3M 2007 Annual Report Download - page 3

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$25
$20
$15
$10
$6.00
$4.00
$2.00
0
0
$2.00
$1.50
$1.00
Net Sales (billions)
Earnings Per Share–Diluted*
Dividends Per Share
* As indicated in the Financial Summary on
page 4, certain years include net gains (losses)
related to sales of businesses, restructuring and
other items.
2003 2004 2005 2006 2007
$18.2 $20.0 $21.2 $22.9 $24.5
2003 2004 2005 2006 2007
$2.88 $3.56 $3.98 $5.06 $5.60
2003 2004 2005 2006 2007
$1.32 $1.44 $1.68 $1.84 $1.92
Leading Through Innovation 1
sometimes through entirely new beginnings. But whatever form growth
might take, it is clear to me that there is a direct correlation between
the successful acceleration of 3M’s growth and the health of innovation
and creativity at our company. At its core, 3M remains an idea
company that prospers best when we commit ourselves to invest in
ideas, technology development and new products. Without innovation
we will not grow.
So I am pleased to report that the people of 3M are once again driving
innovation through their energy and imagination. In 2007, we increased
R&D investment (research, development and related expenses
adjusted for divestitures and special items) by 11.4 percent. Our Vitality
Index, the percentage of new products developed in the last five years,
is on the rise again. We are increasing the number of successful
new product launches and are advancing several exciting emerging
platforms, which I’ll touch on later. So we’re making good progress,
but we have much more to do before we can be satisfied.
The same can be said about our commitment to advance our growth
strategy overall. As we explained in our Annual Report last year, we
are doing this in a four-pronged approach by growing our core, by
building with complementary acquisitions, by capitalizing on emerging
business opportunities in adjacent spaces and by continuing to drive
our international growth.
In 2007, we drove $1.5 billion of sales growth, or $2.3 billion minus
divestitures. To put this in perspective, this is nearly as large as our
entire Electro and Communications Business today. All business
segments contributed to our 2007 growth, and we achieved it through
the growth strategy described above.
First, we focused on and invested in growing 3M’s core and extending
what I call 3M’s “enduring franchises” — well-known products and
brands like Scotch®, Post-it®, 3M™ Scotchlite™ and Scotch-Brite® to
name just a few. A great emerging example is Filtrete™ brand filters,
in our Consumer and Office Business, which is progressing to become
another one of our enduring franchises. The Filtrete brand of air
cleaning products was born out of 3M’s huge competency in nonwoven
materials and its growth now accompanies the increased demand of
people for clean air at home, at work and in their vehicles.