Freudenberg Reports Solid Results For 2020

PLYMOUTH, Mich. — March 31, 2021 — The Freudenberg Group reported sales of $10.1 billion (8.84 billion euros) globally and $2.58 billion (2.25 billion euros) in North America for its 2020 financial year. Freudenberg also continued to invest in both manufacturing and R&D facilities in North America, spending $72.7 million (63.4 million euros) spread out across different business groups in the region.

“The pandemic has made the last 12 months extraordinarily demanding and challenging,” said Dr. Mohsen Sohi, CEO of the Freudenberg Group, adding that, “so far we have managed the crisis comparatively well.”

The Group’s global sales in the 2020 financial year were below the previous year’s total of $10.6 billion (9.46 billion euros). The company reported a profit from operations of $768.4 million (669.9 million euros) compared to $940.5 million (820 million euros) the year before. At $1.31 billion (1.14 billion euros), cash flow was significantly above the comparable figure of $1.1 billion (956.9 million euros) for 2019. In North America, sales declined from $2.84 billion (2.54 billion euros) to $2.58 billion (2.25 billion euros) and employment decreased by roughly 300 from 10,562 to 10,241.

Despite the effects of the pandemic, the international rating agency Moody’s Deutschland GmbH confirmed its credit rating of Freudenberg SE as A3, with a stable outlook, as in the previous year. The Group, therefore, continues to hold an excellent single A rating.

Rapid and disciplined implementation of targeted measures by Freudenberg’s global workforce and the improvement of the economic environment in the fourth quarter were the main contributors to the relatively good 2020 results.

Freudenberg’s businesses in the automotive, textile and mechanical engineering sectors were especially hard hit in the first half of the year. At the same time, businesses such as Freudenberg Medical, Freudenberg Filtration Technologies and Freudenberg Home and Cleaning Solutions experienced a substantial increase in demand for their products.

“These different and, in some cases, divergent developments validate the benefits of Freudenberg’s broad-based portfolio,” Sohi said. “Diversification and innovation have, throughout our long history, proven to be the best defense in a crisis. That is why we continued investments as well as research and development even during this difficult year.”

In 2020, Freudenberg spent $511.9 million (446.3 million euros) or 5 percent of sales (5.1 percent in previous year) on research and development. At the same time, investments in tangible assets (excluding M&A) totaled $329.3 million (287.1 million euros) globally.

The group’s continued expansion in North America included the opening of a new global headquarters and plant for Freudenberg Medical in Beverly, Massachusetts; Freudenberg Sealing Technologies’ investments in research and development and testing centers in Ashland, New Hampshire, and Plymouth, Michigan; relocation and expansion of production of the Freudenberg Filtration Technologies facility from Leon to Silao and EagleBurgmann from Mexico City to Queretaro, Mexico, to name the most significant developments.

Investments in pandemic-related production included lines for the production of surgical masks and N95 respirators by Freudenberg Performance Materials in Durham, N.C., and various components for COVID-19 test kits by Freudenberg Medical in their U.S. facilities, as well as ear-guards used to anchor a face mask and 3D-printed face-mask production by Freudenberg-NOK Sealing technologies.

“Freudenberg companies in North America account for more than a quarter of the Group’s global sales and are its second largest market after Europe,” noted Bob Evans, president of Freudenberg North America. “Our more than 10,000 employees in the region have done a remarkable job adjusting to work under pandemic conditions. Their safety was of utmost concern throughout the year. Thanks to our strict operating measures, we were able to minimize or fully eliminate workplace transmission of the virus. We continue to work and plan cautiously and are pursuing our investments in strategic areas such as mobility transformation, digitalization and sustainable solutions, including the further strengthening of our portfolio through acquisitions in the region.”

Posted March 31, 2021

Source: Freudenberg