Shaping the connected world with broad-based technological and industrial know-how Presentation by Dr. Volkmar Denner,
Chairman of the Board of Management,
and Dr. Stefan Asenkerschbaumer,
Deputy Chairman of the Board of Management
at the Annual Press Conference on April 30, 2014

Ladies and gentlemen, the world is becoming connected.

And it seems as though the internet and globalization have developed a momentum of their own. However, companies like Bosch can help shape this development. This will be one focus of our annual press conference, to which I would also like to welcome you. By 2015, five billion people will no longer be the sole users of the internet. They will have been joined by six billion connected devices. But what does all this mean? What are the implications of data communication that is costing less and less? And what will it mean if the borders between the hardware and software sectors become blurred? At Bosch, we see these developments as a major opportunity – an opportunity to develop new services that will give our strategic imperative “Invented for life” a new quality and breadth. We are complementing our innovative technologies with innovative services.

At this press conference, we will also be providing an overview of business developments in the past year, as well an outlook for 2014. First, allow me to present the main points:

  • In 2013, our business developed positively in a weak economic environment. We were able to improve our sales and earnings thanks to innovative products, but also as a result of hard cost-cutting work. We were especially successful with our automotive technology.
  • In 2014, we expect the economic climate to improve slightly. As a result, our business will be able to grow more quickly than the previous year, by an anticipated 3 to 5 percent. At the same time, we want to further improve our result.
  • Beyond this year, we believe innovation and quality are the recipe for success. In the shape of sensor technology, we have special expertise in an area that will play a decisive role in the future.
It is a good thing that innovation has made it onto the political agenda of many countries. For instance, the new German federal government has not only announced a new high-tech strategy, it has also defined specific areas of action, among them digitization. And yet countries like China produce 40 times as many engineering graduates each year as Germany. This should make us stop and think. Last year, Chinese researchers filed more patents outside their native country than German researchers did. Figures such as these show that Asia’s emerging countries are no longer competing on the cost side alone – innovation is important for them as well. This brings me to two points:

  • First, when it comes to promoting innovation, policymakers should set their sights far higher. In research and development, Germany and other European countries have to measure up to the world’s leading countries.
  • Second, funding must above all benefit basic research, as well as its rapid transfer to industrial application. First-class universities make the regions they are located in more appealing. Companies benefit from this as well. Countries like Germany must continue to be associated with cutting-edge research.
And companies like Bosch aim to be leaders with regard to technical progress – here, we put our faith in the ideas of our associates. Later on in my presentation, I will come back to the ways in which we aim to focus our innovative strength on the connected world. But first, we want to look at our business developments. For this, let me hand over to Mr. Asenkerschbaumer.

Key figures 2013: on the right track

Ladies and gentlemen,

Allow me to provide you with a summary of the 2013 annual financial statements and an outlook for 2014. Three things play a decisive role in these figures: major exchange-rate effects, changes in the policies used in the Bosch Group’s consolidated accounting, and the company’s exit from crystalline photovoltaics. As a discontinued operation, the latter has to be disclosed separately in the statement of financial position and the income statement. My remarks today thus relate mainly to continuing operations – that is to say, to our operations without crystalline photovoltaics.

But first I would like to come back to Mr. Denner’s positive statement: in 2013, our company developed favorably in a difficult economic environment. We are on the right path, even though we still have quite a bit of work ahead of us if we want to reach our target EBIT margin of 8 percent in the medium term. This target is not an end in itself. Rather, it is the foundation of our long-term growth and will help ensure the continued existence of our company.

Especially in the first half of 2013, we faced a difficult economic climate. While the situation improved over the course of the year, global GDP grew just 2.5 percent, which was less than forecast. In the European Union, the economy recovered more slowly than expected as a result of the recession in southern Europe.

As concerns our core markets, global vehicle production grew faster than expected, with a 4 percent increase. But the mechanical engineering market was still weak. In fact, in Europe it even contracted. Worldwide growth in private consumption and construction activity was slightly weaker in 2013 than in 2012.

Against this backdrop, we can be satisfied on the whole with the Bosch Group’s sales growth, especially if we look at the figures after adjusting for exchange-rate effects. Year on year, the Bosch Group’s sales were 3.1 percent higher, increasing to 46.1 billion euros. After adjusting for exchange-rate effects, the figure is 6.3 percent. In other words, exchange-rate burdens amounted to some 1.5 billion euros.

The exit from crystalline photovoltaics, as well as consolidation effects resulting from accounting-policy changes and acquisitions in the previous year, are already included in these figures.
For the sake of comparison, the baseline figures for 2012 had to be adjusted retroactively in the 2013 annual report.

The changes concerned our fifty-fifty joint ventures, mainly BSH Bosch und Siemens Hausgeräte GmbH and ZF Lenksysteme GmbH. They are no longer included on a prorata basis in proportionate consolidation. Rather, they are now accounted for at equity, with their after-tax profit earnings being included in the operating result.

As a result of this change, there are significant changes in sales and headcount figures. The sales figure disclosed for 2012 is reduced by 7.3 billion euros, to 44.7 billion euros. Headcount decreases by about 33,100, to 272,800.

As a discontinued operation, crystalline photovoltaics is no longer included in the sales figure, either. The effect for 2012 amounts to roughly 500 million euros.

Automotive Technology developed well, with sales growth of 6.7 percent, or 10.3 percent after adjusting for exchange-rate effects. For example, demand for gasoline direct injection grew strongly, as did sales revenue from sensors. Other positive examples include infotainment and driver assistance systems. Mr. Denner will have more information on this in a moment.

In contrast, developments in the Industrial Technology business sector were unfavorable, with a decrease in sales of 9.2 percent. Even after adjusting for exchange-rate effects, the drop was still 6.5 percent. I have already mentioned the difficult economic situation. The Drive and Control Technology division was hit especially hard by this environment, while Packaging Technology developed well. In the field of packaging machinery, our customers are mainly in the pharmaceuticals and foodstuffs industries, which are less dependent on economic cycles.

In the Consumer Goods business sector, whose sales figures now only include the Power Tools division following the change in accounting methods, sales were slightly lower than the previous year. After adjusting for exchange-rate effects, however, the sector recorded 2.9 percent growth. The Energy and Building Technology business sector grew more strongly, with sales increasing 3.9 percent, or 5.9 percent after adjusting for exchange-rate effects.

When it comes to the regions, our sales growth was strongest in Asia Pacific. Sales growth there amounted to 5.8 percent. After adjusting for exchange-rate effects, the figure was almost 14 percent. After adjusting for exchange-rate effects, sales growth in North and South America was also above average. The dramatic exchange-rate effects in South America are due to the weak Brazilian real. In Europe, we were able to increase sales by just 2.2 percent, or 2.9 percent after adjusting for exchange-rate effects. Even so, this means our sales developed better than the weak European market.

Let us take a brief look at capital expenditure and R&D expenditure: last year, capital expenditure fell to 2.5 billion euros, or 5.5 percent of sales. The reasons behind this are our efforts to reduce fixed costs and reduce capital expenditure in fields of business that faced a very difficult economic situation. The decrease in capital expenditure can also be attributed to the exit from photovoltaics, a field that demanded a high level of investment, and which is still included in the overall figures.

In Europe, capital expenditure came to 1.6 billion euros. This included major projects, such as the new center for research and advance engineering in Renningen, the expansion of the sensor production facility in Reutlingen, the new logistics center in Karlsruhe, and the expansion of our common-rail manufacturing operations in Bursa, Turkey. We invested some 620 million in Asia Pacific, and about 280 million euros in North and South America. In terms of business sectors, we invested some 2.2 billion euros in our Automotive Technology business sector, which is very production-intensive.

At 4.5 billion euros, R&D expenditure was once again equivalent to 9.9 percent of sales, and slightly over the previous-year level. Here, too, the lion’s share was spent on automotive technology, which accounted for 80 percent of total expenditure. Mr. Denner will address our strategic focal points in a moment.

This brings me to our figures for result. We were able to improve our earnings before interest and tax (EBIT), which is the main indicator of our earnings power. We achieved this despite the considerable burdens we faced once again as a result of our exit from photovoltaics, but also without them. Without this major extraordinary burden of some 1.3 billion euros, which we faced for the last time in 2013, we achieved an EBIT margin of 6 percent. This brought us a major step closer to achieving our target margin of 8 percent.

These improvements in result can be attributed in large part to Automotive Technology, where we achieved a margin of 7.7 percent. It should be noted, however, that consolidation changes at our Chinese subsidiary had a positive one-time effect, to the tune of some 370 million euros, or a return on sales of 1 percent. Our result was negatively affected by the unsatisfactory situation in the Industrial Technology business sector, which generated a loss of 83 million euros.

The double-digit EBIT margin in the Consumer Goods business sector was attributable to the pro rata inclusion of BSH’s profit after tax. Without this effect, result is favorable if it is measured against the difficult economic situation of the previous year. The Energy and Building Technology business sector was able to improve its result. However, its margin amounted to just 2.3 percent.

With an equity ratio of around 50 percent, the structure of the statement of financial position is sound. Here, too, the changes in consolidation method had a positive effect. Due to the ending of proportionate consolidation, total assets in 2012 were 3.7 billion euros lower than the initially published figure.

The year-on-year increase in assets is primarily the result of an increase in liquidity as per the statement of financial position, which increased to 13.2 billion euros compared with the previous year value of 11.6 billion euros. Apart from cash and cash equivalents, this liquidity also includes securities and bank balances with a term of more than 90 days.

Cash itself also increased significantly, to 3.8 billion euros, compared with the previous-year level of 3.1 billion euros. At 4.0 billion euros, cash flow was slightly under its 2012 level. However, at 8.6 percent of sales, it reached a good level once again.

On the equity and liabilities side, provisions increased. This was partially the result of the exit from crystalline photovoltaics. Here, we have set up a provision of some 800 million euros. In connection with the antitrust authorities’ investigations into the automotive industry, Bosch is also faced with allegations. As a precautionary measure, and based on current information, we have set up a provision of 150 million euros for this.

Moreover, we have taken advantage of attractive interest rates to refinance bonds worth 700 million euros on schedule, as well as to repay a bank loan of some 500 million U.S. dollars. We were able to place new bond issues amounting to a total volume of 1.5 billion euros on very attractive conditions and with terms ranging between 8 and 20 years.

In brief: as I said at the start, we are on the right path. We will continue to work flat out to improve the cost situation. At the same time, we want to open up new markets. Mr. Denner will explain this in more detail in a moment.

Outlook: good start to 2014

From a current perspective, we expect to see our sales grow between 3 and 5 percent this year. Indeed, 2014 has got off to a very good start. In the first three months of the year, we were able to increase sales by roughly 7 percent, or roughly 10 percent after adjusting for exchange-rate effects. Of course, this was from a weak prior-year level. Business has developed especially well in automotive technology and Asia Pacific. But growth has also been significant in all other business sectors and regions.

Nonetheless, we are sticking to our guarded sales forecast, especially as we have not raised our cautious expectations for the economy.

At present, we expect the global economy to improve only slightly, with 2.8 percent growth. This is because we believe the pace of growth in the emerging markets will be slower than in previous years. When it comes to vehicle production, we expect moderate growth for the year as a whole, with an increase of some 3 percent to around 90 million vehicles. While the market for mechanical engineering is improving, capacity will be underutilized around the world, and this will continue to dampen willingness to invest.

This year too, major exchange-rate effects cannot be ruled out. We estimate that they could reach more than one billion euros once again. This is because we expect a strong euro for the time being. But this has only partially to do with stabilization in the euro zone. To a large extent, it is also the result of the weakness of other currencies.

Last year, the U.S. Federal Reserve’s reduction of bond purchases led to outflows from a number of emerging countries, and this weakened their currencies. At the end of 2013, some currencies were worth up to 20 percent less than in the middle of the year. Of the countries that are important for us, Brazil, India, and Turkey were particularly affected. The currencies of these countries are further burdened by ongoing structural problems. For this reason, we must continue to be on our guard against high levels of volatility.

In light of such dramatic currency fluctuations, we must aim to limit open currency positions as much as possible. This will allow us to reduce their impact on result. The effects on sales are purely mathematical.

This is why a global company like the Bosch Group must strike a natural balance: taking the sales generated in each country as our guide, we must limit risks through local value-added creation and by sourcing locally. This creates cost advantages, while at the same time limiting open currency positions.

This brings my short overview to its conclusion. I would now like to hand over to Mr. Denner once again.

Strategy: the technology of the future is already generating growth at Bosch

Ladies and gentlemen, if I talk about strategy, I do not want to do so solely in relation to megatrends. It goes without saying that globalization, aging, energy efficiency, and connectivity inform our long-term strategy. But we can also show that we have already begun to grow into the future.

Here, it is worth having a look at the product areas in which our growth is strongest. This year, like last year, gasoline direct injection leads the field. In 2014 alone, we will sell nearly nine million gasoline direct injection systems, two million more than in 2013. Especially in light of upcoming climate protection and emissions standards, we have gained significant new orders. These new standards are driving our diesel business as well. This year, we will deliver over ten million common-rail systems for the first time. More than one million of these will already meet the Euro 6 emissions standard.

It should also be pointed out that micromechanical sensors for consumer electronics have now also made it into the top five Bosch products with the strongest growth. If we include micromechanical sensors for cars, Bosch produced more than one billion such sensors for the first time in 2013. This year, we expect the figure to reach 1.3 billion.

What do these successes show? They are examples of two crucial developments at Bosch.
  • First, we continue to move forward with our traditional hardware and software business – and this not only with injection systems. Cordless power tools, for instance, continue to grow faster than the market, as does measurement technology for tradespeople and do-it-yourselfers. And with a volume of some 45 million euros, we have acquired the largest order in the history of our Packaging Technology division.
  • Second, not only are we opening up new fields of business, we are already growing strongly in them. Micromechanical sensors are the gateway to other technologies of the future. For example, the internet of things and services will only make sense if the things within it have something to say – in other words, if they can record their changing statuses in a sensitive manner. And it is especially with sensor technology that we are growing into the future.
As we see it, the future will bring a new quality to our strategic imperative “Invented for life.” Whether dishwashers or hammer drills, Bosch has always contributed technologies that make life easier. Now, a new picture is emerging: we are bringing technology alive, as it were. Our sensors are giving it a sense of touch, and via the internet of things and services we are helping it to speak. From cars to household appliances and machinery: everything will become even more sensitive, intelligent, and communicative.

This will give rise to a broad range of new applications, and to unprecedented forms of technical assistance in day-to-day life. Whether we are speaking of automated driving or the smart home, a new quality of comfort, safety, and efficiency is emerging. Bosch is creating the technical conditions for this change.

We believe this will create new opportunities for growth, not only in the emerging countries, but also in established markets. At the same time, we will grow in both traditional and new fields of business. Bosch is pushing ahead – dynamically and on several fronts.

Stronger than the market: growing with driver assistance

Successfully opening up new markets while continuing to develop the established ones is something our largest business sector does particularly well. On the one hand, Automotive Technology can point to a string of successes in classic powertrain systems. On the other hand, it is also working on alternative powertrains. After all, the future of driving will be electric. Even now, Bosch is contributing a lot to this aim:

  • Most of the leading automakers are our customers. This year alone, nine further production-related projects will start, including the power electronics for the BMW i3 and the VW e-Golf, as well as the electric motor for the hybrid version of the Mercedes S-class.
  • We offer all the components needed for electromobility, from the motor to battery-charge management. Barely any other supplier can draw on such a breadth of systems expertise.
To make electric vehicles affordable, we are driving the development of battery technology forward. With our new Lithium Energy and Power joint venture, we aim to at least double the battery’s energy density and halve its cost.

This development from classic to new areas of business has been particularly dynamic in the area of vehicle safety and comfort systems. The business for driver assistance systems is growing especially quickly.

This momentum is driven by the new rating scheme for vehicle safety. In each of the next three years, the market is set to grow by a third. And Bosch is set to grow even more strongly. With driver assistance systems, we expect sales to exceed the billion-euro mark by 2016, which is sooner than expected. Even this year, our unit sales will increase significantly over 2013. For instance, with ultrasound sensors, we expect to sell just under 50 million units, a 25 percent increase. And we will be selling more than two million radar and video sensors this year, almost twice as many as last year.

And this growth continues. In the market, it does so as a result of the growing number of standard features, and the shift from single-sensor to multi-sensor systems. Technologically, we want to go even further, and aim to make the autopilot ready for the road. Here, our engineers are driven by two statistics.
  • First, 1.2 million people around the world die as a result of traffic accidents each year.
  • And 90 percent of all traffic accidents are caused by human error.

We could put this another way, and say that automated driving is a technology that saves lives. At the same time, it can spark drivers’ enthusiasm, since it offers them support with unattractive driving tasks. Next year, we will be starting series production of our traffic jam assistant, as well as of our remote-controlled parking assistant. Moreover, initial applications relating to highly automated driving are set to hit the market sooner than expected. By 2020, we will make automated driving possible also at higher speeds on the freeway. This requires significant technical progress, not the least of which is 360-degree environment recognition technology. Here, we will benefit from our special expertise both in the combination of sensor data and in automotive systems integration.

The key technology: sensors will make all things smart

At Bosch, sensor technology also has to do with micromechanics. With microscopic precision, we are producing millions of units of vibrating structures that can detect acceleration, pressure, and a great deal more. In fact, in this area alone we already hold more than 1,000 patents. And for quite some time now, we have been bringing this expertise to market well beyond the automotive industry. More than two-thirds of our micromechanical sensors are used for consumer electronics. Every second smartphone in the world is equipped with a Bosch sensor. This success is the result of a strong start-up: Bosch Sensortec. The economies of scale of our wafer fab in Reutlingen have also played a major role. Without them, this success would have been unthinkable. This is a shining example of how a small unit can also benefit from the strength that size brings. However, we not only see micromechanics as quantitative growth; it also means qualitative shifts. Let me give you two examples.

  • First, we can measure more and more variables. At the start of 2014, we unveiled a new sensor that can measure pressure, temperature, and humidity. This marks our entry into environment recognition sensor technology, and this is important also for smart home applications.
  • And second, we are making our products increasingly smart. We are starting production of the first sensor that not only measures acceleration, yaw rate, and geomagnetic field, but, more importantly, already features a microcontroller for signal evaluation.

This software integration is decisive for the next phase of our micromechanical systems’ advance. Sensors first became increasingly common in vehicles, then in smartphones. Now, they are becoming part of the internet. For precisely this reason, they must include software intelligence in addition to radio chips and batteries. After all, it is not raw data that should be transmitted to the internet, but only information that is relevant. Such local data processing requires the special type of systems know-how that Bosch brings to the table.

We have already started series production of a door sensor that sends warnings of suspicious movements to the homeowner’s smartphone. In the future, windows will be equipped with unobtrusive sensors that control the house’s heating or alarm system. Sensors fixed to bracelets will also be able to call for help when the people wearing them have fallen. Smartphones will not be the only devices to be equipped with sensors. Any “smart” object will feature internet-enabled sensor technology.

This goes well beyond the connectivity of our appliances. Even today, Bosch generates more than half its video-surveillance sales with internet-enabled cameras. Even heating systems are increasingly online. In 2014, Bosch will likely sell 50,000 internet-enabled boilers, twice as many as in 2013. And much more can still be connected via sensors – in the end, everything can be connected with everything. With sensors, things that were free of electronics in the past, such as doors or windows, can transmit data on their status to the internet. It is only through micromechanics that everything can be connected to the internet.

Connecting smart things: our internet solutions

We are not only creating the necessary technical conditions for the internet of things, we also aim to develop new solutions. Another start-up, Bosch Connected Devices and Solutions GmbH, is opening up this new field of business for us. Since it made its first appearance at the start of this year at the Consumer Electronics Show in Las Vegas, the new company has received its first orders, mainly in the area of smart homes. The company also focuses on the logistics and transport segment. In the future, critical freight deliveries will automatically transmit data on unusual status changes to logistics centers.

We could say we are now moving into the internet of things and services with two spearheads: Bosch Connected Devices and Solutions complements our Bosch Software Innovations systems unit. The two companies cooperate closely with one another. Ultimately, the aim is to create new services using sensor information. And these services require rules-based software platforms like the ones our systems unit has developed. Sensor technology, software, and services – this is our 3S program for the connectivity business.

In developing internet-based services, we benefit from our in-depth hardware expertise. This puts us one step ahead of the IT industry. But hardware innovations are no longer enough to stand out from the field. Today, an additional service offering is decisive to maintain a competitive edge.

Our internet-enabled video cameras are thus only one aspect. The other is the cloud-based services we derive from them. Our portfolio already includes monitoring centers that can offer internet-based video surveillance for large construction sites or freeway parking lots. For such applications, Bosch Software Innovations works closely with our traditional divisions. In fact, this has already given rise to some 100 projects related to the internet of things and services. Our connected city pilot project in Monaco is especially ambitious. There, we are creating links between such things as the bus network, road work, and parking lot management. It is significant that internet-related projects involve nearly all our divisions. In a connected world, broad industrial expertise will play a decisive role – and this is an advantage that we intend to exploit.

  • Our solutions for vehicle connectivity are already multifaceted. By 2025, nearly every new vehicle worldwide will be equipped with wireless data communication technology. We already offer a range of services in this regard. Take eCall, for instance. In 2013, our monitoring centers processed a good 30,000 automatic emergency calls from road users. In the area of telematics, we are launching applications for the fleet management of leasing and insurance companies this year. For example, on the basis of control unit data, we can make forecasts about wear and tear, and predict when vehicles will need maintenance. We also offer services in the realm of e-roaming. As part of the "Hubject" project, our software platform makes it possible to recharge electric vehicles at the charge spots of different operators. So connected driving clearly supports electric driving – and not least automated driving. This is because the more vehicles there are driving autonomously on roads, the more they need car-to-x communication. In other words, they must be able to warn each other of obstacles. At Bosch, connectivity on the roads not only means efficiency and comfort, it also means safer driving.

  • When it comes to connected production, Bosch sees itself both as a leading provider and as a leading user. The aim here is to use the internet to optimize manufacturing and logistics networks and to further encourage the merger of information technology and factory automation. Bosch Rexroth recently created the condition for such a merger: with open core engineering, machines can now be programmed via a smartphone app.

  • A common language for all domains is also decisive when it comes to the connected home. For instance, if the dishwasher is to time its start to coincide with the best electricity price, and if the air-conditioning and heating systems start depending on the weather forecast, the devices involved must be able to understand each other. This is why, together with a number of partner companies, Bosch aims to create an open standard for smart homes. The initiative also aims to establish a software platform for service providers.
Bosch contributes software and systems integration expertise to the internet of things and services. At Bosch, every fourth R&D associate is a software specialist. While we continue to be a manufacturer of systems and devices, we are also making those systems and devices sensitive and giving them the ability to communicate. As the world becomes increasingly connected, Bosch’s broad technical base makes it predestined to be a company that connects.

Here, we pay heed to two things:

  • First, to how things are to be used. Connected products should not be overly complex. Their benefit must be obvious, and they must be easy to use. This is especially important for vehicle applications. For instance, our mySPIN solution makes it easier for the smartphone to be integrated into the car. It is to go into series production at Jaguar Land Rover within the next few weeks. mySPIN makes it possible to control apps via the car’s dashboard – and for the first time, regardless of whether drivers use iPhones or Android smartphones. It will initially feature ten apps that are especially important for drivers.
  • The second thing we need to heed is data security. For data transmission, we use state-of-the-art encryption technologies, for instance the security software of our subsidiary escrypt. In addition, transparency and customer discretion are the main focus of our data use policy. After all, the internet of things cannot be successful unless people can trust it. Our clear aim is to ensure that the benefits of connectivity by far outweigh the risks.
Beyond Asia's dynamism: growing in Africa as well

These high-tech solutions mainly target the mature markets of the industrialized nations. Even though Europe’s weak economic growth continues, we are confident that our sales there will grow faster than the market. By contrast, we want to grow strongly in the emerging countries of Asia by offering the low-cost solutions that customers there are demanding. As our airbag light control unit for the Chinese market and our electronic hitch control for an Indian tractor manufacturer show, local success is the product of local expertise. By the end of this year, we will have some 45,000 research and development associates on board. Of these, a good 17,000 will be located in Asia Pacific, 2,000 more than at the start of the year.

Local development plays a significant role in regional growth. Over the past ten years, sales in Asia Pacific have more than doubled, to some 11 billion euros. By 2020, we aim to double our sales in the region once again. To this end, we are making significant upfront investments in Asia Pacific. From 2010 to 2014, we will have invested 3.3 billion euros in the region.

But at Bosch, globalization is far more than dynamic growth in Asia. We have also set ambitious goals for the world’s other regions.
  • In the Americas, we also aim to double our sales by the start of the next decade. There, too, local technical expertise will play a central role in our success. This year, for instance, we are opening a new research and development center in Guadalajara, Mexico.
  • Last, but not least, we also aim to significantly increase our sales in Africa in the years ahead. The continent’s economy is growing at an above-average pace, and we want to take part in this growth with our technologies “Invented for life.” This year alone, we will be opening new regional companies in Kenya and Nigeria.
  • And once again: In Europe as well, we want to and can grow faster than the markets.
In order to achieve our growth targets, we are also strengthening our global network in a technological sense. We are not only doing well with local innovations in emerging markets. Our Asian engineers also contribute to our solutions for the industrialized nations in Europe and North America. The large majority of Bosch software engineers – more than 9,000 – are located in India. We can only network our technologies if our technical specialists are part of a network as well.

As a matter of principle, we are not only globalizing our business, but also the standards according to which we do business. Wherever Bosch is present, our compliance rules and environmental protection policies apply. As you heard in Mr. Asenkerschbaumer’s presentation, Bosch is also currently confronted with antitrust proceedings. On the basis of information currently available, this led us to set aside provisions of 150 million euros in the financial statements for 2013 as a precautionary measure. It is of fundamental importance to us that our associates around the world observe the basic idea of our company founder Robert Bosch, who believed that business had to be done in an honest and fair way. To support this aim, we have introduced training programs that our associates around the world have to regularly participate in. We rigorously follow up and get to the bottom of any suggestions of violations. After all, we believe in competition, and in winning customers over by virtue of the quality of what we offer. Anything else would not only be unlawful, but would also contradict the fundamental principles and values of our company – and will therefore not be tolerated.

More internal and external collaboration: our future

To create solutions for the connected world, our associates are cooperating across divisional and company boundaries more than ever. I would like to extend my sincere thanks to them for their commitment and openness. As always, we need efficient divisions and departments in our business operations. But we also need to open up this vertical organization. Bosch not only stands for networked technology, it also sees itself as a networked company. We promote this network with a broad range of measures:

  • At present, more than 5,600 Bosch associates are working on extended assignments as expatriates outside their home countries. Moreover, short-term assignments are also on the increase. We support both forms by providing intercultural training programs.
  • Some 110,000 associates are already using the “Bosch Connect” social media platform on a regular basis. Since it was launched in the fall of 2013, more than 13,000 communities have taken shape.
  • With an investment of 300 million euros, the new research campus we are building in Renningen, near Stuttgart, will also promote direct knowledge-sharing across disciplines. For us, research also means exploring the business models of the future, which are becoming increasingly diverse in the internet age. Our newly established start-up platform is important for this kind of exploration.
  • More than ever, alliances are complementing our traditional relationships with customers and suppliers. This type of open development is especially important for the internet of things and services. Our software and systems unit is already engaged in 80 partnerships with other companies.
All this shows that Bosch has established a strong position in the connected world – and is helping to shape it. In this respect, two points are of particular importance:

  • First, new business areas can only be opened up if we have a sound core business. This sound basis is currently becoming even sounder, thanks to the kind of success we are enjoying with our injection systems. And Bosch’s traditional strengths – our innovative clout, high standard of quality, international presence, and the unrivaled integrative force of our corporate culture – are also valuable in the connected world.

  • Second, Bosch can connect many different things to one another, not only as a result of its multifaceted hardware and software expertise. Even more importantly, we are the global market leader for micromechanical sensor technology, which is a gateway technology for the internet of things. All this allows us to develop new business models with internet-based services. This is a major opportunity for Bosch, as a supplier of both technology and services.
Press release Annual press conference 2014
Curriculum Vitae Dr. Volkmar Denner
Curriculum Vitae Dr. Stefan Asenkerschbaumer
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  • April 30, 2014
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  • Economical and automated application of measuring technology
  • APAS assistant can work with people without additional safety equipment
Stuttgart, Germany – For the first time, the Bosch group is offering its own measuring and manufacturing technology products to external parties. Up until now, these solutions and systems have been built into Bosch group equipment. Timely measurements as direct part of the manufacturing process are of crucial importance to everyday operations. This ensures the immediate identification of deviations to avoid costs associated with reworking or scrap. At the Stuttgart international trade fair for quality assurance, Control 2014, from May 6 to 9 at stand 7328 in hall 7, Bosch will be presenting the FMS 100 optical 3-D form measuring machine and the FTP40 3-D flatness measurement system. The “APAS assistant” mobile production assistant rounds off the system package. These solutions, proven in Bosch manufacturing, facilitate the economical and automated application of measuring technology with nanometer resolution in the production context.

The FMS 100 was designed for measurement of rotationally symmetric serially produced precision parts. Rotation speeds of up to 100 rounds per minute and optical sensing arms with a diameter of less than 0.7 mm facilitate rapid form measurement for determining internal and external geometries. Standard applications include measurement of circularity and straightness, cone shape, and diameter. Modular extensions make it possible to customize the measuring machine to meet specific customer requirements. The non-contact optical sensing arms allow the measurement of the parallelism of very thin or very delicate objects without causing any alterations to the objects themselves through contact forces.

Robust yet precise
The FTP40 measurement system enables the rapid measurement of two parallel surfaces of a product in a single measuring process, without the need to move the object. This ensures excellent stability, and markedly reduces the cycle time. The FTP40 may equally be used for the rapid measurement of flatness, thickness, and parallelism, either as a standalone device in precision measurement facilities and development departments, or, alternatively, as an industrial measurement system for optical 3-D inspection in manufacturing. The major advantages of the Bosch machines' interferometric technology are high resolution, short cycle times, and non-contact, non-wearing measurement. When developing these measuring machines, great emphasis was put on achieving a highly robust design, with low sensitivity to vibrations and temperature fluctuations.

Easy loading with the APAS assistant
The FMS 100 and FTP40 can be loaded either manually or automatically using an APAS assistant. Providing a flexible solution for retroactive automation of manual workstations and small-scale series production, the mobile production assistant in particular assists associates with dirty, physically demanding or monotonous tasks. Accordingly, the APAS assistant is a valuable automation solution for production-related measurement stations. Its sensitive three-finger gripper allows it to grip a variety of complex shaped parts in a flexible manner. Integrated cameras help to analyze the environment and to identify the parts to be picked up. The image recognition also contributes to a high level of pick-and-place accuracy, which means that part feeding requirements can be kept simple.
Certified by the German Employers' Liability Insurance Association, the APAS assistant is the first and, to date, only assistance system to make it possible to work with people directly without the need for an additional protective device.

Bosch presents its solutions at the Stuttgart international trade fair for quality assurance, Control 2014, from May 6 to 9 in hall 7, stand 7328.

Sven Steib
phone: +49 711 811-33528
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  • April 25, 2014
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Development center officially opened in Mexico Bosch strengthens its software development presence in Americas Programming and service for local needs

  • Cross-sector high-tech software solutions and engineering services for local customers
  • Initial investment of approx. 5 million dollars, creating 200 new jobs
Stuttgart/Guadalajara – Bosch has opened its first center for software development and engineering services in North America in Guadalajara, Mexico. As a first stage, it plans to invest some 5 million U.S. dollars in the 1,800 square-meter IT location in Mexico’s second-largest city, with the initial creation of over 200 engineering jobs. “Our investment in Guadalajara underscores our confidence in the region and Mexico’s strategic importance as a manufacturing and development location,” said Werner Struth, member of the Bosch board of management with responsibility for the Americas, at the opening ceremony. “With this step, we want to expand our local software development and engineering services in the Americas, bringing us closer to our customers.” The international technology and services company already employs more than 300 local engineers, who adapt Bosch products such as electric drives, starters, and generators to the needs of North American customers.

The development center in Guadalajara will offer cross-sector programming and application services – primarily to the automotive industry and other Bosch locations in the Americas. These services will include the development and validation of hardware and software for the electronic control units used in automobiles. The center is currently situated on rented premises. In 2016, it is due to become part of the planned “Ciudad Creativa Digital” industrial park, a Mexican government initiative to encourage digital high-tech companies from industries such as software and electronics to settle in the area. Guadalajara, capital of the state of Jalisco, beat out the competition from eleven other Mexican cities to be chosen as the most attractive location for the project. Clinching arguments in its favor were its well-developed infrastructure and highly qualified workforce.

Bosch in Mexico
Bosch has invested a total of around 370 million euros in Mexico over the past ten years and is looking to further expand its activities there in the years to come. “The conditions in Mexico are ideal: a highly skilled workforce, well-developed infrastructure, and an excellent business environment,” says Struth. Many customers – particularly from the automotive industry – already have plants in the country or have plans to locate new production facilities with increasing manufacturing depth there. On top of this, the North American free trade zone NAFTA and over 40 additional trade agreements with other countries create excellent conditions for international business.

Bosch has had a presence in Mexico since 1955. In 2012, it had sales of more than 700 million euros there. Over the past ten years, Bosch’s Mexican workforce has more than doubled to its current size of over 10,000 associates. All four Bosch business sectors – Automotive Technology, Industrial Technology, Consumer Goods, and Energy and Building Technology – are represented in Mexico. In total, the company has eight manufacturing facilities in the country. The largest plants are situated in Toluca and Juarez.
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  • April 25, 2014
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Annual Press Conference 2014 Bosch registers double-digit growth in China Continuous innovation and localization efforts

  • Consolidated sales increase of 18 percent to a total of CNY 41.2 billion (5 billion euros)
  • Pioneering innovations for a connected world
  • Energy-saving and emissions-reducing efforts for local sustainable development
  • Double-digit growth expected again in 2014
Beijing – Bosch, a leading global supplier of technology and services, recorded consolidated sales of CNY 41.2 billion* (5 billion euros) in China in 2013 – a significant year-on-year growth of 18 percent. “This outstanding performance demonstrates the lasting strength and success of our innovative technologies and localized solutions for the Chinese market,” said Peter Tyroller, the member of the board of management of Robert Bosch GmbH responsible for Asia Pacific. He added: “China expects to witness further stable economic growth, which will ensure a healthy business environment with dynamic opportunities. We aim to further strengthen our position in China, and we strive to achieve double-digit growth in the years to come as well.”

Bosch’s Automotive Technology business sector grew almost twice as fast as the market in China in 2013. Sales development of Bosch’s other three business sectors in China reflects the development of the respective industries in the past year. Power Tools, part of Bosch’s Consumer Goods business sector, reports moderate sales revenue growth. In the Energy and Building Technology business sector, the Thermotechnology division performed well thanks to its expanded portfolio and energy-efficient condensing appliances, while the Security Systems division experienced a slight decrease. In the Industrial Technology business sector, the Drive and Control Technology division has not yet fully recovered: however, there are signs that the construction market is stabilizing. The Packaging Technology division achieved moderate growth.

Continuous localization efforts
Bosch continues to intensify its localization strategy in its various business operations. In the last three years, Bosch has invested over CNY 10 billion in China, with the aim of further enhancing its local value chain, and especially of cultivating local R&D competence. In the past year for example, Bosch’s Automotive Aftermarket and Chassis System divisions opened plants in Nanjing and Chengdu respectively, and a new Automotive Test and Technology Center in Donghai. This year, the Bosch joint venture Bosch Mahle Turbo Systems plans to open a plant in Shanghai for the production of turbochargers for gasoline engines. There are also plans for a plant for diesel systems in Qingdao.

Bosch currently has a total of 17 technical centers in China. The number of Chinese associates working in R&D increased to 3,300 – more than 10 percent of Bosch’s total headcount in China. The more than 150 patents filed in China last year – nearly 20 percent more than in the previous year – are a sign of Bosch’s increasing local R&D competence. “We are focusing on affordable products, especially in the mid-price segment, which are tailored to local customer needs without compromising Bosch quality,” said Dr. Chen Yudong, president of Bosch (China) Investment Ltd. As an example, Bosch Thermotechnology launched its first series of air-source heat pump water heaters in China in March this year. These take account of specific local needs for relatively small volumes of 150 and 200 liters, as well as of energy-saving requirements.

Associates as cornerstone of business development
By the end of 2013, Bosch had increased its workforce in China to over 32,000. Two-thirds of its local management team are Chinese. Bosch offers a comprehensive incentive package with diverse associate training programs. In 2013, Bosch Training Center offered over 900 training sessions. As a result of these efforts, Bosch has now been named “Top Employer” by the Corporate Research Foundation, an independent international human resource institute, for three years running. “Our dedicated associates are our great strength and I would like to give credit to them for Bosch’s business success in 2013,” said Dr. Chen Yudong. “It is their hard work and innovative ideas which make our success possible. The innovations provided by our talented associates will continue to be a main driver of our future success.”

Pioneering innovations for a connected world
Bosch estimates more than 75 percent of the global population and 6.6 billion devices will be connected to the internet by 2015, which will bring more convenience in daily life and significantly improve energy efficiency. In line with this trend, Bosch is reaching out to new business areas and promoting new business models, especially by leveraging and combining its wide-ranging expertise in existing areas of business. “The internet of things and services is now a hot topic in China, and we expect stronger momentum in the coming years. As an innovative company, Bosch is ready for the business opportunities it brings us,” said Dr. Chen Yudong.

Leveraging its sensor and software technologies, Bosch is sparing no effort to establish the framework and foundations of connectivity. Bosch Sensortec, the Bosch subsidiary that specializes in MEMS (micro-electro-mechanical systems) technology, has had its Asia Pacific headquarters in Shanghai since 2013. Bosch Sensortec develops and markets micro-mechanical sensors for consumer electronics, mobile phones, safety systems, industrial technology, and logistics. Now every second smartphone worldwide uses Bosch sensors. While MEMS technologies are regarded as the hardware basis for connectivity, Bosch Software Innovations is capable of providing software solutions. It launched a pilot project for promoting electric vehicle application in Shanghai in 2013. Automated driving is another example of the potential and advantages of connectivity technologies. With connectivity-capable components such as sensors, cameras, and electronic control units, Bosch can offer driving assistance functions which will lead to automated driving in the future.

Energy-saving and emissions-reducing efforts for sustainable development
In China, rapid industrialization and urbanization create enormous challenges for the environment, and make immediate energy-saving and emissions-reducing efforts necessary. Stricter environmental protection regulations already show the government’s determination to tackle these challenges. “The fastest way to get results is by improving the efficiency of energy conversion. Bosch offers innovative technical solutions for energy efficiency, ranging from mobility to home appliances”, Peter Tyroller said. For example, on the path to electrification, Bosch’s aim for 2020 is to reduce the fuel consumption of gasoline- and diesel-powered vehicles by a further 20 percent from their 2012 levels. Bosch’s Thermotechnology division has also successfully developed a condensing wall-mounted boiler with thermal efficiency of as much as 111 percent.

As a sustainable manufacturer, Bosch has introduced its EHS (environment, health, and safety) standards in all its manufacturing sites in China, especially for energy saving, resource conservation, and pollution prevention. Thanks to the joint efforts of 150 fully dedicated associates involved in supervising and controlling work across China, Bosch China reduced its relative energy consumption by almost 24 percent and relative CO2 emissions by 21 percent across China in 2013, compared with their 2007 levels.

Contact person for press inquiries:
Melita Delic
Phone: +49 (711) 811-48617

Asia Pacific/China:
Ms. Hong Hong
Phone: +86 (21) 2218 1254

In China, the Bosch Group manufactures and markets automotive original equipment and aftermarket products, industrial drives and control technology, packaging technology, solar energy products, power tools, security and communication systems, thermotechnology, household appliances. Having established a regional presence in China since 1909, Bosch employs over 32,000 associates in 63 legal entities and facilities, with consolidated sales of CNY 41.2 billion in fiscal 2013 (Note: due to a change in the legal rules governing consolidation, the 2013 figures can only be compared to a limited extent with the 2012 figures).

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The Bosch Group is a leading global supplier of technology and services. According to preliminary figures, its roughly 281,000 associates generated sales of 46.4 billion euros in 2013 (Note: due to a change in the legal rules governing consolidation, the 2013 figures can only be compared to a limited extent with the 2012 figures). Its operations are divided into four business sectors: Automotive Technology, Industrial Technology, Consumer Goods, and Energy and Building Technology. The Bosch Group comprises Robert Bosch GmbH and its more than 360 subsidiaries and regional companies in some 50 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 further growth. In 2013, Bosch applied for some 5,000 patents worldwide. The Bosch Group’s products and services are designed to fascinate, and to improve the quality of life by providing solutions which are both innovative and beneficial. In this way, the company offers technology worldwide that is “Invented for life.”

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  • April 22, 2014
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