Financials and Business Business Developments


In a challenging environment, ZF remains on a steady course. The financial targets, which were adjusted six months into 2019, were achieved. At the same time, ZF continued to invest heavily in future technology.









Group sales almost at previous year’s level

The global economy and the economic situation in the automotive industry in particular grew slower than expected in 2019. As a result, ZF adjusted its forecast halfway through 2019: The adjusted forecast aimed for sales figures between €36 and €37 billion, an adjusted EBIT between 4 and 5 percent, and a free cash flow between €0.5 and €1.0 billion.

At €36.5 billion, sales were slightly lower than in the previous year. The adjusted EBIT reached €1.5 billion. This corresponds to an adjusted EBIT margin of 4.1 percent. The fact that this figure is at the lower end of the target range is the result of greater research and development costs, start-up costs for new plants, mainly for e-mobility, and due to the cost structures that were aimed at growth at the beginning of the year. The adjustment refers to one-off effects from the purchase price allocation of the TRW acquisition, restructuring costs and M&A costs. The adjusted free cash flow totaled €803 million. The adjustments refer to M&A activities and investments in securities.

Acquisition of WABCO strengthens systems expertise in the commercial vehicle sector

One key milestone in pursuit of ZF’s further development was the acquisition of WABCO Holdings Inc. (WABCO) that was initiated in 2019. The planned acquisition of WABCO was initially secured by a syndicated loan agreement in the amount of €7.3 billion. Parts of this financing package have since been refinanced on a long-term basis via the capital market.

Increased investments

Despite the challenging market developments, in 2019 ZF continued implementing its strategy and increased its investments in future technology. The company invested €1.9 billion in property, plant and equipment. This corresponds to an investment ratio of 5.2 percent.

These funds went to the traditional areas of activity such as transmission applications (including hybridization), chassis systems, electronics, damper modules, brakes, steering systems and safety technology as well as to new technology fields such as electromobility and autonomous driving. Moreover, the Group invested in the construction and expansion of production and development buildings in existing locations. The Group invested €2.7 billion (2018: €2.5 billion) in research and development. This corresponds to a rate of 7.3 percent.

Increase in balance sheet total; equity ratio remains sound

In connection with the capital market transactions to finance the planned acquisition of WABCO and an increase in pensions, the balance sheet total increased by 16.7 percent compared to the prior year to a total of €32.4 billion. Compared to the previous year, equity decreased slightly to €7.1 billion. The equity ratio totaled 22.0 percent.

The ZF Group rests on a solid financial foundation thanks to its long-term oriented financing and affirmed and unused credit lines of €6.1 billion.



The Group will continue to tap into new markets, introduce sustainable products and reinforce its technology leadership through high levels of investment in research and development. The economic data depend greatly on how the global economy develops.

Economic development stable on the whole; risk levels remain considerable

After a noticeable economic slowdown in 2019, global growth is expected to stabilize at 3.1 percent during the current year. In developed economies, production is anticipated to grow by 1.5 percent. While the eurozone is forecast to remain stable at 1.2 percent, the U.S. economy is expected to experience a gradual slowdown to 1.7 percent. China’s economic development is forecast to slow to less than 6 percent, in part due to the effects of coronavirus. The factors jeopardizing the economy are a possible escalation of trade conflicts, a no-deal Brexit and a prolonged spread of the coronavirus.

Sales expected to match prior year’s level

Assuming the abovementioned market developments and stable currency exchange rates, ZF is expecting Group sales between €35 billion and €37 billion for 2020. The sales forecast is based on flat development in the markets relevant to the Group. The adjusted EBIT margin is expected to land between 4.0 and 4.5 percent. Based on the planned development of the operating business, the intended investments and the continuation of consistent working capital management, the aim is to achieve free cash flow adjusted for company acquisitions and disposals of between €0.5 billion and €1 billion for 2020.

The planned acquisition of WABCO is excluded from the forecasts provided here.

Overall, ZF is still heading in the right direction

Bolstered by the trust of our customers, our close relationship with our suppliers and business partners and our dedicated, qualified employees who are willing to deliver outstanding performance and embrace change, ZF can rise to the upcoming challenges and look to the future with optimism.


Sales in € billion 35 – 37 36.5
Adjusted EBIT margin in % 4.0 – 4.5 4.1
Adjusted free cash flow in € million 500 – 1,000 803