en.Wedoany.com Reported - Japan's LIXIL Group reported a 22.9% increase in core profit to 38.5 billion yen for the fiscal year ending March 2026, driven by strong performance in its international operations.

CEO Kinya Seto stated that despite a more challenging business environment than anticipated, the company achieved year-on-year growth in both revenue and profit, with core profit exceeding initial forecasts. In Japan, a decline in new housing demand was offset by growth in renovation sales, boosting profit across segments. Internationally, core profit significantly improved in Europe and the IMEA region, with structural reforms and the strategic shift toward higher-value products progressing steadily and delivering results. He noted that, guided by the management direction framework "LIXIL Playbook," the company is building a business foundation resilient to external changes; to address geopolitical risks, such as the current situation in the Middle East, it is enhancing agility in responding to changes by optimizing the supply chain. Additionally, the company is strategically advancing the development and sales of environmentally friendly and circular products, including low-carbon aluminum "PremiAL" made from scrap aluminum and "revia" primarily made from waste plastics, to help improve profitability and mitigate certain supply chain risks.

During the reporting period, LIXIL Group's consolidated revenue increased 0.4% year-on-year to 1,510.7 billion yen. In the Japanese market, strong renovation demand for water-related products, coupled with positive effects from price optimization, drove total business revenue up 0.5% to 1,023.4 billion yen, although a decline in new housing starts in the residential products segment had a negative impact. International revenue grew 0.3% year-on-year to 520.9 billion yen, achieved by increasing sales of European bathroom fittings and faucets and capturing demand in growth markets such as the Middle East and India, despite continued weak demand in the United States and China.

Core profit rose 22.9% to 38.5 billion yen, with the overall core profit margin improving by 0.5 percentage points to 2.5%. In Japan, the impact of reduced new housing demand was offset by growth in renovation sales and price optimization. Internationally, the strategy of shifting to higher-value products in Europe and the Middle East drove core profit growth. EBITDA (core profit plus depreciation and amortization) increased by 7.1 billion yen to 121.6 billion yen. Net profit attributable to owners of the parent company was 8.1 billion yen, an increase of 6.1 billion yen from the previous year, benefiting from improved core profit and reduced corporate income tax expenses, despite higher other expenses and financial costs.

Revenue for LIXIL Water Technology International was flat year-on-year at 492.5 billion yen, but core profit grew significantly by 31.2% to 21.8 billion yen, primarily driven by sales growth and product mix optimization in Europe and the IMEA (India, Middle East, and Africa) region. The IMEA region showed the strongest performance, with revenue up 15% and core profit increasing 4.3 times year-on-year, mainly due to the strong performance of the GROHE brand. By region, European revenue grew 4%, supported by strong sales of faucets and flushing systems; Asia-Pacific revenue was flat; the Americas saw a 4% revenue decline due to a lack of recovery in the renovation market; and China experienced a 10% revenue drop amid the ongoing downturn in the real estate sector.

In terms of sustainable innovation, LIXIL continues to advance the development of environmentally friendly products. The adoption rate of the low-carbon aluminum solution "PremiAL" is steadily increasing, and the company is expanding partnerships to establish a dedicated ecosystem for scrap aluminum recycling. Meanwhile, the product line for "revia," a circular material made from waste plastics, is also being expanded.

For fiscal year 2027, LIXIL Group forecasts revenue of 1,600 billion yen, core profit of 45 billion yen, and net profit of 12 billion yen. This forecast is based on information currently available to the company and does not incorporate uncertainties for which financial impacts are difficult to reasonably calculate, such as heightened geopolitical risks in the Middle East, potential supply chain disruptions, surging crude oil prices, and rising costs of petroleum-based raw materials. The company maintains its year-end dividend forecast for fiscal year 2026 at 45 yen per share, and the annual dividend forecast for fiscal year 2027 remains unchanged at 90 yen per share.

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