International. For the first time in the last eleven years, Daikin recorded a 2.2% drop in sales, as did net income, which showed a decrease of 8.5% compared to 2019, following the official results delivered by the brand corresponding to the fiscal year 2020-2021.
"With an 'aggressive' and 'challenging' mindset, we strive to ensure short-term financial results and strengthen our business structure. Consequently, Daikin was able to achieve results that exceeded the financial plan, despite the continued effects of the COVID-19 pandemic. Specifically, we made efforts to build an SCM system to respond flexibly to changes in demand; strengthen sales and marketing capabilities; launch new products; and completely reduce fixed costs," the brand's report says.
In the Air Conditioning business, sales expanded for residential use products where demand was strong along with ventilation and air purification products that have attracted attention in the COVID 19 pandemic. In the Chemicals business, stagnant demand in the automotive market affected the results, while sales related to tablets and medical protective clothing expanded.
As for forecasts for 2021, Daikin estimates an increase in sales of 10% and an operating profit growth of 13%.
On this, the brand expresses in its report: "While it is difficult to predict when the COVID-19 pandemic will be controlled, the severe business environment is expected to continue due to a slow recovery in the demand for air conditioning for commercial use along with high prices in the raw materials market and high logistics prices. In addition to expanding sales by launching new differentiated products, promoting ventilation and air purification functions, and strengthening sales and marketing capabilities, we intend to thoroughly implement total cost reductions and sales price measures. In the first year of the new strategic management plan, we will vigorously make initial investments for future growth; work to generate results from the key measures we have been working on during COVID-19; and aim for a V-shaped recovery in business performance.
Results in the Americas
Daikin explained in his report that the government's economic measures and strong personal spending boosted the economy, and demand remained stable in the housing market. While Daikin went to great lengths in sales activities using online sales tools, the temporary disruption of Goodman's factory operations in April had a major impact that led to a year-on-year decline in sales.
- In the Unit of Ducts for Housing, the supply was reduced by the shortage of manufacturing personnel due to the COVID-19 pandemic. Since the second half of the year, sales expanded with an increase in staff and the normalization of supply, but the drop in sales in the first half was substantial and sales decreased during the year.
- In ductless systems, sales expanded in AR/SKY by capturing the growing demand for the need to improve living spaces and the increased demand due to warm weather in the summer. For VRV systems, they say they worked to strengthen online sales activities, but sales fell due to lower demand, as in the case of restaurants.
- In Applied, along with a focus on strengthening the sales network, the brand expanded market share by focusing on air handling units to meet ventilation needs.
The full report can be viewed by clicking here.
