Freudenberg SE Business Report FY ended Dec. 2018

Financial Overview

(in million EUR)
  FY ended Dec. 31, 2018 FY ended Dec. 31, 2017 Rate of change (%) Factors
Sales 9,455.4 9,345.6 1.2 1)
Profit before income taxes 835.3 883.1 (5.4)

1) Net Sales
-The Company’s net sales for the fiscal year ended December 31, 2018 increased by 1.2% over the previous year to EUR 9,455.4 million. Acquisitions and disinvestments contributed EUR 43.2 million to sales. Sales were reduced by significant negative exchange rate effects totaling about EUR 285.6 million, especially as a result of the development in the US dollar exchange rate. The application of the new accounting standard IFRS 15 reduced sales by EUR 54.3 million.Adjusted for these special effects, the organic growth in sales was EUR 406.5 million or 4.3 percent.


Recent Developments

-Vibracoustic, a subsidiary of the Company, announced that the company and Hyundai Motor signed a technical partnership agreement. Both companies will expand their global relationship in the area of knowledge exchange as well as in joint research and development of NVH solutions for current and future mobility concepts like electric vehicles that will hit the market after 2020. Key elements of the five-year technical collaboration will be the exchange of NVH expertise enabling Hyundai Motor to further increase the comfort and performance of their vehicles across all models. (From a press release on October 4, 2018)

-Freudenberg Sealing Technologies informed that it has strengthened its position in the energy and electric mobility sectors with an acquisition and a strategic investment. In early 2018, Freudenberg Sealing Technologies acquired portions of the fuel cell manufacturer Elcore and its sister company Elcomax in Germany. In February, Freudenberg Sealing Technologies also has acquired a minority stake in the U.S. firm XALT Energy. XALT Energy manufactures large-scale lithium ion battery cells, modules and systems for use in heavy-duty commercial vehicles. Freudenberg Sealing Technologies invested a sum in the mid-double-digit-million-euros range in the transactions, and organizational changes are accompanying the portfolio expansion. (From a press release on May 14, 2018)



-According to the Group, 85% of cars currently produced in Brazil are equipped with one of its particulate filters or activated carbon filters manufactured at the company’s plant in Jacarei. The company sells 840,000 of its cabin filters annually to Volkswagen, MAN, Renault, Nissan, FCA/Fiat and GM. Recently launched models, such as the VW Polo and Virtus, Fiat Argo, Nissan Kicks, and VW Delivery truck built by MAN, have contributed to Freudenberg’s filtration sales. The company has begun a series of market launches in the first half of 2018 of aftermarket particle and activated carbon filters for 15 vehicles, including the Renault Kwid, which does not have a factory-installed Freudenberg filter, and imported models such as the Chevrolet Cruze, Equinox and Camaro. (From multiple sources on June 22, 2018)


R&D Expenditure

(in million EUR)
  FY ended Dec. 31, 2018 FY ended Dec. 31, 2017 FY ended Dec. 31, 2016
Total 444.3 427.8 335.1

-The Company measures the effectiveness of R&D activities as the share of new products (products less than 4 years old) in total sales. This share is 33.6 percent (previous year: 33.0 percent).  


R&D Structure

-In 2018, the Company had an average of 3,590 employees working in research and development.

Product Development

-Informed that it formulates a new silicone-based material that complies with an international flammability standard adopted for the electric vehicle market in China. In developing the new silicone-based material for its OEM customer, Freudenberg-NOK researchers tested materials by applying the aerospace flammability standards used in aircraft production. To that end, Freudenberg’s material experts have also begun formulating advanced fireproof materials that go above and beyond current customer requests. These materials, now in advanced field testing, not only contain a fire when exposed to a flame but can also protect the battery and nearby components to temperatures in excess of 2000° F. These materials have been formulated to meet the toughest flammability testing standards and will help automotive manufacturers meet a new level of thermal management and occupant safety. For example, one of the advanced materials developed by Freudenberg can prevent a fire from spreading through a vehicle for up to 15 minutes. (From a press release on November 27, 2018)


Freudenberg Sealing Technologies
-Announced that it has developed a foldable seal, a new solution for electric cars. Fixed aluminum elements equipped with a sealing profile on their outer edge not only provide stability - they integrate mounting points for the clips used to attach the seal at the housing cover. The elements are connected with one another using the continuous sealing profile, which exhibits high flexibility and can compensate for small dimensional deviations in the housing. Since the foldable seal is a complete component and does not need to be assembled from separate elements, the reliability of the installation rises dramatically. One key advantage of the approach: Metallic inlays ensure high electrical conductivity between the battery housing and its cover. Freudenberg Sealing Technologies has developed its own endurance tests so it can evaluate housing seals for traction batteries and verify that their operation is flawless. (From a press release on November 20, 2018)

-Informed that it has developed special seals that are attached directly to the gas diffusion layer and facilitate very thin cell designs. An elastomer seal is applied directly onto the gas diffusion layers during the injection molding process. The layers handle the fine distribution of gases and other tasks such as the transport of heat and water on both sides of the polymer electrolyte membrane. The PEM forms a compact and secure sealing unit with the gas diffusion layer that it encloses. The unit can be attached between the bipolar plates of a fuel cell stack, which are responsible for the gross distribution of gases and the transport of electric current. Freudenberg Sealing Technologies turned to an elastomer especially developed for use in fuel cells. (From a press release on October 9, 2018)

-Informed that it has developed a new bonding agent to improve the precision and long-term stability of exhaust gas treatment systems. The technology gives designers new freedom in the configuration of these solutions. It is supplying several providers of SCR systems with seals made of ethylene propylene diene rubber (EPDM) and hydrogenated nitrile rubber (HNBR). Freudenberg’s new bonding agent has proven extremely resistant to the urea solution in laboratory testing. Freudenberg experts have further expanded this testing to a valve tappet component. The tappet successfully withstood 1,000 hours of immersion in AdBlue at the same temperature. (From a press release on July 3, 2018)

-Informed that it has developed an innovative heat shield for use in prismatic and pouch cells with almost no impact on the required installation space. Heat shields between individual cells are designed so that the heat from a damaged cell remains insulated until it can be drained away. The heat shield has three key characteristics: First, the shield itself consists of a heat resistant material, a silicone-based elastomer; second, it slows the heat transfer between the cells with a waffle-like structure. Third, the shield is very thin, with a maximum thickness of just 1 mm. The loss of the existing energy density the shield’s use is hardly noticeable. (From a press release on May 22, 2018)


-Informed that increasingly stringent emission standards and trends such as powertrain electrification make reducing vehicle weight a major challenge for the automotive industry. To address this, Vibracoustic offers a lightweight solution of a motor bearing that uses a thermoplastic housing instead of a die-cast housing. Compared to a conventional steel application, the component is 40 percent lighter, but meets the same requirements for performance and ride comfort. Vibracoustic has a unique range of engine mounts and therefore offers the right solution for every engine-specific requirement. This ranges from conventional rubber and hydraulic engine mounts to switchable engine mounts. (From a press release on September 10, 2018)

-Informed that new air spring concepts from Vibracoustic are now able to switch between up to four different degrees of hardness via intelligent switching. This way, drivers and passengers arrive comfortably and safely at their destination - regardless of whether the road is a little rough or just takes a little longer. Vibracoustic is the leading supplier of vibration control solutions to the global automotive and commercial vehicle industries. (From a press release on August 16, 2018)


Capital Expenditure 

(in million EUR)
  FY ended Dec. 31, 2018 FY ended Dec. 31, 2017 FY ended Dec. 31, 2016
Overall 378.6 501.5 407.1


Investments outside Germany

-Announced on December 5, 2018, a plan to build two plants targeting China. The company aims at launching their operations in 2020. One of them will be made in Chongqing as a new facility for producing vibration control solution programs. Another one will be built in Taoyuan, Taiwan, by expanding its production lines for annually producing 11,000 tons of interior parts and non-woven fabric for carpets. Headquartered in Germany, Freudenberg has four business lines including seal/vibration control technology and non-woven fabric/filters. Currently, its sales in China account for about 10% of the total, and it has 23 factories in China. (From media reports on December 6, 2018)

-Vibracoustic announced that it is expanding its Polish plant Sroda Slaska I with investments of EUR 4 million. At the Sroda Slaska I plant, Vibracoustic produces conventional and hydraulic chassis mounts for international automotive customers. As part of the expansion, new capacities will be created for microcellular polyurethane (MCU) components. In addition, the establishment of a local prototyping facility, including testing, will significantly shorten the development and industrialization process for customer orders. As a result of the expansion, Vibracoustic will create a total of 50 new jobs by the end of 2018 at Sroda Slaska I, mainly in the areas of production, maintenance and engineering. (From a press release on August 8, 2018)

-Informed that its Chennai plant project has cleared all the legal hurdles and construction work at the site has started. The total investment is around EUR 28 million. This is the first investment of the group in Chennai, which is home to several OEMs and Tier I suppliers. It will manufacture high-quality sealing and vibration control solutions for the automotive and other sectors. In 2017, the German group boosted sales to EUR 9.3 billion. That constitutes a rise of 18.3 percent over the previous year. This rise is the result of continuous investments in existing and new projects. (From multiple sources on May 31, 2018)