ZF Achieves Annual Targets and Increases Sales by 6.5 percent

28 March 2024

ZF Friedrichshafen AG has achieved its financial targets set for 2023, as it states in a press release. The company increased its sales by 6.5 percent to €46.6 billion (2022: €43.8 billion). Adjusted EBIT amounted to €2.4 billion (2022: €2.0 billion); the adjusted EBIT margin was 5.1 percent (2022: 4.7 percent). Based on a positive development of free cash flow in the second half of the year, ZF has repaid liabilities of around €2 billion and reduced net debt by €400 million to below €10 billion.

The top-selling region was again Europe with a share of 44 percent, followed by North America with 28 percent and the region of Asia-Pacific with 24 percent. ZF made some important decisions in 2023. One of them was the preparation of the merger between the Car Chassis Technology Division and the Active Safety Systems Division into the new Chassis Solutions Division. Additionally, the carve-out of the Passive Safety Systems Division was started. “We are looking into options for its future development, which could include a complete or partial sale or an IPO”, said ZF’s CEO Dr. Holger Klein when presenting the balance sheet. Another major step was the founding of a joint venture for passenger car chassis systems, ZF Chassis Modules GmbH, with Foxconn, the world’s largest electronics manufacturer. Also ZF took the decision to refrain from building autonomous shuttles and instead focus as a premium supplier of autonomous driving technologies and engineering services.

To become more competitive worldwide and respond to weak markets, ZF will use performance programs and focus even more strongly on improving its cost situation and structures. By the end of 2025, the cost basis is to be reduced Group-wide by €6 billion. Five core areas will contribute their measures to this target. ZF expects Group sales of more than €45 billion in 2024. This corresponds to organic growth of 5 percent. EBIT margin is expected between 4.9 and 5.4 percent. Free cash flow adjusted for company transactions is expected to exceed €800 million. ZF is planning to make global investments in the future of almost €18 billion by the end of 2026. Of this, approximately €10.6 billion is to be spent on research and development and more than €7 billion is to be invested in property, plant and equipment. With increased competitiveness, the German ZF locations are to receive up to 30 percent of these investments.