ZF has posted first-half sales down 1.7% to EUR18.4bn (US$20.4bn), while adjusted EBIT stood at EUR650m.
Based on business performance to date and what the German supplier says is the difficult economic environment, the company adjusted its sales and earnings outlook for 2019.
ZF now anticipates sales between EUR36bn EUR37bn and an adjusted EBIT margin between 4% and 5% for the year.
“The major orders which we recently received for our hybrid-capable automatic passenger car transmission and for our electric drive for a high-volume production luxury vehicle where delivery has already started show our strategy and open-technology approach are the right ones,” said ZF CEO, Wolf-Henning Scheider.
“Customers trust our products and technologies for the long term. We cannot, however, detach ourselves from the challenging economic situation which we are currently facing on a global level and are falling considerably short of our targets as the downturn of the automotive markets worsens.”
While the market for heavy commercial vehicles and the industrial business initially remained stable, ZF’s sales growth slowed in the first half of 2019 due to significantly lower car sales in virtually all major world markets, particularly in China.
The company had previously expected a slightly positive performance in automotive sales overall. In addition to the economic downturn, economic policy factors such as the uncertainty about Brexit as well as tariff and trade issues are having a negative impact.
Including currency and M&A effects, sales decreased organically by around 1.7% to EUR18.4bn.