Bosch Security Systems Chairman Gert van Iperen with positive outlook

Sustainable corporate growth expected for the security market

12.10.2010 - In the press conference at Security Essen show 2010Gert van Iperen, Chairman of the Board of Management of the Robert Bosch GmbH Security Systems Division gave apositive outlok for...

In the press conference at Security Essen show 2010 Gert van Iperen, Chairman of the Board of Management of the Robert Bosch GmbH Security Systems Division gave a positive outlok for the security market in 2010 and 2011. In the Asia Pacific region Bosch is expecting a welcome rejuvenation in the market development and a growth rate of 14 percent in 2010. In Latin America, van Iperen expects the market to grow by eleven percent. Even in EMEA, according to van Iperen, the turnaround has been achieved and Bosch expects slow but positive growth of one percent.

During his speech in Essen Gert van Iperen told the press the following:

"The global market for security technology fell by 13 percent during 2009, a year of significant financial and economic crisis, and this downturn was particularly severe in Western European countries. These countries saw declines in double figures, with the market in Europe shrinking by 17 percent and in North America by 13 percent. By contrast, the market volume in Asia fell by just five percent, with China even reporting a rise of two percent. During this difficult year, Bosch Security Systems achieved sales of 1.349 billion euro. This equates to a nominal five percent lower than sales in the previous year. On January 1, 2010, we employed 11,610 associates worldwide.

Despite the signs of continuing difficult times ahead, we have been able to strengthen our position in the world market and gain market share. There are several reasons for this: We are well-positioned internationally and we were able to benefit from the less negative trend in Asia, Latin America, and the Middle East. We have been able to make structural changes quickly and optimize our processes. In addition, our position was strengthened by our ability to innovate and by the acquisitions and strategic partnerships we forged before the crisis

Upward Trend in the Product Business
The world economy has slowly begun to recover during the current year, 2010. Europe's gross domestic product (GDP) is expected to rise by two percent in 2010. An even stronger growth of four percent is expected in America and six percent in Asia/Pacific. The construction industry, which will grow by three percent this year, will also benefit from this. This trend will have a positive effect on our business development. In Europe and Asia, we have already reported sales growth during the first half year and even America has managed the turnaround.

Technologically, we are in a strong position. This is particularly true in video surveillance systems where we offer a comprehensive portfolio of IP and hybrid video systems. Our cameras feature the space-saving H.264 compression standard and they deliver high-quality pictures in the most demanding surveillance applications. Bosch cameras are used at Expo 2010 in Shanghai, for example. The China Pavilion, one of the largest and most impressive buildings at Expo, is equipped with 700 surveillance cameras from Bosch.

Business is positive once again in fire detection technology and in public address and evacuation systems. We have carried out a particularly interesting project in the USA - providing protection for a 133-year old mansion belonging to the Governor of California, Arnold Schwarzenegger. We supplied the fire detection and intruder alarm technology for this historic and architecturally outstanding building.

Sales for access control systems decreased in 2009. Here too, we are likely to see the market bottom out this year. We are working to develop the market for "small and medium-sized companies" with our access control software "Access Professional Edition". The successful solution is designed to adapt to changing customer needs and features integrated video surveillance functionality. Schools in particular are one sector which is becoming increasingly interested in access control systems. Business showed signs of improvement in 2010 after we were forced to contend with the collapse of the communications systems market in 2009. During the World Cup in South Africa, nine of the ten stadiums used professional sound systems from our brands Electro Voice and Dynacord.

Security Systems from a Single Source
Our "Building Security" business that we operate in Germany and the Netherlands achieved good results. Here we offer our customer security solutions from one single source - from planning, installation, finance through to operation of security systems. Despite a declining market, we were able to make sales gains in Building Security in 2009.

Customers include energy suppliers, transport companies and the public sector. For example, we offer video surveillance for public transport platforms, bus shelters, ticket machines and barrier systems. This increases passenger safety and reduces damage caused by vandalism. Our services are in particularly demanded by federal authorities, the construction industry, energy and water utilities, the service sector, the financial industry, and the consumer goods sector. Our "Remote maintenance and Condition Monitoring Service" ensures that our products work correctly around the clock. In around 60 percent of all cases, faults can be cleared and rectified via the network, so that it is not necessary to send out a service engineer.

One recent example of our capabilities is the upgrade of the security systems at Immergut GmbH & Co. KG for certification to the current food standard 5 (IFS-5). Immergut, a dairy product manufacturer, received our complete security package: from video and access control systems to fire detection panels.

There continues to be a strong demand from our customers for financing and leasing models tailored to meet their requirements. The attractive "operator models" provide our customers with financial certainty and guarantee the use of the most cutting-edge technology and the latest security standards. In 2010 the Hesse State Archive in Darmstadt, Germany entrusted the security of its historically important documents to us, installing our intrusion alarm systems. This important public-sector client has assigned complete responsibility for operational security to us, and is thereby able to ensure the reliable protection of the building and its archive, at constantly calculable costs.

Our new planning software is also expected to generate additional business opportunities. It supports architects, consultants and engineering offices with the planning of complex fire alarm systems. Even before all the requirements are clear, this new software is able to estimate the costs of a fire alarm system, taking into account the building type, usage, and size. The planner is able to produce a complete tender in a very short time thanks to its clear and intuitive Windows menu navigation.

New IP technologies generate new potential applications in the "Remote maintenance and Condition Monitoring' area. IP systems that are based on a permanent connection have the advantage that a defect is detected immediately, increasing reliability. Software updates can be carried out easily via the IP connection and without the need for an on-site engineer. In the future, compliance with the new EU standard EN 50518, with its stipulations for structural, operational, and technical requirements, will be an essential pre-requisite for monitoring centers. Adherence to this standard involves considerable investment. As one of the largest private monitoring center in Germany, we are currently making the necessary investments to implement the standard into our infrastructure. We can, therefore, offer our customers planning reliability and are able to support smaller monitoring centers, working as their partners.

Innovative Products and Systems
Our business success is largely thanks to our innovative products and systems. Even in 2009, we invested more than ten percent of our turnover in development. We also benefit from the expertise of around 33,000 associates working in research and development at the Bosch Group.
Important new developments include our new 420 series automatic fire detectors. These cost-effective detectors feature innovative "dual ray" technology. Using a dual-optical sensor that detects the spread of light from two LEDs of different wavelengths, they measure smoke density and particle size. It is, therefore, possible to reliably distinguish between smoke particles and other disturbance variables like dust or steam. We have developed new passive infrared motion detectors (PIR) for low to medium risk environments which meet levels one and two of the EN50131-2-2 standards. Our new motion detectors offer customers cost-effective, reliable motion detection with a very low likelihood of a false alarm.

To satisfy the growing need for detailed, high-resolution pictures, we have developed a portfolio of HD products that covers the entire scope of a video system, from cameras to storage solutions and monitors. They are based on the standards H.264 and ONVIF and are therefore compatible with products from other manufacturers. Our GV3 control panel is an integrated solution for intrusion systems, fire alarm systems, and access control systems. A high-performance 32-Bit 50-MHz processor enables the simple integration of systems for access control and domestic automation. The alarm can be transferred via Ethernet or cellular radio networks.

Our new security and access control management system "Veristo Secure" seamlessly integrates solutions for video surveillance and alarm verification. This flexible, scalable solution offers a variety of functions, such as visitor management, floor plan display and room booking. The solution is easily embedded into existing infrastructures thanks to its open architecture and can be adapted to match specific user requirements with ease.

Successful ONVIF Alliance
The ONVIF Alliance, founded jointly by us, Axis Communications and Sony Corporation, has made good progress with its goal of developing a standard interface for network video products. 220 manufacturers have since signed up as members. More than 270 video products from nearly 50 manufacturers use this interface. From Bosch it includes products like Dinion 2X, Flexidome 2X and AutoDome cameras. We also provide comprehensive updates of the firmware for our IP video platform, including the Dinion IP, FlexiDome IP, extreme series IP and AutoDome IP cameras, VideoJet X series encoders and for our VIP X1600 multi-channel encoders and decoders. In the meantime, the ONVIF Alliance has started to standardize the interfaces for access control systems. The resulting simplification of the link between video and access control will stimulate the market further.

Registered for Certification to Certalarm
Right from the start, we have supported the objective also being pursued by Euralarm, entitled "Certalarm", which aims to develop a standard quality definition valid across Europe. In the meantime, Certalarm established the non-profit Certalarm A.I.S.B.L. organization (Association Internationale Sans But Lucratif) as an independent, open interest group that offers a pan-European testing and certification process. The testing and certification process is carried out in independent test laboratories, in accordance with the European standards EN54 for fire detection systems and EN5013x for intrusion and hold-up technology. Bosch has had the first products registered for certification. We are convinced that the Certalarm quality mark strengthens the reputation of our products, and of all products manufactured in Europe, and highlights their leading performance.

Strength through Acquisitions and Partnerships
We are well-positioned in terms of our comprehensive product range. Extreme CCTV, acquired in 2008, complements our extensive CCTV portfolio, with its range of infrared enable day/night cameras, high speed pan-tilt-zoom cameras and extreme environment cameras. These products, featuring field proven technology, are designed to deliver the highest resolution images in the most difficult surveillance conditions: at extreme temperatures, in environments with low light or total darkness and in areas where vandal attack can be expected.

The strategic partnership with the worldwide Hochiki Corporation with its offices in Tokyo also strengthens our position. We have cooperated with Hochiki in the field of fire detection technology for some time. We agreed a new partnership for the sale of video products in 2009. Japan is the third largest market for video surveillance systems and video over IP systems are in particular demand. The market is characterized by high growth rates. A national sales and marketing support organization set up by the two partners, with specialized system engineers, guarantees continuing market development. Within a strategic partnership, we supply Siemens with our comprehensive video portfolio. Siemens uses our cameras, recorders, encoders and video management systems in projects in Europe, America, and the Middle East. With Siemens, Bosch has a global installer and system integrator for its video systems.

Two trends will shape our business over the next few years: the penetration of IP in security technology and the demand for more energy-efficient and sustainable solutions. The IP market is a growth market. According to a study by IMS Research, this market is set to grow by around 30 percent from 2005 to 2013. This equates to a market segment worth an impressive 800 million US dollars in 2013. Environmentally friendly products that save on resources are also becoming increasingly popular. We are well-prepared to address the challenges set by both these recent trends, thanks to our existing solutions and new developments.

We are convinced that only the combination of good technology, high quality and design aesthetics will provide our products with a market leading position. With this in mind, we are currently carrying out a design relaunch. In future all our new products will meet a common design principle with high recognition value and equally high aesthetic standards.

All in all, both the global economic recovery and our carefully managed business development will enable us to look forward to the rest of the year with optimism. A clear upward trend is visible and the market for security technology looks set to stabilize. In the Asia Pacific region, we are expecting a welcome rejuvenation in the market development; which is expected to grow by 14 percent in 2010. In Latin America, the market will grow by eleven percent. Even in EMEA, a turnaround has been achieved and we expect slow but positive growth of one percent. Business is good, particularly in Eastern Europe, where we are seeing a market growth of four percent.

We have resolved to consistently maximize on business opportunities in the growth regions and to translate this into positive sales and operating results. We will also utilize the opportunities that develop as a result of the worldwide increase in demand. Security systems continue to be a sector with good prospects for growth for the coming years.



Bosch Building Technologies

Robert-Bosch-Ring 5-7
85630 Grasbrunn

+49 89 6290 0