LIXIL (5938) investor relations material

Executive summary

• Revenue increased 4.0% year-over-year to JPY 379.2 billion in Q1, driven by strong international sales, but core earnings fell sharply by 81.3% to JPY 1.7 billion due to higher raw material costs and a lower renovation sales ratio in Japan.

• EBITDA declined 22.9% year-over-year to JPY 22.6 billion, and net profit was negative at JPY -3.5 billion, down JPY 2.6 billion from the prior year.

• Full-year forecast and dividend guidance remain unchanged, with expectations of recovery in the second half as price revisions and cost reductions take effect.

• Total comprehensive income fell to JPY 1.2 billion from JPY 10.1 billion a year ago.

Financial highlights

• Q1 revenue: JPY 379.2 billion; core earnings: JPY 1.7 billion; net profit: JPY -3.5 billion; EBITDA: JPY 22.6 billion.

• Gross profit margin decreased by 1.4pp to 32.8% year-over-year; SG&A expenses rose by JPY 7.0 billion, mainly due to higher personnel costs and foreign exchange impacts.

• Free cash flow was negative due to increased working capital and short-term investments; operating cash flow decreased to JPY 8.0 billion from JPY 19.5 billion year-over-year.

• EPS declined from JPY -3.17 to JPY -12.20 year-over-year.

Outlook and guidance

• Full-year FY2027 revenue is forecast at JPY 1.6 trillion, up 5.9% year-over-year; core earnings projected to rise 16.9% to JPY 45.0 billion.

• Cost pressures from raw materials, especially aluminum and petroleum-based supplies, are expected to persist into Q2, with price revision benefits materializing from Q3 onward.

• Price increases for key products scheduled for July, August, and October, with full impact expected by year-end.

• Dividend forecast remains unchanged at JPY 90 per share for the year.