LIXIL : Oct 30, 2020ReleaseH1 Results for the Fiscal Year Ending March 31, 2021 (IFRS) (From April 1, 2020 to September 30, 2020) >NEW

H1 Results for the Fiscal Year Ending March 31, 2021 (IFRS)

(From April 1, 2020, to September 30, 2020)

TSE Code: 5938

LIXIL Group Corporation

October 30, 2020

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)
	Continuing Operations
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 for Continuing Operations
	Discontinued Operations
	Net Profit for Discontinued Operations
Net profit attributable to	Net profit attributable to
Non-controlling interests	Owners of the parent
Owners of the parent	Non-controlling interests

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

As disclosed in "Notice of Transfer of Consolidated Subsidiary (Share Transfer)" on May 1 and June 9, 2020, business operations of
Permasteelisa S.p.A. and its subsidiaries and LIXIL VIVA are classified as "discontinued operations". The same period in the previous	2
year is restated for comparison purposes.

KEY HIGHLIGHTS

All business segments rebound in Q2. However, H1 revenue and profit down year- on-year due to the absence of demand after the consumption tax hike last fiscal year and impact of COVID-19

 Revenue: JPY 660.5 billion, decreased 13% year-on-year

Vs H1 FYE2020: Decreased 14% in Japan and 9% in international markets (decreased 8% on local currency basis)

Vs Q1 (3 month): Increased 5% in Japan and 36% in international markets

 Core earnings: JPY 15.4 billion, decreased JPY 18.6 billion year-on-year Returned to black from loss of JPY 2.6 billion in Q1 due to recovery of international demand led by Americas and Europe and improvement of SG&A expenses

 Net profit for the first half (1) : JPY 10.9 billion, decreased JPY 12.3 billion year-on-year Decreased primarily due to the decrease in core earnings

 Forecast for FYE2021

Core earnings forecast revised upward from JPY 25 billion to JPY 40 billion based on H1 results and current business environment. No change in annual dividend forecast of 70 yen, interim dividend of 35 yen was resolved

STATUS OF SHARE TRANSFER OF CONSOLIDATED SUBSIDIARIES

• Permasteelisa: Share transfer completed on September 30(2)
• LIXIL VIVA : Scheduled to be completed in early November

(1)	Net profit for the first half = Profit attributable to owners of the parent for the quarter	3
(2)	See "Notice of Transfer of Consolidated Subsidiary (Share Transfer)" announced on September 30, 2020

IMPACT OF COVID-19

Status of Operations (as of Oct 23, 2020(1)）	Monthly sales status (YoY) by region
Production
	20%	Apr	May Jun	Jul	Aug Sep
All factories operational					13%
Procurement
					12%
No significant issues		10%
Sales		0%				1%
International
Recovery led by Europe and Americas since June
The status by region is described later in "RESULTS BY	-10%
BUSINESS SEGMENT"
Japan	-20%				-17%
Bottomed out in September (YoY) and shows signs of
recovery since October	-30%				-25%
Continue to carefully monitor the spread of COVID-19
infection in Europe and the United States since late October	-40%
			Japan	Americas	EMEA
			China	Asia Pacific
				Apr-Sep: Results (on a management basis)

(1) Updated from "Notification Regarding the Schedule for Announcement of Consolidated Financial Results for the Fiscal Year Ended March 31, 2020, and LIXIL Group's Response to the Spread of COVID-19" announced on May 1, 2020, and "Q1 Results for the Fiscal Year Ending March 4 31, 2021(IFRS) " announced on August 6, 2020

H1 FYE2021 CONSOLIDATED BUSINESS RESULTS

Continuing Operations

JPY billion

Revenue Gross Profit

(%)

SG&A

Core Earnings(1)

(%)

H1 FYE2020	H1 FYE2021	YoY
6 months	6 months	vs Results
After retroactive	Results	Increase/	%
restatement(4)	decrease
759.5	660.5	-99.0		-13.0%
254.9	217.7	-37.3		-14.6%
33.6%	33.0%	-0.6pp		-
220.9	202.3	-18.6		-8.4%
34.0	15.4	-18.6		-54.8%
4.5%	2.3%	-2.2pp		-

Discontinued
Including	Operations

Net Profit for the first half including Discontinued Operations (2)

EPS (Yen)

23.1	10.9	-12.3	-
79.75	37.47	-42.28	-

Continuing Operations	EBITDA(3)	75.0	55.9	-19.1	-
(%)	9.9%	8.5%	-1.4pp	-

• Core earnings ratio improved 3.2pp compared to Q1 but deteriorated by 2.2pp compared to H1 FYE2020 (Gross profit margin deteriorated by 0.6pp and SG&A ratio increased by 1.5pp in H1)
• Deterioration of gross profit margin and core earnings ratio due to a decline in factory utilization rates in response to lowering demand
• However, overall SG&A expenses improved by JPY 18.6 billion for H1 (Q1: 9.1bn, Q2: 9.5bn)

(1)	Equivalent to "Operating profit" of JGAAP	(4) Business results from Permasteelisa S.p.A and its subsidiaries and LIXIL	5
(2)	Profit attributable to owners of the parent for the quarter	VIVA are presented in both current and previous reporting period
(3)	EBITDA=Core earnings + Depreciation	under "Discontinued Operations" due to the decision of divestment

	H1 FYE2021 BUSINESS RESULTS BY SEGMENT
		LIXIL Water Technology revenue and profit supported by strong recovery led by Americas
		and Europe in Q2						JPY billion
					H1 6 months		Q2 3 months
					[A]	[B]	[B]-[A]	Q2
					H1FYE2020 Results	H1	Increase/
					Amount	FYE2021
					after retroactive	FYE2021	decrease
					restatement(1)	Results		Results
		LWT		Revenue	410.8	365.6	-45.2	200.2			-14.3
			CE	33.3	19.9	-13.5	16.9		-3.0
		LHT		Revenue	279.1	235.6	-43.5	118.2		-25.1
			CE	18.2	13.6	-4.6	8.4		-2.4
		LBT		Revenue	54.4	46.3	-8.1	25.0		-5.6
			CE	0.7	0.4	-0.3	1.3		-0.8
		H&S		Revenue	26.8	22.9	-3.9	11.6		-2.1
			CE	1.8	1.0	-0.8	0.6		-0.3
		Consolidation,Revenue	-11.6	-9.9	1.7	-5.0		1.2
			adj.		-20.0	-19.5	0.5	-9.1		1.0
		& otherCE
		LIXIL Group	Revenue	759.5	660.5	-99.0	350.0		-45.8
		CE	34.0	15.4	-18.6	18.0		-5.5
LWT (by region) 3 months YoY(2)︓ Americas Q1: -15%, Q2: +10%, EMEA Q1: -20%, Q2: +13%, Greater China Q1: -7%, Q2: -4%,
					Asia Pacific Q1: -31%, Q2: -14%,Japan Q1: -11%, Q2: -15%
		(1) Business results from Permasteelisa S.p.A and its subsidiaries and LIXIL VIVA are presented in both current and previous reporting period	6
			under "Discontinued Operations" due to the decision of divestment
(2)
Local currency basis

Q2 (3 MONTHS) FYE2021 BUSINESS RESULTS FOR CORE SEGMENTS

Core business segments significantly improve compared to Q1. Revenue and profit for LWT in international markets increased year-on-year in Q2 three-month period

JPY billion	LWT Japan			LWT International			LHT Japan
	1500		Revenue	CE	1500		Revenue	CE	1500		Revenue	CE
			200			200	115.8	116.9	200
Q2			98.7	150	1000		101.5	150	1000	150
1000	91.3	74.2
	100	11.9	100		8.8	100
vs	500		5.0	500			500	5.5
Q1	2.9	50			50		50
			0.1
	0			0	0		0	0			0
	FYE21 Q1	FYE21 Q2	FYE21 Q1	FYE21 Q2	FYE21 Q1	FYE21 Q2

LWT Japan

LWT International

LHT Japan

	1500		Revenue	CE	1500		Revenue	CE	1500	141.0	Revenue	CE
months)	116.2		200			200	116.9	200
1000	98.7	150	1000	98.2	101.5	150	1000		150
		11.9		10.7
	10.2		100		9.7		100		8.8	100
500		500		500
	5.0
(3		50			50			50
Q2	0	FYE20 Q2	FYE21 Q2	0	0	FYE20 Q2	FYE21 Q2	0	0	FYE20 Q2	FYE21 Q2	0
												7

FORECAST FOR FYE2021