Bosch's 2025 Financial Outlook Unveiled: Here's What's Coming for the Tech Giant
Anticipated Adjustments at Bosch: A Look into Expected Changes in Their Financial Landscape This Year - Following the profit decline, Bosch's predictions for this year:
Looking ahead to 2025, Bosch is bracing for a rollercoaster ride, thanks to ongoing U.S. trade policies. According to Bosch CEO Stefan Hartung, the situation is uncertain, and the impact of U.S. President Donald Trump's tariffs on the company remains challenging to predict, ranging from millions to billions. A crystal ball might be necessary for precise predictions, Hartung quipped.
Clarity on the matter may not arrive until late in the second half of the year, as negotiations continue. The unavoidable truth is that Bosch will face costs, and the current environment won't resemble the status quo ante.
Hartung describes external factors as battering Bosch
Anticipating a complex year ahead, Bosch has revised its sales growth expectations to 1% to 3%, significantly below its medium-term targets. Profits are also expected to improve, according to CFO Markus Forschner. Aiming for profitable growth, the executives are already looking ahead to 2026, when they aim for a notable increase in profit margins.
The company plans to intensify efforts on costs and structures, which regrettably could lead to job losses, particularly in Germany and Europe. Bosch announced worldwide job cuts last year, impacting thousands of employees. As of December 31, 2024, the workforce stood at around 417,850, a decrease of 2.7% or nearly 11,600 compared to the previous year.
Turbulent Times Ahead
The bleak economic landscape weighed heavily on Bosch in 2024. Adjusted operating profit (EBIT) took a nosedive of over a third to 3.1 billion euros. Net profit also plummeted 49.5% to 1.3 billion euros, with revenue falling by 1.4% to 90.3 billion euros. Bosch had initially planned for growth of 5% to 7%, and profits were considerably rosier in earlier forecasts.
The world's largest automotive supplier is grappling with reduced demand for vehicles, especially electric ones. Household purchases of devices such as cordless screwdrivers, washing machines, and refrigerators are also dwindling. The trouble extends to other areas as well. The machinery sector is grappling with sluggish economic growth, and the European heating market is putting pressure on the building technology division.
Insights from Enrichment:
- Bosch's ambitious 2025 sales growth projection, even after accounting for currency effects, lies between 1% and 3%[5]. The Mobility sector is projected to see a significant increase, while Industrial Technology faces a decline. Consumer Goods and Energy and Building Technology also anticipate slight growth[4]. A potential acquisition in the HVAC sector could potentially boost growth by 1 to 2 percentage points[4].
- If Bosch manages to complete planned acquisitions, it expects to increase its capex-to-sales ratio to an average of about 5.9% between 2025 and 2028[1]. The company also anticipates average annual dividends of approximately EUR 450 million for minority and common shareholders during this period[1].
- Apart from facing uncertainties in global trade and weak core markets, Bosch also grapples with potential tariff discussions and infrastructure investment impacts in Europe and Germany[5]. The company maintains an operating margin target of 7% for 2026, which is considered highly challenging[4][5].
- Despite challenges posed by U.S. tariffs and ongoing trade policies, Bosch aims for a significant increase in profit margins in 2026.
- In an effort to maintain profitable growth, Bosch is planning to intensify efforts on costs and structures, which might lead to job losses, particularly in EC countries like Germany and Europe.
- Stefan Hartung, the CEO of Bosch, has revised the sales growth expectations for 2025 to a range of 1% to 3%, significantly lower than the company's medium-term targets.
- The predicted growth of Bosch's Mobility sector is projected to see a significant increase in 2025, while the Industrial Technology sector faces a decline. The Consumer Goods and Energy, as well as the Building Technology sectors, anticipate slight growth.
