“Fusion 25”, the new Daikin strategy plan

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Daikin Industries has presented its strategic management plan “Fusion 25,” which extends from fiscal year 2021 to fiscal year 2025. «In recent years – the company said – enormous structural changes have occurred in the economy, industry, and society with faster-than-expected speed and variability. These changes have widely impacted the business activities of the Daikin Group and even the way people live their lives. With the growing importance of environmental and social contributions, companies are called upon to not only pursue profits but also to take the initiative in resolving the social issues set forth in the SDGs. At the same time, customer needs and values have changed, including a shift from goods to experiences, and market needs have expanded for indoor air quality and ventilation due to the Covid-19 pandemic. Additionally, digital technology advances have greatly impacted corporate activities, and their transformation of business activities has become an issue».

From these considerations, Daikin has prepared its strategic management plan “Fusin 25,” looking at these dramatic changes as an opportunity and explored themes leading to sustainable growth and development by viewing the world and its goals in the coming 10 to 20 years from a long-term perspective and then utilized the backcasting method in deciding which themes to adopt. To expand its business and continue to grow and develop while contributing to the environment and society, Daikin has established three growth strategy themes: “Challenge to achieve carbon neutrality,” “Promotion of solutions business connected with customers,” and “Creating value with air.” In addition to these, it set “AC Business in North America” as one theme from the perspective of strengthening existing businesses. Also, in India, where large market growth is expected, it strengthens local production and expands its business aiming to make the region one of the major bases of its global business.

In terms of the quantitative targets, Daikin has set a sales target of 3.1 trillion yen and an operating profit margin of 10.5% in fiscal year 2023, the third year of “Fusion 25,” as a mid-term implementation plan and will make upfront investments that exceed 800 billion yen for further business expansion. Targets for the final year of fiscal year 2025 are sales of 3.6 trillion yen and operating profit of 430 billion yen (for an operating profit margin of 12%).

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