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Message from Management

Transforming the Changes Caused by Uncertain Times into Opportunities

In fiscal 2021, despite challenging business conditions, including the COVID-19 pandemic, soaring prices of raw materials, and semiconductor shortages, Daikin recorded net sales that surpassed 3 trillion yen and operating income in the 300 billion yen range for the first time. Living in a time of turbulent change presents opportunities for reform, and we will continue to tackle challenges and implement new measures.

Achieving Both Business Growth and Solutions to Social Issues as the Social Mission of an Air Conditioner Manufacturer

Over the years, Daikin has supplied products and services utilizing environmental technologies as the only company in the world that manufactures both air conditioners and refrigerants. Our core business of air conditioning, which has transformed the indoor environment in hot climate regions, is considered a part of the infrastructure that underpins society. Our products and services have been used to prevent heatstroke and improve air quality, thereby contributing to customers' health and economic development by improving work efficiency.

On the other hand, as worldwide demand for air conditioning is expected to triple by 2050, increased demand for electricity poses serious issues. The Group's social mission is to minimize the impact of future global warming while providing healthy and comfortable air environments that are safe and reliable, which has increased in importance during the COVID-19 pandemic. Daikin is committed to being a company always looking for ways to resolve environmental and social issues while achieving business growth.

Steadfast Efforts Toward Carbon Neutrality

The world has made a sharp and accelerated turn toward carbon neutrality. The Daikin Group has seized this opportunity to establish "Challenge to achieve carbon neutrality" as one of the growth strategy themes of Fusion 25, our strategic management plan running through 2025, based on the Environmental Vision 2050, which aims to achieve net zero greenhouse gas emissions by 2050. We have set a target to reduce net greenhouse gas emissions throughout the entire lifecycle of our products by 50% or more in 2030 compared to BAU* with fiscal 2019 as the base year. In fiscal 2021, we reduced net emissions by 10% by expanding the sales of energy efficient products mainly in Asia.

The rising cost of energy, in especially recent years, presents the Daikin Group with an opportunity to spread our products and services with low environmental impact worldwide because of our leading environmental technologies of inverters and refrigerants with lower global warming potential. As the transition from gasoline-powered vehicles to electric vehicles continues, we will make new investments in the European market as we aim to promote the switch from combustion heating to heat-pumps that use heat in the air.

With efforts to achieve a decarbonized society being rolled out widely around the world, it is our top priority to further speed up our initiatives to reduce greenhouse gas emissions across the entire lifecycle.

Business As Usual
In this context, BAU refers to emissions in case of normal business growth without the implementation of countermeasures.
Net sales, Reduction rate of net greenhouse gas (GHG) emissions
Net GHG emissions equals GHG emissions during the product lifecycle minus contribution to GHG emissions reduction.

Utilizing Diversity in Human Resources as a Source of Our Competitiveness

Daikin Group's greatest strengths are "flat and speedy" management aiming to promote solidarity in organizational management along with closeness between management and frontline workers and "diversity management" that seeks to attract diverse talent in terms of culture, ethnicity, age, and lifestyle habits and harness their individuality and strengths as the organization's strength. The diverse value offered by the Daikin Group's 80,000-strong workforce serves as the source of our competitiveness, which is backed by the cohesiveness and trust between management and employees. Our ability to refine management's capabilities utilizing the diversity of our workforce will make Daikin's sustainable growth a reality.

Continuing to Live Up to the Expectations of Stakeholders

Daikin has supported the 10 principles of the UN Global Compact since 2008 and endorsed the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) since 2019. We are committed to continuously meeting the expectations of our various stakeholders, including customers, shareholders, investors, suppliers, employees, and local communities as a company that gives back to society as it grows.

Masanori Togawa
President and CEO
Daikin Industries, Ltd.

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