Global integration of the plumbing business, including GROHE

「Although the European economy as a whole has shown only a slow recovery, we are expanding our share in the high-end category by strengthening the GROHE brand. In the United States, results are beginning to emerge from optimising staffing and sales strategies following the completion of the full transfer of the bathtub business to American Bath Group. We achieved significant sales growth in the rapidly growing markets of the Middle East and India.」

「Business profit increased to ¥20.556 billion, up 46.4% year on year, due to higher renovation sales and the effects of price revisions in domestic operations, as well as improved sales in Europe and the Middle East and profit improvements resulting from structural reforms overseas.」

「On 1 September 2024, we succeeded to Aisin’s shower toilet business through an absorption-type company split, and acquired the shares of a subsidiary engaged in Aisin’s shower toilet business in China.」

「On 1 September 2024, we succeeded to Aisin’s shower toilet business through an absorption-type company split, and acquired the shares of a subsidiary engaged in Aisin’s shower toilet business in China.」

「Business profit declined significantly to ¥22.717 billion, down 51.9% year on year. Although both domestic and overseas operations sought to secure gross profit through the effects of price revisions and reduce selling, general and administrative expenses, these efforts were insufficient to offset the impact of lower sales and the burden of fixed costs.」

「Although overseas operations benefited from the foreign-exchange translation effect of the weaker yen, revenue declined year on year because demand fell sharply as high interest rates, particularly in Europe, and persistent inflation dampened investment appetite related to housing.」

「Although overseas operations were affected by external factors, including softer demand in the United States against a backdrop of higher interest rates and weak real estate market conditions in China, revenue increased year on year, supported by the foreign-exchange translation effect of the sharp yen depreciation and the recovery of economic activity in Asia-Pacific, which had previously stagnated during the pandemic.」

「As a result, revenue in the business increased to ¥220.979 billion, up 4.9% year on year.」

「In the Water Technology business, both domestic and overseas operations recovered from the demand decline caused by the spread of COVID-19 in the previous consolidated fiscal year. Supported by strong demand in overseas operations, particularly in Europe, the Middle East and Africa and North America, revenue was ¥862.157 billion, up 10.0% year on year.」

「Overseas revenue increased 20% year on year, driven by the Water Technology business in Europe and North America. By region, sales in the United States performed well across all sales channels, particularly wholesale, and continued to grow above pre-pandemic levels, increasing 15% year on year. In Europe, the Middle East and Africa, sales also performed well across all sales channels and product categories, increasing 19% year on year.」

「Overseas revenue increased significantly by 25% year on year, driven by the Water Technology business in Europe and North America, as sales grew above pre-pandemic levels. In the United States, sales increased 20% year on year, with significant growth across all product categories and sales channels, particularly wholesale and retail. In Europe, the Middle East and Africa, sales also performed well across all product categories and sales channels, increasing 29% year on year. In China, sales increased 1% year on year, supported by solid sales through the retail channel and of GROHE-branded products.」

「Overseas revenue increased significantly by 50% year on year, driven by the Water Technology business, which grew well above pre-pandemic levels. As a result, sales increased across all regions, sales channels and product categories. By region, revenue increased 66% in Europe, the Middle East and Africa and 35% in North America. In China, revenue increased 8%, supported particularly by the retail sales channel and GROHE products. In the Asia-Pacific region, although some countries were affected by the resurgence of COVID-19 infections, the region as a whole remained on a recovery trend and revenue increased 58%.」

「We are accelerating the overseas expansion of INAX, a global brand originating in Japan.」

「To achieve our full-year performance targets, we will continue to improve productivity in our domestic businesses, while making the expansion of sales of synergy products and the expansion of new businesses overseas our top priorities and further strengthening these initiatives.」

「In overseas markets, will strengthen the water and housing equipment business by promoting the growth strategy for shower toilets and the global expansion of the GROHE brand, while pursuing the recovery of businesses such as Permasteelisa.」

「In the Water Technology business, continued to launch new products and services in overseas markets, primarily in North America, Europe and Asia, based on a strategy of becoming a comprehensive solutions provider in the water and housing equipment field, among other initiatives.」

「Immediately before the transaction, our Group owned 51% of GDWT’s total issued shares. Accordingly, this transaction constituted an additional acquisition of shares in a subsidiary under continuing control. The increase in capital surplus and decrease in non-controlling interests resulting from the additional acquisition of these shares were as follows.」

「On 20 December 2017, our consolidated subsidiary LIXIL Corporation acquired 49% of the total issued shares of Grohe Dawn Watertech Holdings Propriety Limited, another consolidated subsidiary of ours (hereinafter, “GDWT”). As a result of this transaction, our Group came to own all of GDWT’s issued shares.」

「On 7 April 2017, LIXIL Corporation, a wholly owned subsidiary of LIXIL Corporation, acquired all of the non-voting shares of GraceA Corporation, a consolidated subsidiary of LIXIL Corporation, held by financial institutions and others, and paid ¥49,100 million for the acquisition of the shares.」

「To advance the globalization of the plumbing business, we are focusing on realizing synergies centered on the GROHE, American Standard, INAX and LIXIL brands, and seeking to further expand earnings power.」

「Following this exercise, GraceA, its 100%-owned subsidiary GraceB S.à r.l., and its subsidiary GROHE are scheduled to become wholly owned subsidiaries of LIXIL Corporation.」

「Following this exercise, GraceA, its 100%-owned subsidiary GraceB S.à r.l., and its subsidiary GROHE are scheduled to become wholly owned subsidiaries of LIXIL Corporation.」

「Among these technology businesses, LIXIL Water Technology globally integrates the plumbing-equipment businesses previously managed separately by each company and operates them as a single business group. The GROHE Group, which has a global sales network centered on Europe and Asia, is expected to play an important role in LIXIL Water Technology as well.」