With its 2023 results, the positive development of Danfoss continued with bold investments in its green growth strategy, Core & Clear 2025. Despite market headwinds in the second half of the year, Danfoss reported financial results within the range of guidance.
Sales grew 7% in local currency compared to 2022, with the EBITA margin reaching 12.6% in 2023. This is combined with a record-level free operating cash flow after financial items and tax of EUR 692 million, an increase of 49% compared to 2022. EBITA increased 10% to EUR 1,345 million compared to 2022.
“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 decarbonised future,” said Kim Fausing, president & 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.”
Besides the significant investments in our core business and new high-growth opportunities, we continued to invest in building a more resilient supply chain by further regionalization and adding new capacity.
In 2023, the integration of our recent acquisitions continued to be on track. With the acquisition of Eaton’s hydraulics business in 2021, we built a leading position within mobile and industrial hydraulics. We are targeting a leading position in power semiconductor modules and assemblies with Semikron Danfoss, established in 2022. With the acquisition of BOCK Compressors in 2023, Danfoss now offers one of the most comprehensive compressor portfolios in the cooling industry.
“During the second half of 2023, high inflation and interest rates impacted the market. The more challenging business environment has continued into 2024, but we remain focused on implementing our green growth strategy and delivering strong value to our customers and partners around the world,” added Fausing.
Danfoss has a clear plan to decarbonize operations by 2030, and we already have agreements in place that ensure a 30% reduction in emissions. These agreements include two long-term power purchase agreements in China and North America, effective from 2024 and 2025, respectively. In 2023, we continued to decarbonize our own operations. Scope 1 and 2 emissions decreased by 18% (before acquisitions), decoupled from organic sales growth of 2%.
