Robert Bosch GmbH has reported a 5.4% increase in turnover in 2006, to EUR43.7bn. However, the company has warned that revenue growth is expected to slow this year because of the appreciation of the euro. After adjusting for currency effects, it nevertheless expects sales growth in the region of five percent.


Pre-tax return on sales in 2006 stood at 7.1%, just within the target corridor of between seven and eight percent. For 2007 the company is aiming to achieve a return of seven percent. “We will have to work hard for this result, ” said Franz Fehrenbach, chairman of the Bosch board of management in a statement. The first three months of the year had begun modestly, he said. Apart from the weaknesses in the automotive markets in North America, he cited exchange-rate effects as the main reason for this. By the end of the year, however, Bosch expects these to be offset by stimuli from a globally positive economic development, which is likely also to have a positive effect on the automotive industry.  Profit before tax stood at 3.1 billion euros in 2006, down slightly from 3.2 billion euros in the previous year.


In 2006 sales in the In the Automotive Technology business sector, rose by 3.4% to 27.2 billion euros. In Industrial Technology, sales increased by 5.1% to 5.5 billion euros, and in Consumer Goods and Building Technology by nearly 11% to 11 billion euros. This meant that the share of business accounted for by these two sectors once again increased, by one percentage point to 38%. “This is a further step toward the balanced structure we want to achieve,” said Bosch CFO, Gerhard Kümmel.


Asia Pacific was the regional growth motor, and once again it generated double-digit growth, with sales increasing by 12%. China and India led the field, growing by 30% and 24% respectively. The share of sales accounted for by Europe fell by one percentage point to 65%, North and South America remained constant at 19%, and Asia Pacific’s share rose by one percentage point to 16%.


It was also in the emerging markets that most new jobs were created in 2006. At the beginning of 2007, The Bosch Group employed some 261,300 associates – 10,300 more than a year previously. At some 110,500, the number of associates in Germany remained nearly constant.


“We shall establish an even stronger presence than before in the world’s growth markets, and this is only possible if we have more manufacturing and development activities in these countries,” Fehrenbach said.


Total capital expenditure came to some 2.7 billion euros in 2006. Expenditure on a similar level is also planned for 2007. New plants are currently being built above all in Asia, and the planned amount of investment for this region alone is some 440 million euros. Bosch intends to invest more than a billion euros in its German locations in 2007. This summer will see the start of construction work for a new semiconductor manufacturing facility in Reutlingen. It is planned to spend roughly 600 million euros on this project by 2015.


Operating result developed correspondingly, and at 2.4 billion euros was slightly down on the prior-year figure of 2.5 billion euros. Bosch said the result was significantly affected by the increased pressure on prices in automotive technology, by the persistently high cost of raw materials, and by the situation in the U.S. automotive market.


For the future Bosch expects to see long-term opportunities from environmental solutions. It produces transmissions for wind turbines and solar collectors through its Bosch Thermotechnology and Bosch Rexroth divisions. It is planned to increase Bosch Thermotechnology’s sales of solar collectors to more than 300,000 units in 2009 – more than three times the 2006 figure.


In-car environmental technologies that are expected to contribute to strong growth at Bosch include diesel engine management systems, gasoline direct injection, hyrbrid drive technologies and stop-start systems.


During a presentation of the results today, Fehrenbach warned unions not to seek hefty pay increases. “The business environment will remain generally favourable in 2007, but not so favourable, especially in the automotive industry, that the wage-bargaining parties – in Germany for example – should be tempted to reach wage agreements that are too generous,” he said, according to Reuters.