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March 30, 2017 2:30 PM, EDT

ZF Reports Strong Results in 2016

ZF Friedrichshafen

ZF Friedrichshafen AG said March 30 it closed the 2016 fiscal year with a significant rise in earnings and sales.

“This strength gives us a solid foundation to help shape the challenging transformation in the automotive industry through digitalization, electromobility and autonomous driving,” CEO Stefan Sommer said in a statement.

ZF’s products include driveline and chassis technology as well as active and passive safety technology.

Its adjusted earnings before interest, taxes, depreciation and amortization grew to $4 billion compared with $3.1 billion in the 2015 period, which corresponds to an adjusted EBITDA margin of 10.8%; ZF thus exceeded its earnings targets for 2016, the company said.

Sales rose 20.6% to $37.6 billion compared with a year earlier, ZF said.

The main reasons for its gains were better operating performance and synergies leveraged by integrating TRW, the company said.

ZF acquired TRW Automotive on May 15, 2015, then integrated it within the organization as the active and passive safety technology division.

“The car of the future will still rely on mechanical components. Even an ‘iPhone on wheels’ needs brakes, a steering system, axles and the rest," Sommer said. "Our strength is our combination of hardware and software. So we produce intelligent mechanical systems.”

Also, ZF reduced its debt from the TRW acquisition by $1.7 billion while increasing spending on research and development to $2.1 billion, the company said.

Free cash flow totaled $2.1 billion, according to ZF.

Also in 2016, the company made an offer in August for Haldex AB, a supplier of brake products and air suspension systems for commercial vehicles, for about $520 million, or $12 per share; but it was rejected.

ZF said it  is targeting sales of about $38.5 billion in 2017.