Danfoss raises sales expectations for 2022

NORDBORG, Denmark, 23 August 2022: Danfoss is transforming, with half-year results setting a strong foundation to deliver on Core & Clear Strategy 2025. In the first six months of 2022, Danfoss said through a Pres release, it grew by EUR 1.6 billion, reaching EUR 4.9 billion in sales. The acquired hydraulics business added sales of EUR 1.1 billion, while organic growth was 13%, the company said.

According to Danfoss, growth was broadly based across the major markets of North America, Europe and Asia-Pacific, as well as in all three business segments. The Danfoss Power Solutions segment, which provides mobile and industrial hydraulics and electrification solutions, stood out with significant growth, the company said. Furthermore, the increasing demand for energy-efficient heating and cooling solutions, as well as power electronics, was driving a growing demand for technologies from Danfoss Climate Solutions and Danfoss Drives, it added.

On July 15, 2022, Danfoss signed an agreement to sell its Russian activities to local management in Russia. Closing of the transaction is expected in September 2022, the company said. Danfoss said it continued significant investments in innovation (R&D), up 38% from the first half, last year. At the same time, Danfoss said, it delivered a 27% increase in operating profits with EBITA of EUR 570 million. Net profit amounted to EUR 289 million, negatively impacted by the write-down of net assets related to the Russia exit, it added.

Kim Fausing, President & CEO, Danfoss, said: “Danfoss is transforming at full speed, and I am very pleased with the outstanding teamwork and strong performance of our teams around the world, despite the challenging times. With the transformational half-year results, we are setting a strong foundation to deliver on our Core & Clear Strategy 2025, fueled by bold investments for our long-term success. In a challenging business environment, we maintained our strong growth momentum, while keeping the integration of the hydraulics business well on track. On top of this, we closed the Semikron Danfoss transaction. The world is on the tip of an electrification revolution, and with this, we take an important step building a leading position. With the results for the first half and the closing of the Semikron transaction, we have raised our sales expectations for 2022.

“We have taken a big and bold step to put sustainability at the center of our Core & Clear 2025 strategy. The new ESG ambitions are clear, and our climate targets have been approved by the Science Based Targets initiative. We are energized by our promise to be the leading technology partner for our customers, decarbonizing through energy efficiency, machine productivity, low emissions, and electrification. Danfoss has never been better positioned to deliver on our purpose to engineer tomorrow to build a better future.”

Science Based Targets initiative approves Danfoss’ climate targets

NORDBORG, Denmark, 23 June 2022: Danfoss said its science-based target has been approved by the Science Based Targets initiative (SBTi). Elaborating, Danfoss said the Science Based Targets initiative (SBTi) has validated that the corporate greenhouse gas (GHG) emissions reduction targets submitted by Danfoss A/S are in conformance with the SBTi Criteria and Recommendations (version 4.2).

According to Danfoss, the science-based target provides a clearly defined pathway for companies to reduce GHG emissions in line with the goals of the Paris Agreement and to help prevent the worst impacts of climate change.

The SBTi’s Target Validation Team has determined that Danfoss’ scope 1 and 2 target ambition is in line with limiting warming to 1.5 degrees C. As part of the science-based target, Danfoss said, it will reduce absolute scope 1 and 2 GHG emissions by at least 46.2% by 2030 from a 2019 base year. In addition, Danfoss has committed to being carbon neutral in scope 1 and 2 emissions by 2030. Danfoss said it will reduce absolute scope 3 GHG emissions by 15% in the same time frame.

Kim Fausing, President & CEO, said: “We have built a strong foundation to achieve our science-based target, an important pillar of Danfoss’ new 2030 ESG ambition. Our science-based target expands our GHG emissions reduction goals beyond our own business, across the entire value chain. It reflects our continued dedication to taking action on climate change and becoming the preferred decarbonization partner to our suppliers and customers.”

Danfoss announced in March 2022 that it had reached its 2030 target of doubling the energy productivity in its factories globally – nine years ahead of time. Energy productivity improved by 104% in 2021 from the baseline year 2007, and energy intensity was halved between 2007 and 2021, Danfoss said, adding that it produced twice the output in 2021 as in 2007, with the same energy consumption. Subsequently, Danfoss had said it would put sustainability at the centre of its Core & Clear 2025 strategy and has the ambition to take leading positions in decarbonisation, circularity, diversity and inclusion.

Martin Rossen, SVP, Head of Group Communication & Sustainability, Danfoss, credited by the company as responsible for developing Danfoss’ ESG strategy and setting the ambition for reducing emissions across the business, said: “The validation of our science-based target confirms that Danfoss’ climate ambitions are in line with science and the goals of the Paris Agreement. But it’s more than order in our own house. Customers, employees, and the public increasingly demand transparency and reward action on ESG. For good reasons. Companies can’t simply get away with saying that they act, they need to document it. The science-based target provides a level playing field. It gives a competitive edge to the companies that truly care and take action. United Nations Secretary-General Kofi Annan once said, ‘Who cares wins’, and we believe that companies that care will win.”

Danfoss said it is on track to making its 250,000 m2 headquarters in Nordborg, near the city of Sønderborg, carbon neutral in scope 1 and 2 in 2022 by implementing available energy efficiency solutions and sourcing renewable electricity and heating.

The Danfoss headquarters campus was one of the field trips taken by ministers during the International Energy Agency’s 7th Annual Global Conference on Energy Efficiency in the City of Sønderborg, Denmark, which ran from June 7 to 9. Dubbed “The Global Capital of Energy Efficiency” by Dr Fatih Birol, Executive Director, IEA, Sønderborg acted as a global showcase of energy-efficient solutions when more than 300 leading politicians, government officials and business leaders joined the conference on energy efficiency.

IEA: ‘We can avoid 95 exajoules a year of final energy consumption by end of decade’

SØNDERBORG, Denmark, 8 June 2022: Global energy and climate leaders are gathering in Denmark for a major ministerial meeting that could drive urgently needed improvements in energy efficiency, with new analysis by the International Energy Agency (IEA) showing that stronger efficiency measures can reduce energy bills, fuel imports and greenhouse gas emissions quickly and significantly.

The IEA’s 7th Annual Global Conference on Energy Efficiency in Sønderborg, Denmark, from June 7-9, is bringing together more than 20 Ministers from countries around the world, including Denmark, Germany, Hungary, Indonesia, Ireland, New Zealand, Nigeria, Panama, Senegal, Sweden and the United Kingdom – as well as African Union Commissioner for Infrastructure and Energy, Amani Abou-Zeid and European Commissioner for Energy, Kadri Simson. Ukrainian Energy Minister, Herman Halushchenko will address the Conference live via video link. Decision-makers from industry, finance, international organisations and civil society will also participate in the discussions.

With the world contending with its biggest energy crisis since the 1970s, the focus of the Global Conference is on how to implement measures quickly to reduce energy use, with the aim of easing cost pressures on consumers, cutting reliance on fuel imports and driving progress towards climate goals – while supporting job creation and economic growth. The new IEA analysis, published to coincide with the Global Conference, underscores the vital role of energy efficiency and energy saving in meeting today’s crises by immediately addressing the crippling impacts of the spike in energy prices, strengthening energy security and tackling climate change.

Fatih Birol, Executive Director, IEA, said: “Energy efficiency is a critical solution to so many of the world’s most urgent challenges – it can simultaneously make our energy supplies more affordable, more secure and more sustainable. But inexplicably, government and business leaders are failing to sufficiently act on this. The oil shocks of the 1970s set in motion major advances in efficiency, and it is utterly essential that efficiency is at the heart of the response to today’s global energy crisis. The leaders meeting at the IEA Global Conference on Energy Efficiency need to make this the moment when the world hits the accelerator on efficiency – or we may fail to respond to the current energy crisis properly and pay the price for years to come.”

This year’s Global Conference is jointly organised by the IEA and Denmark’s Ministry of Climate, Energy and Utilities, with support from Danish engineering company, Danfoss.

Dan Jørgensen, Denmark’s Minister of Climate, Energy and Utilities. said: “It’s no longer a question of whether we should implement more energy-efficient solutions and technologies, globally – it’s a question of how we are going to do that. By increasing our energy efficiency, we can reduce our dependence of Russian oil and gas completely and move closer to achieving climate neutrality. The conference in Sønderborg and the gathering of energy and climate leaders from various sectors and all parts of the world is an important step in the right direction.”

Kim Fausing, CEO, Danfoss, said: “If the world is to meet climate goals to limit global warming, energy efficiency measures must be prioritized. A third of the reduction needed in CO2 emissions this decade, according to the IEA net-zero scenario, must come from improvements in energy efficiency. The good news is that the solutions are there to improve energy efficiency in all sectors. We don’t need to wait. We need action because the greenest energy is the energy we don’t use.”

On the main conference day, on June 8, leaders in industry, government and civil society are discussing issues, such as buildings of the future, the role of consumer behaviour and how to unlock financing for efficiency measures. The following day will include a unique closed-door session, where Ministers from around the world will share best practices on how to accelerate progress. The town of Sønderborg will also host a number of technological showcases for the leaders to visit.

According to the new IEA analysis, doubling the current global rate of energy intensity improvement to four per cent a year has the potential to avoid 95 exajoules a year of final energy consumption by the end of this decade, compared with a pathway based on today’s policy settings. This is equivalent to the current annual energy use of China. That level of savings would reduce global CO2 emissions by an additional 5 billion tonnes a year by 2030, about a third of the total emissions reduction efforts needed this decade to move the world onto a pathway to net-zero emissions by mid-century, as laid out in the Net Zero Roadmap the IEA published last year.

These extra efficiency efforts would cut global spending on energy. For example, households alone could save as much as USD 650 billion a year on energy bills by the end of the decade compared with what they would have spent in a pathway based on today’s policy settings. The amount of natural gas that the world would avoid using as a result of this would be equal to four times what the European Union imported from Russia last year, while the reduced oil consumption would be almost 30 million barrels of oil per day, about triple Russia’s average production in 2021. Compared to today, this global push on efficiency would help create 10 million additional jobs in fields including building retrofits, manufacturing and transport infrastructure.

The new IEA analysis shows the significant opportunities for rapid energy efficiency gains in all sectors of the global economy. Most of these opportunities involve readily available technologies and would fully pay for themselves through lower running costs, especially at today’s high energy prices. By 2030, around a third of the avoided energy demand comes from deploying more efficient equipment, ranging from air conditioners to cars. About a fifth comes from electrification, such as switching to heat pumps or electric cars. Digitalisation and use of more efficient materials in industry provide much of the rest.

The new analysis complements the insights on the critical role of energy efficiency and energy-saving measures in addressing today’s global energy crisis that were highlighted by the IEA’s recent 10-Point Plan to Reduce the European Union’s Reliance on Russian Natural Gas and 10-Point Plan to Cut Oil Use, as well as Playing my part: How to save money, reduce reliance on Russian energy, support Ukraine and help the planet, which was developed in cooperation with the European Commission.

Danfoss breaks ground for ‘supermarket of the future’

NORDBORG, Denmark, 14 April 2022: Engineering firm, Danfoss recently hosted a ground-breaking ceremony for the construction of what it described as one of the world’s most energy-efficient supermarkets. 

Making the announcement through a Press release, Danfoss said the supermarket, scheduled to be ready in mid-2023 and spanning an area of 1,500 square metres, is situated next to Danfoss’ headquarters, in Nordborg, and is expected to lead the way for supermarket chains around the world to develop climate-friendly and sustainable stores with technologies that already exist today.  

Built with energy-efficient refrigeration and heating technology, solar roof panels and charging points for electric cars, the Smart Store supermarket will capture and reuse heat produced by cooling cabinets and freezers to provide heating for the supermarket and local community through district energy, Danfoss said.

The supermarket will be connected to the Nordals Fjernvarmeværk district heating plant and will be able to supply it with surplus heat, Danfoss added. 

The cooling system in the new supermarket will also run on carbon dioxide, as a natural refrigerant, which helps to reduce the overall climate impact.  

Kristian Strand, President, Refrigeration & A/C Controls, Danfoss Climate Solutions, said: “The origins of this project go back a long time, but the new energy-efficient Smart Store supermarket that we are starting to build today has only grown in relevance.

The goal of the project is to show how easy and profitable it is to decarbonise our economy and ensure reliable and sustainable energy use. Heating and cooling are the largest energy consumers in supermarkets. The solutions we are building here today represent the core of Danfoss solutions and will showcase how we can approach zero-energy use in food retail, together.” 

According to Danfoss, the site will also serve as an Application Development Centre, where the company will work together with partners to co-develop new technologies and explore interfaces in the energy system surrounding energy storage. 

Jürgen Fischer, President, Danfoss Climate Solutions, said: “The supermarket will be the focal point for a new part of our campus, where all buildings will be energy-efficient and meet special sustainability requirements. Our aim is to boost the green transition with concrete evidence of how far we can go with energy efficiency. We want to demonstrate to customers and partners how energy-saving solutions work in real life. We want to show the greenest energy is the energy we don’t use or reuse.” 

According to Danfoss, BALS, Brugsen for Als and Sundeved, Denmark’s largest independent supermarket association, will rent the building from the company and install a COOP 365 discount supermarket. BALS, which works together with COOP, has a total of 13 stores in the area around Sønderborg in Denmark and, since 2015, has consistently reduced the consumption of energy in its stores. So far, it has cut 44% of its total CO2 emissions, Danfoss said, adding that it was, therefore, a natural next step that BALS became a partner in the project. 

Danfoss said it is establishing a showroom in a part of the supermarket building, where all installations are visible to visitors and customers. It said visitors will be able to experience its solutions for heating and cooling, such as CO2 as a refrigerant, heat recovery and the interaction between installations, once the building is in operation.  

Danfoss implements planned generational shift in ownership

NORDBORG, Denmark, 23 March 2022: Former Danfoss CEO, Jørgen Mads Clausen has informed the Board of Directors that he will resign as Chairman of the Board of Danfoss A/S with effect from the Annual General Meeting to be held on March 25, 2022. Making the announcement through a Press release, Danfoss said Clausen will remain a member of the Board of Directors until the Annual General Meeting on March 25, when his current term expires.

According to Danfoss, the Board has nominated current Vice Chairman, Jens Bjerg Sørensen to succeed Clausen as Chairman of the Board after the Annual General Meeting.

Clausen said: “Danfoss is now a stronger, bigger and more global company, but also one with a clear goal of contributing to the green transition and combatting climate change with our energy-efficient products and solutions. This is a result of our business strategy, which is now being updated with an ambitious sustainability strategy. It has been a pleasure to safeguard my parents’ life work for the benefit of Southern Jutland, Denmark and the world. Now it’s time for the next generation to take the lead. The timing is right for me.”

According to Danfoss, Clausen was CEO of the company from 1996 to 2008 and Chairman of the Board since the 2009 Annual General Meeting. Despite stepping down from the Board, he intends to maintain his strong commitment to Danfoss, the company said. This follows the tradition that started with Bitten Clausen, who was one of the world’s first female board chairs from 1966 to 1971 and, later, Danfoss’ Vice Chair until 1989, the company added.

Clausen said: “I will continue to be available to the company and represent the family to employees and business associates. But both my siblings and my wife and I are delighted that the third generation of the family is showing their commitment to Danfoss by taking on greater responsibility. At the same time, we couldn’t ask for a better chairman than Jens Bjerg Sørensen. Jens has the right skills, experience and understanding of Danfoss and our culture. He can take Danfoss to new levels, together with the rest of the Board, management and our employees.”

Sørensen said: “I am honored to be nominated as the new Chairman of the Board. Danfoss has an impressive history. The foundation based long-term ownership and the family’s strong values are one of the main reasons why Danfoss now has a decisive influence on whether the world succeeds in the green transition. Danfoss is financially stronger than ever and has developed significantly during Jørgen’s time as Chairman. As Vice Chairman, I have followed the close collaboration between Jørgen and Danfoss’ CEO, Kim Fausing, which I consider crucial to Danfoss’ success. I intend to maintain this together with the new Board of Directors.”

Eurovent Middle East holds annual meeting

DUBAI, UAE, 22 March 2022: HVACR association, Eurovent Middle East conducted its annual meeting on March 22 in Dubai. It re-elected into office Tariq Al Ghussein, Chairman and CEO, Taqeef, as President; and Rafael Van Eijcken, General Manager, Baltimore Aircoil Middle East, as Vice President, during the meeting.

It also introduced three new members to the Board – Marco Duarte, who takes office as Managing Director, ebm-papst Middle East from April 1, 2022; Matteo Zanesco, Managing Director, CAREL Middle East; and Ismail Serhan Ozten, Business Development and Technical Support Director – TMA region, Danfoss.

The other members of the Board are: Andrea Cavalet, General Manager, Epta Middle East; Dani Elamana, Technical Director, Camfil Middle East; Frank Taaning Grundholm, VP – Global HVACR Sales, ABB; Morten Schmelzer, Head of Public Affairs, Systemair; and Rangan Srinivasan, Director of Marketing and Product Management, Rheem MEA

Markus Lattner, Managing Director, Eurovent Middle East, said the meeting represented a happy occasion, as the association was able to bring together members for an in-person event for the first time since the outbreak of the pandemic. In all, 40 representatives gathered for the meeting, which Lattner said shows everybody is eager to get back to physical interaction.

The meeting, he said, was an opportunity to analyse the association’s activities and was a validation of the fact that it had weathered the pandemic with resilience. The association is celebrating its fifth anniversary later in the year. Lattner pointed out that of the five years, two years were under the shadow of the pandemic and that it was commendable that the members showed their support to keep the momentum alive. “The purpose to fulfil the needs of the marker is answered with such interest, and it gives us confidence that we have reason to be here,” Lattner said.

He said there was much to look forward to in the course of the year. Eurovent Middle East, he said, will soon introduce new interesting projects to the public. “We are planning to have our industry summit in September,” he said. “It will take place under the theme: ‘HVACR next gen: Rethinking policies and strategies’.”

Danfoss: ‘A year above expectations’

NORDBORG, Denmark, 3 March 2022: Danfoss reported an increase in sales by 29% to EUR 7.5 billion in 2021. Making the announcement through a Press release, Danfoss described the performance as a record sales level.

The company said organic growth reached 18% year-over-year. The five-month period of ownership of Eaton’s hydraulics business added EUR 786 million to the top-line, the company said, adding that it delivered extensive growth in all regions. Investments in innovation (R&D) increased 23% to EUR 328 million, the company said. At the same time, it said, operating profits reached the highest level ever, with EBITA of EUR 969 million and EBITA margin of 12.8%. Net profit reached EUR 631 million, up 45%, it added.

“We have never seen better opportunities for Danfoss,” said Kim Fausing, President & CEO, Danfoss. “It is our ambition to be the leading technology partner for our customers in the green transition – decarbonising through energy efficiency, low emissions, and electrification. After all, the greenest energy is the energy that we don’t use.

Our momentum is clearly reflected in our 2021 annual results. Danfoss has delivered the best results in our history, and we are in a strong financial position.

“What makes me most proud is how our teams continue to deal with the pandemic and the significant challenges with the supply chain while delivering a transformational, record year. Unfortunately, these considerable challenges affected our customer service.

In addition, all three segments were affected by inflationary pressure. We will continue to do everything we can to serve our customers, and we will continue our high investments in capacity expansion, innovation and digitalisation of Danfoss.”

Danfoss said it assumes a positive outlook in the market in 2022, with a continued ambition to expand or maintain market share. The outlook includes a full year ownership of Eaton’s hydraulics business, it said. Sales are expected to be in the range of EUR 8.8-9.8bn for the full year, it said. The EBITA margin is expected to be in the range of 11.4-12.9%, following continued investments in the development of new products and solutions, it said.

The expected growth and profitability performance is dependent on the development of the pandemic, the global supply chain disruptions as well as the continuation of the current strong growth rates in the world economy, it added.

Regarding the conflict between Ukraine and Russia, the company said its first priority is to keep its people safe. We are monitoring the situation carefully and will act accordingly.

Danfoss completes USD 3.3 bn acquisition of Eaton’s hydraulics business

NORDBORG, DENMARK, 3 August 2021: Danfoss said it has officially finalised its USD 3.3 billion (approximately €3 billion) acquisition of Eaton’s hydraulics business, following confirmation of all necessary regulatory approvals and closing conditions. Making the announcement through a Press release, the company said the move will see the Danfoss Group grow in size by a third and establish itself as a global leader in mobile and industrial hydraulics.

Danfoss said mobile hydraulics has been one of its core and most successful businesses for over 50 years. The acquisition of Eaton’s hydraulics business is a vital aspect of its growth strategy, the company said. Eaton’s hydraulics business will be combined with the Danfoss Power Solutions business segment, adding approximately 10,000 employees worldwide and USD 1.8 billion (around €1.5 billion) in 2020 global sales, it said. Combining the two organisations will double the size of Danfoss Power Solutions, increasing its innovation capacity twofold, it added.

The strengthened Danfoss Power Solutions will have the broadest selection of mobile and industrial hydraulics products and solutions available on the market, with the full line offering including fluid conveyance systems, the company said. Its distribution channels have also been significantly boosted, while its local application support and geographical reach have increased considerably, it said. All of these benefits will enable Danfoss Power Solutions to become an even stronger technology partner for existing and new customers, plus take the lead in digitalisation and electrification, it added.

Kim Fausing, President and CEO, Danfoss, said: “This is a great day for Danfoss as we welcome 10,000 new colleagues into the organization and create a global leader in mobile and industrial hydraulics. By combining the knowledge and experience of the two strong businesses and great teams, our customers will receive an unmatched level of service and expertise from a single partner. We will continue our significant investments to stay on the forefront of technology leadership and provide solutions that improve productivity and reduce emissions to meet the requirements of the future.”

Eric Alström, President, Danfoss Power Solutions, said: “The need for technologically innovative and industry-changing hydraulic solutions is as great as ever. We’re very pleased to complete this significant investment in our core hydraulics business so we can serve our customers and partners even better than before.

Combining the two robust businesses represents a perfect match and provides countless opportunities, such as increasing our engineering expertise and capabilities, doubling our global application support and extending the value of our Application Development Centers and digital design tools. Adding fluid conveyance and industrial applications are other assets gained through this transaction.”

Paulo Ruiz, President of the former Eaton hydraulics business, added: “This is an exciting new chapter for both of our businesses and our people, which are stronger together. The new Danfoss Power Solutions team will create a global leader in mobile and industrial hydraulics, drawing on long legacies of innovation and industry-leading expertise. The combined product portfolio and broadened global reach will better serve customers and distributors all around the world.”