In the fiscal year 2024, ZF Friedrichshafen AG recorded sales of €41.4 billion, down from €46.6 billion in 2023, reflecting an 11% decrease primarily driven by the deconsolidation of the axle assembly product line, which contributed €2.6 billion in sales. On an organic basis, the sales decline was about 3%. Adjusted EBIT fell to €1.5 billion (from €2.4 billion in 2023), resulting in an EBIT margin of 3.6% compared to the previous year’s 5.1%. These results align with ZF’s revised outlook shared in September 2024.
Dr. Holger Klein, CEO of ZF, noted that 2024 highlighted the significant pressures faced by both the industry and the company. However, ZF remains committed to its strategic transformation plan, aimed at reducing debt and evolving into a more agile, profitable technology leader. “We are pushing forward with our transformation, and while it requires significant effort, we are seeing early signs of success,” said Klein.
ZF’s “Strengthening Strengths – Unlocking Potential” strategy continues to optimize its portfolio, particularly in key sectors like chassis systems, commercial vehicle technology, and industrial solutions. The company is focusing on forming strategic partnerships in electric mobility, electronics, and driver assistance systems to capitalize on growth potential and drive future innovations in mobility.
In September 2024, ZF made a significant restructuring move by spinning off its Passive Safety Systems Division, which now operates independently under the new name ZF LIFETEC. This decision is part of ZF’s ongoing strategy to streamline operations and enhance its focus on specialized areas within the automotive industry. By establishing ZF LIFETEC as a separate entity, the company aims to strengthen its presence in the safety systems sector, while also enabling greater innovation and agility.
ZF also entered into a strategic joint venture with Foxconn, resulting in the formation of ZF Foxconn Chassis Modules GmbH. This partnership focuses on the development of advanced passenger car chassis systems, combining ZF’s expertise in automotive components with Foxconn’s manufacturing capabilities. The collaboration is expected to accelerate the creation of innovative chassis solutions for the automotive market, providing a competitive edge in a rapidly evolving industry.
In another strategic move, ZF transferred its partnership with KPIT Technologies to a newly formed software company, Qorix. Qorix specializes in automotive middleware solutions, further advancing ZF’s capabilities in software and digital transformation. Recently, Qorix formed an important partnership with Qualcomm to integrate its automotive middleware into Qualcomm’s system-on-chip platforms, significantly enhancing the software infrastructure in modern vehicles.
ZF is implementing a range of performance programs aimed at increasing the competitiveness of its passenger car and commercial vehicle sectors, as well as enhancing its German operations. Despite these efforts, ZF had to make significant workforce reductions, primarily in Germany, where 4,000 jobs were cut through various means, including partial retirements and the expiration of temporary contracts. However, ZF is committed to minimizing the social impact of these cuts and preserving as many jobs as possible.
For 2024, ZF reported consolidated sales of €41.4 billion, a decline of about 11% from the previous year, due to the deconsolidation of its axle assembly business. On an organic basis, sales fell by 3%. Adjusted EBIT came in at €1.5 billion, down from €2.4 billion in 2023. ZF’s free cash flow, adjusted for mergers and acquisitions, was €305 million. The restructuring costs incurred led to a net result of -€1,020 million, and the company’s net debt rose to €10.47 billion.
ZF’s R&D spending remained stable at €3.6 billion, reflecting an R&D rate of 8.6% of revenue. Investment in property, plant, and equipment reached €2.3 billion, a 5.4% capex rate.
In terms of financing, ZF repaid €2.3 billion in debts and secured new financing through green bonds and loans. The company is maintaining a strong liquidity position with €8.1 billion in available funds. Looking ahead to 2025, ZF expects its sales to exceed €40 billion, with an adjusted EBIT margin of 3-4% and free cash flow of over €500 million. The company’s outlook remains cautious due to expected weak economic growth in Europe and Germany, as well as ongoing pressures from the transformation process.
ZF is pushing ahead with innovative advancements in chassis systems. The company integrated its Active Safety Technology and Passenger Car Chassis Technology Divisions into a unified Chassis Solutions Division.
This move has already yielded promising results, such as securing a major order for its brake-by-wire system, which will be used in nearly five million vehicles. ZF also equipped the electric ET9 vehicle from Nio with its steer-by-wire system, the first production car in China to receive approval for mass production. These advancements reinforce ZF’s leadership in vehicle dynamics and its commitment to shaping the future of mobility through innovative, software-defined technologies.
