• ZF Group grows by 12 percent in 2012
• Operating profit amounts to EUR 687 million
• Number of employees worldwide rises to almost 75,000
Friedrichshafen/Stuttgart. ZF Friedrichshafen AG has closed the business year 2012 with record sales of approximately EUR 17.4 billion – a plus of 12 percent compared with the previous year (EUR 15.5 billion). The operating profit declined by 19 percent to EUR 687 million (previous year: EUR 850 million).
The number of employees worldwide increased last year by 5 percent to 74,775. Dr. Stefan Sommer, ZF’s Chief Executive Officer said: “We will continue to grow in 2013 – less dynamically than in previous years, though. We will focus more on the quality of the result.”
In 2012, ZF also recorded an increase in sales above the industry average. The sales figure was 12 percent higher than in 2011 and went up from EUR 15.509 billion to EUR 17.366 billion. “We achieved particularly dynamic growth in the Region of North America – just like in 2011, this figure also rose by more than 40 percent in 2012,” said ZF’s CEO Sommer at the annual press conference of the technology Group in Stuttgart. In contrast to 2011, the year in which we recorded growth in all market regions, there were regions hit by sales losses alongside other regions that achieved significant gains in 2012.”
According to Mr. Sommer, the Region of Asia-Pacific grew by 21 percent and Western Europe by six percent while figures in Eastern Europe dropped slightly by one percent and declined even more sharply (by 14 percent) in South America due to the market situation. The product segments developed differently as well: Growth in the premium passenger car segment was offset by a stagnating, in some cases downward, trend in the volume passenger car segment. The commercial vehicle market recorded a general decline; the development of the industrial technology market varied widely within the different industries.
The ZF Group workforce grew by over 3,000 or around five percent to almost 75,000 employees at the end of the year 2012. More than half of the additional workforce has been employed at German ZF locations – a distribution that will be reversed within the next few years. “Sales and the number of employees will increase in Germany – but to an even greater extent abroad,” explained Sommer. ZF is expecting around 3 500 new employees worldwide in 2013, with more than 1 000 in Germany.
“The continuously high demand for ZF products, especially for passenger car technology, again allowed us to make huge investments in new plants and in the expansion of our production equipment,” Sommer explained the investment in PP&E of roughly EUR 1.2 billion. “The major investment of around EUR 200 million in 2012 was spent at the transmission plant in the USA which started in 2011.” In South Carolina, ZF built a production plant for automatic passenger car transmissions that will supply various customers with the first 9-speed automatic transmissions worldwide in a few weeks’ time.
Dr. Konstantin Sauer, Member of the Board of Management in charge of Corporate Finance, considered the operating profit of EUR 687 million as “not satisfactory”. The return on sales has thus fallen to four percent. “Besides considerable advance payments for higher production capacities, demand-driven underutilization or overutilisation at some plants caused high extra costs,” Sauer said. “The financial restructuring of the die-casting technology activities acquired in 2011 and the difficult market situation in the wind power business also had an effect on these results.”
For the current, less dynamic year 2013, ZF expects a stabilisation and, especially in the first half of the year, only moderate growth rates. “In a rather weak economic environment, we will develop more strongly than the market and expect a plus in sales of approximately ten percent or around EUR 1.5 billion,” ZF’s CEO Sommer predicts. “Our overseas markets will be unable to fully offset the weak market development in Europe and in the wind energy sector.”
In absolute terms, ZF sales will decrease slightly in 2013: Pursuant to the international financial reporting standards (IFRS), sales of the 50% joint venture with Bosch, the ZF Lenksysteme GmbH, can no longer be proportionately consolidated at ZF but will be reported as at equity investment. Group sales thus posted according to IFRS will decrease by half of the ZF sales share of ZF Lenksysteme of around EUR 2 billion in 2013.
