Danfoss had a really good year in 2013, once again delivering solid results. The group strengthened the business during the year and is poised for growth. By making progress in terms of both financial results and strategic initiatives, the company fulfilled the expectations for 2013, just as it did in 2011 and 2012, and the free cash flow, DKK 3.5 billion (EUR 473 million), is the highest-ever in the group’s history.
Danfoss had a really good year in 2013, once again delivering solid results. The group strengthened the business during the year and is poised for growth. By making progress in terms of both financial results and strategic initiatives, the company fulfilled the expectations for 2013, just as it did in 2011 and 2012, and the free cash flow, DKK 3.5 billion (EUR 473 million), is the highest-ever in the group’s history.
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 two per cent, and earnings grew by four per cent. Also, the group raised the level of innovation investment to more than DKK 1.4 billion (EUR 182 million), and launched a historically large number of new products onto the market.
The power electronics business and the district heating business were especially strong during the year, as well as Danfoss Power Solutions that put up a 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 per cent of the group consolidated sales at the end of 2013. Both Russia and Brazil reported double-digit growth rates all through the year. 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 US 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, as well as in new growth pockets as, for example, 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,” adds Mr. Christiansen.
Danfoss expects the moderate global economic growth and low visibility of 2013 to continue in 2014, and net sales for the year to show moderate growth in local currency terms. The operating profit for 2014 is expected to rise in line with net sales.
“The progress was achieved 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 how successfully its 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.”
– Niels B. Christiansen, Danfoss President & CEO