Business/economy

Annual press conference Networked technology for improved quality of life Improved result expected for 2013

  • Great differences in sectoral and regional development of sales in 2012
  • Bosch Group achieves EBIT return of 2.5 percent in 2012
  • Sales growth of between two and four percent expected for 2013
  • Eight billion euros sales revenue from energy and building technology by 2020
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  • April 18, 2013
  • Business/economy
  • Press releases

press release

Stuttgart – The Bosch Group expects slightly improved economic growth. Under these circumstances, the supplier of technology and services expects its own sales to grow by two to four percent in the current business year. These figures were announced by Dr. Volkmar Denner, the chairman of the Bosch board of management, at the annual press conference. "We have taken many measures in order to improve earnings this year. At the same time, we will seize our opportunities for growth, both in established areas of work and in setting up new areas of business," Denner said. The company still sees considerable economic risks as a result of the high level of sovereign debt in the U.S. and Europe. For the European economy, Bosch expects the recession to end, but anticipates the economic developments there will stagnate this year. Against this background, Bosch Group sales developments were subdued in the first quarter of 2013.

Focus on improving result
In 2013, Bosch will continue the measures introduced last year to improve result. These include tight management of growth areas and limits on fixed costs, capital expenditure, and company acquisitions. At the end of 2012, a combined works agreement was signed for the company's German locations that allows it to adjust more flexibly to cyclical fluctuations. Bosch expects sales growth to come from innovative and beneficial products, web-based business models, and the further expansion of its international presence.

2012 sales: up 1.9 percent
In fiscal 2012, Bosch sales grew 1.9 percent to 52.5 billion euros. After adjustment for exchange-rate effects, sales were 0.8 percent lower than in 2011. In terms of earnings before interest and taxes, Bosch discloses a 2.5 percent return on sales. Profit before tax came to 2.8 billion euros (5.3 percent of sales), as Bosch made a book profit of 1.1 billion euros from the sale of a financial investment. The result was negatively affected above all by the heavy losses made by the Solar Energy division, by considerable upfront investments in growth projects, and by weak sales growth. In addition, the impact of cost-cutting measures was delayed.

Global headcount up slightly to 305,900
In 2012, Bosch brought its headcount growth into line with sales developments. Worldwide, headcount increased only slightly over the course of the year, by 3,400 to 305,900. Some 1,500 additional associates were hired in existing areas of business. The remaining increase of 1,900 is the result of consolidation effects. The largest increase was in Asia Pacific. Headcount fell slightly in Europe, and remained practically unchanged in Germany. The same applies to the Americas. Bosch expects it will have greater personnel requirements in 2013, especially in the Asia Pacific growth region. The number of new apprentices in Germany will be roughly 1,500, as in the previous year.

Looking at result by business sector, the CFO Dr. Stefan Asenkerschbaumer said: "The generally unsatisfactory development of sales and results hides the fact that many divisions developed positively." In 2012, Automotive Technology, the largest business sector, increased its sales by 2.1 percent to 31.1 billion euros. Both EBIT and return on sales were down year on year, at 1.4 billion euros and 4.5 percent respectively. This was mainly due to heavy upfront investments in electromobility, increased raw materials prices, and the disposal of the foundation brake business.

Connected vehicles for automated and efficient driving
"As before, our main development objectives are safer and more eco-friendly cars," said Dr. Bernd Bohr, the chairman of the Bosch Automotive Group. Bosch sees great market and sales potential for safety and driver assistance systems. More than 5,000 engineers are working to make them even better. Such systems currently account for sales of some five billion euros. In the years ahead, these sales are expected to grow by ten percent per annum. This growth will be driven by a new rating scheme for vehicle safety. From 2014, new vehicles will only receive the top mark if they have at least one driver assistance sensor on board. Since 2000, Bosch has produced one million radar sensors. This number is set to increase to ten million by 2016. Bosch believes that the safe integration of these new assistance functions – with their sensors, control units, and actuators – into the car as a whole is a Bosch strength.

One important condition for highly automated functions such as intersection assistants is the exchange of data among vehicles. "Automated driving will be networked driving," Bohr went on. By networking automotive systems, Bosch also wants to unlock further potential for efficiency and environmental protection. Bosch engineers are modifying the internationally successful start-stop system to include smart navigation functions, thus making it into a coasting assistant. Here, the combination of networked technology and driving behavior can bring about a fuel saving of as much as 15 percent.

In powertrains as well, Bosch is working to reduce consumption and CO2 emissions. Further modifications to gasoline and diesel systems can reduce consumption by another 20 percent. In 2012, Bosch sold more than five million gasoline direct injection systems. Sales revenue from these system increased 50 percent.

Bosch believes it is well prepared for growing demand for CNG powertrains, especially in the United States. The company supplies the world's smallest CNG injector. In addition, Bosch manufactures flexible control units that are adapted to both gasoline and CNG injection. Bosch's activities in electromobility remain considerable. Some 1,000 engineers are working to electrify the powertrain. By the end of 2014, the company will have 30 projects in series production. Bosch estimates that a volume market for electric drive will emerge after 2020.

Stagnation in industrial technology – success with packaging machinery
Sales of the Industrial Technology business sector stagnated at eight billion euros in 2012. The economic slowdown especially affected the Drive and Control Technology division. The strong growth in North America could not offset the collapse in China and stagnation in Europe. The Packaging Technology division developed positively. Packaging Technology's products and services were in demand in the pharmaceuticals and foodstuffs industries, which are less prone to cyclical fluctuations.

Negative market developments, a renewed price decline of some 40 percent, and impairments resulted in a loss of one billion euros in the Solar Energy division. At the end of March, Bosch announced its decision to discontinue its activities in crystalline photovoltaics owing to uncertain prospects. As a result of this loss, the Industrial Technology business sector closed the year with negative EBIT of minus -713 million euros. While the Drive and Control Technology and Packaging Technology divisions disclosed a positive result, this could not offset the burden caused by the Solar Energy division.

Power Tools and Thermotechnology successful in eastern Europe
In 2012, the Consumer Goods and Building Technology business sector generated sales of 13.4 billion euros, a 2.5 percent increase. Because of a slump in important European markets, which in some cases was steep, EBIT fell to 620 million euros, compared with 730 million euros in the previous year. The Power Tools division was able to appeal to customers with innovative power tools, especially in eastern Europe, Asia, and North America. The Thermotechnology division developed very encouragingly in Russia. Important markets in southern Europe, by contrast, remained below expectations. This also affected the Security Systems division. However, this division was able to generate strong growth in Asia, South America, Turkey, and Russia.

Continuing internationalization – developments vary from region to region
In the reporting year, Bosch once more expanded its global presence. New regional companies were set up in Bangladesh, Cambodia, Laos, and Myanmar in 2012. Further regional companies are to be set up in the Middle East and Africa by 2014. The company generated sales of some 600 million euros in these regions in 2012. The figure is set to reach one billion euros by 2015.

In Europe, Bosch sales fell slightly. They dropped by 1.9 percent to 29.8 billion euros. This was mainly due to the lack of economic growth, as well as the recession in a number of southern European countries In Germany as well, sales growth was very low, at 0.9 percent. In 2012, Bosch invested some two billion euros in Europe, 1.1 billon euros of this in Germany. Bosch wants to take even more advantage of the growth opportunities in Russia. For this reason, the company will be expanding its manufacturing capacity there by 2015. At the existing location in Engels, the Thermotechnology division is constructing a new plant to make industrial boilers and wall-mounted heaters. A second automotive technology location is currently being created in Samara. In Germany, Bosch will have completed its new center for research and advance engineering by 2015. In Renningen, near Stuttgart, the company is investing more than 300 million euros in its new research campus.

In the Americas, sales developments varied considerably in 2012. Due to a steep increase in automotive production, sales growth was especially high in North America. In this region, Bosch was able to increase its sales by 17 percent to 8.2 billion euros. In the South American markets, by contrast, sales fell by 15 percent to 1.9 billion euros. For the years ahead, the company expects good growth opportunities in both North and South America. Accordingly, Bosch once again made considerable investments in the Americas in 2012. Capital expenditure increased by nine percent to 380 million euros. For example, in order to produce mobile hydraulics components for the American market, the Drive and Control Technology division will significantly expand its Fountain Inn location in South Carolina in the years ahead. One other focus of investment activity in North America was the expansion of manufacturing facilities for commercial-vehicle injection technology and gasoline direct injection for passenger cars.

In Asia Pacific, Bosch increased its sales by 5.6 percent to some 12.6 billion euros. The Chinese and Indian economies, and with them sales, developed less dynamically in 2012 than in previous years. By contrast, the company was able to achieve double-digit growth rates in southeast Asia. To reach its long-term target of generating 30 percent share of its sales in Asia Pacific, the company invested some 780 million euros there last year, on a par with the previous year. In China, two manufacturing sites for automotive technology are currently under construction, one of them in the western Chinese city of Chengdu. There, the Chassis Systems Control division will start producing braking control systems in the summer. At the manufacturing site in Wujin, opened in 2012, the Drive and Control Technology division is constructing an additional research and development center.

Eight billion euros sales revenue from energy and building technology by 2020
Since January 1, 2013, the Bosch Group has been structured into four business sectors. The Security Systems, Thermotechnology, and Solar Energy divisions, as well as the Bosch Energy and Building Solutions GmbH subsidiary, make up the Energy and Building Technology business sector. Bosch believes that there is huge energy-efficiency potential, as well as sales potential, in modernizing buildings' power supply, energy management, and insulation. Buildings account for some 40 percent of global energy demand. "Through the intelligent networking and control of power and heat, a cost saving of up to 20 percent is possible in commercial buildings," said Dr. Stefan Hartung, the Bosch board of management member responsible for the new business sector.

For the owners of residential and commercial buildings, Bosch offers not only technology such as condensing boilers with lambda control and modern combined heat and power plants, but also services. These include energy advice, the management of heating and security systems, and services for energy management. "Decentralized power networks are fundamental for a successful move to alternative forms of energy," Hartung said. Bosch expects this new business sector to grow by eight percent annually, and to achieve sales of eight billion euros by 2020, following five billion euros in 2012.

Heavy investment in the company's future
Bosch spent some 4.8 billion euros for research and development in 2012. Of this expenditure, 45 percent went into ecological products, and nearly 20 percent into products for safety and health. Worldwide, the number of associates in research and development rose to 42,800. In Asia Pacific alone, 13,800 associates are now researching and developing for Bosch. From mid-2013, "Bosch Connect," the company-wide social media platform, will network Bosch associates internationally. "This new method of collaboration will help us to shorten processes, generate ideas faster, and put innovations into practice more efficiently," Denner said.

In 2012, Bosch capital expenditure came to some 3.2 billion euros. In total, therefore, the Bosch Group spent nearly eight billion euros on the future of the company last year. For acquisitions and investments, Bosch spent roughly 1.5 billion euros in 2012, 1.1 billion euros more than in the previous year. Most of the acquisition activities related to the Automotive Aftermarket and Packaging Technology divisions.

Broad footprint as basis for new business models
Bosch will continue to rigorously pursue the main lines of its strategy – with systems for environmental protection, energy efficiency, and safety. The company intends to open up more and more areas of business on the internet of things and services. Denner felt that Bosch was ideally positioned for this, with its hardware, software, and sensor-technology know-how as well as its diversified portfolio. He anticipates that networking these sets of competence will give rise to a constant flow of new solutions that enhance quality of life. "Bosch's broad footprint has never been as valuable as in the age of connected life," Denner said.

Note on the discontinuation of proportionate consolidation:
Due to changes in accounting rules, Bosch will in the future no longer include its fifty-fifty joint ventures in consolidation. Instead, the Bosch Group result will include the proportionate after-tax profit of the joint ventures. The discontinuation of proportionate consolidation will also affect the statement of financial position and the headcount figures. If these rules are applied to 2012, sales came to 45.6 billion euros.

Further information, press photos, and video materials are available online at the Bosch Media Service: www.bosch-press.com.

Bosch key data
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The Bosch Group is a leading global supplier of technology and services. It employs roughly 375,000 associates worldwide (as of December 31, 2015). The company generated sales of 70.6 billion euros in 2015. Its operations are divided into four business sectors: Mobility Solutions, Industrial Technology, Consumer Goods, and Energy and Building Technology. The Bosch Group comprises Robert Bosch GmbH and its roughly 440 subsidiaries and regional companies in some 60 countries. Including sales and service partners, Bosch’s global manufacturing and sales network covers some 150 countries. The basis for the company’s future growth is its innovative strength. Bosch employs 55,800 associates in research and development at 118 locations across the globe. The Bosch Group’s strategic objective is to deliver innovations for a connected life. Bosch improves quality of life worldwide with products and services that are innovative and spark enthusiasm. In short, Bosch creates technology that is “Invented for life.”

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 is available online at www.bosch.com and www.bosch-press.com, http://twitter.com/BoschPresse.

PI8014 - April 18, 2013

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