Surface Solutions Division

Surface Solutions is a technology and market leader in attractive key markets, offering products and services under the brands of Oerlikon Balzers, Oerlikon Metco and Oerlikon AM. Moreover, the division serves the high-end luxury market through its company, Coeurdor. The division has a comprehensive portfolio of surface coating solutions, materials, components and equipment as well as a trusted base of customers, which positions it well to grow. 

The division’s global network of production and coating service centers, consisting of 167 sites in 37 countries provides fast response times and timely delivery to customers. Highly productive and reliable systems, standardized or customizable materials for surface coatings and additive manufacturing are other key factors that will drive the division’s mid-to-long-term growth in end markets.

In 2022, Oerlikon markets and customers faced supply chain disruptions, energy shortages and rising inflation, driven by geopolitical and macroeconomic developments. Against these headwinds, the division performed well, increasing order intake and sales.

The division accounted for 48% of Oerlikon’s sales and 50% of Group operational EBITDA. Order intake increased in 2022 by 5.4% (8.7% FX adjusted) to CHF 1 418 million. Sales of CHF 1 384 million were 7.9% higher (11.4% FX adjusted).

In 2022, operational EBITDA improved by 4.5% to CHF 247 million, or 17.7% of sales, impacted by higher input costs and mix. Operational EBIT was CHF 96 million in 2022, or 6.9% of sales (2021: CHF 81 million, or 6.3% of sales). 

The division experienced a pickup in the aerospace market as the industry continued to recover from the COVID-19 pandemic effects. In this market, Oerlikon was able to realize a number of strategically important projects, including supplying Oerlikon Balzers’ flagship coating BALINIT C for precision components, such as shell clips, deflectors and thrusters, for the Orion spacecraft in NASA’s Artemis moon mission. The division also provided nickel-based superalloy powders, such as MetcoAdd^TM 718C, to the space industry for additive manufacturing of antenna parts.

For BEV, Oerlikon has been developing new coatings, such as a low-temperature coating of differential shafts in the transmission that leads to higher efficiency of the drive system. Thanks to this coating, Oerlikon was able to secure in 2022 two multi-year orders. In addition, Oerlikon’s innovative, ultra-thin and lightweight thermal heat shield solutions that provide excellent thermal insulation and increase safety for EV battery systems are making inroads. In 2022, the division opened a laboratory in Shanghai to offer its thermal insulation solutions to BEV customers in the China market.

Following the acquisition of Coeurdor in 2021, a leading full-service provider of metal components for the luxury goods industry, Oerlikon grew this business. For example, Oerlikon secured in 2022 with a leading Paris fashion house a deal of over CHF 2 million for leather goods and footwear, on top of the existing jewelry business that is worth more than CHF 5 million. To further grow in this market, Oerlikon has launched a new coating, Coeurdor PVD AURISE, and developed a new deep black coating based on BALINIT DLC specifically for a major French luxury house.

As the luxury market sees a shift from electroplated brass to PVD-coated stainless steel, Oerlikon’s PVD solutions are well-positioned to support this market not only with greener technologies but also by offering designers the option to use multiple and iridescent colors.

Toward the end of 2022, the division took the next ideal strategic step after Coeurdor by signing an agreement to acquire Riri, a market leader in metal accessories manufacturing, with a wide product range and unique offering. With the acquisition, the division will become a market leader and provider of a complete portfolio of coated luxury metalware to high-end fashion brands.

Oerlikon grew its business in the energy market in 2022. For example, Oerlikon’s BALINIT TURBINE PRO coating for steam turbine valves was qualified at six global coating centers and across five different machines, resulting in a tenfold growth of the business, and an expectation that the volume will increase by 20% to 30% in 2023.

The division saw sales increase in 2022 across all regions. Europe accounted for 44%, Asia-Pacific 32% and the Americas 24% of division sales in 2022.

Other Key Developments

In 2022, Oerlikon announced that it is planning a new state-of-the-art assembly and production site at Campus Reichhold, in the canton of Aargau, Switzerland, for its surface solutions and equipment businesses. The new location is expected to be ready for move in from mid-2025 onward.

With the introduction of the new brand, Metco Joining & Cladding, Oerlikon laid the foundation for the further expansion of its welding portfolio for applications such as welded overlays, brazing, laser cladding and plasma transferred arc processes. In 2022, Oerlikon decided to exit its embedded PVD (ePD) inline business, due to the slower-than-anticipated uptake of such inline ePD services.

R&D Partnerships

Oerlikon is a partner in the EWARP project, funded by the German Federal Ministry for Economic Affairs and Climate Action. The project aims to increase the energy efficiency of water-lubricated friction pairs in small water pumps. Oerlikon is providing its coatings BALINIT MILUBIA, BALINIT DYLYN and BALINIT DLC STAR to be used on mechanical seals and plain bearings sliding against graphite to reduce friction and wear in the systems. 

For the development of new coatings for the aerospace manufacturer Safran, Oerlikon installed new INNOVENTA kila PVD equipment and a MultiCoat thermal spray coating system at the joint research laboratory at the University Limoges, which Oerlikon created together with partners Safran, the French National Center for Scientific Research (CNRS) and the University of Limoges. The aim is to develop next-generation coatings for aerospace engines.

In 2022, Oerlikon launched two initiatives to drive forward additive manufacturing technologies and master the technical challenges on the road to industrialization. Together with the Technical University of Munich (TUM), Oerlikon has founded the TUM-Oerlikon Advanced Manufacturing Institute where TUM researchers and the Oerlikon AM R&D team will be working closely together. 

The process is enabled by two technical innovations that apply artificial intelligence techniques, among others. The EU-funded project DISCO2030 combines laser powder bed fusion (LPBF) and Directed Energy Deposition (DED), each with a different material, to make products with functionally graded materials.

In Japan, Oerlikon is collaborating with an academic consortium for additive manufacturing, led by Gifu University. Consortium members are Japanese companies in the fields of automotive, aerospace, mold and dye production, as well as the Japanese branch of EOS.

Innovation

In 2022, Oerlikon introduced several new products and innovations, including:

• Design oxide compositions: The proprietary Scoperta Rapid Alloy Development technology was extended to also design oxide compositions in addition to its proven capability of designing novel metal alloys. This led to the development of a platform of high-entropy oxide compositions for applications such as thermal barrier coatings in turbine engines and electrolyte materials for solid-oxide fuel cells.
• BALINIT MOLDENA: A new coating for injection molding and extrusion of filled polymers. Polymers are becoming more and more abrasive and corrosive, thus increasing process costs for the customers. The superior abrasion and corrosion resistance make the coating perfect for applications with glass fiber reinforced plastics (GFRP) and fully recycled materials. 
• BALIQ ANTOS: A new coating for industrial taps for tooling customers to enable high process reliability and longer tool service life. It considerably increases production output thanks to its homogenous running-in behavior.
• BALINIT MAYURA: A new carbon-based coating for machining and forming non-ferrous materials that increases tool service life and productivity. 
• BALORA HALONA YOF: A next-generation proprietary coating for 3nm etch processes that sets new technical standards in the dynamic semiconductor market.

Digitalization

In 2022, Oerlikon worked on several digital innovations for its own operations and supply chain, as well as products and services for its customers. Here are some examples of digital solutions for customers:

• R&D lab data library: The goal of R&D Lab Data Digitization is to establish a digital R&D library. Providing digital laboratory results will help to simplify workflows and to reduce manual work. Additionally, sourcing knowledge from Oerlikon’s development history will make it possible to predict and enhance the development of new materials and coatings. In this way the project will help to speed up the overall R&D life cycle.
• myBalzers: The digital customer platform for coating services, allowing customers to order online, track orders in real time, check the order status and delivery date or retrieve order-related documents, has been further rolled out in various countries. Among others in Poland, where more than 100 customers created a myBalzers account following the launch.
• vConnect: Customers can connect their coating systems to their global production dashboard, giving them a real-time, 24/7 all-round overview of system utilization, material/energy consumption, coating quality and many more data. vConnect supports a widely used industry standard (UPC UA), so that various types of data from customers’ systems can be read in real time and used in manufacturing execution system (MES) or enterprise resource planning (ERP) programs. 
• Tool ID: Oerlikon Balzers partnered with a German customer, Brinkmann Schleiftechnik, to deliver the proof of concept for the performance of a cloud solution to track tools. Tool ID enables each tool to be identified in a split second based on its unique DMC code by a scanning unit specially developed by Oerlikon. All lifecycle data is available in real time thanks to bundled data management via the cloud, and order processing is paperless. Customers benefit from the significantly higher data availability, e.g. from the number of regrinding cycles to order, life cycle and application data of the tools, resulting in less effort and smoother order processing.