LIXIL Revenue Up, Profits Down in Q1 FYE2025

- Japan core earnings in line with expectations, capturing renovation demand with high-performance windows and water-related products
- Revenue in Europe shows recovery, while sluggish demand in the U.S. resulted in limited improvement in the performance of the international business overall 

Tokyo – LIXIL Corporation (“LIXIL”, TSE Code: 5938), maker of pioneering water and housing products, today announced its first-quarter results for the fiscal year ending March 31, 2025.

CEO Comment:
“In the first quarter of FYE2025, our Japan business successfully captured the robust demand in the renovation market, offsetting weak new housing starts and delivering core earnings in line with our expectations. With indicators such as a rise in Japan showroom visitors, we anticipate a recovery in demand towards the second half of the year. In our international business, we saw a recovery in sales in Europe, a critical pillar for profit generation. However, demand remains sluggish in the U.S. Profit for the quarter decreased year-on-year due to an increase in other expenses including costs associated with structural reforms and tax expenses. Internationally, we are driving performance improvements through continued  structural reforms and strengthening our supply and organizational systems in preparation for the recovery of demand in markets such as the U.S.

Amidst an uncertain business environment, we are executing the initiatives outlined in the LIXIL Playbook. We are committed to driving innovation that delivers a positive societal and environmental impact, and remain focused on strengthening the business foundation for continued growth.”

- Kinya Seto, CEO, LIXIL

Financial Highlights: 
Revenue

Revenue for the first quarter was ¥369.8 billion, a 3% increase year-on-year. In Japan, despite  the continued sluggish pace of new housing starts, we performed well in the renovation market with our high-insulation windows, doors  and water-related products. As a result, revenue from Japan businesses remained flat at ¥239.3 billion from the same period last year. In international markets, revenue increased by 10% to ¥133 billion. However, when excluding the impact of foreign exchange, revenue in international markets decreased by 2% year-on-year.

Core Earnings

Core earnings were ¥0.6 billion, a decrease of ¥3.1 billion year-on-year. While core earnings from the Japan business were in line with expectations, demand recovery in the U.S. has not yet been realized, leading to a limited improvement in the performance of our international operations. Furthermore, core earnings were impacted by an increase in selling, general, and administrative (SG&A) expenses due to higher personnel expenses in Japan and an increase in SG&A expenses for international businesses as a result of foreign exchange impacts, as well as additional  inventory write-downs at Decorative Panels International (DPI). This led to a decrease in the core earnings margin by 0.9 pp, bringing it down to 0.2%.

Net profit attributable to owners of the parent

For the first quarter, LIXIL recorded a net loss of ¥5.9 billion, a decline of ¥6.2 billion from the same period in the previous year. This was due to an increase in other expenses (including costs associated with structural reforms) and tax expenses.

Performance by Business Segment and Region:

Revenue for LIXIL Water Technology's (LWT) Japan business increased by 3.2% year-on-year to ¥102.2 billion, due to price optimization and a rise in renovation sales. Core earnings decreased by 14.5% to ¥4.6 billion, impacted by a decline in new housing starts. LWT Japan captured the demand for renovations, particularly in bathrooms and kitchens, with the ratio of revenue generated by renovation-related sales increasing by 2.4 pp to 54%.

LWT’s international business recorded revenues of ¥126.7 billion, a 10.1% increase year-on-year. On a local currency basis, Europe, Middle East, and Africa (EMEA) experienced a 9% increase in revenue, due to a recovery in demand in Europe and sustained robust performance in the Middle East. In Asia Pacific, overall regional sales remained flat, despite continued robust sales in India. Both the U.S. market, hit by persistent high interest rates causing sluggish demand, and the Chinese market, impacted by a real estate downturn, experienced a decrease in revenue on a local currency basis. Core earnings improved by ¥1.9 billion to ¥0.3 billion, due to the recovery in demand in Europe.

Revenue from LIXIL Housing Technology (LHT) decreased by 2.7% year-on-year to ¥143.4 billion. Core earnings were ¥5.3 billion. This represented a decrease of 36.8% compared to the same period in the previous year when we experienced the combined effects of price optimization and an increase in sales of high-insulation windows for renovations. However, core earnings were in line with expectations, supported by continued robust demand for renovations.

-  END

*Please see disclosures here.