Siemens 2012 Annual Report Download - page 150

1 A. To our Shareholders
21 B. Corporate Governance 49 C. Combined Management Report
50 C. Business and economic environment
64 C. Financial performance measures
69 C. Results of operations
82 C. Financial position
93 C. Net assets position
95 C. Overall assessment of the economic position
96 C. Subsequent events
97 C. Sustainability
111 C. Report on expected developments and
associated material opportunities and risks

household spending. Furthermore, Indonesia, Thailand and
Vietnam continue to grow rapidly and support the economy ’s
growth of the Asia, Australia region of .% in .
A key factor for Siemens as a manufacturer is real manufac-
turing value added, a component used in calculating gross
domestic product by means of the production approach. De-
spite accelerating growth in both the Asia, Australia and
Americas regions, growth in manufacturing value added on a
global basis is expected to decline in  to .% from .%
in . This is due to significantly slower growth in the
Europe, C.I.S., Africa, Middle East region, including a slight
decline in Europe.
The partly estimated figures presented here for gross domestic
product, gross fixed investments and manufacturing value add-
ed are drawn from an IHS Global Insight report dated October
, . Siemens has not independently verified this data.
In addition to the common currency of the European Mone-
tary Union (the euro, €) another key currency for Siemens is
the US$. Following an appreciation of the € against the US$ at
the beginning of fiscal , concerns over the sovereign debt
crisis in a number of southern European member states of the
European Monetary Union led to decline of € against the US$.
For the remainder of fiscal , the value of the € relative to
the US$ remained below its level at the end of fiscal . Dur-
ing July , the value of the € against the US$ reached its
lowest levels of the fiscal year. Only at the end of fiscal 
did the value of the € begin to recover somewhat. Among the
contributing factors were the German constitutional court’s
rejection of applications to block the ESM and the ECB’s an-
nouncement of the modalities of a new government bond
purchase program. Nevertheless at September , , the
value of the € against the US$ was around % below the level
a year earlier.
Our businesses are dependent on the development of raw mate-
rial prices. Key materials to which we have significant cost ex-
posure include copper, various grades and formats of steel and
aluminum. In addition, within stainless steel we have consider-
able exposure related to nickel and chrome alloy materials.
The average monthly price of copper (denominated in € per
metric ton) for September  was % higher than the aver-
age monthly price in September ; this reversed a previous-
ly negative trend year-over-year and was due to the release of
financial and fundamental stimulus programs. Prices on a fis-
cal-year average were % lower in fiscal  than the average
for fiscal . Prices for copper are still supported by tight sup-
ply and demand fundamentals and by speculative influences
in the commodity markets. Nevertheless, because copper is
produced in multiple locations and traded, such as across the
London Metal Exchange, the risk to Siemens is primarily a
price risk rather than a supply risk.
Average monthly prices of aluminum traded at the London
Metal Exchange faced more pressure year-over-year, losing %
in September  compared to September . While, among
other factors, high energy costs put upward pressure on alumi-
num, these were more than offset by oversupply. As with cop-
per, we see developments in the aluminum market as posing a
price risk, rather than a supply risk.
The average monthly steel prices for September  came
down by % compared to the average monthly prices in Sep-
tember . Especially at the end of fiscal , steel markets
and prices for upstream raw materials (e.g. iron ore) softened
significantly (source: CRU, an independent business analysis
and consultancy group focused on, among other things, the
mining and metals sectors).
        (:     = )
FY  FY  FY  FY  FY 

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
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
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
Source: Bloomberg