- Four months after acquiring TRW, shared structures are already in place
- In the first six months of 2015, the technology company posted sales of €12.2 billion
- ZF unveiled its Advanced Urban Vehicle as a mobility solution for city driving at the IAA
At the 66th International Motor Show 2015 (IAA), Chief Executive Officer of ZF Friedrichshafen AG, Dr. Stefan Sommer, announced a few of the successes already achieved as a result of the company’s acquisition of U.S. automotive supplier TRW Automotive four months ago. These include, among others, key account management as well as standardizing purchasing structures.
“Since the transaction was completed exactly four months ago, ZF and ZF TRW employees have been working hard on integrating the new division Active & Passive Safety Technology,” said Sommer in Frankfurt on Tuesday. “The 13 working groups are completely on schedule; we are focusing primarily on the areas of materials management, sales, and aftermarket.”
One of the first examples of the integration process is the already established new structure of the key account management which combines the organizations of both companies and assigns one primary person responsible to the customer according to the “one face to the customer” principle. In this context, the online customer portals of ZF and ZF TRW will be gradually standardized to allow for standardized data exchange with the customers. A second area of activity is the reorganization of the purchasing structure in order to create the necessary requirements for contacting suppliers thanks to clear contact partners. ZF plans to save an additional €1 billion in the next three years with this purchasing and supplier strategy.
Business figures for the first half of 2015
Sommer announced ZF’s figures for the first half of the year in Frankfurt, according to which the company generated sales of €12.2 billion in the first six months of the year. This figure includes sales generated by the new division Active & Passive Safety Technology since May 15, 2015 – i.e. since completion of the acquisition of TRW – in the amount of €2 billion. Even without taking into account these pro rata sales from TRW, revenue increased significantly by 11 percent to €10.2 billion, mainly driven by currency effects. After adjusting for currency effects, sales grew by 3 percent. The key financial performance figures of the company are also substantially influenced by extraordinary items. Above all, the sale of the shares held in ZF Lenksysteme led to a disproportionate increase in the financial performance: Earnings before interest, taxes, depreciation and amortization (EBITDA) rose to €1.5 billion (prior year: €902 million). Net profit after tax increased sharply to €711 million (prior year: €310 million).
“We are expecting that ZF’s sales and profit for all of 2015 will be stable,” added Sommer. While individual markets are developing at very different rates, the company is anticipating stable, positive market development in North America for the remainder of the year. In contrast, demand in South America is expected to continue to decline significantly. In the Region of Asia-Pacific, ZF is expecting a downturn in certain premium-class automobile segments, accompanied by slower economic growth in China. “Having said that, we are forecasting overall sales of €29 billion to €30 billion for this year,” announced Sommer.
Sommer admitted in Frankfurt that to make ZF German production locations compatible, it is imperative to shape the company’s cost structures in line with the market. “Our success will depend on whether we will be able to combine innovation leadership with cost leadership,” said ZF’s CEO. According to him, the company is already negotiating with employee representatives in order to establish an overall concept.
New at the IAA: the Advanced Urban Vehicle
This year’s trade show exhibit at the IAA brought together the products from ZF and ZF TRW for the first time. With the Advanced Urban Vehicle, ZF presented an exemplary solution for individual urban transport in the compact and subcompact segments. The features of this concept car include its close-to-wheel, purely electric rear-axle drive, the Electric Twist Beam, a front axle with a turning angle of up to 75 degrees, as well as two driver assistance functions: One is the Smart Parking Assist, which maneuvers the vehicle into virtually any narrow parking space – remote-controlled using mobile devices such as a smart phone or smartwatch. The Cloud-based assistance function, PreVision Cloud Assist, reduces, if needed, the drive torque in a timely manner prior to cornering, thereby also reducing the speed without mechanical braking. “This vehicle is impressive,” emphasized Sommer, “it shows how mechanics and electronics, along with ZF and TRW technology, supplement each other in our company.”
ZF will welcome its visitors, potential and existing customers at the 66th IAA Cars September 17–27, 2015 in Hall 8.0 and at the special exhibit “New Mobility World”.
