For Immediate Release
October 31, 2018
LIXIL Group Corporation

LIXIL Reports Results for First Half FYE 2019
-Slight decrease in consolidated revenues due to weak demand in Japan-Core earnings down significantly after difficult first quarter. Performance expected to normalize in H2

Tokyo – LIXIL Group Corporation (“LIXIL Group”, TSE Code: 5938), maker of pioneering water and housing
products, today announced results for the first half of the fiscal year ending March 31, 2019 (FYE 2019).
CEO Comment:“LIXIL endured a difficult first half, which is reflected in our financial results. This included a series of natural
disasters in Japan, challenges with the implementation of a new trading framework, and the inability tosecure U.S. approval for the share transfer of Permasteelisa. However, we are confident that thefundamentals of the business are strong. Conditions with the new trading framework stabilized in Q2,providing a strong platform for the second half onwards. We are also continuing cost reduction and SG&A
control measures to compensate the unplanned decrease in profit in Q1.
Turning around our housing technology business continues to be a priority and, although we still face a
difficult environment, we have seen some positive signs with the unveiling of new high-end, differentiatedproducts in Japan and overseas. In water technology, we continue to see the fundamentals of our strategy
take root, as we benefit from deep internal synergies and strive to become a full bathroom provider
worldwide.
While we anticipate the business will rebound and normalize from Q3, we are committed to intensifying
initiatives to improve our overall cost competitiveness and productivity.”-Kinya Seto, President & CEO, LIXIL GroupFinancial Summary:In the first six months of FYE 2019, LIXIL Group recorded revenue of ¥888.2 billion, down 0.1% year on year
on a like for like basis.
Revenue in Japan compared to the same period last fiscal year decreased by ¥2.3 billion to ¥626.1 billion,
impacted mainly by lower demand for new housing starts and natural disasters, which slowed demand forhouse renovation. However, while the new housing market declined by 4.9% year on year from January toJune, LIXIL Water Technology (LWT) Japan revenue grew 0.1% while LIXIL Housing Technology (LHT)
recorded a drop of 2.5%, suggesting that the business performed better than the overall market in Japan.

1|P a g e

Overseas, revenue grew by ¥0.9 billion to ¥277.2 billion, up 0.3% year on year. Sales in Europe grew by 3%,
while the Middle East and South Africa faced challenges. Overseas investments have been driving newrevenue growth in the Asia Pacific and Americas regions.
Core earnings decreased by ¥26.9 billion year on year to ¥13.8 billion. In Japan, core earnings were
impacted during Q1 by unplanned one-off costs associated with the introduction of the new trading
framework, although this stabilized in Q2. The core earnings margin improved in all segments except LHT
from Q1 to Q2 through cost reduction and SG&A control efforts.
Overseas, profitability in Europe and Americas declined in H1 year on year due to inflation of costs. This
deterioration of profitability is being addressed through measures to pass through prices, but these steps
are still in the penetration process. Profit decreased in Asia Pacific following advanced investments forgrowth, such as showroom openings.
In addition, core earnings also decreased by ¥4.4 billion due the change in the accounting treatment ofPermasteelisa S.p.A after LIXIL received notice from the Committee on Foreign Investment in the UnitedStates ("CFIUS") that made clear it would not approve the planned share transfer. Permasteelisa and its
subsidiaries are now reclassified to continuing operations.
A net loss of ¥8.6 billion was reported, reflecting primarily the change to core earnings and the change in
the accounting treatment of Permasteelisa noted above.
Reflecting its policy to grow long-term shareholders, LIXIL Group revised up its full-year dividend forecast
from ¥65 to ¥70 per share.

1H Business Highlights:
In line with the strategy to become a full bathroom
provider in US, European, and Asian markets, LIXIL
continued to roll out new products and services overseas
through its unique global brand portfolio, from American
Standard New AC1.0 & 2.0 SpaLet Seats for North America,
to new GROHE ceramic products. In the first half of theyear, synergy and new business accounted for 34% of
LWT’s overseas revenue growth year on year.

In LHT, LIXIL continues to focus on expanding the building
materials business in Asia, as well as the industrial
products business, which makes use of our technology. Forexample, Q2 saw the rollout of the GRANTS window
product, leveraging technologies to drive growth in Asian
countries through design and innovation.



LIXIL continues to realize its initiative in Japan to increase
productivity through the organization. This includes

Business Segment 1H Results:
JPY Billions

Revenue

CE(Q on Q)

CE Margin

LIXIL Water Technology (LWT)
402.0
25.6
6.4%
(+1.4%)(-27.2%)(-2.5pp)
LIXIL Housing Technology (LHT)
257.0
4.61.8%(-3.1%)(-72.9%)(-4.6pp)
LIXIL Building Technology (LBT)
130.3-3.7(-)%(-1.2%)(-)(-)
Distribution & Retail (D&R)
87.8
4.7
5.4%
(+0.4%)(+3.1%)(+0.1pp)
Housing & Services (H&S)
26.2
1.4
5.2%
(+9.5%)(+29.6%)(+0.8pp)2|P a g efostering key project managers and in-house developers; to date, for example, 473 employees havenow been trained in Robotic Process Automation (RPA) out of its annual target of 500. This will enable
LIXIL to accelerate its development processes and effectiveness.
LIXIL continues to integrate sustainability into its overall business strategy. Specifically, LIXIL was listed
again this year in the FTSE4Good Index Series and FTSE Blossom Japan Index, MSCI Japan Empowering
Women Index, DJSI Asia Pacific Index, and the S&P/JPX Carbon Efficient Index.

-Ends-Find out more about LIXIL’s business performance here:> 1H FYE 2019 Earnings Materials>1H 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.

LEARN MORE AT:3|P a g e