BSH UK profits plummet by 25% as ‘inflationary pressures’ blamed

Appliance giant BSH – the company that owns brands such as Neff, Bosch and Siemens – saw a 25% decline in its UK profits across 2023, blaming “inflationary pressures” and “weak consumer confidence”.

As disclosed in its latest annual report, which covers the company’s financial status up to December 31, 2023, pre-tax profits plummeted by around 24% across the year, with BSH UK closing 2023 with a figure of £24m. This is a significant decrease from the £30.2m pre-tax profit seen by the appliance company in 2022.

BSH UK closed the year with profit after tax of £18.5m, which is another decline of around 25%, and is down from last year’s profits of £24.6m. According to BSH, this sum has been transferred entirely to the company’s reserves.

Additionally, turnover for the company had decreased roughly 2%, from £810m in 2022 to £791.2m in 2023.

This was also reflected in the volume of products BSH’s sold across the period. 2022 saw the appliance brand sell a total of 2,212,200 major domestic appliances, which had dropped by around 9% in 2023, to 2,011,108.

Assessing its financial results for the year, BSH said: “Inflationary pressures, due to rising material and logistics costs, continued to put significant pressure on household incomes. Weak consumer confidence led to some consumers to defer big ticket items. In addition, interest rates, which peaked at the start of the year, slowed down mortgage applications and housing completions.

“These factors significantly impacted the market for major domestic appliances. Product availability due to component shortages had eased significantly by the end of the second quarter of 2023 although some problems remained, including the flooding of a factory in Slovenia which restricted the availability of food preparation products and fully automated coffee machines.”

Looking ahead to the rest of the year, BSH said it expected market recovery would be slow due to these overall factors. In addition, it believes the market may still shrink further over the next 12 to 18 months.

Continuing its predictions, BSH forecasted: “Consumer confidence is starting to rise, although there seems to be a divergence between this measure and when consumers are making the decision that it is the right time to buy, and this may be due to consumers still adjusting to the new higher cost of living. Overall, these factors are expected to keep pressure high on sales and the impact on EBIT will have to be mitigated by strict cost management.”

Despite the drop in profits, BSH said it will continue its focus on “quality, innovative, reliable, and environmentally friendly products, and outstanding customer service with the goal of improving the quality of life at home of our consumers”.

Through focusing on these principles, as well as its products and brands, BSH believes it will be able to “provide a strong platform for long-term profitable growth”.

In related news, BSH boss Dr. Matthias Metz spoke to kbbreview last year about his belief that the entire home appliance industry has “fundamentally changed”, as it reels from “persistent global economic and geopolitical crises”.

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