LIXIL (5938) Q3 2026 earnings summary

Executive summary

• Core earnings for Q3 reached JPY 36.5 billion and EBITDA was JPY 98.4 billion, reflecting improved profitability despite a slight year-on-year revenue decline to JPY 1,138.5 billion.

• Profit attributable to owners increased to JPY 11.8 billion, up JPY 7.5 billion year-on-year, driven by higher core earnings and lower tax expenses.

• Strong renovation demand in Japan and robust results in Europe, Middle East, and India offset sluggish demand in the Americas and China.

• Gross profit margin improved by 1.3 points year-on-year, and EPS rose to JPY 41.08.

Financial highlights

• Q3 revenue was JPY 1,138.5 billion, down JPY 2.0 billion (-0.2%) year-on-year, with core earnings up 17.5% to JPY 36.5 billion and EBITDA up 5.0% to JPY 98.4 billion.

• Gross profit increased to JPY 391.2 billion, and total comprehensive income rose to JPY 76.4 billion.

• Free cash flow remained positive at JPY 22.3 billion, though operating cash flow decreased due to higher receivables and inventories.

• Equity ratio stands at 34.4%.

Outlook and guidance

• Commodity prices, especially aluminum and copper, have risen sharply, impacting cost structures; FYE2027 expects continued pressure from high material prices and a weak JPY.

• Japan's renovation market is expected to grow, supported by energy efficiency standards and subsidies, while new housing starts remain weak.

• Americas housing market recovery remains slow; Europe’s recovery timing is uncertain, but strong demand is anticipated in India and the Middle East.

• No adjustment to full-year earnings forecast due to uncertainties in commodity prices, subsidies, and project delays globally.

• Management aims to avoid net losses next year, despite the absence of a one-time JPY 12 billion tax benefit.