Robert Bosch GmbH, Europe’s biggest car-parts maker, is forecasting 2013 sales will increase as much as 4 percent as growth outside the region makes up for a recession in its home market.
First-quarter sales were “subdued,” mainly because of the deteriorating economy in Europe, Bosch said in a statement released at a press conference at its headquarters in Stuttgart, Germany. Earnings will probably rise “significantly,” though the company won’t yet reach its long-term margin target of earnings before interest and taxes at 8 percent of revenue.
“We will seize our opportunities for growth, both in established areas of work and in setting up new areas of business,” Chief Executive Officer Volkmar Denner said in the statement.
The European car market is contracting for a sixth consecutive year, heading for a two-decade low as the economy of the 17 nations using the euro shrinks. Bosch is basing its forecast on global economic growth of 2.7 percent, even with government austerity measures in Europe and the U.S. Further growth in sales and profits will be possible next year, the company said in its annual report.
Ebit last year dropped 52 percent to 1.31 billion euros ($1.71 billion) amid weak demand in Europe, Bosch said. Net income rose 29 percent to 2.26 billion euros on a book gain of 1.1 billion euros from selling a 5.4 percent stake in Japan’s auto parts maker Denso Corp. (6902) in November.
Sales increased 1.9 percent to 52.5 billion euros helped by currency gains. Ebit amounted to 2.5 percent of sales.
Bosch said it will scale back investments this year to preserve profit and is abandoning a near $2.6 billion venture into solar-power equipment.
To contact the reporter on this story: Dorothee Tschampa in Stuttgart via email@example.com