MARKETING AND TECHNOLOGY PERSPECTIVES

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2 MARKETING AND TECHNOLOGY PERSPECTIVES Dr. Terri Jordan, Global Marketing Director & Dr. John Grasmeder, Global Technology Manager Victrex plc

3 3 Questions What is 1. Victrex? 2. Innovation? 3. Impact? 4. Pull or Push? 5. Market or Technology? 6. Success?

4 4 Who is Victrex plc? Manufacturer of VICTREX PEEK Polymer Public, London Stock Exchange (VCT) million 2005 Revenue 400+ Employees, 80+ Global Employees Three Manufacturing Sites (all UK based)

5 5 What is VICTREX PEEK Polymer? It s a semi-crystalline high-performance thermoplastic High strength, high purity Superb thermal & chemical resistance Fully melt processable High surface hardness & excellent wear Non-toxic by-products when burned Finds application in the: Automotive, aerospace Electronics Industrial Energy Medical..industries

6 New Ideas? What is Innovation? 6 Appointing An Innovation Manager?

7 7 We are more ready to try the untried when what we do is inconsequential. Hence the fact that many inventions had their birth as toys. Eric Hoffer ( )

8 8 The Building Blocks of Innovation Leadership Courage Curiosity Speed Commitment Market Knowledge Discipline

9 Leadership 9

10 10 Humility WE DON T KNOW what we DON T KNOW! We KNOW that we DON T KNOW this and we d better find out We KNOW this

11 Courage 11

12 12 Courage Think about yourself Think about your company Do you play to win? OR Do you play to avoid losing?

13 13 Playing to win No Fear Confident Playing Our Game Willing to Take Risks Dare to be Different Teaming Passionate Motivated OK with Failure Clear leadership Strategy/Analysis Playing to avoid losing Defensive No Risk Doing Just Enough Reactive Tactical Tentative/Hesitant Fear of, and not OK with Failure Mechanical Incremental No Fun Afraid to Change

14 14 Innovation Example Time, minutes What if the properties of VICTREX PEEK polymer could be exploited in powder Time coatings taken to or wear dispersions? through strength a 25µm coating at 250N load wear resistance heat & chemical resistance lubricity purity VICOTE 805 VICOTE electrically insulating 804 PFA FEP ETFE PPS PVDF ECTFE

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16 Introducing the next generation of coatings for durability and long life 16 VICOTE Coatings, a family of new highperformance coatings from Victrex, are a great fit for consumer and industrial applications, particularly metal substrates such as cookware, under-the-hood automotive parts or electronics. These coatings have exceptional abrasion, wear and scratch-resistant properties at high temperatures, along with excellent chemical resistance. As a result, they can increase the life of the coated part by up to 200 percent. This remarkable new product line is based on our groundbreaking VICTREX PEEK polymer. VICOTE Coatings are available in both powder (700 series) and dispersion (800 series) and are backed by an experienced team who can assist you with application development, processing knowledge, and performance data. So if you re looking for ways to keep your products around for a long, long time, learn more about VICOTE Coatings at

17 17 Leadership Courage Curiosity Speed Commitment

18 18 Innovation Impact The Time Constant The Dilemma the Innovation must be realized within the time constant of the customer s need to achieve Impact! Constraint: τ innovation < τ lifecycle Mobile phone Automotive Industrial Medical Product Lifecycle, Years

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20 Automotive Gears 20 With the best overall property profile of any high performance material, VICTREX PEEK TM is the unique solution for improved performance and reduced systems cost

21 21 Example: Curiosity An opportunity in implantable medical applications for PEEK-type polymers? Speed 1999: PEEK-OPTIMA launched 2001: Invibio business founded 2005: Turnover exceeds 11 million Commitment Establish and drive a new, independent business within the Victrex group Invest in continuing growth and new application development Cobalt Chromium 316 Stainless Titanium 6Al- 4V Cortical bone PEEK- OPTIMA (CF) UHMW-PE Flexural Modulus, GPa Acknowledgement: Bradley Hip Implant in CF-PEEK-OPTIMA, Orthodynamics Ltd.

22 22 So How do We Define Innovation with Impact?

23 23 Innovation with Impact Can produce a viable new business concept Successful innovations must: Throw off enough free cash flow to justify themselves Meet internal hurdles and performance targets Occur fast enough to stay ahead of competition Occur often enough to keep our brands relevant This is when innovation builds value

24 24 Which of these is Innovation? Impact Improved! Time Improved! Improved! (yet again )

25 Market Knowledge is the Precursor to a Disciplined Approach to Innovation! 25 Leadership Courage Curiosity Speed Commitment Market Knowledge Discipline

26 Market Knowledge Where does the industry think it is going? What is keeping it from getting there? How can we enable their desired course? 300mm wafer 450mm wafer Semiconductor industry roadmap Technology node, nm Killer defect density, per cm2 x 100 Critical particle diameter, nm Max. static charge, nc x 100

27 Acknowledgement: Doblin 27 Innovation : More Than Products 1. Business model how the enterprise makes money 2. Networking enterprise s structure/ value chain 5. Product performance basic features, performance and functionality 6. Product system extended system that surrounds an offering 7. Service how you service your customers Finance Process. Offering Delivery Business model Networking Enabling process Core process Product performance Product system Service Channel Brand Customer experience 3. Enabling process assembled capabilities 4. Core process proprietary processes that add value 8. Channel how you connect your offerings to your customers 9. Brand how you express your offering s benefit to customers 10. Customer experience how you create an overall experience for customers

28 28 Innovation Across The Value Chain Finance Process. Offering Delivery Business model Networking Enabling process Core process Product performance Product system Service Channel Brand Customer experience Core competence planning: Offering & process Innovation planning: Business model Customer experience Think INSIDE THE BOX Innovation is a discipline & a process Acknowledgement: Doblin

29 Acknowledgement: Doblin The Discipline of Innovation: Diagnostics, Process, Accountability 29 diagnose situation foster initiatives declare intent author initiatives discover invent launch extend set conditions customer needs mapping stagegate Market knowledge helps to identify the innovation gaps of an industry... Where is fertile ground for disruptive innovation?

30 An Example of Innovation Intent: Starbucks 30 Strategists would say: Leverage a distinctive brand plus coffee buying, production and marketing systems to achieve premium pricing and global dominance Instead, their innovation intent says: Sell back to a busy customer the twenty minutes each day she will look forward to most

31 Declare Intent If You Want To Be Revolutionary Clarify & Focus what is the arena of increasing importance value and stretch 31 Leave A Lot Of Head Room: It doesn t presume to know what we will do It doesn t presume to know how we will do it It focuses outside the company and competitors It challenges and counts on the talent of the company Live in the We Don t Know what we Don t Know Feel the Fear And Do It Anyway!!

32 32 Once Upon a Time VICTREX PEEK Polymer Compounds Outsourced Pre-Monomer Monomer VICTREX PEEK Polymer Powder Processors End Users Independent Supply Independent Supply Victrex Direct Customers VICTREX PEEK Polymer Granules Outsourced Specifiers

33 33 Since June 2005 VICTREX PEEK Polymer Compounds Victrex Pre-Monomer Monomer VICTREX PEEK Polymer Powder Processors End Users Victrex Victrex Victrex Direct Customers VICTREX PEEK Polymer Granules Victrex Specifiers

34 34 Impact! Relative Value (2002 = 100) Sales Profit ½ yr

35 35 Innovation: Talented People Doing Really Bold Things Prediction: a new category of applied materials excellence in next 2 years! What if Victrex and our partners could co-construct this revolution Victrex and its Partners Together Success!!!

36 36 Conclusions PASSION INNOVATION INNOVATION PERFORMANCE

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