2024-01-28 18:09:31
German automotive supplier ZF Friedrichshafen is focusing on the urgent need to reduce its debt due to high interest rates, German newspaper Handelsblatt reported on Sunday.
“In 2023, we will have to spend a three-digit lower amount on interest than in the previous year,” Holger Klein, CEO of the company, told the newspaper.
“We are in a phase of high interest rates, which makes debt reduction urgent,” he added.
Last year, the group achieved the target of free cash flow of between 1 and 1.5 billion euros ($1.09 and 1.63 billion) and an EBIT margin of between 4.7 and 5.2 percent, Mr. Klein said.
Asked whether the company will have to pay more than half a billion euros in interest for the current financial year, he replied: “In general, yes”: “Overall, yes” .
Mr Klein confirmed that 12,000 jobs might be cut across the group, but he said this would be done in a socially responsible way, adding that even if more jobs were to be cut by 2030, compulsory redundancies might be avoided.
However, he added that rapid action was essential to tackle loss-making sites.
As Germany’s auto sector faces the high upfront cost of switching to electric vehicles and slowing demand from a weak economy, ZF Friedrichshafen is exploring options for its airbag division, including a sale and total or partial IPO.
Mr. Klein said he would continue to separate the airbag division from the rest of the company, but that a sale was not essential.
“The division brings a lot of money to ZF and our cash flow is sufficient even without sales,” he said.
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