Debt Investor Presentation April 2021

Credit 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

View entire presentation