US CREDIT UPDATE: Robert Bosch: Layoffs announced in auto-parts division

Robert Bosch: Layoffs announced in auto-parts division
(RBOSGR; NR/A/A)
[MNI EU Credit]

Points to another weak year, although that is not surprising given the market environment. Most cuts in the auto-parts business.  Division revenues on the smaller side in the US but could be a harbinger for auto-parts segment. 

• Robert Bosch announced 13k job cuts, 3% of its workforce, through 2030. The affected jobs are mostly in Germany, which is likely to be relatively uncompetitive on a cost basis.
• Bloomberg reports a €2.5bn annual shortfall in the Mobility (autoparts) division; we assume that is versus target and would broadly align with stated 7-7.5% group EBIT margin targets.
• Europe accounts for 49% of overall revenues, the Americas 20% and APAC 20%.
• Mobility generated 56% of group revenue in FY24. EBIT was €2bn, with margin down 60bp to 3.8%.
• A €2.5bn shortfall could imply around 2.5% FY25 Mobility EBIT margin assuming divisional targets are in line with group, which we cannot confirm.
• Group outlook aimed for a significant margin rebound this year, but could now see declines based on the shortfall, depending on the performance of other divisions.