LIXIL Corporation (TSE: 5938), the global building-products group that owns the INAX, Tostem, GROHE and American Standard brands and is one of Japan's largest manufacturers of toilets, sashes, kitchens and bathroom fixtures, reported FY3/2026 consolidated IFRS results showing modest top-line growth but a sharp recovery in core operating profitability. Revenue inched up 0.4% year-on-year to ¥1,510,704 million, but business profit jumped 22.9% to ¥38,500 million as cost-discipline and pricing actions offset persistently weak housing demand in Japan and the U.S. Operating profit (after one-offs) fell 4.3% to ¥28,403 million, profit before tax fell 22.0% to ¥15,708 million, but profit for the year (continuing operations) surged 286.8% to ¥8,772 million. Including discontinued operations, profit attributable to owners rose 306.9% to ¥8,143 million versus ¥2,001 million. Basic EPS came in at ¥28.33 versus ¥6.97.
"Business profit" — defined as revenue less cost of sales less SG&A, before one-off items — is the LIXIL's headline operating measure under its IFRS reporting framework and is the more relevant line for tracking underlying profitability. At 2.5%, the business-profit margin expanded from 2.1% a year earlier; the firmer pricing environment in the Water Technology business and progressively normalized input costs were the principal drivers.
Balance sheet and cash flow
Total assets stood at ¥1,883,927 million versus ¥1,830,804 million, with equity attributable to owners at ¥664,838 million. The owner equity ratio rose to 35.3% from 33.7%, while per-share equity attributable to owners climbed to ¥2,312.94 from ¥2,150.86. Operating cash flow eased to ¥82,689 million from ¥100,002 million; investing activities used ¥23,593 million; financing activities used ¥72,468 million. Cash and equivalents at year-end stood at ¥115,624 million.
Dividend defended at ¥90 despite payout-ratio pressure
LIXIL held the FY3/2026 full-year dividend at ¥90.00 per share (¥45 interim + ¥45 year-end), unchanged from the prior year. Total cash dividends paid stood at ¥25,870 million. On the IFRS earnings base, the consolidated payout ratio was very high at 317.7% as continuing-operations net profit recovered off a depressed prior-year base; the equity DOE of 4.0% is the more relevant capital-return metric and remains at the company's stated target level. Management is also guiding ¥90 for FY3/2027.
FY3/2027 guidance: business profit guided to ¥45 billion
For FY3/2027 management guides revenue of ¥1,600,000 million (+5.9%), business profit of ¥45,000 million (+16.9%), operating profit of ¥37,500 million (+32.0%), profit before tax of ¥25,000 million (+59.2%), and profit attributable to owners of ¥12,000 million (+47.4%), with basic EPS guided to ¥41.75. Implementation continues to focus on streamlining the Japanese building-materials operations, lifting Water Technology margins, and rationalizing the U.S. business — areas where the company has flagged restructuring actions over the past several quarters.
| Metric | FY3/2026 | FY3/2025 | YoY |
|---|---|---|---|
| Revenue (¥ million) | 1,510,704 | 1,504,697 | +0.4% |
| Business profit (¥ million) | 38,500 | 31,337 | +22.9% |
| Operating profit (¥ million) | 28,403 | 29,687 | −4.3% |
| Profit before tax (¥ million) | 15,708 | 20,150 | −22.0% |
| Profit attributable to owners (¥ million) | 8,143 | 2,001 | +306.9% |
| Basic EPS (¥) | 28.33 | 6.97 | +306.5% |
| Business profit margin | 2.5% | 2.1% | +0.4pp |
| Equity ratio (owners) | 35.3% | 33.7% | +1.6pp |
| Annual dividend (¥) | 90.00 | 90.00 | ±0.0% |
JapanStockPulse provides informational content only and does not constitute investment advice. Figures are taken from the company's published earnings short report and may be subject to subsequent revision.