Finance
German auto supplier ZF's 2025 profit margin beats own guidance
Published by Global Banking and Finance Review
Posted on January 23, 2026
1 min readLast updated: January 23, 2026
Quick Summary
ZF Friedrichshafen's 2025 profit surpasses expectations with a strong EBIT margin and cash flow, driven by effective restructuring.
German auto supplier ZF's 2025 profit margin beats own guidance
ZF Friedrichshafen's Financial Performance
(Corrects headline to show that ZF beat its profit margin guidance, not profit guidance)
Profit Margin and Cash Flow
Jan 23 (Reuters) - German automotive supplier ZF Friedrichshafen reported full-year profitability above its own guidance on Friday, citing progress in transformation measures.
CEO's Insights on Transformation
The company said adjusted earnings before interest and tax (EBIT) margin came in significantly above 4%, according to preliminary figures for the year, beating own guidance range of 3% to 4%.
Job Restructuring Impact
ZF, which is undergoing a restructuring that includes shedding thousands of jobs in response to the sluggish car industry, said its adjusted free cash flow for 2025 is expected to exceed 1 billion euros ($1.17 billion), double the amount compared with its own target of 500 million.
The company plans to use the strong cash flow to reduce financial debt earlier than planned by the end of 2025, it said in a statement.
"The improved operating performance and faster debt reduction are encouraging," CEO Mathias Miedreich said, adding "our transformation measures are working."
($1 = 0.8523 euros)
(Reporting by Amir OrusovEditing by Linda Pasquini)
Key Takeaways
- •ZF Friedrichshafen's profitability exceeded its own guidance for 2025.
- •The company's adjusted EBIT margin was significantly above 4%.
- •Restructuring efforts include shedding thousands of jobs.
- •Adjusted free cash flow is expected to exceed 1 billion euros.
- •CEO Mathias Miedreich emphasizes successful transformation measures.
Frequently Asked Questions about German auto supplier ZF's 2025 profit margin beats own guidance
1What is EBIT?
EBIT stands for Earnings Before Interest and Taxes. It is a measure of a firm's profitability that excludes interest and income tax expenses, providing insight into operational efficiency.
2What is adjusted free cash flow?
Adjusted free cash flow is the cash generated by a company after accounting for capital expenditures, adjusted for non-recurring items. It indicates the cash available for distribution to investors.
3What is a restructuring?
Restructuring refers to the process of reorganizing a company's structure, operations, or finances to improve efficiency and adapt to changing market conditions.
4What is a profit margin?
Profit margin is a financial metric that represents the percentage of revenue that exceeds the costs of goods sold. It indicates how well a company converts sales into profits.
5What is cash flow?
Cash flow is the total amount of money being transferred into and out of a business. It is crucial for maintaining operations and ensuring liquidity.
