The company also relies, but not only, on premium products.
(Photo: BSH)
Munich Matthias Metz has been at the helm of Europe’s largest home appliance manufacturer, Bosch Siemens Hausgeräte (BSH), since October. His appointment as CEO caused a stir – above all, but not only because his predecessor Carla Kriwet, after two years in office, became CEO of the then Dax group Fresenius Medical Care.
The 52-year-old Metz put the Carl Zeiss eyewear business back on the road to success. Current business figures show that the skills of the former McKinsey consultant are also in demand in Munich. In the past year, BSH was only able to grow sales thanks to price increases and the trend towards higher-quality devices.
Solid result achieved
“Device sales were declining. The high demand dropped significantly from June 2022,” explains Metz, who has a doctorate in business administration. Nevertheless, BSH achieved a solid result in challenging times. The company, which has belonged entirely to the Bosch Group since 2015, does not give any specific earnings figures. Competitors’ profits had roughly halved.
The boom in demand for home appliances during the pandemic is said to be over. Delivery bottlenecks, increased material prices and higher logistics and energy costs are also having a negative impact. According to BSH, it sold 30 million large appliances last year. Only Chinese manufacturers such as Midea, known in Germany through the takeover of the robot manufacturer Kuka, are larger on the world market.
Overall, sales last year increased by 2.5 percent to 15.9 billion euros, making it more than one-sixth of the entire Bosch Group. According to CFO Gerhard Dambach, the abandonment of the Russian business in the course of the war of aggression against Ukraine cost BSH 330 million euros in sales.
German BSH plants are threatened with limited short-time work
The future of the two large plants in Russia has not yet been clarified. Bosch is probing in all directions and hopes to find a solution in the coming months despite the complicated procedures, said the chief financial officer.
Born in Plauen, he got the glasses division of Carl Zeiss back on track before BSH.
(Photo: BSH)
The start of the current year has been subdued: “In the first two months we are slightly up on the previous year,” said BSH boss Metz. Management hopes that inflation has now peaked.
>> Read also: Miele achieves record sales – and continues to rely heavily on China
Because the price increases implemented last year could not compensate for the cost increases in raw materials, energy and electronic parts. This year, Metz wants to “continue to grow profitably above the industry average in all regions and product categories”.
The situation is difficult in Europe and especially in Germany, which initially suffered from delivery bottlenecks in its six plants with 10,000 employees. In addition, the slump in the construction sector in this country is having a negative impact on business with new kitchens.
Due to the uncertain economy, the plant in Dillingen will go on short-time work on special days from May. There are also considerations for the other locations to reduce working hours if necessary.
The company has high hopes for the pent-up demand of Asian countries such as India and Vietnam. The new boss and his management team also hope that China will recover after a four percent drop in sales. “Sales have now grown faster than sales again,” emphasizes the new managing director responsible for this, Alexander Dony.
BSH does not want a pure luxury strategy
BSH relies on new products such as a refrigerator for the equivalent of around 2000 euros – which can smell. Sensors detect odors and the air in the refrigerator is cleaned with active oxygen. According to the company, 99 percent of all bacteria and viruses and around 90 percent of odors can be eliminated in this way. Customers find out via their smartphone when food has gone bad. BSH is considering offering the device developed for China in other markets.
>> Read also: Trouble at Bosch – employees demand future concept for all German locations
For German customers there is now an oven for up to 4800 euros, which thanks to an integrated camera and artificial intelligence automatically prepares food according to the desired degree of browning. And for the first time, BSH is offering a luxury sink under the Gaggenau brand for 10,000 euros, with an adjustable base and six water settings from the tap, from ice cold to boiling, including a sponge dryer.
“We see a clear trend towards higher quality devices,” says Metz. But a purely luxury strategy, such as that used by car manufacturers such as Mercedes, is not suitable for BSH. The group sells brands such as Bosch, Siemens, Neff and Gaggenau.
The development of new products was increased by 5.3 percent to 840 million euros. Investments increased by 3.9 percent to 628 million euros. BSH is building a new stove factory in Egypt for a double-digit million amount, and Mexico is also being expanded.
More: For Bosch, China is becoming the key market for electric cars