As a result of the worldwide slump in business activity, the Bosch Group had to record a fall in sales and earnings in fiscal 2008. At 45.1 billion euros, sales were down 2.6 percent on the previous year. Profit before tax stood at 940 million euros, compared with 3.8 billion euros in the previous year. Despite the unfavorable economic environment, Bosch invested some ten billion euros in the future of the company in 2008. “Research, development, and investment remain the basis for securing our future, even in difficult times,” said Franz Fehrenbach, chairman of the board of management of Robert Bosch GmbH, at the annual press conference. Patent applications reached a new record level in 2008. The company filed just over 3,850 such applications, or 15 per working day.
Naming the main reasons for the crisis, Franz Fehrenbach pointed to short-term thinking and action geared to profit maximization. This, he said, had pushed aside long-term responsibility for the stability of business enterprises themselves and of the society of which they are part. At this turning point, the task now was not only to bring the international financial system back under control and bring back bonus and severance rules to an acceptable scale, but also to cement a sense of responsibility on all management levels. And that, first and foremost, means putting long-term focus before short-term profit maximization.
As to the development of the Bosch Group in the longer term, the company believes it is still well-positioned strategically. Points in its favor include its broad international presence, its firm footing in diverse industries, its great innovative strength, and its basic technological and business direction as expressed in the corporate slogan, ‘Invented for life.’ This shows through particularly strongly in the company’s innovation policy. Bosch wants to provide lasting technological answers to ecological questions. In 2007, 40 percent of its research and development budget was aimed at conserving resources and protecting the environment. This year, the figure is roughly 45 percent. And Bosch now generates a strong third of its sales with products that meet these criteria. Over the next few years, it wants to increase this figure significantly. Just as the environmental focus in its innovation policy retains its validity through times of crisis, so too do two other main lines of strategy: continuing internationalization and focused diversification.
To emerge stronger from this crisis, Fehrenbach is placing his hopes on determination, a sense of proportion, and responsibility. Determined, decisive intervention will preserve earnings power and liquidity in the face of a currently unavoidable fall in sales. A sense of proportion, on the other hand, will preserve the company’s chances for the time after the crisis. “We want to develop strongly – strongly in the sense of sustainably. In other words: we will not optimize our resources and targets in the short term, but consider long-term side effects and feedback effects,” Fehrenbach said. Bosch has a dual responsibility here: on the one hand, responsibility for its associates and the societies in which they live and, on the other hand, responsibility for the company and its financial health. To truly overcome the present crisis, Franz Fehrenbach believes that it is essential to return to responsible action of this nature: “A fair amount remains to be done before this is achieved.”
