LIXIL : Consolidated Financial Results for the Fiscal Year Ended March 31, 2023(International Financial Reporting Standards)

			Flash Report
	LIXIL CORPORATION		April 28, 2023
	Consolidated Financial Results for the Fiscal Year Ended March 31, 2023
	(International Financial Reporting Standards)
Company Name:	LIXIL CORPORATION	Stock Listings:	Tokyo, Nagoya
Code Number:	5938	URL: https://www.lixil.com/en/investor/
Representative:	Kinya Seto, Director, Representative Executive Officer, President & CEO	Telephone:	[phone]
Contact:	Kayo Hirano, Senior Vice President, Leader, Investor Relations Office
	and Leader, Finance ＆ Treasury - Corporate Accounting ＆ Treasury/Tax

Scheduled date of ordinary general meeting of shareholders:					June 21, 2023
Scheduled date of issue of Security report:						June 22, 2023
Schedule date of payment of dividends:						June 6, 2023
Preparation of supplementary materials for the financial results for FYE 2023:	Yes
Information meeting for the financial results for FYE 2023 to be held:	Yes (For investment analysts and institutional investors)
															(Amounts less than one million Japanese yen are rounded)
1. Consolidated Financial Results for the FY Ended March, 2023 (April 1, 2022 through March 31, 2023)
(1) Consolidated Operating Results								(% indicate changes from the figures of corresponding period of the previous fiscal year)
								From Continuing Operations
		Revenue			Core earnings			Operating profit	Profit before tax	Profit for the year
	Million yen	%		Million yen	%			Million yen	%	Million yen	%	Million yen	%
FYE 2023		1,495,987	4.7		25,745	-60.3			24,903	-64.2	19,759		-70.6	16,888	-66.6
FYE 2022		1,428,578	3.7		64,875	13.2			69,471	93.8	67,262		99.0	50,540	208.8
								Including Discontinued Operations
					Profit for the year			Total comprehensive	Basic earnings	Diluted earnings
	Profit for the year			attributable to
					income for the year	per share		per share
					owners of the parent
	Million yen	%		Million yen	%			Million yen	%				Yen			Yen
FYE 2023		16,015	-67.1		15,991	-67.1			48,082	-41.6				55.54			55.54
FYE 2022		48,730	29.6		48,603	47.1			82,401	10.0		167.21			158.83
		Including Discontinued Operations				From Continuing Operations
		Ratio of equity			Total assets			Revenue	Revenue
		attributable to		Earning Ratio before
					Core earnings ratio	Operating profit ratio
	owners of the parent				tax
			%					%					%				%
FYE 2023			2.6					1.0					1.7				1.7
FYE 2022			8.3					3.7					4.5				4.9
Reference: Share of profit (loss) of associates and joint ventures accounted for using the equity method
FYE 2023	-10 million yen		FYE 2022 -151 million yen
Note: Core earnings is calculated by deducting the cost of sales and selling, general and administrative expenses (SG&A) from revenue.
(2) Consolidated Financial Position
												Equity attributable to	Ratio of equity attributable	Equity attributable to
		Total assets				Total equity		to owners of the parent to	owners of the parent per
						owners of the parent
														total assets		share
			Million yen			Million yen				Million yen				%		Yen
FYE 2023			1,853,534			627,720				625,433				33.7	2,178.77
FYE 2022			1,782,882				614,968				612,385				34.3	2,106.30
(3) Consolidated Cash Flows
		Cash flows from		Cash flows from			Cash flows from		Cash and cash equivalents at
		operating activities		investing activities			financing activities			end of period
			Million yen						Million yen					Million yen			Million yen
FYE 2023				15,005					-29,319						19,839		106,677
FYE 2022				118,296					-24,805					-108,094		100,404

2. Cash Dividends

		Dividends per share		Total amount of	Dividend payout	Ratio of total
			dividends to
						cash dividends	ratio
						net assets
	End of Q1	End of Q2	End of Q3	End of period	For the year
	(annual)	(consolidated)
	(consolidated)
	Yen	Yen	Yen	Yen	Yen	Million yen	%	%
FYE 2022	－	40.00	－	45.00	85.00	24,711	50.8	4.2
FYE 2023	－	45.00	－	45.00	90.00	25,835	162.0	4.2
FYE 2024	－	45.00	－	45.00	90.00		234.9
(Forecast)

3. Consolidated Forecast for the FY Ending March, 2024 (April 1, 2023 through March 31, 2024)

(% indicate changes from the figures of corresponding period of the previous fiscal year)

					From Continuing Operations
	Revenue		Core earnings	Operating profit	Profit before tax	Profit for the year
	Million yen	%	Million yen	%	Million yen	%	Million yen	%	Million yen	%
FYE 2024	1,530,000		2.3	40,000	55.4	28,000		12.4	21,000	6.3	11,100	-34.3
			Including Discontinued Operations
				Profit for the year	Basic earnings
	Profit for the year	attributable to
	per share
				owners of the parent
	Million yen	%	Million yen	%			Yen
FYE 2024	11,100		-30.7	11,000	-31.2			38.32

• Notes

1. Changes in significant subsidiaries, which affected the scope of consolidation during this period: Yes
   Newly consolidated company: None
   Excluded company: 1 (Company Name) Grohe Luxembourg Four S.A.
2. Changes in accounting policies and accounting estimate
3. 1. Changes in accounting policies required by IFRS: None
   2. Other changes: None
   3. Changes in accounting estimate: None
4. Outstanding shares (Common shares)

(i) Outstanding shares including treasury shares	(March 31, 2023)	287,109,659	shares	(FY ended March 31, 2022)
(ii) Treasury shares	(March 31, 2023)	51,992	shares	(FY ended March 31, 2022)
(iii) Average number of shares during the fiscal year	(March 31, 2023)	287,910,363	shares	(FY ended March 31, 2022)

313,319,159 shares

22,580,170 shares

290,663,404 shares

* This financial results report is exempt from review procedures under Japan's Financial Instruments and Exchange Law.

*Appropriate use of financial forecasts, other special items (Cautionary statements with respect to forward-looking statements)

Performance forecast and other forward-looking statements contained in this report are based on information currently available and on certain assumptions deemed rational at the time of this report's release. Due to various circumstances, however, actual results may differ significantly from such statements.

For information on the financial forecast, please refer to "1. Overview of Operating Results (1) Overview of Operating Results for the current consolidated fiscal year" on page 4 of the attached material.

(How to access supplementary financial results material)

Presentation material to supplement the financial results announcement has been posted on TDnet and the Company's website.

LIXIL Corporation (TSE Code 5938) Results for the FY Ended March 2023

Table of Contents
1.	Overview of Operating Results	2
	(1)	Overview of Operating Results for the current consolidated fiscal year	2
	(2)	Overview of Financial Position and Cash Flows for the current consolidated fiscal year	5
2.	Basic approach to the selection of accounting standards	6

3. Consolidated Financial Statements ….................................................................................................................................. 7

1. Consolidated Statement of Financial Position …..................................................................................................... 7

(2)	Consolidated Statements of Profit or Loss and Comprehensive Income	9
	Consolidated Statement of Profit or Loss	9
	Consolidated Statement of Comprehensive Income	10
(3)	Consolidated Statement of Changes in Equity	11
(4)	Consolidated Statement of Cash Flows	13
(5)	Notes related to Financial Statements	15
	(Notes related to Going Concern Assumptions)	15
	(Segment Information)	15
	(Notes related to Consolidated Statements of Profit or Loss)	18
	(Information per share)	20
	(Notes on significant subsequent events) ….............................................................................................................. 20

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LIXIL Corporation (TSE Code 5938) Results for the FY Ended March 2023

1. Overview of Operating Results

1. Overview of Operating Results for the current consolidated fiscal year
   In the fiscal year ended March 31, 2023, the Japanese economy faced downward pressure due to price increases for components and higher energy costs and an ongoing depreciation of the Japanese Yen caused by a widening interest rate gap between Japan and the United States due to monetary tightening by the Federal Reserve. This in turn had an impact on consumer confidence as consumers became concerned about longer-term inflation. The outlook for the housing sector remains uncertain, with the number of new housing starts continuing to be sluggish. Although rental housing and detached houses for sale have remained at solid levels, owner-occupied housing starts continue to decline due to concerns about rising mortgage interest rates and the impact of price increases for construction materials. At the same time, a government-led subsidy program for "Advanced Window Renovation" is expected to stimulate demand as consumers seek to save on energy costs.
   In the global economy, the impact of increased component costs and higher energy prices due to the prolonged Russian-Ukrainian conflict persist. In addition, there are concerns over for geopoliccal risks, such as rapid monetary tightening in Europe and the Americas to curb inflation, and the reaction to
   China's Zero-COVID policy and slowing economic growth, with the sluggish real estate market serving as a drag on growth. The situation must be closely monitored.
   However, amid the prolonged impact of COVID-19, both in Japanese and international markets, there is an accelerated movement toward the normalization of economic activities, as well as a significant easing of behavioral restrictions, with the aim of creating a society adapted to the post-COVID period. Within this, the economy is expected to recover going forward.
   The financial results for LIXIL Corporation and its consolidated subsidiaries (together, the "Group") for the fiscal year ended March 31, 2023 were as follows: Despite the effects of supply chain disruptions in international business and declining demand in the United States and China, revenue increased to 1,495,987 million yen (up 4.7% year-on-year). This was due to a number of factors including the effect of foreign currency translation resulting from the weaker Japanese yen, as well as increased revenue due to the implementation of price optimization in the Japan business and sales growth of products for the renovation market. In terms of profit, the Company continued efforts to implement structural reforms, price optimization, and measures to improve profitability both in Japan and international businesses. However, these efforts were not enough to offset the negative impacts of further increases in component costs and energy prices, increased costs associated with logistics system constraints in the European region, softening demand in the United States due to sharply rising interest rates, and sluggish market conditions in China. Consequently, core earnings totaled 25,745 million yen (down 60.3% year-on-year). Operating profit was 24,903 million yen (down 64.2% year-on-year), and profit before tax for continuing operations was 19,759 million yen (down 70.6% year-on-year). As such, each of these figures declined significantly.
   As a result, profit for the year attributable to owners of the parent, after deducting non-controlling interests, amounted to 15,991 million yen (down 67.1% year-on-year).

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LIXIL Corporation (TSE Code 5938) Results for the FY Ended March 2023

Overview by segment is as follows:

Revenues by segment are before the elimination of intersegment transactions and core earnings are before the deduction of Company expenses.

The Company had reported in four reporting segments up until the fiscal year ended March 31, 2022. However, from the fiscal year ended March 31, 2023, the Company has begun to report under two segments. Accordingly, the comparison with the same quarterly period of the previous fiscal year has been revised to reflect the change in reporting segments.

Water Technology Business

For the Water Technology Business, which mainly offers water-related products, revenue in the Japan business slightly exceeded the amount of the same period of the previous year due to the effect of price optimizations and strong sales of renovation-related products, despite a weakening in the number of new housing starts. The international business was affected by negative external factors, such as softening demand in the United States due to rising interest rates and the delayed recovery of economic activity in China after the restrictions of the Zero-COVID policy. Despite these factors, revenue increased slightly year-on-year due to the impact of foreign exchange translation resulting from the weaker Japanese Yen and the recovery of economic activity in the Asia-Pacific region, which had previously been sluggish due to the impact of COVID-19. As a result, revenue rose to 915,285 million yen (up 6.2% year-on-year).

On the other hand, despite an increase in gross profit due to the effect of price optimizations both in Japan and international business, and an increase in the sales composition ratio of renovation products and mid- to high-end priced products in Japan, core earnings decreased to 47,259 million yen (down 38.3% year-on-year). The decline was due to increased costs for components and higher energy prices that have continued since the previous fiscal year, as well as supply chain disruptions in the European region and inventory adjustments by customers in the Americas.

Housing Technology Business

For the Housing Technology Business, which mainly offers housing-related building materials in Japan, revenue increased to 598,211 million yen (up 2.4% year-on-year). This was due to implementation of price optimizations, as well as steady demand for renovations aimed at making homes more efficient and enhance peoples' lifestyles.

On the other hand, despite steady improvement in profitability due to sales growth of high-performance window products and the production in an asset-light manner on track, as well as securing an appropriate gross profit margin through price optimizations, core earnings declined to 19,360 million yen (down 38.9% year-on-year). This was due to the impact of lower sales volume caused by sluggish demand for new housing, as well as higher-than-expected component prices and a significant increase in costs caused by a further rise in component procurement prices from international business partners.

(Notes)

1. Core earnings are calculated by deducting the cost of sales and selling, general and administrative expenses (SG&A) from revenue.
2. The "Japan business" and "International business" are management-based classifications as defined in the Group's consolidated performance management, which differ in some respects from classifications based on country of location. Specifically, in the Water Technology Business and Housing Technology Business, certain international subsidiaries under the jurisdiction of the Japan business are included in the "Japan business" category.

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