Bosch invests billions in climate action and air quality

Denham, England – For the Bosch Group, the 2018 business year was a suc-cessful one. The company increased its sales revenue to a record 78.5 billion euros. Earnings before interest and taxes (EBIT) from operations reached 5.5 billion euros. In spite of heavy upfront investments in areas such as the electrification and automation of mobility, EBIT margin from operations improved again in 2018, rising from 6.8 percent in 2017 to 7.0 percent. Bosch increased its expenditure on research and development to 7.3 billion euros, or 9.3 percent of sales revenue. Capital expenditure rose by 14 percent to 4.9 bil-lion euros, or 6.3 percent of sales revenue. Bosch created almost 8,000 new jobs worldwide in 2018, more than half of them in research and development.

In the UK Bosch registered 3.3 billion pounds in consolidated sales, slightly less than in 2017. In the years before, Bosch always had achieved growth, partly even a double-digit increase.

“While we are not satisfied with the overall development of our sales in the UK, we are pleased with the increase in some of our divisions“, Dr Steffen Hoff-mann, president of Bosch UK, said. Thermotechnology (Worcester Bosch) and BSH (Home Appliances) were among the divisions that performed well and Drive and Control Technology sales increased by double-digit figures.

Dr Hoffmann said the main reason for the small decline was the significant drop in demand in the automotive sector. The diesel debate and the weakening business of British carmakers in China were responsible for the decline in cus-tomers demand, he said. He believed Brexit has not had a significant impact on the business yet.

Nevertheless, Dr. Hoffmann once again confirmed he believes Britain leaving the EU without an agreement will cause considerable damage to the UK econ-omy. “With the postponement of Brexit, potentially until 31st October, the no-deal scenario is at least less likely, but a solution is still not in sight” he said.

Dr. Hoffmann continued: “We need an end to the uncertainty, and an environ-ment that allows us to plan for the long-term again, under conditions friendly to trade and the economy.”

Back to Germany and the current year ahead. Bosch expects economic devel-opments to be subdued. The company forecasts that the global economy will grow by just 2.3 percent. Trade disputes, the high levels of debt in European countries, and the decrease in automotive production are among the factors putting a strain on the global economy. Despite the difficult environment in in-dustries and regions that are important for Bosch, the company expects its sales in 2019 to slightly exceed their 2018 levels. The first three months of the year saw sales nearly on a par with the previous year. Regardless of this short-term outlook, the Bosch Group is intensifying its efforts to combat climate change and improve air quality.

“Climate change is not science fiction; it’s really happening. If we are to take the Paris Agreement seriously, then climate action needs to be seen not just as a long-term aspiration. It needs to happen here and now,” said Dr. Volkmar Den-ner, chairman of the board of management of Robert Bosch GmbH, at the company’s annual press conference. “We also take people’s concerns about clean air quality in cities very seriously. As an innovation leader, we want to de-liver technological solutions to ecological problems.” Moreover, Denner noted, “Driving bans, diesel protests, yellow vests, and Friday climate strikes – all this shows that companies need to take climate action and offer new solutions for urban air quality, not least to stabilize the social climate.”

Bosch to be first carbon-neutral industrial enterprise from 2020

According to the International Energy Agency (IEA), manufacturing is responsi-ble for almost one-third of global carbon dioxide emissions. This is reason enough for Bosch to intensify its already successful efforts to reduce its CO2 output. “We will be the first major industrial enterprise to achieve the ambitious goal of carbon neutrality in a little over a year. From 2020, Bosch will have a net-zero carbon footprint,” Denner announced. “All 400 Bosch locations across the globe will be carbon neutral from 2020.” To achieve this, the company will be using four major levers. Bosch will increase energy efficiency, increase the proportion of renewables in its energy supply, buy in more green power, and offset unavoidable carbon emissions. This will avoid 3.3 million tons of CO2 emissions by 2020. More information about Bosch’s climate action plans is provided here.

Better air quality: near-zero pollution

According to the World Health Organization (WHO), around 90 percent of the world’s population breathe toxic air. Bosch is pursuing an ambitious goal to remedy this: “We want to reduce air pollution from traffic to virtually zero. To do this, we’re looking beyond the car’s hood,” Denner said. The company’s project to reduce the concentration of air pollutants to near-zero levels is built on three pillars: Bosch is developing low-pollutant powertrain technologies, working with municipal governments on projects to maintain steady traffic flows, and is run-ning a company mobility management system at its own locations.

Optimizing internal-combustion engines – using artificial intelligence

The company forecasts that roughly 75 percent of all new cars and light com-mercial vehicles will still be powered by an internal-combustion engine in 2030. In view of this, Bosch is continuing to invest considerable sums in optimizing gasoline and diesel engines. The company is also using artificial intelligence to further develop internal-combustion engines. As an example, Bosch is using AI to predictively control exhaust-gas treatment according to patterns drawn from individuals’ driving behavior, as this can further reduce vehicles’ emissions. Some 3,500 associates in the company’s exhaust-gas treatment and exhaust sensors units generated sales of 2.3 billion euros in 2018. This figure is set to reach 3 billion euros by 2025.

Mobile analyzer units: 20 percent lower nitrogen-oxide emissions

Bosch is currently in discussions with almost 100 municipal governments around Europe on what specific steps to take to improve air quality. In Stuttgart, Paris, and Marseille, Bosch is currently testing a mobile analyzer unit. These newly developed units continuously measure the level of contaminants in the ambient air. Together with simulations, these readings are set to deliver further insights into the relationship between vehicle emissions and environmental pol-lution. For example, a project with the city of Stuttgart has shown that smooth traffic flows can reduce nitrogen-oxide emissions from the existing fleet by up to 20 percent. In the future, it will be possible to create high-resolution pollutant concentration maps with the data from the analyzer units. These maps can then be used to optimize traffic management.

Company mobility management: better air quality in conurbations

The third pillar of the project is company mobility management. Its goal is to re-duce the traffic, and thus the emissions, for which Bosch associates themselves are responsible, particularly in conurbations. The measures taken range from shuttle buses in large cities in Brazil, China, and Turkey, to telecommuting agreements and the leasing of bicycles and pedelecs. In addition, Bosch is har-nessing the power of connectivity. For some weeks now, for example, the roughly 8,000 associates at the Reutlingen location have been able to use the SPLT ridesharing platform, whose app makes it easier for associates to form carpools. In the Stuttgart metropolitan area, where some 55,000 Bosch associ-ates travel a combined distance of 1.5 million kilometers every day, the compa-ny is also a member of the Clean Air Alliance.

Electromobility: 14 million vehicles by end of 2022

Bosch also expects electric vehicles to play a major part in improving air quality in cities. In the emerging mass market for electromobility, Bosch is striving to become market leader. By 2025, the company aims to generate 5 billion euros in sales with electromobility, ten times the figure for 2018. “In the growing com-petition for value creation in the powertrain technology domain, we see good opportunities ahead. Our systems know-how, our broad product portfolio, and economies of scale in manufacturing make us the partner of choice for vehicle manufacturers and mobility providers worldwide,” Denner said. Bosch power-train components already feature in over a million electric cars around the world. By the end of 2022, this number is set to rise to 14 million. To date, the company has carried out powertrain projects for 50 electric vehicle platforms. Last year alone saw 30 newly acquired projects. “We also want to help fuel-cell technology make a breakthrough,” Denner said. To this end, Bosch recently announced an alliance with Powercell, a Swedish manufacturer of fuel-cell stacks. Such stacks make up two-thirds of the value of a fuel cell system. “To-gether with Powercell, we want to commercialize stacks and launch them by 2022 at the latest,” Denner said.

Automated driving: lower consumption and emissions

Automated driving will also play a part in improving air quality. According to the research firm KE Consult, automated driving can reduce fuel consumption by over 30 percent, and by 15 percent on German freeways. More than 5,000 Bosch engineers are now working on automated driving, almost twice as many as two years ago. As Denner noted: “By 2022, we plan to have invested around 4 billion euros in automation and thus in sustainable mobility.” Driver assistance systems are contributing to growth on the path to automated driving. From cur-rent levels of around 2 billion euros, revenue is expected to increase by almost 15 percent this year. Sales of radar sensors are expected to grow by 20 per-cent, and sales of video sensors by 30 percent. Denner: “Automated driving is not just an area of future promise, it’s already a growth area for us today.”

Business year 2018: sales and earnings at record levels

“2018 was a successful business year for the Bosch Group,” said Prof. Stefan Asenkerschbaumer, CFO and deputy chairman of the Bosch board of man-agement. As in 2017, sales and result again reached a high level. Sales reve-nue totaled 78.5 billion euros – a figure that was dented by substantial ex-change-rate effects of 2.1 billion euros. After adjusting for exchange-rate ef-fects and ignoring consolidation effects, sales grew by 5 percent. Nominally, they grew by 2.2 percent. Earnings before interest and taxes (EBIT) from oper-ations totaled 5.5 billion euros, up from 5.3 billion euros the previous year. In spite of heavy upfront investments in promising areas, the EBIT margin from operations increased from 6.8 percent in 2017 to 7.0 percent. “Despite the economic challenges, in 2019 we will continue to invest large amounts in devel-oping new technologies and areas of business in order to secure the compa-ny’s future viability,” Asenkerschbaumer said. “Equally, our commitment to re-ducing carbon emissions and climate action is not guided by short-term finan-cial considerations, but takes a much longer-term view.”

The business year 2018 by business sector

All business sectors played a role in Bosch’s good business performance in 2018: the Mobility Solutions business sector increased its sales by 3.5 per-cent (5.8 percent after adjusting for exchange-rate effects) to 47.6 billion euros. Consequently, Bosch’s growth in this sector once again outperformed global automotive production. At 7.1 percent, EBIT margin from operations almost reached the previous year’s level. The Consumer Goods business sector achieved sales of 17.8 billion euros. Adjusting for exchange-rate effects turns this 3.1 percent fall into a sales increase of 0.7 percent. The main reasons for this low growth were weaker demand in emerging markets and increasing competitive pressure in China. The EBIT margin from operations of 7.8 percent was slightly below the previous year’s level. In the Industrial Technology business sector, sales rose to 7.4 billion euros. This represents an increase of 8.8 percent, or 11.7 percent after adjusting for exchange-rate effects. The EBIT margin from operations rose by more than five percentage points to 8.4 per-cent. In the Energy and Building Technology business sector, sales in-creased by 2.4 percent to 5.6 billion euros. After adjusting for exchange-rate ef-fects, this was equivalent to 5.1 percent growth. At 4.2 percent, EBIT margin from operations remained more or less unchanged.

The business year 2018 by region

In Europe, sales revenue increased by 3.3 percent (4.8 percent after adjusting for exchange-rate effects) to 41.4 billion euros. In North America, sales totaled 12.3 billion euros. After adjusting for exchange-rate effects, this 2.7 percent rise equates to an increase of 7.4 percent. In South America, business recovered with exchange-rate-adjusted sales growth of 11.6 percent. Sales revenue to-taled 1.4 billion euros. In nominal terms, sales fell by 6.2 percent. Bosch now generates almost 30 percent of its total sales in Asia Pacific (including Africa). Sales in this region grew by 3.7 percent to 23.4 billion euros after adjusting for exchange-rate effects. Nominal growth was 0.7 percent.

Headcount development: career opportunities for specialists and executives

As of December 31, 2018, the Bosch Group employed some 410,000 associ-ates worldwide. That is around 7,700 more people than in the previous year. The largest increases in headcount took place in Europe and Asia Pacific. In Germany, the number of associates increased by around 1,700. Bosch now employs just under 70,000 associates in research and development, some 5,000 more than in the previous year. 27,000 associates are software and IT experts. This number is due to increase further. “Over the next five years, Bosch plans to hire almost 25,000 new IT and software experts worldwide,” Denner said.

An overview of key figures can be found here.

Press photographs and Infographics: available via www.bosch-press.com

Contact persons for press inquiries:

For the topic of carbon neutrality:
Katharina Hogh-Binder
Phone: +49 711 811-92571
Twitter: @ka_hoghbinder

UK contacts:
Heather Butcher
Phone: +44 1985 838610
heather.butcher@uk.bosch.com

For economic and financial topics:
Sven Kahn
Phone: +49 711 811-6415
Twitter: @BoschPresse

For the topic of air quality:
Jörn Ebberg
Phone: +49 711 811-26223
Twitter: @joernebberg

Communications
Phone: +44 (0) 1895 83 8822
communications@uk.bosch.com