Danfoss sustains its growth momentum and prioritizes green growth

Danfoss is entering a new period in which the future energy system will be electric, and improving energy efficiency is vital to achieving an affordable, secure, and decarbonised future. The corporation also worked to strengthen its supply chain by regionalising and boosting capacity.

Danfoss’ good development continued in 2023, marked by aggressive investments in their green growth strategy, Core & Clear 2025. Despite facing market difficulties in the second part of the year, Danfoss’ managed to maintain financial performance within the range of expectations.

With the acquisition of Eaton’s hydraulics business in 2021, Danfoss established a leadership position in industrial hydraulics. With Semikron Danfoss, which will be created in 2022, they want to become a market leader in power semiconductor modules and assemblies. With the acquisition of BOCK® Compressors in 2023, Danfoss now has one of the most extensive compressor portfolios in the cooling sector.

Danfoss has a clear goal to decarbonise its activities by 2030, and significant strides have already been made towards this goal. Agreements have been secured to accomplish a 30 percent reduction in emissions, with two long-term power purchase agreements established in China and North America, scheduled to take effect in 2024 and 2025 respectively. In 2023, we continued to decarbonise activities. Scope 1 and 2 emissions fell by 18 percent (prior to acquisitions), decoupling from organic sales growth of 2 percent.

Sales increased 7 percent in local currency compared to 2022, with an EBITA margin of 12.6 percent in 2023. This is accompanied with a record-high free operational cash flow after financial items and taxes of EUR 692 million, a 49 percent increase over 2022. EBITA grew by 10 percent to EUR 1,345 million compared to 2022.

Ravichandran Purushothaman, President, Danfoss India, said, “”I am proud to witness our continued positive trajectory amidst global economic headwinds. Our steadfast commitment to innovation and sustainability has enabled us to achieve remarkable results, evident in our 2023 performance with a 7 percent increase in sales and a significant reduction of 18 percent in scope 1 and 2 emissions. At Danfoss, we’re joining hands with communities worldwide to recognise the power of energy efficiency in shaping a sustainable future. As we strive towards a greener tomorrow, let’s acknowledge the impact of our collective efforts in conserving energy, reducing emissions, and mitigating climate change. With our clear roadmap to decarbonize operations by 2030, including strategic agreements in key markets like China and North America, we are poised to further elevate our impact and drive sustainable growth in the Indian market and beyond. At Danfoss, we already have the expertise and technology to take action on decarbonisation through energy efficiency. Using the three-step process, we can achieve rapid and cost-efficient decarbonisation, reduce energy consumption and waste, reuse energy through energy recovery and sector coupling, and resource energy with renewables.”

“Danfoss is 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. In 2023, they 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, marine vessels, and hydrogen production,” said Kim Fausing, President & CEO of Danfoss.

Besides the significant investments in our core business and new high-growth opportunities, Danfoss continued to invest in building a more resilient supply chain by further regionalisation and adding new capacity.

“During the second half of 2023, high inflation and interest rates impacted the market. The more challenging business environment has continued into 2024; remain focused on implementing our green growth strategy and delivering strong value to our customers and partners around the world,” said Kim Fausing, President and CEO of Danfoss.

“I am excited to see how our global teams continued to implement our green growth strategy and at the same time decouple our organic growth from our own emissions,” said Kim Fausing.