LIXIL Core Earnings Up 23% in FYE2026, Profitability Improved in Both Japan and International Businesses

LIXIL Corporation reported a 22.9% increase in core earnings to ¥38.5 billion for the fiscal year ending 31 March 2026, driven by improved profitability across both its domestic Japanese and international operations despite a challenging global business environment.

Consolidated revenue for the water and housing products manufacturer rose 0.4% year-on-year to ¥1,510.7 billion. Net profit attributable to owners of the parent reached ¥8.1 billion, an improvement of ¥6.1 billion, supported by the core earnings growth and lower corporate income tax expenses, which offset increased finance costs and other expenses. EBITDA (core earnings plus depreciation and amortisation) increased by ¥7.1 billion to ¥121.6 billion.

“In the fiscal year ending March 2026, we achieved year-on-year growth in both revenue and profit despite the business environment remaining more challenging than anticipated,” LIXIL Chief Executive Officer Kinya Seto said. “Core earnings exceeded our initial forecast. In Japan, the decline in new housing demand was offset by growth in renovation sales, which has been a continuous area of focus, and resulted in higher profits across all segments.”

Seto added: “In our international business, we achieved a significant improvement in core earnings, particularly in Europe and IMEA. Our strategic initiatives, including structural reforms and our shift to high-value-added products, are progressing and steadily yielding results.”

The company’s overall core earnings margin improved by 0.5 percentage points to 2.5%. Total revenue for the Japan business increased by 0.5% to ¥1,023.4 billion, as renovation demand for water products and price optimisation offset the negative impact of declining new housing starts. International business revenue rose 0.3% to ¥520.9 billion, achieving growth through increased sales of fittings and faucets in Europe and expanding markets like the Middle East and India, despite continued weak demand in the U.S. and China.

Segment Performance

Within the company’s business segments, LIXIL Water Technology (LWT) Japan saw revenue increase 2.1% to ¥318.6 billion and core earnings rise 16.8% to ¥23.6 billion. The proportion of revenue from renovation-related sales grew by 1.8 percentage points to 57%.

LWT’s international revenue remained flat year-on-year at ¥492.5 billion, but core earnings jumped 31.2% to ¥21.8 billion due to an improved product mix and sales growth in Europe and the IMEA (India, Middle East, and Africa) region.

By region, European revenue grew 4% and core earnings 15%, driven by robust sales volumes of faucets and flushing systems in key markets including Germany. The IMEA region recorded a 15% revenue increase and a 4.3 times surge in core earnings, led by the GROHE brand’s strong performance, sustained Indian revenue growth, and strong Middle Eastern demand. Asia-Pacific revenue was flat. Americas revenue declined 4% due to a sluggish renovation market, although retail sales recovered and the region achieved core earnings profitability in the single month of March following structural reforms. Chinese revenue dropped 10% amid a continued real estate downturn.

LIXIL Housing Technology (LHT) recorded a marginal 0.3% revenue decrease to ¥525.7 billion, while core earnings increased 2.6% to ¥26.7 billion. Robust renovation sales and price optimisation secured the earnings increase despite lower new housing sales and a surge in aluminium prices.

The Living business, which handles kitchens, vanities, and interior materials, posted a 1.0% revenue increase to ¥207.6 billion and an 8.5% rise in core earnings to ¥7.8 billion.

Strategic Initiatives and Outlook

The company noted the steady adoption of its low-carbon aluminium “PremiAL” and the expansion of the product lineup for “revia,” a circular plastic waste material. LIXIL is also expanding initiatives to build a proprietary ecosystem for recycling aluminium scrap in collaboration with business partners.

“Based on the LIXIL Playbook, which outlines our management direction, we have been building a business foundation resilient to external changes,” Seto stated. “To address geopolitical risks such as the current situation in the Middle East, we are enhancing our agility to respond proactively to changes through the optimization of our supply chain. Furthermore, we have been strategically advancing the development and sales expansion of environmentally friendly and circular products that contribute to improved profitability and mitigate some supply chain risks. These include ‘PremiAL’, a low-carbon aluminum made primarily from scrap aluminum, and ‘revia’, which is made primarily from waste plastic. While the future outlook remains uncertain, we will continue our transformation to strengthen our profitability and achieve sustainable growth.”

For the fiscal year ending March 2027, LIXIL forecasts revenue of ¥1,600 billion, core earnings of ¥45 billion, and net profit of ¥12 billion. The company cautioned that this forecast relies on currently available information and does not incorporate potential financial impacts from heightened Middle East geopolitical risks, supply chain disruptions, soaring crude oil prices, and rising petroleum-based raw material costs, as they are currently difficult to reasonably calculate.

The company maintained its FYE2026 year-end dividend forecast at ¥45 per share. The annual dividend for FYE2027 is expected to remain steady at the previous year’s level of ¥90 per share.