Bosch, a leading global supplier of technology and services, ended its 2023 fiscal year with 490 million euros, which corresponds to 1.95 billion AED, in consolidated sales in the Middle East, registering an increase of 3 percent in euros and 6 percent in AED.
The company met its sales expectations despite the challenges faced in the 2023 business year. This growth was attributed to various divisions within Bosch, including Bosch Rexroth, Building Technologies, Mobility Aftermarket, and the Bosch Global Software Technologies subsidiary.
Commenting on the results, Per Johansson, general manager of the Bosch Group in the Middle East, said: “Despite the challenges posed by the market due to geopolitical developments and respective economic impact, Bosch has demonstrated resilience and adaptability. Our associates’ dedication and hard work delivered the best possible results across divisions.” The number of associates employed at Bosch in the Middle East stood at around 485 as of December 31, 2023.
Bosch Middle East: outlook for 2024
“At Bosch, we remain optimistic about the future and are committed to driving growth through our technology ‘Invented for life’ and improving the quality of life. We aim to accelerate our growth in 2024 and beyond, with a focus on continued regional expansion,” Per Johansson added.
Countries in the Middle East are in different stages of development, major players, especially in the Gulf Cooperation Council (GCC), such as Saudi Arabia, UAE, and Oman are making leaps toward economic diversification through the adoption of long-term visions of the respective government leaders. With the adoption of Artificial Intelligence (AI), investment opportunities are set to open across sectors; focus on reducing reliance on fossil fuels and refreshed environmental, social, and governance (ESG) strategies is expected to drive significant sustainable growth in the region. The development of other diversified sectors through investment in AI technologies could strategically position the region for the years to come.
Development of Bosch business sectors
In 2023, sales development in Bosch’s business sectors displayed a mixed picture. Bosch’s Mobility Aftermarket division has seen growth which was driven by the traditional diesel business as well as the passenger car spare parts (batteries, wipers, spark plugs) which was a focus area in 2023. On the other hand, the Bosch Global Software Technologies subsidiary, performed well in the fiscal year 2023 via acquiring new customers in UAE and KSA. The notable growth can be directly attributed to contributions from growing digital enterprise software solutions including enterprise resource planning (ERP), Cloud, and artificial intelligence (AI), along with digital engineering products and services comprising of IoT, product development, and more. The Bosch Rexroth division, focused on serving global application experience in the market segments of mobile and industrial applications as well as factory automation which contributed significantly to the growth of the business in 2023, especially through its refreshed go-to-market strategies and partnerships.
Bosch is at the forefront of innovation in the Building Technologies division driving advancements that enhance safety efficiency and sustainability in modern infrastructure. The division experienced growth, driven by a strategic emphasis on video solutions, conferencing, fire alarm systems, and AI in building management.
Bosch expansion in the Middle East
In 2024, the Bosch Group is planning a strategic expansion in the Kingdom of Saudi Arabia and Oman. This step underlines the company’s commitment to the region and its intention to reinforce its footprint in the Middle East. The growing markets of KSA and Oman are of strategic importance to the Bosch Group in the Middle East as they offer vast potential for expansion, driven by significant economic reforms, infrastructure development, and a focus on sustainability. By leveraging its innovative solutions and aligning with national development goals, Bosch Middle East is planning its contribution to and benefit from the dynamic growth of these key markets.
Sustaining investments in the Middle East
Bosch is strategically focusing on digital transformation and hydrogen as investment areas, reflecting its commitment to innovation, sustainability and addressing global challenges. The Bosch Connected Industry division is spearheading the move towards smart factories as a pivotal component of its digital transformation strategy. By integrating advanced technologies such as IoT, artificial intelligence (AI), and data analytics into their manufacturing processes, Bosch aims to enhance operational efficiency, reduce downtime, and optimize resource utilization. This aligns with Bosch’s commitment to support the region’s broader goals of industrial modernization and economic diversification. Turning the spotlight to hydrogen, it is a clean energy source that is crucial in the journey to net zero. Along the entire hydrogen value chain, Bosch is investing in developing technologies for the production, compression, storage, and use of hydrogen. Starting with developing smart technologies for hydrogen production, Bosch aims to contribute to a more sustainable future.
Bosch champions diversity
Bosch fosters diversity – over 23 nationalities are represented at its location in Dubai. This rich tapestry of cultural backgrounds enhances the company’s creativity, innovation, and global perspective. Bosch actively encourages women to pursue senior positions within the company, aligning with its core values of respect, and equal opportunity. By fostering an inclusive environment where all associates can thrive, regardless of gender or background, Bosch not only strengthens its leadership but also ensures a diverse array of viewpoints and ideas, driving the company’s continued success.
Bosch Group: outlook for 2024 and strategic course
The Bosch Group increased its sales and earnings in 2023 and is successfully implementing its growth strategy despite a difficult environment.
Stefan Hartung, chairman of the board of management of Robert Bosch GmbH, said: “In the 2023 business year, we achieved our financial targets and strengthened our market position in a number of business areas, from semiconductors to integrated building systems.”
The company increased its sales by 3.8 percent compared to the previous year to 91.6 billion euros despite unfavorable economic and market conditions. At 5.3 percent, the EBIT margin from operations was 1 percentage point higher than the previous year.
It was therefore higher than expected, but still lower than the target margin of at least 7 percent required over the long term. Bosch wants to achieve this by 2026.
In the first quarter of 2024, sales were down by more than 0.8 percent year on year; after adjusting for exchange-rate effects, this amounts to an increase of 2.7 percent.
However, the company expects that it will be difficult to increase the EBIT margin from operations compared to the previous year. In addition to the subdued market environment and the expected further increase in upfront investments in areas of strategic importance, restructuring and process improvements will also have a negative impact at first, with their positive effect coming only after a delay.
Even if the economic and social environment remains demanding, Bosch aims to rank among the top three suppliers in its key markets in all regions of the world. “We’re pursuing innovations, partnerships, and acquisitions to ensure we grow as our industries transform – despite economic headwinds,” Hartung said.
Bosch Drives Strategic Growth in Mobility, Hydrogen, and Heating Technology
In its core mobility business, for example, Bosch is systematically driving forward strategic decisions for future growth.
This year alone, it is launching some 30 production projects for electric vehicles. In the growth area of hydrogen, Bosch has reaffirmed its business expectations: by 2030, its sales with hydrogen technology could reach 5 billion euros. Bosch is also systematically exploiting growth opportunities in the area of heating technology.
Although the heat-pump market stagnated across Europe in 2023, Bosch was able to grow its business by almost 50 percent. In the years ahead, Bosch will continue to grow significantly faster than the market in this segment.
However, there could be a slight improvement in the consumer goods markets after two years of consumer restraint. Bosch expect its own business to stabilize, to which innovations as well as the expansion of its international footprint should contribute. Overall, climate action continues to play a central role for Bosch.
In Hartung’s view, it offers great opportunities for growth, even if markets such as electromobility are not developing as fast as expected. Nonetheless, Bosch is continuing to make heavy upfront investments in technologies for a carbon-neutral future, in order to help shape this transformation from the top.
“There is pressure to cut subsidies for CO2-efficient technologies. But climate action requires sustained investment – from government, from companies, and from each and every one of us,” Hartung said.
