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150504_Heraeus_JB_14_EN_Gesamt_rgb_A_1b - Heraeus Group

60 Heraeus Group All in all, 2014 was a satisfactory year for Heraeus. The challenging economic environment, the ongoing price ero- sion on some markets and less than favourable exchange rate effects put the business situation and financial perfor- mance under pressure. The biomaterials, medical prod- ucts and sensors divisions yielded positive developments. Adjusted by precious metal effects, the total product revenue roughly repeated previous year's result, whereas the net income, as had to be expected, was clearly lower than the 2013 reference value which was mainly marked by a capital gain. The product revenue of €3.4 billion was a 6.2% drop from previous year’s level. Adjusted by precious metal effects, was at the same level as in the previous year (– 0.3%). Continuation of the stable Group development was based on Heraeus’ strong position in many global and highly specialized markets, the ongoing power of innovation and an again pronounced and robust financial structure. The sustained insecure economic situation in the US and the euro zone as well as subdued orders from the electronics and semiconductor industries had a particularly negative impact on the 2014 business development. Referred to the product revenue, Asia again yielded the largest turnover (50.4%), even though sales in this region dropped by 7% compared to the previous year. Product revenue in Europe also dropped by 6.9% in the same period. American revenue remained almost unchanged (– 1.4 %). Revenue from precious metal trade amounted to €12.2 billion (previous year: €13.5 billion), mainly affected by weaker demands from the investment sector at lower prices for precious metals. The Group’s 2014 operating profit before interests and taxes (EBIT) amounted to €188.1 million and was thus clearly (26.2%) lower than previous year’s income. The drop in profit was mainly due to exchange rate costs amounting to €57.4 million. Owing to the pronounced devaluation of the euro currency with reference to the US dollar, the key date valuation of financial instruments for hedging foreign currency transactions has led to clearly unrealized foreign currency losses. Another negative effect on the operative result were the €21.6 million spent on the “Magellan” program for harmonizing and standardizing the operative processes by means of an IT platform for the entire Group. The Group’s 2014 net income after taxes (annual net profit) amounted to people €134.4 million. As had been expected, this figure was significantly lower than in the previous year (€453.5 million), because the reference figure included a capital gain, after taxes, of €291.7 million earned by selling the dental division.

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