ZF Posts H1 Sales Up 10% to EUR 21.2 Billion
In the first half of 2022, ZF held its own in a globally challenging and volatile market environment. In the first six months of this year, the company achieved sales of €21.2 billion (2021: €19.3 billion), an increase of 10 percent above the prior-year period. Adjusted EBIT totaled €851 million (2021: €1.0 billion), equivalent to an adjusted EBIT margin of 4.0 percent (2021: 5.2 percent).

“The first half of the year was characterized by many uncertainties and external influences. We, as the ZF team, have mastered them well – notably based on the experience gained in the past two years of the crisis,” said Wolf-Henning Scheider, Chief Executive Officer of ZF Friedrichshafen AG, when presenting the half-year figures on Wednesday. “The war in Ukraine, the pandemic-related lockdowns in China, the limited availability of semiconductors and significant inflation have affected our business. Our focus is on striking the right balance between our customers’ expectations and our earnings target while ensuring ongoing investments in future technologies.”
Stable financial key figures
From January through June 2022, the technology company generated sales of €21.2 billion (2021: €19.3 billion), representing an increase of around 10 percent (5 percent adjusted for currency effects) compared to the prior-year period. Worldwide vehicle production decreased during this period, with output down 2 percent in the passenger car segment and down 28 percent in the commercial vehicle segment from the prior-year figure.
The company reported an adjusted EBIT of €851 million (2021: €1.0 billion). This corresponds to an adjusted EBIT margin of 4.0 percent (2021: 5.2 percent). Adjusted free cash flow totaled minus €630 million (2021: minus €186 million), which is mainly driven by safety stock that is influenced by currency effects and the increase in material prices.
“In a weak and volatile market environment, we have demonstrated stability and perseverance in our performance,” said ZF CFO Dr. Konstantin Sauer. “The challenges will not diminish in the second half of the year. But we are confident that we will remain on track through cost awareness, continued consistent mitigation of inflationary effects, and active management of our inventories. We are keeping a close eye on our annual financial targets.”
In light of developments to date and the prospects for the next few months, ZF is sticking to its full-year outlook that will remain unchanged. The company expects moderate growth in Group sales in 2022, with a volume exceeding €40 billion for the first time. ZF forecasts an adjusted EBIT margin in the range of 4.5 to 5.5 percent and adjusted free cash flow of between €1.0 billion and €1.5 billion.
The outlook still comes with a caveat as ZF expects continuing negative influences from ongoing issues (inflation, war in Ukraine, limited availability of semiconductors, new outbreaks of the Covid-19 pandemic). Possible gas supply stoppages in Germany and Europe could also impact business in this year’s second half. The company is preparing for this scenario. “We are bolstering the measures already in place to further reduce our energy consumption, as reflected in our sustainability strategy,” emphasized CEO Scheider.
ZF further strengthened its equity base: The equity ratio increased from 18.6 percent at the end of 2021 to around 24 percent as of June 30, 2022. In addition, the company increased its existing revolving credit facility (RCF) from €3 billion to €3.5 billion, securing attractive and long-term, predictable financing conditions one year before maturity. By simultaneously expanding the group of core banks, ZF underlines its strong position in the capital market.
New orders for electric drives and connectivity platform
ZF has received comprehensive new orders for strategically important technologies such as electric drives. The order volume in this segment now totals €23 billion for passenger cars and commercial vehicles through 2030. “Today, ZF offers a complete and comprehensive product range of systems and components for electric mobility,” said Wolf-Henning Scheider. The 12-percent sales growth of the Electrified Powertrain Technology Division in the first half of the year impressively underlined this. “With the new orders, we can manage the transformation from conventional transmissions to purely electric drives. And we can at minimum compensate for the elimination of technologies for vehicles with internal combustion engines. We now aim to further expand our leadership role, for example in power electronics.”
An international vehicle manufacturer has placed a substantial order for the first configuration stage of the scalable ZF ProConnect connectivity platform, which will go into volume production in 2024. ZF ProConnect enables communication between vehicles and even satellites (vehicle-to-X communication) – all through the connection to the cloud. This includes services such as route planning, remote system diagnoses or fleet management. Digital business models are integrated within the platform to support the trend toward the software-defined vehicle. Potential applications are also opening up in autonomous driving where reliable and stable connectivity is indispensable. Therefore, ZF ProConnect is also used in ZF’s autonomous shuttle systems.
To reflect the company’s transformation in a structural dimension, ZF has concluded agreements at several German locations, e. g. Saarbrücken, Koblenz and Kreuztal, as part of the Collective Transformation Agreement (“Tarifvertrag Transformation”). These agreements make the sites more competitive, open up future prospects for employees and create the prerequisites for identifying products that can be manufactured in these locations in the future.
Outlook: ZF at the IAA Transportation in Hanover
In his outlook, Scheider also referred to ZF’s presence at the IAA Transportation Exhibition in Hanover, Germany. At this event, ZF’s Commercial Vehicle Solutions Division will present pioneering solutions for commercial vehicle customers and fleet operators for the first time in its new position as the world’s largest commercial vehicle supplier following the integration of Wabco. From September 20 to 25, ZF will be present at the Hanover trade fair grounds (Hall H21, Booth A90). The presence will focus on new electric drives for commercial vehicles and trailers as well as software developments such as ZF SCALAR, a digital platform based on artificial intelligence for efficiently dispatching commercial vehicle fleets.
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