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ePaper created 2015-05-06, 08:22:31 | version 1.38.0
35HERAEUS | FINANCIAL REPORT 2014 | GROUP MANAGEMENT REPORT Incorrect assessments in the definition and implementation of the product and technology roadmaps represent a further risk. Moreover, the emergence of individual alternative technologies may have a sustained negative impact on the business. Market opportunities and risks The Heraeus Group is firmly focused on product innova- tion and product development and therefore continually benefits from new opportunities for growth. Entirely new products present opportunities such as penetration of new market segments. By continually diversifying the product portfolio and by engaging in intensive innovation activities, Heraeus is increasing opportunities to generate robust, sustained growth. The Group strives to systematically reduce risks to the existing product portfolio. The transition from lamp- pumped lasers to laser diodes is gathering pace, for example. In order to secure the future of the business, the company stepped up the search for alternative areas of application. Also, the speed at which the manufac turing sector has adopted the new UV LED technology has been slowed down by the uncertain investment climate. To compensate for this, Heraeus restructured and stepped up sales activities for UV LED solutions in order to extend the geographical reach of its marketing activities. In the Materials Technology business group, the product portfolio and the strong market position in the various segments offer excellent opportunities for further growth. Of particular note is the consolidation of activities in packaging technology, which is significantly improving the spectrum of services and the range of applications of customer products. Future-focused investments in func- tional materials and related production processes are also yielding opportunities for growth. New sales opportunities are also arising in the field of laser and non-laser applications through the development of a module for process solutions that is already available for customer trials in the application centers. The Group also stands to benefit from this year’s reorgani zation of the Precious Metals and Materials Technology business groups. This is giving the business a stronger customer focus and more targeted market presence and is opening up potential for growth. Revenue and earnings growth has the potential to be nega- tively affected by threats to market positions and competi tive advantages, by pronounced fluctuations in demand resulting from changes in the economy, and by the fact that some business groups are heavily reliant on a small number of customers and suppliers. Further risks could emerge from a potential medium-term downturn in the economies of certain countries, and in particular China. The broadly diversified product and cus tomer structures, however, limit the degree to which these individual market risks would impact on the Group as a whole. Heraeus also minimizes risk by keeping a close watch on the market, developing alternative products, building close relationships with customers, securing further big-ticket accounts, and qualifying additional suppliers for key products. An economic downturn due to funding bottlenecks in individual eurozone countries cannot be ruled out. This would undoubtedly have a substantial impact on earnings expectations, particularly in the economically sensitive automotive, steel, and semiconductor industries. Heraeus, however, remains in a position to take appro priate measures in order to mitigate any decrease in earn- ings. Largely completed restructuring measures carried