Life Science
Our Life Science business sector continues to be a global leader in the approximately € 220 billion life science market. As the impact of pandemic-associated supply disruptions and recent capital constraints diminishes, we are poised for growth. We anticipate a medium- to long-term annual market growth rate of 5% to 7%, which presents numerous opportunities for our Life Science business to deliver value to customers in rapidly evolving segments. Our updated strategic plan will concentrate on increasing sales and EBITDA pre by strengthening our focus on academic, biotech and pharma customers and establishing portfolio leadership. At the same time, we intend to improve our customer experience and drive operational excellence. Over the medium to long term, we will continually advance along three themes.
First, we are recognized for offering products, services and solutions that perfectly meet our customers’ scientific and technical needs thanks to our diverse portfolio. To build on this, we are strengthening a unified sector-wide portfolio strategy that aligns our offerings with the emerging needs of our target customers. Second, we will advance our new product development by increasing our research and development (R&D) allocation, pursuing bigger and bolder innovation projects and driving more collaborations. This will invigorate our portfolio with new technology anchors and bring about a step change in the value of our R&D portfolio and returns with new products. Third, we will pursue complementary inorganic paths through targeted collaborations and M&A measures to expand our offerings in attractive segments.
By 2030, we aim to have evolved our portfolio to address the needs of academic, biotech and pharmaceutical customers even more effectively along the molecule and modality journey from concept to commercialization, including discovery research, process development, manufacturing, and testing.
The pursuit of differentiation through portfolio leadership guides our business ambitions.
In Science & Lab Solutions, we aim to accelerate innovation for scientific labs and manufacturers to advance health and contribute to a sustainable future. In Process Solutions, our ambition is to anticipate and shape the future of biomanufacturing together with our customers. We will achieve this through a uniquely differentiated offering, amplified by our commercial execution. And in Life Science Services, our objective is to become an acknowledged, trusted and innovative service provider for the biotech and pharma industry, aiming for an excellent position in our targeted modalities, especially antibody-drug conjugates, viral vectors and mRNAs.
Our commitment to science and technology aligns with our customers’ needs for innovative solutions that facilitate new discoveries and manufacturing efficiencies.
While we aim to secure a lasting role as a scientific and technical leader, we must also evolve our customer experience and drive operational excellence to meet changing customer expectations and continue to grow profitably. On the theme of customer experience, we aim to provide seamless interactions along the customer journey.
We will advance our multichannel sales approach, e-commerce platform and sustainability and improve our service levels. Through operational excellence initiatives, our business processes and integrated supply chain organization will become more agile, resilient and customer-centric.
A sharper focus on the needs of academic, biotech and pharmaceutical customers will unite our teams globally around our declared purpose to impact life and health with science.
Healthcare
The global pharmaceutical industry continues to deliver robust growth at attractive margins. Although the macroeconomic and geopolitical environment has displayed increasing volatility for a number of years, the impact of cyclical and/or crisis-related market fluctuations on the industry’s underlying growth drivers – i.e. demographic shifts, increasing access to medicines and the emergence of innovative new therapeutic approaches – remains comparatively modest, resulting in relatively constant demand for pharmaceutical products. Our diversified portfolio and our geographical footprint have proven resilient and represent a solid foundation for the future success of our Healthcare business.
In developed and, increasingly, in emerging markets, the majority of pharmaceutical market growth and long-term profitability stems from innovation. Similarly, the growth of our Healthcare business is primarily driven by launches of innovative products, while our mature portfolio provides us with a strong foundation to continue our investment in innovation. Given these dynamics, we remain steadfast in our ambition to continue to grow as a global specialty innovator. Innovative launches in Oncology and Neurology & Immunology put us at the leading edge of change and fuel the growth of our business. Our ambition builds on a solid foundation, and we continue to grow our established franchises, Cardiovascular, Metabolism & Endocrinology and Fertility, both sustainably and profitably. Complementing our portfolio with external innovations further boosts our growth outlook and ensures long-term sustainability. In our decision-making, we focus on areas in which we have the best chance of success thanks to our scale and the diligent trade-off of clinical versus commercial risks in our pipeline.
Despite recent setbacks in late trial phases of our pipeline, we remain committed to innovation. We continue to drive pipeline projects with the aim of bringing innovative medicines to patients, maximizing our existing portfolio and continuing our expansion in growth markets.
To maximize the results of our R&D investments and ensure their long-term sustainability, we continuously progress our R&D model to expand our innovation capabilities. Furthermore, we aim to increase our intake of external innovation in line with industry practice in order to bolster our pipeline with more attractive business opportunities.
We continue to focus on specialty medicine franchises. Within each specialty franchise, our approach is to develop deep internal expertise and insights, from internal research to commercialization, augmented by recruiting external talent and strategic collaborations. To optimize the holistic value and focus of our pipeline, we continuously monitor and assess the potential of our pipeline candidates, based on clinical data, strategic fit and financial criteria, to determine the best way forward.
We aim to reinforce and expand our global presence, bringing the innovation of our pipeline to patients and growing our business in all major markets. With innovation being the key growth driver and the majority of absolute pharmaceutical market growth stemming from developed markets, we aim to strengthen our position in these markets through our innovative portfolio. At the same time, rapidly evolving healthcare infrastructure in emerging markets will be a large growth driver for many of our established products in the future. Managing the balance between delivering innovative new medicines while leveraging our strengths in further markets and ensuring the profitable growth of the existing business will be a strategic imperative.
Electronics
Our ambition is to be a leading partner in materials and material-related equipment as well as services for the electronics industry by maximizing added value for our customers with our Materials Intelligence™. We have successfully taken up a leading role in the semiconductor ecosystem and already serve the world’s most important industry players with one of the broadest portfolios. The semiconductor ecosystem is one of the most innovative, fast-paced and scientifically advanced industries. Our portfolio and innovation mindset are ideally suited to helping the industry overcome technological challenges. Our increasingly data-driven solutions are designed to address all areas of 3D densification, including miniaturization, performance optimization, vertical stacking, and heterogeneous integration.
We are investing in innovations and sustainable alternatives to help the industry overcome its sustainability challenges. Recognizing the increased demand for sustainable solutions, we see an opportunity to offer products that are unique in the market and lead the industry toward more resource-efficient production of end products.
The medium- and long-term growth prospects of the industry remain very attractive. The increasing importance of AI and the unabated growth of data volumes in our digital world are setting ever-tougher computing requirements for microchips, which need to be able to process more data faster (logic chips) and enable faster data access (memory chips). Semiconductors will thus continue to be indispensable in numerous industries. The most important end market growth drivers are the next generation of chips enabled by advanced nodes – especially for AI – and the end device replacement cycle accelerated by this, accompanied by an increasing semiconductor content per device. Both growth drivers will have a positive impact on Electronics’ business in wafer processing and microchip packaging. AI in particular is and will remain the driving force behind business development.
These factors are expected to act as a catalyst for growth and market development over the next decade. To produce ever more powerful and energy-efficient microchips, innovation in novel materials will be even more essential. This leads to further miniaturization and ever more complex architectures in semiconductors. We drive customer intimacy by embedding innovations and solutions from our brand portfolio in the technology roadmaps of our customers. At the same time, we are continuously broadening the scope of our offering beyond our current focus on the wafer processing chain and are investing to support the realization of new architectures through heterogeneous integration in chip manufacturing.
Additionally, we expect that expertise in optronics will become even more important. Optical technologies are gaining in importance in the semiconductor industry. Market forecasts take the same view and predict that semiconductor and optical technologies will increasingly converge. To address this growing field of convergence, we will use our Materials Intelligence™, leveraging our deep technological expertise in optics and chemistry throughout critical production processes in the electronics industry. Our strengths – ranging from organic synthesis to our expertise in manufacturing semiconductor components – are essential to utilizing new business opportunities in the field of optoelectronic technologies, such as in augmented reality, virtual reality and mixed reality, as well as the newly acquired metrology and instrumentation business of Unity-SC. Furthermore, the pace of innovation in AI chips requires heterogeneous integration with optical interconnects in order to manage efficiency and high-bandwidth data transfer as well as overcome the transmission limitation of traditional electrical wiring. Additionally, the further development of our display businesses with liquid crystals and materials for organic light-emitting diodes remains an important part of our optronics portfolio and will open up new opportunities.
In our view, we are also well prepared for very long-term trends in the industry. One example is the fusion of semiconductor technology and biotechnology, which is already emerging in neuromorphic chips and biosensors. We believe that a multidisciplinary approach to science will power the next wave of human progress; we call this approach “bioconvergence” because it leverages synergies across digital and material science as well as biotechnology.
With the divestment of Surface Solutions, we are sharpening our focus on the electronics industry in order to play an even more important role within the semiconductor ecosystem.
* The contents of this chapter or section are voluntary and therefore not audited. However, our auditor has read the text critically.