Freudenberg & Co. KG Business Report FY ended Dec. 2015
Financial Overview |
(in million EUR) |
| FY ended Dec. 31, 2015 | FY ended Dec. 31, 2014 | Rate of change (%) | Factors | |
| Sales | 6,410.9 | 5,982.3 | 7.2 | 1) |
| Profit before income taxes | 667.6 | 625.1 | 6.8 | 2) |
Factors
1) Net Sales
-The Company’s sales for the fiscal year ended December 31, 2015 increased by 7.2% to EUR 6,410.9 million. The increase in sales was caused by increased sales in all of the Company’s business areas, acquisitions by Freudenberg Sealing Technologies, Freudenberg Performance Materials, and Freudenberg Medical, and positive exchange rate effects.
2) Profit before income taxes
-Profit before income taxes for the fiscal year ended December 31, 2015 totaled EUR 667.6 million, an increase of 6.8% over the previous year. Positive exchange rate effects, increased sales, improved capacity utilization, implementation of measures to increase productivity and efficiency, and a decline in administrative expenses all contributed to the gains in profit.
Acquisitions
-Japan Vilene Co., Ltd. has agreed on a takeover bid for the company's shares by FT Holdings Co., Ltd., in Minato-ku, Tokyo. FT Holdings is a joint venture between the Company and Toray Industries, Inc. It is believed that Japan Vilene's only shareholders after the takeover bid will be FT Holdings, Freudenberg SE, and Toray Industries, Inc., and that the company will be delisted. The transaction is intended to deepen Japan Vilene’s financial ties with the Company and Toray, and strengthen their businesses to survive an increasingly competitive global non-woven fabric market. (From an article in the Nikkan Jidosha Shimbun on August 12, 2015)
Restructuring
-The Company is planning to restructure its Freudenberg Sealing Technologies headquarters in Weinheim, phasing out 160 jobs in Simmerring production, encoder production, and at the Competence Center Transmission and Driveline to reduce costs. 85 jobs at the location will be saved. Encoder production will be relocated at the Company’s locations in Bursa, Turkey; Kecskemet, Hungary; and Ceperka, Czech Republic.
-The Company consolidated development and production at the Guarulhos plant in Brazil as a response to a decrease in sales due to the country’s recession. As such, the Company closed the plant in Taubate at the end of 2015.
Contracts
-Major orders which the Company won in 2015.
| Business Group | Product | Car model |
| TrelleborgVibracoustic (Lerma, Mexico) | Air springs | GM "Cadillac CTS", "Cadillac Escalade" |
| TrelleborgVibracoustic (Hamburg, Germany) | Air springs | BMW "7 Series", Porsche "Cayenne", Audi "A6" |
| TrelleborgVibracoustic | Air springs, Chassis mounts, Isolators, Dampers | Mercedes-Benz ML and GL SUVs |
| TrelleborgVibracoustic | Cross-axial bellows air springs | Audi "Q7" |
| Freudenberg Performance Materials | Microfilament textile for carpet tiles | GM "Chevrolet Malibu" |
-The Freudenberg Filtration Technologies business unit won a major order from Zhejiang Geely Automotive Parts & Components Stock Co., Ltd., to develop and supply engine intake air systems for a new platform for Volvo compact vehicles. This order is the largest single order that the Company has won for its engine intake air filtration business in China.
Awards
-The Freudenberg Filtration Technologies business unit won an award from Halla Visteon Climate Control (HVCC) as the “Best Overall European Supplier 2014”. The business unit also won “Preferred Supplier 2014” from Bosch.
R&D Expenditure |
(in million EUR) |
| FY ended Dec. 31, 2015 | FY ended Dec. 31, 2014 | FY ended Dec. 31, 2013 | |
| Total | 252.7 | 213.7 | 193.0 |
R&D Structure
-As of December 31, 2015, the Company has 2,160 employees working in research and development, including 1,176 employees in Germany.
R&D Facilities
-The Company’s Freudenberg Sealing Technologies unit invested several million U.S. dollars to expand its research and production capabilities at its facilities in Findlay, Ohio and Morristown, Indiana. The investment is expected to create approximately 100 new jobs over the coming years.
Product Development
Cross-axial ZAX bellows for air springs
-The Company’s TrelleborgVibracoustic joint venture has developed a new bellows technology for air springs. The "ZAX bellows" combines the good torsion decoupling capability of axial bellows with the dimensional stability of cross-ply bellows. The new bellows technology will go into series production in 2015 on the rear axle of a number of new SUVs. (From a press release on February 13, 2015)
Sealing solutions in cooling circuits for electric motors
-The Company has developed Plug & Seals made from EPDM to support the automotive industry’s trend of moving towards alternative powertrains. The Plug & Seals are used in the cooling circuits for electric motors and can compensate for axial tolerances, operate at high pressures and contribute to acoustic and mechanical isolation.
Simmerring seal with electrically conductive nonwoven material
-The Company has developed a Simmerring seal with electrically conductive nonwoven material to protect electric vehicle drive systems from damage. The seal is used for axle drives, and bleeds off electrical charge that builds off in the drive shaft by conducting it to the housing. This prevents static charge from travelling along the shaft into the transmission and damaging elements in the system.
New Rubber Generation Disc
-The New Rubber Generation Disc (NRG Disc) developed by TrelleborgVibracoustic is designed to offer an improved decoupling solution for prop shafts. The NRG Disc’s function is to isolate torsional vibration caused by the engine from the prop shaft. The NRG Disc can be designed for optimal noise decoupling and is significantly more durable than current solutions.
Glass fiber reinforced damper bearing
-The TrelleborgVibracoustic business unit is developing a glass fiber reinforced damper bearing. The new damper bearing weighs 25% less than an aluminum bearing, has improved vibration isolation, and is less expensive.
Capital Expenditure |
(in million EUR) |
| FY ended Dec. 31, 2015 | FY ended Dec. 31, 2014 | FY ended Dec. 31, 2013 | |
| Overall | 302.5 | 271.6 | 229.3 |
Investments in Germany
-The Company announced that it has inaugurated a pilot line costing a total of approximately EUR 3 million at its Kaiserslautern plant in Germany. The plant produces spunlaid nonwovens for use in a wide variety of applications and markets ranging from carpets for car interiors, fitted carpets for buildings, and cabin air filters for vehicles to bedding and mattress covers. New processes are developed and tested on pilot lines before they are transferred to production plants. (From a press release on September 4, 2015)
Investments outside Germany
-On April 2, 2015, the Company and Vilene Nonwovens (Suzhou) Co. Ltd., a joint venture between the Company and Japan Vilene Company, announced its plan to construct a new production line for automotive headliner materials. Production on the new line is scheduled to begin in the summer of 2016. As of October 2014, the joint venture sold an aggregate total of 10 million meters of non-woven fabrics, which are used in approximately 3 million vehicles. (From news releases issued by multiple sources on April 7, 2015)
-The Company’s TrelleborgVibracoustic unit’s new manufacturing facility in Thailand began production in the middle of 2015. The new location produces chassis, engine, and cab mounts for customers including Ford, GM, Nissan, and Volvo.