Source: ZF Group announcement
FRIEDRICHSHAFEN, Germany — Technology Group ZF last year achieved its financial targets in what remains a challenging business environment.
At €38.3 billion, sales increased year-on-year by 17.5 percent, considerably exceeding the 2020 figure of €32.6 billion, and above that of 2019 (€36.5 billion). Adjusted EBIT was €1.9 billion (2020: €1.0 billion), while adjusted EBIT margin came in at 5.0 percent (2020: 3.2 percent).
Meanwhile, ZF continued its strategic orientation, focused on the future of mobility, and secured substantial new customer contracts in the three core areas of electric mobility, autonomous driving and software development.
“Despite the arrival of strong headwinds during the course of the year, we have remained firmly on course and achieved the targets we set at the start of the year,” said ZF CEO Wolf-Henning Scheider, speaking Thursday at the presentation of the Group’s financials. “With their dedication, determination and team spirit, our workforce has played a decisive role in successfully tackling the challenges of these extraordinary times. We have adapted to the new normal and have become even more agile, flexible and digital.”
SCHEIDER TO LEAVE ZF IN EARLY 2023
The second half, in particular, demanded exceptionally high levels of flexibility in production and materials management as a result of interruptions in the global supply chain and last-minute changes in customer orders. All of this took place, of course, against the ongoing backdrop of the global pandemic.
Scheider stressed that ZF has reached strategic milestones and laid further groundwork for the future. By way of example, he cited the successful start of the Electrified Powertrain Technology division, launched at the beginning of the year, the integration of the Wabco acquisition into the new Commercial Vehicle Solutions division and the cooperation with Microsoft for the creation of the ZF Cloud.
The latter will digitalize, network, and provide access to all corporate data and processes worldwide. ZF has also continued structuring its product lineup to serve the electric and software-defined vehicles of the future.
Indeed, the Group has already secured substantial contracts for these solutions from international manufacturers of cars and commercial vehicles, providing an excellent basis for further growth.
2021 key figures: Targets achieved
For the full year, ZF generated Group sales totaling €38.3 billion (2020: €32.6 billion), marking an increase of 17.5 percent year-on-year. The adjusted EBIT was €1,910 million (2020: €1,047 million), while the adjusted EBIT margin rose to 5.0 percent (2020: 3.2 percent). Free cash flow adjusted for M&A activities stood at €991 million (2020: €994 million).
“In a volatile environment marked by profit warnings and revised forecasts, we successfully achieved our targets in the middle of our forecast range,” said ZF CFO Dr. Konstantin Sauer. “This means we were able not only to make substantial investments but also to reduce our financial liabilities and strengthen our equity ratio.”
Gross debt was reduced by €752 million to €12.5 billion. At the end of 2021, equity ratio stood at around 19 percent (2020: 12.1 percent).
ZF further increased its activities in research and development (R&D). Last year, the R&D ratio was 8.0 percent (2020: 7.7 percent), which equates to R&D spending of €3.1 billion (2020: €2.5 billion) – the highest ever in ZF history. Investments in property, plant and equipment were €1.6 billion (2020: €1.4 billion), resulting in an investment ratio of 4.2 percent (2020: 4.4 percent).
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