Car industry - Bosch CEO: Return target will be postponed by up to two years
The world's largest automotive supplier Bosch needs more time to achieve its sales and profit targets. "We are not cutting back on our targets, but we have to take note of the economic realities in the environment - even if this leads to a delay of one to two years," CEO Stefan Hartung told Handelsblatt (Thursday). 2024 will be more difficult than expected, 2025 probably too. "We are currently discussing which delays will allow us to achieve which return and sales targets."
Originally, the technology group wanted to achieve its target return of seven percent in the 2024 or 2025 financial year. According to the Group, it needs this to be financially independent. However, Hartung stuck to the targets for 2023: "We are still aiming for a margin of five percent this year. It is achievable, but there are still currency risks in China and Turkey, for example". However, five percent is not enough to achieve dynamic growth. "It is clear that we must continue to work on performance".
The manager also named a new sales target: "Despite the current difficult environment, we want to achieve growth in the Group to more than 100 billion euros in sales." Hartung did not specify when this milestone would be reached. This question is difficult to answer in the volatile situation. "We thought 2023 would be a year of transition and then the recovery would begin in 2024. We have to say goodbye to that."
Bosch generated sales of 88.2 billion euros in the 2022 financial year. Almost 60 percent of this was attributable to the supplier division. Adjusted earnings before interest and taxes amounted to 3.8 billion euros. Operating profit as a percentage of sales amounted to 4.3 percent. Bosch intends to provide an initial outlook for the 2023 business figures at the beginning of the year.
The transition in the automotive industry - from combustion engines to electric motors and hydrogen - presents Bosch with major challenges. Just last week, it was announced that the company is considering major job cuts in the powertrain division. At the Feuerbach and Schwieberdingen sites in Baden-Württemberg, Bosch sees a need to cut up to 1,500 jobs in the areas of development, administration and sales.
"It has long been clear that the transformation will have a major impact on the entire industry - including Bosch," said Hartung. "This means that we cannot avoid job cuts in affected areas, while we will hopefully continue to recruit in future fields." According to Hartung, there will also have to be an adjustment in the household appliances sector, partly due to the weak demand. "However, talks are still ongoing."
Handelsblatt interview
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- Despite the challenges in the automotive industry, Bosch, the world's largest automotive supplier, aims to surpass 100 billion euros in sales, despite the current difficult environment.
- The auto industry transformation from combustion engines to electric motors and hydrogen poses significant challenges for Bosch, leading to potential job cuts in its powertrain division, such as in Feuerbach and Schwieberdingen in Baden-Württemberg.
- Bosch's CEO, Stefan Hartung, shared with Handelsblatt that the company's return target might be delayed by up to two years due to economic realities, but the target of a 5% margin in the 2023 financial year remains unchanged.
- The technology group, which generated 88.2 billion euros in sales in the 2022 financial year, with 60% coming from the supplier division, plans to release an initial outlook for 2023 business figures at the beginning of the year.
- Bosch's auto industry transformation strategy involves continuing to operate in affected areas while focusing on new opportunities in future fields, as highlighted by CEO Hartung in the Handelsblatt interview.
Source: www.stern.de
