In the first nine months of this year, Danfoss net sales grew by 12 percent to reach DKK 32.5 billion (EUR 4.4 billion, US $5.18 billion). At the same time, continuing improvements in operations contributed to lift the operating profit before other income and expenses by 14 percent to DKK 4.0 billion (EUR 536 million, US $630.44 million), while the net result reached DKK 2.4 billion (EUR 326 million, US $383.44 million).
Operating profit (EBIT) increased by 6 percent to reach DKK 3.7 billion (EUR 493 million, US $579.87 million) against DKK 3.5 billion (EUR 465 million, US $546.93) in the prior-year period, leading to an EBIT margin of 11.3 percent compared to 11.9 percent year-over-year. As expected, the cash generation from operations was lower for the first nine months, mainly due to the high growth driving higher net working capital.
“We are leveraging the growth opportunities, which occur in the market, “ said Danfoss President and CEO Kim Fausing. “We do that as a result of the recent years’ targeted work with creating market-leading positions through investments in growth, acquisition of companies and new technologies. At the same time, we make massive investments in digital opportunities and thereby smarter solutions and increased value for our customers.”
Growth in the first nine months of 2017 is broadly based across Danfoss’ markets, but China, in particular, is standing out with high growth rates. Even though growth rates are lower in Europe and the United States, these more mature markets are also contributing significantly to the improved top line. Progress is driven by all of Danfoss’ four business segments, but Danfoss’ most cyclical business, the mobile hydraulics business Danfoss Power Solutions, has seen a significant upswing in activity levels over the recent quarters.
“Currently, our core businesses are growing faster than the markets and the overall global economy,” Fausing noted. “One reason is that a large part of our technologies and solutions are spot on within some of the major development trends driving the global growth, such as electrification and urbanization. We continue to invest into these trends, most recently with the acquisition of Visedo, a world-leading expert in electric solutions, based in Finland. Moreover, energy efficiency has moved up on the international climate agenda, and the current, general investment level, and the expansion of infrastructure, in particular, is relatively high.”
The company expects to maintain or expand its market share in 2017, while maintaining the profitability measured as margin at 2016 level following significant investments in digitalization.