- Robust growth in sales, up 13% to EUR 5.5 billion. Organic growth was 8%, particularly driven by growth in Danfoss Power Electronics and Drives segment. Growth from M&A was 6%.
- Continued strong momentum in North America, while European markets normalizing. China on par with last year, and India growing significantly.
- Operating profits (EBITA) up 20% to EUR 686 million with a margin of 12.4%.
- Continued to make significant investments in new sustainable technologies and innovation up 17% to EUR 249 million, corresponding to 4.5% of sales, while expanding investments in production capacity, regionalization, and digital solutions up 68% to EUR 274 million.
- All North America facilities to be powered with solar energy by 2025 as Danfoss looks towards achieving carbon neutrality across its global operations by 2030.
- Outlook 2023 confirmed. Sales to be in the range of EUR 10.4-11.9 billion and EBITA margin in the range of 11.5-13.0%.
Danfoss continued to make significant investments in M&A, digital transformation, innovation and expanding capacity and regional footprint to offer customers and partners best-in-class solutions. The aim is to be the preferred technology partner and drive decarbonization globally together with customers through energy efficiency, machine productivity, lower emissions, and electrification.
Sales grew 13% compared to the first half last year, and organic growth was 8%, with EBITA margin reaching 12.4%. After continued high levels of strategic investments in innovation and new technology, EBITA increased 20% to EUR 686m. Earnings were driven by the higher topline, M&A synergies, and unwinding of the disruptions in global supply chains.
“I would like to thank the entire Danfoss team for delivering robust half-year results. In particular, I would like to highlight our continued strong growth momentum in the Americas and India as well as in our Power Electronics and Drives segment,” said Kim Fausing, President & CEO of Danfoss.
On March 1, Danfoss closed the acquisition of the German compressor manufacturer BOCK GmbH, which is a global technology leader in semi-hermetic compressors for natural refrigerants. With the rising demand for climate-friendly technologies in commercial refrigeration systems, Danfoss has invested in this area to broaden its portfolio of compressors. Integration of Eaton’s hydraulics business and Semikron Danfoss are also progressing well.
Danfoss also made 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. Electricity will be sourced from a new six square-mile farm in Texas, USA. Groundbreaking is scheduled for November, with the farm becoming fully operational by the spring of 2025.
Financial outlook 2023 confirmed
Danfoss has a continued ambition to expand or maintain market share. Sales are expected to be in the range of EUR 10.4-11.9bn for the full year. The EBITA margin is expected to be in the range of 11.5-13.0%, 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 disruptions, the war in Ukraine, inflation, and the pandemic, as well as the general growth rates in the world economy.
Key figures for the first six months of 2023
- Sales increased 13% to EUR 5,528 million (H1 2022: 4,906m) with organic growth of 8%.
- Investments in innovation (R&D) increased 17% to EUR 249m (H1 2022: 212m), corresponding to 4.5% of sales (H1 2022: 4.3%).
- Investments (CAPEX) excluding M&A increased 68% to EUR 274 million (H1 2022: 163m).
- Operating profit (EBITA) increased 20% to EUR 686 million (H1 2022: 570m), leading to EBITA margin of 12.4% (H1 2022: 11.6%).
- Free operating cash flow after financial items and tax (before M&A) amounted to EUR -125 million (H1 2022: -226m).
- Net profit increased 39% to EUR 402 million (H1 2022: 289m).