasives                                                  362         335    Drug Delivery                            104          105

         Automotive Aftermarket                                     336          314   Food Safety                               82            87

         Closure and Masking Systems                                304         276    Health Information Systems                219         324

         Communication Markets                                         6          0    Medical Consumables                      763          1,112

         Electrical Materials                                       294         289    Oral Care                                340          330

         Industrial Adhesives and Tapes                             689         662    Separation & Purification                 191         188

         Personal Safety                                             861        852    Other Health Care                          9           (5)

         Roofing Granules                                             70         73      Total Health Care Business Group      1,708        2,141

         Other Safety & Industrial                                    30          10
                                                                                       Consumer Health Care                       91          86
            Total Safety & Industrial Business Group               2,952       2,811
                                                                                       Home Care                                239          244

                                                                                       Home Improvement                         539          566
         Advanced Materials                                         304         285
                                                                                       Stationery and Office                    374          367
         Automotive & Aerospace Solutions                           499         457
                                                                                       Other Consumer                            24             5
         Commercial Solutions                                        414        399
                                                                                         Total Consumer Business Group         1,267        1,268
         Electronics                                                1,014        951

         Transportation Safety                                       199        204
                                                                                       Corporate and Unallocated                  3            12
         Other Transportation & Electronics                            11        (6)
                                                                                       Elimination of Dual Credit              (426)         (411)
            Total Transportation & Electronics Business Group      2,441       2,290
                                                                                       Total                                   7,945         8,111

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Certain amounts adjusted for impacts of significant litigation-related charges, deconsolidation of the
     Company’s Venezuelan subsidiary, and enactment/measurement period adjustments related to the Tax
     Cuts and Jobs Act (TCJA) – (non-GAAP measures)
                                                                                                         Operating           Operating            Income           Provision for          Effective          Net Income              Earnings Per              Earnings Per Diluted
                                                                                                          Income              Income               Before            Income               Tax Rate          Attributable to          Diluted Share              Share Percentage
       (Dollars in millions, except per share amounts)                                                                        Margin               Taxes              Taxes                                       3M                                                 Change

       Q4 2018 GAAP                                                                                            $1,783               22.4%             $1,720                  $371              21.6%                  $1,347                    $2.27

         Adjustment for significant litigation-related charges                                                                                                                (60)                                          60                     0.11

          Adjustment for measurement period accounting of TCJA                                                                                                                   41                                        (41)                 (0.07)

       Q4 2018 adjusted amounts (non-GAAP measures)                                                            $1,783               22.4%             $1,720                 $352              20.5%                   $1,366                    $2.31

       Q4 2019 GAAP                                                                                            $1,325               16.3%             $1,212                 $242               19.9%                    $969                    $1.66                            (26.9%)
         Adjustment for significant litigation-related charges                                                     214                                    214                   48                                         166                    0.29

       Q4 2019 adjusted amounts (non-GAAP measures)                                                            $1,539               19.0%            $1,426                  $290              20.3%                    $1,135                   $1.95                             (15.6%)

       Full Year 2018 GAAP                                                                                     $7,207               22.0%            $7,000                $1,637              23.4%                  $5,349                    $8.89

         Adjustment for significant litigation-related charges                                                    897                                    897                    127                                        770                     1.28

         Adjustment for measurement period accounting of TCJA                                                                                                                 (176)                                        176                    0.29

       Full year 2018 adjusted amounts (non-GAAP measures)                                                     $8,104               24.7%            $7,897                $1,588               20.1%                 $6,295                   $10.46

       Full Year 2019 GAAP                                                                                     $6,174               19.2%             $5,712                $1,130              19.8%                 $4,570                     $7.81                              (12.1%)

         Adjustment for significant litigation-related charges                                                    762                                    762                  (172)                                       590                      1.01

         Adjustment for loss on deconsolidation of Venezuelan                                                                                             162                   ---                                        162                    0.28
         subsidiary

       Full year 2019 adjusted amounts (non-GAAP measures)                                                    $6,936                21.6%            $6,636                $1,302               19.6%                 $5,322                     $9.10                             (13.0%)

      In 2019, the Company recorded significant litigation-related charges of $762 million ($590 million after tax) related to PFAS (certain perfluorinated compounds) matters and coal mine dust respirator mask lawsuits of which $214 million ($166 million after tax) occurred in the
      fourth quarter. In 2018, 3M recorded significant litigation-related charges of $897 million ($770 million after tax) related to PFAS matters of which a tax expense of $60 million occurred in the fourth quarter. In the second quarter of 2019, 3M recorded a pre-tax charge of $162
      million related to deconsolidation of the Company’s Venezuelan subsidiary. During 2018, the Company recorded a net tax expense of $176 related to measurement period adjustments to the provisional amounts recorded in 2017 from the enactment of the Tax Cuts and Jobs Act
      (TCJA), of which a tax benefit of $41 million occurred in the fourth quarter.

      In addition to reporting financial results in accordance with U.S. GAAP, the Company also provides non-GAAP measures that adjust for the impacts of significant litigation-related charges, deconsolidation of the Company’s Venezuelan subsidiary and measurement period
      adjustments to the enactment of the TCJA. These items represent significant amounts that impacted the Company’s financial results. Operating income, income before taxes, net income, earnings per share, and effective tax rate are all measures for which 3M provides the
      reported GAAP measure and an adjusted measure. The adjusted measures are not in accordance with, nor are they a substitute for, GAAP measures. The Company considers these non-GAAP measures in evaluating and managing the Company’s operations. The Company
      believes that discussion of results adjusted for these items is meaningful to investors as it provides a useful analysis of ongoing underlying operating trends. The determination of these items may not be comparable to similarly titled measures used by other companies.

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Reconciliation of GAAP amounts to free cash flow conversion
       Fourth-quarter 2019 results:                                                                  Full-year 2019 results and full-year 2020 estimate:
                                                                                                     forecast:
                                                               Q4          Q4                                                                           Full-year         2020
         ($M)                                                 2018        2019       Change           ($B)                                                2019           Estimate
         Major GAAP cash flow categories:                                                             Free cash flow (non-GAAP measure):
           Operating cash flow                               $2,258      $2,338         $80             Operating cash flow                                $7.1         $6.9 to $7.6
           Investing cash flow                                ($416)     ($5,299)    ($4,883)           Purchases of property, plant and
                                                                                                                                                           $1.7         ($1.6 to $1.8)
                                                                                                        equipment
           Financing cash flow                               ($2,152)    ($2,451)      ($299)
                                                                                                        Free cash flow                                     $5.4         $5.1 to $6.0
         Free cash flow (non-GAAP measure):
                                                                                                        Net income attributable to 3M                      $4.6         $5.4 to $5.7
           Operating cash flow                               $2,258      $2,338         $80
                                                                                                        Free cash flow conversion                          118%         95% to 105%
           Purchases of property, plant and equipment         ($531)      ($538)        ($7)

           Free cash flow                                     $1,727      $1,800        $73

           Net income attributable to 3M                      $1,347      $969         ($378)
           Free cash flow conversion                          128%         186%       +58 pts

         Free cash flow and free cash flow conversion are not defined under U.S. generally accepted accounting principles (GAAP). Therefore, they should not be considered a
         substitute for income or cash flow data prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The
         Company defines free cash flow as net cash provided by operating activities less purchases of property, plant and equipment. It should not be inferred that the entire free
         cash flow is available for discretionary expenditures. The Company defines free cash flow conversion as free cash flow divided by net income attributable to 3M. The
         Company believes free cash flow and free cash flow conversion are meaningful to investors as they function as useful measures of performance and the Company uses these
         measures as an indication of the strength of the Company and its ability to generate cash.

27 January
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Reconciliation of GAAP amounts to return on invested capital
   Full-year 2019 results:                                                                        Full-year 2020 forecast:
                                                                                                                                                                            Year 2020
                                                                             Year 2019                                                                                       Planning
     ($B)                                                                     Results              ($B)                                                                      Estimate
     Return on invested capital (non-GAAP measure):                                                Return on invested capital (non-GAAP measure):

     Net income including non-controlling interest                               $4.6              Net income including non-controlling interest                            $5.4 to $5.7
     Interest expense (after-tax)*                                               $0.4              Interest expense (after-tax)**                                               $0.4

     Adjusted net income (return)                                                $4.9              Adjusted net income (return)                                             $5.8 to $6.1

     Ave. shareholder’s equity (including non-controlling interest)              $10.2             Ave. shareholder’s equity (including non-controlling interest)          $11.0 to $12.0

     Ave. short-term and long-term debt                                          $18.0             Ave. short-term and long-term debt                                      $18.0 to $20.0
     Ave. invested capital                                                       $28.2             Ave. invested capital                                                  $29.0 to $32.0

     Return on invested capital                                                  17.5%             Return on invested capital                                                18% to 21%
     *Effective income tax rate used for interest expense                        19.8%             **Effective income tax rate used for interest expense                    20% to 21%

     Return on Invested Capital (ROIC) is not defined under U.S. generally accepted accounting principles. Therefore, ROIC should not be considered a substitute for other measures
     prepared in accordance with U.S. GAAP and may not be comparable to similarly titled measures used by other companies. The Company defines ROIC as adjusted net income (net
     income including non-controlling interest plus after-tax interest expense) divided by average invested capital (equity plus debt). The Company believes ROIC is meaningful to investors
     as it focuses on shareholder value creation.

27 January
     © 3M 2020 . All Rights Reserved.                                                                                                                                                      24
2020 key assumptions

        Growth/Portfolio                      Raw materials/Productivity                   Other financial
        Management
        EPS contribution: $0.10 - $0.35       EPS contribution: $0.25 - $0.70              EPS contribution: ($0.10) - flat

    Organic growth flat to +2%              Raw materials: includes tariffs, and          Non-op Pension: flat year-over-year;
                                            sourcing cost reduction projects              cash contributions $100-200M
    FX neutral to sales: spot rates of
    Euro 1.12, RMB 7.00, JPY 109,           Productivity: normalized manufacturing        Tax rate 20% to 21%
    BRL 4.05                                utilization and inventories; manufacturing/
                                            SG&A productivity; Lean Six Sigma             Share repurchases ~$1B
    Acquisition/divestiture +3% to sales:
    primarily from Acelity acquisition      2019 headwinds: year-on-year headwinds
                                            from variable compensation; and gain from
                                            sale of certain properties

                                            2019 restructuring: tailwinds from charges
                                            and related year-on-year savings

27 January
     © 3M 2020 . All Rights Reserved.                                                                                            25
2020 organic local-currency growth expectations
                                                               By Business:

      Health Care                       Safety & Industrial            Transportation & Electronics           Consumer
      2% to 4%                          0% to 2%                       -2% to 2%                              1% to 3%
                                                              By Geography:

        Americas                                      EMEA                                     Asia Pacific
        1% to 3%                                      -1% to 1%                                -1% to 3%
27 January
     © 3M 2020 . All Rights Reserved.                                                                                    26
2020 EPS roadmap
                                                                                                                                             $0.50 to                   ($0.10) to
                                                                                                                                              $0.60        Neutral        $0.00      Neutral
                                                                                                    $0.00 to
                                                            $0.05 to                   ($0.05)       $0.10                      $0.00 to
                                                 $9.10                      $0.10                                  ($0.25)                                                                     2020
                                        $0.28                $0.30                                                               $0.25                                                         GAAP
                         $1.01                                                                                                                                                                 $9.30
                                                 2019                                                                                                                                            to
                                                Subtotal                                                                                                                                       $9.75
        2019                                     $8.89
        GAAP
        $7.81

                                                                   Growth and                                                                                            Other
                                                                                                         Raw Materials & Productivity
                                                              Portfolio Management                                                                                     Financial

        $0.21        Gas & flame detection business divestiture
     * Full-year 2020 net interest expense increase of approximately $80 million related to acquisitions is included in the “Acquisitions & Divestitures Impact” category

27 January
     © 3M 2020 . All Rights Reserved.                                                                                                                                                                  27
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