Siemens 2012 Annual Report Download - page 151

135 D. Consolidated Financial Statements
239 E. Additional Information
130 C. Siemens AG (Discussion on basis of
German Commercial Code)
134 C. Notes and forward-looking statements
129 C. Compensation Report, Corporate Governance
statement pursuant to Section a of the
German Commercial Code, Takeover-relevant
information and explanatory report

In addition to the above-mentioned raw materials, we have ex-
posure related to rare earth metals and magnets. The market
situation for buyers improved considerably throughout fiscal
, with respect to both price and availability. Nevertheless,
we track these factors closely as they could still pose signifi-
cant price or supply risks for technology manufacturers, in-
cluding Siemens.
Our main exposure to the prices of copper and related prod-
ucts, and to steel and stainless steel, is in the Sectors Energy,
Industry and Infrastructure & Cities. Our main price exposure
related to aluminum is in the Energy Sector. In addition,
Siemens is generally exposed to energy and fuel prices, both
directly (electricity, gas, oil) and indirectly (energy used in the
manufacturing processes of suppliers). Some of our continu-
ing operations face price and supply risks related to rare earth
metals, particularly the Industry Sector’s Drive Technologies
Division and the Energy Sector’s Wind Power Division.
Siemens employs various strategies to reduce the price risk in
its project and product businesses, such as long-term contract-
ing with suppliers, physical and financial hedging and price
escalation clauses with customers.
...  
According to an analysis published by IHS Global Insight on Ju-
ly , , investments in  are expected to continue to
grow in nominal terms compared to . But the pace of
growth for  is expected to slow down considerably com-
pared to the prior year in almost all of the market segments
that are significant for our Sectors. This is due largely to the
sovereign debt crisis in the euro zone, especially in countries
affected by bank solvency risks, credit availability and austerity
measures, and also to repercussions of the sovereign debt cri-
sis in other regions, particularly including emerging markets.
In markets significant for the Energy Sector, investments in
power utilities are expected to grow by around % in ,
slightly down from around % in . Within these numbers,
investments in many emerging markets are expected to con-
tinue to grow clearly or significantly in  compared to
 – yet the expected growth rates in the majority of these
countries are still slower than a year earlier. Demand in Europe
is particularly weak. Following a recovery in , power utility
investments are expected to show a decline in nearly all Euro-
pean countries in , especially in countries affected by the
sovereign debt crisis. In contrast, investments in the U.S. are
expected to grow moderately in , following a decline a
year earlier. Investments in the oil and gas markets are expect-
ed to grow around % year-over-year, down markedly from
around % in . Some of the most important countries in
this market, including the U.S., Russia and Saudi Arabia, which
increased their investments in  substantially year-over-
year, are expected to either clearly reduce investment growth
in  or to keep investments on the prior-year level. In the
chemical industry, which is particularly sensitive to changes in
current economic conditions, growth in investments is also
expected to slow considerably year-over-year, down to around
% in  compared to around % a year earlier. This includes
lower growth in China, the world’s largest national market,
and shrinking investments year over-year in other major coun-
tries, among them Japan and Germany. In contrast, the growth
rate in the U.S. is expected to remain nearly steady.
Investments within the international healthcare markets,
served by our Healthcare Sector, are expected to increase by
around % in , following a rise of around % in the year
before. This decline in growth includes reduced investments
not only in many European countries, but also in some emerg-
ing markets such as Brazil. Furthermore, growth in other large
emerging markets, is expected to slow down year-over-year,
     (:     = )
FY  FY  FY  FY  FY 

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

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
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Copper Aluminum (HG) Steel HRC
Source: London Metal Exchange (LME) for copper and aluminum, CRU HRC Germany for steel; cash prices in € per ton.