Bosch, cuts and investment in research to return to growth

Bosch president Stefan Hartung doesn't mince words: in order to regain competitiveness, it is necessary to continue to reduce costs, cut jobs and concentrate on profitable business areas and regions. At yesterday's annual strategy conference at the Bosch research centre in Renningen, a stone's throw from Stuttgart, those expecting a turnaround for the German giant from the last few years with the handbrake on were disappointed. "Last year," said Hartung, "we made significant progress in terms of cost cutting, but global instability still forces us to safeguard the company. To be competitive when the market becomes dynamic again'.

In 2024, Bosch's sales stood at EUR 90.3 billion, a year-on-year decrease of 1.4%. Net profit before taxes and financial expenses (EBIT) was EUR 3.1 billion compared to EUR 4.8 billion in 2024. Numbers that testify to how Bosch is at the centre of the perfect storm of these years: the deep crisis of the automotive industry, the German one in particular, of which Bosch is the main technology partner; the crisis of Germany, for the first time in the post-war period in recession, and of manufacturing in primis, of which Bosch is a strategic supplier of systems and solutions. Now the nebula of Trump's tariffs and the ongoing trade war, a boulder hanging over a group with a worldwide presence.

The year 2025 does not start under the best auspices. Although the first quarter closed with a 4% increase in sales, Bosch expects a modest year-end growth of between 1 and 3%, but an increase in profit. Thanks precisely to cuts and restructuring and a policy of regionalisation of the business that will favour the most dynamic markets, North America, Asia Pacific and India, at the expense of slower-growing areas. Tables with the trade unions for restructuring are open, Hartung confirmed. Germany and Europe, where turnover fell by 4.9 per cent in 2024, are in the crosshairs. The fear of many is that the 2.7% workforce cut in 2024 (11,557 employees out of 429,416) is only the beginning of a process that is far from over.

But the long-term goals do not change. Hartung confirmed Strategy 2030, with an average annual revenue growth of 6 per cent and a 7 per cent profit on sales. Results that he described as challenging 'to become one of the top three suppliers in our key markets. Within five years at most'. The levers are not lacking. Investments have not stopped (57 billion in the last five years) and the fundamentals remain solid, emphasised the group's CFO, Markus Forschner. In 2024, investment in research and development amounted to EUR 7.8 billion (EUR 7.3 billion in 2023), 8.6% of turnover (8% in 2023). Capital expenditure decreased from the previous year (5.1 billion versus 5.5 billion in 2023). Liquidity increased to 8.2 billion (7.4 billion in 2023). Cash flow was positive at 0.9 billion. "The conservation financial policy we have implemented," Forschner said, "provides us with financial flexibility and allows us to make large acquisitions and major investments."

The message, as clear as cuts, is that the ammunition, despite everything, is there and will be used to push research and innovation. By 2025 Bosch is working on 50 new projects for electric mobility and has announcedthe launch of a 250 million euro fund for innovative start-ups worldwide. The emission reduction targets do not change. On the contrary, Bosch relaunches and sends a message to the newly installed Merz government. 'We must not allow financial measures to distract us from the urgency of a turnaround,' said Hartung. Despite the global crisis, climate action must not fall off the radar. The Bosch president explained that the goal is to double the reduction of CO2 emissions from 15 to 30 per cent regardless of Bosch's growth targets. "Climate change," said Hartung, "is not going away just because the global economy has other problems to deal with.