LIXIL (5938) H1 2025 earnings summary

Executive summary

• Revenue and core earnings increased year-over-year for H1 FYE2025, driven by strong renovation demand and new product launches, despite a decline in new housing starts in Japan and sluggish international markets.

• Operating profit increased 49.0% to ¥9.9 billion, but net loss attributable to owners was ¥3.9 billion, mainly due to higher finance costs, tax expenses, and negative foreign currency translation effects.

• Business performance improved in the last three months, with positive momentum in both domestic and international segments.

• Operating cash flow and free cash flow improved significantly, with FCF up JPY65.2 billion year-over-year.

• Interim dividend of JPY45 was resolved, with full-year dividend forecast unchanged.

Financial highlights

• H1 revenue: JPY739.8 billion, up JPY7.5 billion (+1.0%) year-over-year.

• Core earnings: JPY10.5 billion, up JPY1.7 billion (+18.9%) year-over-year.

• EBITDA: JPY52.3 billion, up JPY3.8 billion (+7.8%) year-over-year.

• Gross profit margin improved to 33.5% in Q1 and 32.6% for H1, driven by new product launches.

• Profit attributable to owners: -JPY3.9 billion, down JPY4.4 billion year-over-year due to increased finance costs and tax expenses.

Outlook and guidance

• FY2025 revenue forecast is ¥1,570 billion, up 5.9% year-over-year.

• Core earnings expected at ¥35 billion (+51.1%), operating profit at ¥25 billion (+52.9%), and profit attributable to owners at ¥8 billion.

• Full-year dividend forecast remains unchanged at ¥90 per share.

• Anticipates pent-up demand in international markets as interest rate cuts take effect.

• Further profitability improvement expected in Japan due to seasonal factors and price optimizations.