We are the company behind the companies, advancing digital living. Our primary focus is on the electronics market with our materials and solutions changing the way we generate, access, store, process, and display information. In addition, our highly specialized, application-driven Surface Solutions business makes life more colorful. The business sector consists of three business units: Semiconductor Solutions, Display Solutions, and Surface Solutions. Comparing Electronics with a smartphone, Display Solutions represents the user interface, Semiconductor Solutions the intelligence, and Surface Solutions the aesthetics. We offer innovative solutions especially for the electronics industry – for microchips and displays – and for surfaces of every kind.
As part of our transformation program Bright Future, we repositioned ourselves and developed into a leading player in the global electronic materials market. At our Capital Markets Day on September 9, we announced the successful conclusion of our five-year Bright Future transformation, originally scheduled to take five years, two years ahead of schedule and introduced our new growth program Level Up. We seek to capture the growth opportunities that come with the significantly accelerating global demand for innovative semiconductor and display materials. This demand is driven by exponential data growth and highly impactful technology trends such as the Internet of Things and 5G. As a result, we upgraded our top-line guidance for the second consecutive time since the launch of Bright Future. As we shift from transformation into an execution and growth phase, we are aiming for an organic compound annual growth rate of 3% to 6% between 2021 and 2025.
On September 20, we announced our plans to invest significantly more than € 3 billion in innovation and capacities until the end of 2025. These investments are an essential part of the new Level Up growth program. Within the scope of the program, we are addressing four mutually reinforcing key priorities: Scale, Technology, Portfolio, and Capabilities. We are investing in digital business models and data analysis competencies, as well as expanding our production and innovation capacities and footprints in close proximity to our customers. In addition, we will continue to evaluate external growth options, made possible by potential targeted bolt-on acquisitions. We will also invest further in our people and the capabilities required to enable the future growth trajectory.
Electronics accounted for 18% of Group sales in 2021, and its share of EBITDA pre (excluding Corporate and Other) was 17%. The EBITDA pre margin was 31.3% of net sales.
Semiconductor Solutions*
Semiconductor Solutions is at the heart of Electronics and is enabling the digital transformation in communications, mobility, and healthcare. As almost every electronic device uses one of our products, we are advancing virtually every aspect of digital living. We are developing solutions for smaller, faster, and more powerful devices. Semiconductor Solutions is the largest business unit in terms of sales within Electronics and offers materials, delivery systems, and services for the semiconductor industry. The overall semiconductor market is seeing strong growth with the rising adoption of digital technologies driven by recovering automotive markets and increasing smartphone demand amid wider availability of 5G networks.
The Semiconductor Materials business supplies products for every major production step in wafer processing, including doping, patterning, deposition, planarization, etching, and cleaning. Specialty cleans, photoresists, and conductive pastes for semiconductor packaging round off the portfolio. Our business fields are Thin-Film Solutions, Specialty Gases, Planarization, and Patterning Solutions. Intermolecular is our center for complex material solutions in Electronics, located in San Jose, California, USA. There, we explore, test, and develop combinations of advanced materials for next-generation electronics. Compared to conventional methods, our approach provides significant time savings in the material development process, faster learning cycles, and detailed findings on new material combinations to provide a unique service for customers.
The Delivery Systems & Services business develops and deploys reliable delivery equipment to ensure the safe and responsible handling of gases and liquid materials with the highest quality and safety standards for electronic manufacturers.
Display Solutions*
Our Display Solutions business unit includes the businesses Liquid Crystals (LC), Organic Light-Emitting Diodes (OLED), Photoresists, Smart Antenna and Liquid Crystal Glazing. We support our display customers in developing novel display technologies and product concepts for applications, while also addressing new requirements that have emerged from the Covid-19 pandemic. With the proliferation of multiple applications and display trends, the display industry’s technological requirements are significantly expanding. We are in a leading position to develop required new display materials and technology concepts to contribute to the diverse display landscape. We are active in the development of a broad range of display materials, including LCs, OLED, Quantum Dots Pixel Color Converters, and Display Patterning Materials (DPM).
In Liquid Crystals, we continue to see very dynamic market developments. Covid-19 has accelerated the market shift towards China and increased competition. We maintained our position as the technology leader with our XtraBright™ products, winning new projects for large-area displays as well as high-resolution mobile devices. Our OLED and photoresist materials are used in multiple free-form display products. Our low-temperature processable positive tone photoresists are widely used to pattern on-cell touch sensors. These sensors enable a thinner display structure, which is crucial for foldable devices. Our Liquid Crystal Glazing business is receiving an increasing number of commercial orders for eyrise® i350 invisible privacy glazing. The transparent dynamic liquid crystal glass partitions can be switched on demand to create private spaces in public and commercial venues. In October, AVUS (automobile traffic and training road) in Berlin, Germany, celebrated the reopening of its main building which now displays a full eyrise® s350 Solar Shading facade. In September, we presented our Smart Antenna technology together with our development partners ALCAN Systems and NexTenna at SATELLITE 2021, the largest tradeshow in the satellite industry. Our LC-based technology licriOn™ enables extensive connectivity access, even in remote areas where fast internet connections are unavailable or unaffordable today.
Surface Solutions*
The core markets for Surface Solutions are automotive coatings, cosmetics, and, to a smaller extent, industrial applications. We are serving these markets with functional and decorative solutions. Our main focus is on proactive solution development in close cooperation with our customers as well as expanding our portfolio through innovation in all areas. We provide our customers with solutions that help them to create innovative surfaces of all kinds. Our materials enable more beautiful, more resistant, and more effective product designs. Our pearlescent pigments allow striking automotive coatings, fascinating cosmetics, extraordinary packaging, and innovative product design. With a broad portfolio of active ingredients, we enable cosmetics manufacturers to enrich their skin care products with moisturizing, protecting, and anti-aging effects. Moreover, with our functional solutions we serve a large number of innovative applications, from dirt-repellent and easy-care surfaces to laser markings of plastic parts and cables.
* The contents of this chapter or section are voluntary and therefore not audited. However, our auditor has read the text critically.