"A3", outlook stable: rating reaffirmed

Moody's evaluation highlighted the company's solid business and financial profile, as well as its strong market position which the rating agency believes allows for stable cash flow generation.

Although Moody's expects the global economic downturn to negatively impact the Freudenberg Group's performance in 2020, particularly in automotive-related activities, the rating agency nevertheless anticipates a substantial recovery back to historical performance levels in 2021.

The stable outlook reflects Moody's expectation that Freudenberg's diversification will “help the Group limit the negative effects of the rapid spread of the coronavirus”. Moody's expects Freudenberg to suffer a substantial decline in sales of around 10 to 15 percent, and subsequently, to show a limited operating performance. However, the company's ability to generate a consistently positive free cash flow should support a rapid recovery.

Freudenberg has held a rating from Moody's since 2001. Decisive factors for the rating in the "investment grade" category are historically the Freudenberg Group's diversified and balanced portfolio, global presence, market leadership in independent niche markets, active portfolio management and strong corporate governance.

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