Press Release

• Demand boosted by Asia Pacific
• Significant growth in renewable energies expected for 2010
• Innovation focus retained despite difficult conditions

Stuttgart. The Bosch Group has made a good start to the current fiscal year, and intends to make up for much of the loss of sales in 2009 this year.

At the Annual Press Conference in Stuttgart, Franz Fehrenbach, the chairman of the Bosch board of management, said: "We want to return to a positive result in 2010.

” There were clear signs of recovery in all regions, he said, with an especially powerful boost coming from the markets in China and India. In the first quarter of this year, Bosch Group sales were up roughly 25 percent year on year.

But the first quarter of 2009 was also the lowest point of that crisis year, so current sales are still significantly below their 2007 level. All in all, sales in the current fiscal year are expected to grow by more than 10 percent, to 42 billion euros.

Due to increased demand for vehicles, especially outside Europe, automotive technology will make the greatest contribution to this growth.

However, Fehrenbach warned that recovery should not be "taken for granted.” As a result of the crisis, he pointed out, Bosch had lost ground when it came to productivity.

This was why it was decisive to lay the foundations for the future now, and not to let up with the structural measures that were needed.

Sound financial basis secured
Last year's global economic crisis also affected the business development of the Bosch Group. Sales fell by 15 percent to 38.2 billion euros.

At minus 1.2 billion euros, profit before tax (EBT) was negative for the first time in decades, following a positive result of 940 million euros in 2008.

Apart from the considerable drop in sales, the main reason for this loss was the high provisions set up in connection with reorganization and impairments.

Strict measures to save costs and secure liquidity meant that the Bosch Group was able to continue to build on a very sound financial basis, even in the crisis year 2009. All capital expenditure and all acquisitions were financed from operating activities.

Further evidence of this sound financial substance is shown by the equity ratio, which remains at 49 percent, and the net financial position of some 500 million euros.

Keeping the core team in the company
Despite the significant drop in sales in nearly all its markets, the Bosch Group set itself the target of keeping the core team in the company.

"In the years to come, the know-how that remains in the company in the form of qualified associates can be translated into growth,” Fehrenbach said. The number of associates fell by some 11,000 or 4 percent to a total of roughly 270,000.

Divestments also played a role here. The number of apprentices, by contrast, remained stable. In the crisis year 2009, Bosch offered 6,500 young people worldwide the chance to learn a career, once again training far more people than it actually needs.

This year, Bosch will take on some 3,700 university graduates worldwide, 500 of them in Germany and more than 1,000 in both India and China.

The Automotive Technology business sector felt the effects of the difficult situation in the global markets above all in the first quarter of 2009, when sales fell by one-third year on year. The gradual recovery that followed was not sufficient to make up for this fall.

The Diesel Systems division was especially hard hit, feeling the effects not only of the substantial drop in demand in the commercial vehicles market but also of the trend toward smaller passenger cars. In this segment, the share of diesel vehicles is significantly lower.

At 21.7 billion euros, total sales were down 18 percent on the previous year. As a result, the Automotive Technology business sector closed the year with negative earnings before financial result and taxes (EBIT) of some 500 million euros.

The economic recovery has continued strongly in automotive technology. Once again, major stimuli are coming from Asia, where this business sector generated 25 percent of its sales last year.

However, the latest developments in the markets in Europe and North America are also encouraging. Nonetheless, these markets are unlikely to return to their 2007 levels before 2012.

It was the Industrial Technology business sector that was worst hit by the economic crisis. In this business sector, the low point of the downturn was reached only in the third quarter of 2009.

Overall, sales fell by 24 percent to 5.1 billion euros. EBIT was correspondingly disappointing, at minus 1.1 billion euros. One important reason for this was the steep drop in business in the Drive and Control Technology division.

As in mechanical engineering as a whole, not only were significantly fewer orders received, but existing orders were also cancelled.

Since the autumn, the situation has evened out on a low level. From a present perspective, an appreciable recovery cannot be expected until the second half of 2010 at the earliest.

In packaging machinery, by contrast, there were only slight losses. In photovoltaics, the significant recovery in business in the second half of 2009 was not enough to offset the weak first two quarters the year and the drastic fall in the price of solar cells.

The Consumer Goods and Building Technology business sector, by contrast, recorded only a moderate fall in business despite the difficult overall economic situation.

Sales fell by 5 percent to 11.3 billion euros. Business in the Thermotechnology and Household Appliances divisions developed steadily.

By contrast, the effects of general economic developments were felt in the power tools business, especially in the professional segment. In Security Systems, the business with complete products was especially affected.

Overall, however, the Consumer Goods and Building Technology business sector was able to close the difficult year 2009 with positive EBIT of 440 million euros. A significantly positive development is expected for the current fiscal year.

Stabilizing effect of a broad regional presence
Especially in the crisis year 2009, the Bosch Group's broad international presence in every important market proved its worth.

This is how the company benefited from early onset of recovery in Asia Pacific. For the first time, the Bosch Group generated 20 percent of its total sales in this region.

Apart from India, a distinct boost to business came from China, which is now second only to the U.S. as the company's most important market outside Germany.

Overall, the sales generated in Asia Pacific were down 2 percent (6 percent in local currencies) year on year. The sluggish developments in Japan played a decisive role here.

Bosch will further expand its presence in Asia Pacific, and this year open its new headquarter buildings in Shanghai and Singapore.

Although a recovery also began in Europe and the Americas in the second half of 2009, this was not enough to make up for the severe losses in these regions in the first two quarters.

Accordingly, sales in Europe were down 20 percent year on year (18 percent in local currencies). Unlike other regions, overall developments here this year are not so positive as yet, but an upturn is expected, also in central and eastern Europe.

As a region, Europe remains a key market for the Bosch Group. The new wafer fab in Reutlingen and the extension of the solar cell manufacturing facility in Arnstadt (both in Germany) are just two examples of investments in new plants in Europe.

These two plants alone, which go into operation this year, account for a total investment of more than one billion euros.

In North America, 2009 sales fell by 11 percent (13 percent after adjusting for currency effects), following an already drastic slump in sales in 2008.

Despite these extremely difficult conditions, it was possible to carry out essential structural measures. In this way, good conditions have been created for the recovery which is now setting in.

In South America, fiscal 2009 closed with a steep 16 percent drop in sales (13 percent in local currencies). In 2010, the recovery is expected to continue in this region as well, and to become increasingly strong.

Innovative strength improved
Despite the difficult conditions last year, the Bosch Group kept its activities clearly focused on innovation.

At 3.6 billion euros (3.9 billion euros in the previous year), research and development expenditure remained on a high level. And with some 3,800 patent applications, the company again filed an average of 15 patents per working day.

The number of associates working in research and development worldwide rose by a further thousand to 33,000, especially as a result of new appointments in Asia.

The innovations being launched this year include the world's smallest motorcycle ABS and the first strong hybrid based on parallel technology.

"We make considerable upfront investments, be it to develop electromobility or to harness renewable energies,” Fehrenbach said.

He added that it was every unit's task, whether they were working on vehicles, heating systems, or industrial technology, to further improve the energy efficiency of established systems.

The Bosch Group's investments in research and development also aim to further consolidate its ecological course. Even today, some 45 percent of this spending goes into the development of products that protect the environment and conserve resources.

And these products already account for one-third of total sales. "This is both a great opportunity and a great responsibility,” Fehrenbach said.

He cited the example of gasoline and diesel engines, whose fuel consumption could be reduced by a further 30 percent. "Instead of waiting for a new Copenhagen, we are using the potential we already have,” Fehrenbach said.

Business with renewable energy-related products continues to grow in importance. In this area, for example, the target is to achieve sales of 1.5 billion euros in 2010.

Even in the crisis year 2009, it was possible to achieve a slight improvement here, with sales of just under one billion euros.

The most important Bosch key data 2009/2008/2007
 

Currency figures in millions of euros		2009 г.	2008 г.	2007 г.
Total sales revenue		38 174	45 127	46 320
percentage change from previous year		-15	-2,6	6,0
percentage share generated outside Germany		76	74	75

Sales revenue of the business sectors
Automotive Technology percentage change from previous year		21 716 -18	26 475 -6,9	28 449 4,5
Industrial Technology percentage change from previous year		5 105 -24	6 733 13	5 967 9,4
Consumer Goods and Building Technology percentage change from previous year		11 331 -4,8	11 897 1,4	11 733 6,5

Sales revenue in the major regions
Europe percentage change from previous year		23 831 -20	29 720 -1,9	30 289 6,2
of which Germany percentage change from previous year		9 325 -21	11 747 1,3	11 595 2,3
Americas percentage change from previous year		6 661 -12	7 557 -10	8 421 0,8
Asia Pacific, including other regions percentage change from previous year		7 682 -2,1	7 850 3,2	7610 -12

EBIT (previously operating result)		-1 151	1 515	3 170
Profit before tax as a percentage of sales revenue		-1 197 -3,1	942 2,1	3 801 8,2
Profit after tax as a percentage of sales revenue		-1 214 -3,2	372 0,8	2 850 6,2
Unappropriated earnings (dividend of Robert Bosch GmbH)		67	75	72

Research and development cost as a percentage of sales revenue percentage change from previous year

3 603 9,4 -7,4

3 889 8,6 8 ,5

3 583 7,7 7,0

Capital expenditure as a percentage of sales revenue percentage change from previous year

1 892 5,0 -42,2

3 276 7,3 24,4

2 634 5,7 -1,3

Depreciation of property, plant, and equipment percentage change from previous year

2 374 -1,5

2 410 -0,7

2 428 5,2

Equity		23 069	23 009	24 825
Equity ratio		49	49	51

Associates (as per 01/01 of the respective following year) percentage change from previous year		270 687 -3,9	281 717 3,9	271 265 3,8
Europe percentage change from previous year		183 440 -3,2	189 433 2,4	185 024 2,5
of which Germany percentage change from previous year		111 710 -2,3	114 360 1,8	112 300 1,6
Americas percentage change from previous year		31 709 -14,4	37 032 -4,5	38 782 1,0
Asia Pacific, including other regions percentage change from previous year		55 538 0,5	55 252 16,4	47 459 11,8

For additional information, contact:
Julia Golubtsova, OOO Robert Bosch 
Tel.:  +7 495 937-04-02   
Fax: +7 495 937-71-99   
e-mail: julia.golubtsova@ru.bosch.com 

April 21, 2010