1st to 3rd quarter announcement 2016: Danfoss continues growth momentum
Danfoss maintained the growth momentum from the first half-year into the third quarter. Following the first nine months of 2016, the sales reached DKK 29.1bn compared to DKK 28.7bn in the same period last year, which corresponds to growth of 4% in local currency. The increased sales and continuing improvements in operations lifted the operating profit (EBIT) to DKK 3.5bn, corresponding to a 10% increase compared to the same period last year.
In the third quarter, Danfoss acquired two companies, Sondex Holding A/S and White Drive Products Inc., totaling annual sales of approx. DKK 1.6bn, and as part of the Group’s digitalization strategy, a new digital development hub has been set up in Berlin.
“Our committed efforts to lift growth through, among other things, investments in innovation and growth markets, have resulted in increased market share. At the same time, our consistently strong cash flow and strong earnings capacity pave the way for a further strengthening of our core businesses through acquisitions and investments in new digital initiatives,” says President & CEO Niels B. Christiansen.
Sales in Europe, Danfoss’ largest market, are improving. The development is also positive in China and in some parts of North America, and India maintains the double-digit growth rates. Danfoss Cooling, in particular, had solid growth in both sales and earnings. But, also Danfoss Power Solutions and Danfoss Heating delivered improved sales and earnings, whereas Danfoss Drives was impacted by the lower activity levels in several global industries.
“We maintain the positive trend, and despite a global economy characterized by low prices on commodities and generally low activity levels in a number of the major global industries, several factors are triggering a positive development. Looking ahead, with the COP21 climate agreement entering into force, we see a major potential for us, as energy efficiency is key for each country to reach the planned reduction targets. Accordingly, we expect that the demand for several of our energy-efficient technologies and solutions will rise in the medium and long term,” says Niels B. Christiansen.
Financial key figures for the first nine months 2016:
- Sales reached DKK 29.1bn compared to DKK 28.7bn in the same period last year, corresponding to growth of 4% in local currency.
- Operating profit (EBIT) increased by 10%, reaching DKK 3.5bn, compared to DKK 3.1bn in the same period last year. The EBIT margin was 11.9% against 10.9% last year.
- Free cash flow before M&A increased to DKK 2.4bn compared to DKK 2.3bn last year.
Maintaining expectations for 2016:
We expect to maintain or increase our market share, while maintaining the EBIT margin at level with 2015.
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