- LIXIL’s Japan business experienced steady sales supported by water-related and insulation renovation products, despite continued weakness in new housing demand
- LIXIL Water Technology's (LWT)’s international business saw revenue and profit growth driven by sales improvement in Europe and the Middle East, and structural reforms
Tokyo – LIXIL Corporation (“LIXIL”, TSE Code: 5938), maker of pioneering water and housing products, today announced its third-quarter results for the fiscal year ending March 31, 2025.
CEO Comment:
“In the third quarter of the fiscal year ending March 2025, we achieved year-on-year increases in revenue and core earnings despite challenging business conditions both in Japan and international markets. Profitability in our water technology business in Japan improved significantly due to growth in renovation sales, although new housing starts remained weak. Sales of high-insulation windows also remained robust. In the international business, although demand remained sluggish except for some growth markets, we achieved increased revenue and profit by improving our market share in Europe and steadily expanding sales in the Middle East and India.
We have continued to implement structural reforms in our international business and optimize our business portfolio to improve profitability. In line with the 'LIXIL Playbook,' we will focus our resources and investments in areas where we can demonstrate our strengths, concentrating on the development of high-value-added, differentiated products and seizing new business opportunities.”
- Kinya Seto, CEO, LIXIL
Financial Highlights (9-month period):
Revenue
Consolidated revenue increased by 1.6% year-on-year to ¥1,140.5 billion. In Japan, while new housing starts declined, we captured renovation demand for water products and saw steady sales of high insulation products for renovations, resulting in flat revenue year-on-year at ¥756.3 billion. Revenue from the international business increased by 6% year-on-year to ¥392.1 billion, and a 1% decline on a local currency basis. Despite continued weak demand in the U.S. and China, we achieved sales improvements in bathroom and shower products in Europe, and increased sales in growth markets such as the Middle East and India.
Core Earnings
Core earnings increased by 16.7% year-on-year to ¥31.1 billion. The profitability of our international business improved significantly, driven by sales growth in Europe, the Middle East, and India. Although the Japan business experienced a slight decrease in profit from weak new housing demand and increased selling, general, and administrative expenses (SG&A) from higher IT amortization costs, the improvement in productivity resulting from structural reforms also contributed positively. As a result, the overall core earnings margin improved by 0.4 pp to 2.7%.
Net profit attributable to owners of the parent
For the third quarter, LIXIL recorded a net profit of ¥4.3 billion, a decrease of ¥2.5 billion from the same period in the previous year due to increased tax expenses. For the three months of the third quarter, profit improved by ¥1.9 billion year-on-year supported by increased core earnings.
Performance by Business Segment and Region:
LWT’s Japan business revenue increased by 3.5% year-on-year to ¥326.6 billion due to increased sales of new products and renovations. Core earnings increased by 10.9% to ¥20.4 billion reflecting the effects of increased sales and price optimization initiatives. The ratio of revenue generated by renovation-related sales increased by 3.3 pp to 54%.
Revenue from LWT's international business increased by 5.5% year-on-year to ¥372.1 billion. Core earnings increased by ¥10.2 billion to ¥11.5 billion due to sales improvements and the effects of structural reforms. On a local currency basis, sales continued to improve in Europe driven by sales initiatives and sales recovery of our bath and shower products, and demand remained robust in the Middle East, resulting in a 12% increase in revenue in the Europe, the Middle East, and Africa (EMEA) region. In the Asia-Pacific region, project sales in India were strong, and sales in Vietnam showed a recovery, resulting in a 7% increase in revenue. In the U.S. market, despite the beginning of interest rate cuts, the renovation market has not yet recovered, and the impact from a system outage in response to unauthorized security access by the third party occurred in December led to a 9% decrease in revenue. In China, where the real estate market remained sluggish, revenue decreased by 12%.
For LIXIL Housing Technology (LHT), revenue decreased by 2.8% year-on-year to ¥449.7 billion. Core earnings decreased by 17.1% to ¥27.3 billion. Although orders for window renovations increased, supported by government subsidies, revenue and profit decreased due to the impact of the decline in new housing starts, higher component costs and increased SG&A expenses. Profitability has improved over the three months of the third quarter.
- END
*Please see disclosures here.