The Bosch Group expects slightly improved economic growth this year and its own sales to grow by 2-4%.
Chairman Volkmar Denner told 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.”
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The company still sees considerable economic risks as a result of the high level of sovereign debt in the US 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, 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 results. 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%
In fiscal 2012, Bosch sales grew 1.9% to EUR52.5bn. After adjustment for exchange-rate effects, sales were 0.8% lower than in 2011. In terms of earnings before interest and taxes, Bosch disclosed a 2.5% return on sales. Profit before tax came to EUR2.8bn (5.3% of sales), as the supplier made a book profit of EUR1.1bn 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.
Looking at results by business sector, CFO 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% to 31.1bn euros. Both EBIT and return on sales were down year on year, at EUR1.4bn and 4.5% 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 auto group chairman Bernd Bohr. The supplier 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 RUR5bn. In the years ahead, these sales are expected to grow by 10% 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 1m radar sensors. This number is set to increase to 10m 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 company 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 added. 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%.
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%. In 2012, Bosch sold more than 5m petrol direct injection systems. Sales revenue from these system increased 50%.
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.
