Daikin Industries (6367): FY2025 Results Summary — Record Sales and Profit Despite U.S. Tariffs and Soft Demand

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Daikin Industries reported record-high consolidated net sales and operating profit for FY2025 (fiscal year ended March 2026), with net sales of 5,015.0 billion yen (106% year over year) and operating profit of 415.0 billion yen (103% year over year), both exceeding the full-year forecast. Profit attributable to owners of parent rose to 275.2 billion yen (104% year over year). Fourth-quarter (January-March) profit increased, enabling the company to achieve its full-term plan despite a greater-than-expected drop in demand, supported by the ‘Project Directly under Top Management: Six Group-wide Themes’ initiative covering strengthened sales and marketing capabilities, strategic selling price measures, and cost reductions.

Consolidated Results (Full-Year Actual)

Both net sales and operating profit increased year over year, setting new record highs. FX effects added 26.0 billion yen to net sales but reduced operating profit by 11.5 billion yen; excluding FX, net sales grew 105% and operating profit grew 106% year over year. Ordinary profit rose 111% year over year to 408.2 billion yen (8.1% margin). Gross profit was 1,732.5 billion yen (34.5% margin, +105.8 billion yen year over year), while SG&A expenses were 1,317.5 billion yen (26.3% of net sales). The tax burden ratio was 29.1%, up from 26.8% in FY2024. Extraordinary losses included an 11.8 billion yen impairment loss on intangible fixed assets of the AHT Group, a subsidiary manufacturing and selling refrigerating and freezing showcases, after the business fell short of its reassessed business plan.

Item	FY2025	FY2024	Change
Net sales	5,015.0	4,752.3	106%
Operating profit	415.0 (8.3%)	401.7 (8.5%)	103%
Ordinary profit	408.2 (8.1%)	366.4 (7.7%)	111%
Profit attributable to owners of parent	275.2 (5.5%)	264.8 (5.6%)	104%

Segment Results

In the Air-Conditioning and Refrigeration Equipment business, revenue and profit increased together with an improved operating profit margin. Despite declining Residential demand in the Americas and China and the impact of a stagnant economy and unseasonable weather in Asia, sales expanded in businesses with strong demand such as Applied and Commercial Air Conditioning, supported by a major recovery in market share for Residential Ducted Unitary for Houses in the Americas and expanded sales of high value-added products in Japan and Europe. The direct impact of U.S. tariff measures (approximately 41.0 billion yen on operating profit) was absorbed by utilizing pass-through pricing and implementing cost reductions. In the Chemicals business, profit declined while revenue increased, as sales of high-performance fluoropolymers decreased due to the slow recovery in semiconductor sector demand and subsequent adjustments in distribution inventory.

Segment	Metric	FY2025	FY2024
Air-Conditioning and Refrigeration Equipment	Net sales	4,621.1	4,384.5
Air-Conditioning and Refrigeration Equipment	Operating profit (margin)	377.0 (8.2%)	351.0 (8.0%)
Chemicals	Net sales	281.5	263.0
Chemicals	Operating profit (margin)	33.1 (11.8%)	46.1 (17.5%)
Others	Net sales	112.4	104.8
Others	Operating profit (margin)	4.9 (4.4%)	4.5 (4.3%)
Total	Net sales	5,015.0	4,752.3
Total	Operating profit (margin)	415.0 (8.3%)	401.7 (8.5%)

FY2026 Forecast

Daikin formulated its strategic management plan ‘Fusion 30’ to strengthen its earning capacity further, targeting an operating profit margin of 10% and a return on equity (ROE) of 12% for fiscal year 2028. For FY2026, the company forecasts consolidated net sales of 5,150.0 billion yen (103% year over year) and operating profit of 436.0 billion yen (105% year over year), aiming for new record highs despite uncertainty in the business environment. FX effects are expected to reduce net sales by 120.0 billion yen and operating profit by 20.0 billion yen; excluding FX, net sales are expected to grow 105% and operating profit 110% year over year. The company has already factored in risks from the worsening Middle East situation—including business stagnation in the region, rising component prices, and higher logistical costs—into its plan, and will implement countermeasures such as pricing measures, cost reductions, and expanded sales of energy-saving equipment.

Item	Forecast	FY2025 (Actual)
Net sales	5,150.0	5,015.0
Operating profit	436.0 (8.5%)	415.0 (8.3%)
Ordinary profit	414.0 (8.0%)	408.2 (8.1%)
Profit attributable to owners of parent	278.0 (5.4%)	275.2 (5.5%)

Shareholder Returns

Due to record highs in net sales and operating profit, the year-end dividend for FY2025 is planned to be ¥175, an increase of ¥10 from the previously announced amount. Combined with the interim dividend of ¥165 already paid, the annual dividend for FY2025 is planned to be ¥340. For FY2026, the annual dividend is planned to be ¥360 (¥180 interim and ¥180 year-end). The company also revised its dividend policy: rather than emphasizing a dividends-to-shareholder-equity ratio (DOE) of 3.0% while aiming for an increasingly higher dividend payout ratio, it will now strive for continuous dividend increases based on past dividend performance while placing importance on stability and maintaining awareness of the level of the dividend payout ratio.

Item	FY2025 (Proposed)	FY2026 (Forecast)
Interim dividend per share	¥165	¥180
Annual dividend per share	¥340	¥360
Annual earnings per share	¥939.9	¥949.3
DOE	3.3%	3.2%

Medium-Term Plan / Topics

Under the ‘Project Directly under Top Management: Six Group-wide Themes,’ Daikin is (1) strengthening sales and marketing capabilities, (2) accelerating the launch of new and differentiated products, (3) bolstering the supply chain including responses to U.S. tariff measures, (4) maximizing cost reductions—including switching materials from copper to aluminum and stainless steel, (5) expanding the Service Solutions business globally, and (6) achieving results through digital investment and process innovation. For FY2026, capex is planned at 300.0 billion yen (versus 324.6 billion yen in FY2025) and depreciation at 285.0 billion yen (versus 300.0 billion yen in FY2025), while R&D cost is planned at 155.0 billion yen (versus 150.7 billion yen in FY2025).

This article is an analysis based on publicly available information and is not a recommendation to buy or sell any specific securities. Investment decisions are your own responsibility.