LIXIL Corporation
5938・Prime Market・Metal Products
Business
LIXIL was formed in 2011 through the merger of five leading domestic building materials and equipment manufacturers, and operates as a comprehensive manufacturer of housing equipment and building materials. The company operates three segments: the Water Technology Business (sanitary ware, faucets & fittings, unit baths, etc.), the Housing Technology Business (sashes, entrance doors, shutters, etc.), and the Living Business (system kitchens, washstands, interior building materials, etc.). Under its umbrella are globally renowned brands such as GROHE and American Standard, and the group—comprising 152 subsidiaries and 36 affiliated companies—employs approximately 48,000 people, with more than one billion people using the company's products every day. Its main customers span homebuilders, remodeling contractors, general consumers, and building construction companies, among others.
Business Model
The majority of revenue of ¥1,510,704 million is composed of direct sales of products and merchandise. Domestically, the company is accelerating its shift toward the renovation market in addition to new construction, and improving profit margins through price optimization of high-value-added products (highly insulated windows, energy-saving water fixtures, etc.). Overseas, centered on the GROHE brand, the company aims to expand its share in the European high-end market and capture demand in the growth markets of the Middle East and India. With R&D expenses of ¥25,092 million and capital expenditure of ¥60,855 million, the company continues to drive product differentiation and production efficiency improvements.
Company Strengths
Centered on GROHE AG, acquired in 2015, the company holds global brands under its umbrella including American Standard. In Europe, sales volumes have increased across most categories such as Faucets & Fittings and Flushing Systems, achieving expanded share in high-end categories. Backed by brand strength, the company is building a revenue structure less dependent on price competition.
The company covers nearly the entire range of housing equipment and building materials, from Sanitary Ware & Faucets to Windows, Doors, and Shutters, as well as Kitchens, Washstands, and Interior Building Materials. Combined revenue across the three segments reached ¥1,544,288 million (before elimination) in FY2026 (ending March 2026), reflecting a product portfolio that enables cross-selling and one-stop proposals.
The order backlog for construction projects in the Housing Technology Business reached ¥134,147 million (up 9.4% year on year), providing high visibility into future sales. Even as new housing starts in Japan declined sharply by 12.9% year on year, the business secured an increase in business profit by capturing renovation demand.
ENVALITH's Perspective
Performance Trend
Revenue has maintained a modest growth trend, rising from ¥1,428,578 million in FY2022 (ended March 2022) to ¥1,510,704 million in FY2026 (ending March 2026), though the growth rate remains limited at around 0.4%. Operating profit peaked at ¥69,471 million in FY2022 (ended March 2022) before declining sharply, remaining at a low level of ¥28,403 million in FY2026 (ending March 2026). Profit for the period recorded a loss of ¥-13,908 million in FY2024 (ended March 2024) before recovering to ¥8,143 million in FY2026 (ending March 2026). On a business profit basis, there is an improving trend, with business profit reaching ¥38,500 million (business profit margin of 2.5%) in FY2026 (ending March 2026), driven mainly by the effects of price optimization in Japan, structural reforms in Europe, and expanding demand in the Middle East and India. On the other hand, the delayed recovery of the US housing market, the sluggish real estate market in China, and elevated raw material and energy costs continue to weigh on earnings.
Growth Strategy
Aiming for a business profit margin of 10% and ROIC of 10%, centered on the reform shift, strengthening of the GROHE brand, and development of differentiated products
In response to the structural decline in new housing starts, the company is strengthening its capture of reform demand, centered on water-related, window, and insulation building materials. Backed by government support measures for housing energy efficiency, resources are being concentrated on highly insulated windows and energy-efficient water-related products, while improving profitability through price optimization.
The company is promoting share expansion in the European high-end category and actively capturing demand in the growing markets of the Middle East and India. It aims to move away from a commodity business through expanded sales of high value-added products, diversification of sales channels, and building a strategic brand portfolio.
The company has completed the full transfer of the bathtub business to American Bath Group and is promoting profitability improvement through optimization of staffing and sales strategy. It continues to rebuild its business foundation in anticipation of a recovery in reform market demand.
The company is expanding circular products utilizing recycled materials, such as PremiAL (aluminum building materials) and Rebia (a fused material of waste plastic and waste wood), aiming to enhance brand strength and expand reform demand. By integrating environmental strategy into business strategy, it seeks to avoid price competition through differentiation and improve profitability.
The company has set medium-term targets of a business profit margin of 7.5%, a net interest-bearing debt to EBITDA ratio of 3.5x or below, and an equity attributable to owners of parent ratio of 35% or above. As of FY2026 (ending March 2026), the business profit margin stood at 2.5%, the ratio at 4.4x, and the equity ratio at 35.3%, with a path being built toward the long-term targets of a 10% business profit margin and 10% ROIC.
Last updated: July 19, 2026