LIXIL (5938) Q1 2025 earnings summary

Executive summary

• Q1 FY2025 revenue increased 3.0% year-over-year to JPY369.8 billion, but core earnings dropped 82.9% to JPY0.6 billion and profit for the quarter fell to a loss of JPY5.9 billion due to higher expenses and tax costs.

• Japan's renovation sales offset declines in new housing, while international business saw limited improvement; Europe showed recovery, but US and China remained sluggish.

• Operating cash flow improved, generating JPY14.6 billion in free cash flow for the quarter.

Financial highlights

• Revenue: JPY369.8 billion (+3.0% YoY); gross profit: JPY117.4 billion (+1.5% YoY); gross margin: 31.7% (-0.5pp YoY).

• Core earnings: JPY0.6 billion (-82.9% YoY); EBITDA: JPY21.7 billion (-7.2% YoY); EPS: -20.39 (down from 1.31 YoY).

• Free cash flow improved by JPY50.2 billion YoY to JPY14.6 billion.

• Equity ratio stood at 33.9% at quarter-end; cash and cash equivalents at JPY125.9 billion.

• Profit for the quarter declined year-over-year due to structural reform costs and higher tax expenses.

Outlook and guidance

• Full-year FY2025 revenue forecast is JPY1,570 billion, up 5.9% year-over-year.

• Core earnings projected at JPY35 billion, up 51.1% year-over-year; operating profit at JPY25 billion, up 52.9%.

• Profit for the year expected to reach JPY8 billion, with basic EPS of JPY27.86.

• Japan renovation demand remains strong; a turnaround is expected in the second half as showroom visitors rise.

• Positive impact from structural reforms anticipated from Q2, with further improvements in Q3.