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issue: June 2009 APPLIANCE Magazine

Europe Report
Web Exclusive: BSH and the Challenge of 2009


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By Paul Roggema, Europe correspondent

BSH's technology head Werner Vogt talks to APPLIANCE magazine about technology investments and new competitive pressures in Europe.

BSH Bosch und Siemens Hausgeräte GmbH reported its 2008 result in Munich on May 19. Keyword: stable, at least for 2008. For 2009 they are not so sure.

Total sales were €8.76 billion, down just 0.7 % from 2007. This was quite good, as several key markets (Spain, the UK, Ireland) suffered severe contractions, mostly due to the crisis in housing construction in the last quarter of 2008. Happily, BSH still showed some growth on Germany, the Netherlands, France, Eastern Europe and China. Market shares in Europe (including Turkey) was about 24%, and this makes BSH a market leader. Profit before tax was €510 million (down 20%), after tax € 311 million (down 24.3%), which is 3.6% of total revenue. BSH's employee count is 40,300.

For 2009, the outlook is not as good. Revenue in 1Q was down 10%. No improvement is expected for this year; growth in Asia will not compensate for problems in other markets. Still, BSH CEO Dr. Kurt-Ludwig Gutberlet was looking at the bright side: BSH is better off than many other companies.

"For 2009 we anticipate a single-digit decline in sales compared with 2008," Gutberlet said.

He said, “BSH has excellent brands and products and is strategically well positioned. Our long-term, value-driven management strategy will remain unchanged and BSH has the means to uphold that strategy even in times of crisis.”

Successful Innovation

BSH's new heat pump dryer is proving to be a big success, as is the zeolite dishwasher drying feature. The coffee systems Tassimo (multi-beverage) and EQ7 (bean-to-cup) did very well also.

BSH sees energy efficiency continuing to be the most important trend in its markets, and the company will use the new Europeans energy labels – "A -20%” and “A -40%” - instead of the confusing A+ and A++.

More engineering details were provided in an interview for APPLIANCE magazine with Chief Technology Officer Prof. E. h. Werner Vogt.

“We made large investments in the new dishwasher platform for midrange and top models, called GV640," Vogt said. "The new zeolite drying function called for a full redesign, including motor, pump, heating, and software. The heating tube now has a surface resistor layer, and the motor is brushless dc. This platform is used [to manufacture appliances] in our main dishwasher plant in Dillingen, near Munich, and in Spain. Our other, entry-level platform is produced in Poland and Turkey."

Vogt said BSH is also introducing a new built-in oven platform. "New coffee makers (Tassimo, EQ7) are also produced in-house, in our small-appliance factory in Slovenia," he said. He's referring to Tassimo coffee makers, using prefilled discs to make beverages, and the EQ7 fully automatic espresso machines. "Both mark the entry of BSH in the coffee market with in-house design and production," Vogt told APPLIANCE magazine.

Manufacturing:

“Regarding the market difficulties, we will focus even more on cost reductions in our plants," Vogt said. "Relocation is not an option at this point, as current investments are long-term.”

Korean OEMs (such as LG and Samsung) are selling major appliances in Europe and recently Japan's Panasonic began bringing its major appliances to Europe. Is BSH worried?

“No. The Koreans do offer excellent quality but their sales are modest, and they sometimes over-emphasize gimmicks. Their brands however, are well-known due to their brown goods and cell phones," Prof. Vogt said. "Panasonic however, even if they are busy integrating Sanyo, is a formidable competitor, with deep pockets, a well-known brand, lots of innovations, and a strong market presence in Europe.”

 

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