ZF Friedrichshafen its annual report revealed it may sell additional businesses as it works to further reduce net debt.
In 2025, the German auto-parts maker reduced financial liabilities by around €250m, lowering net debt to €10.2bn ($11.7bn).
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“This deleveraging is an important sign of stability and confidence – for employees, customers, and capital markets,” said CFO Michael Frick. “We will continue this path of organic debt reduction, complemented by proceeds from selective divestments.”
ZF has already been pursuing disposals. In December, it agreed to sell its driver-assistance business ADAS to Samsung Electronics’ Harman for €1.5bn.
The group also spun off its wind power division into a standalone unit, saying the move would open up “strategic options” for that business.
On trading, ZF reported group sales of €38.8bn for fiscal 2025, down 6% from €41.4bn in 2024. Excluding M&A and currency effects, sales rose by around 0.6% organically.
“The overall picture hasn’t changed: We see no broad based recovery in demand. We must perform in an environment without meaningful market growth. That requires higher profitability. This remains our focus, along with cash flow generation to reduce our debt,” Frick said.
Adjusted EBIT increased to €1.7bn from €1.5bn a year earlier. The adjusted EBIT margin improved to 4.5% from 3.5%.
ZF said it is preparing for another year of subdued demand, forecasting 2026 revenue to be broadly stable at just over €38bn.
To reduce pressure from debt and refinancing costs, the company is continuing a restructuring plan that could include up to 14,000 job cuts in Germany by the end of 2028.
ZF said it halted several e-mobility projects early and booked €1.6bn in one-time charges in fiscal 2025, citing a slower-than-expected shift to electric vehicles.
It added that it is now counting on stronger demand for combustion-engine and hybrid powertrains, while also watching for a potential easing of European Union restrictions on internal combustion engines.
During the results presentation, CEO Mathias Miedreich addressed regulatory issues.
“Location factors continue to weigh on us. We expect Berlin to present a new reform agenda. And we expect Brussels to be honest about fleet wide CO₂ legislation.
“The European Commission has hinted at more flexibility but continues an industrial policy collision course.
“We urgently need adjustments, especially regarding plug in hybrids, which are a key transition technology. “They ease range anxiety, support the ramp up of electric mobility, and help safeguard jobs,” said Miedreich.
