Ladies and gentlemen, welcome to Evonik in Essen, and welcome to our first part of our division spotlight series for 2021. Of course, it's a bit strange today for us to only talk into the black lens of the camera. We would have loved to have you here Essen with us to look directly into your faces and into your eyes, but I'm sure you're sitting in front of your screens and following the event very closely and very attentively, and I hope that's also the case in London, even though the pubs are open again since yesterday. As you know, we have implemented our new divisional structure about a year ago, mid 2020. And for us internally, this has already become like the second nature.
Externally, I think the new structure has helped already in the last year to give a bit more transparency and especially to highlight the resilience of our divisions in the last year, and I think this will continue also into this year. So we thought it's now a good time to shed a bit more light onto the 3 growth divisions and then you set up. The kick off today is with Nutrition and Care. With me today is the management team of Nutrition and Care, That is Johan Casper Gamelin, the head of the division Thomas Riehmeyer, the head of the health care business line, Emmanuel Auer, the Head of the Animal Nutrition Business and from his home office in France, joining Jan Der Wer for Care Solutions. The agenda for today is intentionally not a dog and pony show, to go through each and every detail of the division and to break it down into all the details, whatever.
We want to give you the strategy, the long term strategy of the division. We want to show you some of our most promising seeing growth areas of the division, and you will see Nutrition and Care has quite a lot of them. Or let's to put it differently, we want to show you what the division will look like in 10 years' time from now. The agenda for today will start with Casper on the overall divisional strategy. After that, we will follow-up with Jan and Thomas series on the business lines, Care Solutions and Healthcare, and finally, back to Kasper for some closing remarks that will be followed by the Q and A session afterwards.
You can already post your questions In your browser, in the Q and A chat of your browser, and we will obviously try to answer all your questions Today, as long as time allows, we are planning to end this session here by about 4:30, so after 1.5 hours. We will also have 1 or 2 questions already in between the presentation, between the different speakers and their different parts. So already 1 to 2 questions there. Before I hand over to Kasper, let me become a bit more philosophical by saying, I have a dream that one day We have an event on Nutrition and Care without talking about methionine. And maybe this day is already today.
I guess, more or less, all has been said over the last 8 years since Evonik has listed about methionine to nearly all investor. So in the course of today, Kasper will share his general strategic view on methionine in the Of course, of this presentation and Emmanuel in the Q and A will give you brief comments on current trading in methionine. And I guess this should give us more room to discuss all the other interesting growth areas in Nutrition and Care, if it's drug delivery, if it's active ingredients, if it's biotechnology or if it's sustainable nutrition. And by the way, these from these areas, In about 10 years' time, we expect more sales than from methionine. So that's so far from me.
And with that, I hand over to Kasper for the presentation.
Bringing nutrition and care to life for life and living, that's what this Evolving divisional spotlight is all about. It's an exciting story. It's an exciting story about leading technology platform, a full loaded innovation pipeline and amazing sustainable solution. Together, this all offers huge growth potential. That's why Nutrition and Care is one major value driver for Evonik.
We want to convince you. We want to inspire you with nutrition and care, with our management agenda, growth, performance people. We that are the 3 business lines heads, that's Jan Der We for personal care, Thomas Riemmeier for Healthcare and Emmanuel Auer for Animal Nutrition. My name is Kasper Gamelin. I'm President of Nutrition and Care.
I'm with Evonik almost since 30 years. My last 10 years highlights are I had a corporate strategy Contributing to refocusing Evonik towards a pure chemical play, selling the utilities in real estate, a A set of Performance Materials, I restructured the business and made methanoloclates business ready for divestments. And since almost 2 years, I'm heading the division Nutrition and Care. So let's have a deeper look into our new responsibility towards Nutrition and Care. The new division, Nutrition and Care, was launched in July 2020 When Evonik recognized reorganizes its business in the new setup, Nutrition and Care has The clear focus, human life.
That is in the center of everything we do. Our business is based on active ingredients, not materials. Our operating space compromised personal care, cosmetics, household smart cleaning solutions. It's about active drug deliveries, Business with around 5,000 employees, about €3,000,000,000 turnover that represents around 25% of the overall Evonik revenue. With our strong positioning in attractive and resilient markets and the well filled Innovation pipeline, Nutrition and Care has the potential to be a strong value driver for Evonik.
Bringing Nutrition and Care to life means to enable the new setup to realize its full potential, Leveraging our market access, focusing on core technology platforms and bundling our innovation And we have a great positioning for highly attractive growth. Why? Early on, we have identified some most significant trends in the market and built the foundation on our future growth to deliver. For us, It was clear that sustainability will shape our markets. You, we, we as consumers, ask for more sustainable solutions.
Every one of us is looking for healthier, more sustainable products in cosmetics, health care and nutrition. We enable human well-being within planetary boundaries. We are active in the area of biotechnology for more than 30 years and develop highly sustainable and bio draggable active ingredients. Biosurfactants are now ready to invest. And our Doctor.
Straivman's acquisition 2017 with its alternative preservation systems fits perfectly and supports the need for more natural cosmetics and bio durable cleaning solutions. We enable effective and accessible health care. For years, we have been developing our advanced drug delivery offerings with acquisition and on growth to better deliver more personalized healthcare solutions. Today, we are already a trusted and growing supplier of various products and services for messenger RNA related drug Delivery Solutions. We enabled climate and natural positive food systems.
We make antibiotics obsolete in livestock farming with our gut health solution driven by our probiotics portfolio. Our natural algal OIST Omega 3 assets are preventing the need of using wild caught fish in aquafarming. That is a strong contribution against overfishing and loss of biodiversity. And this is not all. We intend to do much more and will do so, leveraging our strong innovation pipeline and targeting technology acquisitions.
Bringing nutrition and care to life for life and living, we have Our strategic management agenda for a clear and consistent implementation is simple: growth, performance, people. Growth. Profitable growth is key to meet our ambition as a leading nutrition and care player. We will focus on more sustainable differentiation solutions for our customers. To finance our own growth ambitions, we have to strengthen our self financing power, portfolio adjustments, asset optimization, Continuous operational excellence programs.
People. In striving for knowledge based business models, it's crucial To have the right people in the right place at the right time, striving for best competences is essential. So let's elaborate a little bit more on the strategic levers, what we have achieved already and what has to come. Let's start with people. In future, we will operate in an even more knowledge based and innovation driven business.
Attracting and retaining the most talent workforce is crucial. Our global setup gives us access to these people. We operate 9 R and D sets and 20 application labs at 38 sites around the globe. We have 17 nationalities working in Nutrition Care. More than 70% of our people are non German, 30% of our management is Female and 20% of our workforce is dedicated to R and D and application services.
As I said, Our business is built not only on excellent product performance, but on knowledge. Therefore, people and talent are Important for our successes, our new, more focused organizational setup gives us the opportunity to also renovate our culture. It's not only common markets and technologies that connect us but also a common purpose and the values that bring our people together. Today, we are even much more in fostering true collaboration across all three business lines, Bringing the people together that have barely worked together before, trying new ways of working, Creating an organization that is acting more like a network, tackling the complexity of finding the best solution into Nutrition and Care Markets. People to advance our businesses.
Performance. We placed 3 initiatives under our performance lever, portfolio adjustments, asset optimization and operational excellence. We at Nutrition and Care strive for more sustainable growth. Precise KPIs guide us products with Superior sustainability profile. EBITDA margin above 22%, a ROCE above 14 presented.
Anything that does not meet these expectations will be handled accordingly: fix it, sell it Asset optimization means sweating our assets as well as maximizing the efficiency and their utilization rates. Whatever we do, We grouped our methionine production into 3 major international hubs: Singapore, Antwerp and Mobile. Consequently, we recently terminated methionine production at the Wesselink site in Germany. The second example is our site in Slovakia. It used to be an animal nutrition site, but we repurposed it so that it's now a Nutrition and Care.
The 3rd example is the optimization of our Care Solutions production network. To consolidate And to improve the asset network, we'll meet the future requirements for a higher share of specialties. Operational excellence. Our operational excellence programs across all business lines ensure that we are ready and prepared for future growth. This will be achieved by BL specific robust continuous improvement processes like OYO, Adjust or Austin.
So let's summarize the performance initiatives. All three performance initiatives help us to increase the productivity, strengthen the return on the investments and clear the way for further growth. Consequent asset and net working capital management brought the ROCE up by 200 basis points. Also going forward, we see future significant potential across all three performance initiatives. We are targeting annual cost saving Approximately €30,000,000 per year that overcompensate our annual factor cost increase.
Series. But our ambition only can be reached by accelerating our profitable growth. In future, Nutrition and Care will follow an even more focused growth path. We have a strong position in attractive markets. Series.
Many of our markets are highly regulated like drug safety or food standards. Sustainability is And this growth is knowledge driven, innovation driven, and that's what our expertise make us available in these markets. Care Solutions, Healthcare and Animal Nutrition have a general market growth of around 3%, but we will shift our focus even more towards these growth fields, more attractive submarkets with above market average growth rates like skincare, drug delivery or gut health. Towards these markets, we have already a well established success. We have long term customer relationships built on trust.
Due to our global setup, we can serve customers globally. Our marketing along the value chain offers access to multiple value pools. Because of this, We will unleash the full potential and outgrow the relevant markets by our new setup and clearly focusing on Common technology focus and reaching higher margin levels by concentrating on our system solution approach. Technology platforms that are used by all three business lines. Strong technology platforms applicable for various applications additive advantage.
We will use these technology platforms and the relative asset structure even more as one common base building on our strengths but also leveraging them in all businesses. Our wheelchair acquisition, which is relevant both for Care Solutions and Healthcare, it's a very good example for this strategy. Let's pick our biotechnology platform to explain in more detail how we bring to life the technology platform First, you can say Nutrition and Care is the home of biotechnology at Evonik. All promising Evonik Biotech projects are dedicated to Nutrition and Care. Over the last 30 years, we have built broad and differentiating competences in white biotechnology.
Within biotechnology, two areas of expertise besides many others are microbiome modulation and the development, Operation Optimization of Biotech Processes. Today, we operate 6 major sites and 4 continents where biotechnology is applied on a business scale with an industry leading fermentation capacity. All three businesses The Nutrition and Care rely on biotechnology for established products, but even more so for new products. We talked already about our portfolio biosurfactants, active ingredients, amino acids for pharma applications or gut health solutions. To accelerate process and product development across all the business lines, we just consolidated our R and D for all customers.
For bio based solutions, we expect sales to rise up to €1,000,000,000 by 2,030 late. And these products are excipients or active ingredients with differentiating properties already. Sustainability benefits that offers higher barriers to entry and higher EBITDA margins. In the system solutions, we refine And a product with formulation or application services, sometimes we combine them with digital services, and often, We developed them in a co creation process with our customers, tailor made for complex systems like human skin, Human Body or Animal Gut. With System Solutions, we will serve all three growth fields: Care Solutions, Healthcare and Sustainable Nutrition.
We expect this share to more than 50%, all of it with a margin potential above average. Examples of how we will achieve this. Our retinol for personal care application is encapsulated with our delivery technology to increase stability and bioavailability. Lipid nanoparticles for parenteral drug delivery systems, What's the livestock, which make antibiotic growth promoters in chicken farming obsolete? And methionine?
With an approximately 5% annual volume growth. With our sharpened focus on 3 methionine production hubs, Evonik is in the cost leadership position. Methionine is delivering and will deliver strong cash flows to Nutrition and Care. We are well invested, and we will spend CapEx in methionine only for three reasons: maintenance, Global customer base in more than 120 countries, methionine is the entry ticket to build up and strengthen our sustainable nutrition business. Trition and Care.
This will automatically lead to a lower share of Methionine within our portfolio over the Ladies and gentlemen, this is the end of my first part. My colleagues Jan and Thomas will give you now some very tangible examples or system solution approach underlying our ambition to be a growth driver for Evonik.
Thank you, Kasper, for the first part of your presentation. We will hear you later again. Let us interrupt here a bit and start maybe with the first question that is already related to the first part of your presentation. The question is, you talked about further portfolio adjustments. You talked about further asset optimization.
What is your plan? Do you have any further next steps in mind already? What is the agenda here in terms of developing the portfolio further and potentially further divestments of the portfolio.
Yes. First of all, we have to Sarah, I have To repeat that we and each and every business have to benchmark itself against our KPIs that I already mentioned during my presentation. That is mainly the EBITDA margin around 22% and the ROCE about 14%. And everything that doesn't meet this expectation will be handled accordingly. Give me 2 examples.
The Oliu platform, for example, here we bring together 2 businesses, Health Care and Personal Care. We make portfolio adjustments, really concentrating more and shifting the portfolio more to the specialties. We consolidated our asset park mainly in Europe By consolidating Esterquats and Betaine's closing plants in U. K. And Spain, overall, that result in Savings of about €30,000,000 in the last 2 years and the loss of 100 30 employees.
2nd example is that we work heavily on our bioamino assets strategy. We run already cost improvement programs in the Americas sites, in North America and South America. We stepped out on the production of our trunnine and tryptophan of our own production. We closed the plant in Hungary. We repurposed the plant in Slovakia as a biotechnology hub.
And we shifted already half of our lysine capacities in lysine towards a more A promising application that is the LG Oil Omega 3 assets, which we jointly produce with DSM at our blast site, Veromases. That are two examples in the recent years. More has to come, and We will further optimize our portfolio towards our approach, towards our growth strategy, towards our more Specialized portfolio by addressing all three levers: portfolio optimization, asset Optimization and continuous improvement and growing towards specialties.
Thank you very much, Kasper, for these first insights. I guess, we'll leave the other questions for the 2nd part or for the main part of the Q and A after your second part of your presentation. And with that, I would like to hand over to Thomas for a deeper look into our Healthcare business.
Yes. Thank you, Tim, and also a warm welcome from my side. My name is Thomas Wehrmeier. I'm a chemist by training. I have been with the company since over 20 years, served in many functions like R and D, business development, marketing, general management, mainly with a strong focus on the life science industry.
The Healthcare business line is really my natural habitat. I've been with Healthcare since a decade before I then took over the lead of health care about a year ago. During this time, we transformed the health care product line for which I And today, I will talk to you about some of our attractive growth opportunities within the Health Care business lines. In my presentation on health care, you will find some similarities to Jan's presentation later on, and this is what we mean with bringing nutrition and care set up to life. We share important technology platforms, for example, our biotechnology platform, but also our delivery technologies.
And for all three business lines, System Solutions is at the center of our growth strategy. And just like Care Solutions, Healthcare has demonstrated strong growth and high innovation power over the last years. This is nicely demonstrated by, on average, more than 10 product launches per year. We are close to our customers. The selected market segments we serve are characterized by both attractive margins Today, we would like to take a closer look at our advanced drug delivery systems before we then to dive deep dive into our lipid nanoparticle drug delivery technology.
So What is a drug delivery system? A drug efficacy is significantly impacted by the way in which the active pharmaceutical ingredient, The API gets released in the body. Very often, it is the drug delivery system that enables the therapeutic of the API. So advanced drug delivery systems are products and technologies for targeted delivery and controlled release of an API. Drugs can be administered to the body via several different routes, and the most important routes of administration are oral and parenteral, and Evonik Healthcare is an spurt and BOSS.
We have over 65 years' experience in this space, and today, we are a leading integrated CDMOs or contract development and manufacturing organization for both platforms, oral and in parenteral drug delivery. We support our customers with highly flexible and tailor made system solutions along the entire value chain, during of the final drug product. Our advanced drug delivery solutions are commercially proven across a variety of of therapeutic areas with a broad range of APIs. And I would now like to deep dive into the field of lipid nanoparticles, which is one of our parenteral drug delivery technologies. Pharmaceuticals using nanoparticles composed of lipids and due to its application in leading mRNA based COVID-nineteen vaccines.
Evonik is one of the very few integrated development and manufacturing partners for LNP based medicine, including cell and gene therapies. Piece. Our broad portfolio of products, services and technologies allows us to support customers of key excipients for lipid nanoparticles. We offer a broad portfolio of lipids, including our own products, and we also serve the market as a contract development and manufacturing organization for lipids. For example, as part of our Strategic partnership with BioNTech, we are establishing new production lines for 2 of the critical lipids used in the COVID-nineteen vaccine.
In addition to that, we offer a non animal derived cholesterol under the brand name Phytocoll, which is also part of some of the current with 19 vaccines. The next step in the value chain are formulation and process development as well as clinical during. And this brings us to the beating heart of the LNP technology. LNPs are created through a complex process of the lipids with, for example, a fragile mRNA. And this critical step must be scalable under pharmaceutical quality standards.
And this is exactly our expertise in Vancouver, where we can manufacture up to clinical scale. Vancouver is the center of our activities around series. We recognized the potential of the LNP drug delivery technology very early on and made a targeted investment in this promising technology. In 2016, we acquired Transvera Nanosciences based in the Vancouver area. For manufacturing commercial quantities, including fill finish, we or are involved in the development of leading mRNA COVID-nineteen vaccines or we manufacture lipids for the supply of those vaccines.
And beyond vaccines, we have been involved in over 100 LNP projects with pharma and bio tech companies globally. So we are very well positioned in the market, thanks to our integrated at system solutions approach. Our position along the entire value chain is valuable per se, and our deep understanding enables us to serve as an eye to eye partner to the industry and not just as an XCPN supplier. We are a competent partner for our customers. We do have a deep understanding of the application, and we support them vision to expand our leading position as an integrated development partner in cell and gene therapies We currently plan to strengthen our activities in Vancouver with a competent center for nucleic acid formulations, and at the same time, We are evaluating to expand our commercial fill finish capabilities.
The success of mRNA in fighting the COVID-nineteen pandemic is accelerating a fundamental paradigm shift in the pharmaceutical industry. The launch of the first mRNA Based vaccine in late 2020 marked the breakthrough for this new class of therapeutics. And currently, LNPs are the industry standard for the delivery of mRNA. This is leading the way to unlock the untapped potential of LNP based cell and gene therapies. The market is very dynamic and is moving at unprecedented speed.
And beyond vaccines against COVID-nineteen, there are other exciting developments going on. For example, cancer immunotherapies potentially becomes the next area for mRNA therapeutics. And because, again, of our successful system solution approach, we are already taking part in some of these exciting developments. We are involved in a double digit number of mRNA projects at various development stages from feasibility to commercial. And since 2016, we share the share of mRNA Projects in our LNP technology platform has grown to 70%.
We expect the pharmaceutical end market for LNP based cell and gene therapies to be above US50 $1,000,000,000 by 2026. Out of that, Our accessible market will be above $5,000,000,000 by that time, and we aim to take a relevant share of that market, resulting in a clear triple digit €1,000,000 sales potential over the next years. So let me summarize our strong positioning in drug development and drug delivery solutions. We are recognized by the industry as a leader and an innovation hub for the most relevant advanced drug delivery technologies along the entire value chain. We have a very clear idea of our current and future position in the market, significant market insight and a strong relationships with our customers and partners.
And all this puts us in an excellent position to continue our growth in drug delivery.
Yes. Thank you very much, Thomas. As you can see on the order of the slides, I was so excited about our opportunities in health care that I switched the 2 parts between health care and care solutions. But I can promise you, care solutions is not less exciting. Before we come to that, let Me also let us also squeeze in here a question for the Healthcare business already asked in the Q and A chat.
Please feel free to enter any further questions already now. In the chat, Thomas, the question is, you talked a lot about drug delivery systems in your presentation, exciting opportunity. But what other growth areas are there outside drug delivery in your health care portfolio?
So welcome. There are several exciting growth opportunities within our portfolio, and we typically go into new areas by building on our competences and also by following a clear solution system approach. I just want to highlight briefly 2 of our other growth In our portfolio, the one being Medical Device Solutions, the other our Cell Culture Ingredients business. So we set up a dedicated Team, a dedicated business segment on the Medical Device Solutions some time back. We invested here in Application areas in China, in the U.
S. And in Germany, and we also set up an R and D center for medical device solutions in the United States. In addition, we added special technologies and surface modification and also complemented the material portfolio with 2 targeted technology acquisitions. So we also see pharma and medical device converging, so So we can really build on our competencies in both areas, in pharma as well as in med device and materials to expand the business even And when it comes to innovation, we developed a non animal derived collagen based on our biotechnology platform that we brought to the market last year. We received a lot of positive feedback actually from the market and also here other businesses within Nutrition and Care benefit from this exciting development.
Cell culture, my The other example, the build more or less organically coming from our pharma amino acid business. We see a lot of growth over the last 5 years for amino acids, for D peptides, for other boosters in this business. And a part of this growth is driven Pharmaceuticals like monoclonal antibodies or other vaccines that are used to fight COVID-nineteen. So it's not just in the drug delivery. There are also other areas where we are heavily involved fighting COVID-nineteen.
And again, we're leveraging for the manufacturing of our cell culture ingredients, but also when it comes to the application, really our biotechnology platform of Nutrition and Care. So these are just two examples where of the platform of Nutrition and Care. So these are just two examples where we build on our competencies on our strong technology platforms following a System Solution Approach to grow our business.
Yes. Thank you very much, Thomas. And now we come to Care Solutions and we come to Jan. So we switched to France. And Jan, we are looking forward to your deep dive into Care Solutions.
Thank you, Tim, and welcome from me as well. My name is Jan Verdel, I'm a chemist by education. I'm French and American. And for the last 25 years, I've worked in Europe and America, Evonik in operations, Business, sales and marketing. I've been part of several business lines such as oil additives, Pharma Polymers, Health Care and now Care Solutions.
For the past 10 years, I've had the opportunity to build a global Sales and Application Technology team at Erwin Healthcare in order to sell series. There are various opportunities with Care Solutions. This is a very dynamic market where clients are extremely open for development At Care Solutions, we've built a very strong sustainable specialty portfolio and geared toward the personal care and cleaning markets. We built this portfolio with our own strong innovation power complemented with selected acquisitions. The innovation and sustainability efforts of Evonik are recognized by our customers, not only with Innovation and sustainability awards like for our biosurfactant solution, for example, but also through increased inclusion of our system solution in our clients and formulations.
Recently, our portfolio has been upgraded Through targeted acquisitions such as Wilshire and Doctor. Straitsman as indicated by Caspar. Due to Doctor. Straitsman, We can provide a sustainable preservation system to customer formulations and with which But nonetheless, we have clearly outperformed market growth in 2020. Skincare and dermocosmetics are extremely dynamic markets from a growth, but also from an innovation standpoint.
The end consumers want products with benefits for the skin. For this, You need to develop products with scientifically proven claims. In response, Evonik has developed and acquired competencies To better understand the skin as a complex system, and we've also developed skin models and acquire technologies such as Inner Health to rapidly assess the scientific benefits of ingredients. This allows Evonik to become to develop and launch unique active ingredients with scientifically proven claims that are highly attractive for clients and consumers. Claims can be centered around anti aging, skin defense, moisturizing, rebalancing and purifying.
And we will do the same in 2021. Kaspar has explained our system solution concept to you. We At Care Solutions are the perfect example of creating superior customer value along all parts of the value chain. We have developed a complete offering from functional ingredients over active ingredients to active delivery systems and alternative preservation systems. Let me describe it this way.
We market active ingredients with substantiated claims And we develop and support formulation for our clients. We've developed system solutions such as ready to use formulations and delivery systems that make it easy for our customers to include in their final products. As you can see, There are multiple benefits and the value for our customers is enhanced. Let me now share 2 concrete examples. The first example is SK Influx.
This is a ready to use formulation containing the essential, I mean, ceramides, cholesterol, A proprietary emission system and preservation system that increases the effectiveness of ceramides and makes them easy for our clients to use. This is a very synergistic proprietary system solution that increases the value for our clients And the consumer in comparison to standalone ceramides. As you can see, there are multiple substantiated claims. Another example is our Inumax advanced retinal. This is an encapsulated retinal that increases stability, Reduces irritation potential and enhances bioavailability to the skin.
Those are just two examples amongst many that show how our system solutions support our clients by ensuring they are easy to integrate in their products and are supported by substantiation claims. Our unique setup of competencies has delivered a strong growth track record and we are determined to continue on that path. With our active ingredients and active delivery systems, We have consistently achieved double digit growth for the last 20 years and are reaching triple digit €1,000,000 sales. In 2020, we were able to grow the active ingredients and active delivery business organically by more than 20%, even despite the COVID-nineteen crisis. With our recent acquisition and own innovations, We are convinced we will deliver clear double digit organic growth rates going forward.
A lot of this growth is actually secure via contracts. With our high barriers to entry and our asset light approach, we are also very satisfied with the development of our financial performance. Additionally, our size, our international presence and our understanding of complex systems Put us in a unique position to spot smaller but very valuable M and A targets at attractive valuations and to grow their value as part of our portfolio. Recent acquisitions such as With Schier with Schreichterkol in particular have been leveraged beyond cosmetic application and are enabling Further growth in healthcare in mRNA delivery as just mentioned by Thomas. Dean, back to you.
Yes. Thank you very much, Jan. And maybe also Here, a first question to you, which comes from Jaydeep Panjia from On Field Research. What do you consider your relevant peers in Care Solutions. And also, if you compare yourself in terms of the margin profiles, Do you still see a gap to these peers?
And how do you plan to close this gap over time?
Yes, this is a good question and the one that we have in mind all the time. Ian?
So we are still fighting with the Challenges of this digital and virtual format, we are hoping to have Jan back. There, I can hear you, Jan. Yes, looking good. Jan, you want to go ahead? Yes, let's
hope. We have in mind all the time, right? In cosmetic, Sorry, Tim, can you hear me now? Yes, yes, yes. Okay.
So Again, in Cosmetiq, we compare ourselves to system solution providers such as Croda, Simrise and Gborden. Those peers have a portfolio more oriented towards system solutions than our portfolio currently. But Recent acquisitions, divestments and own innovations such as biosurfactants are bringing closer every day. Our growth in active ingredients and dairy systems, very, very effective, right, is certainly a benchmark for the industry at the moment As it is much higher than the market. For example, we grew by 20% last year and expect to continue in upcoming years.
And we also continue to learn from our customer on what is important for them. We develop with our customers next generation solutions And this intimacy will make us even better moving forward. So we are getting closer.
Thank you very much, Jan. And with that, we come to the final part of our presentation, the wrap up by Casper before we then go into the Q and A session.
Ladies and gentlemen, You can see from the two examples what we mean by system solutions and how we are built on technology platforms and joint Capabilities and Competences. You could see the synergistic effects between Care Solutions and Healthcare. In both examples, we started from a high value product and excipients in case of health care and active ingredients in the case of Care Solutions. In both examples, we refined them to a system solution with formulation know how and our technology platform delivery systems. And on top of our business, we use the same assets, making them even more synergistic and improving capital efficiency.
Ingredients alone, both are already high available. Our strategic management agenda, growth, performance people will result in highly attractive KPIs. We will continue to enhance our existing Internationality and gender diversity aiming for 23 35 international and 23 female in our top management in in midterm. In terms of sustainability, we aim at least for 50% next generation solutions based on Our sales in our portfolio. Next generation solutions are based on a thorough portfolio sustainability assessment and stand for a superior sustainability benefit.
Next generation solutions will reduce our footprint For KPIs, we are targeting an EBITDA growth about 8%, an EBITDA margin above 22%, a ROCE above 14%. Setting targets is always the easier part. Deriving in these services, that's what drives us. That's what motivates us as a team in Nutrition and Care. And after nearly 2 years on board, the KPIs show that we are moving in the right direction.
We have delivered the first This impressive growth is driven by 2 levers of our strategy, performance and growth. Our organic EBITDA growth from both higher specialty growth and prices was more than 10%. We have reduced costs by €85,000,000 last year. Our EBITDA margin was increased by 300 basis points due to a consequent asset and cash management, we were able to improve our ROCE up to 200 basis points. What do you think?
Is it not only an existing but also a convincing story, isn't it? Nutrition and Care has a new strategic setup Our management agenda is simple: growth, performance, people. We focus on common technology platforms. And with the system solution approach, we strive for higher margin. Profitability and EBITDA, Kaga, before sales and volume growth.
We will deliver on our management agenda and on our financial targets and will provide you with very tangible frequent proof points along the way. And this will, step by step, making Nutrition and Care a Strong value driver for Evonik, bringing nutrition and care to life for life and living. More than happy to answer now your questions.
And it seems like my dream is coming true. There are very little to no questions on methionine. So We are excited to talk about all the other parts of our portfolio. Let's start with biotechnology, very prominent In the presentation, very interesting growth area, and we have a question here or questions from Martin Roediger from Kepler Cheuvreux and Charlie Webb from Morgan Stanley. We talk about €1,000,000,000 sales target from biotechnology by 2,030.
What is the sales level that we have today already and what are in terms of sales the biggest contributor, the biggest product groups with the biggest sales potential going forward.
Biotechnology, I think it's the leading example for technology platform. We are in this biotechnology Since 30 years, white backed technology, we are driven by a scientific approach. We We have a deep understanding of the biological effects of complex systems like the skin, like the human body or the animal gut. Our core competencies beside others are microbiome modulation. And really the process design, the process innovation, the process optimization, especially In the downstream of the biotech processes after the fermentation, and that makes us as available partner For companies like DSM or BioNTech, that is the reason why they choose us to bring up the business together with us in the example of Veramaris, Currently, we have a portfolio of around 100 products, about The 15 application mainly driven by active ingredients in the cosmetic areas.
In pharma, it's Cell culture, it's about CDMO play, fermentation, biotech Processes, we are talking about amino acids in the pharmaceutical area, and we have, of course, amino acids in the Nutrition area. Regarding the current sales split, we have currently fifty-fifty, I would say, 50% In the amino assets for nutrition application, the rest goes towards the applications in Care Solutions and Healthcare. As you know, that The Bio amino assets in Nutrition is not the strongest margin driven business. We're currently reshaping our focus to a higher margin profile. I already explained it in my during my presentation.
And the shift from the half of the Blair capacities towards the LGA oil based omega 3 assets is a very good example on our path towards a higher value portfolio. We just concentrated our competence center. We grouped all our expertise in 1 R and D competent center with more than 200 researchers to accelerate even the development of new solutions. And the most promising, which has to come now, is gut health for nutritional application and biosurfactants, which are Really ready for investment where we really see a lot of potential for smart greening solution. Active ingredients For Pharma and Cosmetic Solutions will be the other area where we see promising Projects already.
So overall, we are very confident to reach the €1,000,000,000 extra sales on biotech based products by 2,030 latest.
Yes. Thank you very much. We would have a question here for Jan. We might give it another try. Also, I can see the Connection is not very good.
No. We will skip that and go ahead with Thomas maybe first and try to connect to Jan later. Hopefully, it works then. So Thomas, let's Take your question on the liquid nanoparticle business. What are the next steps to expand this business?
And especially how much CapEx do you need for this expansion over the next, like, 3 years?
So while we are not starting from 0 here, we already do have an existing infrastructure along the entire value chain, starting with the excipients, formulation development, clinical manufacturing as well as commercial manufacturing. So and as such, yes, we focus our extension, our further investments along our current existing structure. For example, here in Germany, we are currently investing in the expansion of the lipid production. I mentioned the Strategic partnership with BioNTech in this context where we're setting up 2 dedicated production lines. We are Planning to expand our Vancouver enterprise where we already invested back in 2019 into the R and D expansion, we are now planning to expand our clinical manufacturing.
And I already mentioned that we're also looking into adding additional highly flexible fill finish capabilities. So this all will be in our lower triple digit million Euro range at the end if we execute this project. And also worth to mention, it's also typical in the industry that for specific projects customers are willing to at least co invest. In addition to that, There may be the one or the other very targeted, very focused technology acquisition in order to complement our setup to complement our sets of capabilities and competences.
Yes. Thank you, Thomas. And I think still worth to add that this obviously, this CapEx is part of the group's CapEx plan over the next year. So that's included in the CapEx number and in the CapEx guidance for the group already. I'm looking whether we are good to go to France or whether we continue maybe we continue from Essen for the time being.
And I think now it's time to move also to Emmanuel for the Animal Nutrition business, obviously, still and also And even above the attractive methionine business, an attractive part of the Evonik portfolio, We already heard a question here on we already heard on sustainable healthy nutrition. So what is behind that? Sustainable healthy nutrition as a second Black in animal nutrition as a growth driver, how are you changing your business model here away from methionine?
Yes. Thank you for the question, Tim. Sustainable Healthy Nutrition is a 1st and foremost, very attractive market segment that develops currently very fast above and beyond the growth rates of the Feed Additives business that goes into the various essentials like amino acids and vitamins and minerals. Chain. And these growth rates are driven by pressing needs in the industries.
It's not about, Let's say, a kind of must have ingredients. It's really a replacement that makes Sustainability. There is no product in the animal nutrition family of innovation that has no positive impact on the footprint of our value chain. It builds on broad synergies in terms of the biotech area because for this purpose, we need to understand more It's about the life the entire life of an animal. And this portfolio enables growth that is beyond the numbers you see on the slide.
We aim to grow with this business in a double digit range and very fast with a good trajectory. Antibiotic Growth Promoters in Livestock. You have to go by a portfolio solution by understanding and modeling the gut health and by finding a more healthy nutrition concept in the diet. It's clear that and Kasper mentioned it already in his speech. It's clear that we cannot continue like we do right now with the way we feed animals.
And that is a driver for Veramaris. That is also a driver for our special solutions in shrimp nutrition. Quality will be impacted by a holistic approach towards more than just a single molecule that goes into a nutritional diet. And therefore, we believe that this attractive market segment is good for building a clear second pillar next to the amino acid portfolio of animal nutrition and our global customer access, and it was also in the speech of Customer, our global customer access in a lot of countries with a lot of, let's say, Good addresses in the industry helps to promote these solutions clearly in the direct contact and convincing the industry that a better solution is also the more sustainable one, not only for the animal, but also for the financial.
Thank you very much, Emmanuel. A follow-up question here. What is the existing sales base in that business. As of today, you've spoken about clear double digit growth rates going forward. What sales do you have already today in this Sustainable Health and Nutrition Business.
Yes. We are going into a 3 digit million number. This is, of course, relatively small compared to to the amino acid business. But as said, it's a very dynamic area. It has a lot of growth potential, And we are confident that the trajectory in the coming years will also result in the appropriate or in the expected returns.
Great. Thank you very much. So then let's Take the next question here from the guys in Essen, from Jofre from UBS. What areas, What technology areas do you see for possible acquisitions in Nutrition and Care? I think the question goes to you, Kasper.
Yes, go ahead.
Thank you for that question. So common technology platform is one of our main growth pillars within our strategy. It's built on our common strengths, but we really want to concentrate how we can use common technology platforms for all the three business lines. So what are our growth Those areas that are active ingredients, excipients in health care, in pharmaceutical business that Is gut health within animal nutrition, but that we can use For skin modulation, macro beyond modulation, delivery systems as one area where we already invested, where we have strengthened our platform, what we really Want to build on and, of course, particularly sign. I love as well some targets in the area of artificial Intelligence, just to mention 2 of the recent years, that is Profurya in the Precision Livestock Farming, we acquired a small company in the Netherlands to really set the base for our digital solutions of digitalization of our farming and which series.
We already are selling actively licensing of really have And a healthier livestock farming on chicken farms. The second one I want to mention is Innoh Health, a very interesting Innovation we did in the personal care area. I love it as well because they gave us the possibility really to Screen bioactive ingredients support our customers. We offer that even as a service towards our customer to support them in their A claim towards new marketing, for us, it helps us to identify the most available Bioactive ingredients for cosmetic application, and we support as well our customers in their new marketing areas. So that is the area where we want to grow and where we want to combine our competencies.
Yes. Thank you, Kasper. And I hope we are ready for the next try to go to France to Jan with the next question here From the chat, there's a couple of questions on biosurfactants and our biosurfactant exposure. We are planning to build here the 1st world scale plant. What is the status of this plant and what kind of sales potential market, potential market size do you see from that business?
And how do you differentiate against your competitors in biosurfactants or bio based surfactants.
Thank you, Tim. And hopefully, it's going to warrant his time. This is a good question, of course, right? Biosurfactant It's very important to Evonik's strategy. We will establish the 1st world scale by the surfactant plant and we're expecting to ramp up into 2023.
Our industry of biosurfactants are unique, so for lipids and random lipids Produced via fermentations and purified in high quality allowing usage in personal care for home care application. We own a strong patent portfolio for both the production process as well as the applications, which allows us to sell these as a system solution. I consult multiple applications in cosmetic, household care, as well as healthcare and animal nutrition, Which shows the strength of this biotechnology platform for Nutrition and Care. We have also pre established The corporation that allows us to build high capacity serving several markets and therefore reaching an excellent cost position. Skin sensory and CTM avoids the use of palm derived oil.
This approach differentiates Evonik's approach as it does not use Any conventional synthetic chemistry derived from oil and is therefore deemed to have a better sustainability index. By its reflect on, I mean, this is currently a small size, but we expect the market in 10 years to reach €1,000,000,000 And Evonik will be in a leading position in this €1,000,000,000 market. Thank you
very much, Jan. Very strong answer and very strong connection to France. So it's good to hear. Next question goes to Essen again here from Markus Mayer from Baader on the CDMO exclusive synthesis business within the health care portfolio. Marcus asked or sees a consolidation in this exclusive synthesis CDMO market.
What is Evonik's strategy in this business going forward?
So So of course, we
are watching and monitoring here the market developments very closely. And we are positioning ourselves along our again, along our competencies, technology platforms, following the system solution approach. So when it comes to Exclusive Synthesis, we focus on areas that allow for high margin and allow for high growth. And this is typically coming via differentiation. So it's not about the scale and not about the magnitude of assets.
It's really following an asset light approach using a knowledge based business model. As such, maybe talked about our biotechnology platform, for example. We have assets At various scale, where we can support our customers really from lab development via launch platforms up to really build scale So there, there is some complementary competences, some complementary assets required, really to I have an even better offering to the customer. We will look into it, but it's not about scale per se.
Yes. Thank you very much, Thomas. Next question from Andreas Heine from Stifel on methionine. But from a more strategic viewpoint, I think, Casper, So you already commented during your presentation, but the specific question is what role does methionine play going forward? And what is your strategy for methionine?
Is it a growth business or run for cash? Are you planning to exited even at some point. So what's the strategic perspective for methionine?
Yes. Thank you very much for clarification or giving the possibility for clarification. Series. Currently, we with our Srihapur strategy are really in a cost leadership position, and we want To maintain in that position, we are concentrating on the 3 ups. I explained it already.
But the Singapore, Verb and Mobile, out of this sharpened focus on our 3 hubs, We will deliver and Methionine will deliver as well in the future a strong cash flow. Methionine Fulfill currently all the financial criteria within our portfolio management, as I elaborated on, As well on growth, as well on margin, as well on return on capital. We will run methionine Based on the current status as a cash cow, we only will invest in this business for three reasons: that is maintenance, That is smart debottlenecking or the necessity to improve our cost position. That is the only thing where we want to allocate the CapEx And we will focus on reallocate even more capital to the sustainable solutions approach Yes, I worked on that. We have a strong customer base.
We are globally represented with methionine. Methionine is the Entry ticket to build up the nutrition and care is a sustainable nutrition part, The growth field, and we will use that to even grow in these applications I explained, Dharthdal Solutions or Precision Livestock Farming that will enable us. For that reason, we see it It's still as a valuable part of our portfolio. But as I said, we will go and We manage it as a pure cash cow within our portfolio. The share of the methionine business within The next 10 years will decline by approximately and sales by approximately 10% over sales.
Very clear, Kasper. Thank you very much. Let's take the next question here from Mu Basak from Citi, again, on the lipid nanoparticle business. How are we seeing Thomas, how are you seeing the competitive landscape? Are there other players entering this field?
And what is your general, probably rather future split of revenue opportunities between the pure vaccine COVID business and potentially also other vaccines or other areas and other products even beyond vaccines in this field.
Yes. So the competitive landscape Right now, especially in the context of mRNA LMPs, it's very dynamic. It was triggered by the launch of the first COVID-nineteen mRNA based vaccine in December. And of course, a lot of players are positioning themselves, are trying to enter in this space. And you can cluster them.
There are More chemical driven companies entering or trying to enter. There are big CMOs, contract manufacturing organizations, who play in that field. You have mixing you have very complex mixing technologies that are required to have also some tech companies. What really differentiates us and what makes it hard For others, to enter in this broad context is our positioning along the entire value chain because the formulation know how, Yes, it's really critical. The formulation at the end will also define what kind of excipients are used.
So you also need to have this chemical Competence in order to translate a formulation need into a chemical pharmaceutical excipient. And we are not a pharma company, yes? So we are a specialty chemicals company. As such, we are not in competition with our customers. And I think this makes us really unique in the industry.
We have a track record here. We have Years of experience, we are involved in very relevant, very significant projects. So we are very, very well positioned here as the leading or one of the here as the leading or one of the leading integrated CDMOs in the space. So when it comes to the split of the revenue, That's not an easy one, yes, because this mRNA LNP technology is evolving very, very dynamically. A year ago, the commercial value was almost 0.
There was no product on the market. This changed due to, as mentioned, the COVID-nineteen vaccine. There are a lot of developments going on using mRNA Also for other vaccines, like flu, like rabies, but also new developments in cell and in gene therapies, like therapeutic Cancer Immunization and others. So it's really too hard to say what the individual split Between COVID and other vaccines will be, there's a lot of unknowns. Nobody knows how the new variants of COVID-nineteen will develop, so I see it really as one big class of application or applied technologies here, the LNP, mRNA in a space, and we will have a significant triple digit €1,000,000 revenue generated in this market.
Thank you very much, Thomas. Very clear. Next question is on our financial targets from Martin Evans from HSBC and here specifically on the ROCE target of more than 14%. To bring it to the 14% or even above 14% target in the midterm.
Yes. On the ROCE, you're absolutely right. We still have to do our own work. We are currently in the range of 7.7%. It's above average But not enough for earning the cost of capital and not targeting our ambition 14%.
So the good news is that our major investments are already capitalized, the big ones like ME6 that we have done in Singapore. And all our growth areas, which we mentioned during our presentation, where we want to grow with our System solutions, namely action active ingredients, gut health solutions, drug delivery systems Less capital intensive. We have the approach of 1 technology platform concept. So use our This is to even for more than one business and that we already practice size than using our asset structure for in filling it up for different application. We improved already our capital The asset structure with these things, much more has to come.
One lever is, of course, the ROCE for higher margin business, as I explained, And we are very, very confident that we will deliver on these growth stories, especially driven in Cosmetics by Active and Louisian or Delivery Systems in Health Care. And the other pillar, don't forget it, that is the Constant cost and cash management. We are committed to overcompensate our annual cost effective cost Compensation by achieving more than EUR 30,000,000 of annual cost savings. So both So please, that will lead us to reach our ambition, and we are targeting a ROCE in our target area within the next 3 to 5 years.
Thank you, Kasper. Next question goes again to Jan on the active ingredients business and on the typical contract structure in that business. And as we say on the slides, a majority some kind of a majority of the really secured this growth going forward.
Good question as well. Thanks, Tim. I mean, the clients want to secure There are growth prospects and the access to our system solutions in particular. This is true for today and for tomorrow. So as such, we signed mid- to long term supply agreements that have, In general, also some strategic element for future development as well of the next generation of system solution.
That's normally how we handle the situation. I mean, for sake of confidentiality, I won't say more at the moment.
Thank you very much. Nevertheless, I think very clear. And we are approaching more or less the 4:30 deadline. We still have a couple of more questions. So I think we will take One or 2 more.
One other question comes from Chetan Udeshi from JPMorgan on the impact of plant based meat on our Animal Nutrition business and on the growth prospects in our Animal Nutrition business. Emmanuel, to you.
Yes. It's a topic that we can talk about more than just a minute. Yes, it's undisputed that the growth of protein in the next 30 years will be by 30%, 35%, and the value of a single piece of protein will also increase. What we see now is that, of course, plant based Meat and alternatives to animal protein will find its place in the world. And in the Preferences of end consumers going more towards flexitarian diets.
So I believe this will be a relevant Part in future. On the other side, we have always very broad projections how big this portion will be, But I believe it is a contribution for the existing animal derived protein industry to foster and focus more on sustainable solutions. I think this impact is clear, And it will also drive, I think, the development of sustainable and long lasting positive It's also a relevant part for a very round and sound human diet. So all in all, yes, there will be a clear place. I don't think that it will remove the animal derived protein at all.
On the other side, we have a challenge ahead of us. Pathways that we all know, but also taking into consideration that alternatives also increase The innovation power for the existing and for the new ones. And therefore, I believe the place will be there, but it will be also a positive momentum on the existing 3 to improve and to show the value of animal derived protein for, I would say, holistic and Sound Human Diet.
Yes. Thank you, Emmanuel. And let's Take a last question here, a last modeling question from Thomas Roboda on the profitability trends of the 3 business lines in Nutrition and Care. What's today the difference between Animal Nutrition, Health Care and Care Solutions in terms of margin and how might that develop going forward?
Yes. I published our division last year was around 18.7%. And Animal Nutrition, as publicly communicated as well, is Above 20%. So that means that the 2 other businesses are below that 20% and still have a way to go. But I can tell you that we really have and built on a consistent track record.
We elaborated already On the Care Solutions that we really bring together the 2 business line areas that we shifted the portfolio to a higher active ingredients business that we're bringing Our assets were sweating that we make some nice acquisition and growing nicely with Active Ingredients. Overall, Working on our cost structure by reducing it more than €30,000,000 reducing the staff by more than €130,000,000 That makes and counts for 400 basic points improvement in EBITDA margin over the last 4 years. And I'm pretty sure that the business line We'll build on this track as well this year and will further improve till end of 2021. The same applies to Health Healthcare, if I look now to Healthcare, we make some recent acquisition, especially in the high margin drug delivery systems area, Where we now are building on this growth area. We make a lot of progress in the inclusive synthesis By doing an adequate portfolio management, like Thomas already explained, to higher margin, high CDMO plays high potency APIs, lipid nanoparticles as just some examples, As well with a consistent cost saving approach, we as well improved here the EBITDA margin by Nearly four basic points, and we are quite confident that we might reach even EBITDA margin Around 20% by this year.
So you see, slowly but surely, we are moving that portfolio in that direction I already described towards a higher margin with addressing all three
Great closing remark. Thank you very much, Kasper, for that. And that Brings us to the end of our 1st division spotlight series on Nutrition and Care for today. Thank you very much for joining. Thank you very much here to all of you to sharing your vision and your growth strategy on the division with us.
And we hope to see you end of June, beginning of July for Part 2 and part 3 of our division spotlight series on Smart Materials and on Specialty Additives. I guess it's getting at least as exciting as today for Nutritional Care. Thank you very much for joining, for dialing in for all of your questions, and I'm sure we'll be in touch soon.