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a Robert Bosch GmbH Annual Report Robert-Bosch-Platz 1 D-70839 Gerlingen-Schillerhöhe 1999 Mailing address: Postfach 1060 50 D-70049 Stuttgart

Telephone + 49 711 811-0 Fax + 49 711 811-66 30

www.bosch.com KH/DLD 1 987 782 126 Bosch Group Business Sectors and Divisions

Key Figures Automotive Equipment1 (million DM) ABS and braking systems Engine-management systems – Bodywork electrics gasoline

Bosch Group Worldwide 1999 1998 Fuel-injection technology – diesel Body electronics Mobile communications2

Sales 54,579 50,333 percentage change from prior year + 8.4 + 7.4 Semiconductors and control units Starters and alternators Aftermarket products, after-sales service, test equipment and technology

Foreign sales 66 as a percentage of sales 65 Consumer Goods

Research and development expense 3,757 3,478 as a percentage of sales 6.9 6.9 Power tools Thermotechnology Household appliances3

Investments in tangible fixed assets 3,806 3,773 128 as a percentage of depreciation 148 Communications Technology4

Number of employees average for the year 194,335 188,017 Broadband networks Aerospace engineering Security systems as of January 1, 2000/1999 194,889 189,537

Total assets 40,743 36,343 Capital Goods

Equity capital 12,998 11,869 as a percentage of total assets 32 33 Automation technology Packaging machinery

Net income for the year 900 850 Front-page illustration: In 1999, we introduced a gasoline direct-injection Unappropriated earnings system. It is used on stratified- (Dividends of Robert Bosch GmbH) 80 80 charge engines. This requires an injector with an extremely accurate spray pattern. The benefits of direct injection, 1 Including ZF Lenksysteme GmbH (50% Bosch) especially substantial savings 2 Blaupunkt-Werke GmbH (100% Bosch) 3 BSH Bosch und Siemens Hausgeräte GmbH (50% Bosch) in fuel consumption, are thus 4 Bosch Telecom GmbH (100% Bosch) and product groups Status as of May 1, 2000 maximized. Table of Contents

Page

Supervisory Council 4

Board of Management 5

Supervisory Council Report 6

Management Report 8

Automotive Equipment Business Sector 16

Consumer Goods Business Sector 24

Communications Technology Business Sector 30

Capital Goods Business Sector 32

International Business 34

Research and Development 38

Employees of the Bosch Group 40

Financial Statements of the Bosch Group Worldwide 42

Major Companies of the Bosch Group Worldwide 58

Financial Statements of Robert Bosch GmbH 60

Ten Year Statistics Bosch Group Worldwide 62

3 Supervisory Council Until April 11, 2000 Board of Management

Dr. phil. Dr. rer. oec. h.c. Ruth Fischer-Pusch, Stuttgart Olaf Kunz, Frankfurt Until June 30, 1999 Effective July 1, 1999 Marcus Bierich, Stuttgart Trade Unions of the Metal Industry, Managing Director of the Trade Unions Chairman District Management of the Metal Industry, Department for Board of Management Board of Management Former Chairman of the Board of Baden-Württemberg Union Policy Management of Robert Bosch GmbH Hermann Scholl Hermann Scholl Hans-Henning Funk, Hildesheim Prof. Gero Madelung, Munich Chairman Chairman Walter Bauer, Kohlberg Chairman of the Shop Council of Formerly Technical University Munich Deputy Chairman the Hildesheim Plant and Member Chair of Aviation Technology Rainer Hahn Tilman Todenhöfer Chairman of the Joint Shop Council of the Joint Shop Council of Deputy Chairman of Robert Bosch GmbH as well as of Robert Bosch GmbH Prof. Dr. rer. nat. Claus Dieter Hoffmann the Combined Shop Council, and Hans-Joachim Queisser, Stuttgart Rainer Hahn Chairman of the Shop Council of the Dr. jur. Karl Gutbrod, Stuttgart Formerly Director at the Max-Planck- Robert S. Oswald Reutlingen Plant Former Member of the Board of Institute for Solid-State Research Claus Dieter Hoffmann Management of Robert Bosch GmbH, Tilman Todenhöfer Dr. jur. Peter Adolff, Stuttgart, Chairman of the Board of Trustees of Urs B. Rinderknecht, Ennetbaden Robert S. Oswald former Member of the Board of Robert Bosch Stiftung GmbH Chief Executive of UBS AG Hubert Zimmerer Management of Allianz Versicherungs- Stephan Rojahn Aktiengesellschaft Gudrun Hamacher, Frankfurt Gerhard Sautter, Erdmannhausen Former Managing Member of the Chairman of the Shop Council of the Associate Members of the Gotthard Romberg Knut Angstenberger, Stuttgart Board of Directors of the Trade Unions Feuerbach Plant, and Deputy Chairman Board of Management Department Manager in the Diesel of the Metal Industry of the Joint Shop Council of Robert Fuel-Injection Technology Division, and Bosch GmbH and the Combined Shop Siegfried Dais Deputy Members of the Chairman of the Joint Speaker Group Hans-Joachim Jaquet, Council Board of Management of Robert Bosch GmbH and of the Mörfelden-Walldorf Stephan Rojahn Group Speaker Committee Chairman of the Joint Shop Council of Hans Peter Stihl, Remseck Bernd Bohr Bosch Telecom GmbH and Chairman Chairman of the Board of Management Gotthard Romberg Dr. h.c. Bo Erik Berggren, Stockholm, of the Shop Council of Bosch Telecom of Andreas Stihl AG & Co Wolfgang Chur former Chairman of the Board of GmbH at Frankfurt Directors and Chief Executive Officer until March 31, 2000 Manfred Wenkemann, Homburg Siegfried Dais of STORA Kopparbergs Bergslags AB Chairman of the Shop Council of the Dieter Klein, Wolfersheim Homburg Plant of Robert Bosch GmbH Franz Fehrenbach Dr. jur. Ulrich Cartellieri, Frankfurt Chairman of the Shop Council of the and Member of the Joint Shop Council Member of the Supervisory Homburg Plant of Robert Bosch GmbH of Robert Bosch GmbH Council of Deutsche Bank AG and Member of the Joint Shop Council until March 31, 1999 of Robert Bosch GmbH Dr.-Ing. Wolfgang Eychmüller, as of April 1, 1999 Hans Wolff, Bamberg Ulm/Donau Chairman of the Shop Council Chairman of the Supervisory Council Dieter Krause, Hildesheim of the Bamberg Plant and of Wieland-Werke AG Chairman of the Shop Council Member of the Joint Shop Council of Blaupunkt-Werke GmbH, Hildesheim of Robert Bosch GmbH as of April 3, 2000

4 5 Our customers are very demanding when it comes to the quality and reliability of our products. We utilize the highest-precision testing methods as shown here in Supervisory laser-measurement of disc brakes. Council Report

In its sessions, and using written with the audit findings, and recom- Board of Management Stephan monthly reports, the Supervisory mends that the shareholders approve Rojahn and Gotthard Romberg as full Council of Robert Bosch GmbH kept the financial statements of Robert members of the Board of Manage- itself regularly informed about the Bosch GmbH and follow the proposal ment, and Dr. Siegfried Dais as progress of business and the com- of the Board of Management for the deputy member, all effective as of pany’s situation. Business develop- disposition of net income. July 1, 1999. In addition, the Council, ments, financial situation, investment following the recommendation of the plans, as well as new technical devel- As of March 31, 1999, Manfred shareholders, named Dr. Bernhard opments were presented and dis- Wenkemann retired and as a result Bohr, previously in charge of devel- cussed in detail. Reporting and dis- left the Supervisory Council. Dieter opment at the ABS and braking sys- cussion included all important com- Klein was appointed as his successor tems division, Wolfgang Chur, previ- panies of the Bosch Group. Written by the Stuttgart court effective ously speaker for the management of monthly reports brought the Supervi- April 1, 1999. The Council expresses the mobile communications division, sory Council up to date on current its appreciation to Manfred Wenke- and Franz Fehrenbach, previously business developments. Special mann for his constructive teamwork. speaker for the management of the events were covered in newsletters. diesel fuel-injection technology divi- As of June 30, 1999, Hubert Zim- sion, as deputy members of the Board Ernst & Young Deutsche Allgemeine merer, a member of the Board of of Management, all effective as of Treuhand AG, Stuttgart, audited the Management, retired. The Supervi- July 1, 1999. accounting and financial statements of sory Council expresses its thanks to Robert Bosch GmbH and the consoli- him for his many successful years of Stuttgart, April 2000 dated financial statements of the work in the company. For the Supervisory Council Bosch Group. The auditors in all Dr. Marcus Bierich cases gave their unqualified opinion. Tilman Todenhöfer was elected Chairman The Supervisory Council concurs Deputy Chairman of the Board of Management effective July 1, 1999.

At its meeting on April 13, 1999, the Supervisory Council of Robert Bosch GmbH, acting on the recommenda- tion of the shareholders, appointed the former associate members of the

6 7 important coreactivities. important ourresourceson concentrate us to This allows andterminals. networks, private divisions forpublicnetworks, product our telecommunications Tokyo, of Corporation, sale andthe Zexel equipment manufacturer Japaneseautomotive ofthe tion acquisi- majority werethe we took steps mostimportant ofthe Some BoschGroup. of the structure tional organiza- changesinthe significant weinitiated yearprogressed, As the EquipmentBusinessSector. motive Auto- inthe developments tive posi- influencedbythe particularly andwas exceeded ourexpectations Growth BoschGroup. forthe tive The year1999 wasgenerallyposi- 8 Management Report many) andNorth America,sales kets, Western Europe(without Ger- In ourmostimportant foreignmar- to66%. increased from65% as apercentageoftotalsales Asaresult,foreignsales billion DM. to18.6 grew abelow-average4.7% SalesinGermany, however, 11%. Foreign salesgrewbyapproximately increased to11%. in thesecondhalfofyear German Europeaneconomies,growth buoyant North Americanandnon- and capitalgoods.Influencedby demand inGermany forconsumer restrained, primarilybecauseofweak wassomewhat at only5.9%, During thefirsthalfof1999, growth, net. millionDM sales by300 SpA, Milan.Thesechanges increased joint venturewithMagnetiMarelli division which wascontributedtoa elimination ofthelightingtechnology GmbH, Schwäbisch Gmünd,andthe Lenksysteme jointventureZF 50-50 inclusion ofourproratasharethe group wasprimarilyaffectedbythe Theconsolidated billionDM. 54.6 to Group increasedin1999 by8.4% Consolidated salesoftheBosch year second halfofthe Business upswingduringthe tions. which wemadeimportantcontribu- vations inautomobiletechnology, to fitted fromthelargenumberofinno- America. Inaddition,weagainbene- marily inWestern EuropeandNorth edly robustautomobileboom,pri- We thusparticipatedintheunexpect- billion DM. to35.5 in 1999 by12% tor whoseworldwidesalesincreased Automotive EquipmentBusinessSec- of thepositivedevelopmentin in theyearbefore,primarilyresult The growthoftheBosch Groupis,as equipment automotive in utilization High capacity devaluation oftheBrazilianreal. nomic activitythereandthemassive year, reflectingthedecliningeco- fromtheprior America fellby30% decline. Incontrast,oursalesinSouth did notyetmakeupforthe1998 However, this rate inAsiawith23%. We achieved ourstrongestgrowth stronger dollar. wereinfluencedbyamuchDM The higherNorth Americansalesin respectively. and16% increased 12% activity, especiallyinGermany. climate anddecliningconstruction suffered fromtheweakconsumption As intheyearbefore,thisbusiness to atotalof11.7 billionDM. 3.5% hold appliances–increasedamodest tools, thermotechnology andhouse- Our salesofconsumergoods–power volumes. been producingsince1997 ingrowing injection systems,which wehave enhanced bythehigh-pressurediesel automobiles withdieselenginesis els. Theattractivenessofpassenger installed inanumberofvehiclemod- direct-injection systemwhich willbe ogy. In1999 weintroducedagasoline more importantininjectiontechnol- Direct injectioncontinuestobecome tronic stabilityprogram(ESP). tion technology, andwiththeelec- ucts forvehiclenavigationandinjec- increases weachieved withnewprod- equipment. Especiallylargewerethe tributed tothegrowthinautomotive Nearly allourareasofactivitycon- Progress 1995–1999 DM) (billion Sales 02 04 06 70 60 50 40 30 20 10 ______

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______the lastthreeyears. Germany in rosebyatotal of5,800 that thenumberofemployees in Thismeans toaround96,800. 2,400 annual averageincreasedin1999 by number ofemployeesinGermany on morethantheyearbefore.The 3,900 Germany amountedto97,500 or than in1998. Employmentoutside more toabout194,300, or 3.4% 6,300 employees increasedin1999 by On annualaverage,thenumberof grow to continues Number ofemployees jects arenotbeingcarriedout. ued, assizablenewinfrastructurepro- the public-networksdivisioncontin- contrast, thenegativedevelopmentin in themobile-telephonebusiness.In ily attributabletosignificantincreases Thisgrowthwasprimar- billion DM. to5.3 1999 salesincreasedby4.9% In communicationstechnology, our into account,salesincreasedby6.1%. ment forourownplantsaretaken If thedeliveriesofproductionequip- ment climate,especiallyinGermany. asaresultoftheweakinvest- DM to2.1 billion machinery –fell3.4% tion technology andpackaging tal Goods BusinessSector –automa- The salestothirdpartiesbytheCapi- 35.8

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______units was aplantforelectroniccontrol most importantconstructionproject the newdiesel-injectionsystems.The were fortheexpansionofcapacity abroad. Themajorityofinvestments wereinvested assets, ofwhich 54% intangiblefixed 3.8 billionDM ities weinvested–asin1998 – manufacturing anddevelopmentfacil- In ordertoexpandandmodernize 1998 in linewith Investments in Germany also dampenedprofits. ness. New generaltaxation measures area ofautomotive-equipmentbusi- pricing pressureespeciallyinthecore new productsandundiminished high expendituresinthestart-upof nated, theywereoffsetbycontinued cantly andthoseatBlaupunktelimi- technology couldbereducedsignifi- though lossesincommunications generally positivesalestrends.Even ued tobeunsatisfactoryinlightof to thepreviousyear,theystillcontin- Group in1999 improvedcompared Although theprofitsofBosch profitability unsatisfactory Still 1995 1996 1997 1998 1999 (ECUs) in Hatvan (Hungary). 9 10 merchandise andcapitalgoods the Bosch Group,includingservices, The worldwidepurchasing volumeof program started Global purchasing ity program(ESP). tion systems,andtheelectronicstabil- engines, aswellinvehiclenaviga- systems forgasolineanddiesel expended inhigh-pressureinjection equipment area.Key effortswere ditures weremadeintheautomotive- expen- More thantwo-thirdsofR&D new productionmethodology. improvement ofexistingproductsand new productsandsystems,the nicians workonthedevelopmentof 15,700) scientists,engineersandtech- Worldwide, about16,300 (1998: ofsales. amounted tonearly7% Asin1998, that 3.8 billionDM. to expenditures in1999 by8.0% increased research anddevelopment tomers innovativeproducts,we In ordertocontinueofferourcus- development ahighpriority Research and Communications TechnologyCommunications Automotive Equipment Automotive Consumer Goods Capital Goods Capital (as a percentage) bybusinesssectors1999 apercentage) (as Breakdown ofsales directly withourlogistics systems. pliers willalsobeable tonetwork directly viatheinternet.Smallersup- expendable andstandardmaterials which allowsdepartmentstopurchase introduced anE-commercesolution and toreducetransactioncosts.We grate oursuppliersinprocesses in purchasing andlogisticstointe- We areusingtheinternetincreasingly internet onthe logistics Purchasing and pate inthedesignofourproducts. giving themtheopportunitytopartici- in thedevelopmentofnewproducts, these suppliersatamuch earlierpoint We intendtostartcooperationwith areas onthemostefficientsuppliers. centrate totalpurchases inallmaterial which, inthenexttwoyears,willcon- started acompany-wideprogram strengthen ourposition,wehave tiveness oftheBosch Group.To influence ontheglobalcompeti- our suppliershaveasignificant This purchasing volumemeansthat Germany. what webuycomesfromoutside of (1998: 56%) our sales.About57% of correspondingto53% billion DM, (1998:climbed in1999 to28.8 26.7) 02 04 06 08 0100 90 80 70 60 50 40 30 20 10 ______

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______standard. 16949 in theinternationalISO/TS the automobileindustry,culminating of severalnationalqualitystandardsin We participatedintheharmonization andsuppliers customers with together Improved quality important thaninthepast. Bosch brandsbecomesevenmore media increases,enhancementofour E-commerce. Astheuseofelectronic program tomeettherequirementsof ing structuresforourentireproduct in sales.We areadjustingthemarket- increased theuseofelectronicmedia addition, withourcustomerswehave ened orderanddeliverytimes.In process simplificationwehaveshort- has adaptedtothesechallenges. By as theinternet.Oursalesorganization increased useofnewmediatoolssuch trading groupsandbecauseofthe market ischanging becauseofglobal The marketstructureintheafter- systems marketing New electronic

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______21.6 65.0 3.8 9.6 orientation. the German wordforcustomer quality, Iforinnovation,andK inwhich“BeQIK”, Qstandsfor incorporated inournewmotto tomer orientation.Thesechanges are teamwork, andmorepronouncedcus- more individualinitiative,increased throughout thecompanywillbeon set byourcustomers,emphasis In ordertomeetthehighstandards efficiency greater to With BeQIK recipients. tics serviceproviderswereaward capital-goods suppliersandtwologis- suppliers forproductionmaterial,four panies. Asafirst,inadditionto wenttoforeigncom- awards,20 53 products andservices.Ofatotalof best suppliersforgoodqualityof In 1999, weonceagainhonoredour as earlythedevelopmentphase. also contributestoqualityassurance allows ustoachieve teamwork,which together withourcustomers.This include projectswhich wecarryout to improvesoftwarequalityalso ucts tobeveryimportant.Ourefforts ware inachieving qualityinourprod- We considerthecontributionofsoft- The“CustomerFocus” initiativeis – With the“TimetoMarket”project, – process CIP: into ourcontinuousimprovement started twoinitiativeswhich fit wehave Under themottoBeQIK we wanttobe“easyworkwith”. be easy,quick andproblem-free: customers, workingwithusshould upon workandservices.For our reliable fulfillmentofallagreed still more.Thehighestprincipleis and toincreasecustomerbenefits we aimtofulfillcustomerneeds areas andatallmanagementlevels, customer relationsinallfunctional customer satisfaction.Using close designed tofurtherincreaseBosch cost reduction. wishes. Thiswillalsocontributeto faster fulfillmentofcustomer start-ups, andgenerallybetter times, securecontrolovernew further shorteningofdevelopment initiation phase.Thiswillleadtoa internal processesintheproduct we willimproveandspeedupthe tive automotivelightingmarket. to besuccessfulintheverycompeti- volume which givesitagoodchance of theventureare1.5 a billionDM, Marelli SpAandourselves.Total sales which isownedequallybyMagneti Lighting Holding GmbH,Innsbruck, our headlightactivitiestoAutomotive As ofthesamedatewecontributed statements. is includedintheBosch financial Ofthis,50% sales of2.5billionDM. automobile industry,andhad1999 mercial vehiclestotheworldwide ing systemsforpassengerandcom- Gmünd. Thiscompanysuppliessteer- LenksystemeGmbH,SchwäbischZF jointventure, lished a50-50 FriedrichshafenZF AG,weestab- As ofJanuary1, 1999, togetherwith areas automotive-equipment Changes inthe of theBosch Group. made affectingthefuturestructure activities, far-reaching decisionswere In additiontotheregularbusiness Special events 11 12 Ltd inTokyo togetherwithZexel. founded Bosch BrakingSystems Co At the beginningofOctober 1999, we Paris. ned betweenZexel andValeo SA, achieve this,ajointventureisplan- automotive airconditioning.To advantage ofthegrowthpotentialin Zexel wealsowanttotakeincreased concentrated atZexel. Together with transmission technologies arebeing The dieselandgasolineinjection Japanese automotive-equipmentarea. new structuringofouractivitiesinthe This transactionisthecoreofabasic year which endedMarch 31, 1999. sales of3.1 inthebusiness billionDM with about10,000 employees,had by aforeigncompany. Zexel Group, motive supplierbecamemajority-held first timeanimportantJapaneseauto- ticularly inthedieselarea.Itwas Tokyo, alongtimepartnerofourspar- tive supplier,Zexel Corporation, took overthemajorityofautomo- At thebeginningofApril1999 we inJapan our position Strengthening Communications TechnologyCommunications Automotive Equipment Automotive Consumer Goods Capital Goods Capital Other (as a percentage) bybusinesssectors1999 apercentage) (as fixedassets intangible Investments and requireslargecommitments, tions technology which isaccelerating of aradicalchange incommunica- These disposalsarethe consequence continue tobeoperatedbyBosch. neering, andsecuritysystemswill broadband networks,aerospaceengi- three otherproductdivisions,thatis, The approximately 4billionDM. lines haveatotalsalesvolumeof mobile-telephone business.These Siemens AGonthesaleof also reached anagreementwith Kravis Roberts & Co, New York. We private-networks divisiontoKohlberg sold toMarconiplc,London,andthe The public-networksdivisionwas this areaduringthelastfewyears. had sufferedconsiderablelossesin Wein thefirsthalfofyear2000. and equipment,which willtakeeffect ble fortelecommunicationsproducts the disposalofdivisionsresponsi- Another importantstrategicmoveis technology cations ofcoreareasincommuni- Disposal 1 billionDM. new companyhassalesofabout company, JidoshaKikiCo Ltd.The eral jointventures,such astheZexel were previouslydispersedamongsev- activitiesinJapan,which and ABS This ventureincorporatesourbraking 02 04 06 08 0100 90 80 70 60 50 40 30 20 10 ______

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______acquisition. wide accessoriesmarketwiththis enhances itspositionintheworld- 1999 salesof4.5billionDM, Ourpowertoolsdivision,with DM. It had1999 salesofabout750 million duces accessoriesforpowertools. which, employees,pro- with3,200 held equalsharesinthisventure tric Co, St.Louis, Missouri(USA), Until now,Bosch andEmersonElec- effectiveDecember 31,(USA), 2000. can Corporation, Louisville,Kentucky complete takeoverofVermont Ameri- world. Onestepinthisprocessisour the mostimportantregionsof continue toexpandourpositionin In theotherbusinessareaswewill Vermont Corporation American Takeover of as amedium-sizedsupplier. centration, which alsoaffectedBosch therefore intheprocessofglobalcon- large globalsuppliers.Theindustryis which canonlybemadebyvery

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______80.2 3.8 2.0 4.1 9.9 (as a percentage) byregions1999 apercentage) (as fixedassets intangible Investments 02 04 06 08 0100 90 80 70 60 50 40 30 20 10 ______

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______20.1 67.3 8.4 4.2 Rest ofEurope Australia Africa, Asia, America EuropeanUnion ofthe Countries cutting process. cutting averypreciselaser with We accomplishthis meters. aprecisioninmicro- with processes manufacturing dieselenginesrequire tion fordirect-injec- systems tion Our newhigh-pressureinjec- 13 14 tinue throughouttheyear,evenif which wecurrentlyexpecttocon- ing fromtheeconomicupswing, The otherbusinesssectorsareprofit- products. ramp-up tofullproductionofnew supported bytheintroductionand sales will,however,continuetobe will falterastheyearprogresses.Our the automotive-equipmentbusiness therefore expectthatourgrowthin and particularlyinGermany. We has weakenedinWestern Europe, The automobileindustry,however, beginning oftheprioryear. a relativelyweaksalesbaseatthe vigorously, compared,however,to the Bosch Group.Salesincreased positive businessdevelopmentfor startedwithcontinued The year2000 currentyear the for Outlook can betakenatanytime. effective risk-containmentmeasures an earlystagesothatappropriateand to assets,profitsandliquidityatsuch system isorganizedtodetectthreats Our group-widerisk-management development in future Risks inherent graphical areas. allow ustoberepresentedinallgeo- our corebusinessactivitiesandwhich clude acquisitionswhich complement internal growth.Thatdoesnotpre- tions, ourbusinessfocuswillbeon products, andgoodcustomerrela- innovations, thehighqualityofour Basedonfurther ofabout5%. 2000 a salesgrowthfortheBosch Groupin Given thesemarkettrends,weexpect climate. regardless oftheoveralleconomic ucts, which willbenefitourgrowth have introducedaseriesofnewprod- tions Technology BusinessSector product divisionsoftheCommunica- Business Sectors andtheremaining Consumer Goods andCapitalGoods America shouldflattenout.Our economic developmentinNorth more intensiveefforts. we wanttotakeadvantageofbyeven also matched byopportunitieswhich our productareas.Theserisksare from newgloballyactivesuppliersin tomers, andtoughercompetition constant pricepressurebyourcus- ability andsafetyinnewproducts, tion regulations,highdemandforreli- tightening ofenvironmental-protec- world economicclimate,worldwide foremost intheuncertaintiesof The riskswhich wemustdealwithlie internal auditdepartment. movements andanindependent a constantreviewofallmonetary business data.Itiscomplementedby sive monitoringofallrelevantkey system which enablescomprehen- constitutes aninternalreporting The coreofourriskmanagement To protectourselvesfromthe – We willtakeintoaccountthe – future strategyandactions: trate onthefollowingpointsinour In ordertolimitrisks,wewillconcen- Progress 1995–1999 DM) (million fixedassets intangible Investments from openpositions. hedge possibilitiestocoverrisks financing, weutilizetheavailable major regionsoftheworld.In and productionineach ofthe to alargeextentmatched sales andyen,wehave euro, US-dollar tions such asthosebetweenthe effects ofexchange-rate fluctua- increased demand. structure canexpecttoexperience especially inareaswhich bytheir allowing forcapacityexpansion of cautiousinvestmentplanning, mobile industryclimatebymeans uncertainty intheworldwideauto- 0 ,0 ,0 ,0 ,0 ,0 ,0 ,0 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500

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______2,056 We aremeetingthechallenge of – Customer demandsonoureffi- – For yearsnow,we morethan25 – activities ofourown,which include national distributionchannels by E-commerce forourvariousinter- focus onthecustomer. processes, andanuncompromising improvement ofourinternal new technical concepts,permanent this trendfirstandforemostwith and mergers.We arerespondingto result oftransnationalcooperations ciency continuetoincreaseasa ever stricterconditions. mobile, eventhoughitissubjectto degree ofacceptancefortheauto- which willcontributetoahigh investments infurtherinnovations this mottowearemakinglarge “S”– safe,clean,economical.Using three German wordsstartingwith program: mental laws,withour3-S especially thoseposedbyenviron- have metthetechnical challenges,

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______3,773 3,806 ______future’s changing challenges. will alwaysbeabletocopewiththe All inall,weareconfidentthat of ourbrandnames. ures tofurtherimprovetheimage will implementappropriatemeas- more transparentmarketplace,we strengthen ourpositionintheever ners andsuppliers.Inorderto our customers,aftermarketpart- 1995 1996 1997 1998 1999 15 presence. expanded ourinternational andfurther 35.5billionDM to 12% equipmentby of automotive We increasedourworldwidesales shrink. to continued Japanese market whilethe units, 13.0million to increased by8.3% production automobile US yearbeforeby1.5%. ofthe that of 16.8millionvehiclesexceeded year. Europeanproduction Western prior highlevelofthe extremely moreorlessatthe many stayed inGer- worldwide.Production units 55.2million to increased by5.1% in1999 production Motor-vehicle 35.5 2.7 3.1 Expense R&D Investments Sales Key numbers 16 Automotive Equipment Automotive 1999 1998 18billionDM 31.8 . billionDM 2.4 billionDM 2.9 Business Sector Automotive Equipment – the 500,000th route-finding vehicle the500,000th – radial-piston themillionthVP44 – themillionthCommon Railhigh- – themillionthelectronicstability – the10 forelectronic millionthECU – millionthMotronic engine- the25 – millionthantilock the50 braking – The100 millionthBlaupunktradio – stones. We produced: guished byimportantproductmile- umes. Theyear1999 wasdistin- confirmed bythehighproductvol- products, andtheirmarketsuccessis is reflectedinthemajorityofournew safe, clean,economical.Thisprogram program: under themottoofits3-S its developmentandproductiongoals yearsagothatBosch25 summarized fuel economy. Itwasmorethan mental compatibility,andimproved lenges withrespecttosafety,environ- faced withincreasinglyseverechal- State-of-the-art motorvehiclesare economical clean, safe, technology: Bosch automotive navigation system distributor pumpfordieselengines engines pressure injectionsystemfordiesel program (ESP) diesel injection(EDC) management system system (ABS) ment ofthe system’stechnology and be noletupinthefurther develop- contributions sothat therewould equipped. We havemade major cars inWestern Europeare nowABS- ofsmall of compactcarsand 30% mostly inluxurypassenger cars,86% wasfound Although initiallyABS brought tomarketin1978. system which wepioneeredand Japan wereequippedwiththissafety in der ofWestern Europeand62% ofthoseintheremain- America, 67% ofthosemanufacturedinNorth 74% of vehiclesproducedinGermany, system. Inthatyearmorethan90% equipped withanantilock braking duced worldwidein1999 were More thanhalfofallvehiclespro- ABS belt: safety as the asnatural Soon an optimaldevelopmentprocess. together tocreatetheconditionsfor andignition,arebrought ESP, and productionplanningforABS, are employedinthedevelopment domestic andforeignlocationswho (Germany). Here, expertsfrom opment centerinImmenstadt/Allgäu October 1999 aspecializeddevel- cost-effectiveness, weinauguratedin maintaining theirsuperiorqualityand more quickly, whileatthesametime systems tothemass-productionstage To beabletodevelopnewbraking Allgäu in the New developmentcenter valid results arenowavailable. dation ofthe systemasstatistically tors areemphatic intheirrecommen- for vehicle safety. Accident investiga- tions, andisthusan important system vehicle’s handlingin criticalsitua- makes iteasiertocontrolthe ESP the hydraulicsintoone module. and and wehavecombined theECU now usemuch-simplified hydraulics short periodoftime.Asexamples,we and moreeconomical,allwithina even moreefficient,smaller,lighter ment oftheproduct,makingESP ous furtherdevelopmentandrefine- tance bycarmakerswasthecontinu- A prerequisitefortherapidaccep- vehicles. now availableinnearlyallclassesof the competition.Thesystemis in1995 longbefore introduced ESP continues togrow. Weprogram (ESP) Demand forourelectronicstability vehicle classes inall ESP 10 units. millionABS 1999 wemanufacturedapproximately all unitsproducedworldwide.In That constitutesmorethanathirdof plants inGermany andabroad. production systems leaveoursixABS Every ofthesesafety workday 40,000 thousand patents. nology isalsoreflectedinseveral tech-The Bosch know-howinABS cal tointegrateinbrakingequipment. continually easierandmoreeconomi- therefore,became production. ABS, Progress 1995–1999 DM) (billion equipment ofautomotive Sales 510152025303540 ______

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______applications. market inanevenbroader rangeof systems wereverysuccessful onthe ment foreach engineconcept, our offer theappropriate injectionequip- gradually tothemarket. Sincewecan production stageand broughtthese direct-injection systems tothemass- We developedseveralhigh-pressure increase drivingenjoyment. operation andimprovedacceleration gas, andthroughsmootherengine sume evenlessfuel,emitexhaust direct-injection engines.Thesecon- alreadyhad cars soldin1999, 75% Of thenewdiesel-enginepassenger tion ofnewdirect-injectionengines. resulted primarilyfromtheintroduc- year before.Thisincreaseddemand the from25% 1999 tonearly29% passenger-vehicle productiongrewin The dieselshareofWest European engines areincreasinglyindemand. Passenger carsequippedwithdiesel fordieselengines systems High-pressure injection detect incipientvehiclerollover. and sideorfrontalairbags.Itcanalso devices, such asseat-belttighteners protection nals andactivateupto20 ate moresensors,processsig- protection ofpassengers.Itcanevalu- system considerablyimprovesthe feature expandedfunctionality. The generation ofairbagtriggers,which During 1999 weintroducedanew deviceforairbags New trigger 20.5

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______28.7 31.8

______35.5 1995 1996 1997 1998 1999 bility. relia- and increasedignition longlife requirement, voltage lowignition renowned forits is Platinum+4 of-the-line every engine.Thecally top- right sparkplugforpracti- develops andproducesthe industry, Bosch automobile the Working closelywith 17 18 Automotive Equipment Automotive speeds. especially athighdriving improves wipingquality, ofpressure distribution The uniform strips. tension windshield bymeansoftwo wiper rubberagainstthe wiper bladepressesthe wiper. Ournewhingeless windshield forthe Innovation 1998 1999 Western Europe North America North Germany Japan in selectedmarkets 1998/1999 ofpassenger-carproduction vehiclesasapercentage ABS-equipped market Passenger-car the stratified-charge principle.This direct-injection gasolineengines using an innovativeengine controlfor Show inFrankfurt. We haveproduced tion systemattheInternational Auto sented ournewgasoline direct-injec- In 1999, as aworldpremiere,wepre- production series chargegoesinto stratified with Gasoline direct-injection delivered inFebruary, 2000. vehicles. Thefirstinstallationswere Rail System forheavycommercial production ramp-upoftheCommon During 1999 wepreparedforthefull tougher emissionlimits. This isnecessarytomeetthefuture, rithms forstillmoreexactinjection. ming ofnew,complexcontrolalgo- software developmentistheprogram- Oneoftheprioritiesinour 40-fold. processor performancehasincreased increased byafactorof15 andthe electronic controlunitshasbeen 1987, thememorycapacityofour tion systems.Sinceitsintroductionin electronic controlsofourdieselinjec- We improvedtheefficiencyof System cameontomarket. engine usingtheBosch Common Rail car withaneight-cylinderdiesel System). Inaddition,thefirstluxury Injector injection dieselengine(Unit production. Itispoweredbyadirect- per 100 kilometerswentintomass ing afuel-economyfigureof3liters During 1999 thefirstsmallcarfeatur- 55 5100 75 50 25

______

______vehicles. small cars, butalsoformid-size sions inseries production,not just for broader-based useof such transmis- mission specialists,are workingona commercial vehicles, aswelltrans- ducers ofpassenger cars andlight cars. Inthemeantime nearlyallpro- Variable Transmission) forpassenger component ofCVT (Continuously belts intheNetherlands. Thisisakey duced increasingvolumesofpush- For severalyearsnowwehavepro- transmissions automatic andmodules for Pushbelts for thesemethods. control unitsanddrivemechanisms the appropriateactuators,sensors, fuel cells.We havestarteddeveloping methods, such asthoseonthebasisof opment ofalternativepropulsion are placinghighhopesonthedevel- resources. Automobile manufacturers on theenvironmentandavailable tions which furtherreducetheload which willcontributetotrafficsolu- are workingtogetheronsystems Research, developmentanddivisions fuel-cell propulsion for Components effect in2005. IV)whichlimits (Euro comeinto The systemalreadymeetsemission time increasingperformanceby5%. manifold injection,whileatthesame comparedtoconventional up to15% but alsoreducesfuelconsumptionby and highlydynamicgasolineengines technology notonlyresultsinflexible 57 58 62 67 71 ______71 74 88 92 development process. for anoptimal conditions the This creates locations. fromGermanandforeign ties activi- andignition ESP ABS, employedinour experts up teaming (Germany), inImmenstadt/Allgäu center 1999 atanew development in We commenced operations 19 20 Automotive Equipment Automotive Bosch. comesfrom wide today producedworld- ABS third began in1978.tion Every opment in1967 and produc- devel- its We started system. braking antilock 50 millionth In 1999 weproducedthe 1997 1998 1999 Western Europe Germany France row’s vehicles, wearedeveloping a for theenergy requirementsof tomor- lightweight on-board electricsystem can continuetoprovide alow-cost, tors andelectricnetworks. So thatwe stantly morefrombatteries, alterna- today’s automobiledemands con- The growingnumber ofaccessoriesin future ofthe network The electric on-board meters driven. fuel canbesavedforevery100 kilo- vehicle, between0.1 and0.5litersof on thetypeofalternatorand Depending mance increaseof25%. andaperfor- level raisedto74% their predecessorsbyanefficiency nators distinguishthemselvesfrom Although equalinsize,thesealter- the reductioninfuelconsumption. makes asignificantcontributionto Our newseriesofcompactalternators New seriesofalternators ogy withoil-proofconnections. ature-resistant micro-hybridtechnol- electronics areconstructedintemper- mission asacompactassembly. The ule, which isintegratedintothetrans- separate componentsintoonemod- have nowcombinedthepreviously tors forautomatictransmissions.We magnetic valvesandpressureregula- producing electroniccontrolunits, For manyyearsnowwehavebeen ticularly highlevelsoftorque. new versionswhich cantransmitpar- To thispurposeweareworkingon 1997–1999 ofnew-carregistrationsinselectedmarkets Diesel-engine passengercarsasapercentage market Automotive 14.9 04 60 40 20 17.6 ______22.3 22.4 24.8 28.4 Blaupunkt tradename. and totheenhancement ofour to theredesigningof ourproductline tures makeasignificant contribution user-friendly technology. Thesefea- attractive designwith state-of-the-art Skyline carradioswhich combines cessfully marketedthenewseriesof During thesummerof1999, wesuc- our Blaupunktsubsidiary. facturers ledtorobustsalesgrowthat tems onthepartofautomobilemanu- especially forvehiclenavigationsys- Higher demandforcarradiosand at Blaupunkt growth Strong users to42V. entire on-boardnetworkandallend- long-term goalistoconvertthe batteries, convertersandloads.Our smooth interplayofalternators, ager coordinatesandcontrolsthe possible. Anon-boardnetworkman- and automaticstart-stopoperation nators which willmakesilentstarting users. We aredevelopingstarter-alter- for ECUs,sensors,andlow-load network supplies thestillexistent14V converter windshield heaters.ADC electro-magnetic valvecontrols,or These loadsincluderadiatorfans, with particularlyhighinputneeds. tothoseloads directly supply42V powerful high-outputalternators on-boardnetwork,inwhich 42V

______40.2 41.8 44.1 mount. at attractivepricesand areeasyto ket businessastheyarebeingoffered given strongimpetustotheaftermar- these innovativeaccessorieshave development ofanewmarket.Both one, wehavealsocontributedtothe functionsin navigation andCD-audio car radio,which combinesradio, With acompactdevicethesizeof dynamic destinationguidance. which providesfar-sighted,automatic it istheonlysystemonmarket determining therecommendedroute, driver inputandtakenintoaccountin information isprocessedwithout market device.Sinceincomingtraffic expanded withaninnovativeafter- Our lineofnavigationsystemswas for vehiclenavigation New equipment large-capacity vehicles. already inuseluxurycoaches and ally goodspatialtonequalityitis manufacturers. Because ofitsunusu- est onthepartofanumbervehicle which hasarousedconsiderableinter- tem formultimediainstallations vehicles. We developedasoundsys- more andimportanceinluxury Multimedia equipmentistakingon 1998/1999 millionunits) (in Motor-vehicle productioninselectedmarkets market Automotive 5101520 ______5.7 5.7

______9.9 10.0 of vision. and thedriver hasamaximum field equipment lighterand morecompact, rods areeliminated. This makesthe motors, theconventional connecting synchronization ofboth electric own electricdrive.Using electronic tem inwhich each wiperarm hasits We alsodeveloped anewwipersys- accumulate. lack ofjointswheresnowandicecan winter thisbladestandsoutduetoits airflow noiseconsiderably,andin speeds. Itsflatstructurealsoreduces vides aclearviewevenathigh wiper bladecleansbetterandpro- employs severalhinges.Thenew instead oftheusualsystemwhich using onlyapre-tensionedstrip the wiperrubbertowindshield wiper bladetothemarket.Itpresses facturer tointroduceanewhingeless During 1999 wewerethefirstmanu- andseatadjustment systems forwiper New developments faster thanbefore. thus bedesignedandimplemented additional informationfunctionscan troller. New displaysystemswith microcon- platform basedona32-bit have developedanewelectronic systems. To meetthisrequirementwe number ofdatafromvariousvehicle center which mustdealwithalarge more andintoaninformation The displayinstrumentisdeveloping for displayinstruments platform Computer

______16.0 16.6 16.8 17.6 Japan America North Western Europe Germany fuel per100kilometers. of liters three use lessthan to produced passengercar firstmass- inthe installed In1999,emissions. itwas andpollutant consumption considerably reducesfuel dieselengines – injection fordirect- pressure system from Bosch –ahigh- (UIS) System The UnitInjector 1998 1999 21 Automotive Equipment

In 1999, we introduced a compact, To counter this, we employ electroni- lightweight spindle drive for seat- cally controlled booster heaters. For adjustment use. This assembly this purpose we developed a power enables linear adjustments without transistor, which is protected against additional gears. Accident-caused thermal overload. forces are absorbed by the gear hous- ing via the spindle. Aftermarket business expands further Increased use We were able to increase aftermarket of brushless electric motors sales further. Especially our business We are constantly using more and in the Asian and Latin American more brushless, electronically com- regions, which are recovering from mutated electric motors. We devel- economical and financial crises, oped a new auxiliary water pump on improved again. We continued the The subsequent installation this basis. Without involving higher expansion of our distribution organi- of a navigation system is production costs, the motor’s elec- zation in Europe. considerably simplified with tronic commutation reduces the our compact Travelpilot. It pump’s weight and the space it needs, We introduced a new generation of combines radio, navigation as well as increasing its useful life. We sheathed-element glow plugs with and CD-player and fits in are also working on an electrically double the useful life of their prede- the normal car-radio installation bay. powered main water pump which will cessors. The product range was lead to fuel savings. expanded with a universal adapter for easy and fast installation of wiper Increased sales blades. of closing systems The positive business trend in closing Our worldwide service organization systems continued in 1999 with a fur- consists of about 9,100 service centers ther strong jump in sales. New devel- with more than 90,000 employees in opments have considerably improved 132 countries. In 1999 we started our standing in the market. Our redesigning the outward appearance NAFTA-area activities were expanded of the Bosch service centers. by commencing operations at another production line for vehicle locks at the San Luis Potosí, Mexico, plant.

Efficient transistors New external design for for interior heating Bosch service centers. It As modern internal-combustion emphasizes the change from engines optimize fuel consumption, the vehicle electric specialist to the customer-oriented the residual heat available for heating auto workshop. the car interior goes down.

22 23 Consumer Goods

Key numbers

1999 1998 Sales 11.7 11.3 billion DM Consumer Goods Investments 378 385 million DM R&D Expense 314 294 million DM Business Sector

After a temporary weakening during Strong position Vermont American Corporation, the first half of 1999, the economic in power tools Louisville, Kentucky (USA). Previ- development in the European Union We develop, produce and sell power ously, Emerson Electric Co, St. Louis, again picked up speed, supported tools, accessories and gardening Missouri (USA), and Bosch each held substantially by robust domestic equipment. Each of these three busi- a 50% interest in this company. demand. Even so, there were con- ness areas had a 1999 world market siderable differences among various of approximately 13 billion DM. The market for gardening equipment, countries in their rates of growth, too, is covered by a large number of with consumer demand in Germany In the core business of power tools generally national suppliers. More remaining weak for example. North we are one of the three largest suppli- than half the market volume is made American private consumption on ers, who together share about 60% of up by lawn mowers. the other hand increased, and the the market. The remainder is covered economies of Latin America and by smaller producers ranging from Our subsidiary Atco-Qualcast Ltd, Southeast Asia recovered during specialists for professional power Stowmarket (UK), concentrates its the course of the year. tools of high quality to Asian manu- marketing in Europe; Vermont Amer- facturers of unbranded products. ican Corporation is active in the Our sales of consumer goods US market with watering systems. increased by 3.5% to 11.7 billion Fragmented markets for accessories DM. This includes 50% of sales by and gardening equipment The worldwide market BSH Bosch und Siemens Haus- The accessories market is severely for power tools grows again geräte GmbH. fragmented. In many countries we After the decline in the prior year, the compete with our brands against sup- 1999 worldwide market for power pliers of strong regional importance. tools increased by 3% to 95 million In 1999, to strengthen our position as units. We continued to increase our a universal supplier, we purchased sales and were able to strengthen 60% of Aresi SpA, Brembate/Ber- our position in important markets, gamo (Italy), a producer of chisels, especially in North America and the hammer drills, and drill bits. As of Far East. the end of 2000 we will complete the takeover of our current joint-venture

Production line for compass saws. We are one of the three largest manufacturers of high- quality branded products.

24 25 26 Consumer Goods accessories. systems extensive with grindingbrushes electric ournew do-it-yourselfers: professionals and for both innovations Highly practical recovered primarily in Korea and Demand in1999 grew byareal6%. The power-toolmarket inAsiaalso and Dremelbrands. growth potentialfor our Bosch, Skil ment marketsoffers considerable provided bythelargehome-improve- this growth.Thedistributionchannel new branches, arekeycausesbehind coupled withtheopeningofmany into largehome-improvementchains, boom andthegrowingconcentration in1999. Aconstruction a real6% The North Americanmarketgrewby recovery inAsia America, Brisk demandinNorth is appreciated. are well-knownthereandourquality nomic crisisinRussia. Ourbrands volume declinedbecauseoftheeco- tries. EasternEuropeanmarket strong marketpositioninmostcoun- Europe, wetraditionallymaintaina most importantmarket,Western and discount-storechains. Inour price rangesinhome-improvement unbranded productsinthelower again increasingcompetitionfrom construction industryandtheonce the continuingrecessionin year inarow. Thiswastheresultof German marketdeclinedforthethird showed somegrowthin1999, the German Western Europeanmarkets prior yearlevels.Althoughmostnon- Demand inEuroperemainedat of innovations. the exhibitorwithlargestnumber newgardeningtools,makingus 22 Cologne GardenShow,wepresented market. At theSeptember 1999 mercial usersandthedo-it-yourself brush which isofferedbothtocom- new product:theelectricgrinding 1999 weagainintroducedatotally business sector. Asinprioryears, high degreeofinnovativenessthis nounced customerorientationand owes itsgoodreputationtothepro- strength ofourbusiness.Thisimage brands which constitutestheessential Dremel, Atco, QualcastandHawera the goodimageofourBosch, Skil, Besides ourinternationalization,itis a highdegreeofinnovativeness Good brandimageand non-Asian producersinthisregion. making usoneofthemostimportant and inourjointventureChina, Asian continentinMalaysia,India We manufacturepowertoolsonthe region, Japan,shrankconsiderably. and thelargestsinglemarketin however, showedbutlittlegrowth Southeast Asia.TheChinesemarket, petitive conditionsin West European pean marketscontinued, whilecom- Growth intheCentral andEastEuro- equipment market. supplier totheEuropeanheating- secured ourpositionasanimportant and renewalofourproductrangewe uncompromising furtherdevelopment thermotechnology areain1999. By We wereabletoraisethesalesin maintained thermotechnology Position in 700 dealersalreadyusethisservice. aftermarket. InGermany, morethan our completetrainingprogramforthe It alsolistsourcustomerservicesand special offers,andpersonstocontact. delivery capabilities,promotionsand information aboutproducts,prices, that ourtradepartnerscanobtain tomized fortheaftermarket.Itishere Our extranetiscompletelycus- Portugal. Othercountrieswillfollow. Netherlands, Luxemburg,France, and offerings inGermany toBelgium, the expanded thesuccessfulextranet teamwork intheaftermarket.We scribers only,allowformoreefficient limited toacertaingroupofsub- area oftheinternetwithaccess New media, such astheextranet,an offeringsexpanded Extranet Progress 1995–1999 DM) (billion ofconsumergoods Sales 2468101214 ______

______

______of innovativeproducts. gas-fired boilersbytheintroduction in theshrinkingEuropeanmarketfor were abletostrengthenourposition our marketpositioninGermany. We additional models,therebyimproving mented ourbroadproductrangewith maximizing usefulheat,wesupple- segment ofenergy-savingequipment In thestillrapidlygrowingmarket customer wishes. able toreactmorequickly to product creationprocessandtobe heating unitsinordertoshortenthe in thedevelopmentofmodulargas- in theEuropeanmarket.We invested tion forwall-mountedgasheaters We expandedourgoodmarketposi- Germany. impeded businessdevelopmentin in theconstructionindustryagain cult. In1999, thecontinuedweakness capacity, becameincreasinglydiffi- markets which sufferedfromover-

______7.9 9.2

______11.1 11.3

______11.7 1995 1996 1997 1998 1999 27 Consumer Goods

Our development activities center on BSH increased its sales in 1999 by the enhancement of customer utility. 4.3% to 10.7 billion DM. This devel- With this in mind, we developed a opment was supported by an increase special device for use in a standard in foreign sales of 11%. The share of chimney, and a new gas-fired boiler sales abroad rose from 64% to 68%. which is not dependent on an electric Double-digit growth rates marked the network or battery. Both new prod- expansion in European markets, ucts will be marketed in the year especially in the U.K., France, Italy, 2000. and Scandinavia. But above-average increases were also noted in the US The complete takeover of our former and China. The good sales develop- joint venture Shenzhou Gas Appli- ment abroad was negatively influ- ances Co Ltd in Shunde (China) sim- enced by the continued difficult situa- plified incorporation of the plant into tion in Latin America and Russia. our international production network. We supply the European market from In the largest single European market, our plants in Germany, U.K., France, Germany, BSH sales declined. The Portugal, and Turkey. decisive factors here were the nega- tive trend in the household-appliance Foreign sales of market and the start-up difficulties in household appliances increase the conversion to a new distribution After robust expansion of its interna- system. Production of sawblades. tional presence in the past few years, Bosch maintains a wide BSH Bosch und Siemens Hausgeräte range of accessories for GmbH, Munich – a 50-50 Bosch and power tools. This business Siemens joint venture – entered a continues to expand. consolidation phase in 1999. In North America and in Spain business activi- ties were combined. In Austria a com- pany was established in which all sales activities in the country were united.

Production of gas-fired boil- ers in China. We further expanded our position in the largest Asian growth market.

28 29 5.3 billionDM. to nology in1999increasedby4.9% tech- incommunications Our sales pean andoverseasmarkets. Euro- non-German focused onthe wasagain Regionalgrowth tion. communica- and mobiledata technology communications private prioryear, inthe especiallyin than in1999 area grewmorestrongly communications-technology the The worldmarketforequipmentin 5.3 591 154 Expense R&D Investments Sales Key numbers 30 omnctostechnology Communications taken ingoodtime. taken be measurescan security This meansthat grounds. andfair- such asairports complexes andcompounds oflargebuilding centers security-management the convergeat Bosch: Alldata managementfrom Security 1999 1998 0 millionDM 600 millionDM 220 . ilo DM billion 5.0 Business Sector CommunicationsTechnology new digital imagingsystem.It func- image processing.We introduced a result oftheincreased useofdigital disproportionally more, primarilyasa Video-monitoring technology grew duction ofinnovative products. growth inGermany andbytheintro- ing environmentwithabove-average already strongpositioninthischang- were abletofurtherstrengthenour and globalizationoftheindustry. We ized bycompetitiveconcentration The marketisincreasinglycharacter- with growthofapproximately4%. security systemsrecoveredin1999 The Europeanmarketforelectronic expanded systems security Product rangein security systems. networks, aerospaceengineering,and other productgroupsforbroadband We continuetooperatethethree about 4billionDM. areas haveatotalsalesvolumeof the mobile-telephonebusiness.These Siemens AG,Munich, onthesaleof We reached anagreementwith and forprivatenetworksweresold. product groupsforpublicnetworks The during thefirsthalfof2000. tions, which willbecomeeffective munications equipmentandinstalla- is thedisposalofactivitiesintelecom- The strategicallymostimportantstep in telecommunications ofactivities Disposal able thanwithconventional detectors. therefore much fasterand morereli- heat, butalsofire-gases. Detection is ket which detectsnotonly smokeand first detectorofthistype inthemar- standards inthemarket.Thisis introduced ayearearlierhassetnew generation offirealarmswhich we freedom fromfalsealarms,thenew With regardtodetectionspeedand this solution. additional customersandlicenseesfor dow monitoring.We havegained such asthemagneticcontactsforwin- integrated intothesmallestdetector overload protection.Itcanevenbe tions management,andthenecessary tronics forthecompletecommunica- field bus,thechip containstheelec- cally. Apartfromaninterfacewiththe rity networksquickly andeconomi- actuators tobeintegratedintosecu- oped achip which allowssensorsand Security(Local Network) wedevel- For thedigitalbustechnology LSN monitoring systems. technical leadincomplexvideo- system hasgivenusanevengreater capacity ofcurrentsolutions.This ofthememory it onlyneeds40% camera monitoringfield.Asaresult, when movementstakeplaceinthe process andrecordsimagesonly tions withaspecialcompression Development andDemonstration Comed (Constellationand Media cant participationin the international growth opportunities fromoursignifi- components. We expectfurther for thedeliveryofhigh-reliability space station,wereceived anorder whichtion) istosucceed theMir SpaceSta- (International For theISS customers inAsia. facturers andwereabletogainnew well-known Europeansatellitemanu- frequencies. We obtainedordersfrom traveling-wave tubeamplifiersforall able toexpandourstrongpositionin market trends.Despite this,wewere of globalsystemsledtodeclining and theunsolvedfinancingproblems systems inAsiaandSouth America in satellite-supportedcommunications The continuinginvestmentrestraints technology development insatellite Decreasing market traffic telematics. areas fromtwolargesuppliersof route-planning, andemergency-alarm services inthetrafficinformation, During 1999 wereceivedordersfor line intotheclient’scomputersystem. information orenterdatadirectlyon- process them,supplythecallerswith ees takeupto15,000 callsdaily, center. Here, morethan100 employ- of servicesourMagdeburgcall We havefurtherexpandedtherange areaexpanded systems security inthe Services Progress 1995–1999 DM) (billion products technology ofcommunications Sales 2468 ______

______take advantage ofthisnewbusiness. modernization ofournetworks, to ourselves thoroughly, forexample by We are preparing private end-users. transmission ofinternet signalsto they areespeciallysuitable forfast Because oftheirwidebandwidth, cations servicesadistinct possibility. networks makesinteractive communi- transmission, theuse ofbroadband programs asaresultoffuturedigital siderably widerchoice oftelevision Aside frombeingabletoofferacon- for privatecable-networkoperators. business opportunitiesareopeningup create growth.Asaresult,additional considerable marketchanges which technical developmentsarecausing Deregulation, newcompetitorsand our customers. secure itbylong-termcontractswith 1999 asintheyearsbefore,andto able toexpandourmarketpositionin chase ofadditionalnetworks,wewere nies andbytheinstallationpur- ment buildingmanagementcompa- reception. Working closelywithapart- holds withcabletelevisionandradio we supplymorethanamillionhouse- the mostimportantEuropeanmarket, band networksinGermany, byfar As thethird-largestoperatorofbroad- broadbandnetworks state-of-the-art for New perspectives tems formultimediauses. future satellitecommunicationssys- tered onbasicdevelopmenteffortsfor project. Theprojectiscen- Program) 5.0 5.0 5.3 5.4 5.4

______1995 1996 1997 1998 1999 equipment. satellite communication for Multiplexer Photo: engineering components. supplier ofaerospace Bosch isahighlyreliable 31 declined 3.4% to 2.1billionDM. to declined 3.4% goodsin1999 ofcapital Our sales fall. to industry inthis duction pro- caused engineeringexports cal Large declinesinGermanmechani- goods inGermanyalsorecovered. Demand forcapital investments. 1999 aslightriseincapital ledto secondhalfof Europe duringthe The economicupswinginWestern 2.1 158 74 Expense R&D Investments Sales Key numbers 32 Capital Goods Capital of ampules. filling andclosing sterilizing, equipment forcleaning, from Bosch: industry ceutical pharma- forthe technology Highly demandinginsulator 1999 1998 4 millionDM 143 . ilo DM billion 2.2 5millionDM 65 Business Sector Goods Capital components. Asanexample,we range withdigital-control hydraulics tomers byexpanding ourproduct our mechanical-engineering cus- ues togrow. We metthedemandsof industrial-hydraulics productscontin- The partplayedbyelectronics inour inhydrauliccomponents electronics Increased useof lift trucks. permits verysensitiveliftingbyfork- expanded withanewserieswhich hydro-assemblieswas our DC munication. Theproductrangeof with CAN businterface fordatacom- hydraulic directional-controlvalves tant newcustomersforourelectro- market. We wereabletogainimpor- tive extra-quietgearpumptothe technology. We introduced aninnova- agricultural andmaterials-handling was abletomaintainitspositionin our mobile-hydraulicsproductline In adifficulteconomicenvironment, year. increased inthesecondhalfof nomic crisis,ordersfromAsia increased. Afterweatheringtheeco- sales ofautomationtechnology of manufacturingequipment,our Including company-internaldeliveries contrast, salesabroadincreased. a resultofweakdomesticbusiness.In mation-technology sales,primarilyas We experiencedadeclineinauto- technology automation Weakness in tomer service. increase theflexibility ofourcus- Remote diagnosticsand programming variants foruseindirty environments. applications byintroducing further by ourcustomers.We opened upnew year before,werefavorablyaccepted controls, which wefirstmarketedthe Our swivel-armrobotswithPC-based heavier workpieces. also allowsforthemovementof Compared tosingle-beltsystems,it our customersclearcostbenefits. ble-belt conveyorsystemwhich offers workstations. We introducedadou- cost systemformanuallyconnecting profile system,wedevelopedalow- 1999. Onthebasisofourmodular nologies wasexpandedfurtherin cal baseelementsforassemblytech- Our accessoriesprogramofmechani- introduced conveyor systems New double-belt flow-rate capacity. valves which haveamarkedlyhigher pneumatic valveseries,includingbox success. We introducedtwonew range contributedconsiderablytothis the market.Additions totheproduct valve mountwerewellacceptedby Our pneumaticcompactcylinderand draulic controls. noise vanepumpwithelectrohy- equipped themedium-pressurelow- we develop andproducepackaging tion. Besides at threeGerman plants, service closetothecustomer’s loca- our customers.Inaddition, weoffer the country-specific requirements of engineering, weadapt ourproductsto presence. By offeringlocal application One ofourstrengths isourforeign activities. mirrors theglobalfocusofour market. Theexportshareof86% and grewfasterthantheoverallworld 1999 exceededthoseoftheprioryear Our packaging-machinery salesin machinery of packaging Worldwide production instruction tools. now constitutebenchmarks forsuch technology werewellreceivedand interactive trainingprogramsinfluid them intoseverallanguages.The and mechatronics andtranslated technical manualsinfluidtechnology expanded thesuccessfulseriesof ing ofdealersandcustomers.We developed fortheschooling andtrain- New seminars andlearningtoolswere power range. a low-costminicontrolforthelower memory-programmable controlswith devices areopen.We expandedour although mechanical protection makes forsafemachine set-ups integrated intheelectricdrive.It system which, asaninnovation,is nology wedevelopedamonitoring In theareaofdriveandcontroltech- Progress 1995–1999 DM) (billion goods ofcapital Sales . . . . 2.5 2.0 1.5 1.0 0.5

______

______mance boiling, cuttingandfolding industry was increasedbyhigh-perfor- aging machines fortheconfectionery ity. Ourrangeofproduction andpack- high degreeofflexibility andavailabil- controls.The equipmentoffersa PC dynamic servodrives andindustrial- cartoning machine with highly line. Itconsistsofadeep-drawing and was enlargedwithahigh-performance ing machines fortablets and capsules Our productrangeofblister-packag- chamber (insulatortechnology). designed asanencapsulatedsterile which theproducthandlingelementis preproduced one-waysyringes,in closing ampules,injectionvialsand with newequipmentforfillingand We expandedourmarketposition upright bags. potato productsinnewreclosable States customerforthepackaging of pouch-filling56 machines toaUnited As partofalargeproject,wedelivered ments. innovations andprogramcomple- ments withtheappropriateproduct ing solutions.We meettheserequire- cal industriesexpectcompletepackag- food, confectioneryandpharmaceuti- Increasingly, ourcustomersinthe supplied solutions packaging Complete Russia, Singapore,andMexico. service branches existalsoinChina, and theUnitedStates.Customer the Netherlands, theCzech Republic, machinery inBrazil,India,Japan,

______

______2.0 2.0 2.1 2.1 2.2 1999 1995 1996 1997 1998 products. gum andsphericalconfectionery machines forproducingchewing candy mixtures.We alsointroduced equipment forhardandsoftcaramel flow. material fullyautomatic antee valve and cylinder mountguar- cylinder,pneumatic solenoid of consisting processing: units forplastics Bosch pneumatics 33 pates in32jointventures. pates company. Worldwide, Boschpartici- ofthe commitment international the 145 to Germany, areoutside testify ofwhich sites, 190 manufacturing Morethan nies in48countries. compa- subsidiaries andassociated Bosch Grouphas the In total, NAFTA primarilyinthe growth area. We alsoseestronger region. in this countries overcome inmostofthe of 1997/98 hasmeanwhilebeen economicrecession sincethe ket, Asianmar- inthe potential growth seegood to We continue ness. busi- our automotive-equipment for case This allthe isabove Asia. in expandedouractivities particular andin presencefurther international During 1999 our westrengthened 36.0 1,085 Expense R&D 2,060 Investments Sales Key numbers 34 1999 ,4 millionDM 1,843 1998 25billionDM 32.5 4 millionDM 946 Business International makes usthefirstsupplier inthe jointly heldbyBosch and Zexel. This Braking Systems, anewcompany braking-systems business inBosch We alsocombined ourpassenger-car tion andtransmission technology. the fieldsofgasoline anddieselinjec- concentrating ouractivitiestherein in Zexel Corporation, Tokyo, weare After acquiringthemajorityinterest inJapan Reorganization these countries. ther expansionofourbusinessin is anessentialprerequisiteforthefur- tion-engineering capacities.Thistrust with localmanufacturingandapplica- tent, innovativeandefficientsupplier acquired thereputationofacompe- active inJapanandKorea wherewe For manyyearsnow,wehavebeen increasingly losingtheirimportance. ducers andnationalsuppliersare ing traditionalrelationsbetweenpro- degree ofsystemscompetence.Exist- foreign supplierswhohaveahigh efficient andtechnologically leading increasingly opentocooperationwith worldwide. Themanufacturersare tive vehicleswhich cancompete ing andthedevelopmentofinnova- focus isonorganizationalrestructur- ment oftheircompetitiveness.The working vigorouslyontheimprove- The manufacturersinthisregionare vehicleproducers of Far Eastern part More opennessonthe 800 million DM in1999. millionDM 800 solidated, salesinKorea reached rata, previouslyonly partiallycon- and twominorityholdings. Thepro now activewithonlytwocompanies market business.Asaresult,Bosch is further companyconductstheafter- organization becamepossible.A tion withourinternationalproduction and ElectronicsLtd,sothatintegra- one roof,theBosch Korea Mechanics automotive equipmentbusinessunder ventures. We combinedourOEM ship offourourformersixjoint ners, wetookovercompleteowner- Korea. Inagreementwithourpart- We alsorestructuredouractivitiesin Korean activities ofour Restructuring in1999. about 4.5billionDM only partiallyconsolidated,reached sales inJapan,which previouslywere tion hasthreeminorityinterests.Our total offivecompanies,andinaddi- Bosch isrepresentedinJapanwitha projects. engaged usmorestronglyintheir Asian automobileproducershave to theneworganization.Important were highlypositiveintheirreactions and brakingsystems.Ourcustomers plete programofbrakingcomponents Japanese marketabletoofferacom- tors, freezersandwashing machines. Hausgeräte GmbHproduces refrigera- Bosch undSiemens ventures, BSH two othercompanies. Intwojoint gas-fired boilersand power toolsin ventures withChinese partners,and produce automotiveequipmentinfive two aftermarketcompanies,wealso Aside fromtheholdingcompanyand injection technology. higher salesingasolineanddiesel- and heavycommercialvehiclesledto increased useofdieselenginesinlight stricter emissionregulationsandthe again in1999. Theintroductionof Our volumeofbusinessinChinagrew companies. hold thesharesinourChinese as awholly-ownedsubsidiary,will Beijing, asaholdingcompany,which, InvestmentLtd, Bosch (China) March, We 2000. alsoestablished pumps fortheChinesemarketin It startedproductionofinjection pany jointlyheldbyBosch andZexel. systems, weestablishedanewcom- duction andsalesofdieselinjection trols. For applicationengineering,pro- especially intheareaofenginecon- increased therangeofourproduction, expanded ourmarketingactivitiesand World Trade Organization.We have for China’smembershipinthe In Chinawearepreparingourselves inChina growth Strong byregions1999 apercentage) (as Breakdown ofsales 02 04 06 08 0100 90 80 70 60 50 40 30 20 10 ______

______

______

______

______and modules. and high-qualitycomponents, systems we seegreatpotential forourefficient strong growthinNorth America,as injection. We aregearingup forfurther injectors fordieseland gasolinedirect prepared fortheproduction start-upof and tronic stabilityprogram(ESP), a newLambdasensorandoftheelec- further. We commencedproductionof expanded ourproductionprogram books oftheautomobileindustry,and strong U.S.economyandthefullorder market. We participatedin1999 inthe isourlargestforeign 9.4 billionDM, North America,withasalesvolumeof adjustment, fansandwipers. alternators andelectricmotorsforseat tion equipmentaswellstarters, equipment, dieselandgasoline-injec- control units,componentsforbraking within NAFTA, weproduceelectronic customers. Intotal,at18 locations North American automobileindustry better meettherequirementsofour Illinois.Thisenablesusto (Chicago), Robert Bosch Corporation, Broadview under oneroof,i.e.ourU.S.subsidiary activities inautomotiveequipment and Mexico, wecombinedimportant In 1999, intheUnitedStates,Canada America in North expansion Further in 1999 to275 millionDM. consolidated, salesinChinaincreased Our prorata,untilnowonlypartially

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______19.9 69.0 4.4 6.7 Rest ofEurope Australia Africa, Asia, America EuropeanUnion ofthe Countries 35 The most important 1999 In order to be able to meet future Because of the strong demand for Employees and production outside Germany (1999) markets outside Germany requirements still better, we have con- diesel-injection equipment compo- siderably expanded our technical cen- nents, our plants at Rodez and Country Employees Automotive Consumer Communications Capital Sales (billion DM) ter at Farmington Hills near Detroit, Vénissieux were working at full equipment goods technology goods USA 8.3 Michigan. The plan is to concentrate capacity. We are expanding diesel USA 15,150 France 5.2 application engineering and sales of production at Rodez, where we will U.K. 3.2 automotive equipment there. invest about 175 million DM by the Brazil 11,360 Italy 3.0 end of the year 2000 for the produc- Spain 2.6 In order to gain direct access to tion of a new high-pressure injection India 11,250 Brazil 1.2 research and development in the system, the Unit Injector System Austria 1.2 United States, we established the (UIS). France 10,750 Japan 1.0 Bosch Research and Technology Cen- Netherlands 0.9 ter North America. Located in Palo In the U.K., the second most impor- Spain 7,450 Sweden 0.9 Alto, California, it deals with sensor tant non-German European market systems which exchange information after France, with sales of 3.2 billion Mexico 4,570 in a wire-less mode and which can DM, we produce automotive equip- combine into networks. At its Pitts- ment, power tools and products in the U.K. 3,860 burgh, Pennsylvania location, work thermotechnology area. The unex- progresses on development methods pectedly strong growth in British Portugal 3,730 for systems and software. automobile production had a signifi- Malaysia 2,630 cant impact on the development of Illuminated sign in Stagnation in Brazil our business. Our sales in the U.K. the Hongkong skyline: Switzerland 2,120 The economic development in South increased by 14%. Bosch is also well- America is influenced especially by known in Asian Brazil. Following the economic stag- Weakness in markets. nation of 1999, we expect this coun- Central and Eastern Europe try to again show growth in the During the past eight years we estab- future. In the automotive-equipment lished 12 sales companies in the coun- area we intend to participate in the tries of Central and Eastern Europe. expected increase in Brazilian auto- In addition, we built plants in Poland, mobile output. Our total sales in Russia, the Czech Republic, and South America amount to 1.5 billion Hungary for the production of auto- DM. Approximately 1.2 billion motive equipment. thereof pertains to our most impor- tant market, Brazil. Our business in Central and Eastern Europe was marked by a pronounced Strong growth downward trend in 1999. While we in France and the U.K. were able to achieve generally France is our largest European mar- double-digit aftermarket-business ket outside Germany with a sales vol- growth during the past seven years, ume of about 5.2 billion DM. In aftermarket-sales growth slowed in France, we manufacture products for 1999 and in some markets actually automotive equipment, thermotech- stagnated or declined. In the medium North America is our largest nology and automation technology. and long term we again see growth foreign market. We manufac- potential in these countries. ture automotive equipment at During 1999 we were able to increase 18 locations. Photo: Disc- our sales in the French market by brake assembly in the 21%. Business with the country’s auto- Clarksville, Tennessee (USA), mobile producers grew at an above- plant. average pace, major contributors being the increased use of ABS in vehicles as standard equipment and the steep increase in production of diesel-powered vehicles.

36 37 before. year the morethan 14% patents, Bosch inGermanyappliedfor2,050 In1999, itholds. number ofpatents especiallyinthe That isreflected highdegreeofinnovation. by its The BoschGroupischaracterized 38 engine. inan laser spectroscopy processwith analyze the chamber.combustion We placeinthe engine takes gasoline direct-injection inthe formation Mixture Development Research and with coldenginestarts. important forexhaust-gas control response times.This isespecially sensitive sensorswith shorter materials. Ouraimis tocreatemore ical cellsfromceramic andmetallic multi-layer compositeofelectrochem- sensor technology. We constructa In theproductionweutilizeplanar optimally. injection vehiclescanalsobecleaned ner, exhaustgasfromgasolinedirect- value).Inthisman- position (Lambda mixturecom- fuel quantityandA/F which controls management ECU values areevaluatedbytheengine- model ofthecatalyticconverter, verters. Together withamathematical on-board diagnosisofcatalyticcon- the enginemanagementandfor nitric oxides.Thesensorsareusedfor components, such asoxygenand for themeasurementofexhaust-gas We areworkingonselectivesensors systems emission-control forstate-of-the-art Sensors pany. neering throughoutthewholecom- technology, andforadvancedengi- tion-oriented research, forproduction ment isresponsibleforbasic,applica- and Advanced EngineeringDepart- other hand,ourCorporate Research their ownareaindependently. Onthe The divisionsdeveloptheproductsin in close-range situations.These for distance andspeedmeasurement functions of microwavesensors used integration intoasingleunitof the We weresuccessful intheeconomical driver supportthe to Close-up sensorics demanding plasticelements. improve thequality of highly process conditionshelps usto In particular,thisadaptationtoactual sampling intheproductionprocess. stantly mergetheresultsofperiodic process modelsintowhich wecon- rely inourproductiononstatistical nents. Inordertoreducethese,we injection moldingofplasticcompo- lead toqualityfluctuationsinthe well aswearintoolsandfittings,can Process andmaterialvariations,as moldingprocesses in injection control Quality structures onminimalsurfaces. mits thegenerationofhigh-resistance Among otherthings,thisprocessper- process ofphotographicimaging. We developedanew,economical 0.1 millimeter. limited tostructurewidthsofaround ceramic film.Theirresolutionis heaters andsensorelementsonto structure conductorpaths,electrodes, processes weregenerallyusedto technology. Untilnow,silk-screening ceramic exhaust-gassensorsinplanar demand alsowhenitappliesto Miniaturization ismoreandin for fine-structuring New method ern inputandoutput technologies. with thetechnical possibilities ofmod- human abilitytoprocess information it isnecessarytosynchronize the tion ofindividualsystems. Indoingso, as isclearinformationaboutthecondi- to understandoperationisnecessary, and unequivocably,uniformeasy information withthedriverreliably In orderforthesesystemstoexchange increase theeaseandsafetyofdriving. control andtracking controlto driver assistancewithadaptivespeed device. Future systemswillprovide mobile telephoneandnavigation mation systemsareused,such asradio, In state-of-the-artvehicles,manyinfor- automobile machine inthe humanand between Interaction ing traffic. controlled speedadaptedtosurround- automatic distancesafetymarginand drive evenindensetrafficwithan tion. With thisprocessitispossibleto vehicle withadequatelocalresolu- of theareadirectlyinfront only twosensors,allowsregistration oped aprocesswhich, withtheaidof and-go drivingconditionswedevel- For vehicle-speedcontrolunderstop- ing upandadaptivespeedcontrol. sensors, andsensorstoassistinback- include precrashsensors,blind-spot Progress 1995–1999 DM) (million Total forresearchanddevelopment expenditures ,0 ,0 ,0 ,0 5,000 4,000 3,000 2,000 1,000

______

______2,474 development. be plannedintoanearly stageofthe Necessary protectivesteps can then motors andelectronic controldevices. instance, inthedesign ofelectric processes which areemployed, for the-art modelingand simulation examining anddeveloping state-of- aided methods.To thisendweare being metwiththehelpofcomputer- Both requirementsareincreasingly legal limits. output ofourproductswellinsidethe keep theelectromagneticinterference netic interference.Inaddition,we when subjecttoexternalelectromag- that theywillfunctionreliablyeven Thisguarantees compatibility (EMC). their highdegreeofelectromagnetic Our productsaredistinguishedby compatibility Ensuring electromagnetic demands. systems mustbeadaptedtothesesame the assistanceandcommunications actual trafficsituationandtheeffectsof tized basedonthedemandsof future, driveractionsmustbepriori- tance andcommunicationssystems.In their interactionswitharangeofassis- ers withdifferentlevelsofskilltotest and inactualtraffic,weareusingdriv- operational elements.Inasimulator activated operationaswellhaptic have developedcomponentsforvoice- tion betweendriverandsystems,we For simpleandefficientcommunica- 1

______2,887 3,257 3,478 3,757 ______1999 1995 1996 1997 1998 engine can bestarted. engine can upandthe sensor’s surroundlights user, him asanauthorized the print identifies driver’sthumb as the key. ignition Assoon replaces the lever gearselection inthe grated inte- Afingerprintdetector features. basedonphysiological detection processes suchasfinger-print bymeansof biometric identified beunequivocally Drivers can prxmtl 1%there- Approximately 11 1 product development. and foreignsubsidiariesfor in thebusinessdivisions research anddevelopment engineering; thereston research andadvanced of isspentoncorporate 39 apprentices. and4% employees, were salaried wereskilled–,38% – ofwhich41% employees werehourly-paidworkers ofourdomestic 58% 96,970. About abroad increasedby2,790to 97,919,whileemployment 2,562 to Employment inGermanyroseby companies. group ofconsolidated fromchangesinthe 1,000 resulted earlier. increase,about Ofthis ayear worldwide, 5,352morethan employed aworkforceof194,889 BoschGroup On January1,2000,the 40 quality discussions. quality and meet regularlyinCIP The employees inourplants of theBosch Group Employees increasing lack ofengineersinGer- wereengineers. Because ofan 80% sity graduates inGermany, ofwhich During 1999 wehired 2,000univer- more andinternational willbe executives Future year 2000. include alldepartment headsinthe ment echelon, wasexpanded to only pertainedtothe topmanage- goals. Thisprovision,which asastart respective businessunitmeetits degree bywhich theresultsof future alsotakeintoconsiderationthe variable year-endbonuses,wewillin ual performanceindeterminingthe worldwide Bosch Groupandindivid- taking intoaccounttheprofitsof performance based.Inadditionto ing theportionswhich areprofitand pensation structurefurther,expand- employees, wedevelopedourcom- preneurial activitiesofourmanagerial In ordertofurtherencourageentre- for managerialstaff New year-endbonuses tions. tractual andothersocialcontribu- additionalmandatory,con- DM 86 pay forworkperformed,therewere For each 100increased by1.0%. DM Domestic employee-benefitcosts rise inthenumberofemployees. raises innewunioncontractsandthe was mainlytheresultofsignificant to10.6 billionDM Germany by4.2% 15.6) Theincreasein billionDM. toapproximately16.2 (1998: by 4.2% Our laborcostsworldwideincreased increase to continue costs Labor (January 1, 1999: 3, (January therewere a totalof3,839 2000, the previousyear. Thus,onJanuary 1, more than German plants.Thatis 8% started theirapprenticeship inour During 1999, 1,236 young people hired inGermany More apprentices projects. take careofspecialassignmentsand temporary capacitybottlenecks and This assistanceenablesustobridge divisions andforeigncompanies. tives, andofferstheirservicestoour employees, typicallylong-timeexecu- employs formerBosch Group Support GmbH.Thisorganization lished theBosch Management retired employees,wehaveestab- the experienceandknowledgeof In ordertocontinuebenefitfrom of olderemployees know-how Using the companies. promising employeesinourforeign ing increasinglyonthepotentialof leadership characteristics, wearerely- positions requiringqualifiedskillsand project ataforeignlocation.Infilling required toparticipateinasix-month tional orientation.Each traineeis trainee programsastillmoreinterna- sity graduates.We arealsogivingour are hiringevermoreforeignuniver- ing globalnatureofouractivities,we many, andwithaneyeonthegrow- have come intobeingsince1997. these arebeing trainedinjobs which of in training. Approximately30% 538) apprentices knowledge. more effectively exploitandutilize about the many waysinwhich to managers andspecialists areinformed edge management.In theseseminars, began aseriesofseminars inknowl- institution forcontinuing education, Robert Bosch Kolleg, aninternal tant factorforcompany success.The Knowledge isincreasingly animpor- measures Knowledge-management wide. guidelines which areineffectworld- eign locations,wehaveformulated instruction atbothdomesticandfor- guarantee thehighestlevelofquality countries.Inorderto more than20 All inall,wetrainapprentices tive personnelisalsoinpreparation. nicians there.Acourseforadministra- will alsostarttrainingelectronictech- we Bursa usingthismodel.In2000 mechanics atourTurkish plantat 1999, webegantrainingindustrial training model.For instance,during andworkstation) dual (classroom foreign locationsusingtheGerman conditions, wealsotrainapprenticesat As faraspermittedbycountry-specific Training abroad and telecommunicationstechnologies. duction, andtraineesininformation employment insemiconductorpro- training, microtechnologists for nation ofmechanical andelectronics ics apprentices,whoreceiveacombi- These consistprimarilyofmechatron- Trend averages) (annual 1995–1999 Number ofemployees 0008,0 2,0 6,0 0,0 240,000 200,000 160,000 120,000 80,000 40,000

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______degree ofreadiness toperform and Bosch Group. Onlywithahigh strained at manylocationsofthe ment situation in1999 wasextremely As intheyearbefore, theemploy- perform readiness to for Appreciation measures forimprovement. veys todeterminethe appropriate We willapply theresultsofthesesur- employees atourvariouslocations. to conductregularsurveyswiththe employee satisfaction,wehavestarted order toascertainthedegreeof external andinternalcustomers.In and forsuccessfulcooperationwith quisite fortheirwillingnesstoperform environment isanimportantprere- part ofouremployeeswiththeirwork A highdegreeofsatisfactiononthe Employee survey job market. shortage ofavailableengineersinthe measure isalsoaresponsetothe academically trainedemployees.This merly wereperformedprimarilyby equipment construction,which for- quality assuranceandproduction ment, workandproductionplanning, technically skilledjobsindevelop- neers. Thisappliesparticularlyto them totakeoveractivitiesfromengi- which inspecialareasshouldenable month part-timetrainingprogram 100 skilledworkersbeganaten- tiveness ofskilledwork.About in Germany toenhancetheattrac- During 1999 westartedapilotproject ofskilledemployees promotion Pilot projectforthe

______158,372 172,359 179,719 188,017

______194,335 1999 1995 1996 1997 1998 arrangements possible. time, madeflexible,work-related who, especiallywithregardtowork standing andcooperativemanner reacted tothedemandsinanunder- to thelaborrepresentativeswho also wanttoexpressourappreciation We employees fortheircommitment. to deliver. We wanttothankour guarantee theabilityofcompany possible tomeetcustomerneeds,and flexibility ofouremployeeswasit sale ofourproducts. sale and manufacture development, employees getanideaofthe days atwhichprospective weorganizerecruiting activities, engineers forourdevelopment more attract Inorderto ates. gradu- university recruiting in newpaths We aretreading 41 Financial Statements of the Bosch Group Worldwide Consolidated Balance Sheet as of December 31,1999

(million DM)

Assets Appendix December 31, 1999 December 31, 1998 Liabilities Appendix December 31, 1999 December 31, 1998

Fixed assets (6) Equity capital (9)

Intangible fixed assets 1,643 1,657 Capital stock 1,800 1,800

Tangible fixed assets 10,909 9,975 Capital surplus 4,630 4,630

Financial investments 1,552 1,071 Earned surplus 5,842 4,797

14,104 12,703 Unappropriated earnings 80 80

Current assets Minority interests 646 562

Leased products 419 449 12,998 11,869

Inventories (7) 6,525 5,989 Accruals with valuation reserve portion (10) 533 67

Accounts receivable and other assets (8)

Accounts receivable 9,337 7,968 Accruals

Other receivables and assets 2,910 2,106 Accruals for pensions and similar obligations 7,256 6,917

Marketable securities 5,216 5,822 Other accruals (11) 10,782 9,315

Liquid assets 2,178 1,260 18,038 16,232

26,585 23,594 Liabilities (12)

Deferred expenses 54 46 Liabilities with banks 2,356 1,979

Accounts payable 4,064 3,557

Other liabilities 2,690 2,575

9,110 8,111

Deferred income 64 64

40,743 36,343 40,743 36,343

42 43 Financial Statements of the Bosch Group Worldwide Financial Statements of the Bosch Group Worldwide Consolidated Statement of Income Capital Flow Statement for the period from January1to December 31,1999 (million DM) (million DM)

Appendix 1999 1998 1999 1998

Sales (15) 54,579 50,333 Net income for the year 900 850

Changes in finished goods and work-in-progress inventories Depreciation of fixed assets*) 3,884 3,570 and other capitalized costs (16) 743 551 Increase in long-term accruals and accruals with valuation reserve portion 1,588 484 Total operating performance 55,322 50,884 Cash flow 6,372 4,904

Increase in inventories and leased products –506 –307 Other operating income (17) 2,822 2,753 Increase in receivables –2,181 –670 Costs of materials (18) –25,734 –23,697 Change in short-term accruals 684 –63 Personnel costs (19) –16,229 –15,575 Increase in liabilities 622 258 Depreciation of intangible and tangible fixed assets –3,749 –3,265 Additions to funds from business activities (1) 4,991 4,122 Other operating expenses (17) –10,854 –9,366 Additions to fixed assets –4,832 –4,488 Net income from investments (20) 95 22 Retirements of fixed assets 576 242 Amortization of financial investments and securities included Application of funds to investment activities (2) –4,256 –4,246 with current assets –221 –262 Dividends 1998/1997 –80 –2,209 Interest income, net of expenses (21) 251 306 Increase in capital stock 300 Income from ordinary business activities 1,703 1,800 Increase in capital surplus 1,735 Taxes on income (22) –803 –950 Increase in liabilities with banks 377 266 Net income for the year 900 850 Other changes in balance-sheet items –720 –198 Including profit and loss of minority shareholders (23) 115 66 Application of funds to financial activities (3) –423 –106

Change in liquidity (1) + (2) + (3) 312 –230

Liquidity at the beginning of the year 7,082 7,312

Liquidity at the end of the year 7,394 7,082

*) including 19 million DM write-ups in 1999

44 45 Financial Statements of the Bosch Group Worldwide 1999 Development of Fixed Assets

(million DM)

Cost of acquisition or manufacture

Jan.1,1999 Changes in the Additions Transfers Retirements Dec.31,1999 Depreciation Net book Net book Depreciation consolidated cumulative value as of value as of current year group to Dec.31,1999 Dec.31,1999 Dec.31,1998 Intangible fixed assets

Concessions, patents, trademarks and similar rights

and assets as well as licenses to such rights and assets 765 27 184 1 403 574 380 194 202 209

Goodwill 2,804 463 17 47 3,237 1,788 1,449 1,454 561

Advance payments 2 –1 1 –1 1 11

3,571 489 202 451 3,811 2,168 1,643 1,657 771

Tangible fixed assets

Land, leasehold rights and buildings,

including buildings on land owned by others 6,307 42 231 55 62 6,573 3,627 2,946 2,789 242

Production equipment and machinery 14,355 209 2,032 538 710 16,424 11,283 5,141 4,442 1,913

Other equipment, fixtures and furniture 9,327 64 783 24 980 9,218 7,353 1,865 1,906 822

Advance payments and construction in progress 857 12 760 –617 44 968 11 957 838 1

30,846 327 3,806 1,796 33,183 22,274 10,909 9,975 2,978

Financial investments

Investments in affiliated companies 602 –79 494 713 78 1,652 806 846 118 37

Loans to affiliated companies 148 –42 90 16 1 15 143

Investments in associated companies 1,075 57 –589 91 452 98 354 559

Other financial investments 382 2 265 –124 12 513 259 254 165 117

Other loans 89 5 8 18 84 1 83 86

2,296 –114 824 289 2,717 1,165 1,552 1,071 154

Total fixed assets 36,713 702 4,832 2,536 39,711 25,607 14,104 12,703 3,903

46 47 Financial Statements of the Bosch Group Worldwide Balance Sheet Structure 1995–1999

(million DM)

1995 1996 1997 1998 1999

Assets

14,104 35% Fixed assets 12,703 12,013 35% 34% 6,957 10,784 24% 33% 6,944 Inventories, leased products 6,438 17 % 6,131 5,173 5,329 18% 18% 17% 18%

6,790 12,301 Receivables 8,578 9,450 10,120 24% 30% 27% 27% 28%

9,584 Marketable securities, liquid assets 7,582 7,312 7,082 7,394 34% 23% 21% 19% 18 %

Total assets 28,504 32,273 34,906 36,343 40,743

12,998 32% Liabilities 11,869 11,377 33% 9,527 33% 30% 9,038 32% Equity capital 15,703 38% 13,149 13,870 12,928 38% 11,388 40% 37% Long-term liabilities 40%

12,042 9,818 10,380 10,604 Current liabilities 8,078 30% 30% 29% 28% 30%

Total liabilities and equity 28,504 32,273 34,906 36,343 40,743

48 Financial Statements of the Bosch Group Worldwide Appendix 1999

(1) General remarks The consolidated statements of the Bosch Group Worldwide conform to the regulations of the Commercial Code. In order to ensure better understanding of these financial statements, we com- bined a number of individual balance sheet and statement of income items into key groupings. These items are stated separately in this Appendix. Required comments for individual items are also contained in this Appendix. The consol- idated statement of income follows the format of the total cost method.

(2) Consolidated group The consolidated statements include Robert Bosch GmbH and 20 domestic as well as 103 foreign subsidiaries. For the first time, we consolidated the newly- established Robert Bosch Finance Corporation, Broadview (Chicago), and the partially consolidated financial statements of ZF Lenksysteme GmbH, Schwäbisch Gmünd, a joint venture with ZF Friedrichshafen AG. During the year we sold Fr. Hesser AG, Waiblingen, and Signalbau Huber AG, Munich, together with its subsidiary Robot Foto und Electronic GmbH, Düssel- dorf. Several businesses were integrated into other companies both within and outside the consolidated group by way of legal restructuring. These were primarily, Robert Bosch Componenti per Veicoli Spa, Milan; Robert Bosch Industriale e Commerciale SpA, Milan; Nippon ABS Ltd, Yokosuka; Bosch Korea Ltd, Seoul; and Malaysian German Automotive Equipment Sdn Bhd, Penang. The consolidated statements of BSH Bosch und Siemens Hausgeräte GmbH, Munich and ZF Lenksysteme GmbH (ZFLS), Schwäbisch Gmünd, were included pro rata pursuant to Section 310 of the Commercial Code. In accordance with Section 296, Paragraph 2 of the Commercial Code, com- panies lacking operations or having insignificant business volume, were not included with the consolidated financial statements. In addition, we did not include in the consolidation the financial statements of Zexel Corporation, Tokyo, and Bosch Braking Systems Co Ltd, Tokyo, in which we did not acquire major- ity ownership until 1999 (see Section 296, Paragraph 1, Sub 2 of the Commercial Code). The equity valuation of specific interests in associated companies was applied in accordance with the book-value method. This valuation pertained to three domestic and six foreign companies. An investment which was reclassified dur- ing the year from associated to affiliated companies continued to be accounted for by the equity method.

(3) Principles of classification The financial statements of Bosch Group Worldwide include the individual state- and valuation ments of our subsidiaries which conform to uniform principles of classification and valuation. We adhered to the valuation at lower of cost or market and imparity of gain or loss recognition. Financial statements of foreign associated companies were not modified to com- ply with the uniform accounting principles of the consolidated group.

49 Intangible assets including goodwill resulting from first-time consolidations as For the translation to DM of the financial statements in foreign currencies and the well as tangible and financial assets were valued at acquisition cost or cost of related profits and losses, we applied, in principle, average exchange rates at the manufacture subject to depreciation. balance-sheet date. Transactions pertaining to fixed assets were translated at aver- We applied straight-line as well as accelerated depreciation methods. Items of age annual DM equivalents. Resulting differences were included with beginning minor value were fully depreciated during the year of acquisition. We applied spe- balances of cost of acquisition or manufacture as well as in cumulative deprecia- cial depreciation allowances according to tax regulations in all countries. tion. Interest-free and low-interest loans were adjusted to reflect present values by Income and expenses were translated at average exchange rates. Differences application of a uniform discount rate domestically, and prevailing rates in resulting from the application of average exchange rates versus year-end foreign countries. exchange rates were included with other operating expenses. Additions to interests in associated companies include shares purchased as well as capital contributions and prorated profits. Retirements include prorated losses, dividends paid and shares sold. We valued inventories at the lower of average purchase or manufacturing cost (5) Consolidation principles For capital consolidation of companies or for newly acquired capital shares, we or market. Manufacturing costs include direct costs and reasonable overhead. applied the book-value method at the date of acquisition or at the date of first- At domestic companies, the Lifo valuation method was used in principle. We time consolidation. As far as possible, we allocated amounts subject to capital- used this method also at foreign subsidiaries when accepted by the taxing author- ization to the respective assets. Remaining amounts were included with goodwill. ities. Negative goodwill resulting from capital consolidation was included with earned We provided for risks inherent in warehousing and distribution through appro- surplus. priate deductions. Additional write-downs were taken in cases of unfavorable Receivables and payables, sales, expenses, and income, as well as results within returns. the consolidated group were eliminated. Accounts receivable and other current assets were stated at face values less write- Profits from sales to the consolidated group by associated companies were not downs for individual risks and for general credit risks. Interest-free or low-inter- eliminated since they were insignificant. est receivables with maturities of more than one year were discounted. Deferred tax assets resulting from consolidation measures in the amount of We valued marketable securities included in current assets at the lower of acqui- 60 (prior year 81) million DM were included with other assets. sition cost or market. Special write-downs among current assets of 7 million DM were taken on account of expected price fluctuations. In determining the size of accruals we provided for all identifiable risks. (6) Fixed assets Extraordinary depreciation amounting to 330 million DM pertained mostly to Pension accruals and similar liabilities were determined by the application of goodwill and to financial investments. actuarial principles and were discounted to reflect present values. For domestic In accordance with tax regulations, we deducted an extra 26 million DM directly companies, we used a 6% discount rate in accordance with the 1998 guideline from the acquisition costs of tangible fixed assets. The depreciation was taken tables, while foreign subsidiaries used discount rates prevailing in their respective pursuant to Section 6b of the Income Tax Law, Section 4 of the Development countries. Area Law, Section 82a of the Income Tax Implementation Regulations and pur- In determining the amounts accrued for pending transactions with expected suant to local tax laws at our foreign subsidiaries. losses, we basically took account of prices and costs expected at the time these Land and investments in associated companies were written up by 3 million DM transactions would close. and 16 million DM, respectively. Liabilities were stated at the amounts owed. The development of fixed assets is presented on pages 46 and 47 of this report.

(4) Currency translation Accounts receivable and accounts payable stated in foreign currencies were trans- (7) Inventories Included with the stated value of inventories, in the amount of 6,525 million DM, lated to DM equivalents at the less favorable of the exchange rate at the date of are our advance payments of 50 million DM (1998: 45 million DM). On the origin, or at the balance-sheet date. other hand, advance payments received in the amount of 218 million DM (1998: 201 million DM) were deducted.

50 51 (8) Accounts receivable Million DM 1999 1998 (12) Liabilities Million DM 1999 Including 1998 Including and other assets maturities maturities Accounts receivable 9,337 7,968 up to one up to one including maturities of more than one year 13 17 year year Liabilities with banks 2,356 467 1,979 564 Other receivables and assets Receivables from affiliated companies 655 269 Accounts payable 4,064 4,064 3,557 3,557 including maturities of more than one year 154 Receivables from companies in which Other liabilities interests are held 150 112 Liabilities from acceptances including maturities of more than one year – 9 and drafts 118 118 216 216 Other assets 2,105 1,725 including maturities of more than one year 252 182 Liabilities with affiliated companies 104 104 45 45 2,910 2,106 Liabilities with companies in which Receivables and other assets 12,247 10,074 interests are held 155 155 114 114

Other liabilities 2,313 2,227 2,200 1,885 2,690 2,604 2,575 2,260 (9) Equity capital The subscribed capital stock of 1,800 million DM and the capital surplus of 4,630 million DM correspond to the respective balance-sheet items of Robert Bosch Total liabilities 9,110 7,135 8,111 6,381 GmbH.

Revenue surplus accounts consist of the following: Of the liabilities with banks, 42 million DM were secured by mortgages and another 28 million DM by other liens. Of other liabilities, 10 million DM were Million DM 1999 1998 secured by mortgages. Other liabilities contain tax liabilities in the amount of 475 million DM (1998: 465 Earned surplus of Robert Bosch GmbH 1,240 670 million DM) and liabilities pertaining to social obligations in the amount of 420 Other earned surplus 4,602 4,127 million DM (1998: 352 million DM). Liabilities with shareholders in the amount 5,842 4,797 of 42 million DM pertain to Robert Bosch Stiftung GmbH. Total liabilities with maturities of more than 5 years amounting to 1,318 million Unappropriated earnings of the consolidated group are identical to those of DM included 1,295 million DM of liabilities with banks and 23 million DM of Robert Bosch GmbH. other liabilities.

(10) Accruals with Accruals with valuation reserve portion were formed pursuant to Sections 6b and (13) Contingent liabilities Million DM valuation reserve portion 52 Paragraph 16 of the Income Tax Law, Section 12 of the Reorganization Tax Contingent liabilities from the issuance or transfer of notes 213 Law and Section 1 of the DDR Investment Law. Our foreign subsidiaries fol- including on behalf of affiliated companies 19 lowed local regulations with respect to such items. Contingent liabilities from guarantees 328 including on behalf of affiliated companies 20 Contingent liabilities from warranties 29 Contingent liabilities from collateral given for third-party liabilities 13 (11) Other accruals Million DM 1999 1998 including mortgages 6

Accrued taxes 330 296 As a partner in two foreign private companies, we are jointly and severally liable Other accruals 10,452 9,019 in accordance with legal requirements. 10,782 9,315

52 53 (14) Other financial obligations Other financial obligations of significance for an opinion on the financial (19) Personnel costs Million DM 1999 1998 condition of the company did not exist. Wages and salaries 13,069 12,125 Social security, pension plans, and support payments 3,160 3,450 of which pension plans 806 1,141 (15) Breakdown of sales Million DM 1999 % 1998 % 16,229 15,575

Sales by business sectors Average numbers of employees during the year, by region: Automotive equipment 35,470 65.0 31,797 63.2 1999 Including 1998 Including Consumer goods 11,757 21.6 11,357 22.5 Total BS H, Tot al B S H Communications technology 5,260 9.6 5,014 10.0 ZFLS Capital goods 2,092 3.8 2,165 4.3 (prorated) (prorated) 54,579 100.0 50,333 100.0 Countries of the European Union 132,749 15,423 127,568 11,778 Million DM 1999 % 1998 % Rest of Europe 10,527 3,112 9,369 2,574 America 31,592 2,812 32,082 2,598 Sales by regions Asia, Africa, Australia 19,467 1,648 18,998 33 194,335 22,995 188,017 16,983 Countries of the European Union 37,641 69.0 34,589 68.7 Rest of Europe 2,392 4.4 2,449 4.9 America 10,852 19.9 10,183 20.2 Asia, Africa, Australia 3,694 6.7 3,112 6.2 (20) Net income Million DM 1999 1998 54,579 100.0 50,333 100.0 from investments Income from investments 35 23 including affiliated companies 11 10 Result from associated companies 60 –1 (16) Changes in finished goods and Million DM 1999 1998 95 22 work-in-progress inventories and other capitalized costs Change in finished goods and work-in-progress inventories 341 184 Other capitalized costs 402 367 (21) Interest income, Million DM 1999 1998 743 551 net of expenses Interest from loans included with financial investments 6 10 including affiliated companies 4 8 (17) Other operating Expenses resulting from additions to accruals with valuation reserve portion in Other interest and similar income 497 584 expenses and income the amount of 490 million DM are included in other operating expenses. Income including affiliated companies 11 6 from the reversal of accruals with valuation reserve portion in the amount of Interest and similar expenses – 252 – 288 26 million DM are included in other operating income. including affiliated companies – 1 – 1 251 306

(18) Costs of materials Million DM 1999 1998

Cost of raw materials, supplies and merchandise 23,910 21,940 Purchased services 1,824 1,757 25,734 23,697

54 55 (22) Tax expenses Million DM 1999 1998 Auditors’ report We have audited the consolidated financial statements and the group manage- ment report prepared by Robert Bosch GmbH, Stuttgart, for the business year Taxes on income 803 950 from January 1 to December 31, 1999. The preparation of the consolidated finan- Other taxes 241 226 cial statements and group management report in accordance with German com- 1,044 1,176 mercial law is the responsibility of the Company’s management. Our responsi- bility is to express an opinion on the consolidated financial statements and the Other taxes are included in other operating expenses. Utilizing the Tax Relief group management report based on our audit. Act for 1999/2000/2002, we set up an accrual with valuation reserve portion We conducted our audit of the consolidated annual financial statements in accor- totalling 469 million DM which reduced the after-tax profit by approximately dance with §317 HGB (German Commercial Code) and the generally accepted 225 million DM. standards for the audit of financial statements promulgated by the Institut der Wirtschaftsprüfer (IDW). The applied standards are also in accordance with the The impact of other tax allowances on the profit for the fiscal year as well as in International Standards on Auditing. Those standards require that we plan and former years, and the size of future burdens from the resulting valuations are of perform the audit such that misstatements materially affecting the presentation of secondary significance. the net assets, financial position and results of operations in the consolidated financial statements in accordance with German principles of proper accounting and in the group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of (23) Profit and loss of Million DM 1999 1998 the Company and evaluations of possible misstatements are taken into account minority shareholders in the determination of audit procedures. The effectiveness of the internal con- Profits 131 84 trol system and the evidence supporting the disclosures in the consolidated finan- Losses –16 –18 cial statements and the group management report are examined primarily on a 115 66 test basis within the framework of the audit. The audit includes assessing the annual financial statements of the companies included in consolidation, the deter- mination of the companies to be included in consolidation, the accounting and consolidation principles used and significant estimates made by management, as (24) Compensation of the During 1999, the aggregate compensation of the members of the Board of well as evaluating the overall presentation of the consolidated financial state- members of the Board of Management of Robert Bosch GmbH amounted to 11 million DM. Former mem- ments and the group management report. We believe that our audit provides Management and of the bers of the Board of Management and their dependents received 11 million DM, a reasonable basis for our opinion. Supervisory Council and the members of the Supervisory Council one million DM. Our audit has not led to any reservations. Accruals at Robert Bosch GmbH for pension liabilities for former members of the In our opinion, the consolidated financial statements give a true and fair view of Board of Management and their dependents amounted to 96 million DM. the net assets, financial position and results of operations of the Group in accor- The members of the Supervisory Council and the Board of Management of dance with German principles of proper accounting. On the whole the group Robert Bosch GmbH are listed on pages 4 and 5. management report provides a suitable understanding of the Group’s position and suitably presents the risks of future development.

Stuttgart, March 3, 2000 Ernst & Young (25) Shareholdings of A listing of the shareholdings of the consolidated Bosch Group will be deposited Deutsche Allgemeine Treuhand AG Bosch Group Worldwide with the commercial registry of the Stuttgart Court. Wirtschaftsprüfungsgesellschaft

Stuttgart, March 3, 2000 Robert Bosch GmbH Dörner Dr. Pfitzer The Board of Management Wirtschaftsprüfer Wirtschaftsprüfer

56 57 Major Companies of the Bosch Group Worldwide (as of December 31, 1999)

Name Location Equity Equity Sales 2 Profit Name Location Equity Equity Sales 2 Profit Capital Capital 2 or loss 2 Capital Capital 2 or loss 2 % owned1 million DM million DM million DM % owned1 million DM million DM million DM Germany America Robert Bosch Ltda Campinas/Brazil 100 389 1,401 16 Blaupunkt-Werke GmbH Hildesheim 100 186 1,841 PLT 3 Associated Fuel Pump Systems Corporation Anderson, SC/USA 50 210 309 56 BSH Bosch und Siemens Hausgeräte GmbH4 Munich 50 1,235 10,725 55 Automotive Electronic Control Systems Inc Anderson, SC/USA 51 65 157 11 Bosch Telecom GmbH Stuttgart 100 539 4,712 PLT 3 Robert Bosch Corporation4 Broadview (Chicago)/USA 100 2,025 7,850 17 Bosch Telecom Leipzig GmbH Leipzig 100 44 212 PLT 3 S-B Power Tool Company4 Chicago/USA 100 388 1,563 129 BT Magnet-Technologie GmbH Herne 50 60 141 10 Vermont American Corporation4 Louisville/USA 50 390 735 28 Hawera Probst GmbH Ravensburg 100 39 131 6 Knorr-Bremse Systeme für Nutzfahrzeuge GmbH4 Munich 20 187 1,268 29 Asia, Australia Robert Bosch Fahrzeugelektrik Eisenach GmbH Eisenach 100 64 570 23 Motor Industries Co Ltd Bangalore/India 51 226 644 47 VB Autobatterie GmbH Hanover 20 120 405 22 Bosch KK Yokohama/Japan 100 157 661 7 ZF Lenksysteme GmbH4 Schwäbisch Gmünd 50 547 2,483 31 Zexel Corporation Shibuya-ku (Tokyo)/Japan 505 1,259 2,641 –43 Nippon Injector Corporation Odawara-shi/Japan 35 71 126 6 KEFICO Corporation Kunpo-Si/Korea 35 130 349 9 Foreign Countries Robert Bosch Korea Mechanics and Electronics Ltd Chonan/Korea 100 42 138 10 Robert Bosch (Malaysia) Sdn Bhd Penang/Malaysia 100 56 191 20 Europe Robert Bosch (South East Asia) Pte Ltd Singapore/Singapore 100 43 265 7 NV Robert Bosch SA Anderlecht/Belgium 100 44 388 5 Robert Bosch (Australia) Pty Ltd4 Clayton (Melbourne)/ Robert Bosch Produktie NV Tienen/Belgium 100 135 437 29 Australia 100 145 787 21 Robert Bosch A/S Ballerup/Denmark 100 42 194 4 Bosch Telecom Danmark A/S Pandrup/Denmark 100 68 827 45 Robert Bosch (France) SA4 Saint-Ouen (Paris)/ France 100 592 3,757 –37 Atco-Qualcast Limited Stowmarket, Suffolk/U.K. 100 26 156 1 Robert Bosch Ltd Denham/U.K. 100 231 1,230 61 Worcester Group plc4 Worcester/U.K. 100 56 370 24 Robert Bosch SpA4 Milan/Italy 100 85 1,274 –11 Robert Bosch BV Hoofddorp/Netherlands 100 43 300 12 Van Doorne’s Transmissie BV Tilburg/Netherlands 100 19 83 –6 Robert Bosch A/S Trollaasen (Oslo)/ Norway 100 22 110 2 Robert Bosch AG Vienna/Austria 100 132 580 22 Blaupunkt Auto-Rádio Portugal Lda Braga/Portugal 100 54 600 –3 Vulcano Termo-Domésticos SA Aveiro/Portugal 100 161 308 35 1 Shares held directly and indirectly Robert Bosch AB Kista (Stockholm)/ by Robert Bosch GmbH Sweden 100 19 157 8 2 Translation of foreign currencies Robert Bosch Internationale Beteiligungen AG Zurich/Switzerland 90 719 73 pertaining to equity capital and profit Robert Bosch AG Zurich/Switzerland 100 27 249 7 and loss stated at average Scintilla AG Solothurn/Switzerland 85 690 1,081 162 exchange rates at the balance-sheet date; Robert Bosch España SA4 Madrid/Spain 100 437 2,379 48 sales stated at average ˇ Robert Bosch spol. s r.o. Ceské Budeˇjovice/ exchange rates of the year Czech Republic 100 74 290 13 3 Profit and loss transfer agreement (PLT) Bosch Diesel spol. s r.o. Jihlava/Czech Republic 100 45 166 8 4 Represents a consolidated sub-group Bosch Sanayi ve Ticaret AS Bursa/Turkey 100 131 343 35 5 Exact equity capital ownership 50.04%

58 59 Financial Statements of Robert Bosch GmbH Financial Statements of Robert Bosch GmbH Balance Sheet as of December 31,1999 Statement of Income for the period from January1to December 31,1999 (million DM) (million DM)

Assets December 31, 1999 December 31, 1998 1999 1998

Fixed assets Sales 29,061 26,473 Intangible fixed assets – – Changes in finished goods and work-in-progress inventories Tangible fixed assets 3,279 3,112 and other capitalized costs 185 209 Financial investments 6,222 4,076 Total operating performance 29,246 26,682 9,501 7,188 Other operating income 2,172 1,841 Current assets Costs of materials –17,632 –15,737 Inventories 2,175 2,035 Personnel costs –6,670 –6,351 Accounts receivable and other assets Depreciation of intangible and tangible fixed assets –1,203 –1,249 Accounts receivable 3,579 2,999 Other operating expenses –5,144 –4,432 Other receivables and assets 2,752 2,635 Marketable securities 4,394 4,786 Net income from investments 110 300 Liquid assets 803 318 Amortization of financial investments and securities included 13,703 12,773 with current assets –356 –316 Interest income, net of expenses 308 374 Deferred expenses 4 8 Income from ordinary business activities 831 1,112

23,208 19,969 Taxes on income –181 –512

Liabilities Net income for the year 650 600

Additions to surplus accounts –570 –520 Equity capital Capital stock 1,800 1,800 Unappropriated earnings 80 80 Capital surplus 4,630 4,630 Earned surplus 1,240 670 Unappropriated earnings 80 80 7,750 7,180

Accruals with valuation reserve portion 400 16

Accruals Accruals for pensions and similar obligations 4,449 4,333 Other accruals 5,985 5,296 10,434 9,629

Liabilities Liabilities with banks 384 4 Accounts payable 1,093 994 Other liabilities 3,144 2,146 4,621 3,144

Deferred income 3 –

23,208 19,969

60 61 Ten Year Statistics Bosch Group Worldwide

(million DM)

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999

Sales 31,824 33,600 34,432 32,469 34,478 35,844 41,146 46,851 50,333 54,579

Foreign share as a percentage of sales 51 48 47 49 54 56 61 65 65 66

Research and development expense 2,042 2,144 2,302 2,215 2,255 2,474 2,887 3,257 3,478 3,757 as a percentage of sales 6.4 6.4 6.7 6.8 6.5 6.9 7.0 7.0 6.9 6.9 Investments in tangible fixed assets 2,790 2,273 2,038 1,552 1,578 2,056 2,419 2,905 3,773 3,806 including domestic 1,708 1,464 1,347 990 960 1,255 1,270 1,376 1,930 1,746 including foreign 1,082 809 691 562 618 801 1,149 1,529 1,843 2,060 as a percentage of sales 8.8 6.8 5.9 4.8 4.6 5.7 5.9 6.2 7.5 7.0 as a percentage of depreciation 162 126 103 85 90 117 117 125 148 128

Depreciation on tangible fixed assets 1,725 1,799 1,976 1,836 1,747 1,757 2,059 2,321 2,546 2,978

Employees – annual average – (000 omitted) 180 181 177 165 156 158 172 180 188 194 including domestic 118 117 113 104 95 92 91 91 94 97 including foreign 62 64 64 61 61 66 81 89 94 97 as of January 1 of following year 181 177 170 157 154 157 176 181 190 195 Personnel costs 10,718 11,403 11,838 11,692 11,439 11,476 13,017 14,359 15,575 16,229

Total assets 23,544 24,247 24,452 25,447 27,373 28,504 32,273 34,906 36,343 40,743

Fixed assets 7,147 7,467 7,769 7,003 6,650 6,957 10,784 12,013 12,703 14,104 as a percentage of total assets 30 31 32 27 24 24 33 34 35 35 Equity capital 7,050 7,471 7,859 8,304 8,563 9,038 9,527 11,377 11,869 12,998 as a percentage of total assets 30 31 32 33 31 32 30 33 33 32 Cash flow 3,104 3,267 3,501 3,717 3,765 3,245 3,539 5,219 4,904 6,372 as a percentage of sales 9.8 9.7 10.2 11.4 10.9 9.1 8.6 11.1 9.7 11.7 Net income for the year 560 540 512 426 512 550 500 1,659 850 900

Unappropriated earnings (Dividends of Robert Bosch GmbH) 43 43 60 60 60 68 68 2,209 80 80

62