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Bosch sees lower revenue growth in 2007

From Reuters | February 02,2007

Robert Bosch GmbH said group revenue growth could cool in 2007 due to a weaker global economy, lower U.S. exports and pricing pressure.

The firm, controlled by the Robert Bosch Foundation that holds 92 percent of its equity, expects revenues to climb by 3 to 5 percent this year after posting a gain of about 5 percent to almost $56.9 billion (43.7 billion euros) in 2006.

Speaking to reporters late on Wednesday, Jan. 31, Bosch CEO Franz Fehrenbach opened the door though to improved profitability in the current year and forecast the company's return would remain in its target corridor.

"We want a (pretax profit) margin of 7 to 8 percent," Fehrenbach said in remarks embargoed for publication today.

The Bosch CEO reported preliminary results for 2006 that showed the privately held industrial conglomerate's profitability declined to around 7 percent before tax, translating to around $3.99 billion (3.06 billion euros).

Bosch had already warned in April last year that a rise in raw material costs, in particular for energy and base metals such as aluminum and copper, would likely mean that it would not be able to maintain its pretax margin of 7.7 percent from 2005.

"After four years of price hikes for raw materials, it looks as if the prices will ease slightly in 2007," Fehrenbach said.

Revenue at Bosch's core automotive division, which specializes in fuel-injection technology and safety features such as stability control and ABS, increased by 3.5 percent to $35.42 billion (27.2 billion euros).

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