Freudenberg reports Rs. 5,706 Cr profit despite effects of pandemic
The global technology group Freudenberg, Weinheim, has managed the crisis well. Although sales in 2020 was at Rs. 75,305 cr (8.8 billion Euro), it was significantly below the figure of Rs. 80,646 cr (9,467 million Euro) for the previous year, the company reported a profit from operations of Rs. 5,706 cr (669 million Euro) compared to Rs. 6,984 cr (820 million Euro) during previous year. The impact was visible in India as well as sales showed a 16% dip to close at Rs. 2,130 cr in 2020 as compared to Rs. 2,532 cr last year.
According to the company, especially for the Business Groups producing for the automotive, textile and mechanical engineering sectors, the economic environment globally and in India, at the beginning of the year was extremely challenging. “In addition to the pandemic, the transformation in mobility has led to seven of our ten Business Groups having to contend with, in some cases, sizeable losses. In contrast, three Business Groups have experienced a positive impact on their business. Freudenberg Home and Cleaning Solutions (FHCS) is benefiting from more stringent hygiene measures, Freudenberg Filtration Technologies (FFT) from the launch of mask production and Freudenberg Medical (FM) from a positive demand for new products. To tackle the crisis, we are continuing to adhere to our strict cost management and the related measures. Investments are being reduced to as low a level as possible without jeopardizing future growth, and we have avoided making cuts to our research and development activities. These different, and in some cases divergent, developments show just how important its broad-based positioning is for Freudenberg,” said Georg Graf, Freudenberg Regional Representative, India assessing the Freudenberg performance in 2020. “We have also made good progress with our strategic focus topics of e-mobility, digitalization and sustainability. Furthermore, we have continued a high level of research and development activities as an innovative technology group globally,” he added.
Freudenberg’s seven Business Groups in India have a total workforce of some 2,852 employees at around 50 locations – running six R&D centers and 15 production sites with state-of-the-art shop floors in India.
Research and development
In 2020, Freudenberg conducted research and development activities spending to the amount of Rs. 3,799 cr (446 million Euros) (previous year: Rs. 4,096 cr (480 million Euros)). This represents 5 percent of sales (previous year: 5.1 percent). Freudenberg generates more than a third of its sales (34.1 percent; previous year: 34.7 percent) with products that are less than four years old.
Sustainability
In the “Sustainability Drives Climate Action” project, Freudenberg intends to reduce CO2 emissions by 25 percent by 2025.
Outlook
For 2021, Freudenberg once again expects a generally challenging overall economic environment. “One major uncertainty is the further development of the COVID-19 pandemic and its effects on the global economy and on the markets of the Freudenberg Group, especially in the automotive industry,” an official statement said.
Against this backdrop, Freudenberg is planning cautiously for the year ahead and expect a slight recovery of business in the markets relevant for the Group. It adds, “We will continue to invest in long-term projects. Key strategic topics will remain the transformation in mobility, digitalization, and sustainable solutions. We are developing our portfolio selectively and in a targeted way and will strengthen it with highly promising technologies through acquisitions.”
