Bosch Hits Tough 2022 Targets In Difficult Business Environment.
Bosch Hits Tough 2022 Targets – Bosch Group generated total sales of 88.4 billion euros in 2022, an increase of 12 per cent over the previous year, or around 10 per cent after adjusting for exchange-rate effects. EBIT (earnings before interest and taxes) from operations reached 3.7 billion euros. The EBIT margin from operations is expected to be around 4 per cent.
In Asia Pacific, sales growth was 12 per cent, or 8 per cent after adjusting for exchange-rate effects, with sales amounting to 27.5 billion euros. According to Forschner, the region benefited from strong growth in India. By contrast, China’s changes to its Covid-19 policy dampened business developments there at the end of the year.
“The difficult 2022 business year once again demonstrated that Bosch is crisis-proof while possessing tremendous innovative strength,” said Dr. Stefan Hartung, chairman of the board of management of Robert Bosch GmbH, at the presentation of the company’s preliminary business figures.
“In an environment that remains challenging, we are securing our growth opportunities worldwide with targeted investments and expanding our international presence. We want to offer people around the world technology that is ‘Invented for life’ and thus make a meaningful contribution to society – from climate-friendly heating to energy saving and sustainable mobility.”
Recently, Bosch announced that some 950 million euros will be invested over 10 years in an engineering and manufacturing centre in Suzhou, China. The centre will create mobility solutions and products in the areas of electrification and automation which are specifically designed to serve local market demand. At the same time, Bosch is helping to boost Europe’s status as a high-tech location.
“A prime example is the expansion of our wafer fabs in Dresden and Reutlingen,” Hartung said. “In the years up to 2026, we plan to invest another 3 billion euros in our semiconductor business – also as a contribution to countering chip shortages in the mobility sector.”
Bosch also plans to focus more on expanding its business globally, in places including Egypt, India, Mexico, the United States, and Vietnam. For Bosch, the changes in the market and technology environment being ushered in by connectivity, automation, and electrification in particular, along with the growing importance of sustainability, will serve as growth drivers in the years ahead. Additional demand in emerging regions such as the ASEAN countries will open up further market growth. Against this backdrop, Hartung believes that the company is well positioned to meet the economic and energy policy situation.
Bosch Hits Tough 2022 Targets
“Despite semiconductor shortages and a weak economy, all business sectors were able to increase their sales,” said Dr. Markus Forschner, member of the board of management and chief financial officer of Robert Bosch GmbH. At 52.6 billion euros, the biggest business sector, Bosch Mobility Solutions, once again generated the highest sales in 2022. The 17 per cent increase in sales came to 12 per cent after adjusting for exchange-rate effects.
“The good news is that our sales thus grew faster than automotive production,” Forschner said. “Nonetheless, Bosch cannot be satisfied with its profitability: margins were burdened by cost increases along the entire supply chain as well as upfront investments for the transformation of the company’s mobility business.
“Encouragingly, all regions increased their sales significantly. We saw especially strong growth in the second half of 2022. In Europe, sales totalled 44.8 billion euros. The 8 per cent increase amounts to 10 per cent after adjusting for exchange-rate effects. Growth in Europe was hit harder than the other regions by the war in Ukraine and its consequences,” Forschner said.
In North America, sales grew by 25 per cent to 14.3 billion euros. The increase amounted to 11 per cent after adjusting for exchange-rate effects, which makes it the second-biggest sales increase across all the Bosch Group’s regions. Forschner reported that the development of Bosch’s business with heating and air-conditioning solutions was especially encouraging.
In South America, sales totlaled 1.8 billion euros. Sales there thus grew faster than in any other region – by 30 per cent, or 21 per cent after adjusting for exchange-rate effects. As Forschner pointed out, “The strong economy was a key factor in this growth.”
Bosch anticipates an economic slowdown and expects global economic output to grow by less than 2 per cent in the current year.
“The global business climate is already reflecting economic burdens,” Forschner said. “Rising interest rates are weighing on investment, especially construction activity and private consumption.”
In Europe, this is being compounded by the marked rise in energy costs, even after the recent declines. In China, on the other hand, following the abandonment of its zero-covid policy, a recovery process is likely to begin once the massive infection waves have subsided. According to Forschner, Bosch is feeling an economic slowdown in important sectors and expects to see ongoing cost pressure in value chains. At the same time, a significant amount of capital must be outlaid to finance growth in future technologies.
“An innovative company like Bosch must make heavy upfront investments,” he said. Over the course of 2023, he went on, Bosch thus aims to increase its sales and further improve its profitability. “We are on course to achieve our long-term target margin of at least 7 per cent,” Forschner said. “On these rough economic seas, we’ll maintain a balance – between securing our profitability and financial strength on one hand, and investments and possible acquisitions on the other.”
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“Bosch Hits Tough 2022 Targets In Difficult Business Environment.”