FORMULATION OF FUSION 25 LATTER-HALF THREE-YEAR PLAN

Daikin Industries, Ltd. has formulated the Latter-Half Three-Year plan (FY2023-FY2025) for its strategic management plan Fusion 25 with fiscal year 2025 as the final year.

Having started in fiscal year 2021, Fusion 25 now marks the mid-year of the five-year plan. Because of the global spread of the COVID-19 pandemic, Fusion 25 started in the midst of unprecedented environmental changes and great uncertainty for the future. Responding to a series of environmental changes that included supply chain problems, acceleration of the movement toward a decarbonized society, the emergence of geopolitical risks, and rising inflation, Daikin achieved results by taking measures one step or half a step ahead of competitors and by leveraging the strengths it has cultivated over many years, such as business localization based on local production for local consumption, a sales network that has expanded worldwide, and the action-taking ability of the organization.

This fiscal term Daikin plans net sales of JPY4.1 trillion and operating profit of JPY400 billion, which are well ahead of its original Fusion 25 midway targets (net sales of JPY3.1 trillion and operating profit of JPY325 billion).

Based on the results of the first half of Fusion 25 and changes in the business environment, quantitative targets of JPY4.55 trillion for net sales and JPY500 billion for operating profit (operating profit margin of 11%) have been set in the Latter-Half Three-Year Plan for achievement in fiscal year 2025.

In addition to the key themes of 'Challenge to Achieve Carbon Neutrality,' 'Promotion of Solutions Business Connected with Customers,' 'Creating Value with Air,' and 'AC Business in North America' that were among the Nine Key Themes set at the outset, the company has added two new themes, including the theme of 'Establishment of a Major Base in India.' To further refine and implement these key strategies, the Latter-Half Plan calls for Daikin to invest approximately JPY1.2 trillion over the next three years for research and development, enhancement of production capacity, and further business expansion in response to the changing times.

Through Fusion 25, a management strategy that emphasizes execution, Daikin looks to provide new value for the environment and air, contribute to a sustainable society, and realize growth of the Daikin Group.