For Immediate Release
April 18, 2019
LIXIL Group Corporation

LIXIL Group Revises Guidance for FYE 2019
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LIXIL Group continuing operations, except Permasteelisa, on track to achieve targets for FYE 2019
Compared to previous earnings guidance, expect to recognize further net loss of ¥54.5 billion
due to Permasteelisa
LIXIL Group and Permasteelisa working together on plan to return Permasteelisa to profitability

Tokyo, Japan – LIXIL Group Corporation (“LIXIL Group”, TSE Code: 5938) announced today it hasrevised its guidance for the fiscal year ending March 31, 2019. Excluding Permasteelisa S.p.A(“Permasteelisa”), held by LIXIL Group subsidiary LIXIL Corporation, continuing operations across LIXILGroup are on track to achieve full-year revised targets announced on October 22, 2018. While coreearnings1 for overseas businesses are expected to be lower than forecast, core earnings forbusinesses in Japan are expected to exceed the forecasted amount. However, in addition to theprevious earnings guidance, LIXIL Group expects to book a further net loss of ¥54.5 billion due toPermasteelisa, revising down its guidance.
Summary of Revision of consolidated forecast for the full year of the fiscal year ending March31, 2019

Previous FYE2019 Forecast(Oct. 22, 2018)
Revised FYE2019 Forecast(Mar. 18, 2019)

RevenueCore Earnings

1,845,000

45,000(JPY millions)
Net Profit
Attributable to theOwners of theCompany
1,500

1,832,000

13,000(53,000)

Reasons for revision and plan to return Permasteelisa to profitability
LIXIL Group decided to terminate the share transfer agreement of Permasteelisa to Grandland
Holdings Group Limited in November 2018. Since then, LIXIL Group has been working through all
options to ensure that a robust plan is put in place that will strengthen Permasteelisa as well as LIXILGroup. As part of this, LIXIL Group has been conducting a comprehensive and detailed examinationof all aspects of on-going projects, as well as working to develop a revitalization plan in order torecover the profitability of Permasteelisa.
1Core earnings in IFRS is equivalent to operating profit in JGAAP

1|P a g eBased on the result of the examination, LIXIL Group has increased accrual for expected future losses
on construction projects because estimated construction costs are expected to increase significantlyin the future, primarily in North America. This is mainly due to the increase in raw material prices,
expected large increases in labor costs caused by the shortage of on-site workers and technicians, aswell as the decline in project management ability caused by the resignation of skilled project
managers for multiple projects.
In addition, project owners of certain projects have changed because of their respective deteriorating
business performance caused by global economic challenges. This has also resulted in requiring LIXILGroup to accrue allowances for doubtful accounts for receivables that it does not expect to be able tocollect in the future.
Due to this situation, LIXIL is developing a business plan with Permasteelisa to revitalize and torecover its profitability. The plan includes scaling down operations, including selective order taking
within its capacity to execute construction projects, and decreasing fixed costs by optimizing SG&A,
and enhancing measures to drive more reliable cash flow management.
As a result, LIXIL Group is also required to recognize impairment losses on intangible assets including
goodwill due to the changes in the business environment, such as the scaling down of the operations,as a result of the impairment test under International Accounting Reporting Standard (IFRS).
Furthermore, Permasteelisa CEO Riccardo Mollo, who has led the company since 2016, has decided topursue opportunities outside of the company. Klaus Lother, who is Permasteelisa’s Europe CEO, willassume the role of CEO and begin working closely with LIXIL management to deliver on this plan by
setting forth clearly a new direction for the company.
Hirokazu Yamanashi, Chief Operating Officer of LIXIL Group, commented, “From Water to Housing
Technology, LIXIL Group’s continuing operations are on track to achieve its targets. Japan is doing
especially well, where a strong recovery in demand is driving earnings growth. However, we expect tobook a further net loss of ¥54.5 billion related to Permasteelisa compared to our previous earningsrevision. We have been conducting an extensive review of Permasteelisa’s operations to identify theroot causes and are now working on a plan with Permasteelisa to return it to profitability.”
Continuing his comments on the Permasteelisa plan, Yamanashi said, “Riccardo Mollo, who has beenleading this business since 2016, has decided to pursue other opportunities. I want to sincerely thank
Riccardo for his contributions and leadership over the past three years. He inherited a challenging
business but his steadfast dedication to Permasteelisa is self-evident, and he has operated withstrong leadership, open and transparent communication, and high ethical standards. I would also liketo welcome Klaus Lother, who will take on the role of reshaping Permasteelisa for the future. We havea lot of work to do but we are confident that this plan will improve the financial viability of thiscompany, a company the world’s architects still rely on to develop some of the most prominentbuildings around the world today.”-Ends2|P a g eAbout LIXIL
LIXIL makes pioneering water and housing products that are designed to solve everyday, real-life challenges, making better homes areality 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, an entrepreneurial
spirit, a dedication to improving accessibility for all, and responsible business growth. Our approach comes to life 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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