How we strengthen our innovative power. Ulrich Küsthardt June 21, 2016, Essen

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1 How we strengthen our innovative power Ulrich Küsthardt June 21, 2016, Essen

2 We make our innovation power measurable Innovation KPIs: What do we invest, what are the returns (KPIs) Innovation excellence: How do we achieve it (processes, best practices) Innovation reputation: How are we perceived (opinion survey) June 21, 2016 R&D Press Briefing How we strengthen our innovative power Slide 2

3 Innovation KPIs: what we invest R&D expenditures and R&D rates % Over 4 billion planned for R&D in the next 10 years // 2025 R&D expenditure [ million] R&D/sales [%] June 21, 2016 R&D Press Briefing How we strengthen our innovative power Slide 3

4 Innovation KPIs at a glance 57% patent-driven sales 3.2% R&D rate 500 m increase in value of innovation pipeline 434 m R&D expenditure 2,700 employees 10% sales from new products and applications 1 1) Younger than 5 years June 21, 2016 R&D Press Briefing How we strengthen our innovative power Slide 4

5 Innovation KPIs: our goals R&D rate Continue to exceed 3 percent mark in the medium term R&D expenditure 4 billion in the next ten years (from 2015) Our goals Innovation pipeline Continuous increase in value Evonik growth fields 1 billion additional turnover by 2025 Products/applications younger than five years 16 percent share of overall sales (medium term) June 21, 2016 R&D Press Briefing How we strengthen our innovative power Slide 5

6 Innovation excellence: our goals Innovation excellence Strategy Organization and culture Processes Examples of activities Definition of innovation goals Definition of Evonik growth fields Definition of strategic target portfolio Strategic research (Creavis) Project houses Innovation and Entrepreneurship Award Culture initiatives for error and learning culture Corporate Foresight Ideation Jams I2P Process Active portfolio management IP management Source: A.T. Kearney June 21, 2016 R&D Press Briefing How we strengthen our innovative power Slide 6

7 Innovation excellence: Evonik growth field example Megatrends Health & Nutrition Resource Efficiency Globalization Evonik Growth Fields Sustainable Nutrition Advanced Food Ingredients Healthcare Solutions Cosmetic Solutions Membranes Smart Materials Additional contribution to sales of more than 1 billion by 2025 Evonik Technology Competence Fields Polymer Design Inorganic Particle Design Interfacial Technologies Coating & Bonding Technologies Catalytic Processes Biotechnology June 21, 2016 R&D Press Briefing How we strengthen our innovative power Slide 7

8 Innovation excellence: project house example The setting Wide-ranging expertise (internal/external) One location, one innovation topic 50:50 financing between segments and Creavis 3-year period The aims Close collaboration with partners along the value chain Promote the internationalization of research and development Develop new competencies June 21, 2016 R&D Press Briefing How we strengthen our innovative power Slide 8

9 Innovation excellence: patent quality example 4,0 4.0 Competitive Impact 3, , , , Evonik Peer Arkema group Arkema, BASF BASF, Clariant, Clariant DSM, DuPont, DSM Lanxess, Solvay DuPont Lanxess Solvay Source: PatentSight, April 15, 2016 June 21, 2016 R&D Press Briefing How we strengthen our innovative power Slide 9

10 Innovation reputation: Perceptions and activities How innovative would you rate Evonik? 1% 14% not innovative at all very innovative The number of people who believe Evonik s aspiration to become one of the most innovative companies in the world within a few years is achievable (in %) 15% somewhat innovative % don t know/no idea 64% innovative Source: forsa, Estimations of Evonik s innovative power, Communication 47 activities 41 Collaborations 41 with scientific institutions, universities, 45 and companies Long-term orientation of research topics Product solutions of relevance to society Resource-conserving development of products and processes54 ja, dieser Anspruch ist in den kommenden Jahren umsetzbar weiß nicht/ k.a nein, das ist ein zu ehrgeiziges Ziel June 21, 2016 R&D Press Briefing How we strengthen our innovative power Slide 10

11 Key strategic objectives Focus the innovation portfolio Strengthen the innovation culture Measure success Vision Fewer but therefore larger projects Larger share of midto long-term projects Collaborations along the value chain + Ideation Jams Entrepreneurship competition Culture initiatives for the learning culture Open Innovation Increase the innovation pipeline by 0.5 billion Evonik is one of the most innovative companies in the world June 21, 2016 R&D Press Briefing How we strengthen our innovative power Slide 11

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