Danfoss Sustains Growth Momentum in 2023 Despite Market Challenges
Danfoss’ positive trajectory continued in 2023, bolstered by bold investments in its green growth strategy, Core & Clear 2025. Despite encountering market headwinds in the latter half of the year, Danfoss achieved financial results in line with expectations.
Key Highlights:
- Revenue surged by 7% in local currency compared to 2022, accompanied by a notable EBITA margin of 12.6% in 2023.
- The company achieved a record free operating cash flow after financial items and taxes, amounting to EUR 692 million, marking a substantial 49% increase from 2022.
- EBITA climbed by 10% to EUR 1,345 million compared to the previous year.
Kim Fausing, President & CEO of Danfoss, emphasized the company’s commitment to investing in competitive and innovative solutions across core business sectors and high-growth areas, including data centers, electrification of heating systems, electric vehicles, and hydrogen production.
In addition to reinforcing its core business and venturing into new high-growth sectors, Danfoss continued to enhance its supply chain resilience through regionalization efforts and capacity expansion.
The integration of recent acquisitions remained on track, contributing to Danfoss’ leading position in mobile and industrial hydraulics, power semiconductor modules and assemblies, and the refrigeration industry.
While grappling with challenges such as high inflation and interest rates in the latter part of 2023, Danfoss remains focused on executing its green growth strategy to deliver value to customers and partners worldwide.
Danfoss has set ambitious targets to decarbonize its operations by 2030 and has already secured agreements ensuring a 30% reduction in emissions. Efforts in 2023 led to an 18% decrease in Scope 1 and 2 emissions, despite organic sales growth of 2%.
Looking ahead to 2024, Danfoss aims to maintain or expand its market share, with projected sales ranging between EUR 10.0-11.5 billion. The EBITA margin is anticipated to fall between 11.8 and 13.3%, contingent on factors such as the stability of the global supply chain, geopolitical dynamics, inflation rates, and overall global economic growth.
Key Financial Figures for 2023:
- Sales increased by 7% in local currency, reaching EUR 10.7 billion.
- Investments in innovation (R&D) rose by 7% to EUR 487 million.
- Operating result (EBITA) increased by 10% to EUR 1,345 million, resulting in an EBITA margin of 12.6%.
- Net profit surged by 20% to EUR 819 million.
- Free operating cash flow amounted to EUR 692 million.
- The accident frequency rate (LTIF) hit a record low of 1.2.
- Danfoss employed 42,054 individuals by the end of 2023.
For more detailed insights into Danfoss’ 2023 financial results, refer to the provided link.
