Danfoss reports 2023 growth despite market headwinds

Despite market headwinds in the second half of 2023, Danfoss saw sales grow 7% in local currency compared to 2022, with EBITA margin reaching 12.6% for the year. It also saw a record free operating cash flow of EUR 629 million, a 49% rise from the prior year.

Operating profit (EBITA) rose by 10% to EUR 1,345 million (2022: 1,224m). Net profit increased 20% to EUR 819 million (2022: 683m).

Kim Fausing, president and CEO, Danfoss

“We are entering a new era where the future energy system is electric, and improving energy efficiency in machines, infrastructure and industry is critical to delivering an affordable, secure and decarbonized future,” said Kim Fausing, president and CEO of Danfoss. “In 2023, we continued with bold investments in expanding our offering of competitive and innovative solutions for our core business and high-growth opportunities like data centers, the electrification of heating systems, EVs, on- and off-highway vehicles, as well as marine vessels, and hydrogen production.”

In 2023, the integration of recent acquisitions continued to be on track, the company said. The acquisition of Eaton’s hydraulics business in 2021 has enabled Danfoss to build “a leading position within mobile and industrial hydraulics.” It is also targeting a leading position in power semiconductor modules and assemblies with Semikron Danfoss, established in 2022. In addition, the acquisition of BOCK Compressors in 2023 added a comprehensive compressor portfolio for the cooling industry. The company also continued to invest in building a more resilient supply chain by further regionalization and adding new capacity.

Danfoss expects to continue to expand or maintain market share in 2024. Sales are projected to be in the range of EUR 10.0-11.5 billion for the full year. The EBITA margin is forecast to be in the range of 11.8-13.3%, 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 stability, the geopolitical environment and inflation, as well as general global growth rates.

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