The situation for ZF is becoming increasingly precarious. Last year, the earnings of Germany's second-largest automotive supplier after Bosch slipped deep into the red. The bottom line for 2024 was a 1.020 billion euro after tax loss. Net debt rose by 485 million euros to 10.5 billion euros at year end, while the equity ratio fell to 19.2%.

„Never before has our industry been so clearly in the midst of a perfect storm,“ said CEO Holger Klein at the online earnings press conference. He specified „weak markets, structural deficits, bureaucratic burdens and considerable cost increases“. He also cited the uncertainty surrounding the development of electromobility, the compartmentalisation of markets, and the sharp rise in capital costs, as added complications.

Klein emphasised that the goal not only concerns the transformation to electromobility, but also transforming the „large tanker ZF into a strong fleet of agile speedboats“. The company is looking for partners in several segments to strengthen its strengths and tap into its potential. One of these is driveline technology, which according to Klein is considered by many to be the heart of ZF. No decisions have been made yet, Klein reported. „But we are preparing the driveline division to become so independent that a partner can participate.“ And contrary to speculation, there are currently no plans to sell the division.

With a partner, ZF wants to be one of the three largest suppliers, thus benefiting from economies of scale and remaining competitive in the case of driver assistance systems. The company is currently unable to make the considerable investments required for this alone. Regarding the future of ZF Lifetec, the spun-off airbag division, Klein said that the options of an IPO or sale were being pursued. Bloomberg recently reported interest from the Irish automotive supplier Adient and two private equity companies. The CEO did not comment on this, saying only that "we are in the middle of the process.“

Last year, ZF entered into a partnership with Foxconn for the assembly of axle systems in a joint venture. Since 2021, there has been development cooperation for vehicle software with the Indian company KPIT Technologies.

The ZF Board of Management's outlook for this year does not suggest a revival. Klein does not anticipate „a significant change in sales“. Last year, sales fell by 11% to 41.4 billion euros. Excluding portfolio and currency effects, it fell by just under 3%. Adjusted for special items, the return on sales before interest and taxes is expected to be between 3% and 4%. In 2024, it fell to 3.6% (the previous year: 5.1%). When asked about the net result, CFO Michael Frick replied that, from today's perspective, no loss is expected for 2025. However, this could change quickly due to possible one-off effects. The loss of 1 billion euros in 2024 includes extraordinary items totalling 1.5 billion euros. Some of these are restructuring costs.

ZF has been planning job cuts for some time due to overcapacity; 11,000 to 14,000 jobs are to be cut in Germany by the end of 2028. In 2024, the workforce in Germany will be reduced by around 4,000 to 52,000, and worldwide by 7,100 to around 162,000. Frick put the restructuring costs at 626 million euros.

Because of such costs, net debt will not fall this year, said Frick. At the current margin level, ZF does generate a positive cash flow. However, the cash inflow is not sufficient to reduce debt. The reason for the high level of debt is the two major acquisitions TRW 2015 and Wabco 2020.