Annual press conference 2016
Bosch expects further growth in 2016 following record year
- Record sales of 70.6 billion euros (£55.1 billion) in 2015
- 2015: result from operations soared 24 percent to 4.6 billion euros (£3.6 billion)
- 2016: sales growth of 3 to 5 percent forecast
- Connected industry: cost savings and sales each totalling one billion euros
Following a record year in 2015, Bosch forecasts to continue its growth trend in 2016. Despite a challenging economic outlook, the supplier of technology and services expects its sales to grow between 3 and 5 percent in 2016.
If the first quarter’s slowdown continues, sales growth is expected to be at the lower end of the forecast scale. Even considering the subdued market environment of the first quarter of 2016, Bosch saw a year-on-year sales increase of just under 3 percent, or after adjusting for exchange rates around 4 percent.
“We plan to grow not only with innovative products, but also with innovative services,” said Dr. Volkmar Denner, the chairman of the Bosch board of management, at the annual press conference at Bosch’s research campus in Renningen. He continued: “We are increasingly using connected services to build on our broad basis in the hardware business.” The company benefits not just from technological versatility, but also from its wide-ranging industry and domain expertise. As Denner explained, “In the future, Bosch will not only be engaging with its customers in their cars and kitchens. Connected services will make it a constant companion in many aspects of their daily lives.”
Business year 2015: highs in sales and result
In 2015, Bosch Group sales reached an all-time high of 70.6 billion euros (£55.1 billion). The acquisition of BSH Hausgeräte GmbH and Robert Bosch Automotive Steering GmbH pushed sales up by almost 22 billion euros (£17.2 billion), or 44 percent. Bosch saw strong growth in its operations too with sales marking growth of 10 percent. After adjusting for exchange-rate effects, the sales increase was 3.8 percent. Aside from the Industrial Technology business sector, all business sectors saw double-digit growth and were able to improve their result in 2015. Similarly, the result for the Bosch Group as a whole improved once again in 2015. The supplier of technology and services recorded 4.6 billion euros (£3.6 billion) in earnings before interest and taxes (EBIT), which equates to an EBIT margin of 6.5 percent. This means that EBIT from operations increased year on year by some 0.9 billion euros (£0.7 billion), or 24 percent.
Services to supplement broad hardware basis in the future
Bosch’s strategic objectives include service solutions for every aspect of connecting those products on the internet of things. Bosch focuses on the “3S’s”: sensors, software, and services. “Services are becoming an integral part of our product business. Every sale of hardware should be followed by the sale of complementary services,” Denner said. He continued “Bosch can connect many things across a wide range of domains as no other company can – cars with houses, even entire cities.”
Connected industry: cost savings and sales of a billion euros each
In the world of connected industry Bosch benefits from the practical experience it gains by using Industry 4.0 in around 250 of its own plants, using this experience to provide services for third parties. By 2020, Bosch expects connected industry to deliver an aggregate 1 billion euros (£0.78 billion) in cost savings and generate an additional 1 billion euros (£0.78 billion) in sales. “Bosch’s broad footing and its international presence stand it in good stead in connected industry. We can connect large-scale automotive production as well as small-batch mechanical engineering – in Asia, Europe, and the Americas,” Denner said.
Service Solutions: 15 percent annual sales growth
The newly created Bosch Global Service Solutions division is already seeing strong growth. Approximately 6,000 associates work on projects such as supporting the business processes of customers in a variety of sectors or processing eCalls on behalf of automakers. In 2015, Global Service Solutions handled more than 120 million customer calls for over 1,000 companies in 30 countries – 30 million more than in 2013. Bosch expects the division’s sales to grow by about 15 percent each year.
Smart homes: new smart-home products to debut in fall 2016
Bosch launched its Smart Home System at the start of the year, offering a simple and secure solution for smart homes. Further products for the system are to follow over the course of 2016. One of these is a smoke alarm that provides increased security. Bosch expects the global market potential of smart homes to reach 10 billion euros (£7.8 billion) as early as 2017. By 2020, some 230 million homes – 15 percent of all households worldwide – will be equipped with smart-home solutions.
Mobility Solutions: one app for car, bicycle, bus, and train
Bosch’s portfolio in the Mobility Solutions business sector already extends beyond the car. For example, Bosch is working with several partners on realising a software-based mobility assistant for intermodal transportation. It offers users in the greater Stuttgart area the ability to plan, reserve, and pay for tickets for various forms of transport, including cars, bicycles, trains, and buses, all via a single app. Similarly, connected parking will also have a strong service component. Vehicles identify empty parking spaces on the street as they drive past, then report these over the internet to Bosch. The company uses this information to generate a real-time map that displays available parking spaces.
Bosch IoT Cloud: integral part of the services business
A core component of Bosch’s services business is its IoT cloud. The Bosch IoT Cloud offers the technological infrastructure necessary for scaling connected solutions. In 2016, around 50 Bosch applications will be running in the company’s cloud. Use of the IoT cloud will also be extended to third-party customers as a service starting in 2017. The Bosch IoT Suite forms the software core of the IoT cloud. Bosch and its customers already operate many solutions and projects that are based on this platform. More than five million devices and machines are currently connected via components of the Bosch IoT Suite.
The business year 2015 by region and business sector
Asia Pacific: subdued growth in China
In Asia Pacific – including Africa – the Bosch Group boosted its sales in 2015 by 17 percent to a total of 19.2 billion euros (£15 billion) (2.8 percent after adjusting for exchange-rate effects). This was below expectations, due to subdued economic growth in China and other emerging markets. Bosch sees major potential in Africa over the long term. In 2015, the company continued expanding its activities there, and now has its own branch offices in ten African countries.
Americas: strong year in North America
In North America, Bosch was able to benefit from the region’s excellent economic development with sales growth of 25 percent to 12.7 billion euros (£9.9 billion), (6.7 percent after adjusting for exchange-rate effects). However, in South America the recession in Brazil had a major impact on Bosch’s business. Overall, sales in the region fell by 13 percent (3.7 percent after adjusting for exchange-rate effects).
Europe: good development in Western Europe
The Bosch Group’s business in Europe developed better than initial forecasts, with sales rising by 3.8 percent to 37.3 billion euros in 2015. Sales developed positively in the company’s home market of Germany as well, climbing 1.3 percent.
Mobility Solutions: outpacing market growth
The Mobility Solutions business sector was able to achieve a marked increase in its growth and result in 2015 as sales rose by 12 percent to 41.7 billion euros (£32.6 billion) (4.6 percent after adjusting for exchange-rate effects). The sector considerably outperformed global automotive production, which grew by just 2 percent to 92 million units. Margin from operations rose to 8.4 percent.
Industrial Technology: lingering weakness in the mechanical engineering market
The Industrial Technology sector’s development reflected the difficult situation in the mechanical engineering market. Overall, sales in this sector fell by 1.6 percent to 6.6 billion euros (£5.1 billion) (6.5 percent after adjusting for exchange-rate effects). Industrial Technology finished 2015 with an operating loss of roughly 100 million euros (£78.1 billion). In contrast, the Packaging Technology division performed well.
Consumer Goods: double-digit sales growth
Last year proved positive for the Consumer Goods sector, with 17.1 billion euros in sales. On an operational level, both the business with household appliances and the Power Tools division developed well. Sales increased by around 10 percent year-on-year (5.7 percent after adjusting for exchange-rate effects). The sector’s margin from operations increased to 7.2 percent.
Energy and Building Technology: strong growth in sales and result
Last year, Energy and Building Technology achieved a sales revenue increase of 11 percent to 5.1 billion euros (£3.9 billion) (7.2 percent after adjusting for currency effects). The sector’s steady improvement was reflected in a margin of 4.4 percent.
Headcount: IT and software specialists wanted
As of December 31, 2015, the Bosch Group employed some 375,000 associates worldwide with the headcount increasing last year by 17,600 associates. The largest increases were in central and eastern Europe, Germany, Asia Pacific, and the United States. In 2016 Bosch plans to hire roughly 14,000 university graduates around the world, with software expertise in high demand with nearly half of all vacancies at Bosch are software-related.
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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 roughly 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.