ZF clocks 9% growth in 2014, N American and APAC growth drivers

ZF Friedrichshafen AG has reported a sales growth of nine percent in 2014, with sales of 18.4 billion euros (Rs 140,649 crore). Profitability has improved, with earnings before interest and taxes (EBIT) rising more than one-third to about 1.1 billion euros (Rs 8,408 crore).

Presenting the company’s annual financial statements in Stuttgart yesterday, ZF's CEO Dr Stefan Sommer said: “2014 was again characterized by heterogeneous market trends. It is all the more gratifying that we reached our goal. Our employees contributed to this success with their extraordinary commitment.”

The main growth driver was business with automatic passenger car transmissions and axle systems. “The 8-speed automatic transmission, whose second generation we launched last year, has been especially popular among customers,” added Sommer. The market for commercial vehicles and off-road machinery, however, turned out to be more difficult.

Growth drivers: North America and Asia-Pacific
North America (3.7 billion euros) and Asia-Pacific (3.6 billion euros) were the top contributors to the company's record sales of 18.4 billion euros, with each region increasing sales by 21 percent. In Europe, where ZF generated about 56 percent of sales, the company saw sales of 10.3 billion euros, an increase of five percent compared to 2013. In comparison, market developments in South America were quite different, with sales dropping by approximately one-fifth due to the floundering economic situation.

2014 saw ZF invest about a billion euros in property, plant, and equipment. “Our customers require our presence on site, and the company itself is continuously expanding its production and research network,” said Sommer. The Engineering Center in Shanghai is being expanded on a massive scale; a new test centre for transmissions is being built in Friedrichshafen, the headquarters of Corporate Research and Development at the ZF Group.

ZF also spent 891 million euros (Rs 6,810 crore) on research and development, which is seven percent more compared to the previous year. With more than 860 patent applications, the company was again ranked among the top 10 innovators in Germany.

Acquisition of TRW most important milestone in 2014
“ZF set an important strategic course in 2014,” emphasised CEO Sommer. Important steps along the way included the founding of two new joint ventures in China: one with automotive manufacturer BAIC in the passenger car chassis sector and the other one with tractor manufacturer YTO in the agricultural machinery sector. “The most important step, however, was, of course, the agreement to acquire TRW Automotive, which will help us considerably expand our expertise as a systems supplier,” added Sommer. “As a result, customers of ZF and TRW will have access to a broad product portfolio from a single source that will offer future mobility solutions in both driveline and chassis technology as well as safety and assistance systems.”