- Order intake: +14.6 % CHF 1 417 million
- Sales: +11.2 % increase to CHF 1 377 million
- EBITDA margin: 20.0%
- Sites: 156
- Employees: 7 079
- R&D expenses: CHF 80 million
The Surface Solutions Segment’s combined served market totaled CHF 6.5 billion in 2017. Over the next five years, the Segment’s addressable market is expected to grow to nearly CHF 9.0 billion, reflecting a compound annual growth rate of 6.7 %. In 2017, the Segment had an extensive list of accomplishments, which powered continued strong order and sales growth. The Segment’s most important markets are automotive, aerospace, general industries, tooling and energy.
Automotive was the Segment’s largest market in 2017 in terms of sales. Driven by strengthening emissions standards, the European automotive sector has a need for solutions such as surface technologies, and is thus a key market for Oerlikon’s Automotive Solutions unit, which offers physical vapor deposition (PVD) coatings, among others, in this market. German, French and Italian auto makers are also important customers for nitriding solutions. Among the 2017 automotive market highlights were the strong entry of Oerlikon Metco Frictions Systems into Japan and growth in special coating applications in Asia and in Europe. Adding to its comprehensive coating portfolio for automotive components, the Segment introduced in 2017, under its Oerlikon Balzers brand and among others, BALIFOR M and BALIFOR T, as well as coating solutions for heating devices and brake disks of electric cars. BALIFOR M is a molybdenum-nitride coating with excellent compatibility with lubricants and additives that can degrade in high temperatures. BALIFOR T is ideal for high-temperature and low-lubrication applications for longer periods and in aggressive additive environments. Under the Oerlikon Metco Brand, the RotaPlasmaTM HS1, a unique, continuous, rotating spray gun was launched in 2017. The RotaPlasma HS1 is an integral part of the SUMEBore coating solution, which helps reduce friction, oil and fuel consumption and wear in automotive cylinder bores.
General industries and tooling
In the general industries market, the Segment’s 2017 sales included winning precision component and equipment orders in Northern Europe, China and the USA. In addition, sales in Europe were also driven by the off-highway diesel market and the demand for elevator and pump applications. Oerlikon Balzers also noted a strong year in the semiconductor business, which it has served for more than 20 years with customized surface technologies for optimized semiconductor manufacturing solutions. In the medical market, sales increased in dental applications in Europe, Korea and Brazil. The Segment also launched several products specifically for customers in the tooling and general industries, for instance, the color-coding enabler BALIQ UNIQUE as well as INLENIA pica and INLENIA kila. INLENIA is the coating system leveraging Oerlikon Balzers S3p® technology to produce coatings with exceptional surface smoothness and a long service life. In particular, cutting tool applications with high demands on precision and surface quality (microtools, taps and reamers, inserts for finishing) and applications in difficult-to-cut materials (stainless steel, titanium) can benefit from S3p. INLENIA pica is the compact and flexible solution for highly precise tools, while INLENIA kila is designed to handle large batch loads of tools for high-volume production needs. The Segment also expanded its thermal spray and other surface enhancement technologies including laser-based coatings and hard facing technologies for industrial applications, including novel carbides products.
The aerospace market continued on its growth trajectory in 2017 due to the ramp-up of new engine programs. This resulted in increased demand for materials and for Oerlikon Metco solutions, including bond coats, gas path seals and thermal barrier coatings, while Oerlikon Balzers’ solutions saw higher demand driven by the A320neo production and its first North American National Aerospace and Defense Contractors Accreditation Program certification. Among the 2017 wins in this market are an important new aero engine customer and new five-year contracts with two existing Tier 1 customers. For aerospace customers, Oerlikon Balzers introduced in 2017 its new BALINIT DIAMOND coatings designed for tools used to machine challenging aerospace components made of alloys, such as titanium and nickel, to improve the cutting parameters for aerospace tooling applications. The new MetcoAdd™ alloys, which are next-generation materials for coating and additive manufacturing (AM) processes to improve aircraft engine efficiency, were also launched. With Surface ONE, Oerlikon Metco’s latest thermal spray coating system, customers can significantly boost process efficiency and productivity thanks to the improved usability, standardized design, compact construction, enhanced mobility and safety features. Following its launch, Surface One has already received positive interest from aerospace customers.
In the energy market, Oerlikon’s coatings enable turbines, hydroelectric plants and drilling equipment to withstand extreme temperature, pressure and friction. Demand in this market in 2017 was strong in the UK oil & gas market, while the general engineering business was supported by GDP growth in Germany, the USA and the rest of Europe. The Segment secured many wins in 2017 in this market, such as with Dongfang Turbine Company in China for abradables technology used for steam turbines, surface coatings for industrial turbines in Korea, bearings and gears for windmills, as well as hydro power installations in China and other Asian markets. Diverse surface technologies were introduced for this market in 2017, for instance BALINIT TURBINE PRO multilayer coatings, which offer longer blade life for turbine compressor stage blades as compared to conventional coatings due to their high hardness and tenacity.
In the AM market, the technology is being recognized as increasingly suitable for series production of advanced industrial components, allowing for the customization of products, the decentralization of production, change in design methodology and efficiency in material usage. While most current opportunities are in prototyping, Oerlikon AM is working with customers to expand prototyping work into more comprehensive industrial production. Also supporting this objective, Oerlikon AM’s Barleben, Germany, facility is being transformed from a main prototyping service bureau to a qualified series production plant for large OEMs, including through AS9100 certification for aerospace, as well as SAP and other software implementation. Plans also are under way to scale-up the AM facilities in Magdeburg to include certifications for aerospace applications. As part of Oerlikon’s investment strategy in AM, new types of AM machines were introduced to the portfolio, including: Carbon, a novel machine that uses digital light synthesis technology to cure a liquid polymer; Xjet, machines that use NanoParticle JettingTM (NPJ) to spray a fine dispersion of ceramic powders suspended in a fluid, allowing 3D printing of ceramics with fine details; and a new industrial metal AM printer, for which Oerlikon has completed beta testing with a German manufacturer, allowing Oerlikon to customize the development path of such machines. Moreover, Oerlikon hosted in 2017 the 1st Munich Technology Conference on AM and inaugurated its Technology & Innovation Center for AM in Munich.
Development in regions
The Segment experienced steady growth in China and generated 14 % of its sales in this market. Oerlikon Balzers received new orders for its INNOVA and INGENIA PVD coating systems. Oerlikon Metco saw demand for product innovations such as its carbide application with high-velocity air fuel (HVAF) coating process, and has successfully sold its first SUMEBore system in China. Oerlikon’s AM business established a local team in Shanghai in mid-2017 to help reduce time to market on orders of popular alloys. In India, where the Segment generated 4 % of its 2017 sales, the Segment focused on expanding its distribution channels in the industrial sector and on growing automotive and aerospace market share. Growth initiatives include:
Oerlikon Balzers’ introduction of its RS 90 DLC (diamond-like carbon) coating system in late 2017 in India and plans to expand its Chennai coating facility’s capacity to serve automotive, aerospace, power generation, oil & gas and general industrial customers in this region. In North America, the Segment derived 18 % of its 2017 sales. Oerlikon Metco is gaining market share in industrial equipment and among aerospace OEMs in the USA. Oerlikon Balzers saw strong interest among tooling customers for innovations such as the BALIQ solutions and BALINIT DIAMOND coatings. Europe continued to be the largest market for the Segment, with 46 % of its sales made in this region.
Strengthening the technology portfolio
To further strengthen its advanced materials technologies and competencies, the Segment completed four acquisitions in 2017. By acquiring Scoperta and Primateria, as well as the assets of Recentis Advanced Materials, DiaPac and DRS, the Segment gained strong complementary knowledge for pretreatment and posttreatment of tools, and for software development, manufacturing, processing, application and recovery/recycling of advanced materials. Leveraging synergies, Oerlikon Metco and AM teams collaborated in 2017 using the acquired Scoperta technology to identify narrower chemistry windows within the standard alloy classification for better 3D printing results. As a result, a new improved version of Hastelloy X, a well-known nickel-based superalloy, specifically for the AM market was developed and launched. This improved material can be offered for applications in the aerospace and power generation industries, where high temperature corrosion resistance and strength are required.