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Bosch Rexroth Records Slight Gains Despite Weak Market

Bosch Rexroth Corporation

Growth perspectives for global machinery and plant construction remain positive for the long term

  • Sales revenue reaches peak of EUR 6.5 billion
  • Recovery in the USA offsets general market slump
  • More than one in ten euros reinvested
  • Innovation in terms of energy efficiency and interconnectedness
Bosch Rexroth grew again in the past fiscal year and generated sales revenues totaling EUR 6.5 billion. That is the highest value in the company's history. The supplier for machinery construction and automation equipment thereby defied the market decline in China and the recession in Europe. "Following two turbulent recovery years in 2010 and 2011, the global machine construction market lost a significant amount of momentum, especially in the second half of 2012," explained Dr. Karl Tragl, Chairman of the Executive Board of Bosch Rexroth AG, at the Annual Press Conference at the Hannover Messe. For 2013, the company is bracing itself for the challenges ahead. "At the same time, long-term growth trends are holding steady," highlighted Dr. Tragl.
 
After an excellent first quarter, the global investment climate cooled off appreciably over the course of 2012. This trend is expected to continue through the middle of this year and will unfavorably affect machinery and plant construction. Like the entire industry, Bosch Rexroth is also feeling the weakening momentum in China, where, for example, the demand for construction machinery declined by 40%. "During the 2008-2009 crisis, China was still the key pillar supporting the capital goods industry. Last year, the USA took over that role," explained Tragl, adding: "As a global company present in all core markets, we were thus able to move with this shift in demand and generate peak sales despite the difficult market."
 
At the same time, the recession has gotten worse in many European countries. "While we assume the situation in China is a temporary decline, in Europe, we also see structural reasons for the sluggish market trend," declared Tragl. From the second half of 2012 on, incoming orders declined significantly, which will have an impact on plant capacity utilization far into the current year. At the end of 2012, the company employed approximately 37,500 associates; 18,900 of those are in Germany. Lower capacity utilization is currently being compensated for at individual plants with various measures related to working hours, such as reduced work schedules.
 
The global supplier for machinery construction and automation equipment expects a recovery starting in the coming summer at the earliest – for example, in China. Bosch Rexroth anticipates that positive momentum will continue to come from the USA, whereas the risks of the debt crisis will continue to have a negative impact on the investment climate in Europe. "For those reasons, we are gearing our company up for a difficult year without growth in 2013. Nevertheless, we still expect that we will be able to win additional shares in this currently stagnating market," explained Dr. Tragl.
 
More than ten percent of sales invested in the future
Despite the current economic climate, the company is investing EUR 370 million in research and development. That corresponds to a sales share of 5.7% and is again above the industry average. All in all, Bosch Rexroth invested EUR 678 million in new plants, machines, and equipment as well as in research and development in 2012. "Our high investment sums show that Bosch Rexroth is set up for the long term and anticipates continued growth in the years ahead," said Tragl. Last year, Bosch Rexroth opened a new plant with 1,200 associates and a local R&D center in Wujin, China. "Our customers in China have noticed in a very positive way that we do not let ourselves be deterred by isolated economic shifts and are also right by their side during difficult times, too," said Tragl. Construction work on a new plant in Ahmedabad, India, which is set to replace and expand rented halls, was started last year. In addition, the production area at the US site in Fountain Inn was doubled.
 
Innovative solutions for high energy efficiency
G
reater energy efficiency and increasing interconnectedness are the mega trends that are decisively shaping technical developments in machinery construction and automation equipment. The company is responding to those trends with its Rexroth for Energy Efficiency system in which not only the energy needs of individual installations are assessed and reduced, but also the energy needs of the entire system. In addition, the company also focuses on energy efficient components and system solutions when it comes to its development activities. Innovative maintenance concepts, on the other hand, increase the availability of wind energy plants, for example. For example, a Rexroth condition monitoring system is not only able to accurately detect whether there is any icing formation on the rotor blades, but also when it has melted and when the plant can be operated again. Until now, technicians had to check each plant for icing individually and manually operate it. Thanks to the certified system from Rexroth, wind energy plants can be controlled.
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