ZF Lenksysteme Gmbh, Schwäbisch Gmünd

PRESS RELEASE

ZF Lenksysteme surpasses the €4 billion revenue mark in 2013 to increase earnings

 Sales up by 3% to €4,114 million  Earnings rise by 4% to €167 million  Global workforce expands by 3% to 13,118

Schwäbisch Gmünd/Stuttgart, May 5, 2013 – ZF Lenksysteme GmbH (ZFLS), a joint venture of Robert Bosch GmbH and ZF Friedrichshafen AG, broke the 4 billion euros revenue barrier for the first time in 2013. This puts the steering specialist on course to set a new sales record for the fourth time in succession – despite the heterogeneous conditions prevailing in regional markets.

ZF Lenksysteme reported sales for the previous fiscal year of €4,114 million, up 3% on 2012. Earnings were boosted by 4% to €167 million ‟We were able to grow sales despite difficult conditions in the European sales market. Greater operational efficiency enabled us to achieve our earnings target and to improve the results of ZF Lenksysteme's operationsˮ, comments Financing and Purchasing Director Dr. Henning Wagner.

Sales were spread among the business fields as follows: 73% (€3,007 million) car steering systems, 18% (€747 million) commercial vehicle steering systems and 9% (€360 million) car steering columns. The structural change in car steering systems, the company's strongest business field, from hydraulic to electric power steering was unmistakable. Sales of hydraulic steering systems fell by 19% in 2013 while, in contrast, 11% more electric power steering units were sold than in the previous year. Thanks to its early strategic focus on mega trends in the automotive industry, such as electrification, energy efficiency and driver

1 of 5 assistance systems, ZF Lenksysteme now sees itself excellently positioned in this growth market.

Sales grew most strongly in the North American sales market (NAFTA) where they were up by 23% to €747 million. In the wake of the sovereign debt crisis, the economy is visibly recovering in the USA, to the benefit of the automotive industry in particular. The South American market also expanded in 2013 by 12% to €151 million. With revenues up by 8%, ZF Lenksysteme reported substantial growth in the Asian market as well in 2013. In 2013 the German and European market as a whole proved to be as weak as had been anticipated: ZF Lenksysteme reported a 3% year on year fall in sales down to €1,838 million. The euro crisis depressed sales in other European countries by 9% (€393 million).

‟The uneven development of global markets underlines the benefits of our international strategy. We are able to compensate for weaker sales areas and secure our earnings by investing in growth regions, such as China and North Americaˮ, explains Dr. Marcus Parche, Director of Passenger Car Steering Systems. ZF Lenksysteme invested a total of €388 million in property, plant and equipment in 2013 – up by 15% from the previous year – with the aim of strengthening its worldwide production capabilities and increasing value added vertical integration. This is equal to a capital spending ratio of 9% which will ensure that ZF Lenksysteme is more securely equipped for the future than ever.

The importance of the company's German base within the Group as a whole was reflected by the 44%, or €168 million, of total investment spent in Germany. As in the previous year, the bulk of spending outside Germany was done in Asia. In fact, in order to expand its production capacities in the Asian growth market, ZF Lenksysteme committed €121 euros or 31% of its total investment in this continent. With three new subsidiaries in Shanghai, Wuhan and Nanjing, ZF Lenksysteme raised its profile in China in 2013 and continues to profit from economic growth in that country. While the new subsidiary in Shanghai, in its function as the company's regional headquarters, is primarily responsible for

2 of 5 coordination tasks, operations in Wuhan and Nanjing mainly produce power steering units for the Chinese sales market.

In addition to investments in property, plant and equipment, ZF Lenksysteme also stepped up its research and development spending by 22% to €238 million. This corresponds to an R&D ratio of 5.8% of sales. ‟We are investing in research and development quite simply in order to safeguard our continuing status as innovation and technological leaders. With an unprecedented 1,400 employees now working in R&D, the company was able to start and successfully complete numerous new projects in 2013ˮ, according to Parche. The rack and pinion steering gear for commercial vehicles, an optimised steering system for single- wheel suspension, was successfully brought to series maturity in 2013, for example. Another ZF Lenksysteme milestone has been the series launch of the Servotwin steering system: The electrohydraulic dual-circuit steering marks the advent of electric commercial vehicle steering. This lays the groundwork for the integration of assistance functions in commercial vehicles. The series launch of the EPSc (electric power steering column type), a lean car power steering system, was of particular strategic importance. ZF Lenksysteme's product portfolio has been expanded by the EPSc, which is designed for low axle loads and is particularly appropriate for the requirements of the compact segment which is currently generating considerable demand in Asia. This means that solutions tailored to meet specific market and customer requirements are offered in all categories in the passenger car segment, both in the premium vehicle market and in the more cost-sensitive compact segment. ZF Lenksysteme's ‟Smart Trailer Parkingˮ combined car/trailer remote control, which has now reached production maturity, provides more than just a glimpse of what the future may well look like. The company has developed a smartphone app which can be used to manoeuvre a combination of car and trailer into a parking space safely and quickly from outside the vehicle.

The Group's growth was also reflected in a workforce which rose worldwide by 3% up to 13,118 (average in 2013). Most growth took place outside Germany, where the workforce expanded by 8%. However, over 50% of the company's total

3 of 5 workforce, 6,645 employees, are still employed at ZF Lenksysteme locations in Germany.

Prospects for the current fiscal year remain uncertain to some extent. Enormous cost and competitive pressures will pose considerable risks for ongoing business development in 2014 as well. Unpredictable political and economic trends in some regions also make it very hard to anticipate how ongoing business development. ZF Lenksysteme assumes that the economic environment will continue to vary from region to region throughout 2014. Modest stimuli for growth, albeit at a low level, are expected in the European market. We forecast vigorous growth in China, analogous to developments on the North American market. Developments for ZFLS in India and South America are expected to be somewhat more muted. All in all, ZF Lenksysteme therefore anticipates sales growing by between 5% and 7% in 2014 with an unchanged profit margin.

ZF Lenksysteme GmbH, a 50:50 joint venture of Robert Bosch GmbH and ZF Friedrichshafen AG, is a specialist and technological leader in the field of steering equipment and has 13,118 employees at 18 locations in 11 countries. The Group generated sales of over four billion euros in 2013.

Press contact:

ZF Lenksysteme GmbH ZF Lenksysteme GmbH Head of Corporate Communication Corporate Communication Andreas Ziegele Cornelia Müller Tel.: 0 71 71 / 31-34 81 Tel: 0 71 71 / 31-38 81 Fax: 0 71 71 / 31-32 29 Fax: 0 71 71 / 31-32 29 Mobile: 0160 / 88 38 136 Mobile: 0175 58 31 887 e-mail: [email protected] E-mail: [email protected] www.zf-lenksysteme.com www.zf-lenksysteme.com

Overview of ZF Lenksysteme GmbH ratios for 2013

All figures in millions of euros 2013 2012 Total sales 4,114 3,977 Change since last year in % +3 +12 4 of 5 Sales per business field 2013 2012 Car steering systems 3,007 2,862 Commercial vehicle steering systems (incl. 747 743 pumps) Car steering columns 360 372

Sales in the most important regions 2013 2012 Europe (excluding Germany) 393 434 Germany 1,838 1,888 Asia 985 910 NAFTA 747 610 South America 151 135

Operating profit 167 160 Net profit before tax 166 158 Net profit after tax 121 112

Research and development expenses 238 195 in % of sales 5.8 4.9

Capital expenditure 388 336

Equity 765 731 Equity ratio 31% 30%

Employees 13,118 12,717 Of which Germany 6,645 6,711

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