Despite a turbulent global economic backdrop, Bosch Group remains steadfast in its commitment to its Strategy 2030, which aims for sustained growth, innovation, and enhanced sustainability measures. The company recorded sales figures of €90.3 billion for the year 2024, reflecting a modest decline of 1.4% compared to the previous year. When exchange-rate fluctuations are taken into account, the decrease is slightly less pronounced at 0.5%. Additionally, earnings before interest and taxes (EBIT) from operations dropped to €3.1 billion, down from €4.8 billion in 2023, largely a consequence of ongoing global market pressures and structural changes within the company.
In presenting the company’s annual financials, Chairman of the Board of Management Stefan Hartung expressed a strong resolve, stating, “Our strategic focus provides the guidance we need in turbulent times. We remain committed to becoming one of the top three players in our core markets by the end of the decade.” This commitment is vital as the company navigates headwinds brought on by economic uncertainties and competitive pressures, particularly from inexpensive rivals in Asia.
Bosch’s adaptability is reflected in its performance over the first quarter of 2025, where it experienced a sales increase of 4%. The organisation aims for an EBIT margin of 7% by 2026, bolstered by efforts in portfolio optimisation, structural cost control, and a regionalisation strategy designed to stay close to customers by localising production and development. The emphasis on sustainable and digital technologies is central to this transformation, with investments in initiatives like software-defined mobility, hydrogen engines, and energy-efficient heating and cooling systems. In 2024, Bosch allocated €7.8 billion for research and development (8.6% of sales) and an additional €5.1 billion in capital expenditures. This strategic funding underscores the company’s focus on the long term, as evidenced by its healthy equity ratio of 44.3% and a positive free cash flow of €0.9 billion, despite the downturn in EBIT.
In a significant sustainability initiative, Bosch has raised its target for the reduction of Scope 3 emissions, aiming for a 30% decrease by 2030, a considerable increase from its original commitment of 15%. Hartung said, “Climate change won’t pause just because the economy has other challenges,” highlighting the company’s resolve to align innovation and product strategies with its climate goals.
A sectoral analysis reveals challenges across Bosch’s various business segments, particularly in mobility, where sales slightly decreased to €55.8 billion. The company did, however, pursue 50 new projects in electromobility and continued to innovate in areas like Advanced Driver-Assistance Systems (ADAS). The EBIT margin within this sector stood at 3.8%, reflecting the competitive landscape. In the industrial technology segment, revenue contracted to €6.4 billion due to slowdowns in the construction and machinery domains. Bosch is counting on its Hydraulic Hub and automated factory solutions to drive growth in the coming years.
The consumer goods segment fared better, witnessing a modest growth of 1.6% to reach €20.3 billion, buoyed by an expansion in cordless power tools and appliances that support the Matter connectivity standard. Conversely, energy and building technology saw revenues drop to €7.5 billion, largely due to a contraction in the European heating market. However, an anticipated acquisition of Johnson Controls-Hitachi’s HVAC operations is expected to significantly bolster this division, particularly in North America and India.
Granular regional performance further illustrates Bosch’s diversified operational strategy. While European revenue fell by 4.9%, the company witnessed growth of 4.8% in the Americas and 0.7% in the Asia Pacific region. This varied performance highlights Bosch’s strategic regionalisation efforts, which focus on localising key production and development capabilities to enhance responsiveness to customer needs.
Looking ahead, Bosch anticipates modest global economic growth between 2.25% and 2.75% in 2025, projecting organic sales growth of 1% to 3%. The company aims to improve margins through enhanced efficiency, innovation, and strategic acquisitions. Should the Johnson Controls-Hitachi deal finalise mid-year, Bosch estimates that it could contribute an additional 1% to 2% in sales growth for 2025.
In this context of operational challenges and strategic pivots, Bosch continues to advance its ambitions, balancing a need for efficiency and adaptation against the reality of a shifting global market.
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Source: Noah Wire Services
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