São Paulo, April 13, 2016. Freudenberg, a diversified global technology group, continued its positive business development despite the worldwide challenging conditions, with sales increasing by 7.6 percent to 7.57 billion euros on the basis of pro-rata consolidation of joint ventures. Adjusted for exchange rate effects, sales grew by about 1.6 percent. "We completed another year of profitable and sustainable growth. Further we developed the company to be ready for the future through many long-term projects", said Dr. Mohsen Sohi, CEO of Freudenberg Group, at the press conference on Wednesday, April 13.
During the last five years the company's sales grew from 5.5 billion euros in 2010 to the 7.57 billion euros in 2015 through organic growth and its "buy and build" strategy. In Brazil, sales grew by 1.3 percent from 659 million Reals in 2014 to 668 million Reals in 2015. "Our result was directly affected by the economic crisis in Brazil, mainly in the automotive sector. Even though, due to our efforts to diversify markets and organizational restructuring, we managed to end the year with growth," said Juan Carlos Borchardt, Regional Representative of Freudenberg in South America.
Freudenberg's investment in South America in 2015 totaled 11.6 million euros or 50 million BRL, thereof 41.8 million BRL in Brazil. Those investments were made to upgrade and expand existing manufacturing as well as research and development facilities at almost all business groups. "Even with the economic downturn in Brazil, the strategies of the Freudenberg Group are long-term oriented. One important example is the new joint site of the Freudenberg companies Chem-Trend and SurTec in Valinhos, which will be officially opened at the end of this month", said Borchardt.
Freudenberg invested more than ever before in innovation during the year under review; the Freudenberg Group conducted research and development activities in the amount of 315.3 million euros (previous year: 270.3 million euros). This corresponds to a research and development ratio of 4.2 percent (previous year: 3.8 percent). The objective of all activities is to further increase the share of new products in sales. The share of products less than four years old reached 26.0 percent. A total of 2,772 Freudenberg employees worked in research and development in 2015 (2,582 in 2014).
Brazil follows the same strategy, at the new site in Valinhos the R&D facilities develop products tailored to the Brazilian market. "Individual Business Groups' innovation activities build upon Freudenberg's core strength – materials competence, which is constantly expanded", said Sohi. "Our corporate efforts focus on the main cross-sectional technologies of relevance to several Business Groups. They reinforce our innovative strength."
Together for society
Freudenberg aims to make a difference for the communities and neighbors at all sites worldwide. That is why a senior management team comprising representatives from all global regions launched the "e²" (education and environment) initiative in summer 2015. The objective is to give people better access to education and work, and to encourage environmental protection. In Barueri, São Paulo, Brazil, Freudenberg supports CEPAC (Association for the Protection of Children and Adolescents), a nonprofit organization that promotes the personal, social and cultural growth of children and teenagers between 11 and 17 years through educational and professional training as well as ethical guidance. Freudenberg sponsors the Vocational Program with 93,000 euros for three years. Youth receive complementary classes, e.g. in logistics or administrative IT, that aim to prepare them for the future and increasing their chances of finding a good job. Freudenberg's help will enable 130 teenagers per year to attend the program.
Outlook for 2016
On the basis of its current assessment, despite all the challenges faced, the Freudenberg Group expects growth in sales between 1.0 and 3.0 percent and profit from operations slightly above the previous year's figure. Almost all Business Groups are likely to contribute to this performance. On the basis of this forecast, Freudenberg expects stable development in its return on sales.