At 3M's annual meeting Tuesday, CEO Inge Thulin reissued his pledge to
keep the United States as the foundation of 3M's research and innovation.
Thulin, who became CEO two years ago and chairman last year, told about 350 shareholders at the River Centre in St. Paul, that the $30 billion conglomerate wants to increase its research and development from about 5.5 percent of revenues in 2012 to 6 percent by 2017.
Much of the increased R&D will take place in the United States. "International is a big opportunity for us and we have built up some [new markets] and there is still more to come ... Over $10 billion [in revenue] is here in the United States. It is the core" and will continue to be, he said.
Thulin noted that 3M is about to build a new R&D center in Maplewood that will house 700 scientists. The building, estimated to cost $150 million, will replace older labs currently on the headquarters campus.
Thulin summarized 3M's successful 2012 and noted that the company best known for its Post-it notes, Scotch tape and LCD films for TVs and cellphones saw earnings per share rise 6 percent to $6.32 a share on sales of nearly $30 billion.
While 3M saw a drop in first-quarter consumer electronic sales, 3M enjoyed strong growth in its four other divisions, especially in industrial, health care and consumer products. Latin America and Canada had the strongest sales with United States and Asia showing very modest growth.
For 2013 and beyond, Thulin told shareholders about efforts to improve 3M's product portfolio mix, division alignments with customers, and investments in R&D to accelerate growth.
Thulin also outlined an internal initiative to drive product sales. The goal is to not only introduce new products, but to also better penetrate existing products in current markets.
Besides measuring product sales, Thulin also talked about his effort to prioritize 3M's product portfolio into four categories in order to optimize growth and to identify, fix or shed problems sooner.
"Heartland" products are the mainstay of 3M. Smaller, "push forward" products are headed for fast-growth countries. 3M's "in transition' products are being fixed and often are set up for broader distribution. Lastly, products in "strategic review" are being evaluated and could be fixed or spun off.
During the 90-minute meeting, several shareholders thanked Thulin for continuing retiree health care benefits and for focusing on 3M's growth and innovation. But others said they missed 3M's old format for annual meetings, which included shareholder lunches, free goody bags full of products, and an on-site 3M store so that retirees and shareholders could stock up on hundreds of household goods. That fanfare went away during the recession.
Shareholder Mark Bradley from Maplewood asked Thulin to bring back 3M's product expo, which showcased 3M's new technologies, products, and the scientists and marketing managers behind them.
By canceling that expo, "what we are missing is what Apple does. [Shareholders] are not aware of new products and market opportunities anymore," Bradley said. "We should bring it back and maybe open it to the public. This is a chance to present these new products as fast and as functionally as possible."
Thulin was not persuaded.
"I like the current format and won't go back," Thulin said. "We have saved shareholders a lot of money by changing the format of our annual meeting. Now it's a business meeting."
Thulin said 3M relies on other formats to introduce products. He joked that 3M is expanding products for airplanes and buses and trains. Introducing some of those products at the meeting at the River Centre might make it a little crowded, he quipped.
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