LIXIL : Integrated Report 2022

INTEGRATED REPORT 2022

01		02		03		04
OVERVIEW		STRATEGY		GOVERNANCE		DATA

Make better homes a reality for everyone, everywhere

INTEGRATED REPORT 2022

01

OVERVIEW

LIXIL'S

VALUE CREATION PROCESS

02 LIXIL'S

VALUE CREATION PROCESS

03 CONTENTS

04 LIXIL'S HISTORY

05 LIXIL AT A GLANCE

06 CEO MESSAGE

11 EXECUTIVE OFFICERS

	01	02		03		04		02
	OVERVIEW	STRATEGY		GOVERNANCE		DATA

LIXIL'S VALUE CREATION PROCESS

How We Create Value in a Sustainable and Meaningful Way for Our Stakeholders and Society

4

THE VALUE WE CREATE

p.17

EXTERNAL ENVIRONMENT p.13

OUTCOMES FOR LIXIL

Megatrends and Social Issues

4.

Sustainable growth comes through strong financial

performance and our commitment to society

T

H

E

V

1

A

L

OUTCOMES FOR STAKEHOLDERS

E

U

LIXIL'S PURPOSE

E

E

O

P

S

W

Employees

C

Make better homes

' S

UR

R

E

P

Thrive in a workplace based on the shared LIXIL Behaviors

E

L

A

X

I

T

Consumers

a reality for everyone,

I

.

the planet's resources

1

L

Enjoy innovative products that improve comfort while saving

everywhere

Partners

OUR VALUE CREATION

Have reliable access to differentiated, high-quality products

Societies

PROCESS

and industry training initiatives

L

Benefit from improved sanitation, ecological innovations and

E

U

our commitment to diversity and inclusion

A

Shareholders

V

E

See financial discipline and a commitment to ESG principles to

T

drive future growth

A

2

T

E

R

2

C

H

.

THE RESOURCES WE RELY ON p.15

E

Y

W

E

E

R

A

S

W

O

A modern

A strong

U

E

Diverse and

Meaningfully

R

C

.

H

work

governance

Governance

E

p.47

Purpose-led People

Designed Products

SW

T

3

environment

foundation

E

R

E

L

Y

O

Global Sales

Financial Foundation

N

LIXIL'S

Infrastructure

LIXIL PLAYBOOK

p.25

Universal

PEOPLE

Clear

(MANAGEMENT DIRECTION)

Unrivalled Portfolio

"Monozukuri"

Sustainable Resource

"LIXIL

strategic

Corporate Responsibility

of Brands

Manufacturing Platform

Management

Behaviors"

goals

Strategy

p.16

3

THE WAY

An efficient

A clear

WE CREATE VALUE

operating

corporate

structure

purpose

INTEGRATED REPORT 2022

01

OVERVIEW

CONTENTS

01	02		03
OVERVIEW	STRATEGY		GOVERNANCE

01 OVERVIEW	02 STRATEGY	03 GOVERNANCE
Our corporate purpose, our vision, an overview	Our management strategies to create long-term value	Our approach to corporate governance and
of LIXIL, and a message from the CEO	for stakeholders and society, our initiatives for	the steps we are taking in this area
	sustainable growth, and their progress

04		03
DATA

04 DATA

A summary of the data that defines our company and performance

02 LIXIL'S

VALUE CREATION PROCESS

03 CONTENTS

04 LIXIL'S HISTORY

05 LIXIL AT A GLANCE

06 CEO MESSAGE

11 EXECUTIVE OFFICERS

02 LIXIL'S VALUE CREATION PROCESS

03 CONTENTS

04 LIXIL'S HISTORY

05 LIXIL AT A GLANCE

06 CEO MESSAGE

11 EXECUTIVE OFFICERS

13 EXTERNAL ENVIRONMENT

15 VALUE CREATION PROCESS

1. THE RESOURCES WE RELY ON
2. THE WAY WE CREATE VALUE
3. THE VALUE WE CREATE

18 CFO MESSAGE

21 CR CHAIRPERSON / CPO MESSAGE

25 MANAGEMENT DIRECTION

26 THE LIXIL PLAYBOOK

1. IMPROVE PROFITABILITY OF JAPANESE BUSINESS
2. PROMOTE GROWTH OF INTERNATIONAL WATER TECHNOLOGY BUSINESS

29 ESTABLISH FOUNDATION FOR LONG-TERM GROWTH THROUGH INNOVATION

1. DIGITAL TRANSFORMATION (DX)

1. GLOBAL PEOPLE STRATEGY

35 LIXIL'S CORE BUSINESSES

1. LWT (JAPAN BUSINESS)

1. LHT

41 LIXIL'S CR STRATEGY

1. CORPORATE RESPONSIBILITY (CR) STRATEGY OVERVIEW
2. GLOBAL SANITATION & HYGIENE

48 MESSAGE FROM THE CHAIRPERSON

OF THE BOARD OF DIRECTORS

49 BOARD OF DIRECTORS' EFFECTIVENESS EVALUATION

50 ELECTION OF DIRECTOR CANDIDATES

51 LIXIL BOARD OF DIRECTORS

52 CORPORATE GOVERNANCE AT LIXIL

54 MESSAGE FROM THE CHAIRPERSON OF THE NOMINATION COMMITTEE

55 MESSAGE FROM THE CHAIRPERSON OF THE AUDIT COMMITTEE

56 MESSAGE FROM THE CHAIRPERSON OF THE COMPENSATION COMMITTEE

57 EXECUTIVE COMPENSATION

59 MESSAGE FROM THE CHAIRPERSON OF THE GOVERNANCE COMMITTEE

60 INTERNAL CONTROL SYSTEMS AND COMPLIANCE

64 CONSOLIDATED 11-YEAR SUMMARY

65 FINANCIAL HIGHLIGHTS

67 NON-FINANCIAL HIGHLIGHTS

69 REVIEW AND ANALYSIS OF OPERATING

RESULTS AND FINANCIAL POSITION

75 PRINCIPAL GROUP COMPANIES /

GLOBAL MANUFACTURING AND SALES SITES

77 BASIC POLICY FOR INVESTOR RELATIONS

78 SHAREHOLDER INFORMATION

79 CORPORATE DATA

1. WATER CONSERVATION & ENVIRONMENTAL SUSTAINABILITY
2. RESPONSE TO TCFD RECOMMENDATIONS

46 DIVERSITY & INCLUSION

Editorial policy

This integrated report aims to enhance communication with LIXIL's stakeholders, especially investors, by presenting our initiatives to achieve long-term, sustainable growth. In editing, we focused on key content and aimed for an easy-to-understand structure. Information not included in this integrated report, such as detailed non-financial information, detailed financial information, and our latest news is available on our corporate website.

Frameworks		International initiatives
referenced		LIXIL has joined

INTEGRATED REPORT 2022

01

OVERVIEW

LIXIL'S HISTORY

	01	02		03		04		04
	OVERVIEW	STRATEGY		GOVERNANCE		DATA

LIXIL'S HISTORY

LIXIL is committed to achieving its corporate purpose and creating sustainable growth and value.

Net sales (JGAAP) / Revenue (IFRS) (Years ended March 31)	■ Japan ■ International
	● Operating income margin (JGAAP) / Core earnings margin (IFRS)

02 LIXIL'S

VALUE CREATION PROCESS

03 CONTENTS

		1,628.7	1,705.4	1,890.5
	1,436.4
1,291.4		4.2%		3.7%
	3.5%	3.0%
1.4%

1,633.2

5.5%

1,829.3

4.2%

LIXIL divests its international building business and Japanese retail business

1,692.4
1,514.4	1,378.3	1,428.6
3.2%	3.5%
			4.2%	4.5%

(¥ billion)

2,000

1,500

1,000

500

04 LIXIL'S HISTORY

										0
2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022

05 LIXIL AT A GLANCE

06 CEO MESSAGE

	JGAAP
Business Phase	Creating LIXIL through mergers of	Establishing the foundation for
Japanese companies	global business expansion and growth

IFRS

Improving the balance sheet, simplifying organizational structure,

and increasing protability

11 EXECUTIVE OFFICERS

Developments Corporate

Creation Value of History

2001 INAX Corporation and TOSTEM Corporation merge under a holding company

2009 American Standard's Asia business becomes a subsidiary

2011 Tostem, INAX, Shin Nikkei, SUNWAVE and Toyo Exterior merge and establish LIXIL Corporation

Permasteelisa becomes a subsidiary

2013 American Standard's North American business becomes a subsidiary

1967 First made-in-Japan shower toilet launches

1990 World's first self-powered automatic faucet Automage launches

1998 Humidity-modulating tile ECOCARAT launches

2009 GROHE Blue water system launches

2010 High-performance hybrid window SAMOS launches

2013 Manufacturing and sales of SATO toilet pans begin

2014 GROHE becomes an equity-method affiliated company

2015 GROHE becomes a consolidated subsidiary

2014 SPAGE, a prefabricated bathroom for at-home spa experience, launches

2016 AQUA CERAMIC, a new toilet material that prevents a build-up of limescale and other stains, developed

Corporate Responsibility (CR) Strategy announced

2020 LIXIL divests its international building business and Japanese retail business

LIXIL transitions from a holding company to an operating company

2017 IoT-enabledGROHE Sense Guard launches

2020 Environmental Vision 2050 announced

SATO Tap, a handwashing station for emerging economies, launches

2021 GROHE's Cradle to Cradle Certified® products unveiled

High-performance resin window EW with increased recycled materials launches