German auto supplier ZF improves profitability in H1 2026
The company increased its adjusted EBIT margin to 5.0% in the first half of 2026, up from 4.3% in the previous-year period. While sales declined 2.0% on a nominal basis, ZF achieved organic growth of 0.5% despite a challenging market environment.
German automotive supplier ZF Friedrichshafen AG improved its profitability in the first half of 2026. The company increased its adjusted EBIT margin to 5.0% in the first half of 2026, up from 4.3% in the previous-year period. Adjusted EBIT rose to EUR 964 million from EUR 853 million in 2025, according to a press release.
Sales in the first half of 2026 were EUR 19.3 billion, compared with EUR 19.7 billion a year earlier. While sales declined 2.0% on a nominal basis, ZF achieved organic growth of 0.5% despite a persistently challenging market environment, the company said.
Adjusted free cash flow improved by EUR 524 million to EUR 989 million.
“Cost discipline and a stronger focus on operational performance and value-creating products are beginning to deliver results,” said ZF CEO Mathias Miedreich. “The environment remains challenging, but we are making steady progress. Each step improves our performance and strengthens our financial flexibility.”
Adjusted free cash flow totaled EUR 989 million compared to the corresponding 2025 figure of EUR 465 million. Cash flow was temporarily affected by payments related to restructuring provisions established in previous periods, the company said.
R&D expenses declined by around 7% to EUR 1.6 billion, corresponding to an R&D ratio of 8.2%. Capital expenditure on property, plant and equipment fell by approximately 19% to EUR 600 million.
Net debt stood at approximately EUR 9.8 billion as of June 30, 2026. Leverage improved to 2.75x, down from 2.98x at year-end 2025. Available liquidity exceeded EUR 7 billion, including an undrawn EUR 3.5 billion revolving credit facility maturing in 2029.
As of June 30, 2026, ZF employed 149,675 people worldwide, a decrease of just over 2% compared with year-end 2025. In Germany, headcount declined by more than 4% to 47,068.
Looking ahead, Frick said ZF remains well positioned to achieve its full-year 2026 targets, including sales of more than EUR 38 billion.
The adjusted EBIT margin of 5.0% at mid-year is at the upper end of the company’s guided range of 4.0% to 5.0%.
“Together with disciplined cost management and ongoing structural measures, this positions us well to continue improving performance through the remainder of the year,” said ZF CFO Michael Frick.
ZF also remains confident of achieving its full-year target of more than €1 billion in adjusted free cash flow, the press release said.
