Freudenberg reports record sales and results

Beijing, May 18, 2011. In the 2010 financial year, the Freudenberg Group achieved new records in China. Compared with the previous year, sales grew by 46% to 3.27 billion Yuan (2009: CNY 2.24 billion). In the first quarter of 2011, the upward trend continued, with sales up 28% on the comparable period of the previous year. The number of associates has grown to more than 4,500. "The dynamic market growth combined with the exceptional performance of our Chinese companies again proved to be the key drivers for the success of the Freudenberg Group," said Hanno D. Wentzler, Regional Representative of the Freudenberg Group in China and CEO of Freudenberg Chemical Specialities, at the press conference held in Beijing on Wednesday.

The Freudenberg Group recorded consolidated sales of about CNY 50 billion in 2010. After allowing for exchange rate effects, this represents an increase of about 30 percent compared with 2009. The growth has now fully compensated for the slump caused by the economic crisis in 2009. Profit from operations (EBIT) grew disproportionately by CNY 5.29 billion to CNY 3.85 billion. In terms of sales and profit, 2010 was therefore one of the most successful financial years in the history of Freudenberg. "The unexpectedly swift economic recovery, market share gains, improvements in processes and cost structures during the crisis and strict financial management are the main reasons for our success in the 2010 financial year," Wentzler said.

Going forward, Freudenberg will continue to expand its activities in China. Future plans include the expansion of the production facility at Qingpu operated jointly by Klüber Lubrication and Chem-Trend. The largest single investment made last year was the Vibracoustic Business Group plant opened in Yantai in October, constructed at a total cost of CNY 130 million. The new plant produces vibration engineering components and truck air springs for the Chinese automotive industry. The customers include Ankai, DFM, KAMA, Sunwin and Yutong, among others. In total, Freudenberg invested CNY 190 million last year. Since 2004, capital expenditure by Freudenberg has totaled more than CNY 1.6 billion.

Developing new markets with a new division

At the end of 2010, Freudenberg Chemical Specialities acquired the surface technology company SurTec International GmbH. The acquisition is part of the Group's strategy of systematically developing its chemical specialities business. SurTec has been active in China since 2005 and has its own production facility in Hangzhou. The company develops, produces and markets chemical products and processes for industrial cleaning, the pre-treatment, processing and post-treatment of metal surfaces, plastic galvanizing and aluminum anodizing. SurTec products and solutions for surface treatment and galvanizing supplement the previous product portfolio of Freudenberg Chemicals Specialities. Like Klüber Lubrication, Chem-Trend and OKS, SurTec is managed and developed by Freudenberg Chemical Specialities on a long-term basis as an independent company. The company has about 500 associates and is active in more than 40 countries throughout the world.

Entering the automobile spare parts business/new warehouse in Shanghai

China is the world's largest automobile market, with 13.8 million cars sold in 2010 (+33 percent). As a result of this dramatic growth, the spare parts market is becoming increasingly important. Recent studies indicate that there are about 59,000 dealers or dealer organizations concerned with the sale of automotive spare parts. Since 2009, Corteco, Freudenberg's spare parts specialist, has also been active in China. The wholly owned subsidiary of NOK-Freudenberg Asia Holding headquartered in Guangzhou boosted sales by 48 percent in 2010. Freudenberg records about 40 percent of its total sales in the automotive sector.

Corteco China cooperates with wholesale organizations which have a clear commitment to using OEM-quality products and whose sales policies are oriented towards the needs of workshops. Corteco offers about 2,500 products for almost every vehicle model via almost 50 partners. This corresponds to the global range of the Freudenberg Group and NOK. Independent aftermarket (IAM) customers have access to the entire know-how and the full range of the market leader. The products are supplied to the following auto-makers: Chery, BYD, Volkswagen and Toyota, among others. To provide customers with safety, better service and to market innovations even faster in future, Corteco is opening a second facility with considerable warehouse and office space in Shanghai this month.

Consistent continuation of earthquake project

Freudenberg has shouldered its social responsibility for more than 160 years. As in all the 59 countries where the Group is represented, Freudenberg is committed to being a good neighbor in China. This is why Freudenberg remains committed to the earthquake project in Sichuan Province. As in the summer of 2010, Freudenberg associates will train schoolchildren and teachers in English and methodological skills at a summer camp during their holidays this year. The primary school in the city of Jiangyou was rebuilt by Freudenberg following the severe earthquake in May 2008.