For Immediate Release
October 30, 2020
LIXIL Group Corporation

LIXIL Revenue and Profits Signal Recovery in Q2;
Transformation Initiatives Gain Momentum-First-half revenue and core earnings decrease year-on-year but all segments recover in Q2-Full-year FYE 2021 revenue forecast stays at ¥1,350 billion, down 11% year-over-year, coreearnings revised up to ¥40 billion, a 24% decrease year-on-year-Accelerating transformation in Japan to improve profitability and achieve sustainable growthTokyo – LIXIL Group Corporation (“LIXIL Group”, TSE Code: 5938), maker of pioneering water andhousing products, today announced results for the second quarter and first six months of the fiscal year
ending March 31, 2021 (FYE 2021).
CEO Statement:“Although our lives continue to be significantly impacted by COVID-19, markets are signaling a recovery
from the second quarter. The situation remains unpredictable but demand in international markets has
been rebounding while the Japan market is showing signs of bottoming out.
In line with our strategic direction, we continue to strengthen our financial position following completionof the sale of Permasteelisa and the expected closing of the LIXIL VIVA divestment in the current quarter.
We are accelerating organizational reform and implementing initiatives that are transforming ourworkforce and culture to become more agile, entrepreneurial and resilient. At the same time, we are
implementing operational improvements such as reducing office space and consolidating bases toimprove profitability. Our performance in the second quarter demonstrates the newfound resilience andagility that these initiatives are bringing to LIXIL.
As consumers adapt to the new normal and spend more time at home, we continue to build on newopportunities for growth such as touchless products and online showroom services in the evening,meeting changing needs.”-Kinya Seto, CEO, LIXIL Group

Full-Year Earnings Summary
Revenue
Consolidated revenue for the first half declined 13% year-on-year to ¥660.5 billion.
Revenue in the Japan market decreased by 14% to ¥491.8 billion. Sales fell in all business segments as
the COVID-19 pandemic weighed down household spending and slowed new housing starts in the first1|P a g ehalf of the calendar year. In addition, the absence of demand generated last fiscal year by theconsumption tax hike contributed to lower year-on-year revenue. However, LIXIL Water Technology(LWT) and LIXIL Housing Technology (LHT) saw a surge in demand in Japan for products that cater to theneeds of consumers during the new normal. Sales of LWT’s touchless faucets and LHT’s smart postaldelivery boxes each rose by 50% year-over-year. In addition, sales of products that protect homes fromthe effects of natural disasters common in Japan also experienced an uptick, with renovation-related
shutters jumping 70% year-on-year. Upward trends in sales from the previous quarter indicate the Japan
market is bottoming out.
Revenue in international markets generated by LIXIL International decreased by 9% year-over-year to¥178.6 billion and by 8% on a local currency basis. While revenue declined in all regions in the first half,international markets began to recover strongly from the second quarter, with LWT’s revenue and profit
up year-on-year for the three-month period. Revenue in Americas and EMEA markets, backed by robust
retail and e-commerce sales, declined 2% and 3% over the first half but increased 10% and 13% in thesecond quarter, respectively. The China market, down 7% in the first quarter but 4% in the secondquarter, grew on the back of favorable commercial projects sales, while Asia Pacific markets began topick up, down 31% in the first quarter and 14% in the second quarter.
Core Earnings
Consolidated core earnings decreased by ¥18.6 billion year-over-year to ¥15.4 billion in the first half ofthe fiscal year. However, core earnings returned to the black from a loss of ¥2.6 billion in the first quarterdue to rebounding demand, led by Americas and European markets, and improved SG&A expenses.
Due to weaker sales and reduced factory operation rates, LIXIL Group’s gross margin declined by 0.6 pp.
In turn, this pushed up LIXIL Group’s SG&A ratio. However, SG&A expenses decreased by ¥9.5 billion in
the second quarter, amounting to a total reduction of ¥18.6 billion in the first fiscal half. The cost
reduction significantly alleviated the impact of decreased sales, supported by transformation measures
making the company more agile and resilient.
Net profit for the first half attributable to owners of the parent
LIXIL Group reported net profit of ¥10.9 billion, down by ¥12.3 billion year-on-year, primarily due todecreased core earnings.
FYE 2021 Full-Year Forecast
LIXIL Group is maintaining its revenue forecast of ¥1,350 billion, a decrease of 11% year-on-year, whileraising core earnings guidance to ¥40 billion, a decrease of 24% year-on-year, and net profit of ¥19billion, up 52% year-on-year. The forecast includes profit/loss incurred by previously disclosed sharetransfers of subsidiaries completed or to be completed in the current fiscal year, as well as actual andestimated costs of structural reform initiatives.

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Notable Business Highlights
LIXIL Group’s Medium Term Plan is focused on improving profitability and transforming the organization
to be more agile, entrepreneurial, and resilient to achieve sustainable growth. Since first quarter earnings
were announced in August 2020, LIXIL Group has taken the following steps:-Business Transformation: LIXIL Group is executing focused initiatives to transform its organizationand culture in Japan, where approximately 70% of LIXIL Group’s total business is generated, toovercome the shrinking market for new homes and improve competitiveness. Changing consumer
trends and rapid digitization have disrupted traditional business models, demanding accelerated
transformation. LIXIL Group will establish a meritocratic and agile culture that supports innovationand entrepreneurship. To this end, the company launched a comprehensive HR strategy, Kawaranaito
LIXIL (LIXIL, We Must Change), in the fall of 2019.
As part of these initiatives, LIXIL Group today also announced the New Life voluntary retirement
program. Under the New Life program, employees in Japan aged 40 and over who have worked at
LIXIL Corporation for more than 10 years and who choose to leave will be offered an attractive
retirement package in recognition of their contributions. New Life is designed to provide strong
support to employees seeking new opportunities and multigenerational life planning, while also
accelerating the speed of LIXIL’s transformation. This announcement builds on other recent initiatives
including the introduction of SuperFlex and trialing second job placements.
In Japan, LIXIL Group has also begun to consolidate its sites, relocating a total of 23 LIXIL Groupfacilities in Tokyo to its WING global headquarters during this fiscal year and next. LIXIL Group will
also consolidate four toilet and washbasin development facilities in Tokoname City, Aichi Prefecture,and open a new global R&D center, “Toko Lab”, to drive innovation. The company is also accelerating
the shift to platform-based manufacturing to improve production efficiency.
Globally, LIXIL Group introduced title simplification across the organization to enable faster decision
making, build a more empowered culture by de-emphasizing hierarchy, and accelerate the shift tomeritocracy. The initiative is focused on fostering a sense of ownership and more collaborative
teamwork to spur innovation.

-Realign Business Portfolio: To focus on its core water and housing businesses and strengthen its
balance sheet, LIXIL Group completed the transfer of shares of Permasteelisa. The company also
expects to complete the previously announced transfer of shares in LIXIL VIVA in the third quarter. In
addition to reallocating resources to core businesses, the sale of LIXIL VIVA will enable LIXIL Group toenhance relationships with other home improvement retailers as an independent supplier. Combinedwith the merger of LIXIL Group and LIXIL Corporation in December, the series of transactions willfurther simplify operations and strengthen corporate governance.

-Differentiated Products and Services: LIXIL Group continues to release new products and services
that cater to changing demand in the new normal. As remote work becomes more commonplace andways of living change, INPLUS for Renovation, a window sash, caters to the growing need for
comfortable living spaces, helping to improve soundproofing and maintain room temperature.
3|P a g eFollowing the introduction of its digital showroom services, LIXIL Group’s Japan business also offers
new Night Online Services until 20:00, servicing consumers who cannot visit during the daytime or
who live further away from showrooms.
-Renew Commitment to Environmental Sustainability: LIXIL Group targets net-zero carbon
emissions from its operations and its housing and lifestyle products by 2050. To achieve this goal,
LIXIL Group will improve the environmental value of its products and services, reduce its
environmental footprint from business process, and responsibly manage its environmental impact. Tothis end, LIXIL Group will reduce single-use plastic used in packaging and business processes,
replacing it with more sustainable alternatives. For example, GROHE has led the Less Plastic Initiative
since 2018 to eliminate plastic from product packaging by 2021, saving 21 million plastic packages todate. GROHE has recently been selected as a finalist for the German Sustainability Award 2021, which
honors companies that combine economic success with social responsibility and environmental
protection. Meanwhile, INAX has introduced paper packaging for one of its products sold globally
Further, LIXIL Group has successfully developed bioplastics* derived from microorganisms and is now
accelerating related R&D for practical application. Every year, five trillion plastic bags are usedworldwide while only 10% of plastic waste is recycled.

-Contribute to Improving the Global Sanitation and Hygiene Market: In the run-up to Global
Handwashing Day, LIXL Group announced a Memorandum of Understanding (“MOU”) with theUnited States Agency for International Development (USAID) to develop the sanitation and hygienemarket. The Group will also collaborate with Reckitt Benckiser (RB) to provide 500,000 bars of Dettol
soap with its SATO Tap for developing markets, as well as to advocate for building a sustainable
sanitation and hygiene market with UNICEF. Currently, three billion people, or 40% of the world’s
population, do not have access to a facility to wash their hands at home. Through its expanding
partnership network, LIXIL Group strives to develop a sustainable sanitation and hygiene market
ecosystem, helping to make better homes a reality for everyone, everywhere.
-End-*Press release only available in Japanese
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 makehigh quality 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 comesto life through industry leading brands, including INAX, GROHE, American Standard, and TOSTEM. Approximately 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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