Bosch clocks 56.2 billion Euros in Mobility business in 2023, forecasts subdued 2024

German Tier-1 major Bosch Group reported a growth in its sales and earnings in 2023, with the company successfully implementing its growth strategy despite a difficult environment. Presenting the company’s annual figures, Stefan Hartung, chairman of the board of management of Robert Bosch GmbH, said: “In the 2023 business year, we achieved our financial targets and strengthened our market position in a number of business areas, from semiconductors to integrated building systems. We’re pursuing innovations, partnerships, and acquisitions to ensure we grow as our industries transform – despite economic headwinds.” 

In the long term, the company aims to achieve average annual growth of between 6 and 8 percent, with a margin of at least 7 percent. It also aims to rank among the top three suppliers in its key markets in all regions of the world.  

Improved 2023 performance, subdued 2024 outlook

In the last business year, Bosch generated cumulative sales of 91.6 billion Euros despite unfavorable economic and market conditions. This is an increase of 3.8 percent, or an exchange rate-adjusted 8.0 percent. Earnings from operations before interest and taxes (EBIT) amounted to 4.8 billion euros (2022: 3.8 billion euros). At 5.3 percent, the EBIT margin from operations was 1 percentage point higher than the previous year. It was therefore higher than expected, but still lower than the target margin of at least 7 percent required over the long term. Bosch wants to achieve this by 2026. 

“We need a high level of profitability and financial strength so we can self-finance our growth targets as far as possible,” said Markus Forschner, member of the board of management and chief financial officer of Robert Bosch GmbH. “A successful final sprint contributed to our expectations for 2023 on the whole being met. However, the 2024 business year will be at least as challenging as 2023.”

The company's Mobility business sector achieved sales growth of 6.9 percent to 56.2 billion euros. Adjusted for exchange-rate effects, growth equates to 10.9 percent. The EBIT margin from operations was 4.4 percent (2022: 3.4 percent).

Bosch’s overall outlook for 2024 remains subdued, not least in light of the current economic backdrop. “For 2024, we aren’t expecting any economic tailwind,” Forschner said. Accordingly, he expects global economic growth of only 2.3 percent in 2024, along with stagnating vehicle production and continued weakness in the mechanical engineering market. However, there could be a slight improvement in the consumer goods markets after two years of consumer restraint. Bosch expects its own business to stabilize, to which innovations as well as the expansion of its international footprint should contribute.

In the first quarter of 2024, sales were down by 0.8 percent year on year; after adjusting for exchange-rate effects, this amounts to a rise of 2.7 percent. “This makes it clear that the 5 to 7 percent increase in sales that we are aiming for in our planning for the year as a whole is very ambitious,” Forschner said. The CFO made it clear that it will be difficult to improve on the previous year’s EBIT margin from operations: “We are not only contending with a subdued market environment and an expected further increase in upfront investments in areas of strategic importance. Restructuring and process improvements will also have a negative impact at first, with their positive effect coming only after a delay.” 

Moreover, Bosch wants to further reduce costs and change structures in order to remain competitive as its industries transform. “We will put the necessary measures in place consistently, but with a sense of proportion,” Forschner pointed out.

Sustainable mobility, hydrogen key growth areas

In its core mobility business, Bosch is pushing forward with strategic decisions for future growth. In 2024, Bosch will launch around 30 production projects for EVs. “Electromobility is coming; the only question is how quickly it will arrive in the various regions of the world,” Hartung said. “

We estimate that 70 percent of all new cars in Europe will likely be purely electric by 2030. That figure will likely be 40 to 50 percent in China and North America,” he added. 

Where heavy vehicles are needed to cover long distances, the Bosch chairman said solutions such as plug-in hybrids and range extenders will remain in demand for some time. The Mobility business sector expects a further stimulus from vehicle dynamics technology. With new and redundant braking systems tailored to electrified and automated driving, Bosch is growing by 10 percent annually – significantly faster than the market. And with vehicle motion management, or VMM for short, Bosch is committed to an innovative system solution that will coordinate all aspects of vehicle motion by controlling the brakes, steering, powertrain, and dampers. For recent winter tests alone, Bosch equipped more than 20 major-brand test vehicles with variants of VMM. “We’re early on the scene, and we’ll be putting our first order into volume production this year,” Hartung said. Overall, the company expects to achieve sales worth hundreds of millions by 2030.

Bosch also reaffirmed its business expectations in the growth area of hydrogen. By 2030, its sales with hydrogen technology could reach 5 billion euros. “In 2023, we launched production of fuel-cell systems in Stuttgart, Germany, and Chongqing, China, revealed Hartung. 

China will likely be the leading market for the time being; Bosch does not expect to see major growth in Europe or North America until the next decade. From a technical point of view, hydrogen engines represent the fastest path to climate-neutral commercial-vehicle transportation. Bosch expects the market for this technology to be worth almost 1 billion euros by 2030. As the Bosch chairman explained: “A hydrogen engine featuring our injection technology will be on the road in India as early as this year, and we’re already working on five production orders from well-known truck manufacturers from all three of the world’s major economic regions.”

Bosch is also systematically exploiting growth opportunities in the area of heating technology. Although the heat-pump market stagnated across Europe in 2023, Bosch says it was able to grow its business by almost 50 percent. In the years ahead, the company says it will continue to grow significantly faster than the market in this segment.