LIXIL Core Earnings Up 19% in H1 FYE2025

- LWT’s international business revenue and profits up due to structural reforms as well as new European product launches
- Japan business experienced steady sales supported by new water products and robust window renovation sales despite weak new housing starts

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

CEO Comment:
“In the first half of the fiscal year ending March 2025, we achieved a year-on-year increase in both revenue and core earnings despite the continued challenging business environment. Although the Japan business was impacted by a sharper-than-expected decline in new housing starts, sales of new products in the water-related business and window renovation remained robust. In international markets, we anticipate having bottomed-out, thanks to the impact of structural reform efforts. While the impact of lower interest rates has been limited so far, pent-up demand is expected to emerge. 
We have continued to make structural reforms by reviewing unprofitable businesses and optimizing personnel allocation in international markets to strengthen our performance and improve profitability ahead of the market recovery. In line with the LIXIL Playbook, we are steadily advancing innovations that create a positive impact on society and the environment for sustainable growth. We will further advance the introduction of innovative products to meet the diversifying needs of our customers.”

- Kinya Seto, CEO, LIXIL

Financial Highlights (6-month period): 
Revenue

Revenue for the second quarter increased by 1% year-on-year to ¥739.8 billion. In Japan, there was a 1% sales decrease year-on-year to ¥483.2 billion, due to a sharper-than-expected decline in new housing starts. This outweighed a growth in sales of new products and renovation sales in water-related business, as well as an increase in window renovation sales. In international markets, revenue increased by 5% to ¥261.8 billion. When excluding the impact of foreign exchange, revenue decreased by 2%. Although demand in Europe, the U.S., and China remained sluggish, enhanced go-to-market strategies and the introduction of new products in Europe, strong sales in the Middle East and India, and the effects of ongoing structural reforms contributed positively.

Core Earnings

Core earnings increased by 19% to ¥10.5 billion. While the Japan business experienced a decline in profit due to weak new housing demand, the international business saw an increase in profit thanks to a sales recovery in Europe and the effects of structural reforms. Despite the impact of higher selling, general, and administrative (SG&A) expenses both domestically and internationally, the core earnings margin improved by 0.2 pp to 1.4%.

Net profit attributable to owners of the parent

For the second quarter, LIXIL recorded a net loss of ¥3.9 billion, a decrease of ¥4.4 billion from the same period in the previous year. This was primarily due to an increase in finance costs and tax expenses. However, the net profit for the three months of the second quarter turned positive.

Performance by Business Segment and Region:

LIXIL Water Technology's (LWT) Japan business revenue increased by 2.9% year-on-year to ¥206.2 billion, due to new product launches and an increase in renovation sales. Core earnings increased by 9.6% to ¥9 billion due to the effects of increased revenue and price optimization initiatives. The ratio of revenue generated by renovation-related sales increased by 2.9 pp to 54%.

LWT’s international business recorded revenues of ¥248.9 billion, a 5.5% increase year-on-year.  On a local currency basis, revenue in Europe, the Middle East, and Africa (EMEA) increased by 10% due to continued sales improvement in Europe and strong sales in the Middle East. In Asia-Pacific, revenue increased by 3%, driven by strong sales in India, despite declines in Vietnam and Thailand. In the U.S. market, revenue decreased by 8% as the impact of interest rate cuts was still limited and demand recovery in the renovation market has not been realized. In China, where the real estate market remains sluggish, revenue decreased by 12%. Core earnings improved by ¥7.1billion year-on-year to ¥6.3 billion, due to sales improvement  in Europe and the effects of structural reforms.

For LIXIL Housing Technology (LHT), revenue decreased by 3.6% year-on-year to ¥290 billion. Core earnings decreased by 25.7% to ¥13.8 billion. Although the ratio of revenue generated by renovation-related sales increased by 1.7 pp to 40% on renovation demand, it was not enough to offset the decline in new housing starts.

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*Please see disclosures here.