Bosch Group says it “held up well in 2019” despite a 5.5% drop in automobile production but is bracing itself for at least a 20% decline in 2020 amid a recession driven by the coronavirus pandemic.
Sales across all business sectors totaled $84.5 billion (€77.7 billion) in 2019, just 0.9% below the prior year, Bosch says. Earnings from operations totaled $3.6 billion (€3.3 billion).
North American revenues rose 5.9% to $14.1 billion (€13 billion). The Mobility Solutions business sector generated sales of $50.9 billion (€46.8 billion), down 1.6% year-on-year but outperforming global production volumes.
Investment in R&D increased to $6.6 billion (€6.1 billion) or 7.8% of sales.
Bosch Group sales in first-quarter 2020 fell 7.3%, including 17% in March alone as the spread of the COVID-19 virus curtailed industrial activity.
The company cites uncertainty stemming from the pandemic in declining to issue a full-year financial forecast. “We are bracing ourselves for a global recession that will also have a considerable impact on our own performance in 2020,” Stefan Asenkerschbaumer, chief financial officer, says at a news conference announcing 2019 results.
The company is preparing for a gradual ramp-up of manufacturing after shutting down production at nearly 100 locations worldwide in April. Those efforts include reducing costs by cutting back on production and working hours, scaling back salaries for specialists and managers including executive management, and extending time frames for investments.
“In the medium term, our objective is to return to a roughly 7% margin from operations, but without neglecting the essential tasks to secure our future,” Asenkerschbaumer says. “We are devoting all our energy to this and to overcoming the coronavirus pandemic.”
Adds Bosch CEO Volkmar Denner: “We want to ensure reliable supplies to meet our customers’ demand as it gradually returns, with a view to helping the world economy recover as quickly as possible. Our goal is to synchronize the ramp-up of production and secure supply chains, especially in automotive production.
“We have already achieved this in China, where our 40 or so local plants are producing again and the supply chains are stable. We are working hard to do the same in our other regions.”
Bosch’s efforts to contain the pandemic include significantly increasing production of its newly developed COVID-19 test and Vivalytic molecular analysis device, Denner says.
The company says it intends to produce more than 1 million rapid tests in 2020, and to increase this to 3 million next year. Besides existing laboratory tests, the Vivalytic device is to be used initially in hospitals and doctors’ offices, where it will be used primarily to test medical staff in less than 2 ½ hours. The rapid test is being delivered to European customers and can be used following validation. An even faster test, which can reliably detect COVID-19 cases in less than 45 minutes, is in the final stages of development.
Bosch has shifted to producing protective masks at 13 plants in nine countries, including Anderson, SC, in the U.S., to ease the burden on the global supply chain for those items. The company also is producing 1,320 gallons (5,000 L) of hand sanitizer weekly at locations in Germany and the U.S.
Bosch CEO Denner with Vivalytic device for rapid COVID-19 testing.
