NORDBORG, Denmark, 3 March 2023: Danfoss said strong 2022 results demonstrate the huge growth potential in products and solutions that contribute to meeting global and regional climate goals.
Making the announcement through a Press release, Danfoss said sales grew 36% compared to 2021. Organic growth was 15% with EBITA margin reaching 11.9% in 2022, the company said. This is combined with a strong free operating cashflow before M&A of EUR 465 million, an increase of 16% compared to 2021, Danfoss said. After continued high levels of strategic investments in innovation, production capacity, digital transformation and regional growth initiatives, EBITA increased 26% to EUR 1,224 million, compared to 2021, Danfoss said. Earnings were affected by the exit from Russia and the creation of Semikron Danfoss and driven by the higher topline and continued traction in managing sourcing, factory performance, and pricing, the company added.
Kim Fausing, President & CEO of Danfoss, said: “Danfoss is better positioned for growth across all regions than we have ever been. Our sales are almost distributed evenly across the Americas, Europe and Asia, with significant opportunities in all regions. As an example, we increased our sales significantly again this year in North America. With our record levels of investments in production capacity, regionalization and digital solutions, we are targeting to further improve the service to our customers globally.”
Danfoss said it launched its Core & Clear 2025 strategy, a green growth strategy, in April 2022 with the aim of ensuring further investments in strengthening the company’s three business segments and sustaining strong application knowhow, sustainable innovation and leading positions.
Fausing said: “By increasing innovation spend by 39%, we are again demonstrating our commitment to offering best-in-class technology and solutions. We continue to invest in technologies for sustainable data centers, the fast-growing market for heat pumps and energy efficiency solutions, autonomous vehicles, the electrification of machines and marine vessels, and mobile machinery as well as Power-to-X and battery energy-storage systems. Finally, it was a true highlight to launch Semikron Danfoss in August and, thereby, establish a leading position in power electronics and electrification.”
Danfoss said it is determined to decouple its carbon impact from its own business growth with technologies for energy efficiency, sector integration, linking various energy carriers and electrification. Adjusted for acquisitions, Danfoss said, it delivered a seven per cent decrease in scope 1 and 2 emissions in 2022, while growing 15% organically. At the same time, Danfoss said, it is taking critical steps towards promoting Diversity & Inclusion through global employee resource groups.
Fausing said: “Our results are truly driven by our high-performing diverse teams across the world. We are taking critical steps to move the needle on Diversity & Inclusion, and it’s been great to follow the growing engagement across the organization. In 2022, we faced a number of challenges, and I am proud to see how we worked together with our customers and partners to handle those challenges best possible. Results are created by people. We are now close to 42,000 people in Danfoss, and I would like to thank all my colleagues who made our results possible. Together we build a better future.”
According to Danfoss, in 2022…
- Sales increased 36% to EUR 10,256 million (2021: 7,539 million), corresponding to a significant organic growth of 15%.
- Investments in innovation (R&D) increased 39% to EUR 457 million (2021: 328 million), corresponding to 4.5% of sales (2021: 4.4%).
- Investments (CAPEX), excluding M&A, increased 44% to EUR 531 million (2021: 368m).
- Operating profit (EBITA) increased 26% to EUR 1,224 million (2021: 969 million), leading to a strong EBITA margin of 11.9% (2021: 12.8%).
- Free operating cash flow after financial items and tax (before M&A) increased 16% to EUR 465 million (2021: 401 million).
- Net profit reached EUR 683 million, up 8% (2021: 631 million).
- Scope 1 and 2 emissions decreased seven per cent (2021: 3%) when adjusting for the 2021 acquired hydraulics business.
- Lost Time Injury Frequency (LTIF) ended at the record-low level of 1.6 (2021: 1.7).
- 41,928 employees (2021: 40,043).
- 21% women in leadership positions (2021: 20%).