Siemens 2014 Annual Report Download - page 182

108 A. To our Shareholders 131 B. Corporate Governance 171 C. Combined Management Report
172 C. Business and economic environment
187 C. Financial performance system
193 C. Results of operations
205 C. Financial position
210 C. Net assets position
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markets differs between the market segments. In the market
for onshore wind farms, competition is widely dispersed with-
out any one company holding a dominant share of the market.
In contrast, there are only a few major players in the market for
offshore wind farms, which are technologically more complex.
Several competitors have managed to return to profitability
through cost reduction measures and restructuring. Previously
existing overcapacities have been adjusted to better match
demand. Consolidation is moving forward in both on- and off-
shore wind power through the market exit of smaller players,
and especially in offshore through joint ventures between
established players and new market entrants. The key drivers
for consolidation are technology and market access challenges,
which increase development costs and the importance of risk
sharing in offshore wind power.
Markets addressed by our Power Transmission Division grew
slightly in fiscal  compared to fiscal , due mainly
to strong demand from parts of Europe and the Middle East,
including Germany, the U.K. and Saudi Arabia, where large
transmission projects were awarded. In contrast, investments
in Russian electrical infrastructure went down significantly in
fiscal . Markets in Asia remained stable year-over-year.
While growth in China slowed down somewhat, India awarded
a new contract for a large high-voltage direct current (HVDC)
project. On a currency-adjusted basis, market volume in the
Americas increased slightly year-over-year. Including currency
translation effects, markets in the Americas declined slightly
year-over-year.
In fiscal , markets served by our Healthcare Sector grew
slightly year-over-year. Growth was again driven by emerging
markets, which continued to build up their healthcare infra-
structures and expand access to modern medical technology
for a broader population. Market development in industrialized
countries remained weak, impacted by healthcare reforms and
budgetary constraints. On a regional basis, markets in the
Americas grew moderately. Market conditions in our large U.S.
market remained challenging as service providers faced ongo-
ing pressure on utilization and reimbursement rates associated
with medical devices. The U.S. market for Healthcare IT contin-
ues to grow, but at a slower pace than in previous years.
Healthcare markets in the Europe, C.I.S., Africa, Middle East
region declined slightly. During fiscal , European health-
care markets saw some stabilization. The market situation in
Germany was challenging. Demand stagnated and price pres-
sure was strong. Decreasing public grants to the country’s
health insurance system is burdening the financial situation of
hospitals and thus their willingness to invest. Growth in China
slowed down compared to the previous fiscal year. Markets in
China are experiencing a shift in demand, from an emphasis on
large clinics to increased investment in small and midsize
regional clinics. Along with this change, competitive and price
pressure rose, due mainly to increasing numbers of local ven-
dors. Overall, the trend toward consolidation in the healthcare
industry continues. Competition among the leading companies
is strong, including with respect to price.
In fiscal , markets served by our Industry Sector, consist-
ing of our Industry Automation and Drive Technologies Divi-
sions, grew slightly year-over-year. At the beginning of the
fiscal year, growth came mainly from stronger demand in
long-cycle industries and restocking by customers in China.
Towards the end of the fiscal year, demand also began to pick
up in short-cycle industries. Within the main industries served
by our Divisions, demand in the automotive industry was par-
ticularly strong, with many countries reporting significant in-
creases in production, especially in Europe. The machine build-
ing industry developed less favorable in the beginning of the
fiscal year due to weaker growth in many emerging economies,
which are important markets for export-oriented industrialized
countries. In the last months of fiscal , demand in the
machine building industries picked up somewhat. On a regional
basis, our markets in Europe experienced a slight recovery in
fiscal , due to a more positive overall economic environ-
ment year-over-year, particularly including Spain, Poland and
the Netherlands. While markets in Germany grew year-over-
year, growth was held back by stagnation in original equip-
ment manufacturing (OEM) industries, which were impacted
by lower demand from emerging markets. Overall, demand in
Europe for industrial investment goods was held back as pro-
duction capacities of our customers still did not reach full utili-
zation. In the Americas, except the U.S., growth in end-cus-
tomer markets slowed down in fiscal  compared to fiscal
. This was particularly evident in Brazil. Within the U.S.,
demand in the oil and gas industries grew strongly. In contrast
markets for electrical investment goods expanded modestly.
Within the Asia, Australia region, growth slowed down year-
over-year in several countries, particularly including Australia,
India, Indonesia and Thailand. Growth in China was solid year-
over-year. While growth in China benefited from restocking ef-
fects, it was supported also by strong demand from the coun-
try’s automotive and infrastructure industries, and, to a lesser
extent, by demand in parts of the construction machinery mar-
kets and food machinery, elevators and rubber machines mar-
kets. Competition of Industry’s business activities can be
grouped into two categories: multinational companies that of-
fer a relatively broad portfolio and companies that are active
only in certain geographic or product markets. Consolidation is
taking place mostly in particular market segments and not