Press Release


ZF Achieves Positive Business Development in the First Half of 2015

  • Key figures of the Group largely influenced by extraordinary items, especially by the acquisition of TRW
  • Slight sales increase and stable operating profit on an adjusted basis
  • Integration of TRW on track

Friedrichshafen. ZF Friedrichshafen AG, which today published half-year figures for the first time in its history, continued its positive business development in the first six months of 2015. The figures are essentially characterized by extraordinary items resulting from the acquisition of the U.S. automotive supplier TRW and the sale of the 50 percent share in ZF Lenksysteme (Steering Systems) and therefore cannot be compared with the previous year's figures. In the first half of 2015, ZF generated Group sales of €12.2 billion. This figure includes sales generated by TRW since May 15, 2015 – i.e. since completion of the acquisition – in the amount of €2.0 billion.

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 ZF Achieves Positive Business Development in the First Half of 2015

Even without taking into account the pro rata sales of TRW, revenue increased significantly by 11 percent to €10.2 billion, mainly driven by currency effects. After adjusting for currency effects, sales grew by 3 percent. The key financial performance figures of the Group are also substantially influenced by the abovementioned extraordinary items. Above all, the sale of the shares held in ZF Lenksysteme led to a disproportionate increase of the financial performance: Earnings before interest, taxes, depreciation and amortization (EBITDA) rose to €1.5 billion (prior year: €902 million). Net profit after tax increased sharply to €711 million (prior year: €310 million).

"ZF continued to develop positively during the first half of 2015 – despite challenging market conditions," says Dr. Stefan Sommer, Chief Executive Officer of ZF. "The successful acquisition of TRW is obviously the most outstanding strategic event which pushed us into a completely new dimension. We are in an excellent position to continue to actively shape our industry in future and to write another chapter in ZF's success story."

The acquisition of TRW did not only result in a strong increase in Group sales to €12.2 billion in the first six months of this year, but it did also - as was expected - change its composition: ZF further strengthened its automotive expertise through the acquisition of TRW, which now represents the "Active & Passive Safety Technology" division within the ZF Group.

Disproportionate rise in profit due to extraordinary items

One-time extraordinary items in the first half of 2015 resulted in a disproportionate rise in ZF Group's financial performance indicators which means that these cannot be compared with the previous year's figures. The most important factors included the acquisition of TRW as well as the sale of the 50 percent share in ZF Lenksysteme.

Adjusted by these one-time effects, operating profit (EBIT) remained on prior-year level. Taking into account these extraordinary items, EBITDA climbed to €1.5 billion (prior year: €902 million), while the EBITDA margin rose to 12.3 percent (prior year: 9.85 percent). Net profit after tax increased to €711 million (prior year: €310 million).

Swift repayment of liabilities intended

Operating free cash flow amounted to €172 million in the first half of 2015, roughly on the prior year's level. The one-time effects from the TRW acquisition as well as from the sale of the 50 percent share in ZF Lenksysteme had a significant influence on free cash flow. Taking into account these extraordinary items, free cash flow amounted to €-8.4 billion.

After the acquisition of TRW, the ZF Group has net financial debt in the amount of €8.8 billion as of June 30, 2015. For the purposes of financing the transaction, ZF issued a bond in the amount of €2.2 billion, U.S. dollar bonds in a total volume of €3.5 billion, and Euro bonds in the amount of €2.25 billion, amongst other things. As expected, the transaction's external financing led to a decrease of the equity ratio to 18 percent as of June 30, 2015 (prior year: 34 percent).

"The financing of the acquisition of TRW is based on solid and favorable conditions in line with our conservative finance policy," says Dr. Konstantin Sauer, Board Member Finance. "Thanks to a balanced maturity profile, we are now able to continuously reduce debt levels each year. We are expecting that our strong cash flow will enable us to achieve this quickly."

Integration of TRW fully on track

The closing of the acquisition on May 15, 2015 marks the start of the integration process of TRW that is projected to last three to five years. Since that date, 13 working groups with different points of focus have been working hard on the integration of TRW into the ZF Group for which a clear-cut timetable has been developed. TRW now represents the division "Active & Passive Safety Technology" within the ZF Group. The integration process is on track.

"Only six weeks after the acquisition of TRW, we already presented a joint product: the 'Advanced Urban Vehicle' – a concept vehicle which combines the competencies of ZF and TRW and which we will also present to the general public at our joint trade fair presentation at the IAA in September," says Stefan Sommer. "Even if there is a long way to go for us yet: These successes clearly and explicitly demonstrate how well the integration process is moving on. In my view, the spirit of partnership as well as the constructive atmosphere and teamwork also prove that we are on the right track."


As regards general market development, ZF expects that Europe will continue to develop positively in the second half of 2015. The Group anticipates a stable, positive market development in North America for the remainder of the year. Demand is expected to continue to decline significantly in South America. In the Region of Asia-Pacific, the Group assumes weakness to occur in certain premium-class automobile segments, accompanied by slower economic growth in China.

ZF expects that the Group's sales and profit for the full year 2015 will be stable. The key performance indicators will then include a contribution of the "Active & Passive Safety Technology" division for a period of 7.5 months, i.e. since the date of the acquisition of TRW. Against this backdrop, ZF expects sales for the full year 2015 to amount to between €29 billion and €30 billion. From today's point of view, the EBITDA margin will exceed 10 percent.


Half-Year Figures as of June 30, 2015

Condensed interim consolidated financial statements as of June 30, 2015


Andreas Veil

Head of Commercial and Financial Communication

+49 7541 77-7925