The global automotive supplier recorded the second highest order intake in its history last year despite a sharp drop in vehicle production.
The Brose Group clocked sales worth 5.1 billion euros in 2020, down 17 percent compared to the previous year. The global automotive supplier recorded the second highest order intake in its history last year despite a sharp drop in vehicle production, the pandemic and internal expenditure associated with restructuring.
Brose Group CEO Ulrich Schrickel said, “In addition to the coronavirus pandemic, Brose is currently in the midst of a demanding renewal and restructuring phase. The associated financial burdens and the significant decline in sales had a markedly negative impact on our earnings in 2020. We were able to achieve positive earnings in the end thanks to the extraordinary dedication of employees at every level of our company and the trust-based partnership we have with our works councils.”
According to the company, cost-cutting measures, slightly improved liquidity and progress in the Future Brose renewal program helped enhance the efficiency rate for the company.
New products and business segments
The Brose Group bagged nearly 1.3 billion euros worth orders in 2020 and this included both existing and new business segments including radar sensor technology with its first series orders for radar-based collision detection sensors. The company was also awarded a contract in the growing micromobility segment: in addition to e-bike drives, Brose will supply motors, control units and power electronics for e-scooters starting in 2022. The first customer is one of the largest two-wheeler manufacturers in the world.
Expanding electronics reach
“Electrification and connectivity offer Brose promising opportunities for growth. We want to position our company more effectively as a system supplier in these fields,” Schrickel underscored. Therefore, the company is expanding its electronics expertise. The automotive supplier uses sensors and software to connect their mechatronic components and create intelligent overall systems for vehicle access as well as the vehicle interior.
This technology provides additional customer benefits along with more convenience and comfort. Electrification of the vehicle powertrain offers further opportunities for Brose. The supplier is partnering with a premium German car manufacturer to work on advanced development of a thermal system that can extend the range of electric vehicles by up to ten percent. “We must make major upfront investments to develop new products and bring them to series production. It will take a lot of hard work to ensure these innovations are also financially viable,” Schrickel explained. In total, the company will invest more than one billion euros over the next three years in innovative technologies, technical equipment and the worldwide expansion of locations.
Despite the uncertainties associated with the pandemic and the global semiconductor shortage, Brose expects automotive production to continue to recover during the current year. Schrickel outlined that, “We want to reach 2019 sales levels again by 2022. We plan on outperforming the market over the next few years. The earnings situation should continue to improve despite major upfront investments. Taking into account the planned joint venture with Volkswagen for complete seats and interior concepts, we expect consolidated business volume to exceed nine billion euros in 2025 – assuming steady growth in the vehicle market.” The joint venture is subject to approval by the antitrust authorities. The company expects to sign the contracts finalising the joint venture with Volkswagen soon.
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