Freudenberg Continues Profitable Growth
By Business Wire News
By Business Wire News
The Freudenberg Group, a diversified global technology conglomerate, continued its positive business development with sales increasing by 7.6 percent to 7.57 billion euros or $8.36 billion on the basis of pro-rata consolidation of joint ventures. The growth came despite challenging conditions in certain market segments and world regions.
Adjusted for exchange rate effects, sales grew by 1.6 percent. “We completed another year of profitable and sustainable growth,” said Dr. Mohsen Sohi, CEO of Freudenberg Group. “Further, we developed the company to be ready for the future through many long-term projects.”
During the last five years the company’s sales grew from 5.5 billion euros in 2010 to 7.57 billion euros in 2015 through organic growth and its “buy and build” strategy. In North America, sales grew from 1.6 billion euros in 2014, or $2.2 billion, to 2 billion euros in 2015, or $2.3 billion. Most Freudenberg business groups in the region saw growth in sales.
“Sales in North America contributed 26 percent of global Freudenberg Group turnover in 2015,” Sohi explained. “With continued investment in sustainably growing our existing businesses in Canada, the U.S. and Mexico and through strategic acquisitions, we are inching toward Freudenberg’s established goal of generating one-third of sales in the Americas.”
Dr. Ralf Krieger, CFO and member of the Board of Management, said “Freudenberg companies in the U.S. performed slightly above plan, while companies in Mexico significantly exceeded their plan, boosted by the recovery of the Mexican manufacturing sector.”
Results from companies in Canada were slightly below plan due to the slowdown in the oil and gas sector. Employment at Freudenberg North American facilities was up by two percent from some 8,300 to more than 8,500, with equal growth in the U.S. and Mexico.
“Freudenberg’s investment in North America in 2015 totaled 105 million euros or $114 million, an increase compared to the previous year (79.5 million euros),” said Bob Evans, Freudenberg North America president and regional representative. “Those investments were made to upgrade and expand existing manufacturing as well as research and development facilities at almost all business groups.”
Major expansions or upgrades in the last year were made at Freudenberg-NOK plants in Findlay and Morristown, Ohio; Freudenberg Performance Materials in Durham, North Carolina; Freudenberg Home and Cleaning Solutions in Aurora, Illinois; Freudenberg Oil and Gas in Houston, Texas; Freudenberg Medical in Baldwin Park, California, and Minnetonka, Minnesota, and at a Freudenberg IT facility in Puebla, Mexico.
In the year under report, Freudenberg investments in innovation reached a new high. The company invested 315.3 million euros or 4.2 percent of sales (compared to 270.3 million euros or 3.8 percent in 2014) in research and development. The goal is to increase the percent of new products in the company’s portfolio. In 2015, products less than four years in the market made up 26 percent of Freudenberg’s sales. A total of 2,772 Freudenberg employees worked in research and development in 2015 (2,582 in 2014).
“Individual Business Groups’ innovation activities build upon Freudenberg’s core strength: materials competence, which is constantly expanded,” said Sohi. “Our corporate efforts focus on the main cross-sectional technologies of relevance to several business groups. They reinforce our innovative strength.”
Freudenberg Group expects continued moderate growth of one to three percent globally in 2016 with comparable growth in the region. North American investments will continue to be high.
About the Freudenberg Group
Freudenberg is a global technology group that strengthens its customers and society long-term through forward-looking innovations. Together with its partners, customers and research institutions, the Freudenberg Group develops leading-edge technologies and excellent products and services for more than 30 markets and for thousands of applications. Strength of innovation, strong customer orientation, diversity, and team spirit are the cornerstones of the Group. The 167-year-old company holds strong to its core values: a commitment to excellence, reliability and pro-active, responsible action. In 2015, the Freudenberg Group employed over 40,000 people in 57 countries worldwide and generated sales of more than 7.5 billion euros. For more information, please visit www.freudenberg.com.
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