Annual Report 2008 Financial Information
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MAKING MODERN LIVING POSSIBLE Annual Report 2008 FINANCIAL INFORMATION Danfoss is one of Denmark’s largest industrial companies. Danfoss is a global Group which plays a leading role within research, development, production, sales and service of mech anical and electronic components and solutions for a large range of sectors. Danfoss’ activities are divided into three main business areas, Danfoss also has a controlling share in Sauer-Danfoss. Danfoss Refrigeration & Air Conditioning Division: The Division supplies products and services worldwide within refrigeration and air-conditioning. Danfoss Heating Division: The Division is a worldwide supplier of a range of components and services within heating and water. Danfoss Motion Controls Division: The Division supplies products and services within frequency converters, gearmotor and power electronics for industries globally. Sauer-Danfoss Inc.: Danfoss owns 55.4% of shares in Sauer-Danfoss Inc., one of the world’s leading producers and suppliers of mobile hydraulics and electronic components and inte- grated solutions for off-road vehicles in the following segments: Agriculture, Construction, Material handling, Road building and Specialty applications. Annual Report 2008 Organisation 2 The Danfoss Group Executive Committee Kim Fausing Niels B. Christiansen Frederik Lotz Executive Vice President & COO President and CEO Executive Vice President & CFO Corporate Danfoss Functions Ventures Danfoss Refrigeration & Danfoss Heating Division Danfoss Motion Controls Sauer-Danfoss Air Conditioning Division Division Owner share 55.4% Kjeld Stærk Nis Storgaard Troels Petersen Sven Ruder President President President President Danfoss Automatic Controls Danfoss Comfort Controls Danfoss Drives Propel Danfoss Compressors Danfoss District Heating Danfoss Gearmotors Work Function Danfoss Electronic Danfoss Burner Components Danfoss Silicon Power Controls Controls & Sensors Danfoss Floor Heating Danfoss Solar Inverters Danfoss Heat Pumps Danfoss Water Controls Danfoss Services Division Divisional Systems Value Streams Operations Roland Fritsch, Senior Vice President and Administration Danfoss A/S DK-6430 Nordborg CVR No.: 20 16 57 15 Tlf.: +45 74 88 22 22 Fax: +45 74 49 09 49 E-mail: [email protected] www.danfoss.com Contents The Danfoss Group 3 Management report Financial highlights (DKK) . 4 2008 Financial highlights (EUR) . 5 • Management Report for the Danfoss Group . 10 Relationship with Shareholders . 24 Annual Report Events after the end of the accounting year . 25 Expectations for 2009 . 26 Danfoss Divisions . 28 Sauer-Danfoss Inc. 48 Group projects . 53 Danfoss Global Services . 54 • Management report for Danfoss A/S . 55 • Statement . .56 Management statement . 56 Audit report . 57 Accounts • Accounts . 56 • Notes, table of contents . 64 Danfoss Group Companies • Danfoss Group Companies . 116 SUPPLEMENTARY REPORTS • Introduction to Corporate Citizenship . 121 • Human rights . 123 • Society . 131 • Labour practices . 134 • Environment . 145 • Product responsibility . 156 • Accounting principles, CSR . 159 • Accounting principles, environment . 162 • Audit endorsement, environment . 164 • GRI INDICATOR . 172 FINANCIAL INFORMATION FinancialKONCERN highlights HOVED- OG NØGLETAL Financialmill DKKmio. DKK highlights (DKK) mill DKK 20042004 2005 2005 2006 2006 2007 2007 2008* 2008* 2008** 2008** PROFITRESULTATOPGØRELSE AND LOSS ACCOUNT Net salesNettoomsætning 16,34516.345 16,416 16.416 19,428 19.428 22,196 22.196 22,786 22.786 27,127 27.127 OperatingResultat profit af added primær depreciations, drift med tillæg amortisations af af- og and impairmentsnedskrivninger (EBITDA) (EBITDA) 1,7461.746 1,699 1.699 2,425 2.425 2,576 2.576 2,104 2.104 2,099 2.099 EBIT excl.EBIT other ekskl. income, andre driftsindtægteretc. mv. 907907 914 914 1,411 1.411 1,634 1.634 1,146 1.146 687 687 AdjustedJusteret EBIT EBIT 1,1281.128 952 952 1,632 1.632 1,687 1.687 1,108 1.108 891 891 OperatingResultat profit af (EBIT) primær drift (EBIT) 1,0721.072 947 947 1,601 1.601 1,616 1.616 1,005 1.005 410 410 IncomeAndel from associatesaf resultat andefter joint skat venturesi associerede/joint after tax ventures 9494 82 82 91 91 210 210 44 44 FinancialFinansielle items, net poster, netto -235-235 -22 -22 -290 -290 -448 -448 -579 -579 Profit beforeResultat tax før skat 931931 1,007 1.007 1,402 1.402 1,378 1.378 -125 -125 Annual Report Net profitÅrets resultat 699699 740 740 1,038 1.038 1,063 1.063 -157 -157 BALANCEBALANCE SHEET Total non-currentLangfristede assets aktiver i alt 2008 6,4976.497 7,665 7.665 10,132 10.132 11,054 11.054 21,237 21.237 Total assetsAktiver i alt 13,10113.101 14,562 14.562 18,534 18.534 19,857 19.857 32,928 32.928 Equity Egenkapital i alt 7,6537.653 8,485 8.485 9,035 9.035 9,744 9.744 11,867 11.867 4 Net interest-bearingNetto rentebærende debt gæld 167167 825 825 2,866 2.866 3,737 3.737 9,776 9.776 Net assetsNettoaktiver 7,0037.003 8,373 8.373 10,736 10.736 12,227 12.227 11,511 11.511 21,326 21.326 The Danfoss Group Capital Anlægsinvesteringerexpenditure 1,5071.507 1,867 1.867 3,401 3.401 1,931 1.931 1,856 1.856 12,614 12.614 CASH FLOWPENGESTRØMSOPGØRELSE STATEMENT Cash flowPengestrøm from operating fra driftsaktivitet activities 1,2321.232 1,192 1.192 1,321 1.321 1,016 1.016 926 926 1,428 1.428 Cash flowPengestrøm from investing fra investeringsaktivitet activities -951-951 -1,626 -1.626 -3,020 -3.020 -1,593 -1.593 -4,543 -4.543 hereof acquisitionheraf køb af of immaterielle intangible and og materielletangible fixed anlægsaktiver assets -1,289-1.289 -1,028 -1.028 -915 -915 -1,399 -1.399 -2,167 -2.167 hereof acquisitionheraf køb af of dattervirksomheder subsidiaries and activities og aktiviteter 355355 -504 -504 -1,936 -1.936 -310 -310 -2,383 -2.383 Free cashFrit flow cash before flow før M&A M&A -53-53 78 78 396 396 -423 -423 -850 -850 -639 -639 Free cashFrit flow cash flow 281281 -434 -434 -1,699 -1.699 -577 -577 -3,115 -3.115 Cash flowPengestrøm from financing fra finansieringsaktivitet activities -705-705 177 177 1,877 1.877 431 431 3,050 3.050 NUMBERANTAL OF EMPLOYEES MEDARBEJDERE NumberAntal of employees medarbejdere (headcount) 17,54317.543 18,168 18.168 20,612 20.612 22,323 22.323 22,133 22.133 31,717 31.717 KEY FIGURESNØGLETAL EBIT marginEBIT marginexcl. other ekskl. income, andre driftsindtægteretc. mv. 5.6%5,6% 5.6% 5,6% 7.3% 7,3% 7.4% 7,4% 5.0% 5,0% 2.5% 2,5% EBIT marginEBIT margin 6.6%6,6% 5.8% 5,8% 8.2% 8,2% 7.3% 7,3% 4.4% 4,4% 1.5% 1,5% AdjustedJusteret EBIT margin EBIT margin 6.9%6,9% 5.8% 5,8% 8.4% 8,4% 7.6% 7,6% 4.9% 4,9% 3.3% 3,3% EBITDA EBITDAmargin margin 10.7%10,7% 10.4% 10,4% 12.5% 12,5% 11.6% 11,6% 9.2% 9,2% 7.7% 7,7% RONA RONA 15.6%15,6% 12.3% 12,3% 16.8% 16,8% 14.1% 14,1% 2.4% 2,4% Return onEgenkapitalens equity forrentning 9.4%9,4% 9.2% 9,2% 11.9% 11,9% 11.4% 11,4% -0.9% -0,9% Equity ratioEgenkapitalandel (soliditetsgrad) 58.4%58,4% 58.2% 58,2% 48.6% 48,6% 49.0% 49,0% 36.0% 36,0% LeverageGæld/egenkapital ratio (finansiel gearing) 2.2%2,2% 9.7% 9,7% 31.8% 31,8% 38.4% 38,4% 82.4% 82,4% DividendUdbytte ratio 15.0%15,0% 18.0% 18,0% 20.0% 20,0% 25.0% 25,0% 20.0% 20,0% 20.0% 20,0% *Financial*Hoved- figures og are nøgletallene exclusive of er the eksklusive Sauer-Danfoss Sauer-Danfoss Inc. acquisition Inc. akkvisitionen and are therefore og er derfor comparable sammenlignelige with previous med years. tidligere år. DEFINITIONS EBIT margin Equity ratio **Financial** Hoved- figures og include nøgletallene the Sauer-Danfoss er inklusive Inc.Sauer-Danfoss acquisitionOperating Inc.and Profitakkvisitionen are therefore as percentage og not er immediately derfor of Net ikke Sales. umiddelbart comparable sammenligneligeShareholders’with previous Equityyears med. as tidli percentagegere år. of Total RONA (Return On Net Assets) Liabilities and Shareholders’ Equity end of year. OperatingIn the caseOvennævnte Profit where (EBIT) the nøgletal Danish as percentage Associationer, i de tilfælde of average of Financial hvor nøgletallene AnalystEBITDA defines margin er defineret the above af Den ratios, Danske the ratiosFinansanalytikerforening, are computed according beregnet to th i eseoverens definitions.stemmelse hermed. Net Assets. Operating Profit added Depreciations, Net-interest bearing debt Net Assets is Total Assets deducted Investments Amortisations and Impairments as percentage of Net-interest bearing debt is recorded as debt in joint ventures and associates, Cash and cash Net Sales. including and excluding security deducted cash equivalents, Provisions and Non-interest bearing funds. debt. Adjusted EBIT margin Operating Profit added cost, Depreciations, Leverage ratio Return on Equity Amortisations and Impairment related to the Net interest-bearing debt as percentage of Net Profit as percentage of average Shareholders’ Purchase Price Allocation in connection with Shareholders’ Equity end of year. Equity. Business Combinations as percentage of sales. FINANCIAL INFORMATION FinancialFinancial highlights highlights Financialmill EURmill EUR highlights (EUR) mill EUR 20042004 2005 2005 2006 2006 2007 2007 2008* 2008* 2008** 2008** PROFITPROFIT AND LOSS AND ACCOUNT LOSS ACCOUNT Net salesNet sales 2,1972,197 2,203 2,203 2,605 2,605 2,979 2,979 3,056 3,056 3,638 3,638 OperatingOperating profit added profit addeddepr., amort. depr., amort.and impairments and impairments (EBITDA) (EBITDA) 235235 228 228 325 325 346 346 282 282 281 281 EBIT excl.EBIT other excl.