ZF says it has achieved its targets for the full year despite markets “collapsing overnight,” due to the coronavirus crisis.
At EUR36.5bn (US$40bn) Group sales – adjusted for currency and M&A effects – were slightly below the previous year’s figure of EUR36.9bn (organically minus 1.9%).
Adjusted EBIT amounted to EUR1.5bn (2018: EUR2.1bn) and adjusted EBIT margin was 4.1% (2018: 5.6%).
At the end of December, ZF had 147,797 employees worldwide (2018: 148,969). As well its immediate priorities to deal with the consequences of the coronavirus, ZF is following its long-term goals of its Next Generation Mobility strategy.
“At present, we are witnessing how the markets are collapsing overnight,” said ZF CEO, Wolf-Henning Scheider in Friedrichshafen at a virtual press conference. “At ZF, we have reacted quickly and decisively to the spread of the coronavirus and have prioritised the health and interests of our employees in line with those of the company in the best way possible.
“Our aim is to pursue our ZF way by securing employment and income wherever the appropriate tools are available. In doing so, we are acting in a socially responsible way and contributing to protecting the health of our employees. Furthermore, we can help to stabilise the economic situation which is volatile for all companies currently.”
The ZF chief added the supplier is preparing to ramp up plants in Europe and the US after customers resume production. In Asia, production has already been resumed. “We will continue to stand by our customers and suppliers as a reliable business partner – and support them when they need us,” said Scheider.
“The general economic climate and special challenges connected to the overall transformation of our industry had a tangible impact on our business last year. Nevertheless, we won several high-volume orders, for example for the next generation of our hybrid-enabled 8-speed automatic transmission and for electric drives for cars and buses.”
ZF has reacted to weaker markets, reviewed and postponed investments and agreed closing days at several locations through operational flexibility instruments. “We were able to adjust our cost structure to the changed market situation,” said ZF CFO, Konstantin Sauer.
“This allowed ZF’s results to remain within the forecasted range that was revised mid-2019. However, these figures do not meet our long-term strategic goals. We therefore continue working on our cost structure in order to achieve further improvements.”
Despite the challenging environment, ZF increased its R&D expenditure to EUR2.7bn (2018: EUR2.5bn)
“When we overcome the current crisis, we want to continue to invest in future technologies in a focused manner,” noted Scheider. “This will enable us to further expand our competencies as a leading systems supplier.”
“When the world comes to a social and economic standstill, we face an unprecedented situation. Its effects are uncertain which is why we are currently not in the position to make a valid forecast for 2020. We will continue to do everything we can to protect our employees, stop the spread of the virus and ensure the stability of our company.”