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ZF Friedrichshafen AG, a global technology company, is intensifying its restructuring program amid challenging automotive markets. The company is adjusting production capacities, enhancing competitiveness, and focusing on profitability through strategic realignments.
Key Highlights
- Sales reached €19.7 billion in the first half, down from €22 billion the previous year.
- Adjusted EBIT margin improved to 4.4 percent, up from 3.5 percent.
- Adjusted EBIT increased to €874 million from €780 million.
- Adjusted free cash flow turned positive at €455 million, compared to a negative €645 million.
- Workforce reduced by over 11,200 full-time equivalents globally since early 2024.
- Strategic focus on divisions like Chassis Solutions, Commercial Vehicle Solutions, and Industrial Technology.
Strategic Realignment Gains Momentum
ZF is advancing its “Strengthen our Strengths” strategy, initiated in 2023, by prioritizing high-potential areas such as chassis solutions, commercial vehicle solutions, industrial technology, and services. The company is optimizing its product portfolio and merging performance improvement programs for cars and commercial vehicles into a company-wide permanent organization. Corporate structures are under review for efficiency, and every product group is evaluated for capital cost recovery, leading to potential adjustments.
CEO Dr. Holger Klein emphasized the company’s commitment to profitability and future readiness, noting the impact of performance programs despite declining sales. Challenges include stagnating global vehicle production, slow electromobility adoption, and uncertainties from US tariffs, which contribute to lower revenues and higher costs.
Division-Specific Adjustments
For the Electronics and Advanced Driver Assistance Systems (ADAS) division, ZF is exploring cooperative relationships or partnerships to foster growth. The Electrified Powertrain Technology division requires a targeted restructuring to align personnel, production locations, and sourcing strategies for long-term competitiveness. This may involve difficult decisions on in-house production versus external suppliers.
The operational carve-out of ZF Lifatec, previously the Passive Safety Systems division, is complete, allowing it to operate independently. However, current economic conditions are not favorable for an IPO or partnership, so ZF keeps all strategic options open.
Workforce and Capacity Reductions
ZF is gradually reducing personnel capacities in response to weakening market demand. As of mid-2025, the global workforce stood at 157,345 employees, a decrease from 163,631 at year-end 2024. In Germany, employee numbers dropped by 2.6 percent to 50,683. Including partial and regular retirements, an additional 4,700 full-time equivalents are transitioning out.
The company aims to handle reductions with social responsibility, though layoffs may be necessary at certain locations or divisions due to dynamic market conditions.
Financial Performance Improvements
Despite a 10.3 percent sales decline, organic sales fell by only 1.7 percent after adjustments for exchange rates and M&A effects, influenced by the transfer of the chassis assembly business to a joint venture.
Net debt was €10.5 billion, with a leverage ratio of 3.2x and liquidity headroom of about €8 billion, including an undrawn €3.5 billion revolving credit facility until 2029.
In early 2025, ZF issued a €1.25 billion bond with a five-year term, receiving strong market demand and providing planning reliability for repositioning.
Upcoming Innovations at IAA Mobility
ZF plans to showcase advancements at IAA Mobility in Munich, including the Chassis 2.0 concept with intelligent actuators for software-driven functions using by-wire solutions. In electric drive technology, the SELECT e-drive platform offers customizable solutions for car makers. Additional highlights include electric range extender systems to address range anxiety and an efficient concept from the eight-speed automatic transmission for hybrid platforms.
About ZF
ZF supplies advanced mobility products and systems for passenger cars, commercial vehicles, and industrial technology. Its range targets vehicle manufacturers, mobility providers, and startups. As a leader in drivetrain, powertrain, chassis technology, engineering, software, and systems for autonomous driving and connected services, ZF’s products serve diverse applications from cars and trucks to industrial equipment.
With approximately 151,600 employees worldwide, ZF achieved sales of €64.1 billion in fiscal 2024. The company operates in 29 production countries and 8 development countries.
For more information, visit www.zf.com.
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