Friedrichshafen, Germany: The ZF Annual Results 2025 highlight a significant improvement in operating performance, as ZF Friedrichshafen AG exceeded its guidance for operating profit and cash flow despite a challenging macroeconomic environment.
The company reported sales of €38.8 billion, alongside a notable rise in profitability and continued progress in debt reduction.
The ZF Annual Results 2025 show that the adjusted EBIT margin increased to 4.5 percent, surpassing the guided range of 3.0 to 4.0 percent. This corresponds to an adjusted EBIT of €1.7 billion, compared to €1.5 billion in 2024.
Additionally, adjusted free cash flow exceeded expectations, reaching €1.4 billion against guidance of over €500 million. Despite a nominal sales decline from €41.4 billion in 2024, ZF achieved organic growth of 0.6 percent.
A key strategic move highlighted in the ZF Annual Results 2025 was the early termination of non-profitable electric mobility projects. While this resulted in a one-time charge and an accounting loss, it has created new strategic flexibility for the company moving forward.
“Operationally, we surpassed our 2025 targets. The fact that our efficiency program is gaining traction encourages us to stay the course. Performance and profitability take precedence over sales and size. But we also know: continuing our upward path will require full focus and maximum effort across the Group,” said ZF CEO Mathias Miedreich at the annual results presentation in Friedrichshafen.
The ZF Annual Results 2025 underline three key priorities outlined by Miedreich: strengthening the company’s financial position through disciplined deleveraging, investing in strategic core areas, and building a more agile organizational structure.
“Reducing our financial liabilities remains our top priority,” he added, emphasizing the importance of financial resilience.
In line with this, the ZF Annual Results 2025 confirm that the company reduced its financial liabilities by approximately €250 million, bringing net debt down to €10.2 billion.
CFO Michael Frick stated, “This deleveraging is an important sign of stability and confidence – for employees, customers, and capital markets. We will continue this path of organic debt reduction, complemented by proceeds from selective divestments.”
Strategic Realignment Gains Momentum
A major highlight of the ZF Annual Results 2025 is the company’s ongoing strategic repositioning. ZF announced the sale of its Advanced Driver Assistance Systems (ADAS) passenger car business to Harman Inc. for an enterprise value of €1.5 billion. The transaction, expected to close in the second half of 2026, supports ZF’s strategic refocusing and deleveraging efforts.
The ZF Annual Results 2025 also reflect structural changes, including the establishment of its wind-power business as a standalone unit to enhance agility and strategic options.
Additionally, ZF reached an agreement to independently restructure its Electrified Powertrain Technology Division, while maintaining it as an integral part of the group.
As part of this restructuring, several non-profitable projects were terminated due to slower-than-expected growth in electric mobility.
This led to a one-time charge of approximately €1.6 billion, contributing to a reported net loss of €2.1 billion for the fiscal year. However, the company emphasized that these are one-off effects that strengthen long-term positioning.
“The write-downs on unprofitable projects are a one-off effect on our 2025 balance sheet. But they remove weight from our backpack for the climb ahead,” said Miedreich.
The ZF Annual Results 2025 also highlight strong customer confidence, evidenced by major new contracts, including an agreement with BMW Group for the continued supply and development of ZF’s eight-speed automatic transmission, including electrified variants.
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Workforce and Operational Adjustments
The ZF Annual Results 2025 show a reduction in global workforce to 153,153 employees, down from 161,631 in 2024. In Germany, the workforce declined to 49,210 employees.
These reductions are part of a broader plan to optimize capacity through voluntary measures such as attrition, severance packages, partial retirement programs, and reduced working hours.
Financial Performance and Investments
According to the ZF Annual Results 2025, the company maintained strong financial discipline amid subdued demand. Adjusted EBIT stood at €1.7 billion, while adjusted free cash flow reached €1.4 billion. The equity ratio was reported at 13.3 percent.
Research and development spending totaled €3.3 billion, maintaining an R&D ratio of 8.6 percent, placing ZF among Europe’s top 20 corporate R&D investors. Capital expenditures amounted to €1.8 billion, reflecting a capex ratio of 4.6 percent.
A significant financing milestone in the ZF Annual Results 2025 was the successful placement of a €1 billion bond in February 2026. The bond, with a six-year maturity and a 5.5 percent coupon, was six times oversubscribed, reflecting strong investor confidence.
“This is a clear vote of confidence from capital markets in ZF’s strategy, credit quality, and transformation path,” said CFO Frick. “We secured a longer maturity at a lower interest rate, increasing financial flexibility and planning certainty.”
ZF Annual Results 2025: Outlook for 2026
Looking ahead, the ZF Annual Results 2025 indicate cautious expectations for 2026, with continued market uncertainty and weak demand, particularly in the commercial vehicle sector. ZF anticipates Group sales of more than €38 billion at stable exchange rates.
The company expects an adjusted EBIT margin of 4.0 to 5.0 percent and adjusted free cash flow exceeding €1 billion, assuming stable market conditions and continued cost discipline.
During the presentation, Miedreich also addressed regulatory challenges, stating, “Location factors continue to weigh on us. We expect Berlin to present a new reform agenda. And we expect Brussels to be honest about fleet-wide CO₂ legislation.
The European Commission has hinted at more flexibility but continues an industrial-policy collision course. We urgently need adjustments, especially regarding plug-in hybrids, which are a key transition technology.”
Key Figures at Glance:2025 2024* Sales €38.8bn €41.4bn Employees worldwide 153,153 161,631 EBIT (adjusted) €1,748m €1,465m EBIT margin (adj.) 4.5 % 3.5 % Net profit or loss
after tax€-2,147m €-1,059m R&D expenditure €3.3bn €3.6bn Investments in property, plant and equipment €1.8bn €2.3bn Equity ratio 13.3 % 18.9 % Free cashflow (adj.) €1.4bn €305m EMEA sales €19.3bn €19.4bn – thereof Germany €8.5bn €8.0bn North America sales €10.0bn €11.2bn – thereof U.S. €8.7bn €9.5bn South America sales €1.3bn €1.4bn Asia-Pacific and India sales €8.2bn €9.5bn – thereof China €5.7bn €6.4bn
* Previous year’s figures restated
