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2 | Group presentation, May 2018
26,645Employees
WORLDWIDE SALESin more than 100 countries
72 FACTORIESin more than 20 countries
Key facts
USA, CHINAAND GERMANYTop three markets
PRIVATELY HELDOwnership
NORDBORG,DENMARKHeadquarters
3 | Group presentation, May 2018
2017 at a glance
Results Regions
37%Share of
Group sales
9%Share of
Group sales
22%Share of
Group sales
Western Europe Eastern Europe North America
Asia-Pacific Latin America Africa-Middle East
Sales EURbn
5.8
Growth in local currency
12%
EBIT EURm
645
Net profit EURm
445
EBIT margin
11.1%
24%Share of
Group sales
5%Share of
Group sales
3%Share of
Group sales
4 | Group presentation, May 2018
#2 Market position
Business segments
32%of Group net sales
• 6,815 employees• 22 factories in 11 countries• 1.9bn EUR
#1 Market position
• 6,396 employees• 13 factories in 10 countries• 1.6bn EUR
#2 Market position
24%of Group net sales
• 4,652 employees• 11 factories in 7 countries• 1.4bn EUR
#1 Market position
• 5,339 employees• 26 factories in 12 countries• 1.0bn EUR
27%of Group net sales
17%of Group net sales
DANFOSS POWER SOLUTIONS
DANFOSS COOLING DANFOSS DRIVES DANFOSS HEATING
5 | Group presentation, May 2018
Danfoss Group Executive Team
President & CEO
Kim Fausing
Executive Vice President & CFO
Jesper V. Christensen
Segment President, Danfoss Power Solutions
Eric Alström
Segment President, Danfoss Cooling
Jürgen Fischer
Segment President, Danfoss Drives
Vesa Laisi
Segment President, Danfoss Heating
Lars Tveen
Regions
North America Central Europe North Europe China South Europe Asia Pacific
Latin America Russia Eastern Europe Turkey, Middle East & Africa India Global Accounts
Organization
Segments
GlobalServices
GroupFunctions
Danfoss Power Solutions Danfoss Cooling Danfoss Drives Danfoss Heating
6 | Group presentation, May 2018
Committed employees
• More than 26,000 employees dedicated to engineering solutions that make a difference to people and businesses worldwide
• High employee engagement (2017: 79 on 1-100 scale)
7 | Group presentation, May 2018
Employees worldwide
North America
3,957Western Europe
10,360Eastern Europe
4,769
Latin America
1,367Africa-Middle
East
281
Asia-Pacific
5,911
8 | Group presentation, May 2018
Innovation that makes a difference
Massive investments in innovation – 4.0% of net sales in 2017
Customer involvement from
start to finish
50 product lines that meet needs
and make a difference
On average, Danfoss is granted
a new patent every day
The right technology can keep the world cool, hot, and powered up with the least amount of energy
9 | Group presentation, May 2018
Innovation that makes a difference
Danfoss awarded for its Turbocor® compressors
In 2017, Danfoss was awarded for its innovative Turbocor®
technology: Bronze Winner in the Edison Awards and an Innovation Award at the China Refrigeration Expo. Danfoss is the pioneer and leader of oil-free, magnetic bearing, variable speed centrifugal compressors for high-efficiency air-conditioning chillers.
Because Turbocor® compressors are frictionless, with no wearing parts, the compressors maintain high performance over time, helping end-users to lower maintenance costs and achieve significant energy-savings compared with traditional systems.
10 | Group presentation, May 2018
Innovation that makes a difference
Smart heating with Danfoss LinkTM
Energy efficiency saves money, reduces air pollution, strengthens competitiveness and delivers short payback time on investments. Well-proven Danfoss technologies help increase energy efficiency.
For example, Danfoss LinkTM is the easiest way to smart heating, saves up to 30% on home heating costs, and enables people to control home heating from anywhere –directly on a smartphone with the Danfoss LinkTM app. Danfoss LinkTM is the only system that effortlessly helps people control both electronic radiator thermostats and floor heating.
11 | Group presentation, May 2018
Innovation that makes a difference
Spearheading autonomous off-highway vehicles
In the future, the way of transporting goods and people will eventually be without involvement from an operator. Autonomous vehicles are also expected to take over most off-road applications, which is why Danfoss has been on the autonomous driving technology path for some time.
In 2017, DAVIS – Danfoss Autonomous Vehicle Integration System – was introduced at the trade fair for agricultural machinery, Agritechnica, in Germany. The early prototype introduction of DAVIS provided valuable feedback and insights from customers about their needs for autonomous driving systems of the future, and how Danfoss can take the lead when developing the autonomous driving technologies of tomorrow.
12 | Group presentation, May 2018
Our history
• Founded in 1933 by Mads Clausen in Nordborg, Denmark
• Grown from a solo enterprise into a world-leader
• Made possible by clear focus on innovative engineering and early entry on emerging markets
Cooling
Danfoss invented one of the first radiator thermostats in the world (1943)
Entered hydraulicsbusiness with orbit motor for agricultural and construction machines(1964)
Later the hermeticcompressor for refrigerators and freezers followed(1952)
First company to mass-produce variable speed drives for controlling motors (1968)
Today, we are one of the world’s leading producers of these and many other products
First product wasan expansion valvefor refrigerationsystems (1933)
Heating Power Solutions Drives
14 | Group presentation, May 2018
Danfoss Heating at a glance
26FACTORIES IN 12 COUNTRIES
5,339EMPLOYEES WORLDWIDE
NUMBER OF COUNTRIES INWHICH OUR PRODUCTS ARE SOLD
100
TOP 5 MARKETS
NORTH AMERICA
LATIN AMERICA
EU
AFRICA/MIDDLE EAST
OTHER EUROPE
ASIA-PACIFIC
Russia
Danfoss Growth Themes Core & Clear Strategy
Denmark
UKGermany
China
Commercial (Non-residential)
Residential 1-2 family houses and multi-family houses
District energy networks
Danfoss Heating application areas
15 | Group presentation, May 2018
Domestic thermostats and District heating controls form Danfoss heating division
Trata acquisitionand concentration of controls production (Slovenia)
Heating split into twodivisions: District Energy (DEN) and Heating Solutions (HS
DEN and HS combine forces, forming Danfoss Heating Segment
Thermia acquisition:heat pumps(Sweden)
Ridan acquisition – heat exchangers (Russia)
Expansion of Anshan district heating production facility in China
DEVI electricalheating acquisition(Denmark)
Gemina Termixacquisition – light duty stations (Denmark)
Rapid growth via M&A and Emerging Markets
Two divisions, Core & Clear
Early years, product line focus New chapter
LPM Group acquisition: HEX & large stations (Finland)
Acquisition of Anshan facility in China via IWK
1978 1995 2009 2015200720052001 2013200420032000 2016 2017
Redan acquisition –light duty stations (Denmark)
Acquisition of Sondex July 2016
Stake acquired in Leanheat September 2016
Vertical Approach to Markets and
Customers Launched January
2017
Danfoss Heating Segment Our inheritance and key milestones
Danfoss Heating Divisionestablished
2018
16 | Group presentation, May 2018
DHS Strategy
Leadership in Advanced Components
Vertical Approach
▪ Foundation for Heating’s business
▪ Scale and innovation
▪ Electronics & connected products
▪ Global strategies
▪ Increase customer focus and relevance
▪ Stronger value propositions
▪ + analytics and services
▪ Local strategies
17 | Group presentation, May 2018
Our Verticals
• Radiator thermostats, floor heating, heat pumps, and smart heating solutions, balancing valves (hydronic balancing of the heating system), flat stations, domestic hot water systems, energy meters etc.
• HVAC digital and manual actuators, hydronic balancing valves, control valves, floor heating, hydronic-or electrical floor heating, heat exchangers, radiator thermostats, heat pumps, pressure independent balancing and control valves, and electronic controllers.
RESIDENTIAL
• Substations, light and heavy duty stations, controls, flat stations, heat exchangers, and domestic hot water systems.
• All components that belong to a substation: control and balancing valves, heat exchangers, electronic controllers and monitoring systems.
MULTI-FAMILY
SINGLE FAMILY
NON-RESIDENTIAL
DISTRICT ENERGY
NON-RESIDENTIAL DISTRICT ENERGY
• Radiator thermostats, floor heating, heat pumps, and smart heating solutions, balancing valves (hydronic balancing of the heating system), flat stations, domestic hot water systems, energy meters etc.
18 | Group presentation, May 2018
District Energy remains a key infrastructure for energy efficiency District Energy
19 | Group presentation, May 2018
District energy is an infrastructure for distributing heating and cooling to buildings in cities. Danfoss has since 1970’s been providing solutions such as substations and key components like heat exchangers that typically save 20-30% energy in district energy networks and end-consumption
District Energy
Substations
Plate Heat Exchangers
Flat stations & DHW systems
Electronic controllers& Automatic controls
20 | Group presentation, May 2018
Building a leading position in heat transfer
▪ Acquisition of Sondex in September 2016
▪ One strong combined plate heat exchanger business
▪ Unmatched value proposition within heat transfer solutions
▪ 1,200 employees
22 | Group presentation, May 2018 22 | Heating Segment
Brazed heat exchangers
* DW = Double Wall (Sonder Safe)
XB Micro Plate Pattern
SL Fishbone Plate Pattern
23 | Group presentation, May 2018
Significant energy saving potential in existing buildings in Europe – with Danfoss products
28%40%
Get The Basics Right Scenario Energy savings using TRV, automatic hydronic balancing
High-Performance Scenario Energy savings. As Get The Basics + More advanced building automation and control measures
21% 33%
Multi-Family Houses Single-Family Houses
Non-Residential Buildings
20% 41%
Source: Ecofys, 2017: ‘Optimising the energy use of technical building systems – unleashing the power of the EPBD’s Article 8’
24 | Group presentation, May 2018
District Energy remains a key infrastructure for energy efficiency District Energy