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Bosch sets aside 650m euros in legal provisions
[FRANKFURT] Car parts maker Bosch set aside 650 million euros in 2015 for potential legal costs, including for an ongoing investigation into the company's role in Volkswagen's diesel emissions manipulation scandal.
Volkswagen has admitted cheating exhaust emissions tests in the United States and last week VW set aside 16.2 billion euros (S$24.7 billion) to cover legal provisions for 2015.
Both companies are under investigation by German prosecutors and US authorities who are examining what role employees of the companies may have played in designing software to help cheat US emissions tests.
Stuttgart-based Bosch makes an engine management programme used by several top automakers including Volkswagen.
Bosch supplied software and components to Volkswagen but has said responsibility for how software is used to manipulate exhaust emissions or fuel consumption lies with carmakers rather than the supplier.
Bosch declined to specify how much of the 650 million euros was earmarked for the emissions scandal, and declined to comment in detail about the company's own internal investigation about its role in the VW affair.
"We are taking the time to thoroughly investigate the matter," Bosch chief executive Volkmar Denner told journalists at a news conference on its full-year results on Wednesday.
Bosch said it expected sales to rise at the lower end of its 3 per cent to 5 per cent forecast range this year if a slowdown in the first quarter continued.
Bosch said revenue rose 44 per cent to an all-time high of 70.6 billion euros last year helped by sales of car safety and assistance systems but cautioned that momentum had slowed at the start of 2016.
"If the first quarter's slowdown continues in certain regions and markets, sales growth will be at the lower end of the forecast scale," Bosch said.
The company, which makes household goods, engine components and sensor technologies, said its earnings before interest and taxes rose 24 per cent to 4.6 billion euros last year.
Earnings were supported by one-off items such as the consolidation of two joint ventures: BSH Hausgeraete and the automotive steering technology division it ran with ZF.
Bosch said it was continuing a push into software, sensors and services businesses, using Internet connectivity to add new products to complement its hardware and components.
Bosch car sensors identify empty parking spaces on the street and an Internet connection then collects this data to generate a real-time map of available parking spaces.
Sales at its mobility solutions division, which supplies the auto industry with sensors and software to give cars semi-autonomous driving and parking capabilities, rose 12 per cent on a currency adjusted basis to 41.7 billion euros last year.
That outpaced global automobile production, which rose only 2 per cent in 2015.
Bosch sales in the industrial technology sector fell 1.6 per cent to 6.6 billion euros.
By 2020, Bosch expects its "connected industry" to deliver 1 billion euros in cost savings and to generate an additional 1 billion euros in sales.