Siemens 2013 Annual Report Download - page 229

253 D. Consolidated Financial Statements
357 E. Additional Information
245 C. Compensation Report, Corporate Governance
statement pursuant to Section a of the
German Commercial Code, Takeover-relevant
information and explanatory report
246 C. Siemens AG ( Discussion on basis of
German Commercial Code)
250 C. Notes and forward-looking statements
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debt levels, particularly in large parts of Europe. Industrialized
countries – especially those more reliant on government health-
care expenditures – are expected to continue to focus on im-
proving the efficiency of healthcare and on slowing the growth
of healthcare spending, thus driving demand for cost-efficient
and high-throughput products and solutions. As a result of U.S.
healthcare reform, we expect a small but increasing share of
healthcare spending being linked to medical outcomes, in an
attempt to drive efficiency and curtail costs. In emerging mar-
kets, we expect continued strong demand, in particular for
entry-level products and solutions, as these countries build up
their healthcare infrastructure to provide their populations with
affordable access to modern medical technology, including in
rural areas. Rising disposable income of private households also
contributes to growing demand for healthcare solutions in
these markets. Growth in the Asia, Australia region is expected
to be driven by double-digit growth rates in China, in an increas-
ingly competitive environment with international and local ven-
dors. We expect that growth in the Americas will be supported
by moderate growth in the U.S., in a market characterized by
continuing implementation of healthcare reform, consolidation
among providers and increasing alignment between hospitals
and ambulatory care providers. We expect the overall market for
the Europe, C.I.S., Africa, Middle East region to recover only
slightly, particularly due to ongoing austerity programs in
southern Europe. For the healthcare market overall, we anti-
cipate that the trends towards entry-level solutions, higher
efficiency and focus on patient outcomes will continue.
Following a stabilization at the end of fiscal , we expect
some of Industry Sector’s markets to show signs of recovery in
the second half of fiscal . We assume that the recovery
will be stronger for process automation solutions than for dis-
crete automation. Overall, we expect markets served by our
Industry Sector to grow slightly in fiscal  year-over-year.
For the Sector’s industry-specific markets, we anticipate slight
growth in consumer-related industries such as pharmaceuti-
cals, chemicals and food and beverages, and also in the ma-
chine building and infrastructure industries. The automotive
markets are anticipated to continue to grow in fiscal , but
at a slower pace than in fiscal . Within the pharmaceutical
industry, we expect demand to be driven by customer invest-
ments in increasing production. Within the chemicals indus-
try, we expect growth in petrochemicals and basic chemicals
in emerging markets. Within the food and beverage industry,
we anticipate the highest growth rates coming from emerging
markets. We believe that demand within the machine building
industry will benefit from the continuing trend toward integra-
tion of product design and product lifecycle management.
Within the automotive industry, we expect growth to come
predominately from major manufacturers and suppliers in the
larger emerging countries and the U.S., as these companies
invest to increase efficiency and productivity along their entire
value chain. Metals technologies markets are expected to de-
cline year-over-year.
On a geographic basis, the strongest growth for Industry is ex-
pected to come from Asia and the Americas. The Asian markets
are dominated by the economic development of China which
is undergoing a transformation from an in vestment-driven
market towards a more consumption-driven market. While this
transition presents longer-term opportunities, overcapacities
and structural barriers to reform in the near-term limit the
pace of expansion and modernization in China’s manufactur-
ing sector. Growth in the Americas is heavily influenced by de-
velopments in the U.S., which are uncertain due to political,
regulatory and economic factors. The downturn in industrial
markets in Europe appears to be coming to an end, and cus-
tomer capital expenditures are expected to stabilize according-
ly. Central and Eastern Europe should show some growth as
the current level of industrial investment still offers potential
for expansion. Within Europe, we expect only modest industri-
al investment in Germany, which is strongly dependent on the
development of its main export markets, such as China, the
U.S. and other European countries.
In fiscal , the short-cycle manufacturing markets served
by our Industry Automation Division are expected to benefit
from stabilizing demand, following de-stocking by customers
in fiscal . Overall we do not expect recovery in the markets
for our short-cycle businesses until late in fiscal . We an-
ticipate that the market for industrial IT will grow faster than
the Division’s markets overall.
The long-cycle industry markets served by the Drive Technol-
ogies Division are expected to grow more slowly or decline,
such as in the mining and oil and gas industries where cus-
tomers are expected to postpone or cancel new projects due to
lower raw material prices. Markets in the pulp and paper in-
dustry are expected to decline.
We expect worldwide markets for solutions provided by the
Infrastructure & Cities Sector to grow moderately in fiscal
. We expect this growth to stem largely from rail markets,
driven by large contract awards. We further expect market
growth for the Sector overall to begin to benefit from a recov-
ery in the nonresidential construction markets towards the
end of fiscal . In contrast, we anticipate that markets for
power grid solutions and products will show little or no growth
compared to fiscal .
Markets served by the Transportation & Logistics Business
are expected to grow moderately in fiscal , fueled by large
contract awards as mentioned above, particularly in the U.K.,