Security

Bosch To Sell Security Products Business, Building Technologies to Focus on Systems Integration

In this Research Note, we examine what’s behind the proposed sale of Bosch Security Products and the realignment to focus on systems integration business in the Building Technologies division, announced on 26th October 2023. This article updates our Bosch Energy & Building Technology Business 2022 Examined article and our coverage of the recent acquisition of Paladin Technologies, which augmented the systems integration business this year. We also assess the outcome for commercial building technologies in the Bosch group. Bosch Security Products Bosch Security and Safety Systems, a segment of Bosch Building Technologies, is a 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. The company plans to sell most of the Building Technologies division’s product business. This includes the Video, […]

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In this Research Note, we examine what’s behind the proposed sale of Bosch Security Products and the realignment to focus on systems integration business in the Building Technologies division, announced on 26th October 2023. This article updates our Bosch Energy & Building Technology Business 2022 Examined article and our coverage of the recent acquisition of Paladin Technologies, which augmented the systems integration business this year. We also assess the outcome for commercial building technologies in the Bosch group.

Bosch Security Products

Bosch Security and Safety Systems, a segment of Bosch Building Technologies, is a 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.

The company plans to sell most of the Building Technologies division’s product business. This includes the Video, Access and Intrusion, and Communication business units, and affects some 4,300 associates at more than 90 locations worldwide. Bosch is now looking for a buyer who will take on all three business units together with their associates and locations.

It is our view that the Bosch Security and Safety Systems business has in recent years had minimal investment or acquisitions and has been slow to keep up with market leaders in either video security or access control. We estimate that revenues have shrunk from around €1.5 billion in 2015 to €1 billion today.

We also note that another large conglomerate business is currently divesting its security products offering. Bosch follows on from Carrier in this strategy, who announced in April 2023 that Carrier Fire & Security would be sold. Previously, Siemens opted for a similar strategy in 2014, when they sold their security products business to Vanderbilt Industries, now Acre Security.

Bosch Divestment Security Products

Bosch Systems Integration

The remaining business within Building Technologies division is Energy and Building Solutions, a regional systems integration business operating at 40 locations in eight countries: Germany, India, Netherlands, Singapore, Switzerland, USA, Canada and the UK.

Because of its importance for systems integration, the product business with fire alarm systems is to be retained and merged with the integrator business. As a brand-independent systems integrator with a wide-ranging portfolio of energy and building solutions, the division intends to benefit in the future from digitalization and growing customer demand for integrated, intelligent, and cross-domain solutions in the areas of building security, energy efficiency, and building automation.

We estimate that systems integration revenues, recently expanded due to the acquisitions of Protec Fire & Security (UK), Climatec (USA) and Paladin Technologies (North America) amount to around €1 billion.

Bosch Building Technologies within the Bosch Group

Following the realignment, the Building Technologies division will employ some 7,600 associates, including an estimated 1,600 employees in the fire products business. The division is a reportable segment of Energy and Building Technology (EBT), the smallest of four reportable sectors, accounting for €7 billion in revenues in 2022, around 8% of Bosch Group’s €88.4 billion revenues.

Bosch Home Comfort Group, formerly Bosch Thermotechnology, accounts for the majority of EBT business, 64% of revenues focused on residential HVAC equipment and smart home products. The systems integration business for commercial smart buildings in this vast conglomerate is a tiny fraction of the overall group.

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

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