Exhibit 99.1

MARCH 1, 2006

PRESS RELEASE

SAUER-DANFOSS INC. REPORTS FOURTH QUARTER 2005 RESULTS AND ANNOUNCES INCREASED QUARTERLY DIVIDEND

• Record Sales and Strong Cash Flow

• Increased Performance Over Prior Year Results in Highest Annual Earnings Since 1998

• Board Declares Cash Dividend of $0.14 per share, a 17% Increase

CHICAGO, Illinois, USA, March 1, 2006—Sauer-Danfoss Inc. (NYSE: SHS) today announced its financial results for the fourth quarter and year ended December 31, 2005.

FOURTH QUARTER REVIEW

Substantial Improvement in Fourth Quarter Results Over Prior Year

The Company reported net income for the fourth quarter of $4.1 million, or $0.08 per share, compared to a net loss for the fourth quarter 2004 of $7.2 million, or $0.15 per share. Fourth quarter 2005 earnings were favorably impacted by a reduction in Sarbanes-Oxley compliance costs ($4.1 million), long-term incentive plan costs ($1.9 million), and a change in currency gains/losses ($4.0 million), totaling $10.0 million, or $0.14 per share. In addition, fourth quarter 2005 earnings include income tax benefits of $3.8 million, or $0.08 per share, primarily related to prior years’ operating loss tax benefits not previously recognized. Fourth quarter 2005 results were negatively impacted by an increase in the cost of implementing the common company-wide business system of $2.2 million, or $0.03 per share, compared to fourth quarter 2004.

“We are pleased with our fourth quarter results,” said David Anderson, President and Chief Executive Officer. “We reduced our Sarbanes-Oxley compliance costs significantly from last year, as expected. More importantly, we improved our core operating performance, in what continues to be a seasonally challenging fourth quarter, to a level above break-even for the first time since 2000. In addition, during the quarter we successfully completed the implementation of our company-wide business system at our largest site which is located in Nordborg, Denmark. This marks the sixth successful implementation,” continued Anderson.

Executive Office: 250 Parkway Drive, Suite 270, Lincolnshire, IL 60069

Sales Continue at Record Level

Net sales for the fourth quarter increased 2 percent to $345.1 million, compared to sales for the fourth quarter 2004 of $339.3 million. Excluding the impact of currency translation rate changes, sales increased 7 percent over the prior year. Sales increased 6 percent in the Americas and, excluding the impact of currency fluctuations, were up 6 percent in Europe and 16 percent in Asia-Pacific.

All operating segments contributed to the sales increase year over year, excluding the impact of currency. Controls sales rose 10 percent, followed by Propel sales, which increased 9 percent, and sales of Work Function products, which were 1 percent higher than in the same quarter in 2004.

Anderson commented, “Our sales growth, while still strong at 7 percent, is in line with the lower growth we reported last quarter. Like last quarter, growth was impacted by the weak U.S. agricultural and turf care markets, offset by the strong road building, construction, and material handling markets.”

Backlog Strong Going into 2006

Orders received for the fourth quarter 2005 were $370.9 million, an increase of 5 percent from the same period last year, excluding the impact of currency exchange rate fluctuations.

Total backlog at the end of the year 2005 was $487.2 million, up 13 percent from the end of 2004, excluding currency impact.

Anderson continued, “While our orders for the quarter were up modestly over prior year, our backlog, at $487 million, is strong, and supports further growth as we move into 2006.”

TWELVE MONTH REVIEW

Full Year Sales Mark Another Record Year

Net sales for the twelve months were $1.55 billion, an increase of 10 percent over sales of $1.40 billion for 2004, with little impact of currency fluctuations.

Increased Earnings Over Prior Year

Net income for full year 2005 was $38.7 million, or $0.81 per share, compared to last year’s net income of $33.2 million, or $0.70 per share. Earnings for 2005 were negatively impacted by an increase in the cost of implementing the company-wide business system compared to the prior year of $15.7 million, or $0.21 per share. Full year 2005 earnings include income tax benefits of $4.4 million or $0.09 per share, primarily related to prior years’ operating loss tax benefits not previously recognized.

Strong Cash Flow

Full year 2005 cash flow from operations was $116.3 million, approaching the record $124.8 million generated in 2004. Capital expenditures for the twelve-month period were $95.2 million, compared to $79.3 million for 2004, reflecting capacity expansion to support sales growth. The Company’s debt to total capital ratio, or leverage ratio, was 40 percent at the end of the year, an improvement from 42 percent at the end of 2004.

Board Declares Increased Quarterly Dividend

The board of directors approved an increase of the Company’s quarterly cash dividend to $0.14 per share, an increase of 17 percent over the Company’s last dividend of $0.12 per share. The dividend, for the quarter ended March 31, 2006, is payable on April 14, 2006, to stockholders of record as of March 31, 2006.

Anderson stated, “We are pleased that our strong cash flow has allowed us to again increase our quarterly dividend. This increase reflects the board’s confidence in the future of our Company and our continued commitment to deliver value to our shareholders.”

This will be the 32nd consecutive quarterly dividend paid by the Company since its initial public offering in May of 1998.

Intended Closing of LaSalle, Illinois, Plant

The Company announced today its intention to close its LaSalle, Illinois, plant by the end of 2006. The plant, which employs approximately 150 people, is primarily a machining facility for the Propel Division. The majority of plant operations will be

outsourced to external suppliers. The total cost of closing the plant is estimated to be between $8.0 million and $10.0 million, or $0.11 to $0.14 per share.

OUTLOOK

Markets Will Remain Strong, but Growth Will Moderate

Anderson stated, “We expect that the U.S. markets will continue to grow, but at a more moderate rate compared to the strong growth experienced in 2005, while our European markets are showing signs of strengthening from 2005 levels. We also expect our markets in Asia-Pacific to contribute to our growth again, in line with the stronger sales we have seen in the last two quarters.

“During 2006 we will continue with the rollout of our company-wide business system, with our largest implementation taking place in seven of our North American plants in the second quarter of this year,” continued Anderson. “We will also continue our drive to reduce our complexity and overall cost structure. This will be accomplished through a combination of actions being considered that would occur over the next eighteen months, including the phase-out and divestiture of underperforming products in combination with the consolidation of select services and facilities. The announced closing of the LaSalle plant is the first step in these actions.

“We will incur costs in the coming year as we continue our business system implementation and further our efforts to reduce the complexity of our business. These efforts will provide for increased future earnings while enabling us to better serve our customers. If we exclude these costs, we expect our underlying earnings to show substantial improvement as we are currently seeing the benefits of the actions we have taken over the past two years,” concluded Anderson.

2006 Expectations for the Full Year Are:

• Sales up 5 to 8 percent

• Earnings per share of $0.90 to $1.05 (after deducting restructuring and implementation costs)

• Restructuring costs of $0.25 to $0.30 per share

• Implementation costs of company-wide business system of $0.17 to $0.19 per share ($0.23 per share for 2005)

• Capital expenditures of 5 - 6 percent of sales

Sauer-Danfoss Inc. is a worldwide leader in the design, manufacture, and sale of engineered hydraulic and electronic systems and components, for use primarily in applications of mobile equipment. Sauer-Danfoss, with approximately 8,500 employees worldwide and revenue of more than $1.5 billion, has sales, manufacturing, and engineering capabilities in Europe, the Americas, and the Asia-Pacific region. The Company’s executive offices are located near Chicago in Lincolnshire, Illinois. More details online at www.sauer-danfoss.com.

This press release contains certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. All statements regarding future performance, growth, sales and earnings projections, conditions or developments are forward-looking statements. Words such as “anticipates,” “in the opinion,” “believes,” “intends,” “expects,” “may,” “will,” “should,” “could,” “plans,” “forecasts,” “estimates,” “predicts,” “projects,” “potential,” “continue,” and similar expressions may be intended to identify forward-looking statements.

Actual future results may differ materially from those described in the forward-looking statements due to a variety of factors, including the fact that the U.S. economy generally, and the construction, road building, and material handling markets specifically, continued to improve in 2005. It is difficult to determine if past experience is a good guide to the future. While the economy in the U.S. has generally been improving, it remains unstable due to the uncertainty surrounding continued job creation, interest rates, crude oil prices, and the U.S.

government’s stance on the exchange rate of the dollar. The economic situation in Europe has not necessarily followed the improvement that occurred in the U.S., and the economy in China was slow in 2005 due to government intervention, however there are signs that the Chinese economy will improve in 2006. Any downturn in the Company’s business segments could adversely affect the Company’s revenues and results of operations. Other factors affecting forward-looking statements include, but are not limited to, the following: specific economic conditions in the agriculture, construction, road building, turf care, material handling and specialty vehicle markets and the impact of such conditions on the Company’s customers in such markets; the cyclical nature of some of the Company’s businesses; the ability of the Company to win new programs and maintain existing programs with its original equipment manufacturer (OEM) customers; the highly competitive nature of the markets for the Company’s products as well as pricing pressures that may result from such competitive conditions; the continued operation and viability of the Company’s significant customers; the Company’s execution of internal performance plans; difficulties or delays in manufacturing; cost-reduction and productivity efforts; competing technologies and difficulties entering new markets, both domestic and foreign; changes in the Company’s product mix; future levels of indebtedness and capital spending; claims, including, without limitation, warranty claims, field retrofit claims, product liability claims, charges or dispute resolutions; ability of suppliers to provide materials as needed and the Company’s ability to recover any price increases for materials in product pricing; the Company’s ability to attract and retain key technical and other personnel; labor relations; the failure of customers to make timely payment; any inadequacy of the Company’s intellectual property protection or the potential for third-party claims of infringement; global economic factors, including currency exchange rates; general economic conditions, including interest rates, the rate of inflation, and commercial and consumer confidence; energy prices; governmental laws and regulations affecting operations, including tax obligations; changes in accounting standards; worldwide political stability; the effects of terrorist activities and resulting political or economic instability; natural catastrophes; U.S. military action overseas; and the effect of acquisitions, divestitures, restructurings, product withdrawals, and other unusual events.

The Company cautions the reader that these lists of cautionary statements and risk factors may not be exhaustive. The Company expressly disclaims any obligation or undertaking to release publicly any updates or changes to these forward-looking statements that may be made to reflect any future events or circumstances.

For further information please contact:

Sauer-Danfoss Inc. — Investor Relations

Kenneth D. McCuskey	Sauer-Danfoss Inc.	Phone:	(515) 239-6364
Vice President and	2800 East 13th Street	Fax:	(515) 239-6443
Chief Accounting Officer	Ames, Iowa, USA, 50010	kmccuskey@sauer-danfoss.com

John N. Langrick	Sauer-Danfoss Inc.	Phone:	+49-4321-871-190
Director of Finance Europe	Krokamp 35	Fax:	+49-4321-871-121
	D-24539 Neumünster	jlangrick@sauer-danfoss.com

Internet: http://www.sauer-danfoss.com

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

	Three Months Ended				Year Ended
	December 31,		December 31,		December 31,		December 31,
	2005		2004		2005		2004
	(Dollars in thousands except per share data)
Net sales	345,103		339,259		1,547,816		1,404,159
Cost of sales	271,925		264,850		1,190,070		1,058,075
Gross profit	73,178		74,409		357,746		346,084
Research and development	13,125		13,979		58,673		51,913
Selling, general and administrative	53,596		59,555		218,521		202,261
Total operating expenses	66,721		73,534		277,194		254,174
Income (loss) from operations	6,457		875		80,552		91,910
Nonoperating income (expenses):
Interest expense, net	(3,295	)	(4,358	)	(15,653	)	(17,415	)
Minority interest in income of consolidated companies	(3,242	)	(4,106	)	(18,657	)	(21,522	)
Other, net	419		(3,947	)	3,465		(4,052	)
Income (loss) before income taxes	339		(11,536	)	49,707		48,921
Income taxes	3,712		4,348		(10,992	)	(15,735	)
Net income (loss)	4,051		(7,188	)	38,715		33,186
Net income (loss) per share:
Basic net income (loss) per common share	0.09		(0.15	)	0.82		0.70
Diluted net income (loss) per common share	0.08		(0.15	)	0.81		0.70
Weighted average shares outstanding
Basic	47,458		47,412		47,456		47,409
Diluted	47,945		47,664		47,795		47,510
Cash dividends declared per common share	0.12		0.10		0.48		0.34

BUSINESS SEGMENT INFORMATION

	Three Months Ended				Year Ended
	December 31,		December 31,		December 31,		December 31,
	2005		2004		2005		2004
	(Dollars in thousands)
Net sales
Propel	165,913		158,050		751,134		656,482
Work Function	92,726		98,211		430,668		412,046
Controls	86,464		82,998		366,014		335,631
Total	345,103		339,259		1,547,816		1,404,159
Segment Income (Loss)
Propel	16,346		14,599		106,376		89,992
Work Function	(3,208	)	105		6,345		20,840
Controls	6,086		1,357		31,436		24,680
Global Services and Other Expenses, net	(12,348	)	(19,133	)	(60,140	)	(47,654	)
Total	6,876		(3,072	)	84,017		87,858

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended
	December 31,		December 31,
	2005		2004
	(Dollars in thousands)
Cash flows from operating activities:
Net income	38,715		33,186
Depreciation and amortization	88,322		82,363
Minority interest in income of consolidated companies	18,657		21,522
Net change in receivables, inventories, and payables	(42,473	)	(32,362	)
Other, net	13,091		20,103
Net cash provided by operating activities	116,312		124,812
Cash flows from investing activities:
Purchases of property, plant and equipment	(95,247	)	(79,257	)
Payments for acquisitions and license rights, net of cash acquired	—		(5,656	)
Proceeds from sales of property, plant and equipment	1,942		9,367
Net cash used in investing activities	(93,305	)	(75,546	)
Cash flows from financing activities:
Net borrowings (repayments) on notes payable and debt instruments	9,180		(23,913	)
Payments for debt financing costs	(898	)	—
Cash dividends	(21,843	)	(14,706	)
Distribution to minority interest partners	(6,570	)	(14,711	)
Net cash used in financing activities	(20,131	)	(53,330	)
Effect of exchange rate changes	45		251
Net increase (decrease) in cash and cash equivalents	2,921		(3,813	)
Cash and cash equivalents at beginning of year	11,273		15,086
Cash and cash equivalents at the end of the year	14,194		11,273

CONDENSED CONSOLIDATED BALANCE SHEETS

	December 31,		December 31,
(Dollars in thousands, except employee data)	2005		2004
ASSETS
Current assets:
Cash and cash equivalents	14,194		11,273
Accounts receivable, net	220,752		233,146
Inventories	245,383		241,562
Other current assets	31,891		40,131
Total current assets	512,220		526,112
Property, plant and equipment, net	450,426		478,543
Other assets	208,267		206,926
Total assets	1,170,913		1,211,581

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Notes payable and bank overdrafts	28,275		23,609
Long-term debt due within one year	168,548		244,987
Accounts payable	107,090		130,071
Other accrued liabilities	107,394		99,320
Total current liabilities	411,307		497,987
Long-term debt	135,452		76,496
Long-term pension liability	49,590		57,148
Deferred income taxes	44,277		48,454
Other liabilities	39,925		47,494
Minority interest in net assets of consolidated companies	51,440		39,927
Stockholders’ equity	438,922		444,075
Total liabilities and stockholders’ equity	1,170,913		1,211,581

Number of employees at end of year	8,614		8,275
Debt to total capital ratio (1)	40	%	42	%