With the half-year results, Danfoss continues to transform, and to deliver on its green growth strategy, Core & Clear 2025.
Danfoss continued to make significant investments in M&A, digital transformation, innovation and expanding capacity and regional footprint to offer customers and partners best-in-class solutions. The aim is to be the preferred technology partner and drive decarbonisation globally together with customers through energy efficiency, machine productivity, lower emissions, and electrification.
Sales grew 13 per cent compared to the first half last year, and organic growth was 8 per cent, with EBITA margin reaching 12.4 per cent. After continued high levels of strategic investments in innovation and new technology, EBITA increased 20 per cent to EUR 686m. Earnings were driven by the higher topline, M&A synergies, and unwinding of the disruptions in global supply chains.
“I would like to thank the entire Danfoss team for delivering robust half-year results. In particular, I would like to highlight our continued strong growth momentum in the Americas and India as well as in our Power Electronics and Drives segment,” said Kim Fausing, President & CEO of Danfoss.
On March 1, Danfoss closed the acquisition of the German compressor manufacturer BOCK GmbH, which is a global technology leader in semi-hermetic compressors for natural refrigerants. With the rising demand for climate-friendly technologies in commercial refrigeration systems, Danfoss has invested in this area to broaden its portfolio of compressors. Integration of Eaton’s hydraulics business and Semikron Danfoss are also progressing well.
Danfoss also made another step towards the target of carbon neutrality in its own global operations (scope 1 & 2) by 2030 by signing a power purchase agreement for solar power in the US, starting in 2025. Electricity will be sourced from a new six square-mile farm in Texas, USA. Groundbreaking is scheduled for November, with the farm becoming fully operational by the spring of 2025.
“We are determined to put sustainability at the heart of our business and committed to achieving carbon neutrality across our global operations by 2030. We are seeing strong progress in decarbonizing scope 1 and 2, and scope 3 initiatives are ongoing. A good example is the new power purchase agreement that fully replaces our annual electricity usage in North America with green energy. It will cut our carbon footprint in North America by 75 per cent and globally by 21 per cent,” said Kim Fausing.
Financial outlook 2023 confirmed
Danfoss has a continued ambition to expand or maintain market share. Sales are expected to be in the range of EUR 10.4-11.9bn for the full year. The EBITA margin is expected to be in the range of 11.5-13.0 per cent, following the continued integration of already acquired businesses as well as investments in the development of new products and solutions. The expected growth and profitability performance is dependent on the development of global supply chain disruptions, the war in Ukraine, inflation, and the pandemic, as well as the general growth rates in the world economy.
Key figures for the first six months of 2023
- Sales increased 13 per cent to EUR 5,528 million (H1 2022: 4,906m) with organic growth of 8 per cent.
- Investments in innovation (R&D) increased 17 per cent to EUR 249m (H1 2022: 212m), corresponding to 4.5 per cent of sales (H1 2022: 4.3 per cent).
- Investments (CAPEX) excluding M&A increased 68 per cent to EUR 274 million (H1 2022: 163m).
- Operating profit (EBITA) increased 20 per cent to EUR 686 million (H1 2022: 570m), leading to EBITA margin of 12.4 per cent (H1 2022: 11.6 per cent).
- Free operating cash flow after financial items and tax (before M&A) amounted to EUR -125 million (H1 2022: -226m).
- Net profit increased 39 per cent to EUR 402 million (H1 2022: 289m).
About Danfoss A/S
Danfoss engineers solutions that increase machine productivity, reduce emissions, lower energy consumption, and enable electrification. Our solutions are used in such areas as refrigeration, air conditioning, heating, power conversion, motor control, industrial machinery, automotive, marine, and off- and on-highway equipment. We also provide solutions for renewable energy, such as solar and wind power, as well as district-energy infrastructure for cities. Our innovative engineering dates back to 1933. Danfoss is family- and foundation-owned, employing more than 42,000 people, serving customers in more than 100 countries through a global footprint of 95 factories. Visit www.danfoss.com.