DUBAI, UAE, 25 August 2023: Danfoss announced its half-year results and said its transformation aligns with Core & Clear 2025, the company’s green growth strategy. Making the announcement through a Press release, the company said it has invested in the Middle East and Africa, digital transformation, innovation, expanding capacity, and regional footprint to offer customers and partners best-in-class solutions. Danfoss further said that it aims to be the preferred technology partner and drive global decarbonisation with customers through energy-efficiency, machine productivity, lower emissions, and electrification.
Danfoss said sales grew 13% compared to the first half of last year, and organic growth was 8 per cent, with EBITA margin reaching 12.4%. After continued strategic investments in innovation and new technology, the company said, EBITA increased 20% to EUR 686 million, and earnings were driven by the higher topline, Middle East and Africa synergies and unwinding of the disruptions in global supply chains.
Kim Fausing, President & CEO, Danfoss, said: “I would like to thank the Danfoss team for delivering robust half-year results. Moreover, I would like to highlight our continued and strong growth momentum in the Americas and India and in our Power Electronics and Drives segment.”
Danfoss said it closed the acquisition of the German compressor manufacturer BOCK GmbH on March 1, which produces semi-hermetic compressors for natural refrigerants. The release further said that Danfoss has invested in this area to broaden its portfolio of compressors with regard to the rising demand for climate-friendly technologies in commercial refrigeration systems. In addition, Danfoss said that the integration of Eaton’s hydraulics business and Semikron Danfoss are progressing.
Danfoss said that it has also taken 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. The company added that electricity will be sourced from a new six-square-mile farm in Texas, USA, and the groundbreaking is scheduled for November, with the farm becoming fully operational by the spring of 2025.
Fausing said: “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 decarbonising 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% and globally by 21%.”
Danfoss also said it aims to expand or maintain market share, and sales are expected to be EUR 10.4-11.9 billion for the entire year. The EBITA margin, the company added, is expected to be in the range of 11.5-13.0%, following the continued integration of already acquired business and as investments in developing new products and solutions. The company further said that expected growth and profitability performance depend on the development of global supply chain disruptions, the crisis in Ukraine, inflation, the pandemic, and the general growth rates in the world economy.
According to Danfoss, key figures for the first six months of 2023
- Sales increased 13% to EUR 5,528 million (H1 2022: 4,906 million), with organic growth of 8 per cent.
- Investments in innovation (R&D) increased by 17% to EUR 249 million (H1 2022: 212 million), corresponding to 4.5% of sales (H1 2022: 4.3%).
- Investments (CAPEX) excluding the Middle East and Africa increased 68% to EUR 274 million (H1 2022: 163 million).
- Operating profit (EBITA) increased 20% to EUR 686 million (H1 2022: 570 million), leading to EBITA margin of 12.4% (H1 2022: 11.6%).
- Free operating cash flow after financial items and tax (before the Middle East and Africa) amounted to EUR -125 million (H1 2022: -226 million).
- Net profit increased 39% to EUR 402 million (H1 2022: 289 million).