Bosch profit up 17% at € 5.3 bn as revenue hits record €78.1 bn
25 Apr 2018
Mobility solutions giant Robert Bosh has reported a 17-per cent growth in annual profits at €5.3 billion and a 6.8 per cent increase in annual sales at € 78.1 billion for the financial year ended 31 December 2017.
The sales revenue of € 78.1 billion, the highest so far for the company, represents an increase of 8.4 per cent after adjusting for exchange-rate effects, which totaled some €.2 billion, Bosch said.With all business sectors contributing to the positive results, Bosh said, EBIT (earnings before interest and tax) from operations reached €5.3 billion in 2017, thus improving by nearly 17 per cent compared with 2016.
“Both sales revenue and earnings are the highest ever in our company’s history. What’s more, EBIT from operations increased at a higher rate than sales revenue,” said Stefan Asenkerschbaumer, Bosch CFO and deputy chairman of the management board. The EBIT margin from operations came to 6.8 per cent, or 0.6 percentage points higher than in the previous year.
Bosch also spent a substantial amount in research and development, with expenditure last year at around €.3 billion, which is more than 9 per cent of its annual sales.
Bosch said its real-world connectivity solutions include smart mobility, connected manufacturing (Industry 4.0), the smart city, and smart homes.
“So far, Bosch has put 170 in-house IoT projects into practice, focusing on fundamental challenges such as population growth, urbanisation, and climate change,” the company said, adding,
“In 2017, the company sold some 38 million web-enabled products, roughly 40 per cent more than in 2016.”
Bosch currently employs more than 25,000 software engineers, with about 4,000 of them engaged in developing solutions for the internet of things.
Bosch has identified significant potential in cross-domain ecosystems that link different industries, such as “Logistics 4.0.” Such ecosystems bring together solutions for manufacturing processes, building services, security, and mobility – all areas in which Bosch plays an active role.
As CEO Volkmar Denner emphasised, “Cross-domain ecosystems are the ultimate IoT-related discipline. No other company is better qualified to realise them than Bosch. The competitive advantage offered by our diversification has never been greater.”
Bosch is working to achieve a breakthrough for electromobility. In 2017, the company won 20 contracts to produce electrical powertrain systems, valued at a total of €4 billion euros. Bosch expects the mass market for electric vehicles to take off from 2020, and aims to be a leading player in that market.
Bosch is also making significant progress in the transition to automated driving. As early as 2019, the company expects to generate sales of €2 billion with driver assistance systems. Bosch said it is growing faster than the market, which is forecast to grow 20 per cent this year.
Since more automation means greater technical complexity, Bosch plans to offer all-in-one solutions, not just discrete components, in future.
Some 4,000 engineers are working for Bosch on automated-driving solutions, 1,000 more than a year ago.
Connected mobility is another market in which Bosch expects to generate significant business. The value of this market is forecast to reach €140 billion worldwide by 2022. By 2025, there will be more than 450 million connected vehicles on the world’s roads.
Bosch has also entered the ridesharing business through its acquisition of the US start-up Splitting Fares (SPLT).
Bosch has brought SPLT and over 20 other mobile service providers together in its new Connected Mobility Solutions division. They include the COUP e-scooter sharing service, which will soon to expand its business to Madrid, Spain.
Bosch’s Mobility Solution sales revenue increased by 7.8 per cent (9.4 per cent after adjusting for exchange-rate effects) to €47.4 billion. The margin from operations was 7.3 per cent, or one percentage point higher than in the previous year.
In the consumer goods business sector, sales revenue rose 4.5 per cent (or 6.7 per cent taking exchange-rate effects into account) to €18.4 billion. The margin from operations was 8.1 per cent.
The Industrial Technology business sector sales revenue increased by 7.8 per cent (or by 9.2 per cent after adjusting for exchange-rate effects) to 6.8 billion euros. The margin from operations was 3.3 per cent, up 2.1 percentage points on the previous year.
The Energy and Building Technology business sector achieved sales of €5.4 billion, which represents an increase of 4.1 per cent (or 5.8 per cent after adjusting for exchange-rate effects). The margin from operations was 4.4 per cent.
Sales revenue from European operations rose 5.6 per cent (or 6.6 percent taking exchange-rate effects into account) to €40.8 billion in 2017, as the company benefited from the recovery of important western European markets and the good economic developments in Germany.
Sales revenue from eastern European countries such as Russia, Romania, and Turkey also increased significantly.
Strong growth was also reported in Asia Pacific, including Africa. Sales revenue increased by 13.5 per cent (16.5 per cent after adjusting for exchange-rate effects) to €23.6 billion.
After adjusting for exchange-rate effects, the group’s sales revenue in North America remained on the previous year’s level. Due to lower output in the automotive sector and negative exchange-rate effects, sales revenue dropped by a nominal 2 per cent to €12.1 billion.
In South America, by contrast, sales revenue increased substantially, rising 16.4 per cent (13.2 per cent after adjusting for exchange-rate effects) to €1.6 billion.
As of end-December 2017, the Bosch Group had around 402,000 associates worldwide. This represents a year-on-year increase of 12,900.
The Bosch Group
- Comprises Robert Bosch GmbH and 440 subsidiaries and regional companies;
- Presence in 60 countries, including sales and service partners;
- Business segments include Mobility Solutions, Industrial Technology, Consumer Goods, and Energy and Building Technology;
- Has R&D network in 125 locations with 62,500 associates;
- Overall workforce stands at over 400,500 associates