Innovative solutions generate strong growth

Beijing, May 28, 2015. Freudenberg, the global family-owned company, generated overall sales of CNY 6 billion (+ 10% vs. 2013) in the Greater China Region in the financial year 2014. Total global sales of the Group amounted to CNY 57.721 billion, a plus of 6.3% compared with 2013, thus resulting in global record sales for the fifth consecutive year.

"China, now representing 10 percent of the Group's global sales, is already the third largest region for Freudenberg after Europe and North America," Hanno D. Wentzler, Regional Representative Asia, said today at the press conference in Beijing. "China's contribution to the Freudenberg Group's overall success is of growing importance. Therefore, we will continue to invest in this region." In 2014 the Group made local investments totaling 245 million Yuan (~ €30 million). Over the last ten years Freudenberg has invested more than 2.5 billion Yuan (€300 million) in China.

Significant projects included:

  • The Qingpu site expansion with state-of-the-art research and development facilities, a training center and administration building for Freudenberg Chemical Specialities (CNY 150 million total investment).
  • The TrelleborgVibracoustic joint venture investment in the Yantai site for buildings, machinery and an extended production facility of additional 8,000 square meters (CNY 200 million total investment).

Food safety through innovative solutions

"Our positive economic performance is the most obvious proof of Freudenberg's success in China. But we have also successfully developed our operational capabilities, e. g. through expanding our R&D footprint in China", Bettina Schoen-Behanzin, Head of the Freudenberg Regional Corporate Center Asia in Shanghai, commented. "With our innovations made in China we also contribute to the overall development of the economic landscape."

Freudenberg products are part of everyday life and make a valuable contribution to many industrial or commercial applications, e.g. by helping to meet regulatory standards. One example is the new Food Safety Law (FSL) which was passed by the National People's Congress Standing Committee (NPC) on April 24. Regulations concerning food safety for food and food processing companies in China will be tightened. Violations will incur severe punishment. OEMs and dealers are to be held accountable for their behavior. Regulations for baby food will be triggered further.

Freudenberg develops innovative solutions that meet the highest standards for applications in the food industry. The Freudenberg Chemical Specialities Business Group delivers specialty lubricants for all kind of machinery in the meat, beverage and bakery segments, for drinking water as well as other segments of the food industry, such as beverage filling machines, bakery ovens, meat cutting machinery and animal feed presses. High-performance lubricants can also be used for food processing machines operating under extreme conditions, such as low-temperature deep-freezing plants. Other examples are specific release agents and process aids for thermoplastic processing or metal forming applications for the production of plastic bottles or sales packaging.
Furthermore, customized filter concepts from the Freudenberg Filtration Technologies Business Group are also being used in the food and beverage industry. They are essential for ensuring that the stringent hygiene requirements are met. They remove particles and harmful germs reliably from the air to provide maximum clean air conditions in food processing plants.
 
Freudenberg financial performance in 2014 and outlook

On the basis of the pro-rata consolidation of joint ventures, the Freudenberg Group reported sales of €7,039.1 million (previous year: €6,662.5 million) in 2014, representing growth of €416.6 million or 6.3 percent over the previous year. Adjusted for the effects of acquisitions and disinvestments to the amount of €131.0 million and exchange rate effects, sales were 5.6 percent or €368.0 million higher than the previous year. Sales rose in all Business Groups. Consolidated profit ran at €478.3 million (previous year: €401.5 million), mainly as a result of market success and innovative products. As at December 31, 2014, the Freudenberg Group employed 40,456 people (previous year: 39,897 people).

The financial data are based on the pro-rata consolidation method (including the activities of the 50:50 joint ventures) which Freudenberg continues to use for the management of its operating activities. Under IFRS financial reporting standards, 50:50 joint ventures are consolidated by the equity method. This means sales and employee figures are not taken into consideration.
Overall, Freudenberg expects a successful year in 2015, with sales growth outpacing the market. The high quality of innovative products aimed specifically at meeting the needs of the Group`s customers, is expected to generate double-digit growth in China.