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.

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

• Profit decreased year-over-year due to higher finance costs and tax expenses, but turned positive in Q2.

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

• Total comprehensive loss was ¥17.8 billion, reversing a ¥44.3 billion gain in the prior year, mainly due to negative foreign currency translation effects.

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%).

• EBITDA for the first half was JPY52.3 billion, up JPY3.8 billion year-over-year.

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

• Gross profit margin improved by 0.6pp to 32.6% year-over-year.

• Cash flows from operating activities turned positive at ¥40.4 billion, compared to a ¥28.1 billion outflow last year.

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.

• Japan: Renovation sales expected to remain strong, with government subsidies supporting demand for window and door insulation.

• International: Europe shows signs of recovery; US market expected to revive renovation demand next fiscal year; Middle East and India remain robust.

• Full-year dividend forecast unchanged.