Japan business growth in renovation products offset decline in new housing starts, leading to increased revenue and core earnings
LIXIL Water Technology's international business saw significant core earnings improvement, with continued strong performance in Europe, the Middle East, and India offsetting sluggish U.S. and China demand
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, 2026.
CEO Comment:
“In the third quarter of the fiscal year ending March 2026, core earnings increased year-on-year despite a marginal decrease in revenue. In our Japan business, sales of renovation products remained robust, leading to higher revenue and core earnings for both our water technology and living businesses. Our housing business also maintained performance on par with the previous year, supported by the expansion of insulation window sales. In international markets, the continued sales recovery in Europe and successful capture of demand in the Middle East and India served as powerful drivers for profit recovery.
The business environment continues to face headwinds, including delayed housing market recoveries in major international regions and fluctuations in raw material and component prices. Nevertheless, through our strategies based on the LIXIL Playbook, we are building a more resilient business foundation, starting with the significant recovery in international profitability. Regarding the challenging U.S. market, we will accelerate the optimization of our business portfolio to ensure an early improvement in profitability. We remain committed to creating innovations that positively impact society and the environment, while focusing on the key initiatives outlined in the LIXIL Playbook.”
- Kinya Seto
Financial Highlights (9-month period):
Revenue
Revenue for the third quarter of FYE2026 declined marginally year-on-year to ¥1,138.5 billion. In Japan, revenue increased 1% year-on-year to ¥779.1 billion. While sales for new housing declined, this was offset by growth in renovation sales for water and high-insulation products. In international markets, revenue decreased by 2% to ¥385.1 billion. When excluding the impact of foreign exchange, revenue decreased by 3%. The decline was primarily due to continued sluggish demand in the U.S. and China, and the impact of lower revenue following the transfer of the U.S. bathing business last fiscal year, despite strong sales in Europe, the Middle East, and India.
Core Earnings
Core earnings increased by 17.5% to ¥36.5 billion. In the Japan business, the positive effects of price optimizations and higher renovation sales offset the increase in SG&A expenses, such as rising labor costs. The international business saw higher core earnings, driven by revenue growth in Europe, the Middle East, and India, as well as an improved product mix. The core earnings margin improved by 0.5 pp to 3.2%.
EBITDA
EBITDA (core earnings plus depreciation and amortization), which represents the earning power of our core business, increased 5% year-on-year to ¥98.4 billion.
Net profit attributable to owners of the parent
Net profit improved by ¥7.5 billion year-on-year to ¥11.8 billion. This was supported by the improvement in core earnings and a decrease in income tax expenses, despite an increase in other expenses and financial costs.
Performance by Business Segment and Region:
LIXIL Water Technology's (LWT) Japan business revenue increased by 2.2% year-on-year to ¥239.6 billion, driven by increased renovation sales of sanitary ware and bathroom products. Core earnings increased by 15.9% to ¥19.1 billion, reflecting the positive effects of both higher renovation sales and price optimization. The ratio of revenue generated by renovation-related sales increased by 1.9 pp to 57%.
The revenue of LWT's international business decreased by 2.1% to ¥364.3 billion yen. Core earnings improved by 32% to ¥15.2 billion. On a local currency basis, Europe saw a 5% increase in revenue. European sales recovered in most product categories, including fittings and faucets. The India, Middle East, and Africa (IMEA) region saw a 15% revenue increase. The Middle East experienced sales growth across all countries, and India maintained revenue growth, even against a strong previous year. In the Asia Pacific region, revenue remained flat year-on-year. Americas recorded a 4% decrease in revenue as weak demand in the housing market persisted. In China, despite a recovery in sales for GROHE products, revenue declined 11% due to the ongoing downturn in the real estate market.
LIXIL Housing Technology (LHT) revenue marginally decreased year-on-year to ¥404.4 billion. While renovation sales were robust, sales for new housing saw a slight decrease. The building business contributed to profit with improved profitability. Core earnings marginally increased to ¥24.5 billion.
Revenue for the Living business, which handles kitchens, vanities, and interior materials, increased by 1% year-on-year to ¥155.8 billion, and core earnings rose by 8.2% to ¥7.3 billion. Sales for renovation products progressed well. The impact of rising raw material and component costs was covered by the price optimization efforts.
*Please note that LIXIL has established the Living business as a new segment starting from FYE2026. Accordingly, historical performance figures for both the LWT and LHT businesses have been restated to reflect this new segment classification.
*Please see disclosures here.