ZF sales and EBIT dropped in 2024 as realignment continues. Commercial Vehicles remain “core area”

ZF has reported sales of €41.4 billion for the 2024 fiscal year, reflecting an 11% decline compared to the previous year. This drop was largely attributed to the deconsolidation of the axle assembly product line, which had generated €2.6 billion in sales. Excluding this one-time effect, the organic sales decline was approximately 3%. ZF, while presenting its 2024 results, states that it continues to implement its strategic realignment and efficiency programs to enhance long-term competitiveness and profitability.

According to a reporting by German newspaper Handelsblatt out in February 2025, ZF is evaluating a full spin-off of its Electrified Powertrain Technologies division under a project called “Verde”. Such move wouldn’t affect the Commercial Vehicles division. Last year the group said that the number of ZF employees in Germany will be gradually reduced by around 11,000 to as many as 14,000 by the end of 2028 within the Electrified Powertrain Technologies division.

Coming to the results 2024, the group saw lower volumes in both the passenger car and, cyclically, the commercial vehicle segment.

ZF states that the group remains committed to optimizing its portfolio, focusing on core sectors such as chassis systems, commercial vehicle and industrial technology, as well as its aftermarket business. These divisions rank among the top three in their respective segments. To support future growth, ZF is actively seeking partnerships in electric mobility, electronics, and driver assistance systems. This approach aims to enhance market alignment and create a robust ecosystem for the future of mobility.

ZF in 2024: Commercial Vehicles and market dynamics

The commercial vehicle segment, like the passenger car business, faced cyclical volume reductions in 2024. However, ZF’s aftermarket division experienced an organic sales increase of 12%, reaching €3.6 billion.

This growth was driven by higher service demands amid lower new vehicle sales. Regionally, Europe remained the primary revenue contributor at 47%, followed by North America (27%) and Asia-Pacific (23%).

The financial results of ZF in 2024

ZF reported an adjusted EBIT of €1.5 billion, yielding a margin of 3.6%, down from 5.1% in 2023. Free cash flow, adjusted for M&A activities, amounted to €305 million. High restructuring provisions of approximately €600 million contributed to a net loss of €1.02 billion, increasing ZF’s net debt to €10.5 billion.

With continued economic uncertainty, particularly in the eurozone and Germany, ZF projects sales exceeding €40 billion for 2025. The company anticipates an adjusted EBIT margin between 3.0% and 4.0% and free cash flow surpassing €500 million.

ZF is reducing workforce

ZF CEO Holger Klein streghtens that Germany would remain a central pillar of ZF in the future, but that it needed a more efficient structure and an adjustment of personnel capacities to the continued expectation of weaker market demand. “We are aware that this means major cutbacks for our employees in some cases. Our goal is to preserve as many jobs as possible and to implement the necessary job cuts in the most socially acceptable way possible”.

Last year, personnel capacity in Germany was reduced by around 4,000 jobs (full-time equivalents / FTEs), mainly through partial retirement, fluctuation, the expiration of temporary employment contracts, and the collective reduction of weekly working hours.

As of December 31, 2024, ZF employed 161,631 people worldwide (2023: 168,738), which is around 4 percent fewer than in the previous year. In Germany, the number of employees also nominally decreased by around 4 percent to 52,027 (2023: 54,447).

A 2024 of developments and partnerships

Summing up the main facts of 2024, ZF underlines that during September of last year it has completed the spin-off of its Passive Safety Systems Division, which began in 2022. The business unit is now operating independently and successfully in the market under the name ZF LIFETEC. In April 2024, ZF Foxconn Chassis Modules GmbH was founded, a joint venture for passenger-car chassis systems with Foxconn, the world’s largest electronics manufacturer. The development partnership with automotive middleware software developer KPIT Technologies, which has been in effect since 2021, has since been transferred to the independent software company Qorix. Qorix middleware is designed to help vehicle manufacturers cope with the ever-increasing software complexity while maintaining full control over its software architecture. U.S. semiconductor manufacturer Qualcomm recently began working with Qorix to use the middleware on its system-on-chip platforms.

“The year 2024 has made it clear just how much pressure our industry and our company is under,” said ZF CEO Holger Klein at the presentation of the annual report in Friedrichshafen on Thursday. ”We’re meeting these challenges with a clear strategic action plan. The goal is to reduce ZF’s debt and develop the company into a more agile and profitable technology leader. This path, which we embarked upon two years ago, is costing us a great deal of energy. Nevertheless, we will continue to pursue it courageously and consistently, because we can see that initial successes are emerging. We continue to make targeted investments in core areas such as chassis, commercial vehicle and industrial technology as well as our aftermarket business, which are already among the top three in their respective segments. We are seeking partnerships in the areas of electric mobility, electronics and driver assistance systems to strengthen these areas for the future and to free up growth potential. This will help us to align these divisions even more closely with customers and markets and to create an ecosystem for the mobility of the future that will make us more agile and stronger overall”.