OC Oerlikon (OERL) investor relations material

Strategic transformation and business model

• Transitioned to a pure-play surface solutions leader, divesting non-core businesses and focusing on material science, engineering, and innovation across 10 industries globally.

• Diversified from a PVD-centric, tooling-focused business to a resilient, multi-industry platform serving aerospace, semiconductors, defense, luxury, automotive, and more.

• Integrated business model combines coating services, components, advanced materials, and equipment, leveraging high entry barriers and a global-local presence in all major regions.

• Digitalization, AI, and data-driven operations, including a Virtual Coating Center and unified global data layer, enhance efficiency, utilization, and customer intimacy.

• Strategic regionalization and customer-centricity drive growth, with local teams and solution centers adapting global innovations to regional needs.

Growth drivers and market opportunities

• Four megatrends—air travel, semiconductors, electrification, and defense—are expected to add CHF 300 million in sales by 2030, with 6% organic annual growth targeted.

• Aerospace and energy (industrial gas turbines) are key, with recurring revenues from OEM and aftermarket, and strong positions in both new builds and MRO.

• Semiconductor market exposure is expanding, with addressable market exceeding CHF 1 billion, driven by AI and electrification, and recurring revenues from equipment refurbishment.

• Defense sector growth is supported by scaling production and innovation, including additive manufacturing and advanced coatings for demanding environments.

• Asia-Pacific and Americas are prioritized for future growth, with India and Southeast Asia highlighted for manufacturing, semiconductors, and aerospace expansion.

Financial targets and execution

• Mission 2030 aims for over CHF 2 billion sales, over 20% EBITDA margin, and over 10% ROCE by 2030, with a balanced approach to growth, profitability, and capital allocation.

• Profitability improvements are driven by portfolio optimization, cost of goods sold reduction, and SG&A efficiency, leveraging digitalization and modularization.

• Capital allocation focuses on high-growth, low-capital-intensity segments, with disciplined CapEx (~4-6% of sales or ~CHF 110m/year) and strong balance sheet management.

• Cash allocation prioritizes reinvestment, dividends, and strategic flexibility, targeting an 80-90% cash conversion ratio.

• Continuous deleveraging and equity ratio improvements have strengthened financial resilience and investment-grade ratings, with leverage targeted below 2.5x by 2030.