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ZF Friedrichshafen AG reported a decline in sales to €41.4 billion for the fiscal year 2024, down from €46.6 billion in 2023, largely due to the deconsolidation of its axle assembly product line, which accounted for €2.6 billion in sales. Despite an organic sales drop of about 3%, the company is pushing forward with strategic realignments, forming partnerships and joint ventures to enhance its focus on electric mobility, electronics, and driver assistance systems. CEO Dr. Holger Klein emphasized ZF’s goal to reduce debt and evolve into a more agile, profitable technology leader amid intense industry pressures.
Key Highlights:
- Financial Performance: Sales at €41.4 billion; adjusted EBIT margin at 3.6%.
- Strategic Moves: Launched ZF LIFETEC, partnered with Foxconn and KPIT for innovative ventures.
- Operational Adjustments: Cut 4,000 jobs in Germany to boost efficiency.
- 2025 Outlook: Expects sales over €40 billion; EBIT margin of 3.0-4.0%.
In 2024, ZF navigated tough financial waters
The nominal sales decline of 11% reflects the axle assembly deconsolidation, but organically, the drop was a modest 3%. Adjusted EBIT reached €1.5 billion, down from €2.4 billion, yielding a 3.6% margin compared to 5.1% in 2023. These figures align with ZF’s updated September 2024 guidance. Meanwhile, a net loss of €1,020 million stemmed from €600 million in restructuring costs, pushing net debt to €10,467 million.
CEO Dr. Holger Klein highlighted the stakes
“The year 2024 has made it clear just how much pressure our industry and our company is under,” he said. “We’re meeting these challenges with a clear strategic action plan.” This includes optimizing ZF’s portfolio by investing in core strengths like chassis and commercial vehicles while seeking partnerships to bolster growth areas.
Strategic partnerships marked a busy year
ZF spun off its Passive Safety Systems into ZF LIFETEC, teamed up with Foxconn for chassis systems, and joined KPIT Technologies to form Qorix, a middleware software firm. These moves aim to sharpen ZF’s edge in future mobility markets. On the operational front, ZF trimmed its German workforce by 4,000 jobs through socially responsible measures like partial retirement and attrition.
Looking to 2025, ZF remains cautious
With weak economic growth expected in the eurozone, the company forecasts sales above €40 billion and an adjusted EBIT margin of 3.0-4.0%. Innovations like brake-by-wire and steer-by-wire systems, already in production, signal ZF’s commitment to staying ahead in a transforming industry. Despite 2024’s financial hurdles, these steps position ZF for resilience and growth.
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