Germany: ZF Continues to Create New Jobs, Reports 2013 Financials

ZF Friedrichshafen AG created approximately 4,200 jobs globally, of which 2,000 positions, about half of the jobs, were created in Germany. During the same period, sales increased by 8 percent from $21.3 billion (€15.5 billion) to $23.2 billion (€16.8 billion).

“ZF once again experienced above-average growth last year,” announced ZF’s CEO Dr. Stefan Sommer on Wednesday, April 30, at the presentation of the financial report in Stuttgart, Germany. “Whether in Europe, the U.S. or China, we were only able to achieve this success with the addition of more qualified and dedicated employees.” Thanks to its new recruits and veteran employees, ZF now employs about 72,600 people around the world, 41,900 of which are based at the German locations. Overall, this corresponds to a 6 percent increase.

Consequently, ZF’s sales total of $23.2 billion (€16.8 billion)—an increase of 8 percent from the previous year — created the need for more employees. “With a 15 percent sales increase, the Asia-Pacific region, in particular, gave us extra impetus,” said Sommer. He mentioned that ZF opened new axle assembly plants in China and Malaysia, and also secured new orders.

With sales of about $4.14 billion (€3 billion) respectively, North America and Asia-Pacific are ZF’s most important foreign markets after Europe, even though the sales increase in Europe (8 percent) and North America (5 percent) was lower than in the Far East.

In July 2013, ZF opened a new transmission plant for 8- and 9-speed automatic transmissions in Gray Court, South Carolina (U.S.), which is already being expanded as a result of the high demand for these products. “The United States of America is an important pillar of our business,” emphasized Sommer. “Thanks to our new plant, we are well-equipped to reliably supply our customers.” Sommer announced that it is anticipated that ZF will also produce the new 9-speed automatic transmission for the Asian market in China starting in 2017. With the global localization of production, the company wants to avoid becoming too dependent on one market region.

At 15 percent and 11 percent respectively, Car Driveline Technology and Car Chassis Technology experienced the strongest growth when looking at sales increase according to product segments. Sales in Commercial Vehicle Technology increased by 7 percent; Electronic Systems and ZF Services enjoyed an increase of 4 percent and 6 percent respectively. These areas profited from a stronger worldwide demand while Industrial Technology was confronted with weaker and, in some cases, extremely volatile market developments, and consequently, recorded a 9 percent decline in sales.

As in previous years, ZF once again spent approximately 5 percent of its sales on research and development in 2013 with investments of $1.15 billion (€836 million) in this area. In contrast, the $1.32 billion (€954 million) used for investments in property, plant and equipment was 7 percent below the prior year’s value.

ZF not only increased sales last year but also improved its profit situation. Operating profit increased from $823 million (€597 million) to $1.04 billion (€756 million), an increase of 27 percent; the return on sales increased from 3.8 percent to 4.5 percent. “We worked very hard on our cost structures and further improved them,” said Konstantin Sauer, member of the board of management of ZF Friedrichshafen AG responsible for Corporate Finance. “We are now profiting from this.” The reorganization of materials management and the introduced optimizations of the net working capital also had a positive effect upon ZF’s fiscal results and liquidity situation.

“This year, ZF will benefit from the positive market development in the majority of market regions and industries,” said Dr. Sommer. He also expects the locations that were put into operation during 2013 to significantly increase production. Therefore, Sommer anticipates a growth in the “high single-digit percentage range” as well as further improvements in terms of the financial report. Subsequently, ZF expects approximately 2,000 jobs to be created worldwide and a quarter of them to be located in Germany.