Freudenberg SE Business Report FY ended Dec. 2019
|(in million EUR)|
|FY ended Dec. 31, 2019||FY ended Dec. 31, 2018||Rate of change (%)||Factors|
|Profit before income taxes||828.5||835.3||(0.8)||-|
1) Net Sales
-The Company’s net sales for the fiscal year ended December 31, 2019 increased by 0.1% over the previous year to EUR 9,467.8 million. Currency translation effects increased sales by approximately EUR 150.6 million. In addition, acquisitions offset the divestiture of the Freudenberg IT Business Group.
-The Company signed a final agreement to acquire 100% of the shares of Filc, a producer of needle punch nonwoven textiles and laminated materials focusing on the automotive and construction industries. Filc is headquartered in Skofja Loka, Slovenia, operates two more production sites in Menges and Lendava, Slovenia, and a sales office in Dayton, OH, U.S. The acquisition will help the Company to strengthen its performance materials business, and expand its portfolio and technological footprint in Europe. (From a press release on November 27, 2019)
-The Company announced that it has acquired the activities of the startup FRICTins GmbH from Wolnzach, Germany which includes FRICTins’ innovative technology to increase friction coefficients. This allows lightweight and more compact component designs as well as the transmission of torque and shear forces up to five times as high. These features are of critical relevance in e-mobility applications and increasing performance requirements for part connections. This technology combines a unique hard particle coating process with a special Company nonwoven. It is utilized by automotive manufacturers and suppliers in engine, chassis and powertrain applications. It can increase the friction coefficient by up to a factor of 8. This allows for a significant improvement in the performance of screw joints and press fits. Currently, the products are manufactured on a pilot production scale in a facility near Munich. The Company has acquired all the assets and will set up industrial scale production within the next few months. (From a press release on October 14, 2019)
-The Company made an offer to acquire 100% of the shares in Low & Bonar PLC, London, United Kingdom. Low & Bonar is a globally active manufacturer of technical textiles. The step would allow the Company to further expand its technical expertise in spunlaid nonwovens. Low & Bonar has 11 production facilities in Asia, Europe and North America. Its aim is to strengthen growth in its markets and expanding its international footprint. The Company has operated successfully in the U.S. and China for decades and is thus an ideal partner for the implementation of this strategy. (From a press release on September 20, 2019)
-In March, Freudenberg Filtration Technologies finalized the acquisition of a 75% stake in Apollo Air-Cleaner Co., Ltd. located in Foshan, China. (From a press release on May 29, 2019)
-The Company’s Freudenberg Sealing Technologies Business Group has been the majority shareholder of XALT Energy since the start of 2019. XALT Energy is headquartered in Midland, Michigan, where it develops and produces lithium-ion technologies for energy storage solutions in the commercial vehicle industry. The Company has held 31.8% of the company since March 2018. The Group has now increased its share to 50.1%. This allows for both expansion of production capacity in Midland for serial production and investment in research and development of new mobility technologies. The Company has also secured the option of acquiring all remaining shares in XALT Energy over the coming years. (From a press release on February 4, 2019)
-The Freudenberg Sealing Technologies Business Group is collaborating with FlixBus to put fuel cell-powered coaches on the road. The two companies will extend their partnership in the near future through participation from a bus vehicle manufacturer. FlixBus and the Company are holding talks to finalize project parameters. The hybrid system, which intelligently combines battery and fuel cells, can be used in long-distance bus transportation and heavy commercial vehicle applications. Initially, a representative bus fleet of 30 vehicles will be equipped with a hybrid powertrain to validate system performance. The two companies are also aiming for public funding within the framework of the German "National Innovation Program Hydrogen and Fuel Cell Technology" (NIP). FlixBus has clearly defined the requirement profile for its vehicles. These fuel cell vehicles should cover at least 500 kilometers of continuous use without refueling. Hydrogen refueling, itself, should be possible in 20 minutes or less. (From a press release on September 2, 2019)
-Benteler and Vibracoustic announced have entered into a strategic partnership for the development of E-Chassis solutions. The partnership enables Benteler to provide car manufacturers with noise- and vibration-optimized chassis solutions. Car manufacturers can speed up their development cycles as they can rely on a system which is already tuned by Vibracoustic in terms of NVH to support optimum ride and handling. This pre-validated front- and rear-axle system guarantees customers high functionality and quality in their electric vehicles. At the Shanghai Auto Show, Benteler and Vibracoustic will showcase their partnership. (From a press release on April 11, 2019)
-Vibracoustic presented the result of a representative survey by the market research institute YouGov. In the survey, German, U.S. and Chinese drivers were asked about the importance of different vehicle characteristics in their purchasing decision. For two-thirds of respondents (67%), "comfort and convenience" are the criteria most often categorized as "very important" or "extremely important", followed by "ease of use" (60%), "driving dynamics" (54%). "Environmental Compatibility" (44%), "Acceleration" (42%) and "Top Speed" (26%). The survey shows that selected groups are giving greater emphasis to the convenience of buying new cars. Approximately 76% of millennials aged between 35 and 44, one of the main target groups for the purchase of new cars, think that comfort is "very important" or "extremely important". Millennials also value "ease of use", which is rated by 75% as "very important" or "extremely important" for a new car. Higher deviations by country are reflected in performance criteria such as "acceleration" and "top speed". While only 20% of German motorists and 22% of U.S. motorists rate "top speed" as "very important" or "extremely important," 36% of Chinese motorists stress the importance of these criteria. "Acceleration" has the least importance for German motorists with only 35% of the rating "very important" or "extremely important". U.S. and Chinese motorists value this issue more, with both groups feature 45% rating this quality as “very important” or “extremely important”. (From a press release on November 7, 2019)
-As a leading supplier of NVH solutions, Vibracoustic develops new technologies to ensure a comfortable, relaxed and safe travel in electric vehicles. Its portfolio of innovative NVH solutions includes specially developed motor mounts and dampers. These are tuned to address and dampen the high frequency excitations of the electric motor in order to minimize the impact on the passengers. On the chassis side, highly robust chassis mounts address the additional weight and higher loads on the chassis of electric vehicles. Air springs not only increase driving comfort and driving dynamics, but they also lower the car at high speeds to improve the aerodynamics and thus increase range. Furthermore, this technology can optimize the airflow under the car for better passive battery cooling. When parked, the air springs can also automatically heighten the car to allow enough space between the road and the battery packs for improved safety. (From a press release on May 7, 2019)
-XALT Energy, a Company subsidiary, is working in partnership with Motor Coach Industries (MCI), a U.S.-subsidiary of NFl Group Inc. (NFl), to supply ultra-high energy lithium-ion battery packs for its zero-emission, MCI D45 CRTe LE CHARGE long-distance motor coach. The bus will be available to private and public transportation leaders in California and other states to test next-generation powertrain technology and improved accessibility developments. NFI is a long-standing, strategic customer to XALT and uses its batteries to power its Xcelsior CHARGE all-electric urban buses that are running in North American cities. MCI will send the D45 CRTe LE CHARGE to Altoona, PA., for federal testing, as is required for all new bus models purchased using federal funds. FlixBus, Europe’s largest operator of long-distance bus travel, will test the bus through its FlixBus USA operations. FlixBus is expanding its innovative city-to-city long-distance service model in the U.S. After successful testing, FlixBus plans to order more all-electric MCI buses in the U.S. (From a press release on November 26, 2019)
-The Company’s automotive filters team in North America received the Supplier Performance Award from Honda for the eighth consecutive year.
-Japan Vilene Company’s floor mat division was awarded the Best Performance Award from Nissan Motor for the fourth consecutive year.
-The Japan Vilene Company won the Excellent Prize (Cost Competitiveness Award) from Keihin Co., Ltd.
|(in million EUR)|
|FY ended Dec. 31, 2019||FY ended Dec. 31, 2018||FY ended Dec. 31, 2017|
-The Company measures the effectiveness of its research and development activities as the share of new products that are less than four years old in total sales. In the fiscal year ended December 31, 2019, the Company’s research and development effectiveness was 34.7%, compared to 33.6% in the year prior.
-The Company had an average of 3,784 employees working in research and development in 2019.
-Vibracoustic, a Company subsidiary, opened its new material development center in Weinheim, Germany. 25 material experts will work closely with Vibracoustic product engineers, assist in the development of new prototype compounds, and conduct comprehensive testing in the new 2,200-square-meter laboratory. In the new lab, material experts can perform analytical and physical material testing and corrosion testing to meet automotive manufacturers' quality, durability and performance criteria. In addition, a rheology laboratory was set up to evaluate the deformation and flow properties of materials. In the field of prototype construction, new raw mixes are developed, small batch batches are made and vulcanized on site to carry out further tests. The new development center further strengthens the Company’s position as a leading global automotive NVH expert. (From a press release on July 11, 2019)
-Freudenberg Sealing Technologies has added several tests stands to its Weinheim test facility that are specially designed to measure frictional torque in the heavily stressed radial shaft seal rings used in electric motors. To guarantee high precision in their measurements, the test stands have several key characteristics. For example, torque is generated by water-cooled, high-rpm spindle drives - the kind commonly seen on machine tools. The test drum is equipped with nearly friction-free air bearings radially and axially so the seal’s frictional torque can be determined as precisely as possible. The latest test stands not only permit frictional torque measurements at rotational speeds of up to 36,000 rpm - they allow the capture of the seals’ electrical impedance at a wide range of frequencies. Freudenberg Sealing Technologies already offers seals that enable the voltage to be drained off across an electrically conductive nonwoven. The new test stands are an important tool for designing and validating such seals. (From a press release on February 19, 2019)
-The Company is taking part in a research initiative of the Baden-Wurttemberg state government, the Karlsruhe Institute for Technology (KIT) and other industrial partners to develop technological solutions for renewable fuel. One challenge is that new fuels cannot have a negative impact on vehicles and their components. Company technicians and developers will focus on how vehicles react to these alternative fuels and how sealing materials react to these various media. In a series of experiments, Freudenberg Sealing Technologies has now examined sealing material reactions after exposure to oxymethylene ether (OME), one of the most often mentioned synthetic fuels. The experimental fuels were composed of standard diesel with an OME admixture equal to 10% to 30% of volume. Other experiments were carried out using pure OME and 100% fossil diesel as a benchmark. (From a press release on March 7, 2019)
Technical fabric cargo cover for SUVs
-The Freudenberg Performance Materials Business Group has developed a new technical fabric cargo cover for SUVs. The cargo cover weighs less than standard cargo covers, reduces noise and improves visual aesthetic. In addition, the fabric cargo cover releases no volatile organic compounds compared to plastic cargo covers, thus improving air quality.
Environmentally-friendly coating as substitute for nickel-zinc coatings
-The SurTec brand under the Company’s Freudenberg Chemical Specialties successfully developed and launched an environmentally-friendly coating with strong corrosion resistance. The new coating is intended to be a substitute for nickel-zinc coatings that were previously used.
Fuel cell stacks for commercial and off-highway applications
-The Freudenberg Sealing Technologies Business Group is developing fuel cell stacks with power between 30 kW and 100 kW at the Fuel Cell Innovation Center in Munich, Germany. The group is developing both a hydrogen and methanol system. The first systems will be available for demonstration purposes in early 2021, with series production set to begin in 2024. The fuel cell stacks will be used for commercial vehicle and off-highway applications. As such, the fuel cells have a much higher power capability than those used for passenger vehicles.
Levitorq axial thrust washers with scoop design
-The Freudenberg Sealing Technologies Business Group has developed an optimized design for its proven Levitorq axial thrust washers. Through a new scoop feature, the enhanced Levitorq design is able to collect and push lubrication under the washer to enable higher critical speeds and enhanced performance. A team of experts developed several scoop designs based on the types and availability of lubricants used in powertrain applications. The new Levitorq scoop feature significantly improves performance as it enables the application to use available fluid more effectively. Also, polymeric materials are designed to have low friction coefficients even in dry running conditions. The new polymeric thrust washers have nine times the pumping ability and three times the critical speed. These designs are ideal for applications with limited or splash lubrication. (From a press release on December 3, 2019)
Steering column bushings
-In order to provide better isolating characteristics and overcome the downsides of conventional hardy discs, Vibracoustic engineers developed an innovative steering column bushing. The compact shape provides significantly more design space, as the radius is only around half of that of a hardy disc. The design furthermore features an elastomer layer around the aluminum core, providing exemplary high isolation in the push and pull directions (low axial stiffness). The whole bushing is highly robust and durable, and the decrease in stiffness is as low as 10% over the component’s lifetime, superior to other conventional solutions which experience a much larger drop in stiffness during their lifetime. Vibracoustic steering column bushings also prevents buckling of the steering column due to its high conical stiffness. (From a press release on November 12, 2019)
-Freudenberg Sealing Technologies has developed an alternative sealing concept for one-tube shock absorbers: a wedge seal. The wedge-shaped design leads to a highly simplified seal structure since it makes the retaining ring used in conventional two-part systems unnecessary. The design makes logistics and installation easier during the absorber manufacturing process because fewer components need to be stocked, assembled and joined together. Wedge seals work as well or even better than conventional seals. For example, the engineers were able to lower the sealing system’s range of operational temperature by an extra 2°C to 4°C. The new wedge seal system is in use in series production at a well-known automaker. In parallel, the Company is continuing to develop its conventional two-part seal design with a focus largely on new polymer materials that further expand the seal’s range of operating temperatures. (From a press release on October 29, 2019)
Low-profile high energy density battery packs
-XALT Energy, a Company subsidiary, presented a new, low-profile, high energy density battery pack for commercial vehicle manufacturers at Busworld. The XPAND Low Profile (XLP) Pack can be installed in buses, trucks and trains in spaces where height or depth is limited. At 185 mm high, 612 mm wide and available lengths of between 360-1080 mm depending on energy capacity, the XLP Pack is designed to fit securely within the frame rails of new and existing medium and heavy trucks and buses. The design eliminates the need for OEMs to redesign and raise the floor of trucks and buses to accommodate the high amount of energy storage required for long-range applications. It will be manufactured at XALT Energy’s 460,000-square-foot manufacturing plant in Midland. (From a press release on October 17, 2019)
Next-generation of conductive sales
-The Freudenberg Sealing Technologies Business Group is developing a new generation of conductive seals designed to ensure a durable electrical connection between housings and shafts while preventing bearing damage caused by electricity and electromagnetic radiation. The first validated, functional models in this category will be available within a few months. To fulfill the new requirements for seals in electric powertrains, Freudenberg Sealing Technologies has developed an appropriate test procedure to evaluate and compare the functioning of current dissipation elements. For several years, the group has been producing an electrically-conductive nonwoven disk as a series-production system element. The conductivity of the nonwoven is achieved with special fibers. The system has been used in electric vehicles for years and reliably prevents bearing damage. The electric resistance in this approach is already at a very low level, but sealing specialists have continued development. Power densities continue to grow in upcoming electric powertrains, increasing current, voltage and disruptive electromagnetic fields. (From a press release on September 19, 2019)
Components to address NVH in autonomous issues
-Vibracoustic has developed advanced mounts and bushings, seat dampers and switchable air springs to address noise and vibration issues in autonomous vehicles. Driver and passengers have a heightened perception of NVH issues when control of the vehicle is partially or fully transferred to an autonomous system. Vibracoustic’s advanced mounts and bushings reduce the vibrations transmitted through the axles and bodywork to the seats and steering system. Electronically controlled switchable air springs continuously monitor the loads in order to control the vehicle’s level. They can offer different degrees of stiffness and allow a quick transition between a stiff chassis for a safe ride and a comfortable setting for long highway drives. Its seat dampers minimize the vibration of screens on the back of vehicle seats. Tuned mass dampers are adapted to the given space inside the seat and eliminate visible vibrations. With silicone rubber and a custom fit, they offer a cost-effective solution that is 100% recyclable. (From a press release on September 6, 2019)
Polyetheretherketone (PEEK) compounds
-The Company has developed PEEK (Polyetheretherketone) compounds that are precisely tailored for applications in extremely high operating temperatures. The materials researchers at Freudenberg Sealing Technologies have spent several years developing special filler packages for new high performance plastics that focus on applications for sealing rings and thrust washers used in automatic transmissions. To optimize material properties, the Company enriched the base polymer with various ingredients. The new material Quantix 55-14, developed on the basis of the high performance polymer PEEK, reduces wear when it comes in contact with steel components. The material is used to manufacture sealing rings that function as hydraulic rotary feedthroughs that contain the oil between the clutch and the interior of the transmissions. (From a press release on July 9, 2019)
Technologies shown at Battery Show Europe
-Freudenberg Sealing Technologies (FST) informed that it will be presenting innovative sealing solutions at Battery Show Europe. They include innovative components for conventional internal combustion engines as well as the latest e-mobility solutions. For example, FST will present innovative sealing solutions for fuel cell stacks and special plastic seals for pouch cells. XALT Energy will join FST on the stand. XALT manufactures large-scale lithium-ion battery cells, modules and systems, among other products, for buses, heavy commercial vehicles and ships. FST secured majority interest in XALT in the beginning of 2019. Freudenberg Performance Materials will also be represented and show their product portfolio for increased safety in lithium-ion batteries. (From a press release on May 7, 2019)
Electromagnetic shielding through plastic housings
-The Company is working on ways to provide shielding with plastic housings. Electronic components must be protected from disruptions caused by electromagnetic waves. Aluminum has been the primary material for this purpose. However, its use substantially increases the proportion of aluminum in electric vehicle, which impairs driving dynamics and raises costs. Due to their lack of conductivity, lighter plastics were not been previously considered. Experts from Freudenberg Performance Materials and Freudenberg Sealing Technologies have teamed up to develop processes that can equip plastics with conductive coatings or nonwovens. In the future, the Company will partially replace the aluminum housings with lightweight plastic housings. (From a press release on April 9, 2019)
Switchable air springs with three-chamber concept
-In order to increase the spread between sporty, firm suspension and the driving comfort expected of a touring car, Vibracoustic has developed switchable air springs with a three-chamber concept. By switching individual air chambers on and off, the air springs can be set to four different stiffness levels depending on the driving situation. The adaptive air suspension including the three-chamber concept is available as an option for the new Porsche Cayenne. In the future, Vibracoustic will also provide switchable air springs in dual-chamber systems. While these systems can only offer two different stiffness levels, the corresponding regulation also enables effective roll stabilization. Vibracoustic thus aims to meet customer demands for improved comfort and driving dynamics of mid-range vehicles. (From a press release on January 23, 2019)
|(in million EUR)|
|FY ended Dec. 31, 2019||FY ended Dec. 31, 2018||FY ended Dec. 31, 2017|
Investments in Germany
-The Vibracoustic Business Group began work on expanding its plant in Hamburg, Germany in the second half of 2019. The investment will expand the production capacity of air springs at the facility to meet increased demand from several premium car manufacturers.
-The Company plans to invest in EUR 370 million worth of projects in 2019. Of this amount, approximately EUR 125 million are to be invested in tangible assets in Germany, including EUR 30 million in Weinheim. In the first quarter of 2019, the Company invested approximately EUR 140 million in majority holdings of the U.S. company XALT Energy as well as the Chinese filter manufacturer Apollo. The Company’s strategy is to develop its portfolio selectively and in a focused way through acquisitions across all its Business Groups. The objective is a balanced portfolio of cyclical and anti-cyclical business with equal sales contributions from the Americas, Europe and Asia. (From a press release on April 10, 2019)
Investments outside Germany
-The Company’s subsidiary, Freudenberg Far Eastern Spunweb Comp. Ltd. located in Taoyuan, Taiwan will install a new spunlaid production line. The installation is expected to complete in the first quarter of 2020, and will support automotive interior applications, among other fields.
-The Freudenberg Performance Materials Business Group commissioned a new production line at the Freudenberg & Vilene Nonwovens (Suzhou) Co. Ltd. The new production line will be used to meet increased demand for printed headliners in the Asian automotive market.
-The Company increased investment in China in 2018 to nearly CNY 300 million, approximately 29% more than in 2017. The large investments in state-of-the-art production facilities include a new factory in Chongqing for Vibracoustic. The plant will produce NVH solutions for automotive customers. NOK-Freudenberg (China) is also building a new facility in Changchun for sealing products. Two new lines are under construction in Suzhou and Taiwan, which will produce components for the automotive interior and apparel businesses. In March 2019, Freudenberg Performance Materials started up a new production line for high-quality car headliners in Suzhou. (From a press release on May 29, 2019)
-The Company and Vilene Nonwovens commissioned a new car headliner production line at its eastern Chinese location in Suzhou, China. The Company is meeting the growing demand for high-quality car headliners and printed quality products in China and Southeast Asia. With the new production line, the Company will increase its annual production of technical textiles in Suzhou by approximately 8 million square meters. The headliners are made of nonwovens, which can be additionally enhanced with innovative surface treatments. This creates products that meet all the requirements of the most modern vehicle design. (From a press release on March 5, 2019)