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ePaper created 2015-05-06, 08:22:31 | version 1.38.0
15HERAEUS | FINANCIAL REPORT 2014 | GROUP MANAGEMENT REPORT Macroeconomic and sector-specific conditions In 2014, the global economy continued to be dominated by a marked level of uncertainty and mixed fortunes. Whereas the USA recovered from the decline of the pre vious years, the eurozone performed weakly. The armed conflicts in the Middle East and Ukraine had an adverse impact on the economic climate. Growth also slowed in China, the engine of growth in recent years, although it remained higher there than in most other economic regions. The improved economic situation in the USA led to a sharp appreciation of the US dollar, resulting in high demand for goods from the eurozone. The Chinese renminbi also rose against the euro. In other economic developments, the gold price in par ticular stabilized at a low level and recovered only slightly during the course of the year. Industrial demand for platinum, gold, and silver, particularly for the chemicals, electronics, semiconductor, and automotive industries, improved only marginally, which was reflected in muted trading business. Continuing low rates of interest in the capital markets and low precious metals prices in com parison with previous years meant that demand for gold and silver investment bars did not rise to any significant extent, causing the trading business to decline slightly. The markets served by our companies, and in particular the electronics, steel, and chemicals industries, main- tained their solid performance worldwide, and there was even a noticeable recovery in vehicle sales in the automotive industry. The healthcare markets saw further growth from already very high levels, and demand from the telecommunications sector for optical fibers was extremely strong again last year. Comparison between actual and forecast business performance At the beginning of 2014, Heraeus forecast a moderate improvement in operating profit (EBIT) for the reporting year. This was in spite of a small fall in product revenue due to the persistently sluggish business with products containing precious metals. A slight increase was antici- pated in revenue excluding precious metals. The product revenue that was actually achieved in 2014 fell short of expectations, declining by 6.2 percent. Revenue excluding precious metals remained at a similar level to the previous year (down by 0.3 percent). The fall in product revenue can be attributed to the rapidly advancing trend toward substituting precious metal with cheaper materials and to lower-than-expected precious metal prices. Furthermore, fluctuations in exchange rates, and in particular that of the US dollar against the euro, led to translation effects that caused the revenue of several business groups to fall short of the forecast. The Precious Metals business group and the Sensors business group were particularly affected by this. Economic report Product revenue € million 3,578 3,356 3,979 4,840 4,079 2014 2013 2012 2011 2010