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By receiving this presentation you agree to be bound by and subject to the foregoing limitations. 2 Danfoss Debt Investor Presentation April 2021 Confidential ENGINEERING TOMORROW Danfoss#3Danfoss Debt Investor Presentation Agenda: 1. Company introduction 4 2. Strategy and business model 9 3. Eaton Hydraulics acquisition 17 4. Financial performance and capital structure 22 5. Appendix 28 Speakers: Jesper V. Christensen EVP and Group CFO Flemming A. Jørgensen Group Treasurer 3 Danfoss Debt Investor Presentation April 2021 Confidential ENGINEERING TOMORROW Danfoss#4Company introduction (excluding Eaton Hydraulics) 4 Danfoss Debt Investor Presentation April 2021 Confidential ENGINEERING TOMORROW Danfoss#5Key investment highlights Sustainability has always been at the center of what we are doing making more out of less · Well-positioned to capitalize on global mega trends Robust and well-performing business segments with attractive market positions Strong and stable profit margin and cash generation over the cycle Proven M&A and integration track record Conservative financial policy targeting BBB rating BBB credit rating with stable outlook 5 Danfoss Debt Investor Presentation April 2021 Confidential ENGINEERING TOMORROW Danfoss#6Our aspiration We engineer tomorrow and build a better future Hanto's Our legacy and values We build our business on trust and integrity We are innovative in our ambition to exceed expectations We are global and embrace diversity • We treasure sustainable results 6 Danfoss Debt Investor Presentation April 2021 Confidential · Founded 1933 in Nordborg, Denmark by Mads Clausen · 27,500 employees • EUR 5.8bn · · · net sales Geographically well balanced sales Western Europe, APAC and North America Regionalized supply chains 71 production sites in 21 countries Privately owned by Bitten & Mads Clausen's Foundation (86% of votes) and the Clausen family All numbers in this presentation represent 2020 numbers unless otherwise stated ENGINEERING TOMORROW Danfoss#7Danfoss business overview Sales well-diversified across segments, geographies and channels Power Solutions Hydraulic, electronic and electric components and solutions for on- and off- highway mobile applications within agriculture and infra- structure 34% of net sales Employees: 7,600 Factories: 28 in 13 countries Business segments Climate Solutions Sustainable and energy- efficient advanced components, solutions and climate technologies for industry, commercial & residential buildings and entire food chain 43% of net sales Employees: 10,500 Factories: 34 in 15 countries Drives AC drives for variable speed control, energy efficiency in electric motors and customized power modules for EV's, solar, wind and industrial use 23% of net sales Employees: 4,400 Factories: 10 in 7 countries Geographies Driving growth based on customer proximity, local application knowledge and localized supply chains Latin America Africa-Middle East 2% 5% Eastern Europe 9% 0 North America 23% Asia-Pacific 24% Channels Largest customer: 3% of net sales 5 largest customers: 11% of net sales Western Europe 37% OEM's 52% Installers, contractors, end customers & service 11% O Distributors & wholesalers 37% 7 Danfoss Debt Investor Presentation April 2021 Confidential ENGINEERING TOMORROW Danfoss#8Danfoss COVID-19 navigation Mitigation measures enabled continued strategy execution We steer Danfoss and our stakeholders through COVID... Priorities • Keep people safe Service customers and stay close to suppliers Flex costs and keep people onboard ...and continue to invest to get ahead R&D spend at an all time high of 4.6% of net sales Digital displacement & electric motors New power module platform for EV's New low voltage drive platform . Protect strategic initiatives EATON Danfoss Hydraulics ENGINEERING TOMORROW Footprint initiatives Consolidated 20 sites and 15 legal entities Turbocor compressors for data centers Our digital transformation Established Danfoss data center One ERP Digital customer experience 17.3% recurring EBITDA margin 2020 (+0.9%-points above 2019) Recurring EBITDA: EBITDA before other operating income and expenses 8 Danfoss Debt Investor Presentation April 2021 Confidential ENGINEERING TOMORROW Danfoss#9Strategy and business model 9 Danfoss Debt Investor Presentation April 2021 Confidential ENGINEERING TOMORROW Danfoss#10Global mega-trends The world accelerates the drive towards a more sustainable future coming out of the COVID-19 pandemic Digitalization Electrification Urbanization Food supply Climate change Dusit Than 10 | Danfoss Debt Investor Presentation April 2021 Confidential ENGINEERING TOMORROW Danfoss#11Our strategy: Core & Clear - Going Great A globally leading technology partner Our aspiration We engineer tomorrow and build a better future Leading Portfolio Our strategy Our aspiration is structured around four strategic focus areas R > Customers & Growth go Innovative Solutions Lean & Agile Our foundation High-performing diverse teams 11 Danfoss Debt Investor Presentation April 2021 We target a global leading #1 or #2 position in all three business segments. We invest to strengthen the Core and to build a leading position in Digital and Electrification We focus on being close to our customers and drive customer satisfaction with a strong and consistent performance on quality and delivery. We focus on hotspots to outgrow the market and provide a seamless end-to-end digital customer experience We differentiate through deep application knowledge and new technology. We create significant opportunities by leveraging the latest technology to create even more value to our customers We aim to be recognized as a leader in operational excellence in the industries we serve. We want to be the benchmark in safety, quality, delivery and costs. A flexible and agile supply chain and One ERP ensure we serve our customers with speed With the Going Great strategy our ambition is to be a top performer among key peers and drive long-term value creation for all our stakeholders SIEMENS Ingenuity for life ABB Confidential EATON IMI Parker EMERSON. ENGINEERING TOMORROW Danfoss#12Our business model Danfoss' competencies create value for our customers G HELLA 76 GC GRUPPE Application knowledge Innovation Close to customers ZOOMLION SIEMENS Gamesa 》 KRONES Carrier Kubota BERENDSEN FLUID POWER Johnson Controls SMARDT CAT Bobcat BEIJER REF JOHN DEERE IR Ingersoll Rand 12 Danfoss Debt Investor Presentation April 2021 Inspiring Progress™ Competitive advantage Leading positions Exploit scale Confidential Differentiate through new technology DAIKIN SCHAEFFLER I LUK INA FAG A HIVE 长城汽车 Great Wall Motors KONE Haier EATON woln SAINT-GOBAIN GREE Schindler BOAOKOMOOPT W WIM GEA engineering for a better world Wholesalers Pentair ENGINEERING TOMORROW Danfoss#13Selected Danfoss applications - hot spots Leveraging the global mega trends across our Segments Power Solutions Climate Solutions Digitalization Electrification Autonomous machines Full-electric excavators Jeg er elektris re Urbanization Food supply Climate change Construction machinery Agriculture machinery Energy-efficient hybrids District energy with AI Heat pumps Single & multi-family Houses Connected supermarkets Data centers Condition-based maintenance Electrical vehicle traction Elevators & escalators Food & beverage Water & waste water Drives wasaline 13 Danfoss Debt Investor Presentation April 2021 Confidential ENGINEERING TOMORROW Danfoss#14How we accelerate the green transition Danfoss technologies make it possible Energy efficiency Sector coupling 40% of global energy consumption is used to heat and cool buildings • Buildings account for 30% of global greenhouse gas emissions • • Coupling of sectors (electricity and heating) is key for storage and efficiency More heat produced by renewable sources through e.g. heat pumps Data sources: WRI (World Resource Institute) and IEA (International Energy Agency) 14 Danfoss Debt Investor Presentation April 2021 • Recover excess heat from data centers, super markets and industrial processes Confidential Electrification of transport ELLEN • • 20% of global energy consumption is used for transportation Transportation accounts for 25% of energy related global green house gas emissions ENGINEERING TOMORROW Danfoss#15Danfoss to be CO2 neutral by 2030 (scope 1 and 2) Through energy efficiency first - sourcing of remaining consumption as green energy Danfoss journey towards 2030 (scope 1 and 2) Index (2007 = Base year) Danfoss Nordborg headquarter CO2 neutral in 2022 (250,000 m²) 200 180 160 140 120 100 80 60 40 20 Energy productivity 80% increase EURM net sales per GWh consumed energy CO2 intensity 36% reduction Tons CO2 (scope 1 & 2) per EURm net sales 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Science Based Targets and baseline to be approved in 2021 for scope 1, 2 and 3 ...One year's production of Drives' products displace 100 million tons of CO2 emissions during their lifetime... www. We take our own medicine ① Energy efficiency first because it - is good return on investment 60% reduction in demand for fossil fuels from building renovation, ventilation heat recovery and AC drives 2 Green heating (100%) Recovery of excess heat from production processes & data center and green district heating 3 Green electricity (100%) Sourcing from wind turbines (Hornsrev 2) and own solar plant 15 Danfoss Debt Investor Presentation April 2021 Confidential ENGINEERING TOMORROW Danfoss#16Continue to invest in strategic initiatives Focus on core business and proven track record in M&A execution Organic Research and development costs Net investments excluding M&A 400 Research and development costs (EUR) Research and development costs (% of net sales) Net investments excluding M&A (EURM) 6,0% 400 6,0% Net investments excluding M&A (% of net sales) Danfoss continues to make significant investments in new technology 300 4,5% 300 4,5% 200 - 3,0% 200 3,0% 100 1,5% 100 1,5% 0+ 0,0% 0 0,0% 2014 2015 2016 2017 2018 2019 2020 2014 2015 2016 2017 2018 2019 2020 Further strengthen core Lead digital In-organic We have a proven M&A track record to further strengthen core business and capture growth opportunities AAIM controls VAGONⓇ ARTEMIS INTELLIGENT POWER 16 Danfoss Debt Investor Presentation April 2021 H HYDRAULIK NORD LEANHEAT THI WHITE DRIVE PRODUCTS SONDEX EATON Hydraulics LIEO PROSA Confidential Qcǝi Innovative Inteport Intuitive Build #1/#2 electrification position VISEDO Electricity in Motion. LQM TECHNOLOGIES IKUSI GE velatia AXCO motors ENGINEERING TOMORROW Danfoss#17Eaton Hydraulics acquisition 17 Danfoss Debt Investor Presentation April 2021 Confidential ENGINEERING TOMORROW Danfoss#18Rationale for Eaton Hydraulics acquisition A perfect match - stronger together - creating a global leader Additional sales EATON Hydraulics Value creation Operational performance Culture Footprint Procurement synergies Danfoss Power Solutions Segment Products & distribution Turnover (2019) EUR 2.0bn Turnover (2019) Employees 10,000 Factories 36 Employees Factories EUR 2.2bn 7,600 28 Mega trends Geographical coverage SG&A improvements 18 Danfoss Debt Investor Presentation April 2021 R&D capabilities - Two companies with common roots a long and proud history in hydraulics - the baseline for our culture Strengthened geographical footprint for complete global coverage Complementary product and market coverage in off- highway, on-highway and industrial applications Together we can further invest in electrification and digitalization Know-how Two strong teams with deep hydraulics knowledge and expertise to deepen partnerships with our customers and unlock further growth in hydraulics Confidential ENGINEERING TOMORROW Danfoss#19Market position and manufacturing footprint Global leader with best local customer connection SCHULER FI-NAME Market position Note: As per Danfoss' estimates Mobile Hydraulics: From #2 to #1 Industrial Hydraulics: From no presence to #3 Hoses & Fittings: From no presence to #3 USA 10 ا 13 ا Netherlands Mexico 4 Brazil 1 1 19 Danfoss Debt Investor Presentation April 2021 Confidential Manufacturing footprint Germany Denmark Finland Poland 42 L1 2 1 3 2 UK 1 2 France 1 Spain 1 Italy L2 Turkey 1 Slovakia 1 ا Singapore India 1 1 1 1 South Korea 1 Japan 1 China 1 3 5 Danfoss Eaton Hydraulics ENGINEERING TOMORROW Danfoss#20Mobile Hydraulics offering Unmatched systems capability with hydraulics, fluid conveyance, electrification and software Eaton Hydraulics EATON Hydraulics Danfoss Power Solutions Danfoss Open Circuit Piston Pumps Swing Drive Motors Load-Sensing Valves Electrohydraulic Valves Electrohydraulic Steering Displays Joysticks Operator Interfaces Orbital Motors Steering Units Remote Controllers PLUS Software Controllers PLUS ICS Cartridge Valves and HICS Digital DisplacementⓇ Pumps Gear Pumps & Motors Sensors Hoses & Fittings Energy 1 Storage Electric Propel Motors Converter Propel Pumps Propel Motors Open Circuit Pumps Track Drive Motors Radial Piston Motors Geroler Motors Large Steering Systems Directional Control Valves 20 | Danfoss Debt Investor Presentation April 2021 Confidential ENGINEERING TOMORROW Danfoss#21Eaton Hydraulics acquisition Transaction update ■ ■ ☐ Continued progress towards closing of the Eaton Hydraulics acquisition... White Drive Motors & Steering (White Drive) business established with divestment process ongoing Prerequisite for obtaining regulatory approvals necessary to close the acquisition of Eaton Hydraulics European Commission approved the Eaton Hydraulics acquisition subject to White Drive divestment ■ White Drive expected to also meet requirements of U.S. Department of Justice and other countries ■ White Drive business comprised EUR 170m of net sales in 2020 United States Hopkinsville, KY Motors Employees 170 Poland Wroclaw Motors & Steering Employees ~480 Germany Parchim Steering Employees ~150 Expected closing of Eaton Hydraulics acquisition during Q2 2021 21 Danfoss Debt Investor Presentation April 2021 Confidential ENGINEERING TOMORROW Danfoss#22Financial performance and capital structure 22 Danfoss Debt Investor Presentation April 2021 Confidential ENGINEERING TOMORROW Danfoss#23Profitability and cash flow Low earnings volatility, stable cash flow, increasing profitability and predictable debt reduction Low earnings volatility... EBITDA before OOI/E (EURM) 1.100 1.000 ...with increasing margins and cash flows... 600 Free operating cash flow after financial items and tax (EURm) EBITDA margin before OOI/E (% of net sales) 18,0% 450 17,0% 900 300 16,0% 800 150 15,0% 700 0 14,0% 2014 2015 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 ...from strong segment performance... EBITA (EURM) 500 Power Solutions Climate Solutions Drives 400 15.1% 16.4% 16.8% 300 16.8% 200 9.6% 100 0 2016 2017 2018 2019 2020 EBITA margin (%) ...has led to continued debt reduction Net interest-bearing debt / EBITDA before OOI/E (x) 3,0x Eaton Hydraulics acquisition Pro-forma 2020 leverage 2,5x Vacon acquisition 2,0x 1,5x 13.6% 1,0x 0,5x 0,0x 2014 2015 2016 2017 2018 2019 2020 2020PF EBITDA before OOI/E: EBITDA before other operating income and expenses Impact from IFRS 16 Lease: 2019 and 2020 EBITDA impact of EUR 59m and EUR 61m, 2019 and 2020 lease liabilities impact of EUR 142m and EUR 174m 23 Danfoss Debt Investor Presentation April 2021 Confidential ENGINEERING TOMORROW Danfoss#242020 financial performance Generating record cash flow despite COVID-19 Danfoss Danfoss Quarterly net sales growth (in local currency) EURM % % 2019 2020 Pro Forma 2020 % 2% 3% 1% Net sales 6,285 5,828 7,276 0% EBITDA before other operating income and expenses 1,028 16.4 1,008 17.3 1,131 15.5 -3% EBITDA 1,026 16.3 954 16.4 1,057 14.5 -6% -6% -7% EBITA 771 12.3 723 12.4 760 10.4 -9% -12% Free operating cash flow after financial items and tax Net interest bearing debt 463 7.4 493 8.5 1,048 537 3,147 -15% -14% Full Year 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Net interest bearing debt / EBITDA before OOI/E 1.0x 0.5x 2.8x • Danfoss has seen a gradual return to pre-COVID sales levels after the low point during Q2 2020 . • . In Q4 2020 Danfoss was back above 2019 sales volume with 2% local currency growth To counter lower sales during first half of 2020, fast actions were taken to reduce cost and CAPEX spend demonstrating the resilience of our strategy and the flexible operating model Fixed costs were adjusted to a lower level of activity without making permanent reductions in the workforce or discontinuing strategic projects EBITDA margin before other operating income and expenses ended at 17.3% - Free operating cash flow increased to EUR 493m in 2020 a record cash flow for Danfoss - confirming the cash generating capability of the Danfoss business model See slide 30-31 for Pro Forma breakdown 24 Danfoss Debt Investor Presentation April 2021 Confidential ENGINEERING TOMORROW Danfoss#25Financing and capital structure Maintaining a BBB rating and adequate liquidity are cornerstones of our policy Key area CREDIT RATING LIQUIDITY MATURITY SHAREHOLDER REMUNERATION Policy Maintain a capital and financing structure over the cycle that is compatible with a BBB credit rating Liquidity reserve equal to minimum 7.5% of net sales in terms of accessible cash and undrawn committed credit facilities Average maturity on committed credit facilities above 3 years Danfoss A/S dividend distribution up to 30% of previous year's net profit in addition to minority shareholder distribution Status BBB with stable outlook by S&P (29 March 2021) New EUR 2.5bn EMTN programme BBB rated (26th March 2021) Liquidity reserve of EUR 2.1bn incl EUR +500m of cash and cash equivalents at Danfoss A/S (+25% of 2020 Pro Forma net sales) Average maturity on committed credit facilities above 2 years. Above 3 years after the contemplated bond financing No dividend paid in 2020 and 2021 from Danfoss A/S and EUR 70m was injected by The Bitten & Mads Clausen's Foundation in 2020. Eaton Hydraulics financing and anticipated post take-out maturity profile Acquisition payment for Eaton Hydraulics • Cash purchase price of USD 3.3bn (EUR ~2.8bn) Indicative financing composition • Proposed bond take-out represents indicatively EUR 1.9bn • Cash at hand of EUR 500m • Bank term loan of EUR 400m EURM 800 Debt maturity profile (excl lease liabilities) 600 400 200 .... | | 2021 2022 2023 2024 2025 2026 ■EIB/NIB/Mortgage EUR Bond 2022 2027 2028 2029 2030 2031 Later ■Proposed new notes Bank term loan Outstanding EUR Bond maturing 2022 0 Prepaid via 2021 cash generation, White Drive divestment proceeds or RCF facilities 25 Danfoss Debt Investor Presentation April 2021 Confidential ENGINEERING TOMORROW Danfoss#26Key terms of the proposed bond offering Please see the EMTN Programme for complete Terms and Conditions Issuer Guarantor(s) Guarantor Rating (S&P) Expected Issue Rating (S&P) Status Currency Tenor Size Coupon Governing Law Listing Documentation Use of Proceeds Joint Bookrunners Target Market Danfoss Finance I B.V. Danfoss A/S and Danfoss Power Solutions Inc. Danfoss Finance I B.V. Danfoss A/S and Danfoss Power Solutions Inc. BBB (stable outlook, Danfoss A/S) [5 years] [EUR Benchmark] BBB Senior Unsecured Fixed EUR [7.5 years] [EUR Benchmark] Annual, ACT/ACT English Law Danfoss Finance II B.V. Danfoss A/S [10 years] [EUR Benchmark] Official List of Luxembourg Stock Exchange (Euro MTF market) EUR 2.5bn EMTN Programme dated 26th March 2021 [Finance the Eaton Hydraulics Acquisition (as described in the EMTN Programme)] BNP Paribas, Citi, Danske Bank, Nordea and SEB Danfoss' target market (MiFID II and UK MiFIR product governance) is eligible counterparties and professional clients only (all distribution channels). NO PRIIPs key information document (KID) or UK PRIIPS KID has been prepared as not available to retail in the EEA or the UK, respectively. 26 Danfoss Debt Investor Presentation April 2021 Confidential ENGINEERING TOMORROW Danfoss#27Key investment highlights Well-positioned to capitalize on global mega trends Robust and well-performing business segments with attractive market positions EBITA (EURM) EBITA margin (%) Strong and stable profit margin and cash generation over the cycle Free operating cash flow after financial items and tax (EURM) EBITDA before OOI/E margin (%) Digitalization Electrification Power Solutions ■Climate Solutions Drives 500 16.4% 15.1% 375 16.8% 455 463 493 441 359 Urbanization Climate change 16.8% 17.3% 250 13.6% 16.4% 9.6% 15.9% 15.8% 125 15.2% Food supply 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Proven M&A and integration track record EATON Hydraulics IKUSI velatia AAIM controls H HYDRAULIK NORD ARTEMIS INTELLIGENT POWER oca UQM TECHNOLOGIES SONDEX AXCO motors VACON PROSA WHITE KAZILO CLEANHEAT VISEDO Electricity in Motion Conservative financial policy targeting BBB rating Net interest-bearing debt / EBITDA before OOI/E (x) 1,9x 1,6x 1,5x H 1,1x 1,0x 1,0x 0,5x 2014 2015 2016 2017 2018 2019 2020 BBB credit rating in line with policy S&P Global Ratings BBB/A-2 with stable outlook We aim to be carbon neutral by 2030 while our solutions continue to support our customers in increasing energy efficiency and lower CO2 emissions 27 Danfoss Debt Investor Presentation April 2021 Confidential ENGINEERING TOMORROW Danfoss#28Appendix 28 Danfoss Debt Investor Presentation April 2021 Confidential ENGINEERING TOMORROW Danfoss#29Credit rating: BBB with stable outlook by S&P "...Danfoss has enough financial flexibility to quickly absorb the planned $3.3 billion acquisition of Eaton hydraulics business" - S&P March 2021 Rating update 29 March 2021 S&P Global Ratings Research Update: Ratings Direct® Danfoss A/S Outlook Revised To Stable From Negative; 'BBB/A-2' Ratings Affirmed; €2.5 Billion EMTN Program Rated 'BBB' March 29, 2021 PRIMARY CREDIT ANALYST Rating Action Overview - Operating performance at Danfoss A/S, a leading European producer of electrical and mechanical components, was better than we anticipated in 2020, with S&P Global Ratings-adjusted EBITDA margin stable at 16.4 % despite a revenue decline of 7.3% year on year. This, combined with higher-than-expected free operating cash flow (FOCF) resulted in funds from operations (FFO) to debt of about 93% compared with about 75% in our previous base case. Although the planned $3.3 billion acquisition of Eaton hydraulics business will significantly weighon credit metrics, wenow believe that Danfoss has enough financial flexibility to maintain pro-forma FFD to debt of about 30% in 2021, and sustainably above this level from 2022 onward. -We are therefore revising our outlook to stable from negative and affirming our BBB/A-2" long- and short-term issuer credit ratingson Danfoss, and assigning our 'BBB' issue rating to the company's new senior unsecured €2.5 billion euro medium-term note (EMTN) program. The stable outlook reflects our view that FFO to debt will remain comfortably above 30% and adjusted EBITDA margin will increase to about 16% in the 12-18 months after the planned acquisition of Eaton's hydraulics business. Marta Bevilacqua +(300272111298 marta bavilacqua @apglobal.com SECONDARY CONTACT Mikaela Hillman Stockholm +48 84 405917 mikasla hilman apgobel.com ADDITIONAL CONTACT Corporate Admin London @apglobe.com Rating Action Rationale Danfoss proved more resilient to the COVID-19 pandemic than we expected in 2020 and is likely to maintain adjusted FFO to debt of about 30% pro forma the acquisition from Eaton. Danfoss quickly prepared to meet unprecedented harsh market conditions. Over 2020, its adjusted EBITDA margins were not affected by the pandemic while revenue decreased by 7.3% This resulted in a healthy S&P Global Ratings-adjusted EBITDA margin of about 16.4%, against 16.2% reached in www.spglobal.com/ratingsdirect Rating summary Summary of rating update 29 March 2021 "Operating performance at Danfoss A/S, a leading European producer of electrical and mechanical components, was better than we anticipated in 2020".... "Although the planned $3.3 billion acquisition of Eaton hydraulics business will significantly weigh on credit metrics, we now believe that Danfoss has enough financial flexibility to maintain pro-forma FFO to debt of about 30% in 2021, and sustainably above this level from 2022 onward".... "Danfoss proved more resilient to the COVID-19 pandemic than we expected in 2020 and is likely to maintain adjusted FFO to debt of about 30% pro forma the acquisition from Eaton" Policy and history • Industrial Ratings Europe • March 29, 2021 1 Maintain a capital and financing structure over the cycle that is compatible with a BBB credit rating Danfoss has been BBB rated by S&P since 2012 Recent rating actions 29 March 2021: BBB with stable outlook, due to performance being better than anticipated 14 September 2020: BBB off credit watch, as a result of resilient performance 25 March 2020: BBB on credit watch negative, related to COVID-19 uncertainty 23 January 2020: BBB with negative outlook, upon announcing Eaton Hydraulics acquisition 29 Danfoss Debt Investor Presentation April 2021 Confidential ENGINEERING TOMORROW Danfoss#30Income Statement Danfoss 2019-2020 and Pro Forma 2020 Danfoss Danfoss EURM 2019 2020 Eaton Hydraulics 2020 White Drive Subtotal Adjustments Pro Forma 2020 2020 2020 2020 Net sales 6,285 5,828 1,619 -171 7,276 0 7,276 Cost of sales -4,173 -3,845 -1,216 124 -4,937 -76 -5,013 Gross profit 2,112 1,983 403 -47 2,339 -76 2,263 Research and development costs -272 -267 -36 1 -302 0 -302 Selling and distribution costs -864 -773 -163 6 -930 -37 -967 Administrative expenses -275 -270 -110 11 -369 0 -369 Other operating income and expenses -2 -54 -20 0 -74 0 -74 Share of profit from Ass./joint ventures -4 6 0 0 6 0 6 Operating profit (EBIT) 695 625 74 -29 670 -113 557 Financial income 4 2 0 0 2 0 2 Financial expenses Profit before tax Tax on profit Net profit EBITDA before other operating income and expenses -37 -50 -2 0 -52 -32 -84 662 577 72 -29 620 -145 475 -160 -142 0 0 -142 -26 -116 502 435 72 -29 478 -119 359 1,028 1,008 163 -40 0 1,131 EBITDA before other operating income and expenses margin (%) EBITDA 16.4% 17.3% 10.1% 23.4% 15.5% 1,026 954 143 -40 0 1,057 EBITDA margin (%) 16.3% 16.4% 8.8% 23.4% 14.5% EBITA 771 723 74 -32 -5 760 EBITA margin (%) 12.3% 12.4% 4.5% 18.7% 10.4% 30 Danfoss Debt Investor Presentation April 2021 Confidential ENGINEERING TOMORROW Danfoss#31Balance Sheet Danfoss 2019-2020 and Pro Forma 2020 Danfoss Danfoss EURM 2019 2020 Eaton Hydraulics 2020 White Drive Subtotal Adjustments Pro Forma 2020 2020 2020 2020 Intangible assets 2,426 2,313 170 -97 2,386 1,738 4,124 Property, plant and equipment 1,409 1,404 397 -60 1,741 48 1,789 Other non-current assets 382 389 7 0 396 0 396 Total non-current assets 4,217 4,106 574 -157 4,523 1,786 6,309 Inventories 742 703 301 -20 984 45 1,029 Trade receivables Other receivables 893 863 264 -7 1,120 0 1,120 134 129 31 -1 159 142 301 Cash and cash equivalents Total current assets Total Assets 110 611 18 0 629 -500 129 1,879 2,306 614 -28 2,892 -313 2,579 6,096 6,412 1,188 -185 7,415 1,473 8,888 Total shareholder's equity 2,933 3,184 808 -142 3,850 -602 3,248 Borrowings 1.093 1,103 29 -14 1,118 2,107 3,225 Other non-current liabilities 545 564 53 -3 614 32 646 Non-current liabilities 1,638 1,667 82 -17 1,732 2,139 3,871 Borrowings Trade payables Other current liabilities 76 68 12 -5 75 0 75 820 774 198 -21 951 0 951 629 719 88 0 807 -64 743 Current liabilities Total liabilities Total liabilities and shareholder's equity 1,525 1,561 298 -26 1,833 -64 1,769 3,163 3,228 380 -43 3,565 2,075 5,640 6,096 6,412 1,188 -185 7,415 1,473 8,888 31 Danfoss Debt Investor Presentation April 2021 Confidential ENGINEERING TOMORROW Danfoss#32Funding setup Legal overview Non-US Climate Solutions, Drives & Sales Companies The Bitten and Mads Clausen Foundation Bank term loan max EUR 400m Danfoss A/S (Denmark) S&P: BBB, Stable US-based Climate Solutions, Drives & Sales Companies Majority of non-US based Power Solutions Companies Non-US based Eaton HYD companies Non-US Eaton HYD Assets and Share deals Danfoss Power Solutions Inc. (US) Danfoss Power Solutions US Company (US) Danfoss Finance I B.V. (Netherlands) Danfoss Finance II B.V. (Netherlands) Danfoss Power Solutions II LLC (US) Senior notes 5 yr [EUR benchmark] 7.5 yr [EUR benchmark] US-based Eaton HYD Assets 32 Danfoss Debt Investor Presentation April 2021 Confidential Senior note 10 yr [EUR benchmark] Unconditional and Irrevocable Guarantee Issuers & Guarantors ENGINEERING TOMORROW Danfoss#33Danfoss ENGINEERING TOMORROW