Freudenberg consolidates as sales grow 10 percent in 2005

Weinheim, Germany - Following a phase of exceptionally high acquisition and investment activity, the Freudenberg Group used the 2005 financial year to consolidate and strengthen the balance sheet. Thanks to improved working capital management, prudent housekeeping and strong cash flow from operating activities, net debt declined by 27 percent to 580 million Euro and the share of partners' equity rose to 45 percent.

In the year under review, the Freudenberg Group generated sales of 4.837 billion Euro, corresponding to a rise of some 10 percent. With a share of 33 percent, the region accounting for by far the largest share of sales was the European Union (excluding Germany), while North America and Germany each accounted for 25 percent of sales. The share of Group sales in Asia was some 7 percent. As a result of various cooperation projects, particularly with the Japanese partners NOK Corporation and Japan Vilene Company Ltd., the largest part of Freudenberg's activities in Asia is not consolidated. If sales by the Japanese partners are included on a pro rata basis, Asia accounts for some 20 percent of total Group sales.

Consolidated profit rose to 202 million Euro, in line with the rise in sales. Lower income from investments in associated companies and higher income taxes partly offset the positive contribution from higher profit from operations. Profit distribution by world region varied considerably, with Germany in particular showing a weak profit/sales ratio.

Cash flow from operating activities amounted to 554 million Euro, 213 million Euro higher than the previous year. Net debt was therefore reduced by just under 30 percent. Cash flow from investing activities declined by 329 million Euro year-on-year to -289 million Euro, as several major investments were made in 2004. The integration of the companies purchased in the Freudenberg Group was one of the key tasks in 2005.

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Press releasefrom Freudenberg