· Strong impetus expected mainly from the emerging markets

Stuttgart – The global recession also had a strong impact on the development of the Bosch Group. Preliminary figures show that the company's sales for 2009 amounted to some 38 billion euros, some 16 percent below their previous-year level. As a result, the company will close the past fiscal year with a loss between 3 and 4 percent of sales. According to Franz Fehrenbach, chairman of the board of management of Robert Bosch GmbH, operating result has been on an even keel since the autumn of 2009. Given that financial statements are currently being prepared, exact figures are not yet available. Fehrenbach went on to say that 2010 will also be a difficult year, despite clear signs of recovery. Moreover, he by all means expects that the company will this year be able to make up for more than half the loss in sales sustained in 2009. He then cautioned that it was still too early to predict how earnings will develop. “Our aim in 2010 is to break even,” Fehrenbach said.

The drop in demand that burdened most major vehicle markets in 2009 is reflected in the development of the Automotive Technology business sector. At 21.7 billion euros, sales were down 18 percent on the previous year. However, there has been a noticeable improvement since the middle of 2009. This trend is likely to continue in 2010. In addition to growth in Asia's emerging markets, particularly in China and India, vehicle production in North America is expected to significantly regain momentum. Recovery is also expected in Europe. In Germany, passenger-car and commercial-vehicle production is likely to see a slight increase, despite the end of the government scrappage scheme.

In 2010, Bosch intends to take advantage of global vehicle market trends to increase Automotive Technology sales by at least 10 percent. To reach the pre-recession levels of 2007, however, this business sector must grow by a good 30 percent. The company aims to achieve this target by 2012. The Industrial Technology business sector is above all feeling the burden of the continuingly difficult situation in mechanical engineering. Sales dropped by 24 percent to some 5.1 billion euros in 2009. In 2010, the industrial technology business is expected to see a slow recovery. Bosch also sees growth opportunities in its Consumer Goods and Building Technology business sector, which has not been as severely affected by the global economic downturn. In fiscal 2009, sales stood at 11.3 billion euros, five percent below the previous year.

A balancing act between saving and securing future growth
In order to limit its losses and ensure its financial stability in light of volatile financial markets, the Bosch Group reacted to the dramatic drop in sales with rigorous cost-cutting measures on all levels. As a result, the company was able to achieve positive free cash flow by the end of the year. At 1.9 billion euros, investment was financed from current operations. Compared with the previous year, the company's net financial position remained practically unchanged. Despite a range of cost-cutting measures, Bosch remained committed to projects which it regards as vital for the company's future. At 3.8 billion euros, the level of R&D expenditure was maintained at nearly the same level as the previous year. Important up-front investments were increased in a number of areas, for instance in work to make the internal-combustion engine more energy efficient, or to develop the electric drive. Moreover, activities in photovoltaics were further intensified, and Bosch continued to expand its presence in major growth markets such as China and India. As measured in local currency, Asia Pacific sales for the year as a whole dropped by some 7 percent. However, year-on-year sales in the fourth quarter were up 18 percent. In other regions around the world, the situation has also improved since summer 2009. However, the first six months of the year had such a severe impact on the company's overall business development that Bosch was faced with a significant drop in sales in many of the world's regions for the year as a whole. In Europe, Bosch sales declined by 19 percent, while sales in the Americas dropped by 14 percent.

A comprehensive package of measures to safeguard jobs
In large part, Bosch was able to use work-time measures to compensate for the capacity underutilization resulting from the collapse in sales. Currently, 80,000 associates around the world are affected by such measures, roughly 55,000 of them in Germany. Fehrenbach said that it was an important principle for Bosch to keep its core team on board as far as possible, yet without shirking any necessary structural adjustments. Consequently, Bosch sold off a large part of its car radio business in 2009, as well as its brakes business in North America. In 2009, the number of Bosch associates fell by some 11,000, or 4 percent, to 271,000.

High level of loyalty among associates
By accepting financial sacrifices and, in many cases, an increased workload, Bosch associates made an important contribution to the company's crisis management. Fehrenbach expressed his sincere thanks to the company's associates for this support. A high level of loyalty such as this was, he felt, by no means a matter of course, but an expression of Bosch corporate culture. This strong bond between the company and its associates was, in Fehrenbach's view, also illustrated by the latest associate survey, in which more than 80 percent of Bosch associates participated. Eighty percent of respondents said that they were “proud to work for the Bosch Group” – the same number as before the crisis.

Cautiously optimistic outlook
The Bosch Group is "cautiously optimistic" about the development of the global economy. Even if the current pace of growth does not increase significantly, Fehrenbach expects global economic growth for 2010 to stand at some 3 percent. Globally, this would mean that the roughly 2 percent decline of 2009 would be more than offset. For Germany, Bosch expects growth to be around 2 percent, compared with a 5 percent decline in 2009. With expected growth of some 6 percent, the greatest impetus is expected to come from the emerging markets. However, Bosch also expects to see recovery in the North American economy, with growth of some 2.5 percent.

The Bosch Group is a leading global supplier of technology and services. In the areas of automotive and industrial technology, consumer goods, and building technology, some 275,000 associates generated sales of 38.2 billion euros in fiscal 2009. The Bosch Group comprises Robert Bosch GmbH and its more than 300 subsidiaries and regional companies in over 60 countries. If its sales and service partners are included, then Bosch is represented in roughly 150 countries. This worldwide development, manufacturing, and sales network is the foundation for growth. Each year, Bosch spends more than 3.5 billion euros for research and development, and applies for some 3,800 patents worldwide. With all its products and services, Bosch enhances the quality of life by providing solutions which are both innovative and beneficial. The company was set up in Stuttgart in 1886 by Robert Bosch (1861-1942) as “Workshop for Precision Mechanics and Electrical Engineering.” The special ownership structure of Robert Bosch GmbH guarantees the entrepreneurial freedom of the Bosch Group, making it possible for the company to plan over the long term and to undertake significant up-front investments in the safeguarding of its future. Ninety-two percent of the share capital of Robert Bosch GmbH is held by Robert Bosch Stiftung GmbH, a charitable foundation. The majority of voting rights are held by Robert Bosch Industrietreuhand KG, an industrial trust. The entrepreneurial ownership functions are carried out by the trust. The remaining shares are held by the Bosch family and by Robert Bosch GmbH. Additional information can be accessed at www.bosch.com.

PI6931 - January 27, 2010