Bosch Reports Significant Profit Decline for 2024

The renowned technology corporation Bosch has announced a staggering profit drop of one-third for the year 2024, highlighting the challenging economic landscape affecting its operations. This decline was revealed during a presentation of provisional financial results, where the company reported a total revenue decrease of 1% to EUR90.5 billion, and a significant drop in operational profit (EBIT) down to EUR3.2 billion, reflecting an operational margin of 3.5%, compared to 5.3% the previous year.

Bosch's CEO expressed concern over the current state of the economy, emphasizing the uncertainty that looms over both businesses and consumers in key markets, which has contributed to stagnant demand across various sectors including automotive, industrial technology, building technology, and consumer goods.

In the automotive sector, Bosch is grappling with a sluggish automotive market and delayed advancements in electric mobility. The postponement of electric platform rollouts by manufacturers has left Bosch without buyers for its tailored electronic systems, leading to a slight revenue decline in this segment to EUR55.9 billion.

Further complicating the situation, the CEO noted that European regulations are making it increasingly difficult for automotive companies to compete on a global scale. During discussions with European Commission leadership, he advocated for regulatory considerations that take into account the international competitive environment.

In machinery manufacturing, Bosch experienced a 13% revenue drop to EUR6.5 billion due to weak demand in Europe, China, and the U.S. Similarly, in energy and building technology, insufficient customer confidence stemming from unclear regulations led to a 3% revenue decline to EUR7.5 billion.

Conversely, Bosch's consumer goods and home appliances division showed resilience, achieving a 2% revenue increase to EUR20.3 billion. Despite the overall downturn, each business division managed to report a positive result.

The ongoing economic challenges have prompted Bosch to announce significant job reductions, including a total of 7,000 positions earlier in the year and an additional 5,500 later, primarily affecting the automotive sector and associated divisions. The CEO acknowledged that further restructuring may be necessary as the industry transitions to new powertrain technologies in the coming years.

Despite the challenges, Bosch remains committed to achieving a targeted profit margin of 7% by 2026, necessitating a return to profitability for underperforming business units. Management is also anticipating a recovery in the global economic landscape, which hinges on the EU's ability to present a strong and unified front in international trade.

Looking ahead, Bosch plans to invest in innovation and modernization, including expanding its production of silicon carbide semiconductors and advancing automated driving technologies through artificial intelligence. These investments are seen as crucial for navigating the future landscape of the automotive and technology sectors.

The CEO urged for a shift in mindset, encouraging optimism and readiness to embrace the opportunities that lie ahead, rather than succumbing to pessimism. He stressed the need for action and reform in both Germany and Europe to foster a more competitive and resilient business environment.