Business/economy

Preliminary figures for 2013 Significant progress: Bosch Group increases sales and result Opening up new market segments for connected living

  • Bosch CEO Denner: “The breadth of our technological expertise and our presence in diverse sectors of the economy are crucial advantages in a connected world.”
  • Sales up 2.7 percent to 46.4 billion euros
  • Disregarding extraordinary burdens from photovoltaics, EBIT margin at roughly 6 percent
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  • January 22, 2014
  • Business/economy
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press release

Stuttgart – According to preliminary figures, the Bosch Group increased its sales by 2.7 percent in 2013, to 46.4 billion euros, and this despite the difficult economic environment (adjusted previous-year figure: 45.2 billion euros). In the form of negative exchange-rate effects to the tune of some 1.5 billion euros, the strong euro places a considerable burden on the sales revenue disclosed by the supplier of technology and services. Earnings have developed fundamentally better, but are once again affected by the situation of the Solar Energy division, which remained difficult in 2013. In early 2013, the company announced its decision to exit its activities in crystalline photovoltaics.

*Note: Due to changes in the law, Bosch no longer includes its fifty-fifty joint ventures in its accounting. This mainly concerns Bosch Siemens Hausgeräte GmbH and ZF Lenksysteme, whose consolidated sales comes to some 7 billion euros. Due to these changes, current figures for sales, result, and headcount are only partially comparable with the figures previously published for 2012.
Progress in earnings
According to preliminary figures, and leaving aside the extraordinary burdens caused by photovoltaics, the Bosch Group EBIT margin comes to some 6 percent. This is roughly one percentage point more than in the previous year. Including the extraordinary burdens as a result of photovoltaics, which are likely to total 1.3 billion euros, EBIT margin some 3 percent. “The many measures taken to improve profitability are clearly working. In fact, we have made better progress with result than expected,” said Dr. Volkmar Denner, chairman of the board of management of Robert Bosch GmbH. In 2014, Bosch will continue to work without let-up on improving its competitiveness and fitness for the future. As regards the targets for sales growth and margin, Denner said: “We have already made progress. We will continue to focus on profitability, growth, and agility.”

Seizing growth opportunities – opening up new market segments
The company wants to unlock existing potential for growth and open up new market segments. Various future trends are relevant for Bosch here. Apart from energy efficiency and connectivity, there is the high-spending aging population in the industrialized countries and the rapidly growing middle class in the emerging markets of Asia and South America. Bosch is also working intensively on the mobility of the future, which will be electric, automated, and connected. In 2013, Bosch launched many products and services related to these trends. They include highly efficient gasoline and diesel injection systems, driver assistance systems such as motorcycle stability control, mySPIN smartphone integration solution, telematics services for the management of vehicle fleets, and robotics applications such as the “Indego” lawnmower.

Shaping and participating – Bosch in the connected world
Bosch especially wants to open up new market segments with solutions for connected living. “The breadth of our technological expertise and our presence in diverse sectors of the economy are crucial advantages in a connected world. We want to play an active role in shaping that world, and at the same time take advantage of the business opportunities it offers. Bosch’s strategic objective is to create solutions for a connected world,” Denner said. For many, connectivity is already a reality. By 2015, some 75 percent of global population will be online, along with more than 6 billion devices. In Bosch’s view, however, this only scratches the surface of the potential opportunities. In the future, the company will make all its electronic appliances web-enabled. “Connectivity will open up new possibilities for all our areas of work. This goes for mobility, for industrial technology, and especially for energy and building technology – also in connection with our consumer goods,” Denner said.

Systematic preparation: activities and partnerships
As the world’s leading sensor manufacturer in terms of sales, the web-enabled MEMS sensors supplied by Bosch are a key technical component for connectivity on the internet of things and services. Moreover, at the beginning of the year Bosch set up a subsidiary for the development and sales of connected terminal devices and solutions based on them. Bosch Connected Devices and Solutions GmbH is headquartered in Reutlingen, where the electronics competence center is based. The company was originally an innovation cluster. Bosch uses these cross-divisional clusters to develop new business ideas for a connected world. There are further clusters related to connected buildings, connected mobility, and connected energy. For example, Bosch will be working with partner companies to make a software platform available for standardized data exchange in smart homes. “Alliances are key drivers of the trend toward connectivity,” Denner said. Since November 2013, Bosch has been testing technologies that will allow the digital networking of an entire city in the “Monaco 3.0” pilot project. “Our broad footprint and technological expertise, combined with the creativity and motivation of our associates, are absolutely essential for innovation and growth,” Denner said. Apart from exploiting new market opportunities for connected living, Bosch will continue to make use of every opportunity that presents itself for its traditional business.

Volatility calls for agility
Driven mainly by internet technologies, the connected world is dynamic, complex, and volatile as well. “The way the internet has risen over the past 20 years, as well as some of its repercussions, could not have been predicted. This will be true of future developments as well. As a result, we have to be fast and agile when dealing with a connected world,” Denner said. Increasingly, therefore, Bosch will be starting up new business activities to test their potential. Here, a key role will be played by Bosch Start-up GmbH, a company recently set up in Ludwigsburg, Germany. It will assume the role of an incubator for new business ideas and models. The team will help Bosch researchers quickly launch products and services. Bosch Start-up GmbH will make things such as infrastructure and business economics know-how available to new units with potential for growth. “An entrepreneurial mindset on the part of all associates and a culture that sees failure as part of the learning process are key factors for success. We want to further encourage and strengthen these factors,” Denner said. “We have to boldly venture into new territory and push back boundaries.

Business developments by business sector and region in 2013
The sales developments of the business sectors are also affected by significant exchange-rate effects. The Automotive Technology and Consumer Goods business sectors are especially hard hit by these effects. Regardless of this, the Automotive Technology business sector developed extremely positively in 2013. Its business with gasoline direct injection and diesel injection systems grew significantly. The Car Multimedia division was very successful with display instruments and infotainment systems. In Industrial Technology, the packaging machinery business was able to record good growth. By contrast, the global weakness of the mechanical engineering sector caused a considerable slump in the Drive and Control Technology division. In Consumer Goods, Bosch was once again successful with power tools in 2013, both for professional and DIY users. Developments in the Energy and Building Technology business sector were overshadowed by the situation in the Solar Energy division, which was again difficult in 2013. The Security Systems division was able to generate strong growth with communications services, while the Thermotechnology division was successful with energy efficient condensing appliances.

Significant sales growth outside Europe
The strong euro had significant negative effects on the development of regional sales. Nonetheless, nominal Asia Pacific sales exceeded their previous-year level by some 5 percent. After adjusting for exchange-rate effects, sales growth even reached double digits. In North America, nominal growth was more than 3 percent according to preliminary figures. At roughly minus 3 percent in nominal terms, sales developed negatively in South America. When adjusted for exchange-rate effects, however, sales grew by a high single-digit figure. Despite an economy that remained very weak, nominal sales in Europe grew slightly, by some 2 percent.

Slight increase in headcount in Asia and North America
Worldwide, the Bosch Group had a total of some 281,000 associates at the beginning of 2014 (adjusted previous-year figure: 273,000 associates). In current business, headcount increased by roughly 1,000. Most of these new jobs were in Asia and North America.

Moderate economic prospects for 2014
According to current forecasts, Bosch expects the economy to develop moderately in 2014. As things stand at present, global GDP is expected to grow by 2.8 percent. The company sees risks in the further development of the countries affected by the euro crisis, as well as in a further appreciation of the euro. Against this background, the Bosch Group expects sales to grow slightly in 2014, with its earnings situation continuing to improve.

For the most important key figures, klick here

Videos:
Connected Mobility
Automated Driving
Motorcycle Stability Control
Smartphone integration system mySPIN

Press images

Contact persons for press inquiries:
Dr. Eva Maria Rakob phone: +49 711 811-6657
René Ziegler phone: +49 711 811-7639

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.

PI8414 - January 22, 2014

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