Annual Report 2012

Annual Report 2012
Technology Transformed

Key Financial Indicators for the Group
Financial performance in € million
» Key financial indicators for 2008 – 2012 can be found on page 88.
2012 2011 CHANGE IN %
Product revenue 4,228 4,840 – 12.7
Precious metal trading revenue 15,989 21,343 – 25.1
Earnings before interest and taxes (EBIT) 365 489 – 25.4
Net income 237 315 – 24.6
Financial position in € million
Total assets 4,039 4,073 – 0.8
Shareholders’ equity 2,344 2,247 + 4.3
Equity-to-assets ratio in % 58
Cash ow in € million
Cash ow from operating activities 337 311 + 8.1
Capital expenditure 126 105 + 19.0
Depreciation 109 84
Employees
55
+ 30.0
Employees at year-end 13,615 13,323 + 2.2
In Germany 5,294 5,128 + 3.2
Outside of Germany 8,321 8,195 + 1.5
Personnel expenses in € million 716 659 + 8.7

Our Business Groups
PRECIOUS METALS MATERIALS AND TECHNOLOGIES
SENSORS DENTAL PRODUCTS
BIOMATERIALS AND MEDICAL PRODUCTS QUARTZ GLASS
SPECIALTY LIGHT SOURCES
Key Financial Indicators for the Group / Our Business Groups

100 years of Heraeus Quarzglas: quartz glass used in specialty fiber products for the laser industry and much more

We are a globally active precious metals and technology
Group with firm roots in Germany. The company
has been family­owned for more than 160 years.
Precious metals, materials and technologies, sensors,
biomaterials and medical products, dental products,
quartz glass, and specialty light sources are the focus
of our activities.
In 2012, we generated more than € 4.2 billion in
product revenue and € 16.0 billion in precious metal
trading revenue with more than 13,600 employees
in over 120 subsidiaries.

Table of Contents
Heraeus 2012
04 Letter from the Board of Management
07 Corporate Boards
08 Report of the Supervisory Board
12 Change is essential to sustainability
14 In Focus: What Moves Us
22 Heraeus worldwide
GrOuP MaNaGeMeNT rePOrT
28 Group Result
38 Precious Metals
42 Materials and Technologies
44 Sensors
45 Dental Products
47 Biomaterials and Medical Products
48 Quartz Glass
50 Specialty Light Sources
56 Human Resources
59 Risk and Compliance Report
70 Events after the Balance Sheet Date / Prognosis Report
75 List of Shareholdings
CONsOlIdaTed fINaNCIal sTaTeMeNTs
84 Consolidated Balance Sheet
86 Consolidated Income Statement
87 Consolidated Cash Flow Statement
88 Key Financial Indicators for the Group 2008 – 2012

p. 14
p. 34
p. 66
p. 52
p. 80
p. 24

4 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
letter from the Board of Management
Dr. Frank Heinricht Jan Rinnert

ladies and Gentlemen,
The Heraeus Group closed financial year 2012 with satisfactory
results overall. Thanks to our broad representation,
we faced the global economic challenges from a
position of strength.
Economic uncertainties and cyclical downturns in several
markets that are important for Heraeus led to a declining
trend during the financial year. We did not match the
previous financial year’s record results; overall, the Group’s
product revenues fell by 13% to € 4.2 billion. Adjusted
for price effects related to precious metals, the reduction
amounted to 5%. Operating results (EBIT) at Group level
were € 365 million, down by 25% from 2011.
Significant factors for this decline include the downturn in
the global photovoltaics industry and cyclical declines in
the global semiconductor market. The internal programs
initiated last year to boost efficiency and reduce costs
led to one­time items that lowered earnings. Despite the
cooling of markets and the ensuing drop in product revenues,
every business group made a positive contribution
to stabilizing business for the Heraeus Group at this high
level.
In precious metal trading, the reduced demand for platinum,
gold, and silver caused a decline in revenues even
though precious metal prices remained high. Precious
metal trading was particularly characterized by internal
and external hedging transactions. The continuation of
our strong recycling business compensated for any supply
bottlenecks in raw materials, such as the shortage of
platinum caused by the strikes in South Africa.
Strong demand for bonding wires as well as for sensors
for steel production was a positive force in the past
year. In addition, the markets for bone cements and optical
fibers for the telecommunications industry remained
positive.
Day in and day out, Heraeus employees make significant
contributions to the further development of the Group
and the products we deliver to global niche markets. To
maintain our leadership in these markets, we require
expertise, perseverance, and the constant drive to create,
modify, and further develop such products. In this annual
report, we highlight some of our employees and their
contributions to shaping the future of our company.
Our future depends on innovations. The Heraeus innovation
rate now stands at 15%. To sustain it at this level,
the Group invested € 84 million in research and development
during 2012. The patent portfolio of the Heraeus
Group reflects this: More than 6,000 patents provide a
solid foundation for protecting our knowledge and our
company’s extraordinary products against plagiarism and
unfair copies. We consider the issue of intellectual property
increasingly important, and in 2012 we launched a
group­wide project to continue safeguarding our innovative
strength.
We also worked in other areas to develop the Heraeus
Group into a globally active company. In addition to
projects such as the centralization of personnel services
in Germany, we completed the preparatory phase and
launch of the Magellan program at the start of 2012. The
5

6 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
letter from the Board of Management
Corporate Boards
goal is to harmonize our global business processes on a
uniform IT platform.
Building on this foundation, we are planning further
growth. One avenue is acquisitions. During the previous
and current financial year, targeted acquisitions have
pro vided access to important markets and technologies,
making Heraeus stronger. However, we remain attentive
to our solid financial underpinnings, especially in times
of economic uncertainty. The Heraeus Group will continue
to plan its business activities on the basis of stable
liquidity and a high equity­to­assets ratio of more than
55%.
There is every likelihood that the uncertain overall economic
situation we navigated in 2012 will continue in
financial year 2013. The European sovereign debt crisis
and the resulting uncertainties in the political sphere
and financial markets continue to shape the economic
environment. Prices for raw materials remain highly
volatile, particularly in precious metals, a crucial sector
for Heraeus. On the other hand, initial predictions indicate
an economic recovery in submarkets and in regions
where Heraeus is active. The first signs in the current
financial year give reason for cautious optimism.
Heraeus continues to rely on the automotive electronics,
telecommunications, medicine, steel, semiconductors,
and renewable energy industries. Our innovative strength,
once again supported by a high volume of investment,
and appropriate acquisitions paired with stable liquidity
create a solid foundation for profitable growth and enduring
success in our business activities. The Heraeus
Holding Board of Management will hold steady on this
course, as outlined in the Corporate Guiding Principles
2020.
The Heraeus Holding GmbH Board of Management
Dr. Frank Heinricht Jan Rinnert
Chairman Vice Chairman

Corporate Boards of the Heraeus Group
suPervIsOry BOard
Heraeus HOldING GMBH
Dr. Jürgen Heraeus (Chairman)
Hans Ostermeier (Vice Chairman)
Dr. Simone Bagel­Trah
Dr. Hans­Tjabert Conring
Franz Haniel
Dr. Hubert Lienhard
Uwe Raschke
Ursula Hess­Moeser
Joachim Reitz
Hans Schweinsberg (since June 2, 2012)
Dr. Andreas Utterodt
Volker Weber (until June 1, 2012)
Andreas Wolf
As of December 31, 2012
BOard Of MaNaGeMeNT
Heraeus HOldING GMBH
Dr. Frank Heinricht (Chairman)
Jan Rinnert (Vice Chairman)
BusINess GrOuPs
Heraeus Precious Metals
Dr. Roland Gerner
Heraeus Materials Technology
Dr. Hans­Joachim Dittloff
Heraeus dental
Dr. Martin Haase
Heraeus Medical
Dr. André Kobelt
Heraeus electro-Nite
Jan Doets
Heraeus Quarzglas
Heinz Fabian
Wolfgang Stang
Heraeus Noblelight
Rainer Küchler
7

8 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
report of the supervisory Board
Dr. Jürgen Heraeus

ladies and Gentlemen,
dear shareholders,
In 2012, the Supervisory Board diligently performed the
monitoring and advisory duties incumbent upon it by law,
the articles of association, and the rules of procedure,
and closely monitored and advised upon the acts of the
Board of Management of the company on an ongoing
basis. We held regular meetings in which the Board of
Management provided us with a summary of developments
and prospects in the individual business groups
and in the Group as a whole. We discussed all questions
relating to basic corporate policy with the Board of
Management at these meetings, including in particular
the Group’s risk situation and risk management system,
compliance issues, and corporate auditing.
In addition, we conducted in­depth reviews of all business
transactions requiring our approval, including acquisition
projects, in compliance with statutory regulations and company
bylaws. After these in­depth reviews, the Supervisory
Board voted on the reports and recommendations
of the Board of Management, in so far as this was required
by law and the articles of association.
In addition to the meetings mentioned above, the Chairman
of the Supervisory Board maintained regular contact
with the Board of Management. He was regularly and
comprehensively informed of significant business transactions
and current events of importance for assessing
the situation and development of the company, and he
advised management in its strategic decisions, in particular
with regard to acquisition projects within the Group.
During the reporting period, the Supervisory Board
steadfastly fulfilled its duty to monitor the Board of
Management consistently.
MeeTINGs Of THe suPervIsOry BOard aNd ITs COMMITTees
During the reporting period, the Supervisory Board held
two regular meetings.
In its meeting on May 3, 2012, the Supervisory Board
mainly discussed preparation for the shareholders’ meeting
and – in the auditor’s presence – the annual and
consolidated financial statements for financial year 2011,
including the recommendation for the allocation of profits,
approving these after thorough deliberation. The Board
of Management also reported on the 2011 financial year
and on the current financial year including a current risk
report.
In addition, the Supervisory Board appointed the audit
firm KPMG AG Wirtschaftsprüfungsgesellschaft as the
auditor for Heraeus Holding GmbH and Group auditor,
pending approval of this appointment by the shareholders’
meeting.
The main topic of the Supervisory Board’s meeting on
December 11, 2012, was the Heraeus Group’s finance
plan for financial years 2013 – 2015, which was reviewed
thoroughly and approved at this meeting. The Board of
Management also reported on the current financial year,
again including a current risk report.
9

10 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
report of the supervisory Board
In addition, the Supervisory Board voted by written resolution
on the following business projects:
a) the acquisition of Biomain AB, Helsingborg, Sweden,
and its subsidiaries by the Heraeus Dental business
group;
b) the acquisition of the business activities of Midwest
Instrument Company of Hartland, Wisconsin, USA, by
the Heraeus Electro­Nite business group;
c) the acquisition of the Fusion UV Systems Group by
the Heraeus Noblelight business group.
The Supervisory Board’s Audit Committee, in the presence
of the auditor, mainly dealt with the annual and
con solidated financial statements for financial year 2011
at its meeting on March 30, 2012. The Audit Committee
also dealt with the mandate of the auditor, KPMG AG
Wirtschaftsprüfungsgesellschaft, Frankfurt am Main, and
expressed its support for extending this mandate for two
additional years. A rotation in the KPMG’s auditor team
was also recommended for the future.
The Audit Committee dealt definitively with the 2012
midyear report and preparation of the consolidated annual
financial statements for 2012 at its meeting on September
17, 2012, and with compliance issues, the risk
management systems, and corporate auditing at its
meeting on December 3, 2012.
The Chairman of the Audit Committee reported its activities
to the Supervisory Board at the Supervisory Board
meetings following each of these meetings.
A meeting of the Steering Committee was held in late
November 2012 in preparation for the appointment of
an additional managing director. Meetings of the Mediation
Committee were not necessary during the report ­
ing period.
aNNual fINaNCIal sTaTeMeNTs
The annual financial statements and the management
report of Heraeus Holding GmbH as well as the consolidated
financial statements and the management report of
the Heraeus Group for financial year 2012 were audited
by KPMG AG Wirtschaftsprüfungsgesellschaft, Frankfurt
am Main, and endorsed with an unqualified auditor’s
report.
The Supervisory Board authorized these audits in its
meeting on May 3, 2012. Together with the Board of
Management of Heraeus Holding GmbH, the Chairman
of the Supervisory Board, the Board of Management,
and the auditors discussed relevant accounting matters
before the annual financial statements were prepared.
Moreover, the Supervisory Board’s Audit Committee discussed
the annual and consolidated financial statements
for financial year 2012 and their audits at its meeting of
April 9, 2013. The Audit Committee accepted the result
of the auditor’s report with no objections.

The annual financial statements for financial year 2012
and the management report of Heraeus Holding GmbH
and the Heraeus Group for financial year 2012, along with
the reports of the auditor, were provided to all members
of the Supervisory Board in advance of the meeting on
April 24, 2013. The auditors who signed the auditor’s
report participated in the Supervisory Board’s discussion
of the documents to be audited. They reported on the
most important findings of their audit and were available
during the meeting to answer questions. The Supervisory
Board reviewed the financial statements and the management
report of Heraeus Holding GmbH as well as the
consolidated financial statements and management report
of the Heraeus Group prepared for financial year
2012, along with their respective auditor’s reports. In
accordance with the final result of its own audit, there
were no objections. Accordingly, the Supervisory Board
approved the annual financial statements and management
report along with the consolidated financial statements
and management report.
The Supervisory Board reviewed and approved the Board
of Management’s recommendation for the allocation of
profits.
CHaNGes TO THe COMPOsITION Of THe suPervIsOry BOard
The shareholders’ meeting elected Dr. Hubert Lienhard,
CEO of Voith GmbH, to the Supervisory Board of Heraeus
Holding GmbH on June 2, 2012. Dr. Hubert Lienhard
had already been appointed as a member of the Supervisory
Board of Heraeus Holding GmbH by the Hanau
District Court on November 8, 2011 at the request of the
Heraeus Holding GmbH Board of Management, following
the resignation of Dieter Ammer from his position on the
Supervisory Board effective June 30, 2011.
Volker Weber resigned from his position on the Supervisory
Board effective June 1, 2012. At the request of the
trade union IG Bergbau, Chemie, Energie, the Hanau
District Court appointed Hans Schweinsberg as a member
of the Supervisory Board as a representative of
the trade union effective June 2, 2012. The Supervisory
Board would like to take this opportunity to thank Mr.
Weber for his steadfast service on the Board.
The Supervisory Board would like to offer special thanks
to everyone in management and on the works councils
of the Heraeus Group, as well as to each and every employee
for their extraordinary dedication throughout
the past year.
Hanau, Germany, April 24, 2013
The Supervisory Board
Dr. Jürgen Heraeus
Chairman
11

12 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
Change is essential to sustainability
Change is essential to sustainability
It almost sounds like a rivalry. There are widely
divergent opinions whether family­owned com­
panies are more successful than publicly owned
companies. Critics disparage family­owned com­
panies as underperformers, arguing that systemic
factors limit financial performance. Many pre­
dict that the decline of family­owned companies
within just a few generations is almost inevitable.
On the other hand, we hear over and over again
that family­owned companies are the backbone
of the economy. Many family­owned companies
have become models and future blueprints for
present­day managers who, now more than ever
before, are focusing on long­term strategies
rather than short­term wins.
In recent years, US investor Warren Buffett has
worked intensively to include more European
family­owned companies – especially German
companies – in his investment portfolio. His
explanation for this is at once simple and instructive:
Family­owned companies focus on performance
over the long term, they believe that hard
work brings success, and they have a strong
corporate culture.
In this regard, Warren Buffett is a man after
my own heart, but these factors alone are not
enough for family­owned businesses to be
successful. More than ever before, our fast­paced
economy demands that we strike the right
balance between tradition and sustainability on
the one hand and speed and adaptability on
the other.
Corporate cultures, particularly within familyowned
companies, have a tendency to embrace
the status quo, but even these cultures need
to move ahead. This is absolutely necessary, especially
when difficult times call for entrepreneurial
decisions and drastic, sometimes painful
measures, such as job cuts.
Tough decisions like these must be made trans­
parent to employees and company owners,
particularly today when there are so many people
who do not believe that the pursuit of profit
can go hand in hand with a culture of corporate
responsibility. For family­owned companies,
the bar is even higher. The expectation – often
tacit – is that a long­term strategy, paired with
a socially responsible attitude, precludes job cuts.

When this expectation is not met, there is an
erosion of trust – in the company, its manage­
ment, its owners, and, in some cases, even in
the market economy as a whole.
This is the special challenge faced by the management
of family­owned companies, which
must not only make the right decisions, but also
communicate them so that they are understood
and follow through on these decisions conscientiously
and compassionately. Company deci ­
sions must inspire confidence – nothing else will
do. After all, a company cannot be successful
over the long term without highly motivated and
qualified employees.
Like any other company, family­owned companies
must remain profitable as they grow. I would
even go so far as to say that financially independent
companies must be even more profitable
than listed companies if they are to maintain their
independence over the long term.
This has nothing to do with the reputedly high
demands of the shareholders. On the contrary:
The majority of family­owned companies keep
most of the profit in the business to secure
future growth, i.e. for research and development,
investment, and in some cases for acquisitions.
Only companies that operate at a profit succeed
in maintaining solidly financed and sustainable
growth on the strength of their own resources.
And only if they continue to operate at a profit
can companies fulfill their all­important social
responsibility, i.e. by creating and safeguarding
attractive jobs.
All of this argues for the fact that there is no
justification for reintroducing the wealth tax.
This tax will come at the cost of the company,
not of the “wealthy” whom it is supposed to
target, and in the end it will compromise the
company over the long term by weakening its
sustainability.
Dr. Jürgen Heraeus
Chairman of the Supervisory Board
Chairman of the Shareholders’ Committee
13

What Moves Us
Every day, the people at Heraeus promote the company, its clients
and products, and its continuing development. What began more
than 160 years ago in a pharmacy is now a corporate group that
spans the globe with seven business groups, where more than
13,600 people serve a broad range of markets and niches. But
what drives them? Is there a common denomi nator? What is it
about Heraeus that brings people of diverse cultures together?
A look behind the scenes.
15

16 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
In focus: What Moves us
Mandy Chen laughs. Naturally, the name Heraeus
sounds foreign in most Asian languages. The company
employs a staff of more than 6,000 in Asia, including 2,500
in China. China has been one of Heraeus’ growth markets
for years. “The competition for highly trained specialists presents
challenges for international companies in China. In
downtown areas of Shanghai, there are often several international
companies even in the same office building,” says
Chen, describing the challenge of finding and retaining a skilled
workforce. Chen works in the HR department at the Heraeus
Regional Center China in Shanghai, where she is in charge of
staff development for the region. At first glance, positioning
her employer does not seem like a simple task: the company
is German, has a complicated portfolio and the name
sounds decidedly European. But that is not the whole picture.
“There are selling points that go over well,” Chen says.
“Heraeus is a family­owned company with a 160­year­long
tradition. It is also a Fortune 500 company. And there are
some other key qualities for attracting potential employees.”
Such as … ? “Reliability, a long­term vision, predictability,
and punctuality,” she says, grinning. But there is more to the
matter than initially meets the eye: Mandy Chen had her
own reasons for coming to Heraeus two years ago. “I’d previously
worked as an HR business partner for European companies,”
says Chen. But the possibility of moving from administrative
duties to staff development offered her an
opportunity for development that she had been looking for.
“I felt a feeling of trust from the very outset, and I was
given the freedom to develop new areas, things which should
be taken for granted. The company is inspiring and
moti vating.”
Today, Chen develops programs to train employees and
management in leadership programs and soft skills such as
negotiation strategies, time management, etc. that are needed
every day in the workplace. In addition, hard factors like
salary, work­life balance and harmonious relations with others
are enjoying increasing demand around the world and in
MAnDy CHEn
“ I felt a feeling of trust
from the very outset,
and I was given the freedom
to develop new
areas, things which should
be taken for granted.
The company is inspiring
and moti vating.”
China as well. “The prospect of working for a growing company
with a culture of individual responsibility also makes us
attractive for applicants,” says Chen.
Be a rOle MOdel
In Bitterfeld near Leipzig, plant manager Christian Nasarow
looks out the window at the world’s largest quartz glass
production plant. “Heraeus was a pioneer here in 1992. At
that time, Bitterfeld symbolized the sins of the chemical
industry. But together with other companies that also recognized
opportunity, we created a state­of­the­art industrial
park and an extremely productive plant. This plant is now a
key employer in the economically underdeveloped region
of Saxony­Anhalt.” In 2012, the location celebrated 20 years
of producing primarily synthetic quartz glass in Bitterfeld,

Mandy Chen
17

Christian Nasarow
18 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
In focus: What Moves us
CHrIsTIAn nAsAroW
“ In 1992, Heraeus was a
pioneer in Bitterfeld.
Together with other companies
that also recognized
the opportunities
there, we created a stateof­the­art
industrial
park and an extremely
productive plant.”
which is fundamental to a host of applications in the tele­
communications industry. The expansion of the fiber­optic
network is the basis for fast Internet connections across the
globe. Nasarow and quartz glass have accompanied each
other for many years over the course of his career at Heraeus
and other companies as well. Quartz glass even brought
Nasarow, a mechanical engineer, all the way from his home
in Northern Germany to the United States. “I was contacted
by Heraeus in 2006,” he recalls. “They had previously been
a competitor, albeit one with a deep understanding of quartz
glass production. So I took on the challenge.” Nasarow’s new
responsibility was to work with the team to bring productivity
in Bitterfeld to a world­class level. It is not simply a matter
of having the technical foundation, however: a well­function­
ing team is critical. “In addition to introducing the Six Sigma
method and improving occupational safety, we also needed
to do something for the team’s personal development and co­
hesiveness,” says Nasarow, explaining the challenges. This
situation inspired him to develop Community Service Day:
Once a year, the employees at the Bitterfeld plant, led by
their plant manager, devote themselves to a group community

service project during working hours. In past years, crafts­
manship has combined with social conscience to benefit
kindergartens, schools and youth clubs in the regions. Thanks
to their helping hands and workmanship, those institutions
now enjoy renovated indoor and outdoor facilities. “It is also
a good way of finding your employees’ hidden talents,” says
Nasarow, referring to his team’s unexpected expertise in bricklaying
and gardening. A little goes a long way, both internally
and externally. It is not by chance that Community Service Day
benefits young people. “While we are working, we are also promoting
the company’s image for future generations of Heraeus
employees,” says Nasarow with satisfaction.
MakING CHaNGe
Richard Ward is also thinking about the future of the company.
Ward left Atlanta in 2012 for the corporate headquarters in
Hanau as a project manager for the Magellan process harmonization
program. He did not make the leap from the United
States to Germany alone. Because the project was slated to
last several years, Ward decided to bring his family to Germany
with him. This new chapter of his life meant that Ward,
41, and his wife were able to live in Europe, something they
had wanted to do for a long time. So the couple, along with
their daughter and son, ages 11 and 6, embarked on an adventure
in a new country. “It is a bit different from the dream
of a Paris apartment with a view of the Eiffel tower that we
had in college,” says Ward jokingly. But the daily sight of the
Frankfurt skyline is not a problem for him, either. “After all,
Europe’s business center is Germany, and I always wanted to
work at Heraeus’ headquarters, at least for a while.” Ward,
a passionate marathon runner, also enjoys the variety of running
paths in his new home. He no longer has to run on
tracks, as he did in the USA. He is now exploring the Rhine­
Main region “without crossing the same path twice.”
Richard Ward
MAGEllAn
19
The Magellan harmonization project begun in 2012 is
setting a course at Heraeus for better process efficiency
and continued profitable growth. The goal of
the program, named after the Portuguese navigator,
is to reconfigure and improve processes in a group­wide
sAP system. These unified processes are the foundation
of successful future performance at Heraeus.
An international core team of about 80, made up of
employees from all business groups, Heraeus IT, and
external consultants, is currently working on standardizing
business processes. The initial pilot projects
are set to launch in singapore and Hong Kong during
the 2013 business year. The project will then be introduced
throughout the company, starting in 2014.
Magellan supports the growth targets defined in the
Heraeus Corporate Guiding Principles 2020.

20 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
In focus: What Moves us
Ward sees the Magellan program as exemplifying the company’s
openness to change. “With its business groups, Heraeus
combines the competitiveness of seven medium­sized enterprises
into a strong Fortune 500 company. Now we need to
define, on the basis of an IT platform, company­wide business
processes so that continued growth is possible as well,”
he explains. It goes without saying that change on that
scale will affect the entire company. “It is a daunting project,
but even the way we tackle it sets Heraeus apart. We analyzed
the direction in which we wanted to develop. It starts
with a creative spark that turns into a common vision and
the desire to realize it, incorporating all business segments.”
Ward is working with his team to prepare for implementing
the program and training Heraeus’ employees. “We will be
training roughly 1,400 of our co­workers over six weeks.
And that’s just in Hanau,” he explains. Not an easy task, but
one that is feasible with a common commitment to change.
COMMITMeNT aCrOss CONTINeNTs – BOTH ON aNd Off THe jOB
Change is nothing new for Regiane Marton. These days she
travels between two worlds: Hanau and São Paulo in Brazil.
A dentist by training, she has been participating in an 18month
management training program in the Heraeus Dental
business group since August 2012. This program involves
training in finance, IT, supply chain, and marketing departments
in headquarters, one after another. She has been at
Heraeus Kulzer Brasil since 2006, where she is in charge
of operation management (quality and regulatory affairs,
supply chain, and sales administration. Marton’s employment
with Heraeus was almost inevitable; as a practicing dentist
she worked regularly with Heraeus products. “There are only
a few big names in that market, and Heraeus is one of them.
And I can only work with things that I have a connection to.
So it made perfect sense to work for Heraeus.” While Marton
misses working side­by­side with her colleagues every day,
Internet­based communication tools enable her to keep
rEGIAnE MArTon
“ I can only work with things
that I have a connection to.
so it made perfect sense to
work for Heraeus.”
collaborating with them. “Initially there was some doubt as
to whether we could continue to work in the same way during
my traineeship. But all it took was a bit more dedication
and efficiency to continue developing things together.” The
efficiency is a very German quality, Marton finds, but it is
one that sets Heraeus apart as a company. She benefits from
it personally: “Better time management means that even
in this very busy phase, I can still plan on having some free
time.” That benefits others, too. Since 2008, Marton, a
native of Brazil, has been involved in the Make­A­Wish Foundation,
which makes the dreams of sick children come true.
“Once I started volunteering, I couldn’t go back. The gratitude
of the children is such a reward. And it is less about financial
support than about sharing your time and yourself.” There is
more to life than professional fulfillment for Marton. There
has to be room for balance and involvement elsewhere.
What drives Heraeus employees? The desire for a challenge
may be one motivator, as with Mandy Chen, on the quest in
China for new co­workers. Or with Christian Nasarow, who not
only produces high­quality quartz glass in Bitterfeld, but
also puts his team’s talents to work for the community. The
same is true for Richard Ward, who works to make Heraeus
future­proof from the ground up, and for Regiane Marton, who
still finds time to spend with sick children in addition to juggling
work on two continents. It is the same thing that drives
our developers at 25 research centers across the globe, who
dedicate themselves to the task of finding new solutions for
clients and developing new technologies and products that
are unique in their own way – by taking the Heraeus path rather
than the easy route to shape technology.

Regiane Marton
21

22 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
Heraeus worldwide
Heraeus has 13,615 employees around the world at
126 locations and 25 dedicated development centers.
The map shows the number of workers worldwide by percent and location, organized by region.
18%
THe aMerICas (20)
Brazil (3)
Canada (1)
Mexico (2)
Puerto Rico (1)
USA (13)
As of December 31, 2012
15% GerMaNy (23) 39%
eurOPe exCludING GerMaNy (39)
Austria (1)
Belgium (1)
Czech Republic (1)
France (4)
Greece (1)
Hungary (1)
Ireland (1)
Italy (3)
Poland (2)
Portugal (1)
Russia (2)
Spain (2)
Sweden (3)
Switzerland (3)
The Netherlands (3)
Turkey (2)
Ukraine (1)
United Kingdom (7)

sOuTH afrICa (2)
1%
ausTralIa (3)
asIa (39)
23
27%
China (16)
Hong Kong (2)
India (3)
Indonesia (2)
Japan (4)
Korea (5)
Malaysia (1)
Singapore (2)
Taiwan (2)
Thailand (1)
The Philippines (1)

»I make
pacemakers tick«

» Turning new items is very exciting – especially
when they are millimeter-sized products that
can save lives. With high-tech methods such
as micro-precision turning, I’m helping to
produce electrodes of the finest quality for use
in cardio- and neuro stimulation. For example,
extremely sensitive custom-made stimulation
electrodes transmit impulses from the pacemaker
to the heart muscle. They ensure that
the heart beats with the proper rhythm. I’m
proud of the fact that most pacemakers already
use our tiny lifesavers.«
CeCilia Strüber haS worked at the MediCal CoMponentS diviSion of heraeuS
preCiouS MetalS in hanau for four yearS. aS a MaChining teChniCian, She iS
reSponSible for Cleaning and deburring eleCtrodeS for paCeMakerS and StentS
for MiniMally invaSive proCedureS. at the SaMe tiMe, She iS Studying engineering
in order to be able to ConCentrate on working with Cad prograMS in the
future.

paCeMaker eleCtrodeS are
firMly anChored in the heart MuSCle

28 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
Group Result
Group Management Report 2012
group result
Heraeus can look back at the 2012 financial year with
satisfaction overall. Although it was not possible to
match the record results of the previous year, the markets
Heraeus serves, especially the electronics, steel, and
chemical industries, performed well worldwide. Health
care markets remained at a solid level. The semiconductor
industry was confronted with a cyclical downturn.
The uncertain economic situation in individual eurozone
countries led, among other things, to a weakening
of the euro in 2012 and an associated favorable impact
on demand from other currency areas. Heraeus has
a widely diversified business portfolio. This includes
products based on precious metals for a variety of applications
and industries, along with precious metal life
cycle management. Heraeus also produces sensors and
measurement equipment for monitoring processes in
steel production; medical products for dental health, orthopedics,
trauma surgery, and biosurgery; quartz glass
products for the semiconductor, electronics, and telecommunications
industries; and specialty light sources for
applications in the UV and IR spectrums.
Ongoing economic trends, particularly in parts of Europe,
also affected the demand for precious metals. Industrial
demand for platinum, gold, and silver – especially from
the chemical, electronics, semiconductor, and automotive
industries – declined, triggering a considerable drop in
trading. In contrast, continued low interest rates in the
capital markets and the search for crisis­proof investment
opportunities boosted demand for gold and silver
investment bars, which had a positive effect on trading
business. At the same time, investor and speculator interest
also significantly increased price volatility.
Following record revenue levels in 2011, the precious
metals business group posted satisfactory revenues in
2012. The decline in demand for photovoltaics, coming
on the heels of a very strong previous year, triggered
a significant decrease in the business group overall that
could not be completely offset by the positive results
achieved through other activities. One example is the recycling
business, which broadened the scope of its activities.
Despite generally challenging market conditions,
the materials and technologies business group, driven
in particular by strong demand for bonding wire, continued
to post gratifying revenues that remained only
slightly below the record set in the previous year. This
performance compensated for a decline in sensors
for thermal energy measurement and for magnetic data
storage. The stable performance of the steel market so
vital to the sensors business group ensured that revenue
remained at a gratifying level. Continued solid demand
in Asian countries drove revenue growth, although at a
slower pace. The markets in Europe and those in North
and South America showed satisfactory performance in
view of the economic situation. The dental products
business group saw a slight dip in revenue, particularly
in its dental prosthetics product business. Following
the market trend, precious metals revenue declined. The
dental business, on the other hand, showed a noticeable
increase. Once again, the biomaterials and medical
products business group saw very promising development
in 2012. This was due particularly to positive trends
in the established markets of Europe and North America,
entry into new Asian and African markets for bone cement,
and the market for orthopedic biomaterials. In the
quartz glass business group, semiconductor and solar

2012
2011
2010
2009
2008
PRODUCT REVENUE
in € million
2,586
2,920
4,228
4,079
4,840
industry demand fell considerably from its high of the
previous year. On the other hand, strong growth in the
telecommunications sector continued. Persistent rising demand
for glass fibers for the continued expansion of
broadband networks contributed significantly to the positive
trend. The business group saw sustained growth
both in China and in the USA. The specialty light sources
business group also reflected the weak demand in the
solar industry. Disproportionately high growth rates at the
beginning of 2012 were followed, however, by a drop
in demand in the photovoltaics industry, leading to adverse
effects on the infrared business. The business
group continues to provide its products and applications
to a variety of industries and sectors. Key customers
come from the printing and plastics industries and also
include automobile manufacturers and their suppliers.
PRODUCT REVENUE BY REGION
2008 2012
18 %
23 %
18 %
39 %
2 %
14 %
16 %
16 %
52 %
2 %
germany
europe excluding germany
the americas
asia
africa /australia
FINANCIAL PERFORMANCE
The Heraeus Group closed out the 2012 financial year
with a decline in revenue and earnings, falling short of
the record values of the previous year. Heraeus’ strong
position in a wide variety of markets, ongoing innovative
strength, flexible management and workforce, and solid
financial structure laid the groundwork for the Group’s
continued stable development – all in spite of economic
uncertainty in the eurozone, the cyclical downturn in the
semiconductor industry, and the sharp drop in demand
from the photovoltaics industry.
Product revenue totaled € 4.2 billion, a decrease of 12.7%
from the previous year. Adjusted for precious metals effects,
the drop in revenue amounted to 5%. While falling
short of the record values achieved in 2011, product
29

30 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
Group Result
revenues for the past financial year were still significantly
above the level of previous years. Asia remains the region
with the strongest revenue, at 51.5%, although this
represented a drop of 17.6% from the previous year.
Product revenues in Europe also fell by 10.5% from the
previous year, while revenues in the USA remained constant
(– 1.3%). Exchange rate effects had a positive impact
on revenues, bringing the fall in product revenues
from the previous year to 16.8% when adjusted for currency
translation.
The precious metals business group posted a 24.7%
decline in revenues compared to the previous year due
to sharp declines in demand in the photovoltaics business.
Even the materials and technologies business group
came in below the values of the previous year (– 6.3%),
mainly due to the decline in demand and high inventory
levels in the automotive and computer industries. The
sensors and dental products business groups achieved a
slight increase in revenues over the previous year
(+ 2.3% and + 0.3%, respectively). The biomaterials and
medical products business group once again contrib uted
positively to the Group’s revenue development (+ 8.2%).
The quartz glass business group showed a 9.3% decline
in revenues due to the heavy drop in demand from the
semiconductor and solar industries. The declining demand
in the photovoltaics industry also affected the specialty
light sources business group, which posted a 10.2% decrease
in revenues.
Due to significantly lower industrial demand and transactions
related to financing activities, precious metal
trading revenue came to €16.0 billion following € 21.3
billion the previous year.
The Group’s earnings before interest and taxes (EBIT)
for the 2012 financial year fell to € 364.6 million,
representing a substantial decrease of € 124.2 million
or 25.4% from the record year of 2011. The significant
economic downturn in important customer markets and
persistant uncertainty over the direction the economy
will take have played a major part in this decrease. At a
cost of € 38.5 million, the ongoing projects to restructure
the materials and technologies and dental products
business groups also had an adverse effect on the 2012
results. Moreover, the Magellan project, begun at the end
of 2011 to harmonize and standardize operating processes
on the basis of a single, group­wide IT platform,
accounts for €17.3 million in spending.
The two restructuring programs and the acquisitions
made in 2012 together increased personnel expenses by
8.7%, bringing them to € 716.1 million. The Heraeus
Group added 292 employees, for a total of 13,615 at
year’s end. Acquisitions in the precious metals and
dental products business groups added 428 employees
to the workforce of the Heraeus Group. Depreciation
increased over the previous year from € 28.6 million
to €135.9 million, mainly as a result of impairments
taken. Other operating income rose by € 53.2 million to
€152.0 million. This increase is due primarily to unrealized
gains from closing date valuations of finan cial
instruments to hedge against risks in foreign exchange
transactions. Other operating expenses fell by € 35.3 million
to € 414.6 million during the 2012 financial year,
mainly as a result of unrealized losses from closing date
valuations of financial instruments in the prior year.
The associated companies’ contributions to earnings before
interest and taxes stood at €13.2 million, down by

€ 4.2 million from the previous year. This was mainly attributable
to the declining earnings of Shin­Etsu Quartz
Products Co., Ltd. in Japan. The Group’s financial result
declined slightly by € 2.4 million, closing out the year
with a loss of € – 36.4 million. This com prises interest
expenses of € 24.9 million (previous year: € 24.6 million)
for long­term financing, as well as the interest expense
associated with the addition of accrued interest on provisions
for pensions of €13.6 million (pre vious year: €12.7
million).
Group earnings before taxes (EBT) stand at € 328.2 million,
€121.8 million below those of the previous year.
A more favorable geographic distribution of earnings focused
on countries with lower tax rates caused the tax
ratio to decrease from 30.1% to 27.8%. The Group’s income
after taxes (net income) amounted to € 237.0 million,
which represents a drop of € 77.5 million (24.6%)
from the previous year.
FINANCIAL POSITION AND CASH FLOW
The Heraeus Group’s financial position and cash flow
continued to show positive development in 2012. Heraeus
possesses a healthy balance sheet structure, a substantial
supply of liquid funds, and a secure basis for mediumto
long­term financing. At the end of 2012, the Heraeus
Group’s total assets came to € 4,038.8 million, remaining
nearly level with the total for the previous year
(€ – 34.1 million). At 58.0%, the Group’s equity­to­assets
ratio is just slightly above the very healthy level of previous
years.
The balance sheet structure remains stable in comparison
with the previous year, without any significant movement
GROUP EARNINGS
in € million
500
450
400
350
300
250
200
150
100
50
0
ebit
net income
2008 2009 2010 2011 2012
in individual items. On the asset side of the balance
sheet, non­current assets increased by € 47.5 million,
mainly owing to the acquisitions completed in 2012.
Trade receivables declined by € 60.2 million in line with
the decrease in business volume. The main change on
the liabilities side was the increase in pension provisions
(€ + 65.4 million) as a result of a necessary adjustment
to the underlying interest rate. On the other hand, trade
payables declined by € 48.8 million and short­ and longterm
financial debt decreased by a total of € 47.3 million.
31

32 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
Group Result
FINANCIAL POSITION AS OF DEC. 31, 2012, IN € MILLION
assets equity
1,153
1,039
856
991
ppe
inventories
Securities / Cash and
cash equivalents
other assets
2,344
385
576
734
Shareholders’ equity
pensions provisions
interest-bearing
liabilities
other borrowings
Heraeus Holding centrally controls the Group’s financing
activities through the Corporate Treasury Department.
The Group secures liquidity on the basis of medium­term
financial planning. Our companies’ operating business
activities represent the Group’s most significant source
of liquidity.
Medium­ and long­term external Group financing is provided
mainly through a euro bond with a term of seven
years issued in May 2010, through promissory notes, and
through a bond placed privately in 2012. Short­term
financing requirements were also met through the use of
the commercial paper program. In addition, a long­term
syndicated credit line is available at short notice for other
financing needs. In the Trading department, precious
metal loans are also used as a short­term financing tool.
The cash flow from operating activities is generated primarily
through net income, taking into account depreciation,
changes to current assets tied up in operations,
as well as changes to provisions, and amounted to
€ 336.5 million for 2012. The net income of € 237.0
million contributed significantly to this cash flow. By
contrast, the negative cash flow from investment activities
totaled €100.4 million, mainly for investments
in tangible assets in the amount of €136.0 million, payments
for acquisitions of € 69.5 million, and a reduction
in liquidity reserves in the form of securities (€ – 98.8
million). The decline in interest­bearing liabilities of
€ 48.8 million on balance, along with a still moderate
dividend distribution of € 77.7 million, resulted in a
cash flow from financing activities of €126.5 million. This
resulted in a total net increase of €109.6 million in
cash and cash equivalents. Overall, the Group’s liquid ­
ity reserves (cash and cash equivalents and securities)
increased by € 22.3 million to a total of € 856.4 million
at the end of the financial year. The Heraeus Group’s
con tinued very solid financial position and cash flow
establish an important foundation for actively developing
its business and market position in the future.
CAPITAL EXPENDITURES
Investments in property, plant, and equipment totaled
€125.5 million in 2012, showing a significant increase
(19.0%) from the previous year’s level of €105.5 million.
The Group continued to invest in future­proof technologies
and growth markets while making prudent and disciplined
outlays in other areas.

CAPITAL EXPENDITURE, DEPRECIATION, AND AMORTIZATION
in € million
120
100
80
60
40
20
0
investments
2008 2009 2010 2011
depreciation
excluding impairments
2012
Investments by the precious metals business group focused
on the continued expansion of the Singapore
location as a development and production location for
medical technology products, on strengthening its market
position, and in expanding its capacities, particularly
in the Chemicals and Thick Film Materials business
units. In the materials and technologies business group,
investments emphasized expanding capacities for producing
copper bonding wires and palladium­coated copper
bonding wires in Singapore. Besides opening a
new plant at the location in Pyeongtaek, Korea, and beginning
construction on a location in In donesia, in
2012, the sensors business group invested in automation
and modernization in the area of production. The
dental products business group invested in new technologies
and appli cations in the field of digital prosthetics
and making the e­commerce solution easier for customers
to use.
In the biomaterials and medical product business group,
investment focused on facilities and tools to automate
packaging equipment.
The largest share of investments in property, plant, and
equipment, at € 40.9 million, went to the quartz glass
business group, which continued to expand its capacities
in the optical fiber business to meet continued high
demand from the telecommunications industry. No significant
investments were made by the specialty light
sources business group in 2012.
A total of € 69.5 million was spent on acquisitions during
the financial year.
As of January 31, 2012, the precious metals business
group took over the business of Daychem Laboratories,
Inc., USA. The asset deal expands Heraeus’ product
portfolio in the field of organic special chemicals for the
semiconductor and display industries.
The dental products business group acquired Biomain
AB, Sweden, on March 1, 2012. The share deal strengthens
Heraeus’ market presence in Northern Europe and
expands its patent and product portfolio in digital implant
prosthetics.
On September 7, 2012, the sensors business group,
the Heraeus Group’s specialist in the area of sensors and
measurement systems, announced that its acquisition
of the business activities of Midwest Instrument Company,
based in Hartland, Wisconsin (USA), had entered into
force. The acquisition of the company expands the business
group’s product portfolio in the field of measurement,
monitoring, and control of metal smelting.
33

»I am a
trendsetter for alloyed
copper wires«

» Heraeus is a leading supplier of ultra-thin
bonding wires for microelectronics in the packaging
industry. The latest trend in wire production
is to use materials other than gold, such
as copper. I have developed two state-of-the-
art alloyed copper wire products for the packaging
industry and have done some problem
solving for customers as well as the production
team. I’m proud to say that a number of
semiconductor businesses regard Heraeus as
the trendsetter for alloyed copper wire products.
My research and work ranges from basic
alloy design to processing of the products.«
dr. Murali Sarangapani haS Spent 26 yearS reSearChing MaterialS and Metallurgy,
with a partiCular foCuS on bonding wireS. he haS been a developer at heraeuS
MaterialS teChnology in Singapore for four yearS now. he holdS Six patentS for
Copper wireS, with four More in the approval phaSe. dr. Sarangapani haS publiShed
over 100 artiCleS on the topiC and iS a reSpeCted Speaker at ConferenCeS
and SeMinarS.

new alloyed Copper wire produCtS
for the paCkaging induStry

38 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
Precious Metals
precious Metals business group – heraeus precious Metals
The precious metals business group (Heraeus Precious Metals) is a world leader in industrial precious metals and special
metals, processing the precious metals gold, silver, and platinum group metals, primarily for use in the manufacture of
industrial products for the automotive, semiconductor, electronics, and medical industries. In addition, Heraeus Precious
Metals holds a leading international position in industrial precious metal trading. The principal purchasers of Heraeus
Precious Metals products operate in the environmental, mobility, communications, energy, and health care sectors.
BUSINESS DEVELOPMENT
The massive market consolidation in the area of photovoltaics
and the significantly reduced use of silver pastes
made it impossible to repeat the previous year’s record
sales. Product revenues decreased by 24.7% in comparison
with 2011 to €1,468.2 million. Adjusted for precious
metal effects, product revenues declined by 14.7%
over the previous year. Precious metal prices and increased
demand from the investment sector had a significant
positive influence on precious metal trading
revenue. As a result of decreased industrial demand, at
€15,989.0 million, it was clearly below the amount for
the previous year. Overall, the precious metals business
group achieved satisfactory results even matching the
previous year in some areas.
CHEMICALS
The stagnant economy affected the Chemicals Division
to varying degrees this year.
Overall, it achieved the operating earnings target for
2012. The division successfully further developed the
recycling business in China this year, thereby creating
a basis for additional growth. The clear focus of recycling
over the next few years will be on China. Activities in
the USA will be reoriented and have gained significant
impetus.
The downturn in the European automobile industry and
the associated catalytic converter business is still having
a negative impact on demand for coating solutions containing
precious metals.
In contrast, catalyst business for the upgrading of vehicles
through system integrators has been on the rise
because of additional tax breaks and the increasing num­
ber of environmental zones in Europe. For example, the
Chinese joint venture generated a sales increase of over
50% in comparison with the previous year for motorcycle
catalysts. The business group looks forward to a continuation
of this positive development despite continuing
delays in implementing the Chinese emissions legislation.
In process chemistry, many years of focusing strategically
on innovative products for new applications (e.g. biomass­to­liquid,
gas­to­liquid) and for homogenous catalysis,
is starting to pay off.
A peak in demand for platinum­based active ingredients
from most manufacturers had a positive effect on the
highly active generic platinum­based active ingredient
sector, extending the Heraeus lead in this field.
The continuing epirubicin price collapse made it necessary
to revise the business plan while refocusing the
product portfolio, which in turn led to an extraordinary
write­down for the fermentation plant.
CONDUCTIVE POLYMERS
The division sells its products – conductive polymers and
related intermediate products for condensers, and for
antistatic and transparent high­conductivity coatings –
under the umbrella brand Clevios. It is becoming a
leader in international competition. The focus for future
markets is currently on projects for display solutions,
such as touch panels, OLEDs and organic photovoltaics.
Capacitor revenues fell as a result of the economic slowdown
in the computer market and the loss of the division’s
largest individual client after its production facility
in Thailand flooded. Revenues were already weak in
the last quarter of 2011 and continued to go down in Q1

PRODUCT REVENUE PRECIOUS METAL TRADING REVENUE
in € million in € million
2012
2011
2010
2009
688.5
1,468.2
1,447.2
1,949.1
2012. It was possible to achieve budget levels during the
year. In the LCD industry the division maintained its
leading position worldwide. The market for screens – for
everything from televisions to mobile phones – has the
largest potential for growth; medium­ to long­term growth
potential of conductive polymers remains positive.
MEDICAL COMPONENTS
In a market that is currently experiencing minimal growth,
the Medical Components Division enjoyed an over­proportional
increase in revenue. The division became market
leader in pacemaker electrodes because of additional
revenue generated by the world market leader in pacemakers
and defibrillators.
In order to increase profitability, the Swiss location was
restructured, production was relocated, and other automation
was introduced. In addition, the division successfully
opened a production and R&D site in Singapore.
This site is the basis for further development of the division’s
Asian market.
2012
2011
2010
2009
2008
13,633.9
12,994.0
15,989.0
17,946.0
21,342.6
THICk FILM MATERIALS
This division is still characterized by business in silver
pastes for solar cells, which delivered a decreased, but
still pleasing result despite difficult market circumstances
in 2012. The reduction in the paste quantity per cell
turned out to be greater than expected, and with hardly
any change in demand for solar modules during the
year, this led to a significant decline in the market for
silver pastes.
A new revival in demand for solar modules and consequently
for silver pastes could occur in the medium term
as a result of increased customer demand and government
incentive programs.
The acquisition of Daychem Laboratories Inc., USA, and
its business in organic special chemicals contributed
to good revenue and earnings performance in this business
segment in comparison with 2011. Customers also
seem willing to expand on their cooperation with Heraeus
after the takeover of Daychem’s activities. Projects in
the established semiconductor market saw initial success
in the second half of 2012, making the outlook for 2013
positive.
39

40 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
Precious Metals
Regional expansion of activities, particularly in Asia, is
progressing as planned. Furthermore, the strategy provides
for further expansion of activities in the Displays
market.
After completing the integration of Ferro activities and
staff adjustments, business in Precious Colours is looking
significantly more profitable. In addition, the division
has been steadily optimizing its product portfolio. However,
precious metal prices remain high and the situation
in the Middle East is strained, so these two factors combined
to have a negative effect on this business.
The division completed the renovation / expansion of its
global production sites in 2012.
TRADING
As expected, the weakening of the global economy kept
things a lot quieter in the precious metals markets. The
debt problem and associated economic difficulties led to
a continuing decrease in demand in many European
countries, affecting the automotive industry in particular.
Prices of platinum and palladium for industrial use were
influenced by the restraint displayed in certain industries,
and declined during the year, sometimes significantly,
for both metals. Another example of the weak demand
throughout the financial year was the fact that even interruptions
resulting from strikes at the large South African
manufacturers led to only temporary price increases.
In addition to primary production, secondary circulation
is stabilizing supply as a result of growing recycling
quantities. Some globally active clients who are less affected
by weak demand in Europe are using the falling
prices to secure future metal requirements. The division
could benefit from this development.
The more efficient use of pastes in the photovoltaics industry,
in addition to the high levels of inventory in the
solar industry, led to reduced silver procurement activities.
Business in gold investment bars continued at a high
level until a weak phase occurred in the first quarter. Due
to the current economic environment, we can assume
that precious metal prices will not fall in the near future
because interest rates remain low, meaning that tangible
assets such as equities and precious metals remain
attractive to investors. Annual industrial consumption
is currently below production quantities, with investors
absorbing the surpluses.
Current prices for the platinum group metals do not allow
for profitable production in many South African
mines. The largest producer, Anglo American Platinum,
has already reacted to this and announced that it will
decrease platinum production in 2013 by around 15% to
approximately 2.1 million ounces. In this environment,
however, no problems are expected in securing the general
supply of precious metals. The quantities that are
effectively secured by contract, as well as availability on
spot and secondary markets create sufficient security.
RESEARCH AND DEVELOPMENT
Expansion of development sites in Asia (China, Japan,
Korea, and Singapore) has equipped the precious metals
business group for the challenges and opportunities of
a dynamic market environment. In research and development,
existing and supplementary technology components
(e.g. coating technologies) and market access
(e.g. in the electronics industry) have been explored
to open up new business opportunities across divisions.

The 2012 Heraeus Innovation Award and other indicators
highlighted the success of research and development
activities: The Chemicals Division successfully introduced
an innovative process for large­scale technical manufacture
of the preliminary catalyst platinum oxalate. In
addition, a process innovation in China enabled the processing
of fluorinated materials in a new recycling plant
for precious metals. The Medical Components Division
developed a magnetically hard, precious­metal alloy for
implants for treating patients with advanced cardiac
failure. In addition, the division opened a development
center for materials used in medical technology.
Total expenditures for research and development amounted
to € 24.0 million in 2012 (previous year: €17.8 million).
The division achieved an innovation rate of 29.5%,
which was below the previous year’s record level.
41

42 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
Materials and Technologies
Materials and technologies business group –
heraeus Materials technology
The materials and technologies business group (Heraeus Materials Technology) develops and manufactures high-tech industrial
products using precious metals, such as gold, silver, and platinum-group metals, as well as high-melting-point, nonprecious
refractory metals. Based on a broad portfolio of technologies and deep added value, Heraeus Materials Technology
is a skilled partner for processing these precious metals and other innovative materials. As a technology leader with decades
of experience and facilities around the world, this business group is a leading provider in many key markets.
BUSINESS DEVELOPMENT
Product revenue in the materials and technologies business
group weakened during the year after a good start
in financial year 2012 as a result of global economic
performance. The business group saw decreased demand
from the automotive industry, computer industry, and
business in sensors for thermal energy measurement in
China. Compared to the previous year, product revenues
decreased by 6.3% to €1,541.1 million. Revenues adjusted
for precious metals price effects decreased by 5.4%
in comparison with 2011. Under difficult market conditions,
the business group achieved very good results
for product revenue, which remained slightly below the
record revenue of the previous year.
The business group also introduced comprehensive
projects to improve cost savings and efficiency in order
to increase competitiveness over the next few years.
CONTACT MATERIALS
The Contact Materials Division also saw excellent business
growth in 2012, but could not repeat the record
performance of the previous year. As a manufacturer of
bonding wires, the division benefited from increased
demand in the semiconductor industry during the first
half of 2012. However, demand for gold bonding wire is
decreasing and will increasingly be replaced with cheaper
copper bonding wire. Market share was gained here,
which almost compensates for the decline in gold bonding
wire business. In addition, the division successfully
positioned itself in the market for palladium­coated copper
bonding wires. With the development and patenting
of new sinter pastes for manufacturing electronic components,
the division laid the foundations for expanding
its competitive position in Europe.
PRODUCT REVENUE
in € million
2012
2011
2010
2009
978.3
1,541.1
1,501.2
1,645.3
The division also began its “Global Competition Offensive
2014” project to improve productivity, capacity
for innovation, and global positioning as well as equip itself
for future challenges. One of the key project points
is to strengthen the division’s position in a sustainable
way by making investments in Asia and optimizing its
presence in Europe. Initial measures were initiated in
2012 and will be continued in the following year.
ENGINEERED MATERIALS
The Engineered Materials Division enjoyed success in
financial year 2012. Despite a volatile business climate,
it achieved a sustainable and stable result: double­digit
growth in Asia and increased activity in the US market.
The catalyst systems business for fertilizer production
as well as products for glass manufacturing saw gratifying
developments. By contrast, products for the lighting industry
experienced increased price competition in 2012.
In addition, the division had to deal with declining revenues
as a result of the shrinking demand from the automobile
industry.

THIN FILM MATERIALS
The Thin Film Materials Division is one of the world’s leading
producers of high­purity sputtering targets and PVD
coating materials. Despite measures implemented in the
past to improve efficiency, business development in
2012 remained below expectations.
As a manufacturer of targets for coating magnetic data
storage, the division felt the impact of the flood in Thailand
in autumn 2011. The ongoing technological shift
towards mobile devices such as tablet PCs, which do not
use hard drives, remained noticeable. This resulted in
price competition that was also associated with lower order
quantities for sputtering targets.
The division has been instrumental in developing large
area coatings for the display and photovoltaics industry
as well as glass coatings on the market. In 2012, business
involving sputtering targets for thin­film solar cells was
affected by changes to government subsidy programs and
the resulting weaker order quantities. Lower levels of
construction activity, in the US in particular, negatively
impacted order quantities for targets for window glass
coating. On the other hand, promising products were developed
for AMOLED and OLED displays, which are still
relatively new technology segments.
SENSOR COMPONENTS
After many years in a row of setting records with doubledigit
growth rates, business in the Sensor Components
Division dwindled in 2012. A fall in profits resulted from
weaker demand for diesel vehicles and a major drop in
demand for sensors for heat meters in China.
RESEARCH AND DEVELOPMENT
Heraeus Materials Technology is countering the weak
economy with an even stronger focus on innovation
projects. Total expenditures for research and development
increased in 2012 by 12.0% to €14.5 million.
The rate of innovation in the business group was 16.9%,
enjoying the positive impact of introducing a global
standardized development process. Research focused
on materials for power electronics, for example sinter
pastes.
43

44 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
Sensors
Dental Products
Sensors business group – heraeus electro-nite
The sensors business group (Heraeus Electro-Nite) is the world market leader in sensor and measurement systems for the
steel, aluminum, and foundry industries. As a recognized specialist in measurements for molten iron, steel, and aluminum,
the company produces and markets high-quality sensors from global manufacturing and sales facilities on every continent.
In close cooperation with its customers, Heraeus Electro-Nite develops product solutions that contribute significantly to
greater efficiency and higher quality in production processes, as well as improving working conditions and protecting the
environment.
BUSINESS DEVELOPMENT
Worldwide steel production, the most important driving
factor for the sensors business group, was subject to
an appreciable slump after two years of considerable
growth. According to information from the World Steel
Association (WSA), growth totaled just 1.2%.
The downturn in steel production in Europe (– 5%) and
South America (– 3%) was not offset by above­average
growth in China as it has been in previous years. China,
which accounts for almost 50% of global steel production,
increased its steel production in 2012 by just 3%
in comparison to the previous year. This meant that the
important business customer market in the Asia region
gained just 2.6%.
Despite low growth in steel, the sensors business group
increased its revenue to € 417.5 million, a 2.3% hike
on the previous year, as a result of favorable exchange
rate effects and initial revenues from the acquisition
made in 2012. The foundry industry is another important
market for the sensors business group. A positive trend
driven by automobile sales in Asia was evident here as
well, although the growth rates of the previous year
could not be repeated.
The acquisition of Midwest Instrument Company and its
activities at the end of Q3 2012, adjusted for acquisition
costs, already had a minor positive impact on the business
group’s success in financial year 2012. After completing
the integration in 2013, the business group is
expecting the extended product portfolio to deliver positive
contributions to revenue and earnings.
PRODUCT REVENUE
in € million
2012
2011
2010
2009
2008
294.5
375.2
377.3
417.5
408.0
RESEARCH AND DEVELOPMENT
As a recognized specialist in measurements for molten
iron, steel, and aluminum, the sensors business group
is continually expanding and improving its range of products,
introducing additional process control sensors in
the reporting period.
Research and development activities include the development
of platform technologies and product innovations
as well as meeting the need for continual improvement in
existing products and adding application­specific versions.
During the past financial year, some innovations
were successfully launched onto the market, for example
a new platform for wireless measurement, a durable
probe for continual temperature measurement in tundishes,
aluminum control sensors for continuous galvanizing,
as well as a high­performance sampler for pure steel
and stainless steel.
Despite the strained economic climate during the reporting
period, the business group was able to defend its
position as an innovation leader. Total expenditures for
research and development increased to €13.9 million
in 2012, a 16.2% rise on the previous year.

dental products business group – heraeus dental
The dental products business group (Heraeus Dental), a provider of prosthetics and systems for the conservation and
restoration of natural teeth, has an extensive range of products for dental laboratories and dentists.
BUSINESS DEVELOPMENT
The market for dental consumables performed well this
year after moderate growth in the previous year, recording
a 4% upturn globally. The dental products business group
shared in this performance in accordance with the market
trend. Nevertheless, product revenues in this business
group for financial year 2012 were only slightly higher
than in the previous year, at € 307.0 million (+ 0.3%),
despite positive exchange rate effects and additional revenues
from acquisitions.
This performance resulted from ongoing decreases in
revenue resulting from changing technologies in the
area of consumer materials for x­ray films, as well as the
structural revenue decline in the area of prosthetics,
particularly in precious metals.
The business group enjoyed a strong revenue increase
in the area of direct restoration. In addition, the acquisition
of Biomain AB, Sweden, the Scandinavian market
leader in individual CAD/CAM­produced implant prosthetics,
served as a cushion against a drop in revenues,
but did not completely prevent it.
From a regional perspective, there was a slight change
compared to the previous reporting period: While nonprecious
metal revenues and the favorable exchange rates
made up for the declining market trend for precious
metal revenues in the USA and Asia, the Central European
region remains below the level of the previous reporting
period. In line with expectations, the Eastern and Western
European regions reported favorable rates of revenue
growth. The business group pushed ahead with its longterm
growth strategy in digital prosthetics for dental
PRODUCT REVENUE
in € million
2012
2011
2010
2009
2008
288.8
290.4
307.0
306.1
305.9
applications, both through asset­based investments and
acquisitions in the implant superstructures segment.
In 2012, the dental products business group began a restructuring
program with the aim of creating more competitive
cost structures. Furthermore, the organization of
the two divisions in the business group was restructured
to suit market needs. Digital activities were bundled in the
new division “Digital Services”, while other activities
were merged into the “Dental Materials” Division. These
two new divisions replaced the old reporting units as
of the beginning of financial year 2013.
PROSTHETICS
The non­precious metals business, adjusted to take into
account the new acquisition of Biomain AB, continued at
the same level as the previous reporting period.
DENTISTRY
The restorative and preventative segments were the
main force driving the dental business, which declined
somewhat in comparison with the market.
45

46 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
Dental Products
Biomaterials and Medical Products
RESEARCH AND DEVELOPMENT
The dental products business group made its processes
more efficient and decreased its expenditures for research
and development over the course of the year compared
to the previous year by € 0.9 million to € 9.4 million.
Development activities focused on the Cara brand
CAD/CAM system and implant suprastructures, digital
technologies for intraoral scanning, as well as applicationspecific
technologies for dental restoration and casting.

iomaterials and Medical products business group –
heraeus Medical
The biomaterials and medical products business group (Heraeus Medical) concentrates on medical products for orthopedic
surgery as well as traumatology and biosurgery. It develops, produces, and globally markets biomaterials used in bone and
joint surgery and to stabilize spinal fractures. Core product PALACOS ® , the gold standard among bone cements, has proved
its worth in clinical use for decades.
BUSINESS DEVELOPMENT
The biomaterials and medical products business group increased
revenue to € 80.8 million, an 8.2% jump over
the previous year. The business group therefore achieved
record product revenues five years in a row. From a geographical
perspective, North America, Europe, and Asia
made an approximately equal contribution to growth.
The global orthopedic market for artificial joints grew by
5%. Growth drivers include a society that is becoming
older and more obese as well as increased demand in
emerging market countries. Due to growing demands
for mobility and quality of life, artificial joints are also
increasingly being used in younger patients.
For the biomaterials and medical products business group,
revenue growth in joint fixation and infection management
products has been very satisfactory. Two innovative
products were launched in 2012: a bone cement for
use in septic revision endoprosthesis, which was specially
developed for use against multi­resistant bacteria
(MRSA), as well as a bone cement for primary endoprosthetics,
which uses a new application form to enable
simplified mixing and application during surgery.
The biomaterials and medical products business group
continues to play a leading role in the global bone cement
market.
RESEARCH AND DEVELOPMENT
Price pressures in the health care system are boosting demand
for products that are easy to use without a long
or steep learning curve. Heraeus Medical is meeting this
need, developing new bone cement dosage forms that
minimize handling steps and potential sources of error.
PRODUCT REVENUE
in € million
2012
2011
2010
2009
2008
56.2
59.9
67.0
74.7
80.8
In addition to its focus on bone cements and biomaterials,
Heraeus is expanding another business segment:
the development and marketing of antibiotic coating technologies
and systems for medical implants. These coating
technologies give the business group access to fields
including cementless endoprosthetics, for example in
artificial hip joints.
As the number of joint replacement procedures rises, so
does the risk of infections that can have lasting effects
on patients and health care systems. Heraeus Medical
offers innovative products that help minimize the risk
of infection and thus the risk of revision.
For this purpose, the business group invested around
€ 4.6 million in research and development, which represents
a decrease of 14.2% from higher expenditures
in the previous period, but is still significantly greater
than that of the direct competition.
47

48 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
Quartz Glass
Quartz glass business group – heraeus Quarzglas
The quartz glass business group (Heraeus Quarzglas) is the technology leader and materials specialist for the manufacture
and processing of high-purity quartz glass. It excels in all key processes for producing different quartz glass types for the
semiconductor and telecommunications industries as well as applications for the optical, chemical, and lamp industries.
From base materials to complex system components, custom-tailored products and solutions can be developed and produced
from natural and synthetic quartz glass. As the largest quartz glass smelting facility in the world, Heraeus Quarzglas is the
world’s largest manufacturer of synthetic quartz glass for use in the microlithography and telecommunications industries.
BUSINESS DEVELOPMENT
With revenues of € 315.9 million during the past financial
year, the quartz glass business group was not able to
maintain its record revenue level of the previous year
at € 348.2 million. Nevertheless, the business group
achieved positive results in particular due to high demand
for optical glass fibers for the telecommunications industry.
The products business for the optical industry
also continued to develop very well. The massive drop
in the photovoltaics and solar industry as well as the expected
weakening in the semiconductor market had a
negative effect on earnings in the quartz glass business
group.
QUARTZ GLASS FOR THE SEMICONDUCTOR INDUSTRY
After demand weakened in the semiconductor industry,
a more severe slump in investment activities occurred
in the chip industry. Every site within the business group
felt a negative impact on incoming order volumes and
capacity utilization. The Japanese joint venture in particular
suffered as a result of the low demand and consolidation
of chip manufacturers in Japan. Many Japanese
manufacturers of semiconductor equipment are currently
relocating their production within Asia, which is
increasing pressure to restructure the joint venture in
Japan. Nevertheless, the business group made market
share gains among key clients in Asia in particular.
QUARTZ GLASS FOR THE SOLAR INDUSTRY
The segments that manufacture crucibles, reaction and
process chambers, as well as transportation systems
from quartz glass were hardest hit by the collapse of the
photovoltaics and solar industry in 2012. Revenue and
earnings were correspondingly unsatisfactory.
PRODUCT REVENUE
in € million
2012
2011
2010
2009
2008
199.0
213.0
278.7
315.9
348.2
QUARTZ GLASS FOR THE OPTICAL INDUSTRY
After good progress in the first half of 2012 with synthetic
quartz glass for optical microlithography, the
quartz glass business group saw a severe deterioration
in revenue during the second half of the year as a result
of global investing reluctance.
Products for the optical industry allowed Heraeus Quarzglas
to generate gratifying base production levels and
realize significant revenues from participating in largescale
scientific projects during the reporting period.
QUARTZ GLASS FOR THE TELECOMMUNICATIONS INDUSTRY
Global demand for glass fibers for optical data transmission
resulted in continued positive development for
the Telecom Fiber division in 2012. Demand for synthetic
quartz glass remained especially high in China and
the USA. In addition to general market growth, the
business group expanded its dominant market position
by increasing its market share, because RIC

technol ogy developed by Heraeus provides customers with
decisive competitive advantages. Based on this positive
market situation, capacities were brought into line with
demand accordingly. The launch of new products supported
positive performance.
RESEARCH AND DEVELOPMENT
In a difficult market environment, the business group
primarily promoted basic development projects and
process optimizations. Various development projects and
approaches as well as prototypes were successfully implemented
in pilot production. These will be launched on
the international markets over the next few years; the
business group anticipates a positive contribution to earnings.
Development activities focused on areas including
manufacturing process optimization, above all in the area
of natural and synthetic base materials. Total expenditures
for research and development activities amounted
to €12.6 million, which corresponds to a slight decline
of 1.1% in comparison with the previous year.
49

50 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
Specialty Light Sources
Specialty light Sources business group – heraeus noblelight
The specialty light sources business group (Heraeus Noblelight) counts itself among the market and technology leaders
worldwide for special lamps with wavelengths from ultraviolet to infrared for industrial, scientific, and medical applications.
With locations in Germany, the United Kingdom, China, and the USA, the business group manufactures lamps for analytical
measurement technology and the printing industry, infrared emitters for industrial heating processes, arc and flash lamps,
and products for water and surface disinfection, air treatment, and sun simulation with a high level of vertical integration.
BUSINESS DEVELOPMENT
As a result of economic stagnation in the investment
goods market, the specialty light sources business
group was not able to continue its very positive growth
from 2011. Although business in Q1 2012 was still
predominantly stable, the continuingly weak economy
later placed a burden on some areas of the business
group. In the fourth quarter, there was a slight revival in
economic development, resulting in product revenue
of € 92.5 million in the specialty light sources business
group. Compared to the previous year, this indicates
a drop of 10.2%.
The acquisition of Fusion UV Systems Group, which has
around 170 employees, was concluded at the end of
the year and will take full economic effect in 2013. The
business group plans to offer a significant expansion
of UV service offerings both through the application and
technology portfolio and market access.
INFRARED
The ongoing significant decline in the market for photovoltaics
machines had a heavy impact on the infrared
emitters and modules business, with revenue remaining
below expectations. Business performance in the USA
and England provided positive impetus, as did the systematic
opening up of new application fields. Together
with measures implemented to increase productivity and
reduce costs, the infrared business continued to record
solid revenues overall. New sales activities in Brazil’s
emerging market and the expansion of analysis and simulation
offerings are stepping up opportunities for active
market development.
PRODUCT REVENUE
in € million
2012
2011
2010
2009
2008
71.6
92.5
92.5
103.0
ULTRAVIOLET
2012’s poor investment climate was noticeable in the
business for UV lamps and units for industrial applications.
Sales of replacement lamps and UV components
in the printing sector were restrained. Revenues remained
stable in a declining, but obviously positive earnings
situation. The business group successfully continued
its strategic focus on providing solutions for UV technology,
with the acquisition of Fusion UV Systems Group
speeding up this process noticeably. Through this development,
the specialty light sources business is becoming
the innovation and market leader in UV solutions for
industrial processes.
98.9
Sales of continuous arc and flash lamps for laser and nonlaser
applications remained very positive and reached
a new high, while the earnings situation remained good.
The business group secured its business relationship
with important key clients over the long term by means
of excellent product stability and delivery capabilities.

In the area of analysis lamps, the positive revenue level
of the previous year rose again. Although business in PID
lamps was somewhat below expectations, overall revenues
nevertheless reached record highs. Initial promising
revenues were generated and market share gained with
plus innovative new developments such as the D lamp and
2
the High Power Fiberlight ® system.
The product range in optoelectronic specialty light systems
was expanded further, completing the group’s offering
for the UV curing target market. Various projects
and orders ended up being somewhat more challenging
than expected, or were delayed, and this prevented continuous
revenue development.
RESEARCH AND DEVELOPMENT
The business group’s innovation rate of 16.7% for 2012
reflects the high level of importance of continual product
and application development. The business group invested
€ 4.8 million in new and ongoing development projects
in 2012, which represents an increase of 2.5% over the
same period in the previous year. The new High Power
Fiberlight ® module opened up a wide and flexible range of
appli cations for mobile measurement. An energy­optimized
combination procedure was developed for complex
UV paint­curing processes, which unites the advantages
of LED and lamp technology.
51

»I help improve
patient safety«

» There are two methods for anchoring prosthetic
implants: cementless and cemented. We already
offer a unique portfolio of bone cements containing
antibiotics. For cementless implants, we
have filled a gap in the market, because until
now these were not coated with antibiotics. In
collaboration with the innovation department,
I developed a method for coating cementless
arthroplasty with anti biotics. During the operation,
we create a thin protective layer on the
implant. This reduces the risk of infection and
improves patient safety.«
dr. ekaterini Copanaki haS worked at heraeuS MediCal in wehrheiM SinCe early
2011. a MiCrobiologiSt, She partiCipateS in the developMent of CeMent-free
iMplantS. after her work at frankfurt univerSity, She welCoMed the opportunity
“to advanCe produCt developMent and interaCt direCtly with CuStoMerS.”
She alSo appreCiateS the atMoSphere of Collegiality in whiCh She Can ConduCt
reSearCh on new appliCationS. in 2012, She reCeived a heraeuS innovation
award for a proCeSS for Coating CeMentleSS hip proStheSeS with antibiotiCS.

eady-to-uSe Coating deviCe
for appliCation of antibiotiC proteCtion on CeMent-free proSthetiC iMplantS

56 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
Human Resources
human resources
Slowing overall economic perfomance throughout the year
coupled with varying developments in the Heraeus business
groups called for a range of activities and efforts in
human resources management around the world. The activity
was centered on personnel expansion caused mainly
by acquisition activity but also on personnel adjustments
in response to the economic downturn in submarkets.
As in previous years, the total workforce of the Heraeus
Group has grown. As of December 31, 2012, Heraeus
employed a workforce of 13,615 worldwide; that amounts
to 292 more employees than in 2011 (13,323 employees),
a 2.2% increase. The number of employees grew
by 166 in Germany and by 126 in foreign Heraeus
companies.
The dedication of the Heraeus employees around the world
made the development of the Heraeus Group possible in
the challenging environment of financial year 2012. The
members of the Board of Management and the management
team thank all employees for their commitment.
CHANGES IN THE BUSINESS GROUPS
Acquisition activity in the business groups of the Heraeus
Group resulted in an increase in employee numbers in
the Heraeus subsidiaries. This increase took place solely
at locations outside of Germany. A total of 428 employees
joined the Group in this way last year. In the precious
metals business group, the number of employees rose
by 28 due to the acquisition of the US company Daychem
Laboratories. In the dental products business group,
41 new employees were added due to the acquisition of
the Swedish company Biomain AB. In addition, with
the acquisition of the US company Midwest Instruments
Co., the sensors business group added 359 people to
EMPLOYEES BY REGION
2008 2012
36 %
17 %
19 %
27 %
1 %
39 %
15 %
18 %
27 %
1 %
germany
europe excluding germany
the americas
asia
africa /australia
its workforce. In the biomaterials business group, the positive
business development resulted in organic growth
of the workforce by 22 people, amounting to a 10% increase
over the 2011 level.
Past financial year, this addition contrasted with capacity
adjustment measures in individual business areas.
These were owing to altering market developments, ongoing
economic restraint in submarkets and cost optimization
to maintain competitiveness. Subsidiary­specific
workforce reductions became necessary in Germany,
France, the Philippines, and Korea, as well as in the US.
The Heraeus Materials Technology business group implemented
a restructuring program at the divisional level
to improve business with contact materials and bonding
wires. Around 310 jobs will be moved into the Asia and
East Europe regions from 2012 to 2014 under the
measures. These regions are strategically significant due
to market growth and offer the business group both the
local proximity to the customers, which has always been

2012
2011
2010
2009
2008
GLOBAL EMPLOYEE DEVELOPMENT
13,615
13,323
12,931
12,340
12,830
a goal, along with a competitive environment. The
Heraeus Materials Technology business group employed
a workforce of 2,924 at the end of the 2012 financial
year, a decrease of 179 jobs compared to 2011.
The dental products business group reorganized its two
divisions under the strategic program “Business Transformation
2014”. The realignment involves a worldwide
reorganization of the sales structure and relocation of
manufacturing activities in Germany to locations in East
Europe with a more competitive cost structure. The
changes will affect 160 employees in Germany between
2012 and 2014. As yet, the restructuring program had
not impacted the total number of employees in the dental
products business group. The business group employed
a workforce of 1,420 at the end of the 2012 financial
year, remaining at the level of 2011 (1,421 employees).
Business development in the other business groups and
Group functions of the Heraeus Group was reflected
through the year, resulting only in a slight increase in employee
numbers.
HUMAN RESOURCES MANAGEMENT SUCCESSFULLY IMPLEMENTS PROjECTS
During the past financial year, the HR area intensified
its work on the professionalization of the Group function.
As planned, a milestone was reached for HR management
with the introduction of the HRdirekt Shared Service
Center. Since May 2012, employees in Germany have
had access to a central service center for all questions
on HR matters.
In international HR management, too, work continues
on standardizing processes and information. Standardized
processes for collecting personnel data and payroll accounting
were introduced in the regional centers of the
Heraeus Group in Shanghai and New York.
Employees from all business groups and Group functions
of the Heraeus Group worldwide staff the IT and process
harmonization program Magellan. The HR area was faced
with a variety of challenges: The entire project team was
assembled, project contracts were prepared for around
80 employees, infrastructure solutions were found for the
international employees of the program at the Hanau
location, and, in the business groups and Group functions,
short­term solutions were found for the resulting vacant
positions.
HUMAN RESOURCES DEVELOPMENT AS THE FOUNDATION FOR SUSTAINED
GROWTH
HR development at Heraeus ensures that the corporate
culture and the management concept as defined in the
corporate strategy and Heraeus Corporate Guiding Principles
2020 are reflected in day­to­day actions. The
international management programs for executives were
revised and rolled out in line with this. The appeal
of these measures is indicated by the high number of
57

58 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
Human Resources
Risk and Compliance Report
participants. In addition, Personnel and Organizational
Development provided support through coaching and
change management in the implementation of the HR
integration and adjustment measures in the business
groups.
Heraeus continues to rely on training its own skilled employees.
Last year, 348 employees of the Heraeus Group
were either trainees or participating in a dual study program.
A total of 89 trainees and dual study participants
completed their training at Heraeus in 2012. The num ­
ber of dual study programs was increased as has the number
of participants in these programs. The fact that over
6% of the workforce is in training shows that the number
of trainees remains high.
As an employer, Heraeus is also faced with challenges
presented by the demographic changes in society. To
address these, the model project ViSIO on the consequences
of demographic change in the workplace
was launched in the Heraeus Quarzglas business group.
This approach and its results will be transferred to
other business groups.
HERAEUS: AN ATTRACTIVE EMPLOYER AROUND THE WORLD
The Heraeus employee survey was conducted again in
2012. For the first time, all locations around the world
participated in the survey; a total of 12,700 employees
were asked to participate in the survey. With a participation
rate of 83%, the outstanding response was even
higher than the high level achieved in the previous survey
(2008: 74%). The evaluation of the survey results revealed
significant employee approval of Heraeus as an
employer. More than 80% of participants said that they
BUSINESS GROUPS 2012 2011 CHANGE
Precious Metals 2,732 2,613 + 119
Materials and Technologies 2,924 3,103 – 179
Sensors 3,242 3,030 + 212
Dental Products 1,420 1,421 – 1
Biomaterials and
Medical Products 228 208 + 20
Quartz Glass 1,510 1,489 + 21
Specialty Light Sources 715 731 – 16
Other 844 728 + 116
Total 13,615 13,323 + 292
number of employees as of december 31, 2012
would recommend Heraeus as an employer and that
they were proud to work at Heraeus. Conducting surveys
at regular intervals also helps in developing improvements.
Last year, measures for a systematic follow­up
process were initiated.
SHAPING THE HERAEUS EMPLOYER BRAND
In order to continue to be perceived as an attractive employer,
Heraeus plans to position itself more favorably
with skilled personnel and executives. In 2012, Heraeus
implemented several measures geared toward building a
solid foundation on which to develop our employer brand.
To achieve this, focus group workshops were carried out
with employees and managers around the world. In the
“Heraeus + me” contest, all employees were also called
upon to creatively express their impressions of Heraeus as
an employer. 250 employees from 22 countries participated
in the contest. The results of these campaigns contribute
to shaping the global Heraeus employer brand.

isk and Compliance report
INTEGRATED RISk MANAGEMENT SYSTEM
Heraeus draws on a group­wide, process­integrated risk
management system throughout the organization to recognize
risks early, and document, evaluate, manage, and
monitor them according to standards, ensuring lasting
security and the company’s livelihood. Further goals of
the risk management system include definition, implementation,
and tracking of goal­oriented measures to effectively
manage risks to the company’s existence.
Findings from Risk Management, the annual audit, as
well as Corporate Auditing and Compliance Management
are included. All developments that may have a negative
impact on future developments in the Group’s economic
situation must be considered risks.
RISk REPORT
Risk management process
Identifying individual risks involves those responsible for
business function and operations looking at two criteria:
potentially damaging and serious risks in the business
groups that have significant influence on the value of the
company. For this, only additive risks, i.e. risks that do
not countervail each other, and risk figures that are not
part of planned or actual figures, are considered. Identified
risks are evaluated on their probability of occurrence
and maximum extent of damages, and summarized at
the business group, company, subgroup, and Group levels.
In addition, the relative extent of damages (the maximum
extent of damages times probability of occurrence)
is compared to shareholders’ equity and cash or cash
equivalents. This allows for analyzing the current risk situation
systematically and uniformly across the company.
Concrete risk mitigation measures are derived from this
basis. Individual risks that are identified but no longer
present are deleted from the risk catalog only when this
can be substantiated and noted through the implementation
of appropriate countermeasures. Risk reporting requirements
are fully integrated into the standardized
controlling process.
The current risk status and its financial impact are
examined every six months.
Management and supervisory bodies are regularly informed
of the current risk situation, and the efficiency
and effectiveness of the risk management system are
constantly monitored internally.
IDENTIFIED GROUP-WIDE INDIVIDUAL RISkS
Strategic risks
At Heraeus, this risk category focuses on particular risks
associated with threats to core competencies, critical
success factors, and strategic goals. Long­term success is
based on our customers’ perceptions of our company’s
competitive advantages and our ability to generate competitive
advantages in the future. We attempt to minimize
the likelihood of this risk occurring through our intensive
research and development activities.
Market risks
Threats from market positions and competitive advantages,
fluctuations in demand as a result of the economy,
and a strong dependence of some business groups on
few customers and suppliers could have a lasting impact
on revenue and earnings development. Further risks
59

60 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
Risk and Compliance Report
could emerge from a potential medium­term weakness
in the national economies of certain countries, and
China in particular. However, widely differentiated products
and client structures will limit these individual
market risks from impacting the entire company. Exacting
observation of the market, development of alternative
products, intensive client relationships, building
up more key accounts, and qualifying additional suppliers
for key products all contribute to risk minimization.
The ongoing euro debt crisis and the situation on the
financial markets meant that the year 2012 was generally
characterized by some uncertainty, which was dealt with
by means of solid measures that stabilized the business.
An economic downturn due to funding shortfalls in individual
countries across the eurozone cannot be ruled out.
This would doubtless have a substantial impact on earnings
expectations, particularly in economically sensitive
consumer branches, such as the automotive, steel, and
semiconductor industries. Heraeus, however, can continue
to mitigate decreased earnings with suitable measures.
Financial risks
The majority of individual financial risks identified are
related to creditworthiness and loan default. Heraeus
mitigates these risks with active global receivables management,
which is the responsibility of the individual
business groups. These activities have been made even
more consistent and robust through the installation of
additional reporting and monitoring tools. Because of its
international activities, Heraeus is prepared for some
financial risks. In addition to credit and liquidity risks,
this includes market price risks. Financial risks are con­
stantly monitored and managed by the central Treasury
department (in­house bank).
The establishment and expansion of the Group’s central
Treasury department ensures that the increased significance
of these risks exacerbated by the capital market
crisis is taken into account. In addition to regular reporting,
the Financial Risk Committee constantly monitors
the in­house bank as well as the impact of financial risks
on the Heraeus Group. This committee consists of the
Chief Financial Officer, the heads of Corporate Finance
and Corporate Accounting, Corporate Controlling, and
representatives from the business groups. Market price
risks include currency, interest, and other price risks.
Heraeus determines important risk positions in standardized
processes, evaluates them with different risk instruments
(limits, coverage rates, value­at­risk) on a weekly
basis, and implements measures accordingly (see Notes
to Consolidated Financial Statements, “Financial risk
management” section). Currency risks resulting from the
international orientation of individual legal entities are
targeted for reduction by implementing selected derivative
financial instruments, in particular forward exchange
and currency option transactions. This means that security
decisions will be made based on a rolling, differentiated
currency plan, according to the latest Group financial
guidelines. The significant currency risks arising here
are from cash flows in US dollars (USD) and Singapore
dollars (SGD). The planned currency positions for 2013
were predominantly hedged by the conclusion of currency
derivatives and initial security. Hedging measures
have already been implemented for 2014. Like currency
risks, interest risks are exclusively managed centrally.

To manage liquidity risks, Heraeus Holding GmbH negotiated
a long­term syndicated line of credit to finance the
Heraeus Group. Liquidity risks are regularly simulated and
subjected to stress tests as part of regular reporting and
Financial Risk Committee activities. The parameters needed
to maintain the current rating are constantly monitored.
Operational risks
The Group’s highly diversified business portfolio faces
the general risks of controlling technical and business
processes. Strong growth in previous years, the founding
of new subsidiaries, and numerous acquisitions have
led to a widespread heterogeneous IT landscape. The
resulting risks will be mitigated to the extent our business
resources allow through continuing standardization
and the introduction of professional IT systems in the
coming years. In financial year 2012, a major project for
the modernization and harmonization of structures and
processes was continued. The Magellan program, initiated
at the end of 2011, concerns the comprehensive
harmonization of our worldwide business processes based
on a standardized IT platform. The fact that the duration
several years and the planned use of resources make the
program the most extensive project among the on going
change processes.
In spite of this, risks of quality defects from production
and job execution, loss of key personnel, and due to
data security cannot be completely ruled out. These risks
are limited through permanent improvements to the
quality management system, through extensive continuing
education programs for employees, and through
global implementation of current and reliable IT security
programs.
Legal risks
Despite a careful examination of the patent situation,
violations of industrial and intellectual property rights can
occur. Occasionally, this can lead to expensive and protracted
lawsuits. It is therefore not possible to rule out for
the future that Heraeus may be confronted with allegations
or charges of patent rights infringements and will
have to deal with them. Should any risks arise from
lawsuits regarding potential patent infringements, these
will be taken into account in the consolidated financial
statements. Possible infringements or violations of law
are limited by the compliance management system.
Likewise, the possibility of theft in the precious metal
area, already minimized through multiple security standards,
is reduced through continual improvements to
those security measures with regard to global standards
and controlling mechanisms. Risk from taxes and customs
duties arising from wide­ranging global activities
and the different associated legal conditions cannot
be completely ruled out. These are compen sated for with
appropriate provisions or addressed preventatively by
adding personnel in the corresponding central Group
functions.
Outside risks
In addition to the risks outlined above, there are other
influences that resist attempts to affect them, making
them difficult to control. Heraeus includes among these
risks acts of God (unforeseeable natural disasters, epidemics),
and risks resulting from country­specific sociocultural
and political developments. These also include
threats to the company’s reputation, which can lead to
direct or indirect losses due to diminished status.
61

62 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
Risk and Compliance Report
Precious metal risks
The precious metal trade is governed by the guidelines
of the individual Heraeus trading companies located in
Hanau, New York, Hong Kong, and Shanghai. The trading
companies as a rule may only conduct precious metal
transactions on the basis of customers’ underlying physical
transaction. Positions can only be accumulated and
held within closely defined risk limits that are monitored
on a daily basis. All transactions are recorded and constantly
tracked in an electronic trading system. Hedging
instruments commonly used in the market are employed
to hedge price risks. These include precious metal spot
and futures transactions, precious metal swaps and loans
(loans and cash­and­carry transactions). Ongoing monitoring
of compliance with prescribed risk limits and limit
counts is conducted by employees who are not subject
to trading instructions, adhering to the principle of separating
functions.
Other risks
Sufficient provisions have been made for risks arising
from responsibilities for environmental protection and
job security, information technology breakdowns, and
the potential risks of all other internal services. The
probability of risks in these areas is therefore limited to
a minimum so that substantial impacts on the Group
can largely be ruled out.
BUSINESS GROUPS
Precious metals
Long­term supply contracts exist with the leading precious
metal producers in all regions. These contracts are regularly
updated to reflect the development of the market and
the demand situation. High demand for some industrial
metals could lead to scarcity and result in supply short­
ages. For this reason, in addition to primary metals,
customers supply precious metal in substantial volumes,
and Heraeus also has access to fine metal (pure precious
metal) from the recovery of refining batches and
from used products that are reintroduced to the precious
metal cycle. This reduces procurement risks considerably
in spite of partial reductions in production
amounts from individual mines.
The high risk of partner default for loan and hedging
transactions is being dealt with through augmented risk
provisioning and additional monitoring measures. Every
precious metal transaction is promptly secured in order
to exclude the possibility of price volatility as far as
possible.
Systems to secure the supply of precious metal are integrated
into a data and monitoring network that also
enables IT­supported tracking of efficiency in the respective
production processes while supplying important
pointers for their optimization. Despite these comprehensive
measures, risks arising from the physical loss of
precious metal cannot be completely ruled out.
Materials and technologies
In an increasingly difficult market environment, the business
group performed well in 2012. If the economic
situation in the key markets of the automobile, semiconductor,
lighting, and hard drive industries continues to
deteriorate, the result may be a clearer decrease in demand.
On the other hand, if these markets pick up,
this may have a positive effect on the group’s business.
The Contact Materials Division began a program of
measures with the aim of increasing productivity and

improving the efficiency of the organization. There is
still some substitution risk, in particular in the areas of
lighting technology and sensors. The risks are being
dealt with by an increase in the level of research and
development activities, as well as the search for new
materials and applications.
Dependence on the availability of raw materials is also
significant for the product business, especially with
products for the electronics industry. Establishing longterm
supply contracts with mines and qualifying of
alternative raw material suppliers are the methods being
used to cope with this risk.
The risk of a recall action hangs over the entire supplier
industry for the automotive sector. Having a suitable
quality management system, supplier qualifications, and
product liability insurance in place addresses this risk.
Sensors
Business activity in the area of sensors for the steel industry
is heavily dependent on global steel production.
Global crude steel production reached a new record in
2012, although growth slowed. However, should the
economic situation worsen, especially in Asia, it could
have a significant effect on demand for steel production.
We have already implemented restructuring measures
in the past and these make it possible for the business
group to react quickly and flexibly to decreases in demand,
without posing a risk to future growth.
Dental products
The decline in demand due to the healthcare reforms
that entered into effect for certain indication areas continued.
Precious metal alloys on the global dental market
were especially hard hit by these changes. We are assuming
that this development will continue over the long
term. We are focusing now on adapting strategic and organizational
areas to ensure appropriate and sustainable
protection of earnings. The area of indus trially manufactured
dental crowns and bridges performed successfully.
Ongoing development of industrially manufactured denture
materials could present some risks, which could delay
the prospects of success. However, these risks should not
have a substantial effect on the business group.
Biomaterials and medical products
This group continued to grow and increase revenue despite
increased price pressure in the market. Intensive
professional training programs, an expanded sales network,
and favorable demographic trends in target markets
aided this development.
In the medical products market, flawless and reliable delivery
of raw materials and preliminary products is very
important; this is achieved through quality control, contractual
regulations, and the maintenance of emergency
stocks. Continual further developments and innovations
also make it possible to adapt quickly to changing customer
demand, and even to anticipate it in certain areas.
Quartz glass
Activities in various sectors, including the telecommunications
industry in particular, were able to compensate
for the difficult economic conditions resulting from the
cyclical downturn in the semiconductor industry and
simultaneous decline in the solar industry. In addition,
the economic effects of the drop in revenue were reduced
through the use of flexible cost structures.
63

64 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
Risk and Compliance Report
The telecommunications industry is not expected to suffer
any decline in the medium to long term, but this cannot
be ruled out entirely.
Specialty light sources
The consistent and systematic addition of new fields of
application further reduces dependency on individual
branches of industry. In conjunction with the opening up
of new attractive markets, such as South America, and
continued positioning as a solution provider for productive
light, this leads to a further minimization of risk and
increase in additional growth potential. The successful
acquisition of the Fusion UV Systems Group supports
this development. The internal development and marketing
of specialty lighting LED solutions will counter the
medium­term technology substitution at an early stage.
The basic dependency on the investment climate in the
manufacturing industry and the associated restraint with
uncertain business expectations delay market adaptation
for new technologies and procedures.
HOLISTIC CLASSIFICATION OF OPPORTUNITIES AND RISkS
With systems in place for risk measurement and limitation,
Heraeus also takes into account the requirements
for early risk detection. At the present time, no risks
to the Group’s ability to continue as a going concern can
be identified with respect to the net assets, operating
results, and financial position.
In addition, there are opportunities involved with the
individual business activities. In this way, better overall
economic growth, in particular in important partial
markets such as China or the USA, may have a positive
effect on the growth potential of individual businesses,
e.g. photovoltaics, the steel industry, or healthcare businesses.
A stronger or earlier revival of the cyclical semiconductor
business would have positive effects on the revenue
and earnings situation in the quartz glass business.
Finally, there is the possibility that the competitive position
in important businesses may develop positively,
in particular as a result of successful innovation activities
and intensive market and customer development.
COMPLIANCE REPORT
Content and structural development for the Heraeus Compliance
System has continued since the Heraeus Group
introduced a global Code of Conduct on January 1, 2007.
The Code of Conduct and its accompanying guidelines
were completely revised in 2010 to reflect ongoing developments.
The Code of Conduct’s existing guidelines
were expanded to include the Heraeus Sourcing Policy,
which contains rules governing the selection and monitoring
of suppliers.
The rules stated in the Sourcing Policy ensure that
Heraeus does not work with questionable suppliers or
receive raw materials from dubious sources. The Sourcing
Policy contains regulations that must be observed for
every procurement process and special regulations for
the procurement of risk products (e.g. tantalum, molybdenum,
and cobalt). It also includes strict guidelines
already in place for precious metal trading that monitor
business partners and transactions. Implementation of
the Sourcing Policy included the introduction of a code
of conduct for precious metal suppliers in 2011, and a
procedure was also adopted for auditing mines. The risk
analysis for the Heraeus Group was reviewed in the
second half of 2012. The results of the review of the
risk analysis will be included in the guidelines and in
training in 2013.

Training is performed around the world by the Heraeus
Compliance Officer, the compliance officers and executives
of the business groups and the compliance officers
and executives of the foreign subsidiaries to ensure that
all relevant employees know and understand the rules of
the Heraeus Compliance System.
A Compliance Board links compliance management with
risk management, corporate auditing, and annual auditing.
The board meets twice yearly. Group management,
the head of Corporate Auditing, the Heraeus Compliance
Officer, the Heraeus Risk Officer, and the International
Tax Manager, as well as the auditor, are represented
on the Compliance Board. The Compliance Board
exchanges information about risks to the Group and determines
measures accordingly.
The Heraeus Compliance Officer reports to the CEO. In
this capacity, the Heraeus Compliance Officer compiles
the reports from compliance officers at the individual
business groups and subsidiaries, highlights key events,
and reports about ongoing progress with the Compliance
Management System at Heraeus. Furthermore, the
Heraeus Compliance Officer exchanges information on
compliance topics with officers at the different business
groups on a regular basis.
Corporate Auditing collects information from the Compliance
Board about issues in addition to compliance
risks. It also includes compliance­relevant issues in its
auditing catalog and reports on its findings to both
Group management as well as the Heraeus Compliance
Officer. Using systematic risk analysis, the head of Corporate
Auditing and the Heraeus Compliance Officer work
together to select the companies where compliance
audits are to be conducted. Since 2009, the business
groups have completed a yearly compliance questionnaire
on the introduction and implementation of compliance
guidelines. The completed compliance questionnaires
are available to Corporate Auditing as the starting
point for compliance audits.
Based on the findings, Group management informs the
Supervisory Board’s Audit Committee about developments
and progress in the Compliance Management System,
as well as important individual events.
65

»I work with the
most fascinating
material of all«

» Quartz glass fascinates me. I am continually
amazed at how we can take two chemical
elements – silicon and oxygen – and conjure
up a material with so many different proper-
ties! Time and again, we make use of technological
challenges to expand our expertise
in manufacturing precision, high-performance
quartz glass. The material is currently playing
a key role in experiments with gravitational wave
detectors to research an aspect of Einstein’s
theory of relativity. Specifically, we are studying
the collapse of neutron stars. The resulting
gravitational waves ripple through our universe.
Our specialty quartz glass makes the detectors
so sensitive that these waves can be measured.«
dr. ralf takke leadS the optiCS diviSion of heraeuS QuarzglaS. he haS worked
at heraeuS SinCe 1983. originally a CryStal grower, takke Soon beCaMe intereSted
in the variouS appliCationS of Quartz glaSS, beCauSe “there’S alwayS a
poSSibility that you Could develop SoMething new for CuStoMerS froM SiliCon
and oxygen.” for exaMple, takke worked on the developMent of optiCal fiberS
for the teleCoMMuniCationS induStry before he turned to inveStigating
the optiCal propertieS of Quartz glaSS.

Quartz glaSS preforM
for gravitational wave deteCtor

70 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
Events after the Balance Sheet Date / Prognosis Report
events after the balance Sheet date / prognosis report
EVENTS AFTER THE BALANCE SHEET DATE
After the balance sheet date of December 31, 2012, the
specialty light sources business group acquired the
Fusion UV Systems Group, headquartered in Gaithersburg,
Maryland, USA, from the British manufacturer Spectris.
Prompt official approval made it possible to finalize the
acquisition on January 31, 2013. The combined technology
portfolio includes a range of UV generation methods
that will make new applications possible. Fusion
UV is involved in the use of UV technology in the production
of glass fibers and displays, such as for smartphones.
Because the companies have also focused on
different regions, the acquisition provides broad market
coverage with direct access to all key industrial markets
in the USA, Europe, and Asia.
In addition, the precious metals business group took over
the solar pastes business of the US group Ferro Corporation
on February 6, 2013. The previous Ferro activities
are integrated into the Photovoltaics business unit, a
leading innovator and supplier of metallization pastes for
solar cells. With this acquisition, Heraeus underscores
its commitment to photovoltaics technology.
To further strengthen its competitiveness and expertise
in materials and technologies, at the beginning of March
2013 the management of Heraeus Materials Technology
decided to undertake a complete restructuring around
the world over the next two years. The objectives are to
adapt the organization and processes to the needs of the
market and to significantly expand the business group’s
materials expertise and innovative capacity.
PROGNOSIS REPORT
The stability of financial year 2012 and the evident
demand in all important economic regions and markets
at the start of 2013 give rise to cautious optimism
overall about the coming year. Heraeus expects a general
improvement in business during financial year
2013, with growth rates slightly higher than last year’s
for both revenue and earnings.
Price trends in precious metal markets have a major effect
on revenues in many Heraeus business groups. Rising
price volatility for precious metal trading and general uncertainty
about the economic situation in the European
region make it difficult to forecast revenues for the coming
year. Over the long term, Heraeus expects continued
positive development, particularly given our ability
to leverage innovations for organic and profitable growth
in attractive markets. Furthermore, targeted acquisitions
to expand existing product portfolios will contribute to
success at Heraeus.
In 2013, we expect to see a slight upturn in the economy,
especially during the second half of the year. The sovereign
debt crisis could continue to burden the European
economy with significant uncertainty. The potentially
lower growth rates in newly industrializing countries, in
particular China, could also hamper revenue development
in individual markets. Renewed tension in the financial
markets and substantial price increases for crucial
raw materials could pose another threat. Nevertheless,
we anticipate moderately positive economic growth in
2013. The aforementioned risks, however, could cloud
our overall positive forecast.

For 2014, we currently expect to see a further increase
in product revenue and earnings. This forecast presupposes
that Europe can contain the sovereign debt crisis
and avoid an economic recession. Likewise, a slowdown
in Asia’s economic growth would lower our expectations.
The restructuring now underway puts Heraeus in a good
position to meet the challenges ahead.
Over the next few years, Heraeus will adhere to the fundamental
policies necessary to secure solid medium­
and long­term financing. In order to repay the promissory
note due in 2013 (€100 million), a sum of € 50 million
was refinanced before the balance sheet date (payment
received in January 2013). It will be possible to cover
further cash outflows from the current cash and cash
equivalents. If necessary, we will also continue to use
the capital markets for refinancing.
PRECIOUS METALS
In 2013, the precious metals business group expects to
see a recovery in demand for products containing precious
metals. Positive results are expected for all transactions
in this business group. Further growth is anticipated
particularly in the thick film materials consumer
industries but also in precious metals recycling and the
catalyst business.
The expansion of local R&D activities to ensure further
expansion of business in Asia is a significant contributor
to success, because the Asian region will continue to
play a leading role.
Electronics applications in Asia, as well as industrial precious
metal applications and recycling, particularly in
China and Southeast Asia, will underpin additional growth
over the next two years. Trading in precious metals is
influenced, in part markedly, by the repercussions of the
euro crisis, which in 2012 continued to spur sales of
precious metals for investment purposes, among other
effects. The volatile economic environment, varying by
region, may temporarily further reduce demand in the industrial
sector; on the other hand, investors are likely
to remain interested in precious metals, especially gold.
Overall, Heraeus Precious Metals has an optimistic outlook,
anticipating growth particularly in Asia and emerging
market nations.
For 2014, the business group expects a noticeable increase
in both product revenue and earnings. With the
development and market launch of a new generation of
silver pastes for photovoltaics during the second half
of 2012, we consider the business well equipped to consolidate
its market leadership over the next two years,
despite continued market uncertainty and steep increases
in price pressure. In addition, the business group’s
new product portfolio of conductive polymers, along with
specialty chemicals from Daychem, will stand it in good
stead in the clear growth areas of electronics. Products
and technologies for the environment, such as catalysts
and photovoltaics materials, fuel cells and LEDs, will take
on even greater significance.
71

72 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
Events after the Balance Sheet Date / Prognosis Report
MATERIALS AND TECHNOLOGIES
Heraeus Materials Technology plays a leading role in processing
precious and special metals, as well as platinum­group
metals. High­quality products from this international
technology company can be found in the
health, environmental, energy, mobility, and communications
sectors.
Suppliers of automotive electronics worldwide are important
customers for such products, as are manufacturers
for applications in the communications and entertainment
electronics industries (particularly in Asia). On
the whole, we do not expect a sustained upturn in 2013.
The business group is assuming that price competition
in the lighting and computer hard drive industries will
continue and that business in heat meter sensors in China
will recover only slowly. Nor will the general demand
from the automobile industry increase significantly; positive
impetus will come only as the new Euro 6 emissions
standards boost demand for temperature sensors
in cars. The group also expects the new standards to
spur a recovery in the sensor business for diesel emissions
control.
In addition to the modest prospects for key markets, the
recent organizational changes and cost reduction measures
will hold down results in 2013. In subsequent years,
however, the business group will benefit from these
changes and can expect significant increases in earnings.
SENSORS
According to the World Steel Association (WSA), global
steel demand is expected to grow by about 3% in 2013.
The growth is mainly driven by developing markets, for
example in the BRIC states, where per capita steel consumption
will continue to increase.
Research and development activities will again lead to
the market launch of various innovative products over
the next few years, helping to consolidate our market
position.
In line with the WSA’s forecast and reflecting the innovations
coming onto the market, the sensors business group
anticipates further revenue growth in 2013. It expects
growth to continue at a similar pace in 2014, with price
pressure further increasing in China and in the USA.
DENTAL PRODUCTS
The market for dental products for dentists and dental
technicians will continue to grow over the next two years
due to demographic development, increasing demand
for function and aesthetics, and innovations in both treatment
methods and products. With a strategic focus on
restorative dentistry, digital prosthetics including highquality
implants, and industrially manufactured denture
materials, the dental products business group is set to
take advantage of these growth opportunities. However,
we will again feel the effects of the trend toward replacing
precious metals in prosthetics with industrially manufactured
ceramic solutions and non­precious metals,
while digital solutions edge out traditional materials

and technologies. Despite increasing price pressure,
this group anticipates positive growth in revenues and
earnings from a new pharmaceutical product for dental
applications. Heraeus Dental expects that strengthening
the sales structure, above all in the USA, and internationalizing
some product groups will result in revenue
growth over the next few years. Overall, the business
group is expecting a slight rise in product revenues in
2013 and 2014. In response to the changed conditions,
a strategic reorientation of the business group and cost
projects was initiated and will be implemented over the
next two financial years.
BIOMATERIALS AND MEDICAL PRODUCTS
The global market for bone cement and biomaterials for
orthopedics and traumatology will continue to grow due to
demographic shifts, rising expectations for quality of life
and mobility, medical advances, and product innovations.
Heraeus Medical is poised to take advantage of these
growth opportunities with its attractive product portfolio,
top­notch comprehensive training programs, and excel ­
lent business structures. Over the next two years, Heraeus
Medical anticipates strengthening its market position
with its existing portfolio in countries where its market
share is still relatively small. In addition, further market
segments will be gained in Europe and Australia with
innovative products. These include new products for
primary and revision endoprosthesis, bone replacement
materials, and anti­infective therapy for bone surgery.
In 2013 and 2014, the business group anticipates continued
revenue growth.
QUARTZ GLASS
After the significant slump in the solar industry as well
as a cyclical decrease in the semiconductor market, a
gradual recovery is expected in both sectors starting in
the second half of 2013. In the area of crucible manufacture,
the special customer constellation makes any
fundamental improvement in the business situation
unlikely. New developments in the optical industry give
the business group reason for optimism. The telecommunications
industry is expecting strong demand to persist
through 2013 and into the following years. Infrastructure
projects in China and the USA continue to ensure
growing demand for synthetic quartz glass and potential
revenue growth in the business group.
Process optimizations will also continue to improve the
earnings situation.
Based on revenues in the telecommunications industry
as well as a planned recovery in the remaining industries,
the revenue situation is expected to improve significantly
in the medium term.
SPECIALTY LIGHT SOURCES
The business and investment climate in the industrial
sector is characterized by a high level of uncertainty.
The European crisis, the decline in the photovoltaics
sector, and changing news from the most important
industrial nations made restraint the preferred approach
to capacity expansions. Nevertheless, the business
group forecasts growth for the next two years. The strategy
of acting more as a solution provider and opening
up new application markets, consistently investing in new
73

74 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
Events after the Balance Sheet Date / Prognosis Report
List of Shareholdings
and further development of the product portfolio, and
opening up access to new markets will continue to boost
performance and earnings.
The successful acquisition of Fusion UV Systems Group
not only makes the business group the market leader
in UV solutions but also significantly accelerates its progress
toward its strategic goals. In 2013, the aim is to
match the revenue level of the record year 2011. Subsequently,
the growth achieved in the past few years is
expected to continue, yielding a good earnings situation.

List of Shareholdings
of the Heraeus Group, Hanau, as of December 31, 2012
NAME OF COMPANY REGISTERED OFFICE COUNTRY EQUITY INTEREST IN %
1. Subsidiaries included in consolidated financial statements
Domestic
Heraeus Beteiligungsverwaltungsgesellschaft mbH Hanau Germany 100.00
Heraeus Electro­Nite GmbH & Co. KG Hanau Germany 100.00
Heraeus Electro­Nite Verwaltungsgesellschaft mbH Hanau Germany 100.00
Heraeus Energieversorgungsgesellschaft mbH Hanau Germany 100.00
Heraeus Finance GmbH Hanau Germany 100.00
Heraeus Holding GmbH Hanau Germany 100.00
Heraeus infosystems GmbH Hanau Germany 100.00
Heraeus Instruments Administration and Management GmbH Hanau Germany 100.00
Heraeus Kulzer GmbH Hanau Germany 100.00
Heraeus Kulzer International GmbH Hanau Germany 100.00
Heraeus Kulzer Liegenschaften GmbH & Co. KG Hanau Germany 100.00
Heraeus Liegenschafts­ und Facility
Management GmbH & Co. KG Hanau Germany 100.00
Heraeus Liegenschafts­ und Facility III
Management GmbH & Co. KG Hanau Germany 100.00
Heraeus Liegenschafts­ und Facility Management
Verwaltungsgesellschaft mbH Hanau Germany 100.00
Heraeus Materials Technology GmbH & Co. KG Hanau Germany 100.00
Heraeus Materials Technology Verwaltungs GmbH Hanau Germany 100.00
Heraeus Medical GmbH Wehrheim Germany 100.00
Heraeus Metallhandelsgesellschaft mbH Hanau Germany 100.00
Heraeus Noblelight GmbH Hanau Germany 100.00
Heraeus Noblelight Liegenschaften GmbH & Co. KG Hanau Germany 100.00
Heraeus Precious Metals GmbH & Co. KG Hanau Germany 100.00
Heraeus Precious Metals Verwaltungs GmbH Hanau Germany 100.00
Heraeus Quarzglas GmbH & Co. KG Hanau Germany 100.00
Heraeus Quarzglas International GmbH Hanau Germany 100.00
Heraeus Quarzglas Verwaltungsgesellschaft mbH Hanau Germany 100.00
Heraeus Sensor Technology GmbH Hanau Germany 100.00
Scientific Glass GmbH Usingen Germany 100.00
W. C. Heraeus International GmbH Hanau Germany 100.00
75

76 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
List of Shareholdings
NAME OF COMPANY REGISTERED OFFICE COUNTRY EQUITY INTEREST IN %
Foreign
Beijing Heraeus Biomaterials Co., Ltd. Beijing China 100.00
Biomain AB Helsingborg Sweden 100.00
Cavex Holland B.V. Haarlem The Netherlands 100.00
Heraeus Amba Ltd. Banbury United Kingdom 100.00
Heraeus Catalysts (Danyang) Co. Ltd. Jiangsu China 70.00
Heraeus CZ s.r.o. Prague Czech Republic 100.00
Heraeus Dental Korea Co., Ltd. Seoul Republic of Korea 51.00
Heraeus Drijfhout B.V. Amsterdam The Netherlands 100.00
Heraeus Electronic Materials Philippines, Inc. Makati City The Philippines 100.00
Heraeus Electro­Nite (Aust.) Pty. Ltd. Unanderra Australia 100.00
Heraeus Electro­Nite (Pty.) Ltd. Boksburg South Africa 100.00
Heraeus Electro­Nite (U.K.) Ltd. Chesterfield United Kingdom 100.00
Heraeus Electro­Nite AB Lidingö Sweden 100.00
Heraeus Electro­Nite A.S. Ankara Turkey 100.00
Heraeus Electro­Nite Canada Ltd. Stoney Creek/ON Canada 100.00
Heraeus Electro­Nite Chelyabinsk LLC Chelyabinsk Russia 100.00
Heraeus Electro­Nite Co., LLC Dover/DE USA 100.00
Heraeus Electro­Nite Espana, S.L. Llanera, Asturias Spain 100.00
Heraeus Electro­Nite France S.A.R.L. Illange France 100.00
Heraeus Electro­Nite Instrumentos Ltda. Diadema/SP Brazil 100.00
Heraeus Electro­Nite International N.V. Houthalen Belgium 100.00
Heraeus Electro­Nite Italy S.R.L. Milan Italy 100.00
Heraeus Electro­Nite Japan Ltd. Ichikawa­shi, Chiba Japan 100.00
Heraeus Electro­Nite L.L.C. Moscow Russia 100.00
Heraeus Electro­Nite Mexicana S.A. de C.V. Ramos Arizpe/COA Mexico 100.00
Heraeus Electro­Nite Polska Sp. z o.o. Sosnowiec Poland 100.00
Heraeus Electro­Nite Shanghai Ltd. Shanghai China 100.00
Heraeus Electro­Nite Shenyang Co. Ltd. Shenyang China 100.00
Heraeus Electro­Nite Taicang Co. Ltd. Taicang China 100.00
Heraeus Electro­Nite Taiwan Ltd. Kaohsiung Taiwan 100.00
Heraeus Electro­Nite Ukraina LLC Zaporozhye Ukraine 100.00

NAME OF COMPANY REGISTERED OFFICE COUNTRY EQUITY INTEREST IN %
Heraeus Hellas Monoprosopi EPE Athens Greece 100.00
Heraeus Inc. New York/NY USA 100.00
Heraeus K.K. Tokyo Japan 100.00
Heraeus Kulzer Australia Pty. Ltd. Macquarie Park/NSW Australia 100.00
Heraeus Kulzer Austria GmbH Vienna Austria 100.00
Heraeus Kulzer Benelux B.V. Nijmegen The Netherlands 100.00
Heraeus Kulzer Dental Ltd. Shanghai China 100.00
Heraeus Kulzer Hungary Kft. Budapest Hungary 100.00
Heraeus Kulzer, LLC Dover/DE USA 100.00
Heraeus Kulzer Japan Co., Ltd. Tokyo Japan 100.00
Heraeus Kulzer Ltd. Newbury United Kingdom 100.00
Heraeus Kulzer Mexico S.A. de C.V. Mexico D.F. Mexico 100.00
Heraeus Kulzer Nordic AB Sollentuna Sweden 100.00
Heraeus Kulzer Poland Sp. z o.o. Warsaw Poland 100.00
Heraeus Kulzer Portugal Lda. Carcavelos Portugal 100.00
Heraeus Kulzer S.R.L. Milan Italy 100.00
Heraeus Kulzer Schweiz AG Dübendorf Switzerland 100.00
Heraeus Kulzer South America Ltda. Sao Paulo Brazil 100.00
Heraeus Ltd. Hong Kong China 100.00
Heraeus Materials Ltd. Stoke­on­Trent United Kingdom 100.00
Heraeus Materials S.A. Yverdon­les­Bains Switzerland 100.00
Heraeus Materials Korea Corporation Seoul Republic of Korea 100.00
Heraeus Materials Malaysia Sdn. Bhd. Kuala Lumpur Malaysia 100.00
Heraeus Materials Singapore Pte. Ltd. Singapore Singapore 100.00
Heraeus Materials Technology North America LLC Dover/DE USA 100.00
Heraeus Materials Technology Shanghai Ltd. Shanghai China 100.00
Heraeus Materials Technology Taiwan Ltd. Taipei Taiwan 100.00
Heraeus Medical Components LLC St. Paul/MN USA 100.00
Heraeus Medical Components Caribe, Inc. Dorado Puerto Rico 100.00
Heraeus Metal Processing, Ltd. Shannon Ireland 100.00
Heraeus Metals Hong Kong Ltd. Hong Kong China 100.00
Heraeus Metals New York LLC Dover/DE USA 100.00
77

78 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
List of Shareholdings
NAME OF COMPANY REGISTERED OFFICE COUNTRY EQUITY INTEREST IN %
Heraeus Metals (Shanghai) Co., Ltd. Shanghai China 100.00
Heraeus Noblelight Analytics Ltd. Cambridge United Kingdom 100.00
Heraeus Noblelight LLC Dover/DE USA 100.00
Heraeus Noblelight Ltd. Cambridge United Kingdom 100.00
Heraeus Noblelight France S.A.R.L. Courtaboeuf France 100.00
Heraeus Noblelight (Shenyang) Ltd. Shenyang China 100.00
Heraeus Oriental HiTec Co., Ltd. Incheon Republic of Korea 100.00
Heraeus Precious Metals North America LLC Dover/DE USA 100.00
Heraeus Precious Metals North America Conshohocken LLC Dover/DE USA 100.00
Heraeus Precious Metals North America Daychem LLC Dover/DE USA 100.00
Heraeus PSP France SAS Gresy sur Aix France 100.00
Heraeus Quartz America LLC Dover/DE USA 100.00
Heraeus Quartz UK Ltd. Wallsend United Kingdom 100.00
Heraeus Recycling Technology (Taicang) Co., Ltd. Taicang China 100.00
Heraeus S.A. Madrid Spain 100.00
Heraeus S.A.S. Villebon sur Yvette France 100.00
Heraeus S.p.A. Milan Italy 100.00
Heraeus Shanghai Management Consulting Co., Ltd. Shanghai China 100.00
Heraeus ShinEtsu Quartz China Inc. Shenyang China 66.67
Heraeus South Africa (Pty) Ltd. Port Elizabeth South Africa 100.00
Heraeus Technologies India Private Ltd. New Delhi India 100.00
Heraeus Tenevo LLC Dover/DE USA 100.00
Heraeus (Thailand) Ltd. Bangkok Thailand 100.00
Heraeus Tokmak Kiymetli Madenler Sanayi A.S. Izmir Turkey 95.00
Heraeus Vectra do Brasil Ltda. Sao Paulo Brazil 70.00
Heraeus Zhaoyuan Changshu Electronic Materials Co. Ltd. Changshu China 80.00
Heraeus Zhaoyuan Precious Metal Materials Co. Ltd. Zhaoyuan China 60.00
Minco (Shanghai) Metallurgical Co., Ltd. Shanghai China 100.00
PT Heraeus Materials Indonesia Tangerang, Prov. Banten Indonesia 100.00
PT. Woojin Electro­Nite Indonesia Cilegon Indonesia 100.00
Shanghai Heraeus Kulzer Dental Trading Ltd. Shanghai China 100.00
Woojin Electro­Nite Inc. Pyeongtaek­si, Gyeonggi­do Republic of Korea 66.00

NAME OF COMPANY REGISTERED OFFICE COUNTRY EQUITY INTEREST IN %
2. Subsidiaries not included in the consolidated financial statements
Domestic
Heraeus Edelmetalle GmbH Hanau Germany 100.00
Heraeus Original Hanau GmbH Hanau Germany 100.00
Heraeus UV Solutions GmbH Hanau Germany 100.00
Foreign
Heraeus Amba Australia Pty. Ltd. Victoria Australia 100.00
3. Associated companies reported in the consolidated financial statements in accordance with the equity method
Foreign
Argor­Heraeus S.A. Mendrisio Switzerland 31.17
Choksi Heraeus Private Ltd. Udaipur/Rajasthan India 50.00
Heraeus Shin­Etsu America, Inc. Wilmington/DE USA 25.00
Ravindra Heraeus Private Ltd. Udaipur/Rajasthan India 50.00
Shin­Etsu Quartz Products Co., Ltd. Tokyo Japan 50.00
Young Shin Quartz Co., Ltd. Gwanghyewon­myeon,
Chungbuk
4. Associated companies not reported in the consolidated financial statements in accordance with the equity method
due to their minor significance
Domestic
Republic of
Korea 50.00
HN Sunlight GmbH Hanau Germany 50.00
Foreign
Amba Italia S.R.L. Milan Italy 50.00
Amba Lamps Benelux BVBA Turnhout Belgium 50.00
Heraeus Shin­Etsu Quartz Singapore Pte. Ltd. Singapore Singapore 50.00
Inner Mongolia Electrolyte Metals and Powders Co., Ltd. Dengkou County China 49.75
Perdent GmbH Schaan The Principality
of Liechtenstein 50.00
79

»I can
simulate
the sun«

» It’s amazing what we can do with arc and flash
lamps. We can use them to remove hair, treat
blemishes, precisely measure distances, excite
industrial lasers, or simply simulate the sun.
In Cambridge, we develop arc and flash lamps
of particularly high quality, including Xenon
lamps. Heraeus is dominant in the market be -
cause we are the only semi-automated manufacturer
of these lamps. The lamps must function
reliably and efficiently, the ignition process
should be constant and repeatable. The Noblelight
team and I continuously optimize our flash
lamps.«
Martin brown iS a phySiCiSt who haS worked aS a SaleS engineer for arC and
flaSh laMpS for laSer appliCationS at heraeuS noblelight in CaMbridge, united
kingdoM SinCe 2006. thiS iS not hiS firSt tiMe at heraeuS noblelight: brown
worked in the produCtion departMent there froM 1985 to 1994. he then Spent
SoMe yearS working with diaMond proCeSSing laSerS, but hiS deCiSion to
return to heraeuS waS eaSy. a new Market haS opened up for xenon laMpS,
whiCh offerS infinite poSSibilitieS, eSpeCially in CoMbination with other
heraeuS produCtS.

arC and pulSed flaSh laMpS
for a variety of appliCation areaS

84 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
Consolidated Balance Sheet
of Heraeus Holding GmbH, Hanau, as of December 31, 2012
ASSETS IN € MILLION DEC. 31, 2012 DEC. 31, 2011
Cash and cash equivalents 298.2 188.9
Securities 558.2 645.2
Trade receivables 635.1 695.3
Current tax receivables 124.8 160.9
Miscellaneous current receivables and other assets 87.5 125.3
Inventories – excluding precious metals 355.4 356.2
Precious metals 683.5 674.6
Current assets 2,742.7 2,846.4
Goodwill 82.0 60.7
Other intangible assets 179.5 158.7
Property, plant, and equipment 723.1 710.4
Investments at equity 167.6 174.3
Other financial assets 0.3 0.9
Non­current tax receivables 9.8 12.0
Other non­current assets 5.2 7.8
Deferred tax assets 128.6 101.7
Non-current assets 1,296.1 1,226.5
Assets 4,038.8 4,072.9

SHAREHOLDERS’ EQUITY AND LIABILITIES IN € MILLION DEC. 31, 2012 DEC. 31, 2011
Short­term financial debt 179.6 175.7
Trade payables 194.4 243.2
Current tax liabilities 90.6 109.2
Other current liabilities 98.1 143.3
Current provisions 128.6 137.5
Current liabilities 691.3 808.9
Long­term financial debt 396.9 448.1
Other non­current liabilities 24.9 39.1
Provisions for pensions and similar obligations 384.6 319.2
Other non­current provisions 32.8 36.2
Deferred tax liabilities 164.2 174.2
Non-current liabilities 1,003.4 1,016.8
Capital subscribed 210.0 210.0
Capital reserve 127.8 127.8
Retained earnings 1,941.4 1,834.7
Other reserves 39.7 55.5
Non­controlling interests 25.2 19.2
Shareholders’ equity 2,344.1 2,247.2
Total shareholders’ equity and liabilities 4,038.8 4,072.9
85

86 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
Consolidated Income Statement
of Heraeus Holding GmbH, Hanau, for the period from January 1 to December 31, 2012
IN € MILLION 2012 2011
Revenue 20,216.9 26,182.8
Cost of materials – 18,750.9 – 24,595.2
Personnel expenses – 716.1 – 658.7
Amortization, depreciation, and impairment – 135.9 – 106.4
Other operating income 152.0 98.8
Other operating expenses – 414.6 – 449.9
Income from investments accounted for using the equity method 13.2 17.4
Earnings before interest and taxes (EBIT) 364.6 488.8
Financial result – 36.4 – 38.8
Income before taxes 328.2 450.0
Income taxes – 91.2 – 135.5
Net income 237.0 314.5
Thereof attributable to shareholders of the Group 230.8 308.5
Thereof attributable to non­controlling interests 6.2 6.0

Consolidated Cash Flow Statement
of Heraeus Holding GmbH, Hanau, for the period from January 1 to December 31, 2012
IN € MILLION 2012 2011
Net income 237.0 314.5
Depreciation and impairment/write­ups of non­current assets 135.9 106.6
Changes in inventories – 7.7 – 12.8
Changes in trade receivables 62.3 – 45.2
Changes in trade payables – 47.4 – 57.5
Changes in provisions – 12.4 5.4
Change in other net assets/other non­cash transactions – 30.8 – 0.3
Result from the disposal of non­current and other financial assets – 0.4 0.7
Cash flow from operating activities 336.5 311.4
Cash inflows from the disposal of non­current assets 6.3 10.8
Cash outflows for investments in non­current assets – 136.0 – 128.5
Cash outflows for acquisitions minus acquired liquid funds – 69.5 – 2.1
Changes in other financial assets 98.8 – 357.2
Cash flow from investing activities – 100.4 – 477.0
Dividends paid, including dividends to non­controlling interests – 77.7 – 70.0
Cash inflows from the issuing of interest­bearing liabilities 96.5 79.5
Cash outflows from the redemption of interest­bearing liabilities – 145.3 – 8.7
Cash inflow / outflow from financing activities – 126.5 0.8
Net change in cash and cash equivalents 109.6 – 164.8
Effect of exchange rate differences on cash and cash equivalents – 0.3 6.1
Cash and cash equivalents at the beginning of the period 188.9 347.6
Cash and cash equivalents at the end of the period 298.2 188.9
FREE CASH FLOW
IN € MILLION 2012 2011
Cash flow from operating activities 336.5 311.4
Cash inflows from the disposal of non­current assets 6.3 10.8
Cash outflows for investments in non­current assets – 136.0 – 128.5
Free cash flow 206.8 193.7
87

88 Heraeus 2012 ··· Group Management Report ··· Consolidated Financial Statements
key Financial Indicators for the Group 2008 – 2012
Financial performance in € million
2012 2011 2010 2009 2008
Product revenue 4,228 4,840 4,079 2,586 2,920
Precious metal trading revenue 15,989 21,343 17,946 13,634 12,994
Earnings before interest and taxes (EBIT) 365 489 396 171 275
Net income 237 315 260 118 168
Financial position in € million
Total assets 4,039 4,073 3,677 2,929 2,856
Shareholders’ equity 2,344 2,247 1,965 1,684 1,586
Equity­to­assets ratio in % 58 55 53 58 56
Cash flow in € million
Cash flow from operating activities 337 311 77 131 459
Capital expenditure 126 105 73 88 105
Depreciation 109 84 87 88 68
Employees
Employees at year­end 13,615 13,323 12,931 12,340 12,830
In Germany 5,294 5,128 4,772 4,589 4,662
Outside of Germany 8,321 8,195 8,159 7,751 8,168
Personnel expenses in € million 716 659 608 554 547

PUBLICATION INFORMATION
PUBLISHER:
Heraeus Holding GmbH
Corporate Communications
Heraeusstrasse 12 –14
63450 Hanau, Germany
CONCEPT/ DESIGN:
3st kommunikation, Mainz, Germany
The annual report contains the condensed consolidated nancial statements
and the management report of Heraeus Holding GmbH, Hanau, for nancial
year 2012, along with additional, voluntarily supplied information. The complete
version of the consolidated nancial statements can be obtained from
Corporate Communications, Heraeus Holding GmbH. The annual report and
up-to-date information on Heraeus Holding GmbH are also available on the
Internet at www.heraeus.com.
This annual report is also published in German (original language) and
Chinese. Reproduction, including excerpts, permitted only with reference
to the source.

The Year 2012 at a Glance
The Year 2012 at a Glance
JANUARY
HERAEUS PRECIOUS METALS ACQUIRES DAYCHEM
LABORATORIES
As of January 31, 2012, the precious metals business
group took over the business of Daychem Laboratories,
Inc., USA. The acquisition expands Heraeus’ product
portfolio in the field of organic special chemicals for the
semiconductor and display industries, strengthens its
market position as a global supplier to the electronics
industry, and targets the Asian markets.
FEBRUARY
HERAEUS EMPLOYEE OPINION SURVEY CIRCULATES
FOR THE FOURTH TIME
The 2012 employee opinion survey gets underway on
February 22. For the first time, employees across the
globe had the opportunity to help in shape the further
development of the company by offering feedback.
The employees identified both strengths and specific
areas for improvement, initiating important development
processes. Overall, roughly 80% of the staff took
part in the survey around the world.
MARCH
HERAEUS DENTAL GAINS STRENGTH IN
NORTHERN EUROPE
The dental products business group acquired Biomain
AB, Sweden, on March 1, 2012. Biomain AB is the Scandinavian
market leader in the field of customized CAD/
CAM-based implant-borne prosthetics. In Helsingborg,
Biomain produces high-precision dental frameworks,
suprastructures, and prosthetic components. The acquisition
expands Heraeus’ Northern European presence
and adds to its digital prosthetics product range.
APRIL
MAGELLAN SETS SAIL
The Magellan program officially launched in April after
a preparatory phase. The most comprehensive project
yet in the company’s history, it targets optimizations in
business and IT processes. The aim of the program,
named after the Portuguese navigator and explorer, is
to reconfigure and improve processes within an integrated
IT system. It forms the basis for the successful
future development of the company.
100 YEARS OF HERAEUS QUARZGLAS
On April 3, 1912, Heraeus founded Heraeus Quarzglas
GmbH, becoming a pioneer in the manufacture and use
of the ultrapure material. Today, the company is a market
leader and employs a global workforce of more than
1,500. Quartz glass is the basic raw material for the
chip, photovoltaic, and telecommunications industries.
Chemical and analytical processes also benefit from
the material’s high degree of purity.
MAY
HERAEUS PRESENTS RECORD FIGURES
The Board of Management of Heraeus Holding presents
the key figures for 2011 at its press conference on annual
results in May. The company improves on its prioryear
result yet again, signaling the most successful
year in the company’s history. Once again, the company’s
focus on niche markets and innovations and its solid
financial structure are key factors.
JUNE
JÜRGEN HERAEUS RECOGNIZED FOR LIFETIME
ACHIEVEMENT
Dr. Jürgen Heraeus received an award for lifetime
achieve ment at the awards ceremony for the 11th
Deutscher Gründerpreis. During his tenure as managing
director of Heraeus Holding, the current chairman
of the Super visory Board transformed the company into
a globally operating corporate group, laying the foundation
for its success today. He also introduced a decentralized
holding structure, the first time this was ever
established in a family-owned company.

HERAEUS QUARZGLAS CREATIVE COMPETITION:
“HERAEUS + ME”
The employee creative competition “Heraeus + me” began
on June 14. Employees are encouraged to use their
creativity to describe how they view Heraeus as an employer.
A panel of judges composed of employees and
managers pick the winners, who are then invited to an
awards ceremony at the Hanau headquarters. The collection
of creative work by employees is part of a campaign
to promote Heraeus as an employer.
JULY
NEW PRECIOUS METAL TRADING OFFICE OPENS IN
HONG KONG
Heraeus Limited opens the new office of the Trading
Division in Hong Kong on July 25. Precious metal trading
now has the support of its own team, which handles
settlement, billing, and logistics. The expansion means
that customers in the region will continue to benefit
from precious metals trading and risk management services,
all from a single source.
SEPTEMBER
HERAEUS ELECTRO-NITE ACQUIRES MIDWEST
INSTRUMENT COMPANY
On September 7, the sensors business group acquires
the business activities of Midwest Instrument Company,
based in Hartland, Wisconsin, USA. The acquisition of
the company expands the Heraeus product portfolio in
the fields of measurement, monitoring, and control of
metal smelting.
OCTOBER
HERAEUS DENTAL REALIGNS ITSELF
Changes in the dental market have called for a realignment
of the dental products business group. Digitization
is gathering speed in the field of dental products.
Heraeus intends to benefit from this and is developing
its business across Europe through its new Digital Services
Division. At the same time, the dental consumables
business is dominated by price competition, and
the division is responding to it by realigning its distribution
structure and adapting its production worldwide.
NOVEMBER
HERAEUS INNOVATION PRIZE MARKS 10 YEARS
The year 2012 marks the tenth time the Heraeus Innovation
Prize has been awarded. Over 210 product innovations
have been submitted so far and 34 products and
processes have been recognized. In 2012 there are
three winners; the prize for the best innovation goes to
the precious metals business group. First prize for the
best process innovation is shared by the precious metals
and the materials and technologies business groups.
HERAEUS MEDICAL COMPONENTS OPENS NEW PLANT
IN SINGAPORE
The Medical Components Division of the precious metals
business group opens a new subsidiary in Singapore.
The location focuses on research and development and
on production for the Asian region. Heraeus thus remains
true to its beginnings, performing research and
production in direct proximity to its customers.

Heraeus Holding GmbH
Corporate Communications
Heraeusstrasse 12 –14
63450 Hanau, Germany
Phone + 49 (0) 6181.35-5100
Fax + 49 (0) 6181.35-4242
pr@heraeus.com
www.heraeus.com