ZF Friedrichshafen, in its annual report, revealed it may sell additional businesses as it works to further reduce net debt.
In 2025, the German auto parts maker reduced its financial liabilities by around 250 million euros, reducing net debt to 10.2 billion euros ($11.7 billion).
“This deleveraging is an important sign of stability and confidence – for employees, customers and capital markets,” said Chief Financial Officer Michael Frick. “We will continue this path of organic debt reduction, complemented by income from selective divestitures.”
ZF has already started sales operations. In December, it agreed to sell its ADAS driver assistance business to Samsung Electronics’ Harman for €1.5 billion.
The group also spun off its wind energy division into a standalone unit, saying the move would open up “strategic options” for that business.
On the commercial front, ZF reported group sales of €38.8 billion for fiscal 2025, down 6% from €41.4 billion in 2024. Excluding M&A and currency effects, sales increased by around 0.6% organically.
“The overall picture has not changed: we do not see a broad recovery in demand. We must operate in an environment without significant market growth. That requires increased profitability. This remains our focus, along with generating cash flow to reduce our debt,” Frick said.
Adjusted EBIT increased to €1.7 billion from €1.5 billion a year earlier. Adjusted EBIT margin improved to 4.5% from 3.5%.
ZF said it is preparing for another year of moderate demand and forecast 2026 revenue will remain broadly flat at just over €38 billion.
To reduce debt pressure and refinancing costs, the company is continuing with a restructuring plan that could include up to 14,000 job cuts in Germany until the end of 2028.
ZF said it stopped several e-mobility projects early and booked 1.6 billion euros in one-off charges in fiscal 2025, citing a slower-than-expected shift to electric vehicles.
It added that it now sees increased demand for combustion engines and hybrid propulsion systems, while also noting a possible easing of European Union restrictions on internal combustion engines.
During the results presentation, CEO Mathias Miedreich addressed regulatory issues.
“Location factors continue to weigh on us. We hope that Berlin will present a new reform agenda. And we hope that Brussels will be honest about CO₂ legislation for the entire fleet.
“The European Commission has hinted at greater flexibility, but remains on a collision course on industrial policy.
“We urgently need adjustments, especially when it comes to plug-in hybrids, which are a key transition technology. They alleviate range anxiety, support the rise of electric mobility and help safeguard jobs,” Miedreich said.