Danfoss continued to benefit from strong demand in North America, while other parts of the world saw more volatility – including China that saw subdued demand, which was however partly offset by good momentum in Europe and India.On the back of continued high investment levels, earnings (EBIT) amounted to EUR 160m, which is on par with last year’s strong first quarter.The EBIT margin was 10.3%.
”We have had a good start to the year.As expected, the growth rates in some of the industries we serve have lowered since the fourth quarter last year.Our energy-efficient and innovative solutions have never been more relevant; Therefore, we continue to strengthen our core businesses and increase our investments in innovation.Furthermore, we continue our high investments in creating a strong platform within electrification and digitalization.This is our way of getting ahead and fuel future growth,” says Kim Fausing, President and CEO.
In the first quarter, Danfoss increased its investments in innovation by 11% to EUR 68m, equal to 4.4% of sales. Danfoss also entered into a merger agreement with the American company UQM Technologies, Inc. – a technology leader within propulsion systems for electric and hybrid buses, trucks, off-highway vehicles and marine vessels. Furthermore, in April, Danfoss expanded its ownership share in the Finnish company Leanheat – a leading expert within artificial intelligence making buildings and district heating networks energy-efficient and smart.
“We see a growing demand for more sustainable solutions. As a leading technology partner, we add new cutting-edge technology to our already broad range of solutions to enable our customers to build competitive positions. One example is within off-highway and marine, where we through targeted acquisitions strengthen our electric offering. Leanheat is a strong case of adding competence within software and artificial intelligence to gain a stronger foothold on the market via more energy-efficient and smart solutions for buildings and heating networks,” states Kim Fausing.
Key figures from the first quarter of 2019:
- Sales grew by 6% to EUR 1,563m (Q1 2018: 1,474m), corresponding to 3% growth in local currency.
- Operating profit (EBIT) amounted to EUR 160m (Q1 2018: 166m). The EBIT margin was 10.3% (Q1 2018: 11.3%).
- Net profit for the period was EUR 110m (Q1 2018: 113m).
- Innovation spend increased 11% to EUR 68m (Q1 2018: 61m), corresponding to 4.4% of sales (Q1 2018: 4.1%).
Outlook for 2019 confirmed
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.