Annual Report 2018 - Strong growth and increased investments in the future

Thursday, 28 February 2019

While delivering robust financial results, Danfoss continues to invest in new technologies to drive growth and customer relevance

 

A year of strong growth

In 2018, Danfoss delivered strong growth. Group sales grew by EUR 271m to EUR 6,098m – a 7% growth in local currency. The growth was strong in the major markets of North America, Europe and China and led to robust financial results with earnings (EBIT) of EUR 648m, resulting in an EBIT margin of 10.6%. Net profit improved by EUR 18m to EUR 463m. The momentum was broadly based across Danfoss, and Danfoss Power Solutions, in particular, delivered a very strong year.

"For the second year in a row, Danfoss has seen strong growth. We continue to win market share as we are reaping the fruits of our targeted work with strategic growth initiatives and increased investments in leading technologies. Furthermore, our solutions are relevant to several strong global megatrends, such as increased electrification, urbanization and solving climate-change challenges. These trends are driving a growing demand for smarter and more sustainable solutions, making Danfoss more relevant than ever before,” says Kim Fausing, President and CEO.

Significant investments in new technologies

Danfoss continued its significant investments in growth initiatives and digitalization to advance its connected, intelligent solutions. In 2018, Danfoss invested a record-high EUR 255m equal to 4.2% of sales into innovation. During the year, Danfoss also announced six acquisitions, which will contribute to strengthening the company’s core businesses, digital offerings and solutions for electrification.

“We are investing to offer innovative and competitive solutions that meet the needs of our customers. Currently, we see a clear pull for solutions to reduce energy consumption and emissions as well as ensuring efficiency and productivity gains. This is driving electrification to enable off-highway vehicles, vessels and cars to go hybrid or electric and the widespread use of digital technology to make infrastructure and buildings smart and more efficient,” says Kim Fausing.

He adds: “Furthermore, focus on implementing the Paris Agreement and the UN’s Sustainable Development Goals is increasing. This fits well into our business context, as we have a broad range of solutions with a short payback time, making it very good business for everyone. And of course, we also take our own medicine, and for more than ten years, we have reduced our CO2 footprint and made more efficient use of the energy used in our factories," says Kim Fausing.

Key figures from 2018:

  • Sales grew by 5% to EUR 6,098m (2017: 5,827m), corresponding to an 7% growth in local currency.
  • Operating profit (EBIT) amounted to EUR 648m (2017: 645m). The EBIT margin was 10.6% (2017: 11.1%).
  • Net profit improved by 4% to EUR 463m (2017: 445m).
  • Innovation spend increased 9% to EUR 255m (2017: 234m), corresponding to 4.2% of sales (2017: 4.0%).
  • Since 2007, Danfoss has reduced its energy consumption by 43% and CO2 emissions by 25%, mainly driven by energy-saving projects in the largest factories across the world.

Outlook 2019
For 2019, Danfoss expects to expand or maintain its market share, while increasing the profitability measured as margin compared with the 2018 level, following continued investments in digitalization and electrification.

Further information:
Danfoss Media Relations
Tel.: +45 70 20 44 88

Annual report 2018

Year in review

Read the full Annual report for 2018 and see all the key highlights.