Freudenberg & Co. KG Business Report FY2011

Business Highlights

Financial Overview

(in million euros)
  FY2011 FY2010 Rate of change(%) Factors
Sales 6,006.5 5,481.4 9.6 1)
Operating Profit 505.4 430.6 17.4 -

1) Overall
-Sales in FY2011 increased by 9.6 percent year-on-year. Adjusted for the effects of acquisitions and disinvestments to the amount of 15.2 million euro and exchange rate conversion effects, sales were 10.9 percent higher than the prior year. Sales increased in almost all Business Areas.

Automotive business overview

Sealing products
<Freudenberg Sealing Technologies>
-In the automotive sector, the Division benefited from growth among automakers and major suppliers in Europe and more particularly the USA.

-Energy-saving sealing concepts such as LESS (Low Emission Sealing Solutions), where low-friction seals manufactured from special materials play an important role, were developed further.

<NOK-Freudenberg Group China>
-There was only slight positive growth in the Chinese automotive industry as key government sales incentive measures expired at the end of 2010. However, there was a very positive trend in orders from the automotive sector received by the Division towards the end of the year – in part attributable to new market share won with European customers.

-The Division successfully expanded its leading position in the automotive industry and several general industry segments. In particular there was a strong rise in market share with strategically important Chinese automotive customers as Chinese sales was strengthened and product solutions were specifically developed to meet the needs of Chinese customers.

Vibration control products
-Sales in 2011 was an all-time high in the ten-year history of very good developments in the global automotive industry and numerous project start-ups.

-A motor mount project for an electric car built by Shenzhen BYD Daimler New Technology Co. Ltd., Peking, China, demonstrates the innovative strength of the Business Group.

-General Motors will in future be equipping a top-class model in North America with the Division's airsprings.

-In Europe, the leading market position won through high technological competence was impressively confirmed by the acquisition of the largest platform order to date.

-The Division received successful series rollout of global platform orders for chassis components and engine mounts in China, Europe, India and the NAFTA countries.


-The Company announced that it has concluded with Japan-based EKK Eagle Industry Co. Ltd. an agreement for the transfer of its actuator business. The agreement concerning the business unit which was formerly a division of Freudenberg NOK Mechatronics (FNM) takes effect on July 1, 2011. Since 2002, FNM has been a joint venture of Freudenberg and Japanese company NOK Corporation. Product development and management functions are performed in Germany; production takes place in Hungary. (From a press release on July 1, 2011)

-Eagle Industry Co., Ltd. has acquired a manufacturer of exhaust control system components in Germany. The German business is a subsidiary of Freudenberg NOK Mechatronics, a leading supplier of seals and mechatronics technologies. Eagle, which has paid 12 million euros (approximately 1,370 million yen) for the acquisition, intends to actively expand business in Europe leveraging the business experience of the company it has purchased. (From an article in the Nikkan Jidosha Shimbun on July 30, 2011)

-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). (From a press release on January 5, 2011)

Joint Ventures

-The Company and Trelleborg AB announced that they have signed an agreement to form a 50/50 joint venture to produce antivibration solutions for light and heavy vehicles. As announced on January 17, 2011, the new joint venture will comprise Trelleborg Automotive's operations in antivibration solutions and Freudenberg's corresponding activities, Vibracoustic. At year-end 2010, the antivibration business of Trelleborg Automotive had annual sales of approximately 7 billion euros and approximately 5,200 associates. In the same year, Vibracoustic generated sales of round 600 million euros and employed about 3,100 people. (From a press release on December 22, 2011)


R&D Expenditure

(in million euros)
  FY2011 FY2010 FY2009
Total 205.4 181.3 170.9

R&D Structure

-Workforce for R&D activities in FY2011: 2,187 employees.

-Freudenberg Forschungsdienste KG has been doing research and development work for the Freudenberg Group of Companies.

R&D Activities

-Group innovations were recognized with several awards in 2011. Freudenberg Sealing Technologies received an award from "Der Deutsche Innovationspreis" initiative for a method to produce the steel rings used in rubber-metal seals using an innovative laser welding process rather than stamping. This reduces steel consumption by up to 70 percent.

Investment Activities

Investment in Germany

<Freudenberg Sealing Technologies>
The Division commissioned a new state-of-the-art factory in Berlin-Adlershof in fall 2011. Some 200 associates manufacture a range of products including axle boots made of thermoplastic elastomers for drive shafts in cars and machinery as well as sealing bellows for use in chassis and steering mechanisms. 20 million euro was invested in the new factory.

Investment outside Germany

<Freudenberg Sealing Technologies>
-For 2012, the Division is planning further growth in sales and earnings. Investment will focus in particular on the BRIC countries, i.e. Brazil, Russia, India and China.

<NOK-Freudenberg Group China>
-The Division is setting up new production capacities for transmission piston seals and accumulators from the end of 2012.

-Geographical proximity to the development and production facilities of global automotive customers is a prerequisite for successful business development. The Division therefore continued to expand its global presence, setting up a new production site for engine mounts and chassis components in Querétaro, Mexico.

<Freudenberg Filtration Technologies>
-The Division and Japan Vilene Company Ltd. are investing in a new filter plant in Chengdu, South Western China, which will begin producing filters for the automotive industry in 2013.