summary5

Presentation of Financial Results for FY2011(Term ended March 31, 2012)

May 11, 2012

2222

Financial Results for FY2011Ⅰ． Financial Results for FY2011

Business Results (Company-wide) ･･････････････・・・・・・・・・・・・P.4Points of FY2011 Financial Results・・・・・・・・・・・・・・・・・・・・・・・・・P.5Profit and Loss Statement・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・P.6Breakdown of Changes in Operating Income・・・・・・・・・・・・・・・・P.7

　　　　Balance Sheet・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ P.8Business Results by Segments・・・・・・・・・・・・・・・・・・・・・・・・・・・・P.9Business Review by Segments ･････････････････････････・・・・・・P.10-16

Ⅱ． Business Forecast for FY2012　 Business Forecast (Company-wide) ･･････････････・・・・・・・・・・・・P.18

Business Review FY2012 Forecast ・・・・・・・・・・・・・・・・・・・・・・・・・ P.19Business Forecast (1H/2H)・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・ P.20

　　　 Breakdown of Changes in Operating Income・・・・・・・・・・・・・・・・・P.21　　　 Business Forecast by Segments・・・・・・・・・・・・・・・・・・・・・・・・・・・・ P.22　　　Business Review by Segments ･････････････････････････・・・・・・ P.23-28

( Reference )・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・P.30-34

Table of contents

33

Ⅰ. Financial Results for FY2011

44

■Business Results(Company-wide)

*Effects of FX (Year on year)　On Sales: ▲45.0 billion yenOn Operating Income: ▲7.5 billion yen

■Management IndicatorFY2010 FY2011

ＲＯＡ 1.7% 3.6%ＲＯＥ 4.0% 8.3%ＦＣＦ +38.2 ▲35.0ＤＶＡ ▲17.8 ▲5.6

※DVA=Daikin Economic Value Added

Previousforecast (Feb.) Result

Sales 1160.3 1240.0 1218.7 105%Operating Income 75.5 78.0 81.2 108%(Percentage of income to net sales) (6.5%) (6.3%) (6.7%)Ordinary Income 74.8 75.0 81.8 109%(Percentage of income to net sales) (6.4%) (6.0%) (6.7%)Net Income 19.9 36.0 41.2 207%(Percentage of income to net sales) (1.7%) (2.9%) (3.4%)DPS ¥36 ¥36 ¥36 ―

DOE 2.1% ― 2.1% ―

■FX RateYen／1USD 86 78 79 ―Yen／1EUR 113 108 109 ―

FY2010FY2011

Y/ychange

(¥1billion)

55

■Points of FY2011 Financial ResultsIncreased revenue and profits were achieved for two consecutive Increased revenue and profits were achieved for two consecutive terms terms despite the sudden changes in the economic environment such as tdespite the sudden changes in the economic environment such as the he recession in Europe, the appreciation of the yen, soaring marketrecession in Europe, the appreciation of the yen, soaring market prices, and prices, and natural disasters (Great East Japan Earthquake, massive floods inatural disasters (Great East Japan Earthquake, massive floods in Thailand). n Thailand).

〇Sales largely expanded for the air conditioning business in Japan and 　　　China as well as in emerging countries including India, Vietnam, and Turkey.

〇In the Chemicals business, sales expanded in all regions for all　 products, and the past highest sales and operating income were achieved. 〇Total cost reductions were thoroughly implemented by enacting 　　　　　 comprehensive pricing measures for the rapidly soaring market prices,

minimizing the impact from interruptions in the supply chain by the Great East Japan Earthquake, and reducing fixed costs on a company-wide basis.

○For the power shortages caused by the Great East Japan Earthquake, we constructed a business foundation for actively developing electric power conservation solutions proposals that combine energy-efficient equipment and services.

6666

　■Profit and Loss Statement

<Special affairs>

※1 Changes in selling,general and 　　　

　　administrative expense:　Labor cost +4.8, 　After sales service expense +1.5

※2 Non-operating gain or losses:　Equity in earning of affiliates+1.6(1.3⇒2.9)

※3 Extraordinary IncomeSecurities valuation loss FY2010 ▲26.9FY2011 ▲1.9

(Unit: billion yen)FY2010 FY2011

113 105Net Sales 1,160.3 1,218.7 +58.4Cost of sales 798.7 846.8 +48.1(Percentage to net sales) (68.8%) (69.5%)Gross Income 361.7 372.0 +10.3(Percentage of income to net sales) (31.2%) (30.5%)Selling General andAdministrative expenses 286.2 290.7 ※1 +4.5

(24.7%) (23.9%)Operating Income 75.5 81.3 +5.8(Percentage of income to net sales) (6.5%) (6.7%)Non-operating gain or losses ▲ 0.7 0.5 ※2 +1.2Ordinary Income 74.8 81.9 +7.1(Percentage of income to net sales) (6.4%) (6.7%)Extraordinary gains or losses ▲ 29.1 ▲ 1.2 ※3 +27.9Income before Income Taxes 45.7 80.6 +34.9(Percentage of income to net sales) (3.9%) (6.6%)Corporate Taxes,etc. 22.1 35.9 +13.9

(Tax burden ratio) (48.3%) (44.6%)Minority Interest 3.8 3.4 ▲0.3Net Income 19.9 41.2 +21.3

Changes from the last year

7777

　■Breakdown of Changes in Operating Income

(Reference)FY11

Forecast(Feb.)

FY10Operating

Income75.5

Foreignexchange

▲9.0

Effect of raw material

prices▲36.5

Reduction of Fixed

Expense, etc.▲18.0

Cost reductions

＋27.5Pricing+27.5

Expanding Sales＋20.5

SpecialFactors▲9.5

FY11Operating

Income78.0

（Unit:billion）Impact of Great East Japan Earthquake▲4.0Impact of Thai flooding ▲2.0Quality problems for air purifiers ▲3.5

0

20.0

60.0

40.0 75.5 81.2

Effect of rawmaterial

prices▲37.5

Expanding Sales＋24.4

Cost reductions

＋28.5

FY10 Results FY11 Results

80.0

▲7.5

▲20.7

Pricing＋28.0

100.0

▲9.5

Reduction of Fixed Expense,

etc

Foreignexchange

Special Factors Changesfrom last year＋5.7

8888

　■Balance Sheet

※Numbers on the left are rating period

(Unit: billion yen)

<Breakdown of interest-bearing debt>

(\1billion) 2011/3E 2012/3E Y/y changeShort-term borrowings 68.9 67.4 ▲1.5

ＣＰ 5.1 23.1 +18.0Bonds 100.0 100.0 +0.0

Long-term borrowings 195.2 195.4 +0.2Total 369.1 385.8 +16.7

Y/y change 2011/3E 2012/3E Y/y change

Cash and cashequivalents 167.7 135.6 ▲32.1 Trade payables 116.9 110.1 ▲6.8

Receivables 63days 198.9 63days 209.1 +10.2 Interest bearing 369.1 385.8 +16.7Inventories 63days 201.8 73days 243.6 +41.8 Lease debt 3.3 4.0 +0.7Fixed assets 393.0 404.9 +11.9 (Interest-bearing ratio) (32.9%) (33.6%)Investment and others 97.8 88.9 ▲8.9 Others 142.2 144.6 +2.5Others 73.3 78.5 +5.2 Total liabilities 631.6 644.6 +13.1

Total equity 487.9 502.3 +14.4(Equity ratio) (43.1%) (43.3%)Share Warrant 1.3 1.5 +0.2Minority interests 11.8 12.1 +0.4Total net assets 500.9 515.9 +15.0

Total Assets +28.1 Total 1,132.5 1,160.6 +28.1

2011/3E 2012/3E

1,132.5 1,160.6

99

■ Business Results by Segments

FY2010

ResultPrevious

Forecast(Feb.) Result Y/y changes

Sales 1,160.3 1,240.0 1218.7 105%Operating Income 75.5 78.0 81.2 108%(Percentage of income to net sales) (6.5%) (6.3%) (6.7%)

Sales 1,004.6 1,060.0 1041.4 104%Operating Income 64.7 58.0 60.2 93%(Percentage of income to net sales) (6.4%) (5.5%) (5.8%)

Sales 114.8 135.0 132.9 116%Operating Income 10.9 19.0 20.2(Percentage of income to net sales) (9.5%) (14.1%) (15.2%)

Sales 41.0 45.0 44.4 108%Operating Income ▲ 0.04 1.0 0.9 ー(Percentage of income to net sales)

― (2.2%) (1.9%)

Others

Total

FY2011

Air-Conditioning

Chemicals

(¥1billion)

1010

JapanJapanJapan

■Business Review by Segments (Air-conditioning business)

・The impact of a parts shortage caused by the Great East Japan Earthquake was 　　　　　minimized.

(Recovery support for suppliers, development of alternative parts for microcomputers, and full utilization of product inventory)

・A rally in housing starts and replacement of energy efficient equipment moved forward 　for residential-use, and industry demand was on par with the previous year. Daikin 　worked to increase sales of high value-added products, such as the 『Ururu Sarara

R Series』, that promote electric power conservation. ・Centering on replacement demand due to a greater need for electric power 　　　　

conservation, industry demand surpassed the previous year for commercial-use. 　　Daikin promoted sales of products, such as the 『Eco-ZEAS80』, that provide high 　　　　

energy efficiency and conserve electric power.・Profitability increased for both residential-use and commercial-use from thorough 　　　　implementation of cost reductions, pricing measures for the soaring market prices of 　　raw materials, and structural reforms such as in the sales system, SCM, and similar 　operations.

(1000 units) Results Y/y

Market 7,000 81% 8,303 100%Daikin － 88% － 103%Market 730 101% 826 105%Daikin － 105% － 103%Market 539 95% 497 88%Daikin － 102% － 79%

FY11 Forecast

Eco-cute

Residential

Commercial

＜Unit sales of AC for the entire Japanese market, Daikin sales＞

1111

EuropeEuropeEurope

＜Increase ratio of sales units in Europe（volume-based ）＞


・Sales decreased from a stagnant economy caused by the debt crisis in Europe, 　　　unseasonable weather, and yen appreciation.・Sales promotion measures were expanded centering on favorable regions and 　　　products. 　Meanwhile, a start was made toward structural reforms for fixed costs 　(including efforts to increase efficiency of indirect departments and unify the 　　　　logics function and IT systems) in preparation for long-term demand stagnation.・Although there were harsh conditions for residential-use centering on the main 　　　countries 　of Italy, France, and Spain, sales promotion focusing on commercial-　　use equipment (VRV) increased by business promotion utilizing a strengthened 　　sales network in each country.・Efforts were made primarily in France to enhance the after sales service network 　　for heating. Construction of a new sales network in Germany and Italy moved 　　　forward at a 　rapid pace, and sales expanded. ・By incorporating the sales network of Airfel, 　which was recently acquired by Daikin, sales 　rapidly expanded in Turkey (226% Y/y). SKY

VRV

213.8 97% 193.5 90%112% 94%

105%106% 119%

Local currency Sales (billion yen)

102%

FY10 FY11123% 87%106% 79%113% 104%

(Y/y change)Residential

Applied(Sales)

Commercial

Heating

※SKY・・・Middle or compact size package air conditioners※VRV・・・Multi-split system for buildings※The forecast of Applied is based on sales (local currency).

1212

ChinaChinaChina

＜ Increase ratio of sales units in China（volume-based ）＞

※Calendar year accounting (Jan.- Dec.)


・The air conditioning business steadily expanded against the backdrop of a 　　favorable business environment, and sales widely increased through the sales 　　　promotion of a full range of products from small-sized to large-sized equipment.・Although commercial-use was impacted by monetary tightening, sales 　　　　　　　　　substantially increased by the continued development of dealers that moved from 　large urban areas to suburban areas and to mid-western and interior regions. ・Although demand decreased for residential-use by discontinuation of incentives 　　of the government’s Home Appliance Subsidy Program and replacement demand, 　sales promotion was performed focusing on volume zone inverter models that 　　　meet stricter energy-saving regulations.

Inverter market conversion accelerated. （Demand ratio in FY2011: over 60%）

・Sales for Applied Systems substantially increased by capitalizing on sales 　　　　　　promotion of energy-saving products and brisk demand in interior areas.・By proceeding forward with total cost reductions 　and pricing measures for the soaring market 　prices of raw materials and rise in labor costs

(by revision in the Minimum Wage Law), past profit levels recovered from the second half.

SKYVRV

162.1 125% 187.5 116%131% 121%

154% 141%

Sales (billion yen)

104% 120%125% 124%

Applied


FY10 FY11135% 130%

Local currency

Commercial


1313

Asia/OceaniaAsia/OceaniaAsia/Oceania

Australia103%

Thailand103%

Singapore103%

Malaysia94%

Vietnam146%

India156%

Indonesia126%

Australia82%


・Sales for both residential-use and commercial-use steadily grew in Singapore, where 　the economic environment is bullish, and in emerging countries such as India and 　　Vietnam, where 　dealer development is proceeding forward. However, sales were slow 　in Thailand and Malaysia due to the impact of the unseasonable weather and flooding.

・For Australia, sales fell below the previous year because of stagnation in demand 　　　　

　caused by a sluggish construction market and a cool summer in the season period.＜Sales of main countries in Asia, Oceania over the the previous year　(Local Currency)＞

1414

North AmericaNorth AmericaNorth America


※ Calendar year accounting (Jan.-Dec.) for the Applied Systems business（McQuay）

・Despite harsh market conditions, sales promotion was performed for energy-saving 　products (magnetic bearing centrifugal chillers, air-cooled chillers, etc.). With the 　　strengthening of the sales network and the after sales service system, sales 　　　　　　expanded for Applied Systems, and the region experienced double-digit growth.

・Sales expanded for ductless centering on the progress made in the development 　　　and nurturing of a sales network and VRV, which enjoys an excellent reputation for 　high energy efficiency.

＜ Increase ratio of sales units in North America（volume-based ）＞

SKYVRV

89.7 104% 94.3 105%113% 114%

Residential

115% 117%

Sales (billion yen)

193% 102%137% 126%

FY10 FY11163% 91%

Local currency

Applied

Commercial

(Y/y change)


1515

■Business Review by Segments (Chemicals business)

・Within a mild recovery, sales expanded in all regions for all products. 　Sales and operating income returned to past highest levels by enacting comprehensive 　pricing measures for soaring market prices of raw materials and minimizing the impact 　from the Great East Japan Earthquake (Kashima Plant) as well as by promoting total 　　　cost reductions.・From the aspect of sales, China, with its remarkable growth, has become a region of 　　　high interest. Application development was promoted and linked to sales by 　　　　　　　capitalizing on the change from other materials as well as investment in infrastructure 　and the environment.

－Sales centering on fluoropolymers and fluoroelastomers were promoted in Europe 　　　　and the United States due to the bullish demand in the automobile market and for 　　　　　LAN cables.

－Sales continue to substantially expand for 『OPTOOL (surface anti-fouling coating 　　　　　agent)』, which is utilized in displays such as for smart phones.・Supply to expanding demand was met by increasing manufacturing efficiency such as 　　utilizing “increased production without plant investment” with full operation of 　　　　　　　production facilities and reduction of bottleneck cancellations and periodic 　　　　　　　　　maintenance.

ChemicalsChemicalsChemicals

Fluorocarbon GasPolymers/FluoroelastomersFine Chemicals, etc.

Sales (billion yen) 114.8 133% 132.9 116%Local currency 135% 120%

FY10 FY11153% 136%129% 117%134% 107%

＜ Increase ratio of sales（Sales-based)＞

1616

■Business Review by Segments (Other businesses)

OthersOthersOthers

・ Within the steady expansion of demand for industrial and construction equipment in 　　

　Japan, sales for the Oil Hydraulics business exceeded the previous year, and the 　　　　

　business achieved 　a sales turnaround to profitability.

・Orders for artillery ammunition by the Japan Ministry of Defense were bullish for the 　　

　Defense Systems business, and sales were on par with the previous year.

・Although corporate IT investment decreased accompanying the recession, sales on par 　with the previous year were maintained for the Electronics business due to increased 　　sales to large-scale electronics and machine manufacturers for R&D support systems 　　(visual R&D systems).

1717

Ⅱ． Business Forecast for FY2012

1818

(¥1billion)

*Sensibility of Foreign Exchange(Impact of change by 1 yen to operating income)

FY2012 ForecastUS$　 *0.7billion yenEUR 0.4billion yen

* Including Chinese Yuan, AUS$,THB

■Business Forecast

FY2011 FY2012Actual results Forecast Y/y changes

Net sales 1,218.7 1,380.0 113%Operating Income 81.2 100.0 123%(Percentage of income to net sales) (6.7%) (7.2%)

Operating Income 81.8 97.0 119%(Percentage of income to net sales) (6.7%) (7.0%)

Net Income 41.2 53.0 129%(Percentage of income to net sales) (3.4%) (3.8%)

■FX rateYen/1USD 79 80 ―Yen/1EUR 109 105 ―

1919

■Business Review of FY2012 Forecast

Although uncertainty exists in the global economy such as for a Although uncertainty exists in the global economy such as for a rekindling of rekindling of the European debt crisis, increases in both revenue and profits the European debt crisis, increases in both revenue and profits are to be are to be continued. Our aim is to achieve operating income of 100 billioncontinued. Our aim is to achieve operating income of 100 billion yen to position yen to position the year as a link with quantitative targets for fiscal 2013 (opthe year as a link with quantitative targets for fiscal 2013 (operating income of erating income of 130 billion yen) that were raised in Fusion 15.130 billion yen) that were raised in Fusion 15.

〇High growth is to be maintained in China. In addition to VRV and inverter volume zone 　 inverter models, new markets showing promise, including residential-use multi split 　 air conditioners and solutions for factories, are to be developed without delay.〇In the highly-competitive markets of Japan and Europe, sales promotion and 　　　　　　　 increased market share are to be driven by launch of differentiated products, and total 　 cost reductions are to be actively promoted. 〇A volume zone strategy is to be accelerated for emerging countries. In addition to 　　　　 sales promotion in Turkey and Vietnam, profitability is to be improved by also 　　　　　　 proceeding forward with localization of product development and procurement.〇In the Chemicals business, application development is to be promoted, and sales are 　 to be expanded centering on sales promotion in the Chinese market. We aim to 　　　　　 achieve FY2013 targets (Fusion 15) by frontloading them one year in advance. 〇Profitability is to be strengthened by constitutional reforms such as reductions in 　　　 fixed costs and inventory.

2020

■Business Forecast (1H/2H)

(¥1billion)

1H 2H Total 1H 2H TotalNet sales 621.8 596.9 1218.7 700.0 680.0 1380.0Operating Income 47.9 33.3 81.2 55.0 45.0 100.0(Percentage of income to net sales) (7.7%) (5.6%) (6.7%) (7.9%) (6.6%) (7.2%)Operating Income 46.5 35.2 81.8 54.0 43.0 97.0(Percentage of income to net sales) (7.5%) (5.9%) (6.7%) (7.7%) (6.3%) (7.0%)Net Income 28.1 13.1 41.2 31.0 22.0 53.0(Percentage of income to net sales) (4.5%) (2.2%) (3.4%) (4.4%) (3.2%) (3.8%)

■FX rateYen/1USD 80 78 79 80Yen/1EUR 114 104 109 105

FY2011 Actual results FY2012 Forecast

21212121

　■Breakdown of Changes in Operating Income

（billion）

0

20.0

60.0

40.0 81.2

100.0

ExpandingSales＋17.8

Cost reductions

＋28.0

FY2011 Results

FY2012 Forecast

80.0 ▲2.0

Foreignexchange

Fixed Expense,

Etc.▲26.0

100.0

Changesfrom last year＋18.8

▲3.0Pricing

＋4.0

Effect of rawmaterial prices

2222

■Business Forecast by Segments

(¥1billion)

FY2011 FY2012Result Forecast Y/y changes

Sales 1,218.7 1,380.0 113%Operating Income 81.2 100.0 123%(Percentage of income to net sales) (6.7%) (7.2%)

Sales 1,041.4 1,170.0 112%Operating Income 60.2 75.5 125%(Percentage of income to net sales) (5.8%) (6.5%)

Sales 132.9 160.0 120%Operating Income 20.2 23.0 114%(Percentage of income to net sales) (15.2%) (14.4%)

Sales 44.4 50.0 113%Operating Income 0.9 1.5 176%(Percentage of income to net sales) 　　　　　　－ (3.0%)

Total

Others

Air-Conditioning

Chemicals

2323

JapanJapanJapan

＜Unit sales of AC for the entire Japanese market, Daikin sales＞＜Index of market demand index ＞


・Although housing starts are bearish, a recovery in demand is expected due to 　　　　　　　resumption of subsidies to support reconstruction and special tax measures for 　　　　　　housing loans. We intend to assuredly capitalize on these opportunities. ・New products that pursue ease of operation and comfort such as 『RakuAir』 air 　　　　　　　conditioners are to be launched for residential-use. ・We will strive for product differentiation in commercial-use by adding new features 　　　　such as power-saving mode in such models as 『Eco-ZEAS』.・In addition to high energy efficiency in air conditioners for which Daikin is famous for, 　　we will strengthen our solutions proposals including those for DESICA, which 　　　　　　　simultaneously achieves energy savings and comfort by individually adjusting for 　　　　temperature and humidity, and for original energy efficiency systems that combine heat 　pump-related equipment and the residential-use solar power system Sky Solar.

Although decreased demand is anticipated, we intend to substantiAlthough decreased demand is anticipated, we intend to substantially increase ally increase market share by actively launching differentiated products and tmarket share by actively launching differentiated products and taking an aking an aggressive approach toward reconstruction demand. Furthermore, waggressive approach toward reconstruction demand. Furthermore, we intend to e intend to accelerate development of HVAC solutions that meet the needs foraccelerate development of HVAC solutions that meet the needs for electric power electric power conservation and increase earnings by adjustment of pricing measconservation and increase earnings by adjustment of pricing measures.ures.

(1000units) FY12 Forecast Y/yMarket 7,300 89%Daikin － 104%Market 800 97%Daikin － 102%Market 470 94%Daikin － 106%

Eco-cute

Residential

Commercial

(Y/y change)FY10 FY11 FY12

ForecastPersonal spending +1.5% +0.7% +1.2%New housing starts +5.6% +2.7% +1.2%Private capital investment +3.5% ±0.0% +3.8%Floor area of newcommercial buildingconstruction (Less than3000㎡）

+8.0% +1.0% +1.5%

2424

＜Increase ratio of sales units in Europe（volume-based ）＞

EuropeEuropeEurope


・We will reconsolidate operations capability in main countries. Sales promotion will be 　strengthened that forms a nucleus of new dealer development and consulting business.・New products will be launched that meet local needs. (Residential-use: Nexura, which 　heats and cools by radiant heat)・In addition to conventional high value-added models, new low cost RA, SKY, VRV 　　　products will be launched for volume zone.・For the heating business, dealers are to be further developed in Italy and UK where 　　demand expansion is expected, and the after sales service systems in France and 　　　Germany will be strengthened.・A business foundation is to be established 　　in Turkey where demand is rapidly expanding, and construction of a Middle East/Africa sales 　network such as in Saudi Arabia, UAE, and 　Egypt is to be accelerated. (Sales promotion of low cost models and strengthening in 　　receiving orders for Applied Systems proposals)・Total cost reductions are to be further promoted to maintain short-term profits along with structural 　　　reforms.

Despite the fear that real economy will deteriorate further and Despite the fear that real economy will deteriorate further and the harsh business the harsh business environment will continue, we intend to thoroughly implement busenvironment will continue, we intend to thoroughly implement business operations iness operations from the dual aspect of capturing and maintaining markets by strfrom the dual aspect of capturing and maintaining markets by strengthening new engthening new dealers in main countries and building sales networks in emergindealers in main countries and building sales networks in emerging markets as weg markets as we　　

proceed forward with structural reforms for fixed costs.proceed forward with structural reforms for fixed costs.

Market Daikin97% 101%

SKY 101% 102%VRV 101% 110%

88% 115%95% 96%195.0 101%

105%

FY12

Applied

Commercial

Heating

(Y/y change)

Sales (billion yen)Local currency

Residential


2525

・Production of residential-use volume zone models is to start as scheduled from April 　　for the new Suzhou factory. Together with function strengthening of the R&D Center, 　　total cost reductions are to be promoted by integrated system of local production, 　　　　local procurement, and local development.・Approximately 120 locations for base operations are to be established in China, and 　　　development is to performed in every nook and coincide with market characteristics, 　　such as suburbs of large cities and interior areas. Construction of a sales network is to 　be accelerated. ・In addition to commercial-use Pro Shops, Air Shops are to be constructed for 　　　　　　　residential-use to facilitate specialized sales of residential-use equipment and are to be 　developed as a new sales network. Air conditioners that can work with an iPhone are 　　to be launched as we work to increase degree of 　recognition in the residential-use market.・For the commercial-use, we intend to launch new 　　　　　　　products having cost competitiveness that 　　　　　　　corresponds to market entry of a local 　　　　　manufacturer. Furthermore, we will also expand 　the solutions business for buildings and factories.・Applied Systems is to be strengthened to acquire 　　　　　product bids including power generation plants, 　oil refineries, and factories.・To correspond to the International Financial 　　　　　Reporting Standards (IFRS), the settlement period 　is being changed to March.

ChinaChinaChina

＜ Increase ratio of sales units in China（volume-based ）＞


Although an impact from monetary tightening is anticipated, demaAlthough an impact from monetary tightening is anticipated, demand for air nd for air conditioning is expected to remain brisk. Sales promotion is to conditioning is expected to remain brisk. Sales promotion is to proceed forward to proceed forward to all regions for all products with the aim of continuing doubleall regions for all products with the aim of continuing double--digit growth. digit growth.


SKY 102% 134%VRV 105% 111%

109% 117%230.0 123%

119%



FY12

Applied (Sales)

Commercial


2626

Asia/OceaniaAsia/OceaniaAsia/Oceania


・In addition to strengthening existing sales networks in Singapore, Thailand, and 　　　　　　　Malaysia, we intend to promote sales of commercial-use by acquiring large-scale 　　　　　　projects and proceed with acquiring flooding reconstruction demand in Thailand.・Concerning emerging countries, production of residential-use air conditioners in India 　　begins from July, and we are constructing a full-range, local production system that 　　　　combines with the commercial-use products (VRV, chillers) that are already being 　　　　　manufactured. In Vietnam, sales promotion is to be performed not only in large urban 　　　cities but also in regional cities. In Indonesia, operations for a sales subsidiary begin 　　　from June.・Although the demand environment in Australia continues to be harsh, we will attempt to 　recover from the drop from the previous year by reconsolidating existing sales channels.

Expansion of the air conditioning marketing continues in the bacExpansion of the air conditioning marketing continues in the background of kground of economic growth for both residentialeconomic growth for both residential--use and commercialuse and commercial--use. We will proceed with use. We will proceed with creation of our own sales subsidiaries in each country and accelcreation of our own sales subsidiaries in each country and accelerate dealer erate dealer development.development.

2727

North AmericaNorth AmericaNorth America


・Although demand for Applied Systems is not expected to grow substantially, we are 　　aiming for growth that exceeds industry growth by enhancing the sales network, 　　　　　increasing sales of highly-profitable products, and expanding the after sales service 　　　and solutions businesses.

・We are working to further promote sales of our ductless products, which continue to 　　　gain market recognition as energy-saving air conditioning systems, by strengthening 　　the sales network, enhancing the after sales service system, and expanding our 　　　　　

　product lineup.

Applied Systems is not expected to grow substantially within theApplied Systems is not expected to grow substantially within the slow recovery of slow recovery of the economy and construction market. Ductless has earned a high the economy and construction market. Ductless has earned a high reputation for reputation for energyenergy--efficiency, and the market continues to expand.efficiency, and the market continues to expand.


SKY 110% 156%VRV 127% 127%

102% 106%

105.0 111%110%



FY12

Applied (Sales)

Commercial

＜ Increase ratio of sales units in North America（volume-based ）＞

2828

■Business Review by Segments (Chemicals business, Other business)

ChemicalsChemicalsChemicals

OthersOthersOthers

・We will promote application development centered on China and the United States. In 　China, we have established an application development center and are accelerating 　　proposals, such as those in the fields of automotives and chemicals, to local users.・We are working to further strengthen profitability by continuation of total cost 　　　　　　　reductions and comprehensive pricing measures for fluctuations in market conditions.・Application development for environmental 　fields is being accelerated (including lithium 　ion batteries, new refrigerants, infrared reflective

coating, etc.) ・To achieve Fusion 15 targets, we will start

investments to increase production of fluoropolymersand fluoroelastomers in China and the United States and strengthen the supply systems

・For the Oil Hydraulics business, we are promoting sales at the markets directed at 　　industrial machines in Japan and construction machines and will accelerate business 　　in China.・For the Defense Systems business, we will increase sales by promoting sales in the 　　　home healthcare business (oxygen concentrators) in addition to our defense industry 　　business. ・For the Electronics business, we will promote sales to large-scale electronics and 　　　　　machine manufacturers centering on R&D support systems (visual R&D systems).

In making an important point of expanding business in China, we In making an important point of expanding business in China, we intend to achieve intend to achieve increases in revenue and profits by promoting application develoincreases in revenue and profits by promoting application development in each field, pment in each field, comprehensive pricing measures, and a lean business constitutioncomprehensive pricing measures, and a lean business constitution as we aim to as we aim to achieve FY2013 targets (Fusion 15) by frontloading them one yearachieve FY2013 targets (Fusion 15) by frontloading them one year in advance.in advance.

Market DaikinFor all fluorochemical products 104% 120%

Fluorocarbon Gas 78% 75%Polymers/Fluoroelastomers 105% 127%Fine Chemicals, etc. ― 128%

160.0 120%119%

FY12(Y/y changes)


＜ Demands by Products（Sales)＞

2929

III. Reference

3030

　■Sales by Region: Air-conditioning Business

※Year-on-year sales in local currencyFY2010 FY2011 FY2012 Forecast　

Europe　　　 112%　　 94% 105%China　　　　 131% 　 121% 119%America　　 113% 　　　 114% 110%

(Unit:Billion yen)

Japan 106% 372.8 99% 370.7 88% 324.8 112% 364.6 107% 388.6 108% 420.0Europe 153% 341.3 80% 272.1 81% 220.6 97% 213.8 90% 193.5 101% 195.0China 174% 138.2 102% 140.5 93% 130.0 125% 162.1 116% 187.5 123% 230.0Asia 234% 99.4 98% 97.7 85% 82.8 132% 109.5 102% 111.9 121% 136.0

America 1429% 102.9 103% 105.8 81% 85.9 104% 89.7 105% 94.3 111% 105.0Oceania 134% 48.1 78% 37.4 106% 39.5 101% 39.9 85% 33.8 118% 40.0

Middle East 341% 20.1 123% 24.8 71% 17.7 101% 18.0 138% 24.9 149% 37.0Africa 217% 9.1 114% 10.4 70% 7.3 96% 7.0 98% 6.9 102% 7.0Total 150% 1,131.9 94% 1,059.4 86% 908.6 111% 1,004.6 104% 1,041.4 112% 1,170.0

*Number on the left are year on year basis

Overseas Sales ratio 67% 65% 64% 64% 63% 64%

FX rate(USD/Yen) ¥114 ¥101 ¥93 ¥86 ¥79 ¥80　　　　 (EUR/Yen) ¥162 ¥143 ¥131 ¥113 ¥109 ¥105

FY2012ForecastFY2009FY2008FY2007 FY2010 FY2011

3131

　■Sales by Region: Chemicals

※Year-on-year sales in local currency　　　　　　　 FY2010 FY2011 FY2012 Forecast　　　　 America 133% 　　　123% 130%

China　　　150%　　　　145% 140%Europe　　142%　　　　　 121% 120%

(Unit:Billion yen)

Japan 100% 49.8 83% 41.5 82% 34.2 137% 46.9 103% 48.2 108% 52.0

America 86% 30.0 88% 26.5 83% 22.1 122% 27.1 113% 30.5 131% 40.0

Asia 104% 8.8 91% 8.0 89% 7.1 150% 10.7 140% 15.0 107% 16.0

China 118% 15.0 103% 15.4 88% 13.5 142% 19.2 138% 26.5 143% 38.0

Europe 116% 12.2 77% 9.4 86% 8.1 122% 9.9 116% 11.5 122% 14.0

Others 71% 0.2 669% 1.2 105% 1.2 85% 1.1 120% 1.3 －－

Total 100% 116.0 88% 101.9 85% 86.2 133% 114.8 116% 132.9 120% 160.0*Number on the left are year-on-year basis

Overseas sales ratio 57% 61% 62% 59% 64% 68%

FX rate (USD/Yen) ¥114 ¥101 ¥93 ¥86 ¥79 ¥80 (EUR/Yen) ¥162 ¥143 ¥131 ¥113 ¥109 ¥105

FY2012ForcastFY2009FY2008FY2007 FY2010 FY2011

32323232

　■Foreign Exchange

■Exchange Rate

1H 2H Total 1H 2H TotalYen/US$ ¥89 ¥83 ¥86 ¥80 ¥78 ¥79

Yen/EUR ¥114 ¥112 ¥113 ¥114 ¥104 ¥109

Yen/THB ¥2.8 ¥2.8 ¥2.8 ¥2.6 ¥2.6 ¥2.6

Yen/RMB ¥13.4 ¥12.6 ¥13.0 ¥12.5 ¥12.3 ¥12.4

Yen/AUS$ ¥79 ¥83 ¥81 ¥84 ¥81 ¥83

FY2010 Actual Results FY2011 Actual Results

33333333

Capex and Depreciation R&D Cost

　■Capital Expenditure, Depreciation and R&D Cost

30.838.428.8

FY10

32.138.951.5

FY07

33.038.448.3

FY11(billion yen)　

FY08 FY09 FY12(Forecast)

Capex 60.6 28.4 61.0Depreciation 43.8 38.6 40.0R&D Cost 30.5 28.2 33.0

51.5

60.6

28.4 28.8

48.3

61.0

38.943.8

38.6 38.4 38.4 40.0

0

10

20

30

40

50

60

'07 '08 '09 '10 '11 '12

（billion yen）Capex

Depreciation

32.1 30.528.2

30.833.0 33.0

0

10

20

30

40

50

60

'07 '08 '09 '10 '11 '12

（billion yen）

R&D cost

(Forecast) (Forecast)

34343434

　■Dividends Plan

As currently announced, a dividend of 36 yen for the fiscal year is scheduled for payout. The dividend for the next period is undetermined at this time, and we would like to decide amount based on the trends in results at the time the 2nd Quarter financial results (Nov) are announced.

【Daikin Dividend Policy】As a fundamental principle, Daikin strives to maintain at least a 2.0% ratio of dividends to shareholder equity (DOE) in providing stable dividends to shareholders that takes in account such factors as consolidated performance, financial conditions, and demand for capital.

¥68.1¥18.8¥36¥18

’10

¥66.4¥34.7¥32¥16

’09’07 ‘08 ’11(Forecast)

Dividendsper share

Interim ¥19 ¥19 ¥18Annual ¥38 ¥38 ¥36

Earningsper share

1H ¥176.5 ¥133.4 ¥96.4Annual ¥262.2 ¥74.5 ¥141.4

2.1%

FY10

2.1%

FY11

1.9%2.2%2.2%

FY08 FY09FY07Reference）

The result of DOE　

　Notes on forecast　○This data is compiled for informational proposes and is not to be construed as a solicitation of any action.　　 This data (includes management plan) was compiled by Daikin Industries., Ltd. (the Company) based on reliable

information available at the time of compilation. It may include some risks and uncertainties. The Company is not responsible for its accuracy or completeness.

　○The Company asks for your own discretion in using this data. The Company accepts no liability for any loss or damage of any kind arising out of judgment for investment made solely relying on the business forecast or targetfigures described in the data.

summary5

Business

income taxes45

totaloperating income

business foundation

chemicals business

cost of sales

business forecast 1h2h

net sales1

net sales6