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Improved profitability provides record result

19 March 2007

"2006 was a really good year for Danfoss and we end the year with a very reasonable result. Focusing on our core business in recent years has given us a strengthened and more profitable business which is also reflected in the result. The good result means that we are within realistic reach of the ambitious targets of Danfoss reaching net sales of 24 billion DKK and an EBIT margin of 10% by 2008.”

Jørgen M. Clausen, President and CEO, Danfoss A/S

Highlights from 2006:

  • Net sales increased by 18% to 19.4bn DKK from 16.4bn DKK in the same period last year. Growth was 14%, when converted at last year’s level of exchange rates and adjusted for acquisitions and divestments, compared to 5% in 2005
  • Operating profit (EBIT) increased to 1,601 million DKK from 947 million DKK
  • Profit before tax increased by 39% to 1,402 million DKK
  • The number of employees increased to 20,612 from 18,168 at the same time in 2005

Expectations for 2007:

  • The net sales are expected to be between 21 and 22 billion DKK. Compared to 2006, this will equal growth of between 8% and 13%.
  • The operating profit (EBIT) is expected to be between 1.6 and 1.8 billion DKK, of which acquired companies are expected to contribute with 50 million DKK. The full impact on the result of the companies acquired in 2006 is not expected to show until the 2008 profits. The EBIT margin is expected to be around 8%.
  • Any impact of future acquisitions and divestments has not been included in the expectations.

The Annual Report 2006 is available at www.Danfoss.com on March 19, 2007, at 12:00 noon.

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