Gasgoo Munich- ZF Group officially released its 2025 financial report on March 19. The results show a marked improvement in operational performance, with core metrics like profit and cash flow significantly beating expectations. Strategic transformation and cost-efficiency measures have delivered tangible results, further solidifying the company's financial foundation.
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Specifically, ZF reported sales of €38.8 billion for 2025, achieving organic growth of roughly 0.6% when excluding mergers, acquisitions, and currency effects. Adjusted EBIT reached €1.7 billion, lifting the corresponding margin from 3.5% in 2024 to 4.5%—comfortably above the 3.0% to 4.0% target range. Adjusted free cash flow surged to €1.4 billion, dwarfing the €500 million target and representing a massive increase from the €305 million recorded in 2024. During 2025, ZF successfully reduced financial debt by approximately €250 million, bringing net debt down to €10.2 billion. Meanwhile, a €1 billion six-year bond issued in February 2026 was six times oversubscribed, signaling high confidence from capital markets in the company's transformation path.
Regarding strategic adjustments, ZF is accelerating its focus on core businesses. The company agreed to sell its ADAS unit to Harman for €1.5 billion—a transaction pending regulatory approval and expected to close in the second half of 2026. Additionally, wind power was established as an independent business unit, and the electrified driveline division was restructured. ZF terminated certain unprofitable e-drive projects early; while this incurred one-time financial costs, it has freed up strategic space for long-term development. At the same time, the company optimized its workforce through voluntary programs, reducing global headcount by 5% year-on-year with significant cost-saving results. It also secured major orders, including a long-term supply deal for 8-speed automatic transmissions with BMW, underscoring strong customer recognition of its core technologies.
In terms of R&D, ZF invested €3.3 billion in 2025, maintaining an R&D ratio of 8.6% of sales. This keeps the company at the forefront of R&D spending among European firms and lays the groundwork for technological innovation. The Asia-Pacific region has become a key growth engine for the group, with the Chinese market delivering particularly fruitful results. Cutting-edge technologies such as steer-by-wire systems and the AKC project have achieved localized mass production. In electrification, products like the fourth-generation 8-speed hybrid transmission and the eRE Plus four-in-one range extender system have secured new orders. Business segments including commercial vehicles, industrial technology, and after-sales continue to deepen their local layouts, securing multiple project awards and partnerships.
Looking ahead to 2026, ZF expects the global economic environment to remain uncertain, with sales showing no significant growth compared to 2025. However, assuming stable exchange rates, sales are projected to exceed €38 billion. Provided sales and procurement markets remain stable and cost controls remain stringent, ZF's adjusted EBIT margin is expected to reach between 4.0% and 5.0%. Adjusted free cash flow (excluding M&A impact) is forecast to surpass €1 billion. Moving forward, the company will continue to focus on prudent deleveraging, positioning in core areas, and building an agile organization. It remains committed to a profitability-first development strategy as it advances its strategic transformation.
