Financial Overview

(in million euros)

	FY2010	FY2009	Rate of change(%)	Factors
Sales	5,481.4	4,200.8	30.5	-The highest sales figure in the Company's history. -Sales increased in all business areas.
Profit	321.7	(249.6)	-	-

Automotive business overview:
Sealing products:
-In Europe, the energy saving sealing concept called LESS (Low Emission Sealing Solutions) has met with a positive response from automotive customers.
There was a marked recovery in commercial vehicle business, where sales returned to the 2008 level following the slump of 2009.
Following the sale of cylinder head and exhaust gasket business to ElringKlinger AG in January 2011, the Company has the task of reinforcing and strategically expanding the traditional sealing business.
-In China, the Company benefited well from continued growth in the automotive industry.

Vibration control products
-The Company experienced a marked rise in sales and in particular high unit sales of premium segment vehicles, as well as the roll-out of numerous new projects . It is supplying engine mounts for all engine variants in the next-generation of the Daimler C, E and S Class. And a  customer named the Company a development partner for a lightweight, plastic engine mount bracket that reduces CO2.
- The Company has lead the foundations for further globalization by the full acquisition of the Brazilian company Vibracoustic do Brasil ltda. and the new production facility in Yantai, China.
-The Company started series production of the flexible constant velocity joint.

Contracts

-Chassis parts for VW's new global Golf/Polo platform
-Suspension subframe mounts for GM

 

Acquisition

-In 2010, Vibracoustic took over all shares of the joint venture partner Anvis Group, making it the sole owner of Vibracoustic do Brasil headquartered in Taubate, Brazil. The company with a current workforce of 155 was set up in 1998 and mainly produces engine mounts and chassis parts for the local market.

-In 2010, Freudenberg Filtration Technologies acquired a majority share in Micro Fresh Filters (Aust.) Pty. Ltd., Braeside, Australia. The company specializes in manufacturing filters for vehicles and machines used in the mining industry and now operates under the name of Freudenberg Filtration Technologies (Aust.) Pty. Ltd.

Divestitures

-The Company announced that it has handed over its OEM cylinder head and exhaust gasket business to ElringKlinger AG with effect from January 1, 2011. These products are produced in three European countries: Eurasburg and Geretsried-Gelting (Germany), Chamboret and Nantiat (France), and Settimo (Italy).

R&D Expenditure

(in million euros)

FY2010	FY2009	FY2008
181.3	170.9	195.1

The Company makes use of public funding to develop new materials, products and processes. A total of 40 research and development projects supported by the German government and the EU were ongoing at the Company in 2010.

R&D Structure

Workforce for R&D activities (FY2010): 1,960 employees (Germany 1,318/Other countries 642)

Freudenberg New Technologies business group takes initiative for new business ideas.
In 2010, Under the motto "Your Idea-powered by Freudenberg", over 190 ideas were collected from employees all over the Company; these were then assessed and passed on to the Business Groups for specific use.

Product Development

Key areas of research in 2010 included reducing CO2 emissions, the use of renewable resources, surface technology and mobility concepts for the future such as electric and hybrid powertrains. The Company recognizes that alternative powertrain concepts will remain a focal issue for research and development activities in 2011.

Energy Saving Seal (ESS)
-Freudenberg-NOK developed a new radial shaft seal - Energy Saving Seal (ESS(TM)) - designed to limit power loss by reducing friction. (From a press release on Feb.11, 2010)

New Oil Seal for Heavy duty trucks (MileMaker)
-The Simrit Division of Freudenberg-NOK developed MileMaker(TM), a new oil seal for heavy duty truck wheel and axle applications. The MileMaker seals operate with over 50 percent less torque than conventional seals and help realize fuel-saving benefits. (From a press release on Mar. 26, 2010)

Low Emission Sealing Solution (LESS)
-The Company has developed Low Emission Sealing Solutions (LESS), which help to reduce fuel consumption and emissions significantly. The company is supplying LESS for the new models introduced in 2010 such as BMW X3, Volvo V60 and S60, Daimler Mercedes CLS, Volkswagen Passat, Sharan and Polo GTI, Audi A1, A7 and A8, Porsche Cayenne, Volvo S60 and Opel Meriva. (From a press release on November 26, 2010)

Investment in Germany

-The Company opened a new factory in the Adlershof district of Berlin, Germany. The factory, with an investment of around 20 million euros, will start delivering special sealing products for the automobile industry as early as spring 2011. The Freudenberg Spezialdichtungsprodukte GmbH & Co. KG subsidiary based in Friedrichshain, Berlin, will be relocating its production activities to the Adlershof. (From a press release on May 19, 2010)

Investment outside Germany

China
-In July 2010, Vibracoustic opened a plant in Yantai, China, to produce vibration engineering components and commercial vehicle air springs for the Chinese automotive industry. The plant has a total area of 8,000 square meters and currently employs 100 people – with 100 new jobs planned up to 2014. The company will be investing some 14 million euros in production and infrastructure at the Yantai facility until 2014.