Annual Report 2016

  • A strong 2016 performance allowed for further investments in digitalization and strategic growth initiatives led to higher sales and improved earnings.

    “We keep strengthening our businesses and investing in innovation to offer customers improved value-added products. In the long-term perspective, the key to driving future growth in the Danfoss Group lies in our digital transformation”, former President & CEO Niels B. Christiansen says.

    Watch former President & CEO Niels Bjørn Christiansen, when he tells about how Danfoss is driving profitable growth

  • Key highlights

    Improved sales

    The underlying growth in local currency was 6% (2015: 5%), leading to a DKK 1,216m increase in net sales to DKK 39,247m (2015: DKK 38,031m). All business segments contributed to obtaining local currency growth.

    Earnings up

    Operating profit (EBIT) improved 4% to DKK 4,262m (2015: DKK 4,097m), leading to an EBIT margin of 10.9% (2015: 10.8%). Profit before tax improved 5% to DKK 3,938m (2015: DKK 3,741m), leading to net profit of DKK 2,935m (2015: DKK 2,597m), up 13% on last year.

    Strong cash flow used for acquisitions

    The cash flow before mergers and acquisitions was maintained at a high level of DKK 3,416m (2015: DKK 3,397m), driven by a strong cash generation across the Group. Free cash flow ended at DKK 1,485m (2015: DKK 3,048m), mainly affected by the acquisitions.

    Net interest-bearing debt improved

    At December 31, 2016, the net interest-bearing debt stood at DKK 9,548m (2015: DKK 9,640m), leading to a net interest-bearing debt to EBITDA ratio of 1.6 (2015: 1.6).

    Growing innovation spend utilized for digitalization

    The research and development spend grew 2% to DKK 1,645m (2015: DKK 1,607m), corresponding to 4.2% (2015: 4.2%) of sales. The innovation activities were concentrated around digitalization of the portfolio and on developing energy-efficient and value-added solutions in the core business segments.

    Number of employees up

    The Danfoss Group had 25,292 (2015: 23,420) employees at year-end. The increase was mainly due to the acquisitions, where Sondex Holding A/S contributed with around 1,100 employees and Propulsys, Inc., the parent company of White Drive Products Group, 600 employees worldwide.

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