- Increased renovation sales in Japan despite sluggish demand for new housing starts
- LIXIL Water Technology's (LWT)’s international business saw profit improvement driven by sales growth in Europe and the Middle East, along with structural reform effects
Tokyo – LIXIL Corporation (“LIXIL”, TSE Code: 5938), maker of pioneering water and housing products, today announced its full-year results for the fiscal year ending March 31, 2025.
CEO Comment:
“During the fiscal year ending March 2025, we achieved year-on-year increases in revenue and core earnings despite the challenging business environment both in Japan and international markets. The Japan business faced challenges such as a decline in the number of new housing starts compared to the initial plan and the impact of rising material prices, but this was offset by increased renovation sales. In the international business, sales improvement in Europe continued, and growth in demand was captured in the Middle East and India. Although demand remained sluggish in the U.S and China, the structural reform measures implemented over the past few years contributed to increased profit overall in the international business.
While the key initiatives outlined in the LIXIL Playbook are steadily progressing, we have clarified the areas of focus for the next three years to further improve profitability and achieve sustainable growth. Core focus areas will be to secure turnaround of the U.S. business, grow the GROHE brand globally, strengthen the renovation business in Japan, and accelerate development of differentiated products for global markets. The expansion of differentiated products that positively impact society and the environment is progressing. Despite continued uncertainty in the business environment, we will advance towards sustainable growth by flexibly responding to changes and concentrating resources and investments in areas where we can lead and win.”
- Kinya Seto, CEO, LIXIL
Financial Highlights:
Revenue
Consolidated revenue increased by 1.4% year-on-year to ¥1,504.7 billion. In Japan, we captured renovation demand for water products and saw the positive effects of price optimization, leading to increased sales. For LIXIL Housing Technology (LHT), while we saw an increase in window renovation orders, the decline in new housing starts had a negative impact. Japan business revenue saw a slight increase year-on-year to ¥995.3 billion. Revenue from the international business increased by 3% year-on-year to ¥519.4 billion, a 1% decline on a local currency basis. Sales recovery of shower products in Europe and capturing growth demand in the Middle East contributed to the increase. Demand in the U.S. and China remained sluggish.
Core Earnings
Core earnings increased by 35.3% year-on-year to ¥31.3 billion. While the Japan business saw increased sales for renovations and cost reductions, it was also impacted by an increase in component costs and decreased new housing demand. In the international business, structural reforms such as decreased fixed cost and productivity improvements led to increased profits. The overall core earnings margin improved by 0.5 pp to 2.1%.
Net Profit Attributable to Owners of the Parent
For the full year, LIXIL recorded a net profit of ¥2 billion. Net profit improved ¥15.9 billion year-on-year supported by improved core earnings and reduced structural reform costs despite increased tax expenses.
Year-End Dividend Forecast
LIXIL maintains its year-end dividend forecast at ¥45 per share. The annual dividend is expected to remain the same as the previous year at ¥90 per share.
Full-Year Forecast for FYE2026
LIXIL expects to generate ¥1,540 billion in revenue, ¥35 billion in core earnings and ¥8 billion in net profit.
Performance by Business Segment and Region (Full-Year):
LWT’s Japan business revenue increased by 3.4% year-on-year to ¥435 billion, driven by the effects of price optimization efforts and a rise in sales for renovation. Core earnings grew by 16.5% year-on-year to ¥24.3 billion, as the impact of increased component costs was offset by increased revenue and cost reduction initiatives. The ratio of revenue generated by renovation-related sales increased by 3.0pp to 54%.
Revenue from LWT’s international business grew by 3.5% to ¥492.9 billion. Core earnings saw a significant improvement, increasing by ¥14.8 billion year-on-year to ¥16.6 billion, due to sales recovery and the effects of structural reforms. On a local currency basis, revenue in the Europe region grew by 9%, with increased sales volumes in key markets such as Germany, the Netherlands, and Italy. The India, Middle East, Africa (IMEA) region saw a 20% increase in revenue, driven by continued robust sales growth in India and growing demand in the Middle East. The Asia Pacific region experienced a 2% increase in revenue, attributed to the recovery of project sales in Vietnam. In the Americas, revenue declined by 9%, impacted by limited effects of interest rate cuts on the renovation market and system outage in the third quarter. In China, revenue decreased by 13% due to the continued downturn in the real estate market and an intense competitive environment.
For LHT, revenue decreased by 1.6% year-on-year to ¥586.8 billion. Core earnings decreased by 18.7% to ¥29.2 billion. Despite an increase in orders for window renovations, revenue and earnings declined due to a drop in new housing starts and rising material and SG&A costs.
Medium- to Long-Term Direction:
LIXIL is focused on achieving sustainable growth and value creation based on the key initiatives outlined in the "LIXIL Playbook" introduced in the fiscal year ending March 2021. To clarify the areas to be addressed under the key initiatives and accelerate the transformation, we have announced a medium-term roadmap, including performance targets and strategic measures.
In our consolidated performance, we aim to achieve core earnings of over ¥110 billion, revenue of ¥1,670 billion, and the core earnings margin of 6.5% by FYE2028.
The structural reforms undertaken so far have enabled us to streamline assets, reduce fixed costs, and improve productivity, especially in our international business. Over the next three years, we will accelerate the transformation of the cost structure and shift to profitable products in the U.S. business, while further growing the GROHE brand through a focus on growth markets and continuous introduction of new products. In Japan, we will promote business efficiency through the use of digital technologies such as AI, and improve productivity in the renovation business. In addition, the most critical focus from a long-term perspective is the development of differentiated products for the global market.
- END
*Please see disclosures here.