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Danfoss A/S: Half-year report 2009

31 August 2009
“The first half-year of 2009 turned out to be just as tricky as we had been expecting. We are largely on a par with the implemented plans, so irrespective of the fact that we present a considerable deficit for the half-year we believe that we are on the right path, in spite of the severe global crisis. We have achieved this position not least because we have managed to substantially improve our cash flow which is an essential part of our plan to begin to reduce our debt. In addition to weakened sales caused by the crisis, the biggest negative impact on the Group – as announced mid-summer to the New York Stock Exchange – was that Sauer-Danfoss reported a loss which was larger than had been anticipated.
The restructuring activities which have already been implemented to counter the effects of the global crisis and the initiatives which are currently being put into action will not begin to show their impact until 2010. Since the crisis in our view is likely to continue for some time yet, we intend to focus on our long-term competitiveness.”

Niels B. Christiansen, President and CEO, Danfoss A/S

Highlights from the first half-year of 2009:

The comparison figures are affected by the fact that Sauer-Danfoss is not included in the 2008 figures for the first half-year, whereas Sauer-Danfoss is fully consolidated from July 1, 2008.

  • Net sales were 12.5bn DKK, which equals growth of 10%. When adjusted for acquisitions, divestments and foreign currency translations, growth fell by 20%, compared to growth of 6% in the year before.
  • The profit before other income and expenses showed a loss of 660m DKK compared to a profit of 693m DKK in the first half-year of 2008. The profit before other operating income and expenses for Danfoss (excl. Sauer-Danfoss) is -305m DKK.
  • The operating profit (EBIT) showed a loss of 1,250m DKK compared to a profit of 697m DKK in the year before. The operating profit (EBIT) for Danfoss (excl. Sauer-Danfoss) is -767m DKK compared to 697m DKK in 2008.
  • The profit before tax was a deficit of 1,457m DKK, and the profit after tax was a loss of 1,032m DKK.
  • The free cash flow was -126m DKK compare to -1,233m DKK in the year before.

Expectations for 2009:
The major uncertainty, reluctance and nervousness continuing to characterise the markets mean that Danfoss’ expectations for 2009 are generally in line with this considerable uncertainty. In light of the downward adjustment at Sauer-Danfoss, the expectations for 2009 are:

  • Danfoss now expects net sales to be between 24bn DKK and 25bn DKK.
  • EBIT is expected to be between -1.6bn DKK and -1.9bn DKK. For Danfoss (excl. Sauer-Danfoss), EBIT is expected to be between -0.4bn DKK and -0.8bn DKK.
  • The result before tax is expected to be between -2.0bn DKK and -2.3bn DKK.

Please address any enquiries to:
Niels B. Christiansen, President and CEO, tel.: +45 74 88 75 50
Ole M. Daugbjerg, Chief Reputation Officer, tel.: +45 74 88 20 08

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