For Immediate Release
July 31, 2018
LIXIL Group Corporation

LIXIL Reports Results for First Quarter FYE 2019
- Revenue growth driven by LWT, in particular from strategic marketing investments overseas- Core earnings declined significantly, but two-thirds of decline was anticipated; implementing
transformation measures to drive profitability improvements

Tokyo – LIXIL Group Corporation (“LIXIL Group”, TSE Code: 5938), maker of pioneering water and housing
products, today announced results for the first quarter of the fiscal year ending March 31, 2019 (FYE 2019).
CEO Comment:“During Q1 we continued to make progress against our strategy, as demonstrated by revenue growth
driven by marketing investments overseas, but the significant decline in core earnings shows theconsiderable challenges we still face. Approximately two thirds of the impact on core earnings can beconsidered in line with plans, consisting of costs associated with the introduction of a new trading systemand organization structure in Japan, and marketing investments overseas. These measures, while impacting
us in the short term, are critical to LIXIL’s long-term resilience as they bring accelerated decision-making,enhanced operational efficiency, and, through initiatives such as the new trading system, will help prevent
further decline in profitability. That said, the remaining one third of the decline in core earnings was beyond
our expectations, resulting from issues such as increased labor costs while introducing the new trading
system, and changes to the product mix. To address these issues, we will accelerate internal reform efforts,prioritizing productivity improvements and cost reductions to improve profitability.”-Kinya Seto, President & CEO, LIXIL Group

Financial Summary:During the first quarter of FYE 2019, LIXIL Group recorded revenue of ¥397.1 billion, up 1.1% year on year
on a continuing operations basis1. Sales in Japan were at a level consistent with the previous year despite
the decline in housing starts during the January-March period, while sales of bathroom and kitchen
products continued to perform well. Sales grew overseas during the quarter, in line with plans, driven bystrategic marketing investments and expansion of new businesses.
Core earnings2 from continuing operations for the quarter were down 65.1% year on year, at ¥6.6 billion,primarily due to the impact of a new trading system that was implemented in Japan from April 2018,
affecting both LIXIL Housing Technology (LHT) and LIXIL Water Technology (LWT). Despite efforts to1

Revenue and core earnings for Permasteelisa S.p.A and its subsidiaries have been reclassified under discontinued operations, following

agreement to sell its shares in August 2017
2Core earnings in IFRS is equivalent to operating profit in JGAAP

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improve cost controls, LHT was impacted by the continued decline in new housing starts in Japan between
January and March, while LWT Japan saw core earnings decrease due to the deterioration of its productsales mix and organization changes. Overseas, the decline in core earnings was in line with plans following
strategic marketing investments for future growth.
Net profit3, including discontinued operations, declined to ¥3.1 billion for the quarter, reflecting the change
to core earnings.

Business Highlights:
Introduced a new trading system in Japan from April 2018
to fundamentally tackle deterioration of profitability.

To improve core earnings by ¥27.3 billion by FYE 2021,
kicking off major productivity transformation initiative inJapan, covering organization, production, and products
and services.

Business Segment Q1 Results:
JPY Billions(Q on Q)

RevenueCE

CE Margin

LIXIL Water Technology (LWT)
198.0
12.0
6.0%
(+2.7%)(-27.1%)(-2.5pp)
LIXIL Housing Technology (LHT)
127.5
2.6
2.0%
(-1.7%)(-63.1%)(-3.3pp)
LIXIL Building Technology (LBT)
23.3
-1.2
(-)%
(+6.3%)(-)(-)
Distribution & Retail (D&R)
43.5
2.3
5.4%
(-1.0%)(-8.3%)(-0.4pp)
Housing & Services (H&S)
12.3
0.5
4.0%
(+7.6%)(+11.0%)(+0.2pp)

Investments were made in key markets in Asia Pacific tofurther differentiate product and service offerings overseas,such as new showrooms launched in Changzhou andShanghai in China, and Hanoi in Vietnam.

Steps to optimize the business portfolio and simplify
operating structure continued, with the decision toproceed with the 100% share transfer of LIXIL Suzuki
Shutter to Sanwa Holdings Corporation.

Continued the implementation of strategic initiatives atLHT, including the launch of the LW window, a newdifferentiated product under the TOSTEM brand, as well as
the strengthening LIXIL’s position in the Indian windowmarket.

Launched new global strategic shared value partnership with UNICEF, expanding LIXIL’s purpose
agenda, to bring improved sanitation to children around the world.

-Ends-

3

Profit for the quarter attributable to owners of the parent

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Find out more about LIXIL’s business performance here:> Q1 FYE 2019 Earnings Materials>Q1 FYE 2019 Flash Report

About LIXIL
LIXIL makes pioneering water and housing products that solve everyday, real-life challenges, making better homes a reality
for everyone, everywhere. Drawing on our Japanese heritage, we create world-leading technology and innovate to make highquality products that transform homes. But the LIXIL difference is how we do this; through meaningful design, anentrepreneurial spirit, a dedication to improving accessibility for all, and responsible business growth. Our approach comes tolife through industry leading brands, including INAX, GROHE, American Standard, and TOSTEM. Over 70,000 colleagues
operating in more than 150 countries are proud to make products that touch the lives of more than a billion people every day.
LIXIL Group Corporation (TSE Code: 5938) is the listed holding company for LIXIL’s portfolio of businesses.

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