Freudenberg & Co. Kommanditgesellschaft
Freudenberg Group completes portfolio restructuring
Weinheim (ots)
At the beginning of 2004, the Freudenberg Group completed a far-reaching reorientation of its portfolio, according to the report presented by Dr. Peter Bettermann, Speaker of the Management Board of Freudenberg & Co., at this year's annual press conference of the Group in Weinheim. Over the past five years, the Group has disposed of companies with annual sales totaling some 400 million Euro. The Group is no longer active in shoe production or trading or in leather production, the business activities that dominated the first half of Freudenberg's 155-year history. In addition, the entire business of Freudenberg Technischer Handel has been disposed of to the Brammer Group.
Dr. Betterman reported: "It is gratifying to note that internal growth within the Group has been almost sufficient to compensate for the reduction in sales as a result of disinvestment. The acquisitions which we have now completed will lead to strong growth in sales." The acquisitions, in the fields of seal technology, nonwovens, household products and specialties, have reinforced the core business areas of the Group and represent strong sales of about 500 million Euro which will, for the most part, not affect the balance sheet until the current financial year.
Balance sheet strength maintained / Moody's confirms A 3 rating
Following the acquisitions, the traditional strength of the Freudenberg balance sheet is still maintained and the equity ratio remains above 40 percent. This was confirmed by Moody's Investors Service, which renewed its "A 3 stable" rating for Freudenberg at the beginning of May 2004. Moody's assesses the leading position of the Group on niche markets and its balanced global presence just as positively as its conservative balance sheet structure, its strong cash flow and its continuous, steady, organic growth.
Three percent growth in adjusted sales
In the 2003 financial year, the sales of the Freudenberg Group fell slightly, by 1.3 percent, to 3.87 billion Euro in nominal terms. This decline was mainly due to changes in the US dollar/Euro exchange rate and almost solely concerned North America. Adjusted for the effects of currency fluctuations, acquisitions and disinvestments, sales grew by 109 million Euro or three percent. The fall in consolidated profit to 93 million Euro (2002: 137 million Euro) was chiefly due to currency effects, high restructuring expenses at the Weinheim site and upfront costs and integration expenses in connection with major acquisitions. Cash flow from operating activities amounted to 267 million Euro. As in previous years, cash flow from operating activities was sufficient to cover investments, including the acquisitions. As of year-end 2003, the equity ratio was 43 percent.
Further improvements in health and safety
A significant success in 2003 was the further reduction in the accident rate (notifiable accidents per 1,000 associates) from 14.1 in 2002 to 10.7 in 2003. This 24-percent reduction was chiefly the result of the "We all take care" initiative, intended to encourage health and safety projects at all sites of the Freudenberg Group, to heighten health and safety awareness in accordance with the Group's Guiding Principle of "Responsibility" and to cut accident rates still further. 274 projects were entered for the prizes available as part of the initiative. The main prize was awarded to Korea Vilene Company for its "Daily safety-man" project. In this project, one associate is appointed safety manager for the day every day. The task of those appointed is to identify unsafe machines, unsafe working conditions and unsafe behavior on the part of associates and to ensure that such problems are remedied. In 2003, health and safety expenditure at Freudenberg doubled, reaching about 15 million Euro.
Two new business groups
In 2003, a number of major investments were completed, while preparations were made for others. Freudenberg reinforced its Nonwovens Business Area by acquiring the entire business of the former Freudenberg Politex Joint Venture in Italy, the market leader in polyester-based roofing materials. Freudenberg Household Products became the market leader for mechanical household cleaning products in the USA through the acquisition of O'Cedar and also acquired the laundry care division of Hailo, substantially strengthening its position in the sector. OKS of Munich, another company acquired by Freudenberg, specializes in lubricants for maintenance and ideally complements the business of Klüber Lubrication. Together with US release agent specialist Chem-Trend, taken over at the beginning of 2004, these two companies now form the new Freudenberg Chemical Specialities Business Group, with sales of 375 million Euro and about 2,000 associates. Another new business group is Burgmann Industries, established following the acquisition of the mechanical seals, compensators and automotive divisions of Burgmann Dichtungswerke in Wolfratshausen at the beginning of 2004. Outside Germany, Burgmann Industries cooperates closely with Japanese mechanical seals producer Eagle Industry. The new business group has a workforce of about 3,300 and annual sales of almost 300 million Euro.
Significant increase in the workforce
Freudenberg is an internationally oriented family company with a broad range of products spanning seals and vibration control components, nonwovens, mechanical household cleaning products, specialty lubricants and release agents. The main customer groups are the automobile and investment goods industries (seal and vibration control technology, acoustic and vibration control, car interiors and filters) and the textile industry (interlinings, technical textiles). The Group also has a presence on the final user market with vileda(R) brand household products and nora(R) brand rubber floorcoverings. The Group consists of more than 300 companies in 54 countries. As of the end of 2003, 28,479 persons were employed by Freudenberg, 786 more than the year before. Including the newly acquired companies (as of April 2004), Freudenberg has a total of about 32,000 associates throughout the world, including 12,491 (2003: 11,375) in Germany.
ots Original Text Service: Freudenberg & Co. KG Internet: http://www.presseportal.de
For further information, please contact: Wolfgang Orians Freudenberg & Co. Corporate Communications Phone: +49 (0) 6201-80 66 16 Fax: +49 (0) 6201-88 34 30 E-Mail: wolfgang.orians@freudenberg.de Internet: www.freudenberg.com
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