ZF has posted first half operating profit up to EUR1.1bn (US$1.22bn) while sales rose to EUR17.8bn.

The German supplier says the figures can be compared with the prior-year period only to a limited extent as the first half of 2015 was essentially characterised by extraordinary items: the acquisition of the TRW and the sale of the 50% share in ZF Lenksysteme.

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“Our adjusted EBIT margin rose significantly in the first six months thanks to our improved operating performance and realised synergies within the framework of the ZF TRW integration,” said ZF CFO Konstantin Sauer.

ZF’s sales amounted to EUR17.8bn in the first half of the year. This corresponds to an organic growth of 5% when comparing the current figures with the combined pro forma sales of ZF and ZF TRW for the period from January 1 to June 30, 2015.

Growth was slightly hampered by exchange rate fluctuations. Adjusted by currency effects and other acquisitions and sales, it amounted to 2%.”

In the first half of 2016, ZF’s automotive sales especially grew in North America and Europe. Adjusted for currency and M&A effects, the company achieved slight organic sales growth in the Asia-Pacific region.

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In the Commercial Vehicle Technology Division, solid growth in Europe was offset by weak markets in Russia and South America. The overall significant rise in sales in the Industrial Technology Division is attributable to the acquisition of the large industrial drives and gearboxes business of Bosch Rexroth and to high growth rates in the wind power business.

In spite of fluctuating exchange rates, ZF expects the business development for the overall year 2016 to be stable and forecasts sales of around EUR35bn an adjusted EBIT margin of around 6% and an adjusted EBITDA margin of more than 10%.

“We achieved a significantly improved margin in the first half of the year and we want to maintain this momentum during the overall fiscal year despite challenging conditions,” added ZF CEO, Stefan Sommer.

“At the same time, we must increase the competitiveness, especially of the German locations, by increasing flexibility and adjusting cost structures.”

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