German technology group ZF Friedrichshafen has reported a net loss after tax of €2.1 billion for fiscal 2025, almost doubling the €1.02 billion deficit recorded in 2024.
The sharp deterioration was driven overwhelmingly by one-off restructuring charges of approximately €1.6 billion tied to the early termination of unprofitable electric-mobility projects. In addition, slower-than-expected electric vehicle (EV) adoption continues to weigh on the European auto supply chain.
Preliminary figures released in January had already flagged the exceptional hit, which stems from agreements with customers to wind down several e-mobility programmes that failed to meet profitability thresholds.
Despite the headline loss, the company’s underlying operating performance beat its own guidance.
Adjusted earnings before interest and taxes (EBIT) margin came in significantly above four per cent (against a forecast range of three per cent to four per cent), while adjusted free cash flow exceeded €1 billion, double the previous target of more than €500 million.
Revenue is understood to have fallen about six per cent to just over €38 billion, in line with earlier forecasts that factored in the de-consolidation of certain chassis operations.
CEO Mathias Miedreich, who took the helm in September 2025, described the write-downs as painful but necessary.
“The write-downs on unprofitable projects are a one-off effect on our 2025 balance sheet,” he said. “But they remove weight from our backpack for the climb ahead.”
CFO Michael Frick echoed the sentiment, noting that the measures free the group from “legacy burdens” and lay the foundations for sustainable profitability, even as he cautioned that no strong demand recovery is in sight for 2026.
The results cap a difficult year for ZF, one of Europe’s largest automotive suppliers and a major employer in southern Germany.
Headcount has already fallen by more than 11,000 since the start of 2024, with worldwide employment now at around 153,000 (down five per cent) and around 49,000 in Germany.
The group maintains plans to shed up to 14,000 positions in its home market by 2028, concentrated in the Electrified Powertrain Technologies division.
Net debt edged lower to approximately €10.2 billion, although the equity ratio slipped to 13.3 per cent.
The announcement comes as the broader German and European automotive sector grapples with the realities of the European Union’s accelerated “green” transition.
The company’s decision to axe underperforming EV projects reflects a wider industry recalibration after years of optimistic assumptions about battery-electric vehicle ramp-up.
Brussels has long championed a 2035 ban on internal-combustion engines and aggressive CO₂ targets as the path to climate leadership.
ZF’s restructuring raises fresh questions about whether EU policymakers have adequately weighed the competitive disadvantages imposed on European manufacturers against the pace of global market demand and the rise of subsidised Chinese rivals.
Looking ahead, ZF says it will press on with performance programmes and portfolio optimisation.
New orders, including from BMW, offer some encouragement but the group expects “continued transformation pressure” in 2026.
German automotive supplier ZF has endured a brutal 2024 and reported yearly losses of more than €1 billion. https://t.co/kuLtFmISBs
— Brussels Signal (@brusselssignal) March 21, 2025
