Bosch Cuts Investments for 2013 image

Robert Bosch said that this year it will postpone investments as the crisis in Europe made the company miss its 2012 profitability target.

According to Chief Executive Officer Volkmar Denner, Bosch’s operating return on sales was only 2% in 2012, missing its long-term target of 8%. Although revenue increased 1.6% to 52.3 billion euro from 51.5 billion euro in 2012, it would have fallen if it hadn’t been for the boost from exchange rates.

“We can’t be satisfied with the business year 2012,” Denner said at the press conference in Bosch’s headquarters city of Stuttgart, Germany. “We’re looking at fixed costs very closely, and will be restrictive regarding investments and acquisitions.”

Last year the European auto market fell 16% reaching the lowest level in almost 20 years, fording automakers such as GM and PSA Peugeot Citroen announce factory shutdowns. Bosch also announced it has written down 600 million euro in assets at its loss-making solar-panel division, whose future is currently under revision.

“No final decision has been made for the strategic realignment” of the solar division, which posted a loss of about 450 million euros at its operating business last year,” Denner said. “The unit has been hurt by price declines of about 40 percent.”

On April 18th the company is expected to report detailed figures for 2012. The company added that revenue in Europe has dropped 2% to 29.7 billion euro in 2012, and that sales increased 9% to 10 billion euro in the Americas, and 5% to 12.6 billion euro in the Asia-Pacific region.