Bosch flags further cost cuts after giving 'subdued' outlook for 2024
Adds comments on M&A, China, India in 5-8 paragraphs
FRANKFURT, April 18 (Reuters) -Bosch ROBG.UL, the world's largest automotive supplier, on Thursday warned of further cost cuts and staff reductions, forecasting stagnating vehicle production that will keep a lid on profit margins in 2024.
"For 2024, we aren't expecting any economic tailwind," Chief Financial Officer Markus Forschner said at the group's annual press conference. "Restructuring and process improvements will also have a negative impact at first, with their positive effect coming only after a delay."
Forschner said cuts were necessary to make sure Bosch remains competitive in an environment where most of its big peers, including Continental CONG.DE and ZF Friedrichshafen ZFF.UL, have all announced layoffs.
He said any cuts would be put in place "with a sense of proportion", not elaborating how many of the group's 429,416 employees would be affected.
Bosch is well-positioned for deals but in no rush as it waits for the right targets, CEO Stefan Hartung said, declining to comment on areport saying Bosch was among parties interested in assets worth over $6 billion from Johnson Controls International JCI.N.
Bosch said it will supply the first Chinese carmakers' projects in Europe in the next few years, adding it is also increasing capacities in China, especially in the braking systems business.
Turning to India, Hartung said it is a "huge opportunity" market but not as big as China, and that it would likely not experience similar growth rates as China did in the 1990s.
Bosch expects to resolve issues with 48-volt-system parts, which have caused losses for its contractor Mercedes MBGn.DE, by the end of the second quarter of this year.
For 2024, Bosch expects revenues to grow by 5%-7%, compared with an increase of 3.8% last year. Its margin on earnings before interest and tax from operations will remain stable at best compared with the 5.3% generated in 2023.
Forschner said these targets were ambitious given first-quarter sales were down 0.8% year-on-year, reflecting more challenging conditions for the global automotive sector, including higher costs and a fierce pricing battle in China.
Reporting by Christoph Steitz, Ilona Wissenbach and Andrey Sychev; Editing by Chizu Nomiyama
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
