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ZF 2016 profits rise, debt falls on TRW acquisition
March 30, 2017 / 8:46 AM / 8 months ago

ZF 2016 profits rise, debt falls on TRW acquisition

FRIEDRICHSHAFEN, Germany, March 30 (Reuters) - German engineering company and auto supplier ZF said it expects to achieve an adjusted operating margin of more than 6 percent and group sales of 36 billion euros ($38.65 billion) this year as it absorbs the acquisition of rival TRW.

ZF bought United States based auto supplier rival TRW in 2015, for $13.5 billion, boosting the Friedrichshafen, Germany-based company’s sales and profits.

Last year, unlisted ZF’s adjusted earnings before interest and taxes (EBIT) rose 20 percent to 2.2 billion euros and group sales rose 21 percent to 35.2 billion euros, corresponding to an EBIT margin of 6.4 percent.

ZF said the company’s performance was mainly due to “better operating performance and synergies leveraged by integrating TRW.”

ZF was able to reduce its debt load by roughly 1.6 billion euros to 8.26 billion euros, thanks to a strong free cash flow of more than 2 billion euros, and further debt reduction remains a central target for 2017.

ZF on Thursday said it had bought a 45 percent stake in radar technology company Astyx. ($1 = 0.9314 euros) (Reporting by Edward Taylor; Editing by Harro ten Wolde)

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