Member, Financial Accounting Standards Foundation
Brief Report on the Settlement of Accounts (Consolidated)
for the Three Months Ended June 30, 2020 (J-GAAP)
August 4, 2020 | ||
Name of Listed Company: Daikin Industries, Ltd. | Listed on TSE | |
Code No.: 6367 | ||
(URL: https://www.daikin.co.jp/) | ||
Representative: | Masanori Togawa, President and CEO | |
Contact: | Motoshi Hosomi, | |
General Manager of the Corporate Communication Department of the Head Office | ||
(Tel.: +81-6-6373-4320) | ||
Planned date of the filing of quarterly report: | August 5, 2020 | |
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, 2020
(From April 1, 2020, to June 30, 2020)
(1) Consolidated Business Results (Accumulated)Note: Amounts less than one million yen are truncated. Percentages indicate year-over-year increases/decreases.
Net sales | Operating profit | Ordinary profit | Profit attributable to | |||||
owners of parent | ||||||||
Three months ended | Millions of yen | % | Millions of yen | % | Millions of yen | % | Millions of yen | % |
June 30, 2020 | 581,682 | -14.6 | 54,506 | -39.2 | 55,119 | -38.6 | 33,105 | -47.5 |
June 30, 2019 | 681,298 | 3.7 | 89,619 | 7.8 | 89,826 | 5.1 | 63,106 | 5.8 |
Note: Comprehensive income was ¥47,852 million (137.2%) for the three months ended June 30, 2020, and ¥20,170 million (-66.1%) for the three months ended June 30, 2019.
Earnings per share | Diluted earnings | |
per share | ||
Three months ended | Yen | Yen |
June 30, 2020 | 113.15 | 113.08 |
June 30, 2019 | 215.74 | 215.60 |
(2) Consolidated Financial Position
Total assets | Net assets | Equity ratio | |
Millions of yen | Millions of yen | % | |
As of June 30, 2020 | 2,958,304 | 1,487,079 | 49.3 |
As of March 31, 2020 | 2,667,512 | 1,462,591 | 53.8 |
(Reference) Equity capital was ¥1,458,207 million as of June 30, 2020, and ¥1,434,968 million as of March 31, 2020.
Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Three Months Ended June 30, 2020 (J-GAAP)
2. Dividends
(Annual) Dividend per share | ||||||||||
1Q-end | 2Q-end | 3Q-end | Year-end | Total | ||||||
Yen | Yen | Yen | Yen | Yen | ||||||
Fiscal Year ended March 31, 2020 | ― | 80.00 | ― | 80.00 | 160.00 | |||||
Fiscal Year ending March 31, 2021 | ― | |||||||||
Fiscal Year ending March 31, 2021 | ― | ― | ― | ― | ||||||
(forecast) | ||||||||||
Note: 1. Revisions to the dividend forecast announced most recently: None |
2. The forecast of cash dividends for the fiscal year ending March 31, 2021 have yet to be determined at this point.
3. Consolidated Business Forecast for the Fiscal Year Ending March 31, 2021
(From April 1, 2020, to March 31, 2021)
Note: Percentages indicate year-over-year increases/decreases.
Net sales | Operating profit | Ordinary profit | Profit attributable to | Earnings per | ||||||
owners of parent | share | |||||||||
Millions | % | Millions | % | Millions | % | Millions | % | Yen | ||
of yen | of yen | of yen | of yen | |||||||
First half | 1,180,000 | -12.9 | 100,000 | -40.6 | 100,000 | -41.2 | 63,000 | -46.8 | 215.32 | |
Full year | 2,350,000 | -7.9 | 170,000 | -36.0 | 170,000 | -36.8 | 114,000 | -33.2 | 389.63 |
Note: Revisions to the consolidated business forecast announced most recently: Yes
*Notes
- Changes in Significant Subsidiaries during the Three Months Ended June 30, 2020: None
- Adoption of Accounting Treatment Specific to Quarterly Consolidated Financial Statement Preparation: Yes
- Changes in Accounting Policies, Changes in Accounting Estimates, and Retrospective Restatement
- Changes in accounting policies relating to revisions to accounting standards, etc.: None
- Changes in accounting policies other than (i) above: None
- Changes in accounting estimates: None
- Retrospective restatement: None
- Number of Shares Issued (common stock)
- Number of shares issued at end of period (including treasury shares)
As of June 30, 2020 | 293,113,973 shares |
As of March 31, 2020 | 293,113,973 shares |
(ii) Number of treasury shares at end of period | |
As of June 30, 2020 | 519,060 shares |
As of March 31, 2020 | 529,837 shares |
- Average number of shares outstanding during the three months
Three Months Ended June 30, 2020 | 292,587,527 shares |
Three Months Ended June 30, 2019 | 292,509,830 shares |
Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Three Months Ended June 30, 2020 (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
- The business forecasts are based on information currently available to Daikin Industries, Ltd. (the "Company") and certain assumptions that are deemed reasonable. Actual results may differ significantly from these forecasts. For the basis of presumption of the business forecast and the notes on its use, please refer to "(3) Explanation of Future Forecast Information Such as Consolidated Business Forecast" of "1. Qualitative Information Regarding Settlement of Accounts for the Period under Review."
- The Company plans to hold a briefing on business results (conference call) for institutional investors and analysts on Tuesday, August 4, 2020. Documents and materials distributed in this briefing will be posted on the Company's website soon after the announcement of business results.
Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Three Months Ended June 30, 2020 (J-GAAP)
Content of Attachment | ||
1. Qualitative Information Regarding Settlement of Accounts for the Period under Review........................ | 2 | |
(1) | Explanation of Operating Results .......................................................................................................... | 2 |
(2) | Explanation of Financial Position.......................................................................................................... | 4 |
(3) | Explanation of Future Forecast Information Such as Consolidated Business Forecast ......................... | 4 |
2. Consolidated Financial Statements and Primary Notes ............................................................................. | 6 | |
(1) | Consolidated Balance Sheet .................................................................................................................. | 6 |
(2) | Consolidated Statement of Income and Consolidated Statement of Comprehensive Income ............... | 8 |
(Consolidated Statement of Income) | ||
For the Three Months Ended June 30 ........................................................................................... | 8 | |
(Consolidated Statement of Comprehensive Income) | ||
For the Three Months Ended June 30 ........................................................................................... | 9 | |
(3) | Consolidated Statement of Cash Flows ............................................................................................... | 10 |
(4) | Notes to Consolidated Financial Statements........................................................................................ | 12 |
Notes on the Premises of the Company as a "Going Concern" ........................................................... | 12 | |
Notes on Significant Changes in Shareholders' Equity........................................................................ | 12 | |
Adoption of Accounting Treatment Specific to Quarterly Consolidated Financial Statement | ||
Preparation ........................................................................................................................................... | 12 | |
Additional Information......................................................................................................................... | 12 | |
Segment Information, etc. .................................................................................................................... | 13 |
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Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Three Months Ended June 30, 2020 (J-GAAP)
1. Qualitative Information Regarding Settlement of Accounts for the Period under Review
(1) Explanation of Operating Results
In the three months ended June 30, 2020 (from April 1, 2020, to June 30, 2020), the overall world economy slowed significantly as economic activity stagnated due to the global spread of the coronavirus (COVID-19). The U.S. economy entered a recessionary phase as deteriorating employment and income conditions and stay-at-home orders suppressed consumption. The European economy, despite the gradual lifting of stay-at-home orders from May, experienced serious downward pressure from declines in personal consumption and exports. The growth rate of the economies of Asia and emerging countries slowed substantially as a result of weak service exports due to a sharp decline in foreign tourists and sluggish domestic demand stemming from restrictions on activities imposed by governments. The Chinese economy showed signs of recovery as economic activity resumed quickly and exports and infrastructure investment picked up. The Japanese economy experienced a significant decline in growth rate as a result of a large decrease in exports, sluggish personal consumption due to stay-at-home orders, and a decline in capital investment.
In such a business environment, the Daikin Group focused on business management initiatives in production, procurement, and sales, including the launch of cross-divisional projects, to minimize the impact of COVID-19 on the Group and to ensure a rapid recovery upon resolution of the situation. In particular, the Group worked to expand sales of air-related products, such as air purifiers and ventilation products, by capitalizing on the growing awareness for the safety and assurance of air and space. In addition, the Group worked to maintain its product supply system despite procurement being impacted from the sales networks, production sites, and suppliers in each country.
At the same time, the Daikin Group set "Accelerating Our 3 Structures of Collaborative Innovation, Let Us Win in this Era of Change" (3 Structures of Collaborative Innovation: Collaborative Innovation with Customers, Collaborative Innovation with External Bodies, and Collaborative Innovation within the Group) as the slogan for its Annual Group Policy for this year (2020). Aiming to generate results, the Group made efforts to strengthen sales and marketing capabilities; improve product development, production, procurement and quality; enhance human resources capabilities; and reduce both fixed and variable costs in each region around the world.
The Daikin Group's net sales decreased by 14.6% year over year to ¥581,682 million for the three months ended June 30, 2020. As for profits, operating profit decreased by 39.2% to ¥54,506 million, ordinary profit decreased by 38.6% to ¥55,119 million, and profit attributable to owners of parent decreased by 47.5% to ¥33,105 million.
Operating results by business segment are as follows:
(i) Air-Conditioning and Refrigeration Equipment
Overall sales of the Air-Conditioning and Refrigeration Equipment segment decreased by 14.2% year over year to ¥536,692 million. Operating profit decreased by 37.5% to ¥51,600 million.
In the Japanese commercial air-conditioning equipment market, industry demand declined significantly, particularly in the market for stores, as the trend of reviewing and suspending capital investment plans continued unabated due to the contraction in economic activities accompanying COVID-19 prevention measures. Although the Daikin Group worked to maintain its sales function through sales operations utilizing remote work and proposal- based sales performed remotely, net sales of commercial air-conditioning systems were lower year over year.
In the Japanese residential air-conditioning equipment market, despite a sharp fall in April due to the impact of COVID-19, industry demand remained mostly unchanged year over year due to factors including greater time spent at home, increased interest in ventilation and sanitization, and the effects of government benefits from May. The Group's net sales of residential air-conditioning systems increased year over year. This was due in part to the promotion of energy-saving and air purification functions, including the "Urusara X," which has a ventilation function.
In the Americas, net sales decreased year over year as a whole due to the spread of COVID-19. Net sales of residential air-conditioning systems declined year over year owing to the spread of COVID-19 throughout the United States. This was despite favorable weather conditions and the positive effect on demand from more time spent at home and greater adoption of remote work. Net sales of commercial air-conditioning systems also declined year over year due to the review and suspension of projects in certain industries, including the retail and restaurant industries. In the market for large buildings (Applied Systems), despite market stagnation from the impact of COVID-19, net sales increased year over year as a result of strengthening the sales network and expanding sales, particularly of air handling units (large commercial air-conditioning systems that meet a wide variety of air-conditioning needs depending on the type of business and room application) for which orders were secured before the impact of COVID- 19 was felt.
In China, although production returned to normal, sales were affected by COVID-19, and net sales declined year over year as a whole. Markets reopened throughout China from April and started to fully function in June. The Group invested sales resources by prioritizing in regions and markets that had reopened quickly and strengthened Internet
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Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Three Months Ended June 30, 2020 (J-GAAP)
sales. As a result of these efforts, sales for the single month of June have recovered to roughly the same level as the same month of the previous year. In the midst of this difficult market environment, the Group not only recovered sales, but it also took advantage of the softening raw material market conditions, reduced fixed costs, and promoted cost reductions to maintain high earnings. In the residential-use market, despite the limitations on traditional sales activities imposed by the impact of the COVID-19 pandemic, the Group worked to recover sales in the retail market through efforts including online events and live broadcasts and by strengthening Internet sales. Furthermore, the Group promoted collaboration with major developers and strengthened sales for projects. In the commercial-use market, the Group reinforced customer visits by leveraging the growing market interest in cleaning, sanitization, and ventilation, as it also strengthened its lineup of air-related products and ventilation systems to offer air solutions (including the visualization [digitalization] of air using air-conditioning operation data and sensors, and the establishment of remote air-conditioning monitoring systems). In the Applied Systems air-conditioning equipment market, the Group strengthened sales in information-related fields such as data centers, where demand is growing due to the accelerating pace of online systematization and digitalization.
In Asia and Oceania, sales dropped significantly due to the suspension of business activities in many countries in April as a result of governmental decrees in response to the spread of COVID-19. In residential air-conditioning systems, despite restrictions on business activities that have remained in place from May onward, the Group captured seasonal residential demand, including a rebound, as restrictions were eased from the decline in demand in April when business activities were suspended. In addition, the Group promoted sales through its own dealer channels as shopping malls leasing space to home electronics retailers were closed in many countries due to restrictions on business activities. On the other hand, in commercial air-conditioning systems, the situation was difficult as a result of the spread of COVID-19 at construction sites and the lockdowns of cities, which caused construction delays and postponements of projects. As described above, net sales of both residential and commercial air-conditioning systems decreased year over year as a whole due to the economic slowdown and decline in personal consumption affected by COVID-19.
In Europe, net sales decreased year over year as a whole due to the significant decline in sales affected by COVID-
19. Net sales of residential air-conditioning systems decreased year over year, despite a production and supply response that took advantage of the nearest factories in the Czech Republic and Turkey, and online sales during the lockdown. Despite the continuation of sales activities such as online 'spec-in' activities and the introduction of air- related products during the lockdown, net sales of commercial air-conditioning systems decreased year over year due in part to the impact of a ban on operations of hotels, restaurants, stores, and other facilities under the lockdown.
In the Middle and Near East and Africa, net sales decreased year over year due to the impact of COVID-19 and the economic downturn caused by falling crude oil prices.
In the filter business, sales of residential filters grew in the United States due to rising demand for ventilation amid the spread of COVID-19, and sales of high-performance filters for hospitals and clean rooms increased in Asia and Europe. In Asia, the Group also began selling products such as negative pressure units that prevent viruses from spreading outside the patient hospital rooms. Furthermore, in industrial applications, filter replacement services mainly for filters for offshore oil fields, which can significantly reduce running costs, performed well against a backdrop of contraction in capital investment by major customers. However, overall sales for both commercial and industrial applications declined due to the impact of the lockdown in response to the spread of COVID-19, especially in European countries, and net sales decreased year over year.
In the marine vessels business, net sales declined year over year due to a decrease in unit sales of marine container refrigeration units.
(ii) Chemicals
Overall sales of the Chemicals segment decreased by 19.6% year over year to ¥35,567 million. Operating profit decreased by 57.7% to ¥2,655 million.
The general condition regarding overall sales of fluorochemical products was harsh due to a decline in demand mainly in the semiconductor and automotive fields, a significant drop in demand affected by the spread of COVID- 19, and a decline in market conditions and lower demand in the gas market.
Net sales of fluoropolymers decreased year over year mainly due to a decline in demand for semiconductor and automotive-related applications in Japan, Europe, the United States, and Asia, as well as lower LAN cables and aircraft-related demand in the United States. Net sales of fluoroelastomers also decreased substantially year over year due to the impact of falling demand in the automotive field in Japan, Europe, the United States, and Asia.
Among specialty chemicals, net sales of oil and water repellents grew year over year as a result of the growth in demand for medical-related applications. In addition, net sales of semiconductor etching agents increased year over year due to sales expansion in Japan, Asia, and China. Despite a difficult demand environment, net sales of anti- fouling surface coating agents remained at the same level year over year thanks to sales expansion in Japan and China.
As for fluorocarbon gas, the impact of the decline in global sales was significant, and as a result, overall sales of gas decreased substantially year over year.
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Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Three Months Ended June 30, 2020 (J-GAAP)
(iii) Other Divisions
Overall sales of the "Others" segment decreased by 19.8% year over year to ¥9,422 million. Operating profit decreased by 69.9% to ¥248 million.
In oil hydraulic equipment, net sales of oil hydraulic equipment for industrial machinery and oil hydraulic equipment for construction machinery and vehicles declined year over year as a result of a decline in capital investment in Japan and the lockdown in Europe and the United States triggered by the spread of COVID-19.
In defense systems-related products, net sales grew year over year as a result of robust sales of home oxygen equipment, thanks to a temporary increase in demand for oxygen concentrators as patients with respiratory diseases shifted to home care as some hospitals accepted COVID-19 patients.
In the electronics business, net sales remained at the same level year over year as a result of an increase in sales of CG creation software and molecular design software sold to the game market and the university and public sector markets, where the impact of COVID-19 is relatively low. This occurred despite a decline in sales of "SpaceFinder," a database system for design and development sectors, which is sold mainly to manufacturers, resulting from a decline in investment associated with the spread of COVID-19.
(2) Explanation of Financial Position
(i) Assets, Liabilities and Net Assets
Total assets increased by ¥290,791 million from the end of the previous fiscal year to ¥2,958,304 million. Current assets increased by ¥278,539 million from the end of the previous fiscal year to ¥1,582,966 million, mainly due to an increase in cash and deposits. Non-current assets increased by ¥12,252 million from the end of the previous fiscal year to ¥1,375,337 million, primarily due to an increase in investment securities resulting from market value fluctuation.
Liabilities increased by ¥266,303 million from the end of the previous fiscal year to ¥1,471,225 million, mainly due to an increase in long-term borrowings. Interest bearing debt ratio rose to 27.7% from 20.8% at the end of the previous fiscal year.
Net assets increased by ¥24,487 million from the end of the previous fiscal year to ¥1,487,079 million, primarily due to an increase caused by posting of profit attributable to owners of parent.
(ii) Cash Flows
During the three months ended June 30, 2020, net cash provided by operating activities was ¥59,202 million, a decrease of ¥4,496 million from the same period of the previous fiscal year, principally due to a decrease in profit before income taxes. Net cash used in investing activities was ¥33,276 million, a decrease of ¥3,322 million from the same period of the previous fiscal year, primarily due to a decrease in payment for acquisition of consolidated subsidiaries. Net cash provided by financing activities was ¥234,388 million, an increase of ¥214,100 million from the same period of the previous fiscal year, mainly due to an increase in proceeds from long-term borrowings. After including the effect of foreign exchange rate change to these results, net increase in cash and cash equivalents for the three months ended June 30, 2020, amounted to ¥262,925 million, an increase of ¥228,967 million from the same period of the previous fiscal year.
(3) Explanation of Future Forecast Information Such as Consolidated Business Forecast
With regard to the future world economy, despite the continued spread of COVID-19, social and economic activities have resumed, mainly in developed countries, as measures are being taken to prevent the spread of the infection. However, as the infection continues, the Daikin Group expects restrictions on human contact to continue in the future as well, including small-scale regional lockdowns and suspension of, or refraining from, business activities. Furthermore, the spread of the infection in the United States, Asia, and Latin American countries has not yet been stopped, and there are also risk factors such as concerns about a second wave and a deterioration in corporate earnings. For these reasons, the situation is expected to remain uncertain.
Initially, it was assumed that the impact of COVID-19 would be felt generally through the first half of the fiscal year. During this first quarter, although there was an early resumption of economic activity and a boost in demand for residential air-conditioning systems due to remote work, the Group expects the impact on demand in the second quarter onward to be prolonged in Asia and other emerging countries. In addition, under the new normal in post- coronavirus society, the Group expects that it will take time for demand for commercial air-conditioning systems to recover in retail, restaurant, lodging, and office-related markets.
In light of the above, the business forecast announced on May 12, 2020 has been revised as follows. Please note that this forecast does not assume large-scale city lockdowns or suspension of production and sales activities caused by a so-called second wave of COVID-19.
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Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Three Months Ended June 30, 2020 (J-GAAP)
The Group will continue both defensive and offensive short-term measures in response to COVID-19 and use this challenge as an opportunity to strengthen and reform its business structure as it flexibly responds to rapidly changing conditions and reviews its plans from time to time going forward.
The estimated exchange rate from the second quarter onward is based on the assumption that US$1 equals ¥108 and 1 euro equals ¥120.
Revisions to Consolidated Business Forecast for the Six Months Ending September 30, 2020 (From April 1, 2020, to September 30, 2020)
Profit attributable | |||||
Net sales | Operating profit | Ordinary profit | to owners of | Earnings per share | |
parent | |||||
Millions of yen | Millions of yen | Millions of yen | Millions of yen | Yen | |
Previous forecasts (A) | 1,070,000 | 40,000 | 40,000 | 23,000 | 78.61 |
Revised forecasts (B) | 1,180,000 | 100,000 | 100,000 | 63,000 | 215.32 |
Increase/decrease (B - A) | 110,000 | 60,000 | 60,000 | 40,000 | ― |
Increase/decrease (%) | 10.3 | 150.0 | 150.0 | 173.9 | ― |
(Reference) | |||||
Results for the six months | 1,354,201 | 168,291 | 170,056 | 118,513 | 405.14 |
ended September 30, 2019 | |||||
Revisions to Consolidated Business Forecast for the Fiscal Year Ending March 31, 2021 (From April 1, 2020, to March 31, 2021)
Profit attributable | |||||
Net sales | Operating profit | Ordinary profit | to owners of | Earnings per share | |
parent | |||||
Millions of yen | Millions of yen | Millions of yen | Millions of yen | Yen | |
Previous forecasts (A) | 2,330,000 | 150,000 | 150,000 | 100,000 | 341.78 |
Revised forecasts (B) | 2,350,000 | 170,000 | 170,000 | 114,000 | 389.63 |
Increase/decrease (B - A) | 20,000 | 20,000 | 20,000 | 14,000 | ― |
Increase/decrease (%) | 0.9 | 13.3 | 13.3 | 14.0 | ― |
(Reference) | |||||
Results for the fiscal year | 2,550,305 | 265,513 | 269,025 | 170,731 | 583.61 |
ended March 31, 2020 | |||||
The business forecasts are based on information currently available to the Company and certain assumptions that are deemed reasonable. A number of factors, some major ones of which are explained below, could cause actual results to differ significantly from these forecasts.
- Changes in the market environment including political conditions, the economy, unseasonable weather, and product demand
- Fluctuations in the exchange rates, fund-raising environment, and market value of securities
- Emergence of new products, services, and competitors
- Progress after acquisitions and alliances with other companies
- Quality issues of products and services, changes in the procurement environment for parts, and laws and regulations
- Information leaks due to unauthorized access or cyber attacks
- Strengthening of environment-related regulations and the occurrence of environmental problems
- Impairment of non-current assets, natural disasters, and epidemics of new infectious diseases
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Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Three Months Ended June 30, 2020 (J-GAAP)
2. Consolidated Financial Statements and Primary Notes
(1) Consolidated Balance Sheet | (Millions of yen) | ||
FY2019 | First Quarter of FY2020 | ||
(As of March 31, 2020) | (As of June 30, 2020) | ||
Assets | |||
Current assets | |||
Cash and deposits | 370,793 | 638,064 | |
Notes and accounts receivable - trade | 440,755 | 454,565 | |
Merchandise and finished goods | 292,579 | 292,843 | |
Work in process | 49,686 | 40,307 | |
Raw materials and supplies | 91,517 | 101,235 | |
Other | 69,657 | 67,173 | |
Allowance for doubtful accounts | (10,561) | (11,223) | |
Total current assets | 1,304,427 | 1,582,966 | |
Non-current assets | |||
Property, plant and equipment | 579,980 | 589,032 | |
Intangible assets | |||
Goodwill | 281,969 | 272,129 | |
Other | 260,687 | 257,106 | |
Total intangible assets | 542,656 | 529,235 | |
Investments and other assets | |||
Investment securities | 157,328 | 169,715 | |
Other | 84,326 | 88,562 | |
Allowance for doubtful accounts | (1,206) | (1,208) | |
Total investments and other assets | 240,448 | 257,069 | |
Total non-current assets | 1,363,085 | 1,375,337 | |
Total assets | 2,667,512 | 2,958,304 | |
Liabilities | |||
Current liabilities | |||
Notes and accounts payable - trade | 189,843 | 186,548 | |
Short-term borrowings | 48,937 | 91,231 | |
Current portion of long-term borrowings | 105,900 | 105,696 | |
Income taxes payable | 19,893 | 20,626 | |
Provision for product warranties | 52,849 | 53,844 | |
Other | 276,532 | 271,608 | |
Total current liabilities | 693,957 | 729,555 | |
Non-current liabilities | |||
Bonds payable | 90,000 | 90,000 | |
Long-term borrowings | 233,184 | 453,985 | |
Retirement benefit liability | 13,219 | 13,593 | |
Other | 174,559 | 184,090 | |
Total non-current liabilities | 510,963 | 741,669 | |
Total liabilities | 1,204,921 | 1,471,225 |
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Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Three Months Ended June 30, 2020 (J-GAAP)
(Millions of yen) | |||
FY2019 | First Quarter of FY2020 | ||
(As of March 31, 2020) | (As of June 30, 2020) | ||
Net assets | |||
Shareholders' equity | |||
Share capital | 85,032 | 85,032 | |
Capital surplus | 83,898 | 83,941 | |
Retained earnings | 1,254,072 | 1,263,771 | |
Treasury shares | (2,264) | (2,218) | |
Total shareholders' equity | 1,420,739 | 1,430,526 | |
Accumulated other comprehensive income | |||
Valuation difference on available-for-sale securities | 29,764 | 38,499 | |
Deferred gains or losses on hedges | (2,797) | (460) | |
Foreign currency translation adjustment | (5,051) | (2,768) | |
Remeasurements of defined benefit plans | (7,687) | (7,589) | |
Total accumulated other comprehensive income | 14,228 | 27,680 | |
Share acquisition rights | 1,886 | 1,851 | |
Non-controlling interests | 25,736 | 27,021 | |
Total net assets | 1,462,591 | 1,487,079 | |
Total liabilities and net assets | 2,667,512 | 2,958,304 |
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Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Three Months Ended June 30, 2020 (J-GAAP)
(2) Consolidated Statement of Income and Consolidated Statement of Comprehensive Income (Consolidated Statement of Income)
For the Three Months Ended June 30 | (Millions of yen) | |
First Three Months of | First Three Months of | |
FY2019 | FY2020 | |
(April 1, 2019, to | (April 1, 2020, to | |
June 30, 2019) | June 30, 2020) | |
Net sales | 681,298 | 581,682 |
Cost of sales | 436,702 | 380,458 |
Gross profit | 244,595 | 201,224 |
Selling, general and administrative expenses | 154,976 | 146,717 |
Operating profit | 89,619 | 54,506 |
Non-operating income | ||
Interest income | 1,796 | 1,373 |
Dividend income | 2,665 | 2,233 |
Other | 908 | 1,150 |
Total non-operating income | 5,369 | 4,756 |
Non-operating expenses | ||
Interest expenses | 3,506 | 2,253 |
Share of loss of entities accounted for using equity | ||
method | 22 | 2 |
Foreign exchange losses | 755 | 750 |
Other | 879 | 1,138 |
Total non-operating expenses | 5,162 | 4,144 |
Ordinary profit | 89,826 | 55,119 |
Extraordinary income | ||
Gain on disposal of non-current assets | 529 | ― |
Gain on sales of land | 100 | ― |
Gain on insurance claims | 198 | ― |
Total extraordinary income | 828 | ― |
Extraordinary losses | ||
Loss on disposal of non-current assets | ― | 164 |
Loss on sales of land | ― | 53 |
Loss on valuation of investment securities | 491 | 102 |
Other | 5 | 1 |
Total extraordinary losses | 496 | 322 |
Profit before income taxes | 90,158 | 54,796 |
Income taxes | 25,051 | 19,902 |
Profit | 65,106 | 34,894 |
Profit attributable to non-controlling interests | 1,999 | 1,789 |
Profit attributable to owners of parent | 63,106 | 33,105 |
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Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Three Months Ended June 30, 2020 (J-GAAP)
(Consolidated Statement of Comprehensive Income) | ||
For the Three Months Ended June 30 | (Millions of yen) | |
First Three Months of | First Three Months of | |
FY2019 | FY2020 | |
(April 1, 2019, to | (April 1, 2020, to | |
June 30, 2019) | June 30, 2020) | |
Profit | 65,106 | 34,894 |
Other comprehensive income | ||
Valuation difference on available-for-sale securities | (7,198) | 8,734 |
Deferred gains or losses on hedges | (1,002) | 2,336 |
Foreign currency translation adjustment | (37,225) | 2,195 |
Remeasurements of defined benefit plans | 250 | 98 |
Share of other comprehensive income of entities | ||
accounted for using equity method | 240 | (407) |
Total other comprehensive income | (44,936) | 12,957 |
Comprehensive income | 20,170 | 47,852 |
Comprehensive income attributable to | ||
Comprehensive income attributable to owners of parent | 18,913 | 46,556 |
Comprehensive income attributable to non-controlling | ||
interests | 1,257 | 1,296 |
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Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Three Months Ended June 30, 2020 (J-GAAP)
(3) Consolidated Statement of Cash Flows | (Millions of yen) | ||
First Three Months of | First Three Months of | ||
FY2019 | FY2020 | ||
(April 1, 2019, to | (April 1, 2020, to | ||
June 30, 2019) | June 30, 2020) | ||
I. Cash flows from operating activities | |||
Profit before income taxes | 90,158 | 54,796 | |
Depreciation | 22,539 | 25,047 | |
Amortization of goodwill | 6,936 | 7,413 | |
Increase (decrease) in allowance for doubtful accounts | 961 | 663 | |
Interest and dividend income | (4,461) | (3,606) | |
Interest expenses | 3,506 | 2,253 | |
Share of loss (profit) of entities accounted for using | |||
equity method | 22 | 2 | |
Loss (gain) on disposal of non-current assets | (529) | 164 | |
Loss (gain) on valuation of investment securities | 491 | 102 | |
Decrease (increase) in trade receivables | (44,705) | (12,742) | |
Decrease (increase) in inventories | (12,589) | 1,278 | |
Increase (decrease) in trade payables | 10,349 | (3,518) | |
Increase (decrease) in retirement benefit liability | (229) | 216 | |
Decrease (increase) in retirement benefit asset | (530) | (252) | |
Other, net | 12,548 | 1,034 | |
Subtotal | 84,466 | 72,853 | |
Interest and dividends received | 4,903 | 3,665 | |
Interest paid | (4,187) | (2,783) | |
Income taxes paid | (21,483) | (14,533) | |
Net cash provided by (used in) operating activities | 63,698 | 59,202 | |
II. Cash flows from investing activities | |||
Purchase of property, plant and equipment | (21,944) | (25,561) | |
Proceeds from sales of property, plant and equipment | 2,119 | 928 | |
Purchase of investment securities | (55) | (256) | |
Purchase of shares of subsidiaries and associates | (141) | ― | |
Purchase of shares of subsidiaries resulting in change in | |||
scope of consolidation | (9,765) | ― | |
Decrease (increase) in time deposits | 545 | (4,645) | |
Other, net | (7,358) | (3,742) | |
Net cash provided by (used in) investing activities | (36,599) | (33,276) |
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Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Three Months Ended June 30, 2020 (J-GAAP)
(Millions of yen) | ||||
First Three Months of | First Three Months of | |||
FY2019 | FY2020 | |||
(April 1, 2019, to | (April 1, 2020, to | |||
June 30, 2019) | June 30, 2020) | |||
III. Cash flows from financing activities | ||||
Net increase (decrease) in short-term borrowings | (3,279) | 41,682 | ||
Proceeds from long-term borrowings | 74,105 | 243,048 | ||
Repayments of long-term borrowings | (19,286) | (21,745) | ||
Dividends paid | (26,326) | (23,336) | ||
Dividends paid to non-controlling interests | (27) | (28) | ||
Repayments of lease obligations | (4,864) | (5,284) | ||
Other, net | (33) | 52 | ||
Net cash provided by (used in) financing activities | 20,287 | 234,388 | ||
IV. Effect of exchange rate change on cash and cash | ||||
equivalents | (13,428) | 2,611 | ||
V. Net increase (decrease) in cash and cash equivalents | 33,957 | 262,925 | ||
VI. Cash and cash equivalents at beginning of period | 367,189 | 321,151 | ||
VII. Increase (decrease) in cash and cash equivalents | ||||
resulting from change in accounting period of | ||||
subsidiaries | (7) | (58) | ||
VIII. Cash and cash equivalents at end of period | 401,139 | 584,019 |
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Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Three Months Ended June 30, 2020 (J-GAAP)
(4) Notes to Consolidated Financial Statements
Notes on the Premises of the Company as a "Going Concern"
None applicable
Notes on Significant Changes in Shareholders' Equity
None applicable
Adoption of Accounting Treatment Specific to Quarterly Consolidated Financial Statement Preparation
[Calculation of tax expenses]
The Company and some of its consolidated subsidiaries, reasonably estimate the effective income tax rate after the adoption of tax-effect accounting for profit before income taxes for the consolidated fiscal year ending March 31, 2021, and multiply profit before income taxes for the reporting period by the estimated effective tax rate. However, if as a result of the computation using the estimated effective income tax rate lacks rationality to a remarkable extent, the Company adopts the method of using the legal effective tax rate.
Additional Information
[Application of tax effect accounting for transition from consolidated taxation system to group tax sharing system]
With regard to the items for which a review of the non-consolidated taxation system was made in accordance with the transition to the group tax sharing system established under the "Act for Partial Revision of the Income Tax Act, etc." (Act No. 8 of 2020) and the transition to the group tax sharing system, pursuant to the treatment of Paragraph 3 of "Practical Solution on the Treatment of Tax Effect Accounting for the Transition from the Consolidated Taxation System to the Group Tax Sharing System" (PITF No. 39, March 31, 2020), the provisions of Paragraph 44 of "Implementation Guidance on Tax Effect Accounting" (ASBJ Guidance No. 28, February 16, 2018) do not apply to the Company and some domestic consolidated subsidiaries, and the amounts of deferred tax assets and deferred tax liabilities are based on the provisions of the tax law before amendment.
[Accounting estimates related to the impact of COVID-19]
There are no significant changes to the presumption related to the impact of COVID-19 stated in Additional Information of the securities report for the fiscal year ended March 31, 2020.
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Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Three Months Ended June 30, 2020 (J-GAAP)
Segment Information, etc.
I. For the three months ended June 30, 2019 (From April 1, 2019, to June 30, 2019) 1. Information on net sales and profit or loss amounts by reported segment
(Millions of yen)
Reported segment | Amount | ||||||||
Air- | recorded on | ||||||||
Conditioning | Others | Total | Adjustment | Consolidated | |||||
and | Chemicals | Subtotal | (Note 1) | (Note 2) | Statement of | ||||
Refrigeration | Income | ||||||||
Equipment | (Note 3) | ||||||||
Net sales | |||||||||
Sales to outside customers | 625,285 | 44,261 | 669,547 | 11,750 | 681,298 | ― | 681,298 | ||
Intersegment sales | 813 | 3,982 | 4,796 | 203 | 4,999 | (4,999) | ― | ||
Total | 626,099 | 48,244 | 674,343 | 11,953 | 686,297 | (4,999) | 681,298 | ||
Segment profit | 82,507 | 6,283 | 88,791 | 825 | 89,617 | 2 | 89,619 |
Notes:1. The "Others" segment is a business segment not included in reported segments. It includes the oil hydraulic equipment business, the defense systems-related product business, and the electronics business.
- The adjustment of ¥2 million to segment profit comprises the elimination of intersegment transactions.
- Segment profit is adjusted with operating profit in the Consolidated Statement of Income.
2. Information related to impairment loss of non-current assets and goodwill by reported segment
(Significant impairment loss of non-current assets) None applicable
(Significant change in goodwill amount) None applicable
(Significant gain on bargain purchase) None applicable
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Daikin Industries, Ltd. (6367), Brief Report on the Settlement of Accounts (Consolidated) for the Three Months Ended June 30, 2020 (J-GAAP)
-
For the three months ended June 30, 2020 (From April 1, 2020, to June 30, 2020)
1. Information on net sales and profit or loss amounts by reported segment
(Millions of yen)
Reported segment | Amount | ||||||||
Air- | recorded on | ||||||||
Conditioning | Others | Total | Adjustment | Consolidated | |||||
and | Chemicals | Subtotal | (Note 1) | (Note 2) | Statement of | ||||
Refrigeration | Income | ||||||||
Equipment | (Note 3) | ||||||||
Net sales | |||||||||
Sales to outside customers | 536,692 | 35,567 | 572,260 | 9,422 | 581,682 | ― | 581,682 | ||
Intersegment sales | 561 | 2,260 | 2,822 | 152 | 2,974 | (2,974) | ― | ||
Total | 537,254 | 37,828 | 575,082 | 9,574 | 584,656 | (2,974) | 581,682 | ||
Segment profit | 51,600 | 2,655 | 54,255 | 248 | 54,504 | 2 | 54,506 |
Notes:1. The "Others" segment is a business segment not included in reported segments. It includes the oil hydraulic equipment business, the defense systems-related product business, and the electronics business.
- The adjustment of ¥2 million to segment profit comprises the elimination of intersegment transactions.
- Segment profit is adjusted with operating profit in the Consolidated Statement of Income.
2. Information related to impairment loss of non-current assets and goodwill by reported segment
(Significant impairment loss of non-current assets) None applicable
(Significant change in goodwill amount) None applicable
(Significant gain on bargain purchase) None applicable
The above represents a translation, for reference and convenience only, of the original notice issued in Japanese. We did our utmost to ensure accuracy in our translation and believe it to be of the highest standard. However, due to differences of accounting, legal and other systems as well as of language, this English version might contain inaccuracies, and therefore might be inconsistent with the original intent imported from the Japanese. In the event of any discrepancies between the Japanese and English versions, the former shall prevail as the official version.
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Daikin Industries Ltd. published this content on 24 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 August 2020 04:34:25 UTC