Recently, ZF Group released its 2023 results. Amid the dramatic fluctuations in the global economy, the company’s sales reached 46.6 billion euros (43.8 billion euros in 2022), a year-on-year increase of 6.5%. Adjusted EBIT of €2.4 billion (2022: €2.0 billion); adjusted EBIT margin of 5.1% (2022: 4.7%). Based on the good performance of free cash flow in the second half of 2023, ZF repaid approximately 2 billion euros of debt and reduced net debt by 400 million euros to less than 10 billion euros. It is worth noting that in 2023, ZF’s Chinese market sales will reach 8.1 billion euros (7.7 billion euros in 2022).
In the field of research and development, ZF Group continues to increase its efforts. In fiscal year 2023, the group’s R&D expenditure reached 3.5 billion euros, slightly higher than the 3.4 billion euros in the previous year. R&D expenditures account for 7.6% (7.8% in 2022). The total investment in property, plant and equipment is €2.2 billion (€1.9 billion in 2022), equivalent to 4.8% of the total investment (4.3% in 2022).
“Dr. Holger Klein, CEO of ZF Group”
Dr. Holger Klein, CEO of ZF Group, said at the financial report conference: “2023 is a year for ZF to make major decisions in multiple areas: we have re-adjusted the company’s transformation route and focused on Focused on competitiveness and profitability. Thanks to the unremitting efforts of all employees of the ZF Group, we have achieved our performance expectations. In 2024, we will continue to forge ahead and develop a more focused, efficient and competitive development route.”
In 2023, ZF Group has made many important decisions. First, the Passenger Car Chassis Technology Division and the Active Safety Technology Division were merged into a new comprehensive chassis solutions division. The merger was completed on January 1 this year. In addition, the spin-off of the Passive Safety Systems Division has also been initiated. Ke Haozhe said, “The spin-off of the Passive Safety Systems Division is progressing smoothly. We are studying future development options, which may include a full or partial sale, or an initial public offering.” Another major move is the agreement with Foxconn, the world’s largest electronic product manufacturer ZF Chassis Module Co., Ltd., a joint venture for passenger car chassis systems, was established.
In the field of autonomous driving, ZF has focused on becoming an outstanding supplier of autonomous driving technology and engineering services. This decision is of groundbreaking significance for the group’s long-term positioning. Ke Haozhe said: “Such a decision will ensure that we continue to implement the group strategy on a solid basis. Our broad product portfolio allows us to focus on investment in profitable growth areas and electric drive areas, and provide pure electric and hybrid electric vehicles based on customer needs.” and traditional drive offers a variety of products.”
In order to improve its competitiveness globally and respond to weak markets, the ZF Group will implement performance plans and focus more on improving its cost position and structure. By the end of 2025, the entire group plans to reduce costs by 6 billion euros. To achieve this goal, the ZF Group will take corresponding measures in five core areas, including economies of scale in material procurement, increasing productivity, improving R&D costs, optimizing the cost structure of corporate functions, and scrutinizing the target use of investments. Ke Haozhe said that cost optimization will lay a solid foundation for ZF’s further transformation to electrification in the next five years and beyond.
Looking forward to fiscal year 2024, ZF Group expects sales to exceed 45 billion euros in 2024, achieving organic growth of 5%. Based on the expectations of the sales and purchasing market and cost control, ZF Group forecasts that the adjusted EBIT margin will be between 4.9% and 5.4%, and the adjusted free cash flow based on the company’s transactions is expected to exceed 800 million euros.
In addition, Ke Haozhe announced that ZF Group plans to invest nearly 18 billion euros globally by the end of 2026. Of this amount, approximately 10.6 billion euros will be spent on research and development, and more than 7 billion euros will be invested in real estate, plant and equipment.
