* EBIT margin sinks to 2 pct in 2012 vs 5.2 pct yr-earlier
* Photovoltaic business now valued at zero in its books
* Does not expect to meet 8 pct EBIT margin goal in 2013
(Adds details, background, CEO comments)
STUTTGART, Germany, Jan 23 German conglomerate
Robert Bosch said it would not reach its long-term
profit target this year once again, after it booked heavy losses
at its solar energy business in 2012.
Earnings before interest and tax (EBIT) fell to around 2
percent of revenue last year from 5.2 percent in the previous
one, due mainly to a 1 billion euro loss in its troubled
"All conceivable solutions for the strategic realignment of
the photovoltaics business are currently being weighed in order
to arrive at a reasonable solution," the company said.
The industrial group now values its photovoltaic business at
zero in its accounts, having written off the assets entirely
Chief Executive Volkmar Denner told reporters late on
Tuesday that Bosch would take urgent steps to lower fixed costs,
since it did not expect this year to meet the 8 percent EBIT
margin target it believes is necessary to secure the financial
independence of the unlisted company.
Best known for the auto parts business that makes everything
from advanced electronic brakes to fuel injection systems, Bosch
forecast that group revenue growth would improve somewhat this
year over the 2012 rate of 1.6 percent.
"Despite slightly increased sales and positive free cash
flow, we cannot be satisfied with developments in 2012," Denner
said in a statement, adding that fixed budget limits would be
introduced for capital expenditure, acquisitions and other
The steps are somewhat unusual due to its unique corporate
culture. Bosch is widely admired in Germany for eschewing
short-term measures to boost profit such as job cuts, preferring
continuity in its strategy and management team. Last July,
Denner became only the seventh chief executive to run Bosch
since the company was founded in 1886.
Bosch is controlled by a trust called the "Industrietreuhand
KG", so has no shareholders to please.
Bosch, which competes with Denso for the title of
world's largest auto parts supplier, last year sold its 5
percent stake in the Japanese rival for roughly 1.1 billion
(Reporting by Hendrik Sackmann Writing by Christiaan Hetzner;
Editing by Helen Massy-Beresford)