Edited by Eamonn Ryan from Daikin results announcement

Daikin Industries, a global leader in HVAC&R, has achieved its strongest performance ever in its 100-year history. This is part one of a two-part series.

Daikin’s offices.

Daikin’s offices. Supplied by Daikin

The fiscal year 2023 results, ending on 31 March 2024, reveal impressive figures: a staggering 4395.3-billion yen (CNY) (approximately EUR28-billion euros). Let’s delve into the details:

  • Global triumph: Daikin’s legacy spans a century, and this milestone year marks unparalleled success. The company’s commitment to innovation and excellence has propelled it to the forefront of the HVAC&R industry worldwide.
  • Daikin Europe N.V.: Daikin Europe N.V., the subsidiary leading the charge in Europe, the Middle East, and Africa (EMEA), reported a turnover of EUR4.9-billion in fiscal year 2023. Although slightly below the previous year’s record, this result reflects resilience in the face of challenges. The residential heat pump market posed difficulties, but Daikin’s commercial, industrial and turnkey service divisions contributed to overall growth. Additionally, emerging markets in Türkiye, the Middle East, and Africa showed promising expansion.
  • European heat pump market dynamics: Daikin’s prominence in low-carbon residential heating and cooling solutions remains unshaken. However, the European heat pump market experienced unexpected setbacks in 2023. Despite a booming demand in 2022, all heat pump types faced contraction. Daikin’s last quarter of fiscal year 2023 witnessed a sharp decline in residential heat pump heating demand.

Europe’s transition to low-carbon heating solutions

As Europe strives toward a greener future, heat pumps play a pivotal role in the continent’s energy transition. However, the pace of this transition varies across countries due to unique dynamics and incentive programmes. Despite progress, several challenges persistently impact consumer confidence and purchasing power:

  • Inflation and interest rates: High inflation rates and rising interest rates create uncertainty for consumers. As prices increase, affordability becomes a concern, affecting decisions related to heating solutions.
  • Gas boilers vs. heat pumps: The decrease in gas prices during 2023 has once again made gas boilers an attractive option for homeowners. Balancing cost-effectiveness with environmental considerations remains a challenge.

Now, let’s delve into Daikin’s performance in commercial and industrial heating and cooling.

Commercial direct expansion (DX) segment

Demand for large commercial projects in the hospitality and office sectors stagnated in some European regions. Daikin’s success lies in its energy-efficient large commercial Variable Refrigerant Volume (VRV) ranges. These systems, including those using the lower Global Warming Potential (GWP) refrigerant R-32, contributed to surpassing last year’s results. Light commercial products found applications in small data centres and warehousing.