Freudenberg Group Record sales above €10 billion (plus 14 percent); Operating profit of €877 million (plus 31 percent)

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Source: Freudenberg Group

“We continue to invest in machinery, equipment and future-oriented technologies at a high level. The battery and fuel cell business are being grouped together in a separate Freudenberg Battery & Fuel Cell Business Group. These changes took effect April 1.” - Georg Graf, Freudenberg Regional Representative India and CEO of the Freudenberg Regional Corporate Centre, India

April 2022 : The Freudenberg technology group can look back on a successful year. Sales and profit increased significantly in the past 2021 calendar year. “It was a strong and very successful year for Freudenberg. For the first time, sales exceeded the €10 billion mark,” said Georg Graf, Freudenberg Regional Representative India and CEO of the Freudenberg Regional Corporate Centre, India, commenting on the results. At €10,038.7 million, sales were significantly above the previous year’s figure of €8,840.8 million. Furthermore, Freudenberg reported a profit from operations of €877.3 million, also considerably higher than the figure of €669.9 million for 2020. At €322 million, sales were significantly higher for Freudenberg in India as well. “We continue to invest in machinery, equipment and future-oriented technologies at a high level. The battery and fuel cell business are being grouped together in a separate Freudenberg Battery & Fuel Cell Business Group. These changes took effect April 1,” Georg Graf added.

The Freudenberg Group is following the tragic events in Ukraine with grave concern: Freudenberg is committed to an open, free Europe and peaceful coexistence worldwide. Our thoughts are with the people affected by the war. To support them, Freuden- berg is donating €3 million as immediate humanitarian aid. Half of the amount has already been paid out and is split equally between Doc- tors without Borders, Save the Children, Aktion Deutschland hilft and Aktionsbündnis Katastrophenhilfe. The company's employees and partners have also donated a further €760,000.

Sustainability: a climate-neutral company by 2045

By 2045, Freudenberg intends to become a climate-neutral company. An initial target is to achieve a 25 percent reduction in specific CO2 emissions per million euros of sales by 2025 compared with 2020. With this aim in mind, the company is pursuing a strategy based on energy-saving, electrification, the purchase and generation of green power, and the offsetting of CO2 emissions. Last year, these efforts focused on two objectives: electrifying energy demand and obtaining all required electricity from renewable sources such as wind, solar and hydroelectric power.

One example is the Power Purchase Agreement covering the supply of solar electricity from Tramm-Göthen, where Germany's largest photovoltaic park to date has been built. On an area equivalent to 347 football fields, 420,000 solar modules generate about 172 megawatts of electricity annually. The financing of this megaproject was facilitated by a purchase contract for all of its green electricity over a period of ten years. The agreement was concluded by Freudenberg and automaker Volkswagen on one hand and the electricity provider RWE on the other.

Investments

After eliminating acquisitions, investments in intangible assets, tangible assets and investment properties amounted to €304.8 million (previous year: €287.1 million).

Investments in Germany totalled €88.0 million (previous year:

€85.8 million). Freudenberg Sealing Technologies commissioned the first sections of the Fuel Cell Innovation Center in Munich, Germany. Freudenberg Performance Materials significantly expanded its manufacturing capacity for gas diffusion layers (a key component of fuel cells) and invested in the expansion of its plant in Weinheim. Vibracoustic expanded its air spring manufacturing capacities in Hamburg, Germany.

Investments in India totalled €7.1 million including an investment at SIPCOT, Chennai in Sriperumbudur. “We have acquired land as a strategic investment for future plant installations or expansion projects. The site is 5.84 acres in dimension”. Freudenberg sees India as an important investment destination and supports the “Make in India” projects.

Mobility: future-oriented positioning for fuel cell business With effect from April 1, the battery and fuel cell business is being grouped together in a new Freudenberg Battery & Fuel Cell Business Group. One hundred experts are already working at Freudenberg’s Fuel Cell Technology Center in Munich, Germany. Together with partners, applications for buses, trucks and shipping are being developed. This includes the development of a high-performance fuel cell system for long-distance buses, which may be combined with a battery to create a hybrid system. Freudenberg is also working on fuel cell systems for use on ocean-going passenger liners in partnership with Meyer Werft in Papenburg. Furthermore, Freudenberg Filtration Technologies in Pune, India is providing its micron Air filters to keep fuel cells running on India’s first zero-emission bus which runs on hydrogen. The micron Air fuel cell filter that is now in use is specifically designed to protect cells from ammonia – making the bus the perfect choice for countryside routes.

Corporate Social Responsibility

Freudenberg has been committed to society since the company was founded. Our social engagement is reinforced by our “education and environment” initiative. The objective is to provide people with access to education and employment and support environ- mental protection. In 2021, Freudenberg contributed a further sum of €4 million to the initiative, bringing the total donated amount to €18 million.

One example of how these funds are being used is the Aqua Tower project in India. A year after the successful installation of two Aqua tower filtration systems on the subcontinent, one in Pune and another in Bangalore, Freudenberg employees and the project partner Planet Water installed other Aqua Towers in the Mexican towns of Cerro Prieto and San Vicente de Ferrer. The Aqua Towers transform contaminated water from rivers, streams and wells into drinking water. Two other Aqua Towers are planned for Mexico, and work is ready to start on a project in Thailand.

Outlook

Freudenberg expects the macro-economic and geopolitical environments to remain uncertain. The war in Ukraine and the embargo measures that have been taken are expected to cause significant disruption to global supply chains with direct and indirect effects on the Freudenberg Group. They will be reflected in limited product availability, particularly when it comes to raw materials and supplier parts, as well as in across-the-board increases in energy and logistics costs. The effects are unavoidable and cannot be offset by short-term operational and strategic measures. The Group’s broad geographical and industrial diversification will help to keep the overall impact on Freudenberg manageable, despite the potential for isolated problem areas.

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