LIXIL (5938) Q4 2025 earnings summary

Executive summary

• Revenue and profits increased year-over-year for FYE2025, driven by strong renovation sales in Japan and growth in Europe, Middle East, and India, despite weak new housing starts and challenges in the Americas and China.

• Structural reforms included the transfer of the US bathing business, closure of a plant in Thailand, and cost reductions, with most international reforms completed in FYE2025.

• Operating and free cash flow improved significantly, with free cash flow up JPY53.8 billion year-over-year.

Financial highlights

• FYE2025 revenue: JPY1,504.7 billion (up 1.4% YoY); core earnings: JPY31.3 billion (up 35.3% YoY); EBITDA: JPY114.5 billion (up 9.6% YoY); net profit: JPY2.0 billion (up JPY15.9 billion YoY).

• Gross profit margin rose to 33.1% (+1.2pp YoY); core earnings to revenue: 2.1% (up from 1.6%); equity ratio at 33.7%.

• EPS improved to JPY6.97 from -JPY48.43; net debt/EBITDA improved to 4.7x.

• Free cash flow increased to JPY71.9 billion; cash and equivalents at JPY123.5 billion as of March 2025.

Outlook and guidance

• FYE2026 forecast: revenue JPY1,540.0 billion (+2.3% YoY), core earnings JPY35.0 billion (+11.7% YoY), net profit JPY8.0 billion, annual dividend JPY90 per share.

• Core earnings margin target: 2.3% for FYE2026, aiming for 7.5% medium-term and 10% long-term.

• Ongoing structural reforms expected to have minimal costs in FY2026; focus on further streamlining unprofitable businesses.

• Segment reporting will expand to three units: Water Technology, Housing Technology, and new Living Business.