Energy

Bosch Energy & Building Technology Business 2022 Examined

In this Research Note, we examine the Bosch Energy and Building Technology businesses, based on their 2022 annual results, M&A strategy and related activities in energy, building automation and security systems. Bosch Energy and Building Technology (EBT) business, the smallest of four reportable sectors, accounted for €7.0 billion in revenues in 2022, around 8% of Bosch Group, a leading German diversified supplier of mobility solutions, industrial technology and consumer goods, with €88.4 billion revenues. Bosch Group 2022 Results Announcement, 3rd February 2023 15% revenue growth in Energy and Building Technology reflected the unabated high demand for energy-efficient home and building technology. After adjusting for exchange-rate effects, the increase amounted to 13%. Three divisions comprise the Energy and Building Technology sector: Thermotechnology, Building Technologies and Global Service Solutions. Bosch Thermotechnology, to be renamed Bosch Home Comfort Group as of 1 April 2023, accounts for 64% of EBT business. In 2022, the division increased its sales revenues […]

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In this Research Note, we examine the Bosch Energy and Building Technology businesses, based on their 2022 annual results, M&A strategy and related activities in energy, building automation and security systems.

Bosch Energy and Building Technology (EBT) business, the smallest of four reportable sectors, accounted for 7.0 billion in revenues in 2022, around 8% of Bosch Group, a leading German diversified supplier of mobility solutions, industrial technology and consumer goods, with €88.4 billion revenues.

Bosch Group 2022 Results Announcement
Bosch Group 2022 Results Announcement, 3rd February 2023

15% revenue growth in Energy and Building Technology reflected the unabated high demand for energy-efficient home and building technology. After adjusting for exchange-rate effects, the increase amounted to 13%. Three divisions comprise the Energy and Building Technology sector: Thermotechnology, Building Technologies and Global Service Solutions.

Bosch Thermotechnology, to be renamed Bosch Home Comfort Group as of 1 April 2023, accounts for 64% of EBT business. In 2022, the division increased its sales revenues by around 12% in nominal terms, and by around 13% adjusted for exchange rate effects, to €4.5 billion. They offer solutions for heating and indoor climate control, hot water, and decentralized energy management to customers worldwide. The portfolio includes condensing boilers, solar thermal systems, heat pumps, hybrid systems, industrial boilers, and combined heat and power generation sold under international and regional brand names including Bosch, Buderus, and Worcester.

Bosch Thermotechnology
Bosch Thermotechnology, 13th March 2023

In terms of products, energy-efficient heat pumps were the main growth drivers, with international sales up 54%. In Germany, the company increased its sales of heat pumps by 75%, clearly outpacing the market. In the European Union, Bosch expects to see disproportionate growth in this highly dynamic environment and has set itself the goal of growing faster than the market.

Two divisions, Bosch Building Technologies and Global Service Solutions account for the remaining 34% of EBT revenues - around €2.5 billion sales in 2022. Bosch Building Technologies has two business segments:

  • Security and Safety Systems is the global product business for security and communications solutions. The portfolio includes video security, intrusion detection, fire detection and voice evacuation systems as well as access control and management systems. Professional audio and conference systems for communication of voice, sound and music complete the range.
  • Energy and Building Solutions is a regional systems integration business, offering solutions and customized services for building security, energy efficiency, and building automation for commercial buildings and infrastructure projects. The business operates in seven countries: Germany, India, Netherlands, Singapore, Switzerland, USA and the UK. The acquisition of Protec Fire and Security Group, one of the largest system integrators for fire detection and security technology in the UK was completed in December 2021. With nine locations in the UK and the Netherlands, around 1,100 employees and expected 2021 sales of £125 million (around 142 million euros), the acquisition expands its business further in Europe.

Bosch Acquisitions

Building Technologies strategy in 2022 has continued to focus on expanding the division’s capability in systems integration business in the regions.

Bosch Building Technologies announced German expansion plans in February 2022 to acquire Hoerburger AG, headquartered in Waltenhofen, Bavaria. Hoerburger offers a portfolio of products and solutions focusing on building automation and energy management. A major focus of its activities is the efficient and sustainable operation of buildings. The solutions are used in numerous sectors, for example in large industrial companies, healthcare facilities, and retail chains. Hoerburger has more than 200 employees at six locations in Germany and one location in Romania and generated sales of €33 million in 2020.

In Germany, GFR - Gesellschaft für Regelungstechnik und Energieeinsparung mbH, which has been part of the Bosch Group since October 2019, was merged with Bosch Energy and Building Solutions under one corporate umbrella, operating as the newly founded Bosch Building Automation GmbH effective 1st April 2022.

The Security and Safety Systems business, which accounts for the majority of revenues in Bosch Building Technologies, is focused on strengthening their global products through product modifications and innovations, with artificial intelligence playing an increasingly important role.

Current solutions in the growing markets for video systems, intrusion detection and fire detection include the first cameras based on their Inteox platform, which combines artificial intelligence with a fully open operating system. Further development of their video-based AI-supported fire detection system has also enabled visual detection of fires much faster in protected outdoor areas as well.

However, their strategy to offer AI-equipped cameras via an app store has not been successful, as the closure of Azena, formerly Security & Safety Things, demonstrated in December 2022.

Bosch Energy and Building Technology derives around 80% of its revenues from high-margin products via its leading European position in energy-efficient home heating and climate control and its global safety and security systems business.

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.

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