“As expected, we have managed to maintain the high performance level of 2011 throughout the first half-year in spite of the difficult market conditions, which have been set off by financial instability in Europe and the financial slowdown in China. The trends in China have had a negative impact on, not least, our hydraulics segment, whereas , our climate and energy solutions developed positively on the Russian, American and German markets, in particular.
During the last months of the half-year, we increased our profitability again as the previously implemented capacity adjustments began to take effect, as expected. Moreover, it is also positive to note that we have continued to improve our free cash flow in the underlying business over the course of the last part of the half-year.
Overall, the half-year result is satisfactory, and we affirm our outlook for 2012, whose second half continues to seem unpredictable and uncertain, and where the ability to quickly adapt to the changing global economy will continue to be crucial to the Group.”
Highlights from the first half-year 2012
- Net sales were DKK 17,222m against DKK 17,451m in the first half-year of 2011. Adjusted for divestitures and changes in exchange rates, net sales fell by 1%.
- Operating profit (EBIT) was DKK 1,812m compared to 2,490m DKK in the first half-year of 2011. The latter included, however, an extraordinary gain from divestitures of DKK 563m, Adjusted for this, the decrease was 6%.
- The free cash flow was DKK 664m at the end of the first half-year compared to DKK 751m in the year-earlier period, where divestitures and other M&A activities resulted in an extraordinary inflow of DKK 967m. Adjusted for this, the cash flow was improved by DKK 875m.
Outlook for 2012
Given the half-year result and a second half, which continues to seem unpredictable and volatile, Danfoss maintains its overall expectations for the year.
- 2012 net sales are expected to remain at the same level as 2011.
- 2012 operating profit is expected to remain at the same level as 2011.
The expectations do not include the impact of divestitures, discontinued activities or acquisitions.
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