ZF said it has achieved its financial targets for 1021 in what remains a challenging business environment. At €38.3 billion, its sales increased YOY by 17.5 percent, considerably exceeding the 2020 figure of €32.6 billion, and above that of 2019 (€36.5 billion).
Adjusted EBIT was €1.9 billion (2020: €1.0 billion), while adjusted EBIT margin came in at 5.0 percent (2020: 3.2 percent). 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, speaking at the presentation of the Group’s financials. “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.
In his remarks, Scheider stressed that ZF has reached strategic milestones and laid further groundwork for the future citing 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 creation of the ZF Cloud with Microsoft. The latter, the company said, will digitalize, 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. It said it has already secured substantial contracts for these solutions from international car and CV makers.
“In a volatile environment marked by profit warnings and revised forecasts, we successfully achieved our targets in the middle of our forecast range,” said ZF CFO Dr. Konstantin Sauer. “This means we were able not only to make substantial investments but also to reduce our financial liabilities and strengthen our equity ratio.” Gross debt was reduced by €752 million to €12.5 billion. At the end of 2021, equity ratio stood at around 19 percent (2020: 12.1 percent).
ZF further increased its activities in research and development (R&D). Last year, the R&D ratio was 8.0 percent (2020: 7.7 percent), which equates to R&D spending of €3.1 billion (2020: €2.5 billion) – the highest ever in ZF history. Investments in property, plant and equipment were €1.6 billion (2020: €1.4 billion), resulting in an investment ratio of 4.2 percent (2020: 4.4 percent).
On track for climate neutrality by 2040
The company also said it is 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,” added CEO Scheider, “to make an immediate and demonstrable contribution to climate protection.”
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