However, its economic and financial performance over the last decade is perfectly defensible. At least in yen terms: revenue grew at an annualized rate of 9.8%, while operating profit and free cash flow doubled between 2016 and 2025.
As is customary with large Japanese—and Korean—exporting groups, which need a weak currency to remain competitive, the dollar is where the problem lies. Over ten years, annualized growth fell to just 6.4%, while operating profit, far from doubling, increased by only 38% over the period.
This downward trend dried up foreign investment, despite a general improvement in governance within large Japanese groups, which did not go unnoticed by major asset managers. This was confirmed once again in recent months with Daikin's capital.
A resurgence of interest from foreign investors would undoubtedly be encouraged by a recovery of the yen against the dollar, provided that this does not compromise the group's competitiveness. Since 2012, the Japanese currency has lost half its value against the US dollar, but it seems to have bottomed out exactly a year ago, with signs of a rebound beginning to emerge.
Located in structurally buoyant markets, with a strategy that skillfully combines organic growth and small, targeted acquisitions, sales of equipment, services, and high-margin spare parts, Daikin could benefit from this development given its currently lackluster valuation.
It is true that the gradual reduction of its debt over the last cycle has cost it profitability points, which has undoubtedly done little to restore its image. An improvement in this area would also not go unnoticed.
