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Enterprise strategy*

Our ambition

Our ambition is to become the global 21st century science and technology pioneer. To achieve this, we will continue to focus on our “Big 3” businesses: Process Solutions and Life Science Services, new Healthcare products, and Semiconductor Solutions. Until 2025, these businesses are expected to generate approximately 80% of the targeted sales growth, and more than 50% of total sales by 2025.

Despite the current turbulent environment, which is a stress test for our business model and strategy, we remain fully on track to reach our mid-term growth target of € 25 billion in sales by 2025. We confirm our mid-term forecast for the business sectors: In the Life Science business sector, organic sales will grow 7% to 10% per year on average, driven by the strong development of the core business. Consequently, the forecast would be achieved even amid a complete absence of pandemic-related demand. The Healthcare business sector will show average annual organic sales growth in the mid-single-digit percentage range. In addition to positive contributions of the established portfolio products, growth is expected to come from new medicines and potential market launches including evobrutinib (multiple sclerosis) and xevinapant (head and neck cancer). In the Electronics business sector, our expected mid-term organic sales growth will amount to 3% to 6% per year on average driven by the strong above market performance of Semiconductor Solutions and our comprehensive portfolio in this field.

Our highly resilient business sectors are the foundation for our bold plans to accelerate efficient growth and seize organic and inorganic opportunities.

  • We attribute our high capacity for resilience to several factors, notably:
  • Good financial position: strong balance sheet, sufficient cash reserves and moderate fixed cost exposure
  • High degree of diversification in the three business sectors amid low cyclicality
  • Robust supply networks due to increasing localization
  • Lower dependency on single regions thanks to diversified footprint
  • Strong focus on sustainability as an integral part of the company strategy, linked with clear sustainability goals.

Up until 2025, we expect to grow sales organically by at least 6% on average per year, equating to an increase of more than € 1 billion annually. To this end, we are making targeted investments worldwide to expand our regional capacities, such as the expansions of our Life Science manufacturing sites in Rockville, USA, in Molsheim, France and in Wuxi, China, as well as the construction of our Translational Science Center and Launch & Technology Center for our Healthcare business sector in Darmstadt, Germany. In Electronics – as part of our Level Up program – we are investing in our highly attractive growth markets such as semiconductors by expanding our global production and innovation footprint in close proximity to our customers.

In addition to our organic growth objectives, we plan further in-licensing and bolt-on acquisitions. For example, we announced the closing of the transaction to acquire the chemicals business of Mecaro, a Korean supplier to the semiconductor industry. Another recent example is the collaboration agreement including licensing option with Nerviano Medical Sciences S.r.L. (NMS) for the development of a novel oncology drug. In addition, as of 2023, we will once again consider potential larger-scale acquisitions as an option. Our inorganic growth initiatives will fit our strategic direction, with high priority being given to the Big 3 businesses.

Looking forward, we further identify transformative technologies to be pivotal enablers for our growth and innovation ambition. Therefore, we will look into novel technologies beyond our core products and markets while keeping in strategic proximity to our business sectors to leverage our existing assets and capabilities.

Our Group Science & Technology Office is leading the implementation of our combined strategy for innovation and “Data & Digital,” fostering innovation in as well as across our business sectors through seeding and integrating transformative technology trends while harnessing the power of cutting-edge data and digital capacities. To enable our businesses and accelerate innovation through data we are deploying a company-wide harmonized Data and Analytics Operating Model and Ecosystem. This allows us to derive actionable insights from data, support informed decision-making, and scale related activities across the company to solve business challenges with machine learning and artificial intelligence. Data culture is foundational for our digital transformation. Through dedicated data upskilling activities, we are strengthening the ability of our workforce to identify, understand, create, model, analyze, interpret, communicate, and argue with data.

* The contents of this chapter or section are voluntary and therefore not audited. However, our auditor has read the text critically.

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