Interim financial report 2013

MAKING MODERN LIVING POSSIBLE Interim financial report 2013 Danfoss delivers strong results in a flat market www.danfoss.com

Contents Danfoss delivers strong results in a flat market...3 Financial highlights...4 Interim report for the first half of 2013...5 Financial review...5 Balance sheet...6 Cash flows...6 Innovation...6 Employees...7 Changes to the Executive Committee...7 Full ownership of Sauer-Danfoss...7 Corporate citizenship...9 Outlook for 2013... 10 Danfoss Climate & Energy... 12 Sauer-Danfoss... 13 Income statement... 14 Balance sheet... 15 Cash flow statement... 16 Specification of equity... 17 Notes... 18 Accounting policies... 18 Exchange rates applied... 18 Quarterly financial highlights... 19 Page 2

Danfoss delivers strong results in a flat market The H1 interim report from Danfoss shows that the Group continues to deliver strong results under challenging global market conditions. With net sales of DKK 16,815m and EBIT before other operating income/expenses (exclusive of non-recurring costs relating to the acquisition of Sauer-Danfoss) of DKK 1,665m, the first-half results were satisfactory, but slightly below the strong showing for the first half of 2012. The strong free cash flow of DKK 925m supported the Group's efforts to further increase its financial maneuverability. Commenting on the interim report, President & CEO Niels B. Christiansen says: Our performance remains strong. The Core & Clear strategy is producing results, and our general underlying business is sound. We're delivering good results under the current market conditions, and our full-year guidance is unchanged. As expected, the second quarter proved to be better than the first, and we expect to continue improving our performance in the second half. I would like to note that we are again expanding in the important BRIC growth markets. Also, we are pleased that we have gained full ownership of Sauer-Danfoss and about the stronger position of the overall Group that we are already experiencing from that transaction. Danfoss has proven ability to seize growth opportunities as they arise. Consequently, earlier this year, Danfoss acquired the remaining shares in the joint venture Danfoss Turbocor Compressors; which has introduced a new energy-saving technology to the market. Also, the district heating business in Russia shows fast growth, and is almost at par with the net sales level throughout Europe. Generally, Danfoss enjoys strong demand for its energy and climate efficiency solutions in both Russia and Brazil, both markets generating double-digit growth rates. Furthermore, and the Group has also regained momentum in China. However, like the rest of the industry, we are also seeing slowing demand in the United States and Europe. The most distinct example of this is the European market for solar panels, which has virtually collapsed after a period of considerable uncertainty and changes to the politically induced framework conditions. That makes it very difficult to predict how the market will develop for the rest of the year, explains Niels B. Christiansen. In fact, the challenges encountered in the solar panel market are the main reason why the Danfoss Group's financial results were not quite in line with last year's. In addition, growth is to some extent deriving from other regions and business units than the Group had expected and had positioned the organization for. This is the reason why we continually adapt our businesses to current markets; so that we can maintain Danfoss' long-term position as an attractive place to work and a competitive business that delivers strong results year after year. Our ambitions for long-term growth are intact, says Niels B. Christiansen. Danfoss expects the global financial uncertainty prevailing in the first half of 2013 to continue for the rest of the year, causing sustained low visibility. Danfoss markets are expected to see modest overall growth with climate and energy solutions and globalization as the primary growth trends. At the same time, Danfoss expects a slightly stronger H2 performance, in part due to continuous enhancement of operations and the continuing implementation of the Core & Clear strategy. H1 2013 highlights H1 net sales were DKK 16,815m against DKK 17,222m in H1 2012, equal to a 2% decline that was mainly due to developments in the solar inverter business. Operating profit (EBIT before other operating income/expenses) amounted to DKK 1,665m compared to DKK 1,833m in the yearearlier period. The Group expects developments in the second half of 2013 to boost operating profit. The free cash flow amounted to DKK 925m compared to DKK 664m for the same period last year, lifted by improvements to the Group's investment activities and by the cash flow from operating activities relative to earnings remaining at an extremely high level. Outlook for 2013 The Group maintains the full-year guidance for 2013: Net sales for 2013 are expected to grow at a modest rate. Operating profit for 2013 is expected to grow in line with net sales. Please direct any queries about this announcement to: Danfoss Media Relations, tel.: +45 7020 4488 Page 3

Financial highlights Hoved- og nøgletal Mill. DKK (unless otherwise stated) Change in % 1st halfyear 2012 1st halfyear 2013 Change in % 2012 Q2 2012 Q2 2013 Profit and loss accounts: Net sales 8,865 8,752-1% 17,222 16,815-2% 34,007 Operating profit added depreciations, amortisations and impairments (EBITDA) 1,451 1,336-8% 2,668 2,393-10% 5,729 Operating profit excl. other income and expenses 1,009 987-2% 1,833 1,665-9% 3,705 Operating profit (EBIT) 1,016 907-11% 1,812 1,545-15% 3,745 Financial income/expenses -84-133 -58% -188-170 10% -371 Profit before tax 935 778-17% 1,628 1,380-15% 3,372 Net profit 696 556-20% 1,182 979-17% 2,357 Balance sheet: Total non-current assets 17,581 16,691-5% 17,038 Assets 29,723 28,450-4% 27,768 Total shareholders equity 13,399 10,445-22% 14,193 Net interest-bearing debt 4,778 6,721 41% 2,691 Net assets 17,979 17,089-5% 16,775 Capital expenditure 402 272-32% 589 463-21% 2,053 Cash flow statement: Cash flow from operating activities 1,225 1,265 3% 4,245 Cash flow from investing activities -561-340 *** -1,321 Acqquisition of intangible assets and property, plant and equipment. -560-471 -16% -1,169 Acquisition of subsidiaries and activities 6 0-100% -191 Free Cash flow 664 925 39% 2,924 Free cash flow before M&A 659 918 *** 3,019 Cash flow from financing activities -604-974 61% -2,779 Key figures: Organic net sales growth ( %) -2-1 -1-2 -2 EBIT margin excl. other operating income etc. (%) 11.4 11.3-0.1 10.6 10.0-0.6 10.9 EBIT margin (%) 11.5 10.4-1.1 10.5 9.2-1.3 11.0 EBITDA margin (%) 16.4 15.3-1.1 15.5 14.2-1.3 16.8 Equity ratio (%) 45.1 36.7-8.4 51.1 Leverage ratio (%) 35.7 64.3 28.6 19.0 Net interest bearing debt to EBITDA ratio 0.9 1.2 0.3 0.5 Number of employees (end of period) 23,376 23,155-1% 23,092 Page 4

Interim report for the first half of 2013 Danfoss delivered a satisfactory first-half performance under the still challenging global market conditions. Despite an improved Q2 compared to Q1, the H1 2013 revenue and EBIT ended just short of last year's strong H1 performance. The Group used the strong free cash flow to strengthen its financial maneuverability. Financial review Danfoss generated net sales of DKK 16,815m in what was a solid performance despite also being a 2% drop from the strong H1 2012 showing of DKK 17,222m. Q2 was stronger than Q1 and came close to Q2 last year. Net sales, EBIT & EBIT excl. divestitures - YTD 28,000 2,800 24,000 2,400 20,000 2,000 16,000 1,600 12,000 1,200 8,000 800 4,000 400 0 Q2 2010 Q2 2011 Q2 2012 Q2 2013 0 Sales distribution by regions - Group Other_Europe 10% Asia - Pacific 18% Africa - Middle East 2% Latin_America 5% EU 39% North_America 26% Economic slump in the US and European conventional markets sent revenue lower Strategic focus on BRIC countries continues to yield results With just a few exceptions, demand for climate and energy solutions generally remained at decent levels, but with considerable regional variation. Sales fell by 6% and 8% respectively in the traditional US and European markets. Group sales in the EU and Germany, its biggest market suffered severely with the plunging demand for solar panels caused by widespread uncertainty and changes to the politically induced framework conditions. On the other hand, the Group's long-term strategy of focusing on the BRIC countries produced successful results in the first six months of the year, the sales improvement almost offsetting the setback in the traditional markets. At 32%, Brazil provided the most remarkable sales growth of the BRIC countries with a diversified improvement covering several business units. Danfoss extended the string of double-digit sales growth in the Russian market, at Page 5

Impressive growth in Russia and Brazil Revenue recovering in China Sauer-Danfoss slowing sales decline in China a 19% improvement driven mainly by strong demand for district heating solutions. India was also a positive performer, and China regained its momentum at 6% sales growth. The Sauer-Danfoss business segment reported a 4% drop in sales that was mainly due to the slowing US market. The sales drop in China resulting from the Chinese authorities' attempts to achieve a controlled deceleration of the construction sector has been slowed in 2013. The Climate & Energy segment retained sales at the high level reported for H1 2012. The Group's operating profit (EBIT) amounted to DKK 1,545m against DKK 1,812m in H1 2012. EBIT before other operating income/expenses, this item being stated exclusive of extraordinary non-recurring costs of acquiring the outstanding shares in Sauer-Danfoss Inc. amounted to DKK 1,665m against DKK 1,833m in H1 2012. Through due care and diligence and by continually adapting costs to market demand, Danfoss successfully maintained its EBIT margin. The Group expects earnings to improve throughout the rest of 2013 as the full effects of these initiatives gradually materialize. Balance sheet Total assets amounted to DKK 28,450m against DKK 29,723m. Equity ratio was at June 30, 2013 37% against 45% at June 30, 2012. In Q2, Danfoss carried through the planned acquisition of the remaining 24% shares in Sauer-Danfoss Inc. As a result of the international accounting rules (IFRS), equity was DKK 10,445m at the half-year against DKK 13,399m at half-year 2012. This is due to the fact that, previously, minority interests were recognized in the equity, and their market value has increased since the valuation in 2008. Net interest-bearing debt was DKK 6,721m against DKK 4,778m at June 30, 2012. This change was also due to Danfoss taking full ownership of Sauer-Danfoss Inc. The current debt level corresponds to 1.2 x EBITDA for the last four quarters. The Group still considers this to be a satisfactory level. Danfoss maintains strong free cash flow Danfoss continues to invest in innovation Cash flows The free cash flow amounted to DKK 925m at June 30, 2013 against DKK 664m a year earlier. The amount consisted of a cash inflow from operating activities of DKK 1,265m and a cash outflow from investing activities of DKK 340m. Innovation Danfoss continues to invest in research and development. The total amount invested was DKK 695m compared to DKK 647m last year. Research & Development investments - YTD 800 700 600 500 400 300 200 Q2 2009 Q2 2010 Q2 2011 Q2 2012 Q2 2013 6% 5% 4% 3% 2% 1% 0% Da nfoss Group - mdkk Da nfoss Group - % o f net sales Page 6

Employees Danfoss had a total of 23.155 employees at June 30, 2013 against 23,092 at December 31, 2012.. Danfoss Group 23.155 23.376 Europe excl. Denmark 8.041 8.243 Denmark Asia-Pacific North America incl. Mexico Latin America Africa-Middle East 427 455 58 60 4.950 4.866 4.039 3.813 5.640 5.939 0 5.000 10.000 15.000 20.000 25.000 Q2 2013 Q2 2012 Changes to the Executive Committee Effective July 1, 2013, Jesper V. Christensen joined the Executive Committee as Executive Vice President & CFO. The other members of the Executive Committee are Niels B. Christiansen, President & CEO, and Kim Fausing, Executive Vice President & COO. Full ownership of Sauer-Danfoss Danfoss completed the planned purchase of the outstanding shares in Sauer-Danfoss Inc. on April 12, 2013, gaining full ownership of Sauer-Danfoss. The work to integrate the two businesses commenced immediately after the takeover and is currently progressing satisfactorily and according to plan. Sauer-Danfoss is now a wholly-owned business segment of the Danfoss Group. Danfoss recently announced that the segment will be renamed Danfoss Power Solutions effective from September 2013. Page 7

Danfoss A/S 2nd quarter, August 29, 2013 Page 8

Corporate Citizenship Resource consumption and CO2 emissions Danfoss continued its efforts to reduce CO2 emissions in accordance with the target of reducing emissions by 25% relative to the 2007-level by 2025. In other words, the goal is to reduce CO2 emissions to less than 135,000 metric tons by 2025. In the first six months of 2013, Danfoss emitted approximately 62,115 metric tons of CO2 against 62,950 metric tons in the same period of 2012. Total energy consumption for the reporting period was 645 TJ compared to 636 TJ in H1 2012. Electricity consumption was approximately 96.5 million kwh in H1 2012, which was 5% less than in the year-earlier period. Energy consumed for heating purposes increased by 10% relative to the first half of 2012. Danfoss consumed approximately 281,400 m 3 of water for processes and sanitary purposes, a 9% reduction relative to the year-earlier period. Responsible supplier management As part of its dedicated efforts, Danfoss will retain its focus in 2013 on ensuring that previously audited suppliers resolve any issues identified in a satisfactory manner. At the same time, the process of having all existing suppliers sign the Danfoss Code of Conduct continues. Danfoss continually reviews and adapts its purchasing organization and its supplier management tools. Prior to being approved as a new supplier of goods used in Danfoss products, suppliers are required to sign the Code of Conduct and undergo an initial audit to ensure that the supplier meets all Danfoss standards, requirements and expectations. In the first half of 2013, signed Codes of Conduct were collected from a total of 431 suppliers, and 60 audits were conducted, of which 22 were initial audits and 38 were follow-up audits. A total of 84% of all suppliers of goods used in Danfoss products have now signed the Danfoss Code of Conduct, and audits have been performed at 24% of these suppliers. Among suppliers in high-risk countries, signatures have been collected from 90% and 41% have been audited. Work-related lost time accidents The number of accidents entailing more than one day's absence was 46 in H1 2013 against 55 in the same period last year. At the same time, the accident frequency, which is calculated as the number of accidents per one million working hours, fell to 7.8 from 8.7 in H1 2012. Absence caused by work-related accidents, expressed as the number of lost days per 1,000 work days, fell to 0.9 from 1.2 in H1 2012. The average absence period for employees involved in a work-related accident was 14 days in H1 2013 against 17 days in H1 2012. Page 9

Outlook Danfoss expects the global financial uncertainty prevailing in the first half of 2013 to persist throughout the rest of the year, causing sustained low visibility. Danfoss markets are expected to see modest overall growth with climate and energy solutions and globalization as the primary growth trends. At the same time, Danfoss expects to retain profitability through ongoing operational improvements and the targeted strategic initiatives already launched. Net sales for 2013 are thus expected to grow at a modest rate. Operating profit for 2013 is expected to grow in line with net sales. Page 10

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Danfoss Climate & Energy Danfoss Climate & Energy consists of five divisions: Danfoss Refrigeration & Air Conditioning Controls, Danfoss Power Electronics, Danfoss Heating Solutions, Danfoss Commercial Compressors, and Danfoss District Energy. All divisions are leading players within the climate and energy sector. The segment is focused on providing energy-efficient and climate-friendly solutions for a range of selected business sectors. The divisions play leading roles within research, development, production, sales and service of mechanical and electronic products sold on the global market for cooling and air-conditioning, comfort and heating, control of electric motors and for a number of industries where energy efficiency is important. Net sales were maintained at DKK 10,665m against DKK 10,709m in H1 2012. As expected, the second quarter proved to be better than the first, and performance is expected to continue improving in the second half of the year. The Climate & Energy segment reported improvements in all BRIC countries, with Russia and Brazil as the strongest of the growth markets at 21% and 29% improvements. Sales were up by 7% in China and unchanged in India. Sales in the United States and Europe declined by 11% and 9%, respectively. The setback in the EU markets was predominantly due to the downturn of the solar inverter business caused by uncertainty regarding changes to the framework conditions for solar panels in Europe as well as changes to German and Danish subsidy schemes. Operating profit (EBIT) was DKK 885m against DKK 982m in H1 2012. The EBIT margin was 8.3% against 9.2%. Sales distribution by regions Net sales and EBIT 12,000 1,200 Asia/ Pacific 19% Other Europe 14% 10,000 1,000 8,000 800 Africa/ Middle East 3% 6,000 600 Latin America 6% 4,000 400 North America 13% EU 45% 2,000 0 Q2 2010 Q2 2011 Q2 2012 Q2 2013 200 0 DKK Mill. (unless otherwise stated) Q2 2012 Q2 2013 Change in % 1st halfyear 2012 1st halfyear 2013 Change in % 2012 Net sales 5,735 5,697-1% 10,709 10,665 0% 22,411 Operating profit (EBIT) 621 571-8% 982 885-10% 2,541 EBIT Margin 10.8% 10.0% 9.2% 8.3% 11.3% Capital expenditure 271 213-21% 437 354-19% 1,623 Number of employees 14,453 14,379-1% 14,319 Page 12

Sauer-Danfoss Sauer-Danfoss has four divisions: Hydrostatics, Work Function, Controls, and Stand Alone. Sauer-Danfoss is a global leader in the design, manufacture and sale of energy-efficient and performance-enhancing hydraulic and electronic systems and components, primarily for mobile applications. The company operates within the following business areas: Agriculture, Construction, Material Handling, Turf Care, and Specialty Equipment. Sauer-Danfoss began 2013 with prospects of a rather volatile market, due to a general decline in the construction industry. Net sales were down by 4% from DKK 6,260m in the very strong first half of 2012 to DKK 5,991m in H1 2013. The slump has led to a drop in sales in Sauer- Danfoss' biggest market, the United States. On the other hand, sales in Brazil were boosted by 36% and were maintained in China, both also important markets for Sauer-Danfoss. Overall sales developments were satisfactory and in line with Danfoss' expectations when the Group acquired the outstanding shares in Sauer-Danfoss. Operating profit (EBIT) was DKK 1,001m against DKK 1,065m in H1 2012. The EBIT margin was 16.7% against 17.0%. Sales distribution by regions Net sales and EBIT 0% Asia - Pacific 15% Other_Europe 4% 8,000 1,600 6,000 1,200 Latin_America 4% EU 31% 4,000 800 2,000 400 North_America 46% 0 Q2 2010 Q2 2011 Q2 2012 Q2 2013 0 DKK Mill. (unless otherwise stated) Q2 2012 Q2 2013 Change in % 1st halfyear 2012 1st halfyear 2013 Change in % 2012 Net sales 3,004 2,972-1% 6,260 5,991-4% 11,097 Operating profit (EBIT) 489 488 0% 1,065 1,001-6% 1,562 EBIT Margin 16.3% 16.4% 17.0% 16.7% 14.1% Capital expenditure 42 56 74 100 35% 284 Number of employees 6,457 6,302-2% 6,363 Page 13

Income statement Mill. DKK Q2 2012 Q2 2013 1st halfyear 2012 1st halfyear 2013 2012 Net sales 8,865 8,752 17,222 16,815 34,007 Cost of sales -6,214-6,025-12,159-11,784-23,803 Gross profit 2,651 2,727 5,063 5,031 10,204 Distribution expenses -1,253-1,322-2,482-2,548-5,021 Administration expenses -389-418 -748-818 -1,478 Operating profit excl. other income and expenses 1,009 987 1,833 1,665 3,705 Other operating income and expenses 7-80 -21-120 40 Operating profit (EBIT) 1,016 907 1,812 1,545 3,745 Income from associates and joint ventures after tax 3 4 4 5-2 Financial income/expenses -84-133 -188-170 -371 Profit before tax 935 778 1,628 1,380 3,372 Corporate tax expenses -239-222 -446-401 -1,015 Net profit 696 556 1,182 979 2,357 Page 14

Balance sheet Mill. DKK Q2 2012 Q2 2013 2012 Assets Non-current assets Intangible fixed assets 8,615 8,514 8,649 Tangible fixed assets 7,034 6,719 6,940 Non-current financial assets 1,932 1,458 1,449 Total non-current assets 17,581 16,691 17,038 Current assets Inventories 4,671 4,371 4,050 Accounts receivable 6,606 6,564 5,792 Marketable securities 59 0 0 Cash and cash equivalents 806 824 888 Total current assets 12,142 11,759 10,730 Total assets 29,723 28,450 27,768 Liabilities and shareholders' equity Total shareholders equity 13,399 10,445 14,193 Liabilities Non-current liabilities 8,506 10,442 6,879 Current liabilities 7,818 7,563 6,696 Total liabilities 16,324 18,005 13,575 Total liabilities and shareholders equity 29,723 28,450 27,768 Page 15

Cash flow statement Mill. DKK 1st halfyear 2012 1st halfyear 2013 2012 Profit before tax from continuing operations 1,628 1,380 3,372 Adjustments for non-cash transactions 772 979 1,738 Changes in working capital -433-560 538 Cash flow generated from operations 1,967 1,799 5,648 Financial income 16-9 39 Financial expenses -403-133 -532 Dividends received 8 7 15 Cash flow from operations before tax 1,588 1,664 5,170 Paid tax -363-399 -925 Cash flow from operating activities 1,225 1,265 4,245 Acquisition of intangible fixed assets -53-55 -101 Acquisition of tangible fixed assets -524-432 -1,122 Proceeds from sale of tangible fixed assets 17 16 54 Acquisition of subsidiaries etc. 0 0-415 Proceeds from disposal of subsidiaries etc. 6 0 224 Acquisition (-) and sale of other investments etc. -7 131 39 Cash flow from investing activities -561-340 -1,321 Free Cash flow 664 925 2,924 Financing by non-shareholders: Repayment of (-)/proceeds from interest-bearing debt 43 3,720-2,045 Financing by shareholders: Repurchase (-)/sale of own shares -232-111 -199 Addition/disposal of minority interest 0-4,086 0 Dividends paid to shareholder in the Parent Company -320-396 -320 Dividends paid to minority shareholders -95-101 -215 Cash flow from financing activities -604-974 -2,779 Net change in cash and cash equivalents 60-49 145 Cash and cash equivalents (beginning of period) 744 888 744 Foreign exchange adjustment of cash and cash equivalents 2-15 -1 Cash and cash equivalents (end of period) 806 824 888 Page 16

Specification of equity Mill. DKK Share capital Share premium Hedging reserves Currency translation Reserve own shares Other reserves Reserves Proposed dividends Danfoss A/S' share of equity Minority interest Total equity Balance at 1 January 2012 1,043 685-137 -277-814 9,511 8,283 329 10,340 2,257 12,597 Comprehensive income in 2012 Net profit 1,598 1,598 400 1,998 359 2,357 Other comprehensive income Foreign exchange adjustments when converting foreign currencies -6-6 -6-30 -36 Fair value adjustment of hedging reserve: 0 0 0 Fair value adjustment of the year regarding 0 0 0 hedging of net investments in subsidiaries 35 35 35 35 Fair value adjustment of the year 0 0 0 regarding hedging of future cash flows 39 39 39 2 41 Fair value adjustment transferred to Net sales 87 87 87 5 92 Actuarial gain/loss (-) on 0 0 0 defined benefit plans -176-176 -176-26 -202 Tax on Other comprehensive income -30-9 49 10 10 8 18 Other comprehensive income 96 20-127 -11-11 -41-52 Comprehensive income in the period 96 20 1,471 1,587 400 1,987 318 2,305 Transactions with owners Dividends to shareholders 9 9-329 -320-237 -557 Capital increase/purchase of treasury shares 7 228-387 -387-152 -152 Capital reduction -30-543 926-353 573 0 Total transactions with owners -23-315 539-344 195-329 -472-237 -709 Balance at 31 December 2012 1,020 370-41 -257-275 10,638 10,065 400 11,855 2,338 14,193 Comprehensive income in 2013 Net profit 0 0 0 0 0 791 791 791 188 979 Other comprehensive income Foreign exchange adjustments when converting foreign currencies 0 0 0-42 0 0-42 0-42 -26-68 Fair value adjustment of hedging reserve: 0 0 0 0 0 0 0 0 0 Fair value adjustment of the year regarding 0 0 0 0 0 0 0 0 0 hedging of net investments in subsidiaries 0 0 0-34 0 0-34 0-34 0-34 Fair value adjustment of the year 0 0 0 0 0 0 0 0 0 regarding hedging of future cash flows 0 0 42 0 0 0 42 0 42-2 40 Fair value adjustment transferred to Net sales 0 0 17 0 0 0 17 0 17 17 Actuarial gain/loss (-) on 0 0 0 0 0 0 defined benefit plans 0 0 0 0 0-14 -14 0-14 -2-16 Tax on Other comprehensive income 0 0-15 8 0 4-3 0-3 -3 Other comprehensive income 44-68 -10-34 -34-30 -64 Comprehensive income in the period 44-68 0 781 757 0 757 158 915 Transactions with owners Dividends to shareholders 0 0 0 0 0 13 13-400 -387-79 -466 Purchase of minority interest 0 0 0 0 0-2,687-2,687-2,687-1,399-4,086 Capital increase/purchase of treasury shares 1 38 0 0-150 -150 0-111 -111 Capital reduction 0 0 0 0 0 0 Total transactions with owners 1 38-150 -2,674-2,824-400 -3,185-1,478-4,663 Balance at 30 June 2013 1,021 408 3-325 -425 8,745 7,998 0 9,427 1,018 10,445 Page 17

Notes Accounting policies Danfoss prepares its annual reports and interim reports in accordance with IFRS (International Financial Reporting Standards). For a detailed description of the accounting policies applied, see Danfoss' annual report 2012. Please note that this interim report is not presented in accordance with IAS 34 Interim financial reporting, and that the financial data are unaudited. Exchange rates applied The interim report is presented in Danish kroner. The figures in the income statement have been translated into DKK using the average exchange rates of the reporting period. The balance sheet has been translated using the end-of-period exchange rates. Currency 1st half-year 2012 Ending rates 1st half-year 2013 Ending rates 2012 Ending rates 1st half-year 2012 Average rates 1st half-year 2013 Average rates 2012 Average rates EUR 7.43 7.46 7.46 7.44 7.46 7.44 GBP 9.29 8.76 9.13 9.04 8.77 9.18 USD 5.98 5.73 5.66 5.73 5.68 5.79 Page 18

Quarterly financial highlights Mill. DKK (unless otherwise stated) Q1 2012 Q2 2012 Q3 2012 Q4 2012 2012 Q1 2013 Q2 2013 Profit and loss accounts Net sales 8,357 8,865 8,763 8,022 34,007 8,063 8,752 Operating profit added depreciations, amortisations and impairments (EBITDA) 1,217 1,451 1,565 1,496 5,729 1,057 1,336 Operating profit excl. other income and expenses 823 1,009 1,119 753 3,705 679 987 Operating profit (EBIT) 796 1,016 1,130 803 3,745 638 907 Financial income/expenses -103-85 -55-128 -371-36 -133 Profit before tax 693 935 1,076 667 3,372 603 778 Net profit 486 696 804 371 2,357 422 556 Balance sheet Total non-current assets 17,297 17,581 17,101 17,038 17,038 17,024 16,691 Assets 29,057 29,723 28,857 27,768 27,768 28,546 28,450 Total shareholders equity 12,997 13,398 14,153 14,193 14,193 14,637 10,445 Net interest-bearing debt 4,493 4,778 3,396 2,691 2,691 2,767 6,721 Net assets 17,304 17,979 17,353 16,775 16,775 17,332 17,089 Capital expenditure 187 402 234 1,230 2,053 191 272 Cash flow statement Cash flow from operating activities 317 1,225 2,770 4,245 4,245 435 1,265 Cash flow from investing activities -195-561 -694-1,321-1,321-56 -340 acquisition of intangible assets and property, plant and equipment -183-560 -772-1,169-1,169-167 -471 acquisition of subsidiaries and activities 0 6 6-191 -191 0 0 Free Cash flow 122 664 2,076 2,924 2,924 378 925 Free cash flow before M&A 121 659 2,078 3,019 3,019 365 918 Cash flow from financing activities -5-604 -1,898-2,779-2,779-530 -974 Key figures Organic net sales growth ( %) 0-2 0-3 -2-4 -1 EBIT margin excl. other operating income etc. (%) 9.9 11.4 12.8 8.4 10.9 8.5 11.3 EBIT margin (%) 9.5 11.5 12.9 8.5 11.0 7.9 10.4 EBITDA margin (%) 14.6 16.4 17.9 15.0 16.8 13.1 15.3 Equity ratio (%) 44.7 45.1 49.0 51.1 51.1 51.3 36.7 Leverage ratio (%) 34.6 35.7 24.0 19.0 19.0 18.9 64.3 Net interest bearing debt to EBITDA ratio 0.8 0.9 0.6 0.5 0.5 0.5 1.2 Geographical segments Total net sales EU 3,511 3,621 3,518 3,086 13,735 3,268 3,377 Rest of Europe 674 867 1,082 1,040 3,663 803 944 Asia 1,332 1,434 1,605 1,529 5,899 1,242 1,551 North America 2,159 2,260 1,855 1,671 7,945 2,081 2,113 Africa 53 84 75 61 274 51 68 Pacific 143 138 129 141 551 128 128 Latin America 400 352 407 397 1,556 400 449 Middle East 85 109 92 97 384 90 122 Total 8,357 8,865 8,763 8,022 34,007 8,063 8,752 Number of employees Europe excl. Denmark 8,146 8,243 8,139 7,977 7,977 7,973 8,041 North America incl. Mexico 3,718 3,813 3,877 3,988 3,988 3,994 4,039 Latin America 448 455 454 451 451 441 427 Asia-Pacific incl. China 4,807 4,866 4,904 4,895 4,895 4,894 4,950 Africa - Middle East 56 60 60 54 54 57 58 Denmark 6,051 5,939 5,767 5,727 5,727 5,684 5,640 Total 23,226 23,376 23,201 23,092 23,092 23,043 23,155 Total exclusive sold companies/activities 23,120 23,310 23,135 23,092 23,092 23,043 23,155 Page 19

Further information is available on Danfoss' website: www.danfoss.com Date of publication: August 29, 2013 This interim report is available in Danish and English. In the event of any discrepancy between the two versions, the Danish language version shall prevail. Contact address: Danfoss A/S 6430 Nordborg Tel.: 7488 2222 Fax: 7449 0949 E-mail:danfoss@danfoss.com