The Daikin Group works to boost business performance and raise corporate value in order to meet the expectations of shareholders, investors, and other stakeholders. To this end, we stress free cash flow (a management indicator that can be said to be the source of corporate value), boost earnings, and reduce accounts receivable and inventory.
Fiscal 2011 had a troubling start, with the Great East Japan Earthquake and increasing raw material prices. But the Daikin Group banded together to minimize these effects: maximizing inventory, gaining supplier support, and absorbing high raw material costs into product prices. As well, the power shortages caused by the earthquake prompted us to come out with more energy-efficient products and services to help reduce energy consumption. Globally, we began full-fledged entry into mass consumer markets in emerging countries, where air conditioner demand is rapidly increasing. We also expanded our foray into what we call the environmental innovation business, which includes heating, hot water, filters, and fluorochemicals. As a result of these efforts, net sales were 1.2187 trillion yen, up 5% over fiscal 2010, and group operating income was 81.2 billion yen, up 7.6%.
For fiscal 2012, we plan to step up business in emerging countries by developing and introducing products with the quality and price to meet local consumer needs. As well, in our energy saving solutions business, we will offer an expanding service network to customers in Japan and around the world. And in our environmental innovation business, we will expand worldwide through efforts including the introduction of hybrid products for the combustion-type heating market.
Fiscal Year End Stock Prices
Operating Income Margin
Daikin Industries has been selected for the tenth year in a row for inclusion in the Dow Jones Sustainability Indexes, which comprise approximately 300 leading companies worldwide selected through evaluation based on economic, environmental, and social criteria.
Daikin has also been selected for the Morningstar and other SRI* (socially responsible investing) funds.
* SRI Fund: SRI funds are made up of companies that, in addition to being rated as financially sound, demonstrate outstanding environmental protection and social responsibility in areas such as legal compliance and the promotion of human rights.
Daikin Industries was given a Silver Class distinction in the SAM Awards for Japanese companies demonstrating outstanding sustainability. The awards are conducted by Sustainable Asset Management (SAM), a Swiss asset management company.
Every year, SAM assesses approximately 2,500 companies worldwide in aspects such as economics, environment, and society, and awards distinctions in the three classes of gold, silver, and bronze. There were 21 Japanese companies chosen in fiscal 2011.
By setting a target of maintaining at least a 2.0% ratio of dividends to shareholders equity, we strive to pay stable dividends that take into account a range of factors including consolidated performance, financial situations, and capital needs. The dividend for fiscal 2011 was 36 yen.
With regard to internal reserves, we will allot them to strategic investments aimed at achieving business expansion, and improving competitiveness: these include expanding bases in China, boosting chemical production volume in China and the U.S., accelerating the development of global business (by, for example, expanding sales networks in emerging countries), and developing environmentally conscious products.
Dividends to Shareholders Equity
To ensure that shareholders have more time to consider new proposals before voting at the Ordinary General Meeting of Shareholders, we send announcements of the meeting at least a week earlier than is legally required. To remedy the discrepancy in information available in Japan and other countries, we translate announcements of shareholder meetings into English and send these to overseas institutional investors, and we have an English version of our website.
Since fiscal 2003, we have striven to get as many shareholders as possible to exercise their voting rights by allowing voting over the Internet. This means that those who cannot attend meetings in person can still exercise their voting rights by personal computer or mobile phone. In fiscal 2006, we adopted a platform for exercising voting rights, which made it even easier for institutional investors to vote.
As a result of these efforts, the percentage of voting rights exercised reached 78.18% in fiscal 2011. The number of votes cast over the Internet also increased to 1,056,103 in fiscal 2011 (1,115 shareholders).
Voting Rights Exercised
|Voting rights exercised||Votes cast over the Internet||Shareholders voting online|
Breakdown of Shareholders (March 31, 2012)