Q3 Results for the Fiscal Year Ending March 31, 2020 (IFRS)

(From April 1, 2019, to December 31, 2019)

LIXIL Group Corporation

January 31, 2020

TSE Code: 5938

Copyright © LIXIL Group Corporation. All rights reserved.

LIXIL GROUP HAS TRANSITIONED TO IFRS FROM FYE2016 CHANGE IN PROFIT LEVEL STRUCTURE IS AS SHOWN BELOW

JGAAP

IFRS (LIXIL Group Financial Reporting)

Net sales

Revenue

Cost of sales

Cost of sales

Gross profit

Gross Profit

SG&A

SG&A

Operating profit

Core earnings (CE)

Non-operating income/expenses

Other income/expenses

Ordinary income

Operating profit

Extraordinary income/losses

Finance income/costs

Share of profit (loss) for using the equity method

Profit before income taxes

Profit before tax

Net profit

Net profit

attributable to Non-controlling interests

attributable to Owners of the parent

attributable to Owners of the parent

attributable to Non-controlling interests

"Core earnings" in IFRS is equivalent to JGAAP's "Operating profit"

2

KEY HIGHLIGHTS

Japan business continues to lead revenue and profit growth over nine months Strong H1 performance in Japan offsets decrease in demand following tax hike(1)

  • Revenue: JPY 1,396.5 billion, increased 1.1% year-on-year
    Japan:increased 2.8% year-on-year, driven by LIXIL Water Technology (LWT), LIXIL Housing Technology (LHT), and Distribution & Retail (D&R) businesses but impacted from November onward by consumption tax hike
    Overseas:decreased 3.5% year-on-year due to changing market conditions in North America, slowdown of markets in Asia Pacific regions, and the impact of the Euro-to-Yen exchange rate(2) (Note: overseas sales increased by 1.0% on a local currency basis)
  • Core earnings: JPY 51.7 billion, increased 39.3% year-on-year
    Japan:all businesses except D&R contributed to higher core earnings, benefitting from strong first- half demand for new housing and renovation prior to the consumption tax hike, cost improvement initiatives, and product price revisions
    Overseas:despite decrease in sales, core earnings increased due to changes in the sales mix
  • Net profit(3): JPY 30.7 billion, increased 28.6 billion year-on-year
    Profit before tax increased by JPY 17.0 billion due to increase in core earnings and gain on sales of subsidiaries/interest in former affiliated company (JPY 12.4 billion) in H1

Full-year forecasts remain unchanged while we continue to assess the reactionary impact of the consumption tax hike on demand and the effect of recovering from the delay of medium-term initiatives

(1) Consumption tax hike effective October 1, 2019

(2) Forex: Q3 FYE2019 Results 1EUR = 129.38JPY, Q3 FYE2020 Results 1EUR = 121.46JPY3

(3) Net profit = Net profit attributable to owners of the parent

Q3 FYE2020 CONSOLIDATED BUSINESS RESULTS

Q3

Q3

YoY

9 months

9 months

JPY: billion

FYE2019

FYE2020

Results

Results

Increase/

%

decrease

Revenue

1,381.2

1,396.5

15.3

1.1%

Other businesses

1,260.9

1,285.5

24.6

+2.0%

Permasteelisa

120.3

111.0

-9.3

-7.7%

Gross Profit

415.2

435.7

20.5

4.9%

(%)

30.1%

31.2%

+1.1pp

-

Core Earnings (1)

37.1

51.7

14.6

39.3%

(%)

2.7%

3.7%

+1.0pp

-

Other businesses

46.2

59.2

12.9

+28.0%

Permasteelisa

-9.1

-7.5

1.6

-

Net Profit（2）

2.1

30.7

28.6

-

  • Revenue:increased due to favorable demand in H1 in Japan (Japan +2.8%, overseas -3.5%(3))
  • Core earnings:margin improved by 1.0pp. Improvement of gross profit margin remains +1.1pp. Sales to SG&A ratio remained at the same level as the prior fiscal year.
    (Note: core earnings margin excluding Permasteelisa was 4.6%)

(1) Equivalent to "Operating profit" of JGAAP

(2) Net profit attributable to owners of the parent4

(3) Overseas sales grew by 1.0% excluding forex impact

Q3 BUSINESS RESULTS BY SEGMENT (3 AND 9 MONTH PERIODS)

9-monthperiod:Increase in revenue and core earnings continued to be driven by core housing

and water businesses

3-monthperiod:Decrease in revenue and core earnings due to the decline in demand after

consumption tax hike and the absence of demand generated by natural disasters in the previous

fiscal year in Japan

Q3 3 months

Q3 9 months

FYE2019

FYE2020

Amount

FYE2019

FYE2020

Amount

(B)-(A)

(B)-(A)

(A)

(B)

(A)

(B)

JPY billion

Forex

Forex

LWT(1)

Revenue

218.5

212.8

-3.8

-5.7

620.5

623.6

-11.5

3.1

CE

20.6

18.9

-0.3

-1.7

46.1

52.2

-1.1

6.1

LHT(1)

Revenue

147.9

138.1

0.0

-9.8

404.9

417.1

-0.2

12.2

CE

11.4

8.4

0.0

-3.0

16.0

26.6

0.0

10.6

LBT

Revenue

72.1

66.3

-2.3

-5.8

202.4

193.9

-7.4

-8.5

CE

-4.4

-2.1

0.3

2.3

-8.1

-6.3

0.6

1.8

D&R

Revenue

48.1

47.0

-

-1.1

136.0

142.2

-

6.2

CE

2.9

1.7

-

-1.2

7.6

6.9

-

-0.7

H&S

Revenue

14.8

13.8

-

-1.0

41.0

40.6

-

-0.4

CE

1.2

0.9

-

-0.3

2.6

2.7

-

0.1

Consolidation, adj.Revenue

-8.4

-7.0

-

1.5

-23.6

-21.0

-

2.6

& other(1)CE

-8.4

-10.5

-

-2.1

-27.1

-30.4

-

-3.3

LIXIL Group

Revenue

493.0

471.0

-6.2

-22.0

1,381.2

1,396.5

-19.1

15.3

CE

23.4

17.3

-0.1

-6.1

37.1

51.7

-0.5

14.6

(1) Due to growing importance from Q2 FYE 2020 within the "Housing Technology Business" for some domestic subsidiaries that were

previously classified as the "Water Technology Business", the reporting segment for those subsidiaries are separated to the Housing 5 and Water Businesses

JAPAN BUSINESS HIGHLIGHTS (3 MONTHS PERIOD)

Japan business progressing in line with full-year projections so far despite the decrease in revenue and core earnings following the consumption tax hike. Full-year forecasts remain unchanged while considering impact of consumption tax and initiatives to achieve the MTP

FYE2020

Q3 3 months

Q3 9 months

full-year

f'cst

FYE2019

FYE2020

Amount

FYE2019

FYE2020

Amount

Progress

JPY billion

(A)

(B)

(B)-(A)

(A)

(B)

(B)-(A)

LWT(1)

Revenue

117.9

114.4

-3.5

325.9

333.1

7.2

76.6%

CE

12.8

10.3

-2.5

23.1

27.4

4.3

115.7%

LHT(1)

Revenue

145.4

136.4

-9.1

396.9

410.6

13.7

77.8%

CE

11.1

8.9

-2.1

16.2

27.1

10.9

100.7%

LBT

Revenue

29.5

30.1

0.7

82.1

82.9

0.8

71.5%

CE

0.4

0.8

0.4

1.1

1.4

0.3

61.8%

D&R

Revenue

48.1

47.0

-1.1

136.0

142.2

6.2

75.6%

CE

2.9

1.7

-1.2

7.6

6.9

-0.7

111.4%

H&S

Revenue

14.8

13.8

-1.0

41.0

40.6

-0.4

71.2%

CE

1.2

0.9

-0.3

2.6

2.7

0.1

80.5%

LIXIL Group

Revenue

355.8

341.7

-14.0

981.9

1,009.4

27.5

76.2%

CE

28.3

22.6

-5.8

50.7

65.5

14.8

104.9%

(1) Due to growing importance from Q2 FYE 2020 within the "Housing Technology Business" for some domestic subsidiaries that were

previously classified as the "Water Technology Business", the reporting segment for those subsidiaries are separated to the Housing 6 and Water Businesses

MEDIUM TERM STRATEGY - "ESTABLISH A PURPOSE-DRIVEN ENTREPRENEURIAL COMPANY FOR SUSTAINABLE GROWTH" (1)

Start of Consideration of Merger between LIXIL Group Corp. and its subsidiary

LIXIL Group Corporation (LGC), the holding company of the LIXIL Group, will start consideration of dissolving the two-tierstructure of LGC and LIXIL Corporation, the largest operating company of LIXIL Group in Japan, to improve management efficiency, and improve corporate governance by increasing the transparency of management(1)

  • Background

LIXIL Group is in the process of transforming its operations in order to become an entrepreneurial company that can achieve sustainable competitiveness and growth, in order to fulfill our corporate purpose to contribute to society by making better homes a reality for everyone, everywhere

To achieve this aim, the company is taking steps to transform its operations, including strengthening governance, enhancing productivity and efficiency, as well as becoming a more agile organization that enables better decision-making.

  • Future outlook
  • Purpose of the merger
  1. Enable faster decision-making by dissolving the two-tier structure
  2. Improve efficiency by eliminating duplication of management, operating costs and human resources
  3. Improve corporate governance by increasing transparency of management
  • Future plans

Establish a project team and consider the method of the merger, the timing of the completion of the merger, and the management structure after the merger, etc.

As the considered merger is between LGC and its 100% of consolidated subsidiary, there will be no negative impact on LIXIL Group's consolidated financial performance. LGC will announce the details once it is agreed and determined

(1) Timely disclosure announced on Jan. 27, 2020https://ssl4.eir-parts.net/doc/5938/tdnet/1785907/00.pdf

7

MEDIUM TERM STRATEGY - "ESTABLISH A PURPOSE-DRIVEN ENTREPRENEURIAL COMPANY FOR SUSTAINABLE GROWTH" (2)

Comprehensive HR Program to Revitalize LIXIL's Japan Business

LIXIL has launched a comprehensive series of employee-focused initiatives to transform its Japan operations, in line with its overall strategy to build a more agile, consumer-centric organization to achieve sustainable growth(1)

Employee-focused initiatives

Objectives

  1. Create a more consumer-centric organization, enhancing customer-experience
  2. Bring fresh perspectives and energy to management positions
  3. Enable more flexible working styles, allowing to work more efficiently

Career Option Program (2)

Overview：Permanent employees in Japan who have reached a certain age with certain duration of service can select the option of pursuing opportunities outside the company before the usual statutory retirement age

Duration：5 years

Application period for the 1st year：2020/2/17〜2/28 Costs such as premium payment will be accrued in 4Q

under SG&A

Work Consumer-centrically

Reallocate employees with strong LIXIL DNA, knowledge, and experience in direct consumer engagement roles in Japan

Manage Career Paths

Support career planning, shift to a meritocracy- based system, introduce a new performance review system, offer a "Career Option Program"(2), etc.

Change Working Styles

Encourage employees to take paid holidays, enhance personnel measures such as flextime, teleworking, satellite offices, etc.

(1)

News release announced on November 25, 2019https://www.lixil.com/en/news/pdf/20191125_Kawaranaito_E_Final.pdf

8

(2)

Timely disclosure announced on November 25, 2019https://ssl4.eir-parts.net/doc/5938/tdnet/1773640/00.pdf

RESULTS BY BUSINESS SEGMENT

Water

Housing

Building

Distribution and

Housing and

Technology

Technology

Technology

Retail Business

Services Business

WATER TECHNOLOGY

Increase in revenue and core earnings driven by Japan. Overseas revenue and core earnings

continue to improve following upward trend in H1

■

Americas

Apr-Dec

Q3 FYE2020

FYE2020

Despite positive sales from new focus areas such as

projects and direct-to-consumer renovation business,

In JPYbn

(result)

YoY

(forecast)

revenue decreased overall due to the challenging situation

in major channels, such as retail and wholesale.

Americas

105.3

-2%

+2%

CE increased due to pricing improvement resulting from

(1)

change in sale mix, as well as SG&A efforts

Region

■

EMEA

EMEA

126.5

+5%

+2%

Strong revenue growth in Central Europe, Eastern Europe,

and the Middle East. Overall, revenue increased by 8% YoY

Asia Pacific

79.8

-3%

+8%

by

in Europe. Operations in South Africa stabilizing and

Revenues

degree of losses halved

Japan

333.1

+2%

0%

■

Asia Pacific

Despite China remaining strong, revenue remained flat due

Adjustments

-21.2

to US-China trade friction impact spreading to South East

+3%CE

Asian markets.

Water Technology

623.6

+1%

860.0

CE

■

Japan

margins

margins

Despite the reactionary impact from the consumption tax

Americas

6.3

+39%

6%

+51%

7%

hike from November, revenue and core earnings increased

(1)

over 9-month period, supported by strong market demand

in H1

Region

EMEA

14%

14%

17.8

+16%

+10%

Sales growth of LWT (overseas)

YoY -4.0(-1.4%)

JPY: billion

+4.2

+3.3

-11.5

Asia Pacific

7.1

+1%

9%

+32%

10%

by

294.5

earnings

Japan

27.4

+18%

8%

-19%

5%

290.5

Adjustments

-6.5

Core

Water Technology

52.2

+13%

64.8

+8%

+0.9pp

Q3

Synergy-related All other

FX impact

Q3

Margin

8.4%

7.5%

FYE2019

products &

products

FYE2020

new business

& services

areas

(1) Region: Management basis, Water Technology Total: Statutory basis

Statutory basis currency : Q3 FYE2020 Results 1USD=109.10JPY, 1EUR=121.46JPY

10

Management basis currency : Comparing by FYE2020 current & previous year 1USD=115JPY, 1EUR=133 JPY, FYE2020 Assumptions 1USD=115JPY, 1EUR=133JPY

YoY +12.2 (+3.0%) Like-for-like+16.0 (+4.0%)

HOUSING TECHNOLOGY

Revenue and core earnings increased due to favorable demand prior to the consumption tax hike in Japan and lower manufacturing costs. Core earnings margin improved due to favorable sales of exteriors and wooden interior furnishing materials, which contributed to improved product mix

Apr-Dec

Q3 FYE2020

FYE2020

In JPYbn

(result)

YoY

(forecast)

+3%(1)

0%

by Region

Japan

410.6

-18%(2)

Overseas

6.6

-35%

Revenues

■ Japan

Revenue and CE continued to increase over 9-month period despite the reactionary decline in demand from the consumption tax hike and the absence of demand for exterior products generated by natural disasters in the previous fiscal year

CE margin improved by 2.4pp YoY supported by productivity optimization (cost reductions) from favorable sales of exteriors and wooden interior furnishing materials as well as progress of the platform strategy

Sales growth of LHT

Housing

417.1

+3%

535.0

-1%

Technology

Core Earnings

Housing

26.6

+66%

25.9

25%

Technology

Margin

6.4%

+2.4pp

4.8%

JPY: billion

404.9 -3.8

Q3 Unwinding FYE2019 (overseas)

+15.9 +0.1 417.1

Sales

＋1% YoY

Building

Building

Q3

materials

materials

FYE2020

& others

(overseas) &

(Japan)

industrial

products

  1. +4%YoY growth excluding impact from divestment and other
  2. +9%YoY growth excluding impact from divestment and other

11

BUILDING TECHNOLOGY

Revenue decreased due to impact of foreign exchange rates and selective order intake. While, negative core earnings improved due to progression of the revitalization plan

Apr-Dec

In JPYbn

by Region

Japan

Overseas

Revenues

Building

Technology

EarningsCore

Building

Margin

Technology

Q3 FYE2020

YoY

FYE2020

(result)

(forecast)

+1%

+3%

82.9

+3%

111.0

-8%(1)

-4%

+3%

193.9

263.0

-

-6.3

+1.8

-9.7

Red

-

Red

figure

figure

Japan

Revenue and CE increased due to completion of a

major project in Q3

Overseas (Permasteelisa)

Revenue decreased mainly due to forex impact(1)

for yen appreciation. Revenue

decreased 1% for

euro denominated

Operating loss generally remained at the same level as the previous fiscal year

Implementing business plan(2) to revitalize Permasteelisa by improving cash flow and recovering profitability

  1. Forex impact due to difference between Q3 FYE2019 Results (EUR 1 = JPY 129.38) and Q3 FYE2020 Results (EUR 1 = JPY 121.46) (Forex in statutory basis)
  2. Reference: "Announcement Regarding Revision of the Full-year Forecast on Business Performance for the Fiscal Year Ended March 2019 due to Recognizing Loss12 from an Overseas Subsidiary and Recording Extraordinary Loss from a Subsidiary in Japan", disclosed on Apr. 18, 2019
Core Earnings(1)

UPDATE ON PERMASTEELISA

About progression of revitalization plan

Quarterly results (accumulated) and annual forecast of Permasteelisa (1) （Unit：EUR million ）

1,110

914

976

1,000

617

Expect positive CE

307

(F'cst)

Sales

CE

NP

Q1

H1

Q3

Full-year

Full-year

Full-year

FYE2020

FYE2020

FYE2020

FYE2020

FYE2021

FYE2022

CE

-13

-39

-61

-89

17

35

NP

-21

-74

-98

-165

-31

3

Financial results

Sales and profits in line with annual forecast

Revitalization plan updatesImplementing restructuring plan to optimize supply chain in order to reduce fixed costs

Implementing selective order-intake and project management

Injecting cash in order to execute revitalization plan and operate business

(By Q3 in FYE2020: EUR 100 mil.）

After consolidation adjustment figures. CE=Core Earnings, NP=Net Profit13

(1) "Announcement Regarding Revision of the Full-year Forecast on Business Performance for the Fiscal Year Ended March 2019 due to Recognizing Loss from an Overseas Subsidiary and Recording Extraordinary Loss from a Subsidiary in Japan", disclosed on Apr. 18, 2019

DISTRIBUTION & RETAIL AND HOUSING & SERVICES

Revenue up due to increase in renovation-related product sales at existing stores. Core earnings

decreased due to increased costs, including for distribution

Opened 5 stores over nine-month period.

Apr-Dec

Expect to open 7 stores over the full year

In JPYbn

Q3 FYE2020

FYE2020

YoY

Started operation of new distribution center in

(result)

(forecast)

Higashimatsuyama city, Saitama, in September

Revenue(1)

142.2

+5%

188.0 +7%

Higher composition of revenue recognized from

sales of renovation-related products (YoY +1.3pp)

D&R

42.0%

40.3%

6.9

-9%

6.2

-20%

39.6%

39.7%

39.7%

40.0%

39.0%

-0.7pp

38.0%

Margin(1)

4.9%

3.3%

Q3 FYE2019 Q4 FYE2019 Q1 FYE2020 Q2 FYE2020 Q2 FYE2020

Aiming for renovation goods revenue ratio of 50% in the

medium to long term

Core earnings increased. Maintained revenue composition for businesses other than for new

houses with BtoC growth despite the absence of sale of a major real estate

Apr-Dec

Q3 FYE2020

Revenue composition for businesses other than for

FYE2020

new houses(2) (YoY 0pp)

In JPYbn

(result)

YoY

(forecast)

40.0%

38.7%

38.0%

35.8%

37.1%

Revenue

40.6

-1%(3)

57.0

-1%

36.0%

35.8%

H&S

34.0%

33.3%

Core Earnings

2.7

+3%

3.3

-4%

32.0%

Q3 FYE2019 Q4 FYE2019 Q1 FYE2020 Q2 FYE2020 Q3 FYE2020

Margin

6.5%

+0.2pp

5.8%

Aiming for revenue composition for businesses other than

for new houses of 50% for mid to long term

(1)

Distribution & Retail disclosed as of IFRS basis; Reference: JGAAP is applied for disclosure of LIXIL VIVA Corporation (Securities Code 3564)

14

(2)

Existing business - business other than for new houses and new areas of services and markets

(3)

+1%YoY growth excluding impact from divestment of Senior Life Company

CONSOLIDATED FINANCIAL POSITION

[A]

[B]

Increase/ decrease

Mar-2019

Dec-2019

Impacts from

Others

[B]-[A]

JPY: billion

application

(Increase/

Total of the increase

of IFRS 16(3)

decrease)

/ decrease

Cash and cash equivalents

141.4

145.8

-

4.4

4.4

Trade and other receivables

401.7

388.8

-

1

-12.8

-12.8

Inventories

234.6

244.7

-

1

10.1

10.1

Assets held for sale

11.4

-

-

-11.4

-11.4

Others

Total Assets

1,270.4

1,426.5

166.3

2

-10.2

156.1

2,059.5

2,205.9

166.3

-20.0

146.4

Trade and other payables

392.4

377.8

-

1

-14.6

-14.6

Interest-bearing debt

726.0

890.0

166.3

-2.3

164.0

Liabilities directly associated with

5.0

-

-

-5.0

-5.0

the assets held for sale

Others

Total Liabilities

369.0

360.3

-

-8.7

-8.7

1,492.4

1,628.0

166.3

-30.7

135.7

Treasury shares

-48.9

-48.9

-

0.0

0.0

Others

Total Equity

616.1

626.8

-

10.7

10.7

567.2

3

577.9

-

10.7

10.7

(1)

Equity Ratio (%)

25.9%

24.7%

-1.3pp

(2)

Net Assets per Share (Yen)

1,839.59

1,875.00

35.41

Number of Shares

290,095

290,101

6

(in thousands)

Net interest-bearing debt

584.5

3

744.2

159.6

1

Increased/ decreased due to seasonal factors

2

Decreased due to forex impact (strong yen against the euro) and divestment of a subsidiary, etc.

3

Excluding the impact from the application of IFRS16: Equity ratio is 26.7% (+0.8pp from Mar.2019)

Net interest-bearing debt is JPY577.8 billion (JPY-6.7 billion from Mar. 2019)

(1) Ratio of equity attributable to owners of the parent

(3) Due to the mandatory adoption of

the new accounting standard

15

(2) Equity per share attributable to owners of the parent

(IFRS16 "Leases") from April 2019. Impact amount as of the

beginning of this term (April 1, 2019)

CASH FLOW STATUS AND CASH BALANCE

Q3 FYE2019

Q3 FYE2020

Increase/

JPY: billion

decrease

Profit before tax

36.2

53.2

17.0

Depreciation and amortization

51.0

80.0

1

29.1

Income taxes paid

-26.1

-13.7

12.4

Working capital

-29.7

-10.2

19.5

Others(1)

-5.4

-8.5

-3.1

Net cash flows from operating activities

26.0

100.9

2

74.9

Net cash flows from investing activities

-52.3

-20.6

3

31.7

(of which purchase of property, plant and equipment and

intangible assets)

-48.3

-46.9

1.4

Free cash flows

-26.3

80.2

4

106.5

Net cash flows from financing activities

15.1

-77.1

1

5

-92.3

・・・

・・・

・・・

Cash and cash equivalents (Balance at the end of the period)

130.6

145.8

15.1

1

The impact of applying the new accounting standard (IFRS 16):

Net cash flows from operating activities (increase in Depreciation and amortization) JPY +29.1billion

Net cash flows from financing activities (increase in payment of lease liabilities) JPY -28.0 billion

2

Net cash inflows from operating activities increased by JPY 74.9 billion from increase in profit before tax and improvement in working capital

3

Cash outflows from investing activities decreased by JPY 31.7 billion primarily due to the proceeds from transfer of shares of a consolidated

subsidiary and sale of interest in former associate

4

Free cash flows increased year-on-year by JPY 106.5 billion (excl. IFRS16 impact: JPY77.5 billion)

5

Net cash outflows from financing activities increased due to increase in payment of lease liabilities of JPY 28.0 billion and decrease in

external procurement of working capital by JPY 92.3 billion, resulting from increase in net cash flows from operating activities.

(1) primarily, gain on disposal of interest in a former associate, JPY 11.0 billion

16

APPENDIX

Q3 (9 MONTHS) FYE2020 CONSOLIDATED BUSINESS RESULTS (DETAIL)

JPY: billion

Q3 FYE2019

Q3 FYE2020

YoY

FYE2020

Results

Results

Amount

%

Full-year

Increase/decrease

forecasts

Revenue

1,381.2

1,396.5

15.3

1.1%

1,850.0

(Existing) Continuing

operations

1,260.9

1,285.5

24.6

+2.0%

1,703.0

Permasteelisa

120.3

111.0

-9.3

-7.7%

147.0

Core Earnings (1)

37.1

51.7

14.6

39.3%

47.0

(Existing) Continuing

operations

46.2

59.2

12.9

+28.0%

59.0

Permasteelisa

-9.1

-7.5

1.6

-

-12.0

Operating Profit

38.3

45.7

7.4

19.3%

38.0

(Existing) Continuing

operations

44.9

56.0

11.0

+24.6%

57.9

Permasteelisa

-6.6

-10.3

-3.7

-

-19.9

Net Profit(2)

2.1

30.7

28.6

-

15.0

(Existing) Continuing

operations

24.5

42.6

18.1

+73.9%

36.9

Permasteelisa

-22.4

-11.9

10.4

-

-21.9

EPS (yen)

7.36

105.79

98.43

-

51.71

EBITDA(3)

88.1

131.8

43.6

49.5%

150.4

(%)

6.4%

9.4%

+3.1pp

-

8.1%

■ Impact of applying IFRS 16 included in EBITDA for Q3 (9 months) FYE2020 is JPY 29.1 billion (increase in EBITDA)

(1) Equivalent to "Operating profit" of JGAAP

(3)

EBITDA: Core earnings+Depreciation

18

(2) Net profit attributable to owners of the parent

Q3 FYE2020 INCREASE / DECREASE OF SALES AND CORE EARNINGS

JPYbn

YoY

+1%

+3%

-4%

+5%

-1%

1,400

8.5

0.4

+2.6

1,390

+12.2

+6.2

Revenues

+3.1

1,380

Japan

+1%

1,381.2

1,370

Renovation +6%

Renovation +5%

Overseas -8%

1,396.5

Others

+0%

Others

+3%

Japan

+2%

Japan

+3%

Overseas-1%

Divestment and other -3.8

10

+15.3(+1.1％)

Overseas-18%

0

Q3

LWT

LHT

LBT

D&R

H&S

Consolidation

Q3

FYE2019

adjustment/

FYE2020

result

other

result

JPYbn

LWT +2.6

LWT -1.9

60

LHT +4.7

LHT +2.8

0.6

earnings

50

LBT + 0.1

+9.4

2.3

+3.0

3.3

37.1

+0.9

40

+7.4

Increase of logistics,

Americas

+1.8

51.7

Purchasing condition+0.1

decrease of marketing

EMEA

+2.5

30

LWT -0.3

LWT +0.5

Asia Pacific

-0.3

LHT

+0.4

LHT

-2.8

CE Margin

Core

20

CE Margin

Cost down, etc. +10.6

LBT

-0.9

(LWT +0.1, LHT -0.3)

3.7%

LWT +3.3

Divestment in LHT +0.9

Permasteelisa

+1.5

10

2.7%

LHT +6.3

Forex & other

-2.5

LBT

+1.0

+14.6 (+39.3%)

0

Divestment in LHT

-1.3

Q3

Sales in

Mix/pricing

Cost

SG&A

Overseas

D&R/H&S

Consolidation

Q3

FYE2019

Japan

business

adjustment/Other

FYE2020

result

Japan Tech +15.4(+38%)

Overseas +3.0

result

19

Q3 FYE2020 OTHER INCOME AND OTHER EXPENSES, FINANCE INCOME AND FINANCE COSTS, PROFIT FROM DISPOSAL OF SHARES OF ASSOCIATES

JPY: billion

Q3

Q3

Increase/

FYE2019

FYE2020

decrease

Rental income

5.0

4.4

-0.6

Gains on sale of property, plant and equipment

0.2

1.0

0.9

Gains on sales of subsidiaries

-

1.4

1.4

Gains on sale of investment property

0.6

0.6

0

Loss recognized on the remeasurement of the disposal

2.0

-

-2.0

group held for sale (gain on reversal)

Other

3.7

4.3

0.6

Other Income

11.6

11.8

0.2

Costs of rent

3.2

3.3

0.1

Losses on sale or disposal of property, plant and equipment

1.8

1.2

-0.6

Impairment losses

1.5

6.8

5.3

Restructuring costs

-

1.3

1.3

Other

4.0

5.3

1.3

Other Expenses

10.4

17.9

7.4

1.0

0.1

Interest income

1.1

Dividend income

1.5

1.5

0

Gains on valuation of derivatives

1.4

0.2

-1.2

Other

1.3

-

-1.3

Finance Income

5.1

2.8

-2.4

Interest expense

4.0

4.7

0.8

Exchange difference losses

3.0

1.4

-1.6

Other

0.1

0

-0.1

Finance Costs

7.1

6.2

-0.9

Profit from disposal of share of associates

-

11.0

11.0

  1. Gains on valuation of derivatives is matched with foreign exchange difference losses
    Q3
    FYE2020
    result

Gains on valuation

of derivatives

0.2

Exchange difference

losses

-1.4

Net

-1.3

Loss

(1)

(1)

20

2020/1-Startingsales in Tohoku region 2020/4-Startingsales in all regions of Japan (plan)

RESULTS AND FORECASTS BY SEGMENT

Q3 FYE2019 Results

Q3 FYE2020 Results

JPY: billion

Japan

Overseas

Total

Japan

Overseas

Total

Total YoY%

Revenue

325.9

294.5

620.5

333.1

290.5

623.6

0.5%

Core earnings

23.1

23.0

46.1

27.4

24.8

52.2

13.2%

LWT

CE margin

7.1%

7.8%

7.4%

8.2%

8.5%

8.4%

+0.9pp

Revenue

396.9

8.0

404.9

410.6

6.6

417.1

3.0%

Core earnings

16.2

-0.2

16.0

27.1

-0.5

26.6

65.8%

LHT

CE margin

4.1%

-

4.0%

6.6%

-

6.4%

+2.4pp

Revenue

82.1

120.3

202.4

82.9

111.0

193.9

-4.2%

Core earnings

1.1

-9.3

-8.1

1.4

-7.7

-6.3

-

LBT

CE margin

1.4%

-

-

1.7%

-

-

-

Revenue

136.0

136.0

142.2

142.2

4.6%

Core earnings

7.6

7.6

6.9

6.9

-9.1%

D&R

CE margin

5.6%

5.6%

4.9%

4.9%

-0.7pp

Revenue

41.0

41.0

40.6

40.6

-1.0%

Core earnings

2.6

2.6

2.7

2.7

2.7%

H&S

CE margin

6.3%

6.3%

6.5%

6.5%

+0.2pp

Consolidation, Revenue

-23.6

-21.0

-

-27.1

-30.4

-

adj. & other(1)

Core earnings

Revenue

981.9

422.8

1,381.2

1,009.4

408.1

1,396.5

1.1%

Core earnings

50.7

13.6

37.1

65.5

16.6

51.7

39.3%

LIXIL Group(1)

CE margin

5.2%

3.2%

2.7%

6.5%

4.1%

3.7%

+1.0pp

FYE2020 Forecasts

Japan

Overseas

Total

Total YoY%

435.0

425.0

860.0

3.2%

23.7

41.1

64.8

7.5%

5.4%

9.7%

7.5%

+0.3pp

528.0

7.0

535.0

-1.1%

26.9

-1.0

25.9

25.2%

5.1%

-

4.8%

+1.0pp

116.0

147.0

263.0

2.7%

2.3

-12.0

-9.7

-74.6%

2.0%

-

-

-

188.0

188.0

6.6%

6.26.2 -19.7%

3.3%

3.3%

-1.1pp

57.057.0 -1.4%

3.33.3 -4.5%

5.8%

5.8%

-0.2pp

-53.0

-

-43.5

-

1,324.0

579.0

1,850.0

0.9%

62.4

28.1

47.0

267.2%

4.7%

4.9%

2.5%

+1.8pp

(1) Difference between sum total of Japan and Overseas in Revenue and Core earnings and "Total" is the amount of consolidation, adj. & other 21

RENOVATION STRATEGY IN JAPAN

Sales of renovation-related products increased by 4.5% year-on-year, supported by favorable demand in Japan for H1 and sales of new and differentiated products

Sales of Renovation-Related Products

Q3 FYE2019

Q3 FYE2020

JPY: billion

Results(1)

Results

YoY

Sales of renovation-

related products*

236.2

246.9

+4.5%

Renovation sales ratio

37%

37%

+0.2pp

*Total sales of LIXIL Japan Company

and a building renovation subsidiary (after inter-

segment transactions)

YoY

Ｑ3 3 months

Q3 9 months

Renovation products

LWT-1%,LHT-7%, Total -4%

LWT+6%, LHT+5%, Total+5%

Products other than

LWT-4%,LHT-6%,Total-4%

LWT 0%, LHT+3%, Total+2%

for renovation

Renovation-related products sales ratio by business segment (YoY)

Business segment

Q3 FYE2019

Q3 FYE2020

Difference

LWT

44%

45%

+0.9pp

LHT

32%

32%

+0.4pp

LBT

27%

(1)

24%

-3.1pp

Japan total

37%

(1)

37%

+0.2pp

Number of Member Homebuilders

Stores

Mar

Mar

Dec

-18

-19

-19

LIXIL Reform Shop

(FC)

546

571

562

LIXIL Reform Shop

(Voluntary)

12,602

11,783

11,770

LIXIL PATTO Reform

Service Shop

3,705

3,800

3,581

Super Wall: launched new renovation construction method to improve heat insulation

Approx. 40% of the housing stock in Japan do not have effective insulation(2)

LIXIL newly developed the Super Wall construction method for renovation, which enables houses to be renovated even while staying in the house. LIXIL contributes to making better homes a reality for everyone by accelerating the improvement of the quality of existing homes.

(1)

Sales of renovation product was restated for comparison on the same basis

22

(2)

Reference: Ministry of Land, Infrastructure and Transport "Current state of existing housing stocks"

REVENUE BY PRODUCTS AND SERVICES

JPY: billion

Segment

Major products

FYE2019

Q3 FYE2019

Q3 FYE2020

results

results

results

YoY

LWT

Sanitary ware

103.4

77.4

80.6

4.1%

Bathroom units

99.3

75.5

78.0

3.4%

Washstand cabinet

36.9

27.2

27.9

2.6%

units

Kitchens

112.3

83.5

85.0

1.8%

Tiles

37.7

28.0

27.2

-2.9%

LHT

Housing sashes and

186.2

140.8

145.9

3.6%

related products

Exterior

111.0

83.1

84.7

1.9%

Wooden interior

64.1

47.4

53.1

12.0%

furnishing materials

LHT Other

87.2

64.5

62.3

-3.4%

LBT

Building sashes

112.8

82.1

82.9

1.0%

D&R

Home center revenue

176.4

136.0

142.2

4.6%

H&S

Housing and Services

57.9

41.0

40.6

-1.0%

business

Overseas

551.8

422.8

408.1

-3.5%

Others/

95.5

71.8

78.1

8.7%

consolidation & adj.

Total

1,832.6

1,381.2

1,396.5

1.1%

Unit: %

Quarterly YoY

FYE2019

FYE2020

Q1

Q2

Q3

Q4

Q1

Q2

Q3

-2.8

-5.0

-0.6

-3.8

1.4

10.9

0.2

2.8

-3.2

-5.3

-4.9

-1.4

11.2

0.8

2.0

-1.9

-0.5

0.3

0.6

12.6

-4.4

1.6

-3.2

-1.9

0.0

0.2

11.3

-5.4

3.6

-4.2

0.7

-2.6

-5.0

5.1

-8.2

-7.4

-7.3

0.5

3.8

5.5

10.2

-4.1

-3.9

-3.8

12.1

11.8

5.5

13.4

-10.3

0.2

0.9

10.0

13.1

16.1

20.8

1.4

3.6

4.9

8.8

0.7

7.6

4.0

-19.3

6.5

-0.2

7.1

10.0

0.4

0.3

2.2

-1.0

1.7

3.4

2.4

4.9

11.8

-2.3

7.6

11.3

-5.1

31.9

6.0

-1.0

-6.9

1.6

-0.9

0.4

-14.0

-2.6

-1.2

-6.5

-

-

-

-

-

-

-

0.9

-1.4

2.7

-1.6

2.1

6.2

-4.5

  • Definition for Tiles and LHT Other has been changed to match that of internal management. Therefore, past figures and year-on-year ratio for Tiles and LHT Other have been retroactively restated

23

PERFORMANCE OF MAJOR OVERSEAS SUBSIDIARIES

Company

ASB (ASD Holdings)

Unit

Unit: USD million

Accounting

Q3 FYE2019

Q3 FYE2020

YoY

period

Results

Results

Exchange rate (Average Rate)

110.82

109.10

-

Revenue

929

915

-2%

Core earnings

39

50

29%

%

4%

6%

+1.3pp

FYE2019

Accounting

Q3 FYE2020 (9 months)

period

Balance

Amortization

Others(1)

Balance

Exchange rate (Current Rate for balance,

110.99

109.10

-

109.56

Average Rate for amortization)

Goodwill

231

-

-

231

Intangible assets

235

-5

0

230

Company

Grohe Group (GROHE)(2)

Unit

Unit: EUR million

Accounting

Q3 FYE2019

Q3 FYE2020

YoY

YoY excluding LIXIL

period

Results

Results

Africa impact(2)

Exchange rate (Average Rate)

129.38

121.46

-

-

Revenue

1,094

1,146

5%

8%

Core earnings

111

135

21%

13%

%

10%

12%

+1.6pp

+0.5pp

FYE2019

Accounting

Q3 FYE2020 (9 months)

period

Balance

Amortization

Others(1)

Balance

Exchange rate (Current Rate for balance,

124.56

121.46

-

122.54

Average Rate for amortization)

Goodwill

1,210

-

3

1,213

Intangible assets

1,474

-17

0

1,457

(1)

Forex translation differences, and other

24

(2)

LIXIL Africa (formerly called as GDWT) ,which was formerly under Grohe Group, became a subsidiary of LIXIL Corporation from July 2019

PERFORMANCE OF MAJOR OVERSEAS SUBSIDIARIES

Company

Permasteelisa

Unit

Unit: EUR million

Accounting

Q3 FYE2019

Q3 FYE2020

YoY

period

Results

Results

Exchange rate (Average Rate)

129.38

121.46

-

Revenue

931

919

-1%

Core earnings

-72

-59

-

%

-

-

-

FYE2019

Accounting

Q3 FYE2020 (9 months)

period

Balance (2)

Amortization

Impairment

Others(1)

Balance

Exchange rate (Current Rate for balance,

124.56

121.46

-

-

122.54

Average Rate for amortization)

Goodwill

-

-

-

-

-

Intangible assets

-

-

-

-

-

Accrual for expected future losses on

45

-

-

-8

37

construction projects

Orders received

Q3 FYE2020 Order

Q3 FYE2020 Order

Others intake

backlog

Others

Unit

Unit: EUR million

3%

3%

Accounting

Q3 FYE2019

Q3 FYE2020

Period

Results

Results

Asia

(3)

763

702

Asia

18%

Order intake

Europe

Europe

Order backlog

1,969

1,683

37%

40%

42%

North

North

America

Middle

Middle

34%

America

East

East

14%

6%

3%

(1) Forex translation differences, net changes of the provision, and other

25

(2) Balance as of FYE2019 was restated in accordance with its presentation in the annual report

(3) The figure for the FYE19

Q3 was corrected

BUSINESS RELATED TOPICS

LIXIL Unveiled New Kitchen and Bath

GROHE Received the

Innovations at KBIS 2020(1)

"Red Dot: Brand of the Year"(2)

• Booth design-Clear distinction between each brand and

• Celebrated for design quality and consistent conveying of

featured new products.

brand value 'Pure Freude an Wasser'

• American Standard-Studio S bathroom and Kitchen

collection

• Recognizes GROHE's path to emotionally charge brand and

• DXV-Belshire Bathroom collection- received House

products, adding relevance beyond the sanitary industry

Beautiful "Best of KBIS" Award

• GROHE-Essence and Eurocube chinaware lines

• Out of 8,697 entries, three were awarded

• GROHE Blue Chilled & Sparkling 2.0, received a Beautiful

Kitchen and Baths' "30 Most Innovative Products" Award.

• LIXIL received WorldVision Partnership award-product

donation to most needy

(1)

News releasehttps://www.lixil.com/en/news/pdf/20200124_KBIS_E.pdf

26

(2)

News releasehttps://www.grohe.com/en/corporate/news/category_news/pressreleases/pressrelease/news_14144.html

ESG RELATED TOPICS (1)

Expanded CR Commitments to contribute to solving social issues(1)

Sanitation for All

By 2025, improve the livelihood of 100 million people through sanitation and hygiene initiatives

Zero Carbon and Circular Living

By 2050, achieve net-zero carbon emissions from housing and lifestyle solutions as well as operations, and become a leading manufacturer based on a model that preserves water and natural resources for future generations

Key Updates

  • Remains firmly committed to target but extended target year from 2020 to 2025(2)
  • In addition to SATO Social Business, included all businesses and initiatives that improve sanitation and hygiene worldwide
  • Incorporated Environmental Vision 2050(3)
  • Not only reducing CO₂ but also focusing on water conservation and resource recycling

Inclusive for All

Added Universal Design target

By 2020, establish the culture of diversity

and inclusion within our organization and

Expanded UD target to all users irrespective of

among all employees

their age, gender and the level of disability

By 2030, ensure all products and services*

are based on LIXIL's Universal Design

＊

Scope: Products and services

concept

in

Japan (as of August 2019)

(1) Press release announced on Nov. 25, 2019"LIXIL Sets New

(2) LIXIL has improved sanitation for an estimated 15 million people

27

Sustainability Targets to Drive Its Contribution to the World"

(as of November 2019)

16

https://www.lixil.com/en/news/pdf/191115_CR_E_Final_web.pdf

(3) Reference: Page 14 of FYE2020 H1 Results Presentation Material

ESG RELATED TOPICS (2)

Contributing to Global sanitation challenges through partnerships

"Toilets for all" initiative in 2019

LIXIL will donate part of the revenue of LIXIL

shower toilets to UNICEF (Period: Jun - Nov 2019)

As a result of activities in 2019, LIXIL will donate a total amount of JPY 25,990,052

Donation will be used to provide infrastructure and education for access to basic sanitation through "Make a Splash! Toilets for All", a new international partnership with UNICEF

Signed a memorandum of

understanding (MOU) with JICA

LIXIL signed a MOU with JICA to collaborate to improve sanitation and access to safe toilet in developing economies

JICA has entered into a collaborative MOU with a private company in the water and sanitation field for the first time. LIXIL and JICA will jointly look into the use of toilets and sanitary conditions in developing countries in Africa and Asia, while raising awareness and stimulating demand for toilets(1)

(1) News releasehttps://www.lixil.com/en/news/pdf/JICA_MOU_E_web.pdf

28

EXTERNAL RECOGNITION

DJSI World

S&P Japan 500 ESG

Selected for Dow Jones Sustainability World Index

Selected as a component of the S&P Japan 500 ESG,

(DJSI World) for the first time, created by S&P Dow

created by S&P Dow Jones Indices (June 2019)

Jones Indices and RobecoSAM (September 2019)

FTSE4Good Index Series

MSCI Japan Empowering Women Index

Became a constituent of the FTSE4Good Index Series

Selected as a constituent of the MSCI Japan

and FTSE Blossom Japan Index (June 2019) for three

Empowering Women Index (WIN) for three

consecutive years, created by FTSE Russell(1)

consecutive years, created by MSCI Inc. (June 2019)

Disclaimer

THE INCLUSION OF LIXIL GROUP CORPORATION IN ANY MSCI INDEX, AND THE USE OF MSCI

DJSI Asia Pacific

LOGOS, TRADEMARKS, SERVICE MARKS OR INDEX NAMES HEREIN, DO NOT CONSTITUTE A

SPONSORSHIP, ENDORSEMENT OR PROMOTION OF LIXIL GROUP CORPORATION BY MSCI OR

Selected for DJSI Asia Pacific Index for three

ANY OF ITS AFFILIATES. THE MSCI INDEXES ARE THE EXCLUSIVE PROPERTY OF MSCI. MSCI

AND THE MSCI INDEX NAMES AND LOGOS ARE TRADEMARKS OR SERVICE MARKS OF MSCI

consecutive years, created by S&P Dow Jones Indices

OR ITS AFFILIATES.

and RobecoSAM (September 2019)

(1) It is a registered trademark of FTSE International Limited and Frank Russell Company.

29

MARKET TRENDS

105

Trend of new housing starts in Japan

(10 thousand houses)

Seasonally adjusted

100

value for annual

95

90

Assumption for

Aluminum price trend

Apr 2017

Apr 2018

- Mar 2018

- Mar 2019

Assumption for the plan FYE2020 JPY237,000/ton (approx. USD2,061/ton)

Source：LME 3 months (From January 1, 2017 to December 31, 2019)

85

the plan FYE2020

920,000 houses

80

(-3.4% YoY vs FYE2019)

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

2017 2018 2019

Source：Statics of new housing starts, Ministry of Land,

Infrastructure, Transport and Tourism（2017/1-2019/11)

New housing construction level in Japan（year-on-year）

● Jan-Mar 2019: 5.2% ● Oct-Nov 2019: -10.1%

Jan-Sep 2019: -2.0%

Copper price trend

Apr 2017

Apr 2018

- Mar 2018

- Mar 2019

Assumption for the plan FYE2020 JPY694,000/ton (approx. USD6,035/ton)

Source：LME 3 months (From January 1, 2017 to December 31, 2019)

●

Jan-Nov 2019

Apr-Nov 2019

(11 months)

(8 months)

Amount

YoY

Amount

YoY

Total new housing starts

832,949

-3.6%

617,338

-6.3%

Owner occupied(1)

266,444

2.9%

201,123

1.6%

Rental homes

314,678

-13.9%

233,568

-16.0%

Condos for sale

108,846

7.8%

77,016

-1.6%

Detached houses for

135,095

4.4%

100,323

3.3%

sale(2)

Detached houses

401,539

3.4%

301,446

2.2%

total(1)+(2)

Foreign exchange

FYE2020 Forecast

rates

FYE2018 Results

FYE2019 Results

(Average rate)

assumptions

US dollars

110.81 yen

110.69 yen

115 yen

Euros

129.45 yen

128.43 yen

133 yen

(yen per ton)

Results and

FYE2018 Results

FYE2019 Results

FYE2020 Forecast

assumptions

assumptions

Aluminum price

234,000

249,000

237,000

(Purchasing price)

Copper price

639,000

632,000

694,000

30

Cautionary Statements with Respect to Forward-Looking Statements

Statements made in these materials with respect to plans, strategies and future performance that are not historical facts are forward-looking statements. LIXIL Group Corporation cautions that a number of factors could cause actual results to differ materially from those discussed in the forward- looking statements.

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LIXIL Group Corporation published this content on 31 January 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 January 2020 04:14:06 UTC