Danfoss delivers strong first six months with high growth

Danfoss continues the progress and increased its net sales as well as earnings in the first six months of 2017, which were also characterized by massive investments. Net sales grew by DKK 2.4bn (EUR 0.3bn) to reach DKK 21.8bn (EUR 2.9bn) – a growth of 13%, corresponding to growth of 11% in local currency. Operating profit excl. other income and expenses improved 10% to reach DKK 2.5bn (EUR 332m), and the net profit was DKK 1.5bn (EUR 200m). As expected, the cash flow was lower for the first half-year, due to the high growth and increased investments.

“We have had a strong first half-year, with all of Danfoss’ core businesses delivering good sales growth. Over the past few years, we have made targeted efforts to accelerate growth by investing in innovation and high potential growth markets, and the results are paying off. Our growth and earnings power paves the way for investing heavily in growth, digitalization, and new technologies. This way, we can continue to strengthen Danfoss and our market position,” says President & CEO Kim Fausing.

Danfoss created the strong results across core businesses and markets. Especially the mobile hydraulics business, Danfoss Power Solutions, performed strongly, and the BRIC countries and China, in particular, showed significant growth, driven by an increasing demand for climate-friendly and energy-efficient technologies. At the same time, Danfoss also continued the good performance in the two largest markets, Europe and North America.

Growth can also be ascribed to some of Danfoss’ new, innovative technologies, including Danfoss Turbocor Compressors and Danfoss Silicon Power, which generated double-digit growth rates, driven by an increasing demand for energy efficiency and electrification. It is part of the Danfoss strategy to focus on innovation and the acquisition of new technologies. In the first half-year, Danfoss acquired two companies, which specialize in cloud-based solutions for cooling equipment and advanced thin-film technology for sensors, respectively.

“We are investing in innovation on several fronts with the shared goal of creating growth and building leading, global market positions. A large part of our innovation is driven by our own development functions, but we are also looking outside Danfoss to find new technologies and software, which can strengthen the business. It is crucial that we remain one step ahead and continue to deliver what our customers need,” says Kim Fausing.

Key figures from first half-year 2017

• Net sales increased by 13% to reach DKK 21.8bn (EUR 2.9bn) against DKK 19.4bn (EUR 2.6bn) at the same time last year, corresponding to growth of 11% in local currency.
• Operating profit excl. other income and expenses increased by 10% to reach DKK 2.5bn (EUR 332m) against DKK 2.2bn (EUR 301m) at the same time last year, corresponding to an EBIT margin excl. other income and expenses of 11.3% against 11.6% in the prior-year period.
• Operating profit (EBIT) increased by 3% to reach DKK 2.3bn (EUR 306m) against DKK 2.2bn (EUR 297m) at the same time last year, leading to EBIT margin of 10.4% against 11.4% in the prior-year period.

Outlook 2017 maintained
We expect to maintain or expand our market share, while maintaining the profitability measured as margin at 2016 level following significant investments in digitalization.