Evonik Industries : Innovation drives growth at Evonik

• New products and business models add fresh impetus
to the Group
• Value of innovation pipeline increased by a third over
the past five years
• Digital technology are further boosting innovation

Essen, Germany. Evonik plans to leverage additional growth potential with innovations. 'New products, solutions and business models will make a significant contribution to the growth and profitability of Evonik. That is an essential part of our strategic agenda,' noted Harald Schwager, deputy chairman of the Evonik Industries Executive Board and responsible for innovation. Evonik's innovation pipeline is well filled. The overall value of pipeline projects with detailed business plans has increased by a third over the past five years.

Schwager intends to quickly implement these business plans to generate additional sales from the value of the project pipeline. 'We have to bring our innovation projects to customers in faster, even more targeted ways. We will achieve that with greater efficiency in research and development, working in close collaboration with our customers,' he said. In the intermediate term, Evonik's goal is to increase the sales share from products and applications developed in the past five years to sixteen percent. This portion is currently ten percent.

Evonik wants to increasingly support customer success with digital technologies. The company announced this summer that it would make around €100 million available for digitalization projects. 'Our focus is on new business models as well as bespoke solutions and services for customers. Digital change will be an essential innovation driver, moving through the supply chain to reach our customers' industries,' Schwager emphasized.

Research & development expenses will remain at a high level with over €400 million per year. However, Schwager does not consider research an end in itself. 'It must occur in a targeted way in projects that promise more business and growth - in the short, intermediate and long term.' Accordingly, some ninety percent of funds are invested in the research efforts of the operative segments, and specifically in businesses with particularly high growth potential. The revenue share of R&D expenses (R&D ratio) in these businesses is already between 4 and 6 percent. Throughout the Group, the R&D ratio exceeds 3 percent.

'Innovation is the key to securing and expanding our market positions. On top of that, we are focusing on areas that will generate new business for us, driven by innovation,' says Ulrich Küsthardt, Chief Innovation Officer. Evonik places particular emphasis on six innovation growth fields: Sustainable Nutrition, Healthcare Solutions, Advanced Food Ingredients, Membranes, Cosmetic Solutions und Additive Manufacturing. Each of them is backed up by a clear strategy with business objectives, market goals and business models, up to and including the acquisition of competencies. 'The innovations from these fields will generate another €1 billion in sales by the year 2025,' Küsthardt explains.

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• Company information

  Evonik, the creative industrial group from Germany, is one of the world leaders
  in specialty chemicals. Profitable growth and a sustained increase in the value of the company form the heart of Evonik's corporate strategy. Its activities focus on the key megatrends health, nutrition, resource efficiency and globalization. Evonik benefits specifically from its innovative prowess and integrated technology platforms. Evonik is active in over 100 countries around the world with more than 35,000 employees. In fiscal 2016 the enterprise generated sales of around €12.7 billion and an operating profit (adjusted EBITDA) of about €2.165 billion.

• Evonik Industries has been producing specialty chemical products in the Greater China region (Mainland China, Hong Kong and Taiwan) since the late 1970's; with wide-ranging trading relations already in place prior to this in the region. Evonik regards Greater China as one of the driving forces of the global economy and we consequently endeavor to grow our business in the region. The company now has around 3,200 employees in the Greater China region, the regional sales reached about €1.3 billion in 2016.

• Disclaimer

  In so far as forecasts or expectations are expressed in this press release or where our statements concern the future, these forecasts, expectations or statements may involve known or unknown risks and uncertainties. Actual results or developments may vary, depending on changes in the operating environment. Neither Evonik Industries AG nor its group companies assume an obligation to update the forecasts, expectations or statements contained in this release.