Kumpf

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Kumpf

  1. 1. Hier steht die Headline Systematic Innovation: Driving Profitable Growth at Bayer MaterialScience Dr. Robert Kumpf Vice President, Future Business Americas Presentation to Commercial Development and Marketing Association, April 2006
  2. 2. Forward Looking StatementsThis presentation contains forward-looking statements based on currentassumptions and forecasts made by Bayer Group management.Various known and unknown risks, uncertainties and other factors could leadto material differences between the actual future results, financial situation,development or performance of the company and the estimates given here.These factors include those discussed in our public reports filed with theFrankfurt Stock Exchange and with the U.S. Securities and ExchangeCommission (including our Form 20-F). The company assumes no liabilitywhatsoever to update these forward-looking statements or to conform them tofuture events or developments.
  3. 3. The Core Businesses of the Bayer Group 2005 Global sales = > $ 30Billion
  4. 4. Sales Breakdown by Subgroup BMS has highest sales share within Bayer Net Sales in million EUR Health Care 36% 9,429 Mio. € Bayer 10,695 Mio. €MaterialScience 41% 5,896 Mio. € BMS 2005 Global sales = > $ 10 CropScience 23% Billion
  5. 5. BMS Products Polycarbonates Roof Construction Cellulose Derivatives Optical Data Storage Electronic Industry Insulation Multimedia Entertainment Comfort Sport and Coatings Adhesives Leisure
  6. 6. BMS Products Polyurethanes Roof Construction Cellulose Derivatives Optical Data Storage Electronic Industry Insulation Multimedia Entertainment Comfort Sport and Coatings Adhesives Leisure
  7. 7. BMS Products Coatings, Adhesives and Sealants Roof Construction Cellulose Derivatives Optical Data Storage Electronic Industry Insulation Multimedia Entertainment Comfort Sport and Coatings Adhesives Leisure
  8. 8. BMS Products Thermoplastice Polyurethanes Roof Construction Cellulose Derivatives Optical Data Storage Electronic Industry Insulation Multimedia Entertainment Comfort Sport and Coatings Adhesives Leisure
  9. 9. BMS Products H.C. Starck Roof Construction Cellulose Derivatives Optical Data Storage Electronic Industry Insulation Multimedia Entertainment Comfort Sport and Coatings Adhesives Leisure
  10. 10. Generating Growth at Bayer MaterialScience – Focus on Managements RoleOutline of Presentation:What do we mean by Innovation?Is there a business case for Innovation?Management commitment to Innovation?How we at BMS organizing and investing to achieve this growth?Which Innovation Tools have we found to be effective?Examples of trends and growth opportunities and a “case” study in open innovation at Bayer Material Science?
  11. 11. Growth at Bayer MaterialScience*innovation = implementing new ideas to create value. Growth from *innovation is a business imperative. *Innovation can come from anywhere
  12. 12. Business Case for Innovation - Qualitative A consensus has emerged that innovation in all its forms is the only true sustainable comparative advantage, be it for regions, countries, states, or private sector companies
  13. 13. Innovation “moves the needle” Is there a price premium for “innovation” in a stock price? YES!Source: Business Week , April 2006
  14. 14. Business Case for Innovation - Quantitative Sustained above GDP growth was only achieved if 30% -40% of sales resulted from new *innovations 20% GROWTH (% Change in Revenues) 15% 10% 5% 0% 0% 10% 20% 30% 40% 50% 60% -5% -10% % of revenues from innovations (last 5 years)Source; ACC 2002, Study of 50 chemical companies
  15. 15. Organizing for Sustained GrowthEveryone wants sustained long term growth but daily business interferes. Preventing this from occurring requires: •CEO and Board level-commitment•A “central” * growth-focused organization with influence and resources •A world-class process and metrics for measuring success •Passion for innovation and a tolerance for risk*not necessarily a central R&D group
  16. 16. Our Vision To turn our inherent strength into efficiency,innovation and profitable growth to cope with future challenges Growth Innovation Efficiency Our Vision „To be the best and most respected materials company in the world; supplier and employer of choice“ Strengths Leading Market Positions Global presence & diversity Product & Process know-how
  17. 17. Future Business Opportunities Key Growth Drivers New Emerging • Process development materials products new markets • Technical product New for existing with new management applications products • Application developmentPRODUCT modification Product • Product development via materials research New known Core applications • New business Competencies for existing development outside Bayer products existing portfolio known emerging future APPLICATION
  18. 18. Future Business Organization New Technologies Creative Center “Technology Push” “Market Pull” » University Interactions » Market & » New materials and application trend scouting technmologies » New business and application opportunities “Automotive E/E in 2015” “Automotive E/E in 2015” “Implement Growth” and Customer Projects » Implements profitable project ideas into new markets » Focuses on application ready to market Industry Innovation
  19. 19. A Modern “Tool Chest” for InnovationGlobal Idea - Management Systems “Open Innovation Model” To have a good idea, you need to have a lot of ideas - Thomas Edison Future Planning Tools Ideation sessions withCustomers and Industrial Designers
  20. 20. Global, 24/7, Web-based Idea Management• In the global economy ideas must be harvested 24/7• Bayer MaterialScience has established a Web-based idea management tool – North America, South America, Europe, Asia.• Event-based approach to Idea Management• Our database now contains > 2000 ideas.
  21. 21. Ideation Events: Management, Customersand Non-traditional Stakeholders Scientists and engineer now find themselves “ideating” with customers, artists, designers, and…… senior management Future Business-NALT Innovation Summit on Sustainability
  22. 22. Trend Analysis and Future Planning Tools
  23. 23. Bayer Open Innovation Model Old “Closed” Model of Innovation: •Invent and develop internally – sell what you invent •“Silo” organizations •Only national and sector competition New “Open” Model of Innovation: •Starts with questions: ? Where do we want to go, with what new technologies; and with whom ? •Core strategy and integrated organizations •International and “extra-sector” competition
  24. 24. Bayer Open Innovation Model Technology Alliances Universities (Globally) Venture Capital FundsInvestment in Start-ups
  25. 25. Results from BMS Innovation Tools An implemented innovation process Society demand Technology push Market pull Polymer technology trend scouting Market & application trend scouting New materials and process opportunities New business and application opportunities Flag- New Interface Security Sensitive Nano- Medical Sustainable Electronics Optics Energy Data Man / & Materials Technology Materials Chemistry Enabling & Light Management Technol. ships Storage Machine Defense IdeaWorks Review Priorisation Feasibility Project Management Business Units GreenhouseSenior management ia BMS is involved already in the “fuzzy front end”
  26. 26. Mass Customization and Lux for the Masses:the “my.xyz. com” Generation
  27. 27. AURA® Color Infusion TechnologyTrend Marketing and Mass Customization ► AURA color infusion technology colors already molded, extruded or thermoformed parts made from clear, translucent or opaque resins ► AURA technology is now being licensed by innovative companies in the United States and we are actively pursuing potential licensees ► Recent licensees: Replex Plastics, 3form and Apollo Color Coatings
  28. 28. New Dimensions in Data Storage MaterialScience is Actively Involved Today 600 Holography Multilayer 500 New technologies 200 – 1.600 GB 400Capacity (GB) 300 Near Field Recording 200 > 100 GB HD 100 Blu-ray DVD DVD 25 GB 20 GB CD 4,7 GB 0,7 GB 0 1980 1985 1990 1995 2000 2005 2010 2015 2020
  29. 29. Holographic Data Storage Digital Hologram Spatial light ► Page wise recording modulator ► Angle Multiplexing Volume Storage Reference beam Signal beam α Active recording Disc volume
  30. 30. The Future of Holographic Technologies Potential Beyond ODSMarket growth Market growththrough increased performance through new applications Source: Siemens VDO Source: Bundesdruckerei Source: ECB HoloProTMGerman passport with New types of holographic images - Holographic mirror for next generationholographic shadow pictures (HSPTM) for advanced banknote and brand projection displays, e.g. automotive "heads-up"made of a photopolymer security - Full-color 3-D display and image 2006-2007 2010e ≥ 2015e► Document security ► Anti-counterfeiting ► New display technologies► 3-D imaging media
  31. 31. Future Trends in the Electronics Industry Functional Polymers Entering the Scene ► Addition of new functionalities (e.g. electroconductivity, luminescence) opens up new opportunities for use of polymers in the electronics industry ► Polymer electronics adds to today´s silicon-based technologies Lighting Advantages of Flexible DisplaysIncreasing functionalities polymer electronics Large-scale Displays Barrier films ► Mass product Integrated Sensors nics (e.g. MEMS) ro ► Flexible material t Simple lec ► Cheap, disposable RFID tags erE lym ► Good processability Po Today FutureMulti-functionality as a key factor in polymer electronics
  32. 32. zaZen: Concept Car from Bayer and Rinspeed ► Debuting at the Geneva International Motor Show – March 2006 ► Holographic back light ► Smoothly contoured single-section roof dome made of polycarbonate Makrolon® ► technoGel pads used on the seats ► Car seats based on Makrolon sheet ► Coating based on raw materials with special effects
  33. 33. Future Business - Greenhouse Initiative“Greenhouse” is parts of our Future Business A Greenhouse project –initiatives , providing a platform for projects Carbon Nanotubes (Baytubes)outside the primary scope of current businessunitsFuture Business organization identifiesattractive projects and supports business caseGreenhouse is the business development phasewith milestone-controlled funding for apredefined periodAfter Greenhouse phase, business is integrated Cost-efficient manufacturing ofinto BMS business or follows exit models ultrapure carbon nanotubes Product development using New Greenhouse Core carbon nanotubes: hybrids with Business Business Business outstanding mechanical, electrical Opportunities Development or Exit and physico-chemical properties at significantly lower loadings than conventional fillers
  34. 34. Baytubes®: multi-walled carbon nanotubes Process development for large scale BTS production and polymer processing Electrical conductivity Thermal conductivity 20 nm Tensile strength 25 nm Baytubes™Main Restraints for broad commercialization ► Price and large scale availability Further information ► Quality and Reproducibility www.baytubes.comThe Goal: Low cost / high quality production
  35. 35. Greenhouse Initiative to Start-up Company
  36. 36. Organizing for Sustained Based GrowthEveryone wants sustained long term growth but daily business interferes. Preventing this from occurring requires: •CEO and Board level-commitment•A “central” * growth-focused organization with influence and resources •A world-class innovation process and metrics for measuring success •Passion for innovation and a tolerance for risk
  37. 37. Questions?
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