Danfoss had a really good year in 2013, once again delivering solid results. The Group has strengthened the business and is poised for growth. The 2013 Danfoss Annual Report shows that Danfoss made progress in terms of both financial results and strategic initiatives. Danfoss fulfilled the expectations for 2013, just as it did in 2011 and 2012, and the free cash flow, DKK 3.5bn (EUR 473m), is the highest ever in the Group’s history.
“The progress was created from within and through improvements of a number of areas and it was driven by the powerful underlying business. Our solid financial results show just how robust our Danfoss business is and that our Core & Clear strategy is working. It is satisfactory that we have managed to adapt and deliver such strong results, considering the low-growth global market,” says Danfoss President & CEO Niels B. Christiansen.
Adjusted for the effects of exchange rate fluctuations and extraordinary non-recurring costs related to among other things the acquisition of Sauer-Danfoss Inc., net sales were up 2%, and earnings grew by 4%. Also, the Group raised the level of innovation investment to more than DKK 1.4bn (EUR 182m), and launched a historically large number of new products onto the market.
The power electronics business and the district heating business performed especially strong all year, as well as Danfoss Power Solutions who have delivered strong performance within advanced mobile hydraulics. As a result of the Group’s targeted efforts to expand in global growth economies, the BRIC countries accounted for a record-high proportion of 22% of the Group consolidated sales at the end of 2013. Both Russia and Brazil reported double-digit growth rates all year, and also in China, the Group’s growth reached an acceptable level. Overall, the growth achieved on emerging markets offset the decline on the traditional markets of the United States and Europe, both of which remained weak growth environments.
“Danfoss is well prepared for the challenges of the future, and we are ready for the next phase of our strategy. We intend to invest in areas such as branding, marketing and sales, and we intend to invest in new growth pockets, for example as we are already doing in Turkey. Our plans to create a strong alliance with German company SMA within the field of solar energy also proves that we are ready to utilize our financial strength in order to position our core businesses as a number 1 or 2 in the markets where we operate,” says Niels B. Christiansen.
Danfoss expects the moderate global economic growth and low visibility of 2013 to continue in 2014, and net sales for 2014 to show moderate growth in local currency terms. The operating profit for 2014 is expected to rise in line with net sales.
2013 Financial highlights
•Net sales remained strong at DKK 33.6bn (EUR 4.509bn) against DKK 34.0bn (EUR 4.569bn) in 2012. Adjusted for the effects of exchange rate fluctuations, net sales were up by 2%.
•The Group also improved the profit. The operating profit before other operating income and expenses was DKK 3.9bn (EUR 519m) against DKK 3.7bn (EUR 501m) in 2012, an improvement of 4%.
•Danfoss continues to improve the financial freedom of action. The free cash flow of DKK 3.5bn (EUR 473m) is record-high.
2013 Core & Clear status
•Productivity improved substantially, as have the Group’s on-time delivery performance and the quality of the products.
•Danfoss spent DKK 113m more on innovation, totaling more than DKK 1.4bn (EUR 182m).
•Customer satisfaction improved in 2013 for the third straight year.
•A new employee engagement top level, with a score of 78 compared to 67 in 2007 (on a scale from 1 to 100).
For more information:
Danfoss Media Relations, tel.: +45 7020 4488