Zf plans to invest more in Research and Development

Zf Friedrichshafen recorded a sales volume of 36.4 billion euros. In other words, it means an economic growth of 3.6% compared to 2016. It also resulted in an organic growth of 6%. Ebit (Earnings Before Interests and Taxes) also, once adjusted, grew up from 2.2 to 2.3 billion euros. Equity ratio also increased from 21 to 24.4%.

This means that not only the sales volume has risen, but also the company’s revenues. At the same time, the amount of the debt after the acquisition of Trw Automotive decreased. Zf is, therefore, wandering about a strategic expansion in the field of Research & Development, even though general costs have risen. The plan is to contribute shaping those technologies that will change the mobility of the future.

R&D and growth in the words of Ceo Wolf-Henning Scheider

Zf Ceo, Wolf-Henning Scheider, stated: «the world of mobility is moving fast. Our aim is to provide pioneering solutions to our clients in every sector, following our motto “See – Think – Act”». For this reason, affirms Scheider, «we will bolster our investments in Research & Development». In 2017, Zf invested 2.2 billion euros in R&D, almost a 15% more compared to 2016. In 2018, the percentage of funds destinated to this sector is meant to grow from 6.1 to 6.5. For 2018, Scheider forecasts an organic growth of five percentage points. Ebit should obtain a similar result. The cash flow (now around 1.8 billion euros) should be pretty much the same, even considered the sales drop expected as a consequence of the next Vehicle Control Systems Business Unit divestiture.

Konstantin Sauer, Zf Cfo, looks back at 2017 and says it has been a positive year for the company. «We optimized processes and costs structures in a complex environment, and we became even more productive. Therefore, we have been able to enhance our investments in R&D, improving at the same time revenues quality».

Electrification, automatization, and team innovation

In harmony with the idea of increasing R&D funds, one of the plans for the future is to invest in hybridization of the transmission, vehicles safety, and autonomous driving systems. Zf is designing two new facilities expressly for electric transmissions components production. But also internal organization is a topic issue for Zf. «We are reinforcing the idea of autonomous, sector-crossing teams», explains Scheider. Together with an improved customer experience, this will shorten the process that leads a project to serial production. «But this also means that a project can be abandoned suddenly if it doesn’t meet expectations. Such an approach makes it possible to apply “start-up culture” also to a big group», concludes Scheider.