Weak industry conditions in passenger vehicle markets globally led ZF to underperform in the first half of 2019. This was in line with announcements of major peers such as Continental AG and Schaeffler AG, which all suffered from weak industry conditions. ZF's profitability in first-half 2019 further declined due to decreasing production rates for passenger cars, ramp-up costs for new plants, and rising raw material prices. Its adjusted EBIT margin was 3.5%, down from 5.7% during the same period in 2018. For the 12 months ended June 30, 2019, we calculate an adjusted EBITDA margin of merely 8.3%, which is well below the 10.5% average ZF achieved in 2015-2018. We understand the group its tightening cost controls and has adjusted
