ZF reports sales growth

Technology group, ZF, generated sales of €38.3 billion in 2021, a 17.5 per cent growth year-on-year.

Despite a challenging business environment, ZF achieved its financial targets.

The 2021 sales result exceeded the 2020 figure of €32.6 billion, and above that of 2019 (€36.5 billion), while adjusted EBIT margin came in at 5.0 per cent (2020: 3.2 per cent).

Meanwhile, ZF continued its strategic orientation, focused on the future of mobility, and secured substantial new customer contracts in the three core areas of electric mobility, autonomous driving and software development.

“Despite the arrival of strong headwinds during the course of the year, we have remained firmly on course and achieved the targets we set at the start of the year,” said ZF CEO, Wolf-Henning Scheider.

“With their dedication, determination and team spirit, our workforce has played a decisive role in successfully tackling the challenges of these extraordinary times. We have adapted to the new normal and have become even more agile, flexible and digital.”

The second half, in particular, demanded exceptionally high levels of flexibility in production and materials management as a result of interruptions in the global supply chain and last-minute changes in customer orders. All of this took place, of course, against the ongoing backdrop of the global pandemic.

Scheider said that ZF has reached strategic milestones and laid further groundwork for the future. By way of example, he cited the successful start of the Electrified Powertrain Technology division, launched at the beginning of the year, the integration of the WABCO acquisition into the new Commercial Vehicle Solutions division and the cooperation with Microsoft for the creation of the ZF Cloud. The latter will digitalise, network, and provide access to all corporate data and processes worldwide. ZF has also continued structuring its product lineup to serve the electric and software-defined vehicles of the future. Indeed, the Group has already secured substantial contracts for these solutions from international manufacturers of cars and commercial vehicles, providing an excellent basis for further growth.

ZF is also striving to be climate-neutral by 2040.

To achieve this, the company is acting in many different areas. For example, via power purchase agreements (PPA) concluded in 2021 with producers of wind and solar energy, ZF plants in Germany will be supplied with up to 210 gigawatt hours of green electricity in each of the years 2022 to 2025. The agreed volumes, which correspond to the electricity consumption of 72,000 homes, will reduce CO2 emissions by 80,000 tons annually.

“We are focused on definitive measures and are securing contracts to make an immediate and demonstrable contribution to climate protection,” said Scheider.

Within the scope of its sustainability strategy, ZF was also the first automotive supplier in Germany to issue two green bonds totalling €1 billion for the first time in 2021. The basis for this is the Green Finance Framework, in which ZF has laid out its structures and criteria for sustainable financing. The income from the bonds flows into the Wind Power business unit and electric mobility.

“Our green bonds enable us to expand our circle of investors and bring our financing into line with our sustainability goals and our ‘Next Generation Mobility’ strategy,” said ZF Chief Financial Officer, Konstantin Sauer.

The business is also focused on change via reskilling and upskilling.

In 2021, ZF created around 3,600 additional jobs worldwide, mainly in the fields of electric mobility, autonomous driving and software development. The company also expanded its range of options for further training and qualification. These include the ‘E-Cademy’, a wide-ranging training initiative addressing electric mobility. The aim of the E-Cademy is to support the workforce through the technology transition. Among other things, it will enable them to gain specific qualifications for new jobs within the ZF Group. To-date, 13,000 employees have already taken part in the various learning programs.

The second phase of qualification begins midway through this year.

“The E-Cademy gives the ZF workforce the chance to help shape the future of mobility here with us, even if they began their career in another field,” said Scheider.

To prepare the German ZF locations for the long-term future and to meet the changing needs of the industry, the first so-called ‘target agreements’ were concluded last year. They have been developed within the “Collective Transformation Agreement” (Tarifvertrag Transformation) signed with the employee representatives in July 2020. At year-end, on December 31, 2021, ZF employed 157,549 people worldwide (2020: 153,522).

Also, the ZF Chairman of the Executive Board will not renew his contract, which expires in January 2023, at his own request.

Wolf-Henning Scheider informed the Supervisory Board at its last meeting that he did not wish to extend his contract, which expires in January 2023. After more than three decades in the automotive industry and reaching the age of 60, he had decided to end his active time in the industry at the end of the year, to pursue other challenges.

“Wolf-Henning Scheider has contributed decisively over the past four years, to ZF’s development into a leading supplier of cutting-edge electronic and mechatronic systems in its business fields,” said ZF Chairman of the Supervisory Board, Dr Heinrich Hiesinger.

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