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Message to Shareholders and Investors

Image:Masanori Togawa

Masanori Togawa
President and CEO
Daikin Industries, Ltd.

To those families who have lost loved ones as a result of the 2019 novel coronavirus disease (COVID-19), I would like to extend our prayers and deepest sympathies, and to those who have been infected with and are currently battling COVID-19, our thoughts and prayers are with you for a speedy and full recovery.

In response to the outbreak of COVID-19, we at Daikin immediately established the Emergency Response Headquarters and implemented comprehensive measures as a first priority to ensure the health and safety of our employees. We then moved to collect information on the ever-changing business environment and rapidly enacted countermeasures. Based of the results, we believe that we have been successful in minimizing the impact of COVID-19 on the financial results for fiscal year 2019.

Until the end of the third quarter, Daikin had achieved an increase in both revenue and profits for its main business of air conditioning, despite a challenging business environment, by expanding sales of high value-added products in each global region and promoting total cost reductions. However, economic activities in China halted to a standstill from February due to the spread of COVID-19, and this greatly affected sales. Meanwhile, in Europe, measures such as border closures escalated from Italy to every European country, causing a disruption in economic activities in that region. Recognizing the situation, we developed plans for parts supply and sales in coordination with our suppliers, promoted sales in the Americas, Asia, and Japan where the impact was relatively small, and reduced costs even further than before.

Because fiscal year 2020 is the final year of our strategic management plan Fusion 20, we have been formulating and implementing various action plans since the previous fiscal year. Unfortunately, the COVID-19 pandemic makes it difficult for us to predict financial results going forward. For this reason, we are preparing for all possible contingencies and will take additional measures to both defend our current positions and act upon new ones while striving to strengthen our corporate constitution even further.

As seen in recent years by the crises resulting from the Japanese bubble economy and later from the Lehman shock, Daikin continues to be a company in which its employees rally together to surmount obstacles and take pride in having strong resiliency and fortitude. By fully utilizing this Daikin strength, I firmly believe that we will also rise to overcome the COVID-19 pandemic.

As currently announced, we plan to pay an annual dividend of 160 yen per share (interim dividend of 80 yen and year-end dividend of 80 yen) for the annual dividend for fiscal year 2019. The dividend for fiscal year 2020 remains undecided due to the unknown impact of the COVID-19 pandemic on the future; however, the dividend will be determined in accordance with the Daikin dividend policy after we have made our utmost efforts to maximize financial results. In the future, we will continue to expand our business while implementing strategic investments as we work to enhance corporate value, raise market capitalization, and improve return on investment to shareholders by building a robust corporate constitution that leverages higher financial results and structural reforms.

For now and in the future, I respectively ask for your continued understanding and support of Daikin management.

Masanori Togawa
President and CEO
Daikin Industries, Ltd.

May 2020

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