Daikin Industries (6367) Investor presentation summary

Review of previous plan and current challenges

• Net sales exceeded targets, driven by growth in the Applied business and favorable FX, but operating profit margin and ROE missed targets.

• Margin pressure resulted from increased costs, intensified competition, and insufficient cost reductions.

• Market changes included slowed housing markets in North America and Europe, and intensified price competition in Asia.

• Recovery strategies included strengthening service networks, cost reductions, and maintaining high selling prices.

FUSION 30 framework and strategic themes

• Focus on addressing social issues, shifting to emerging markets, and responding to digital transformation and resource shortages.

• Key themes: growth in high-profit domains, cost structure reform, turnaround of low-profit businesses, and management foundation enhancement.

• Economic targets for FY2028: 10% operating profit margin, 12% ROE, 6% net sales CAGR.

• Social targets include reducing CO2 emissions per net sales by 40% and expanding sustainable air conditioning access.

Growth strategies and investment allocation

• Transform into a solutions provider, aiming for solutions to comprise 40% of air conditioning sales by FY2030.

• Enhance profitability in North America by expanding premium products and solutions, targeting a 13% operating margin.

• Strengthen the Chemicals business with a target of over 20% operating margin by FY2030, focusing on high-performance materials and new refrigerants.

• Allocate ¥1.8 trillion to growth investments over five years, prioritizing applied, solutions, chemicals, and digital transformation.