For Immediate Release
May 7, 2018
LIXIL Group Corporation

FYE 2018 Results: LIXIL Positioned to Start New Medium-Term Plan
- Positive progress against strategy; LWT driving growth through product differentiation, synergies,
and new businesses- Progress not reflected in core earnings, which was down after delayed response to rising material
prices and slowdown in Japan housing starts; countermeasures being implemented at LHT- Record net profit reflects leaner and more manageable company ready for MTP
Tokyo – LIXIL Group Corporation (“LIXIL Group”, TSE Code: 5938), maker of pioneering water and housingproducts, today announced results for the fiscal year ended March 31, 2018 (FYE 2018).
CEO Comment:“In FYE2018, LIXIL Group implemented company-wide changes, which I believe position us for thesuccessful implementation of our new Medium-Term Strategy. We are confident in the direction and theprogress we are making, although this was not reflected in our full-year core earnings performance, which
was impacted by factors such as high raw material costs and a slowdown in housing starts in Japan. We
must be able to respond more effectively to such headwinds, and are putting in place both short-term
measures and a long-term roadmap to turn around our housing technology business.”“Our water technology business is now on a strong footing for success with design, technology, quality, andbrand the key drivers of differentiation, and technology transfer from Japan supporting growth overseas.
We also took steps this year to further streamline our overall organization, reduce HQ costs, optimize ourbusiness portfolio, and strengthen our balance sheet. We have now achieved two years of consecutive
record net profit1, reflecting a leaner and more manageable company ready for the Medium Term Plan.”-Kinya Seto, President & CEO, LIXIL Group

Financial Summary:
LIXIL Group
Full Year
Q4(JPY Billions)

Revenue
1,664.8
414.3(+1.9%)(+0.5%)

Core Earnings
75.3
6.7

(-16.1%)(-49.1%)Net Profit
54.6
15.9(+28.4%)-(%)

In FYE 2018, LIXIL Group recorded full-year revenue of ¥1.66 trillion, up 1.9% year on year on a continuing
operations basis2. The increase in revenue was driven by new product launches and product synergies at1

Retroactive restatement in accordance with IFRS 5 due to decision-making on the share transfer of Permasteelisa S.p.A on August 21, 2017

2Revenue 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 20171|P a g e

LIXIL Water Technology (LWT) in overseas markets, while LWT and LIXIL Kitchen Technology’s (LKT)
differentiated products supported faster-than-market growth in all product categories in Japan.
Core earnings3 from continuing operations were down 16.1% year on year, at ¥75.3 billion for the full-year
period. The decrease was due to LIXIL Housing Technology (LHT) being slow to take strategic actions inresponse to the nature of the business, which is susceptible to fluctuations in raw material costs andhousing starts, while macroeconomic conditions in the Middle East and South Africa also impacted LWT’sperformance. Countermeasures to turn around the housing business, described in the Business Highlights
section (below), are now being implemented.
Net profit4, including discontinued operations, increased by 28.4% year on year to ¥54.6 billion on a fullyear basis, resulting from streamlining and simplifying the business portfolio, selling off unused assets,organization changes to simplify the business structure, and the adoption of a consolidated tax filingsystem in Japan. LIXIL has now achieved two consecutive years of record net profit.
Reflecting its business performance, LIXIL Group revised up its annual dividend forecast from ¥60 to ¥65
per share.
For the fiscal year ending March 31, 2019 (FYE 2019), LIXIL Group projects full-year revenue of ¥1.71 trillion,
a 3% increase year on year, and core earnings of ¥85 billion, a 13% increase year on year.
Business Highlights:
Further simplified and delayered organization structure,accelerating decision-making and enhancing efficiency.

Further optimized business portfolio through acquisitions
and divestures to enhance control, governance and focus.

Strengthened balance sheet by reducing interest-bearing
debt through improvement of cash flows, withdrawing
from unprofitable businesses, and disposing of idle assets.
Net Debt/EBITDA improved from 4.3x to 4.0x year on year.

LWT secured faster-than-market growth across all productcategories in Japan, driven by differentiated products,
while product synergies and new businesses accounted for
34% of sales growth overseas. LWT’s strategic
fundamentals are on track, with core technologies
primarily from Japan demonstrating success. The businesswill continue to harness synergies and new business
opportunities to expand ceramic and other bathroom

3Core earnings in IFRS is equivalent to operating profit in JGAAP

4Profit for the quarter attributable to owners of the parent

Business Segment Full Year Results:(JPY Billions)

RevenueCE

CE Margin

LIXIL Water Technology (LWT)
715.9
67.7
9.5%(+8%)(+4%)(-0.4pt)
LIXIL Housing Technology (LHT)
535.2
27.5
5.1%(-2%)(-30%)(-2.1pt)
LIXIL Building Technology (LBT)
107
3.4
3.2%(-3%)(-37%)(-1.7pt)
LIXIL Kitchen Technology (LKT)
120
6.2
5.1%
(+5%)
(+43%)(+1.4pt)
Distribution & Retail (D&R)
173.5
6.9
4.0%(+1%)(-5%)(-0.2pt)
Housing & Services (H&S)
52.3
2.5
4.8%
(-19%)(-43%)(-2.0pt)

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product categories, becoming a full bathroom solution provider in the American, European, and Asianmarkets.
To create an organization more resistant to external challenges, LHT implemented countermeasures for
FYE 2019 and established a roadmap to turn around the business in the long term. The strategy
focuses on accelerating the development and launch cycle of differentiated products, improving
production efficiency through a platform approach and standardization of parts, streamlining
production processes, and enabling overseas expansion.

Japan marketing activities over the year pushed brand recognition above 80%, and the company
anticipates a decrease in marketing expenses from FYE2019 as it transitions from mass marketing tomore data-driven and targeted end-user marketing.

Costs for IT systems in Japan decreasing on a core basis. Despite an increase in depreciation due tofull-scale operation of IT systems in Japan from FYE 2019, overall IT costs are anticipated to decrease
after peaking in FYE2021.

Find out more about LIXIL’s business performance and MTP here:> FYE 2018 Earnings Materials>FYE 2018 Flash Report>Medium Term Plan-Ends-About LIXIL
LIXIL makes pioneering water and housing products that solve everyday, real-life challenges, making better homes a realityfor 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, an
entrepreneurial 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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