Danfoss Full-Year Report 2023

Highlights

• Sales overall, 2023 marked a year of profitable growth. A strong growth in the first half-year was followed by low, and in some markets negative growth, in the second half-year, due to the decline in the global economy. We continue to see strong sales in several high-growth business areas like data centers, commercial heat pumps, and electrification. 2023 Group sales increased 7% in local currency and 4% reported to EUR 10,654m (2022: 10,256m).
• Earnings after continued high levels of strategic investments to fuel future growth and the cost of integrating acquired companies to harvest synergies, the operating profit before acquisition-related amortizations (EBITA) increased 10% to EUR 1,345m (2022: 1,224m). The EBITA margin reached 12.6% (2022: 11.9%). Earnings were driven by a continued focus on operational excellence and managing costs.
• Danfoss continues to invest in innovation across business segments to improve the performance and customer experience of our products and solutions, and to become the preferred partner in helping our customers to decarbonize. In 2023, research and development expenses increased by 7% to EUR 487m (2022: 457m), corresponding to 4.6% of sales (2022: 4.5%).
• Cash flow Securing a continued solid cash performance remains a priority for Danfoss to finance our M&A activities, and strategic growth initiatives, and repay interest-bearing debt.
  • The free operating cash flow after financial items and tax amounted to EUR 692m (2022: 465m), confirming the cash-generating capability of Danfoss.