Member, Financial Accounting Standards Foundation

Brief Report on the Settlement of Accounts (Consolidated)

for the Three Months Ended June 30, 2022 (J-GAAP)

Name of Listed Company: Daikin Industries, Ltd.

(URL: https://www.daikin.co.jp/)

Masanori Togawa, President and CEO

General Manager of the Corporate Communication Department of the Head Office

Planned date of the filing of quarterly report:

Planned date of start of dividend payment:

Preparation of supplementary explanatory materials for the settlement of accounts for the first quarter: Yes

Holding briefings on the settlement of accounts for the first quarter: Yes (for institutional investors and analysts)

1. Consolidated Business Results for the Three Months Ended June 30, 2022

(1) Consolidated Business Results (Accumulated) Note: Amounts less than one million yen are truncated. Percentages indicate year-over-year increases/decreases.

Note: Comprehensive income was ¥207,854 million (134.8%) for the three months ended June 30, 2022, and ¥88,518 million (85.0%) for the three months ended June 30, 2021.

(Reference) Equity capital was ¥2,127,644 million as of June 30, 2022, and ¥1,969,686 million as of March 31, 2022.

Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Three Months Ended June 30, 2022 (J-GAAP)

Note: Revisions to the dividend forecast announced most recently: None

3. Consolidated Business Forecast for the Fiscal Year Ending March 31, 2023

Note: Percentages indicate year-over-year increases/decreases.

Note: Revisions to the consolidated business forecast announced most recently: Yes

(ii) Number of treasury shares at end of period

Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Three Months Ended June 30, 2022 (J-GAAP)

The Brief Report on the Settlement of Accounts is outside the scope of quarterly review by a certified public accountant or an audit corporation.

Explanation about the Appropriate Use of the Business Forecast and Other Noteworthy Points

Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Three Months Ended June 30, 2022 (J-GAAP)

1. Qualitative Information Regarding Settlement of Accounts for the Period under Review........................

Explanation of Future Forecast Information Such as Consolidated Business Forecast.........................

2. Consolidated Financial Statements and Primary Notes .............................................................................

Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ...............

For the Three Months Ended June 30 .........................................................................................

(Consolidated Statement of Comprehensive Income)

For the Three Months Ended June 30 .......................................................................................

Consolidated Statement of Cash Flows ...............................................................................................

Notes to Consolidated Financial Statements .......................................................................................

Notes on the Premises of the Company as a "Going Concern"...........................................................

Notes on Significant Changes in Shareholders' Equity .......................................................................

Adoption of Accounting Treatment Specific to Quarterly Consolidated Financial Statement

Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Three Months Ended June 30, 2022 (J-GAAP)

1. Qualitative Information Regarding Settlement of Accounts for the Period under Review

In the three months ended June 30, 2022 (from April 1, 2022, to June 30, 2022), the overall world economy continued to recover, especially in personal consumption, as restrictions on economic activities eased. Meanwhile, the prolonged Russia-Ukraine situation and global inflation increased uncertainty about the future. In the U.S. economy, the favorable employment and income environment and brisk personal consumption due to the reversal of excess household savings supported the economy despite high inflation caused by supply constraints. In the European economy, although the economy was affected by the Russia-Ukraine situation and the contraction of trade transactions, it was supported by active personal consumption due to the reversal of excess savings. In Asia and emerging countries, the economic recovery was driven by strong personal consumption without the imposition of strict activity control measures and by strong exports to the United States. In the Chinese economy, while activity restrictions have been gradually eased in many cities since May, personal consumption has bottomed out, industrial production has picked up, and the economy appears to have escaped the worst phase, the future outlook remains uncertain. In the Japanese economy, although production and exports were down due to the impact of urban lockdowns in China, active personal consumption due to the easing of activity restrictions drove the economy.

To complete the strategic management plan "Fusion 25" formulated in the fiscal year ended March 31, 2022, the Daikin Group is working on measures under nine key themes, including the three growth strategy themes of "Challenge to achieve carbon neutrality," "Promotion of solutions business connected with customers," and "Creating value with air."

Under this business environment, we strived to minimize the impact of environmental changes on our business activities by closely following the progress of each region and business and responding to issues while assuming multiple scenarios for both upswings and downswings in our business. Specifically, we continued and strengthened our efforts for the following themes.

In addition, we have taken changes in the world as opportunities to build a strong corporate structure and generate results by setting challenging themes that will lead to the next leap forward by leveraging the Group's strengths, such as accelerating the achievement of carbon neutrality and utilizing digital technology.

The Daikin Group's net sales increased by 21.1% year over year to ¥967,755 million for the three months ended June 30, 2022. As for profits, however, operating profit decreased by 1.3% to ¥107,860 million, ordinary profit decreased by 2.1% to ¥109,515 million, and profit attributable to owners of parent decreased by 10.3% to ¥70,551 million, owing to the sharp rise in raw material prices, lockdowns in China, and other factors.

Operating results by business segment are as follows:

(i) Air-Conditioning and Refrigeration Equipment

Overall sales of the Air-Conditioning and Refrigeration Equipment segment increased by 20.9% year over year to ¥889,254 million. Operating profit decreased by 5.5% to ¥94,483 million.

In the Japanese air-conditioning equipment market, industry demand was affected by both demand and supply factors, including postponement of capital investment amid an uncertain business environment, delays in on-site construction schedules due to shortages of semiconductors, parts, and materials, and a rebound from last year's demand from people staying at home in residential-use market, as both the commercial and residential markets were down year on year. Against this backdrop, the Group worked to minimize the impact by maintaining stable production and supply through the realization of a robust supply chain.

In the Japanese commercial air-conditioning equipment market, we have made more proposals in line with customers' air-related problems by combining the Group's ventilation and disinfection products with air-conditioning systems, such as the "SkyAir" and "VRV" series with greatly improved ease of installation, the "Heat Reclaim Ventilator" total heat exchanger unit and "UV Streamer Air Purifier." In this manner, we have strengthened our

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Daikin Industries Ltd. published this content on 12 August 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 August 2022 01:18:01 UTC.