mike kelly presentation
DESCRIPTION
TRANSCRIPT
3M Display & Graphics Business
2008 3M Investor Conference
1
Optical Film UpdateMike Kelly, Executive Vice President, Display and Graphics
Building a Sustainable BusinessIn Light Management Films
© 3M 2008. All Rights Reserved.
September 9, 2008
2
3M Display & Graphics Business
2008 3M Investor Conference
OpticalSystems
Traffic Safety Systems
TechnologyPipeline
Commercial Graphics
Display & Graphics Business
Film Mfg &Supply Chain
Projection Systems
© 3M 2008. All Rights Reserved.
3
3M Display & Graphics Business
2008 3M Investor Conference
Optical Systems DivisionLeading global supplier of brightness enhancement films that transform the display of information anytime, anywhere
Handheld devicesComputer displaysLCD TVEmerging applications – Ultra mobile PC, Automotive, Digital signs
“Enhancing the Way You See the World”© 3M 2008. All Rights Reserved.
4
3M Display & Graphics Business
2008 3M Investor Conference
Optical Film Strategies for LCDs
• Energy savings• Uniformity improvement• LCD system cost reduction
• New value films
1995 – 2007
2008 – 2009
Future
• Brightness enhancement
© 3M 2008. All Rights Reserved.
5
3M Display & Graphics Business
2008 3M Investor Conference
Recent Changes in the LCD TV Segment
LampsLamps
Diffuser plate2x Diffuser
DBEFLCD Panel
LampsLamps
LCD Panel
Transmission Up 30%
Brightness Up 15-20%
Spec Down 20%
Brightness SpecBrightness = 500 - 550
95% Color GamutBrightness = 400 - 450
75% Color Gamut
DBEF 60% Brighter
Lamps
Diffuser plate3x Diffuser
LCD Panel
Decline in DBEF demand due to:Decline in DBEF demand due to:•• Reduction in TV brightness specifications in order to reduce cosReduction in TV brightness specifications in order to reduce coststs•• Panel transmission increasesPanel transmission increases•• Improved bulb performanceImproved bulb performance
Recent Past Current as of 2008
© 3M 2008. All Rights Reserved.
6
3M Display & Graphics Business
2008 3M Investor Conference
Steady Improvements in LCD Performance
Panel Transmission
4% – 6%
As panel transmission increases, the need for brightness enhanceAs panel transmission increases, the need for brightness enhancement film ment film decreases. However, the need for uniformity solutions may incredecreases. However, the need for uniformity solutions may increase.ase.
Graphic illustration from Scientific American
© 3M 2008. All Rights Reserved.
7
3M Display & Graphics Business
2008 3M Investor Conference
But…. Our Film Value Propositions Vary by LCD Segment
Plug-in: Monitor & TVCustomer needs: Recent shift in priority from brightness to uniformity and low power~1 enhancement film per displayValue proposition has weakened over timeGrowing interest in reducing power consumption
Battery Operated: Handheld & NotebookCustomer needs: Sustained priority on thin, uniformity, low power, brightness2 or more enhancement films per displayFilms have substantial impact on power consumptionStrong enhancement film value proposition
© 3M 2008. All Rights Reserved.
8
3M Display & Graphics Business
2008 3M Investor Conference
“Plug-in” LCDs
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
2007 2008 2009 2010 2011
000
m^2
0%10%20%30%40%50%60%70%80%90%100%
% G
row
th
-
5,000
10,000
15,000
20,000
25,000
30,000
2007 2008 2009 2010 2011
000
m^2
0%5%10%15%20%25%30%35%40%45%50%
% G
row
th
TV Panel Area
Monitor Panel AreaDisplaysearch
Displaysearch
TVIndustry area growth rate slowingLower brightness specificationsFewer films / TV3M competitiveness has declinedDBEF use stabilizing
Lower pricingEnergy savings impactUniformity
MonitorSingle digit area growth rateIntense prism film competition3M competitiveness had declined substantially, but has recently improvedDBEF use growing
Lower pricingEnergy savings impact
© 3M 2008. All Rights Reserved.
9
3M Display & Graphics Business
2008 3M Investor Conference
“Battery-Operated” LCDs
-
1,0002,000
3,0004,000
5,000
6,0007,000
8,000
2007 2008 2009 2010 2011
000
m^2
0%5%10%15%20%25%30%35%40%45%
% G
row
th
NotebookDouble digit area growth to continueLED backlight usage increased significantly3M has remained competitiveDBEF use growing
Lower pricingImproved battery life
HandheldArea growth rate slowing3M has strong competitive positionDBEF use growing
BEF RP (DBEF + BEF multi-function)Improved battery life
-2,0004,000
6,0008,000
10,00012,000
14,00016,00018,000
2007 2008 2009 2010 2011
000m
^2
0%5%10%15%20%25%30%35%40%45%50%
% G
row
th
DisplaysearchNotebook Panel Area
Handheld Panel AreaDisplaysearch
© 3M 2008. All Rights Reserved.
10
3M Display & Graphics Business
2008 3M Investor Conference
Enhancement Film Industry
Area CAGR +10.0%
3M Estimate
Revenue CAGR -9.2%
Area Revenue
2007 2008 2009 2010 20112007 2008 2009 2010 2011
Mark
et S
ize $
Mark
et S
ize S
q Me
ters
Enhancement Film Industry includes: DBEF, Prism, Micro Lens, Diffusers & Reflectors
© 3M 2008. All Rights Reserved.
11
3M Display & Graphics Business
2008 3M Investor Conference
OSD LCD Sales History
Q1'01
Q2'01
Q3'01
Q4'01
Q1'02
Q2'02
Q3'02
Q4'02
Q1'03
Q2'03
Q3'03
Q4'03
Q1'04
Q2'04
Q3'04
Q4'04
Q1'05
Q2'05
Q3'05
Q4'05
Q1'06
Q2'06
Q3'06
Q4'06
Q1'07
Q2'07
Q3'07
Q4'07
Q1'08
Q2'08
Q3'08
Q4'08
Q1'09
Q2'09
Q3'09
Q4'09
Sale
s (0
00's
USD
)
HandHeld LCD Notebooks LCD Monitors LCD TV
© 3M 2008. All Rights Reserved.
12
3M Display & Graphics Business
2008 3M Investor Conference
Optical Film Strategies for LCDs
• Energy savings• Uniformity improvement• LCD system cost reduction
• New value films
1995 – 2007
2008 – 2009
Future
• Brightness enhancement
© 3M 2008. All Rights Reserved.
13
3M Display & Graphics Business
2008 3M Investor Conference
Vikuiti™ DBEF TV Energy Savings
40” Ultra Low Power LCD-TVBrightness: 350 nitsWith DBEF12 CCFLs
40” Common LCD-TVBrightness: 350 nitsWithout DBEF20 CCFLs
Removed 8 CCFLs
Energy savings initiatives create the need for uniformity solutions
Retail Proposition: Reduced energy consumption + GREENConsumer Proposition: Energy Savings of approximately $100 over 5 years
Power: 92 WattsPower: 195 Watts
© 3M 2008. All Rights Reserved.
14
3M Display & Graphics Business
2008 3M Investor Conference
Second Half 2008 Industry Outlook
LCD IndustryQ3 volume will be ~10% lower than earlier expectationsQ4 volume close to earlier expectations unless economy worsens
Enhancement Film IndustryStable industry prism film use at lower pricesTrend toward energy savings and LED use drive slightly higher DBEF use, and we expect this trend to continue
© 3M 2008. All Rights Reserved.
15
3M Display & Graphics Business
2008 3M Investor Conference
2008 Actions
Organization restructureNew leadership team
Business leadership moved to Asia – closer to the customer
Strengthened key account management
Differentiated products that are relevant to customers
Cost down focus and operational optimization
© 3M 2008. All Rights Reserved.
16
3M Display & Graphics Business
2008 3M Investor Conference
Optical Film Strategies for LCDs
• Energy savings• Uniformity improvement• LCD system cost reduction
• New value films
1995 – 2007
2008 – 2009
Future
• Brightness enhancement
AdjacenciesLED backlight componentsComputer filtersOther optical films
3M ProductsAir Guide, Film Light GuidePrivacy FiltersFront Surface Films
Expansion into adjacencies doubles market opportunity size© 3M 2008. All Rights Reserved.
3M Display & Graphics Business
2008 3M Investor Conference
17
Thank You
© 3M 2008. All Rights Reserved.