INTEGRATED REPORT 2024
MAKE BETTER
HOMES A
REALITY FOR
EVERYONE,
EVERYWHERE
LIXIL’s Purpose is the north star that guides
LIXIL’s employees in making decisions and inspires us to become a more agile,
entrepreneurial company for sustainable growth.
Our people are the ultimate drivers of value creation, and they realize LIXIL’s Purpose
by putting the LIXIL Behaviors into practice in their work every day.
MAKE BETTER HOMES A REALITY FOR EVERYONE, EVERYWHERE
Our Philosophy
LIXIL’s
LIXIL BEHAVIORS
LIXIL’s Purpose
Make better homes a reality for everyone, everywhere
01
Our Value Creation Story
02
We cultivate financial and non-financial capital,
which are the sources of value creation
The Resources We Rely On
Our Value Creation Story
Diverse and
Purpose-led People
Meaningfully
Designed Products
Global Sales
Infrastructure
Unrivalled
Portfolio of Brands
“Monozukuri”
Manufacturing Platform
Sustainable
Resource Management
Financial
Foundation
03
LIXIL’s value creation comes from our people, who are empowered
to act and create value for stakeholders via six enablers.
Our Value Creation Story
The Way We Create Value
Our people are the ultimate drivers as we take on the challenge
of creating value as set out in the LIXIL Playbook
Clear
Strategic
Goals
Universal
“LIXIL
Behaviors”
An Efficient
Operating
Structure
A Modern
Work
Environment
A Clear
Corporate
Purpose
A Strong
Governance
Foundation
Employees
Corporate Governance
The LIXIL Playbook
Strategic Initiatives
Our Foundation
04
Our Value Creation Story
The Value We Create
We aim to generate sustainable growth and a positive impact for
society through our businesses that bring people comfort and better living
Outcomes
Contributing to the resolution
of social and environmental issues
Outputs
Enhancing corporate value through
business activities
Make better homes a reality for everyone, everywhere
LIXIL's Purpose
The Resources We Rely On
The Way We Create Value
01
02
04
03
The Value We Create
Stakeholders
* For new detached houses
Core earnings margin
7.5%
Net interest-bearing debt-to-EBITDA ratio
3.5 times or less
Ratio of equity attributable to owners of the parent to total assets 35% or more
Medium-term targets
for sustainable growth
50% female directors and executive officers by FYE2030
30% or more female managers by FYE2030
D&I targets
Net-zero by 2050
100% ratio of high-performance windows sold by FYE2026*
90% waste recycling ratio by FYE2026
Contribute to reducing water use by 2 billion m3 annually by FYE2025
Improve access to sanitation for 100 million people by 2025
Social impact
targets
Shareholders
Employees
Partners
Local Communities
LIXIL's Core Businesses
Impact Strategy
Consumers
P.43
P.28
P.46
Clear
Strategic
Goals
Universal
“LIXIL
Behaviors”
An Efficient
Operating
Structure
A Modern Work
Environment
A Clear
Corporate
Purpose
A Strong
Governance
Foundation
Employees
Corporate Governance
The LIXIL Playbook
Strategic Initiatives
Our Foundation
P.36
P.31
P.67
Our people are the ultimate drivers of value creation
LIXIL's Impact
Outputs
Outcomes
Contributing to the resolution
of social and environmental
issues
Enhancing corporate
value through
business activities
LIXIL Behaviors
Diverse and Purpose-led People
Approx. 49,300 employees worldwide* *Number of persons employed
Global Sales Infrastructure
Sustainable Resource Management
Meaningfully Designed Products
6 major global in-house design studios
“Monozukuri”Manufacturing Platform
78 factories worldwide
Unrivalled Portfolio of Brands
Over 70 % consumer recognition rate
in key markets in each region
Financial Foundation
Long-term goal of10 % core
earnings margin
Present in over 150 countries
34.7% reduction in CO2 emissions
from FYE2019*
LIXIL’S VALUE
CREATION PROCESS
01
02
04
03
0
1.
L
IX
IL
's
P
ur
po
se
0
2.
T
he
R
es
ou
rc
es
W
e
R
el
y
O
n
0
3.
T
h
e
W
ay
W
e
Cr
ea
te
V
al
u
e
0
4.
T
he
V
al
ue
W
e
Cr
ea
te
*Scope 1 & 2
Megatrends and the Current Environment
P.26
How We Create Value in a Sustainable and Meaningful Way for Our Stakeholders and Society
LIXIL’S VALUE CREATION PROCESS
01
06
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
LIXIL's Purpose
Make better homes a reality for everyone, everywhere
The Resources We Rely On
The Way We Create Value
01
02
04
03
The Value We Create
LIXIL’S VALUE
CREATION PROCESS
01
02
04
03
0
1.
L
IX
IL
’S
P
ur
po
se
02
. T
he
R
es
ou
rc
es
W
e
Re
ly
O
n
03
.
Th
e
W
ay
W
e
Cr
ea
te
V
al
ue
0
4.
T
he
V
al
ue
W
e
Cr
ea
te
Diverse and Purpose-led People
Product development that leverages diverse human resources
Global Sales Infrastructure
Sustainable Resource Management
Meaningfully Designed Products
Product design capabilities that resolve social
issues
“Monozukuri” Manufacturing Platform
A “monozukuri” platform that utilizes
accrued production technologies
Unrivalled Portfolio of Brands
Brand power that serves diverse customer
segments
Financial Foundation
A financial foundation that supports product
development
A sales base that captures needs worldwide
Technologies that make effective use
of limited resources
Clear
Strategic
Goals
Universal
“LIXIL
Behaviors”
An Efficient
Operating
Structure
A Modern
Work
Environment
A Clear
Corporate
Purpose
A Strong
Governance
Foundation
Employees
PremiAL contributes to
the reduction of CO2
emissions, and mitigates
the environmental
footprint of buildings
Combining our expertise and technological
capabilities cultivated over 25 years, we were
able to pioneer a low-carbon aluminum
building material in response to rapidly growing
global demand for aluminum. We will achieve
sustainable growth and create an impact on
society based on the LIXIL Playbook.
PremiAL
Outputs
Outcomes
By FYE2031:
Scope 3 CO2 reduction
from PremiAL to contribute
a third of LIXIL's 30% CO2 reduction*1
Use of recycled aluminum
100%
Medium- to
long-term sales
target
¥300 billion
*1 Compared
to FYE2019
Our
Foundation
Empower our people to deliver on strategy and create value
Impact Strategy
Global Sanitation
& Hygiene
Water Conservation &
Environmental Sustainability
Diversity & Inclusion
Strategic
Initiatives
Optimize Japan and
Drive New Growth
Embed Robust
Environment
Strategy
Develop
New Core
Grow Global
Water Business
Tackle Inflation and
Supply Chain
Challenges
Divest Non-core
Businesses and
Simplify Organization
Grow
Innovate
Transform
Focus
VALUE CREATION CASE STUDY: CONTRIBUTING TO THE REALIZATION OF A DECARBONIZED AND CIRCULAR ECONOMY
01
07
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
Exemplifying our approach to achieving our purpose, LIXIL is expanding the development of PremiAL, a low-carbon aluminum building material.
Combining our expertise and technological capabilities cultivated over 25 years, we were able to pioneer this low-carbon aluminum building material.
Based on the LIXIL Playbook, we will achieve sustainable growth and support the realization of a decarbonized and circular economy.
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. Please refer to our corporate website for information not included in this
integrated report, such as detailed non-financial and financial information, and our
latest news.
Organizations covered
LIXIL Corporation (“the Company”) and its consolidated
subsidiaries (collectively, “the LIXIL group”)
Period covered
April 1, 2023 through March 31, 2024
Note: Some activities from before or after the reporting
period are included.
Frameworks
referenced
International initiatives
LIXIL has joined
OVERVIEW
01
Our corporate purpose, our value creation
process, an overview of LIXIL, and
management messages
LIXIL’S VALUE CREATION PROCESS
OVERVIEW
LIXIL’S HISTORY
OUR STRENGTHS
(SOURCES OF OUR BUSINESS ACTIVITIES)
CEO MESSAGE
CFO MESSAGE
CPO MESSAGE
EXECUTIVE OFFICERS
6
9
11
12
13
18
21
24
GOVERNANCE
03
Our approach to corporate governance and
the steps we are taking in this area
MESSAGE FROM THE CHAIRPERSON OF THE
BOARD OF DIRECTORS
THE BOARD OF DIRECTORS’ EFFECTIVENESS
EVALUATION
LIXIL BOARD OF DIRECTORS
CORPORATE GOVERNANCE AT LIXIL
GOVERNANCE REFORM
SUPPORT SYSTEM FOR OUTSIDE DIRECTORS
MESSAGE FROM THE CHAIRPERSON OF THE
NOMINATION COMMITTEE
MESSAGE FROM THE CHAIRPERSON OF THE
AUDIT COMMITTEE
MESSAGE FROM THE CHAIRPERSON OF THE
COMPENSATION COMMITTEE
EXECUTIVE COMPENSATION
MESSAGE FROM THE CHAIRPERSON OF THE
GOVERNANCE COMMITTEE
INTERNAL CONTROL SYSTEMS AND
COMPLIANCE
63
64
64 COMPOSITION OF THE BOARD OF DIRECTORS
66
67
68
68
70
71
72
73
75
76
DATA
04
A summary of the data that defines our
company and performance
CONSOLIDATED 11-YEAR SUMMARY
FINANCIAL HIGHLIGHTS
NON-FINANCIAL HIGHLIGHTS
REVIEW AND ANALYSIS OF OPERATING
RESULTS AND FINANCIAL POSITION
PRINCIPAL GROUP COMPANIES/
GLOBAL MANUFACTURING AND SALES SITES
STAKEHOLDER ENGAGEMENT
BASIC POLICY FOR INVESTOR RELATIONS
SHAREHOLDER INFORMATION
CORPORATE DATA
80
81
83
85
91
93
95
96
97
STRATEGY
02
Our management strategies to create long-term value for
stakeholders and society, our initiatives for sustainable
growth, and their progress
MEGATRENDS AND THE CURRENT ENVIRONMENT
PRINCIPAL RISKS AND COUNTERMEASURES
LIXIL’S IMPACT
MEDIUM-TERM TARGETS
MANAGEMENT DIRECTION
LIXIL PLAYBOOK
LIXIL PLAYBOOK LOOKBACK
LIXIL PLAYBOOK: GROW PHASE
LIXIL PLAYBOOK: INNOVATE PHASE
OUR FOUNDATION
GLOBAL PEOPLE STRATEGY
DIGITAL TRANSFORMATION
INTELLECTUAL PROPERTY STRATEGY
LIXIL’S CORE BUSINESSES
WATER TECHNOLOGY BUSINESS (LWT)
HOUSING TECHNOLOGY BUSINESS (LHT)
IMPACT STRATEGY
LIXIL’S MATERIAL ISSUES
GLOBAL SANITATION & HYGIENE
WATER CONSERVATION & ENVIRONMENTAL SUSTAINABILITY
CLIMATE CHANGE MITIGATION AND ADAPTATION
WATER SUSTAINABILITY
CIRCULAR ECONOMY
RESPONSE TO TCFD AND TNFD RECOMMENDATIONS
DIVERSITY & INCLUSION
HUMAN RIGHTS
RESPONSIBLE SUPPLY CHAIN MANAGEMENT
26
27
28
29
30
31
31
32
34
36
36
40
42
43
43
45
46
47
49
50
52
53
54
55
57
59
61
CONTENTS
01
08
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
Core earnings
Revenue
¥1,483.2 billion
¥23.2 billion
Business in over
Supporting the daily
lives of over
1 billion people
150 countries
worldwide
Production bases
78 factories
Major design centers
6
Employees
Approx. 49,300
Granted patents
and design rights
Over 13,000
Ratio of female managers
17.1%
80.0%
Outside directors ratio*
31.3%
Ratio of female directors
and executive officers
Kitchens
Bathrooms
and showers
(2024.3.31)
87.3%
* Including LIXIL's own paid childcare leave
system for male employees
* Since June 19, 2024
Ratio of male employees who took
childcare leave (LIXIL Corporation)*
Make better homes a reality for everyone,
everywhere. LIXIL provides a wide range of
high-quality products that resolve issues in
everyday life globally by employing
world-leading technologies and innovation.
As an industry leader, we fully leverage the various forms of capital we have developed over our history to expand our business globally.
Our products and services
helping people everywhere
ABOUT LIXIL
AT A GLANCE
01
09
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
Revenue
Core earnings*1
Employees*2
R&D
Core earnings*1
Employees*2
R&D
*1 Equivalent to operating profit in JGAAP
*2 Excluding non-regular employees
60.1%
39.9%
Revenue
Product Brands
• Global Brands
• Specialty Brands
Product Brands
• Global Brands
• Specialty Brands
• Category Brands
• Group Companies’ Brands
（FYE2024 results)
LIXIL WATER TECHNOLOGY (LWT)
LIXIL HOUSING TECHNOLOGY (LHT)
01
10
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
Principal Products and Services
Plumbing fixtures
Sanitaryware, shower toilets, water faucets, washstands, bathtubs, prefabricated
bathrooms, smart products, showerheads, washstand fixtures, washstand
cabinet units, kitchen systems, etc.
Tile building materials
Tiles for houses and buildings, interior decorative tiles, etc.
Principal Products and Services
Metal building materials
Wooden interior furnishing materials
Housing and services
Other building materials
Siding, roofing materials, etc.
Other
Solar power systems, etc.
Direct Customers
Competitors
• Dealers
• Sales agencies
• Construction companies
• Kohler
• Roca
• Hansgrohe
• Masco (Delta)
• Architectural firms
• Developers
• Wholesalers
• Fortune Brands (Moen)
• Geberit
• TOTO
• Takara Standard
• Cleanup
• Panasonic
• Building material trading
companies
• Volume retailers
• General consumers
Direct Customers
Competitors
• Dealers
• Sales agencies
• Construction companies
• YKK AP
• Sankyo Tateyama
• SHIKOKU CHEMICALS
• Takasho
• Panasonic
• DAIKEN
• Eidai
• NODA
• NICHIHA
• KMEW
• Architectural firms
• Developers
• Building materials wholesalers
• Homebuilders
• House manufacturers
• General consumers
Note: In order to strengthen the foundation of the Japan business, the kitchen, vanity, and interior businesses were consolidated
to launch the Living Division in April 2023.
¥22.7 billion
29,108 people
¥17.1 billion
¥35.9 billion
19,004 people
¥7.2 billion
*1 Equivalent to operating profit in JGAAP
*2 Excluding non-regular employees
¥896.9
billion
¥596.4
billion
Development of homebuilding franchise
chains and construction on order, real estate
management services, support for
development of real estate franchises,
housing loans, etc.
Window sashes for houses, buildings, and
stores, entrance doors, shutters, gates, carports,
banisters, high railings, curtain walls, etc.
Window frames, wooden furnishing
materials, interior decorative materials, etc.
2024
1.6%
1.6%
14,832
2013
2018
2017
2016
2015
2014
2019
2020
2021
2022
2023
14,364
16,287
IFRS
JGAAP
17,054
18,905
16,332
18,293
16,924
15,144
13,783
14,286
3.5%
3.5%
4.2%
4.2%
3.0%
3.0%
3.7%
3.7%
5.5%
5.5%
4.2%
4.2%
3.2%
3.2%
3.5%
3.5%
4.2%
4.2%
4.5%
4.5%
1.7%
1.7%
14,960
2001
2022
2023
2016
2011
2013
2014
2015
2020
Corporate Developments
History of Value Creation
1967
2010
2014
2013
2020
SATO Tap handwashing
solution for emerging
markets launches
LIXIL’S HISTORY
01
11
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
Net Sales (JGAAP) / Revenue (IFRS) (Years ended March 31)
(¥ billion)
■Japan
■International
●Operating income margin (JGAAP) /
Core earnings margin (IFRS)
Establishing the foundation for
global business expansion and growth
Creating LIXIL through mergers of
Japanese companies
Improving the balance sheet, simplifying organizational structure,
and increasing profitability
LIXIL divests its international building
business and Japanese retail business
• INAX Corporation and
TOSTEM Corporation
merge
• High-performance
hybrid window
SAMOS launches
• Manufacturing and
sales of SATO toilet
pans begin
• SPAGE, a prefabricated
bathroom, launches
• Development of revia,
a sustainable material
• Five companies merge and
establish LIXIL Corporation
• Overseas building business
becomes a subsidiary
• American Standard’s
North American business
becomes a subsidiary
• GROHE becomes an
equity-method affiliated
company
• GROHE becomes a
subsidiary
• LIXIL focuses on core businesses
• LIXIL divests its international building
business and Japanese retail business
• First made-in-Japan
shower toilet
launches
• Corporate Responsibility
Strategy* formulated
• AQUA CERAMIC, an
industry leading new
material that prevents
stains, launches
*Became Impact Strategy
following update in 2023
• Environmental Vision 2050
announced
• PremiAL, a series
of low-carbon aluminum
extrusion products, launches
• GROHE
Everstream
concept announced
OUR STRENGTHS (SOURCES OF OUR BUSINESS ACTIVITIES)
LIXIL’s employees are an
important resource that represent
the driving force behind our
transformation into an innovative
and inclusive organization. They
represent the very core of the
value creation process.
By providing an environment
where all employees are
empowered, we can tap into their
dedication and commitment to
the long-term improvement of
corporate value.
Diverse and
Purpose-led People
Innovative, thoughtful and
consumer-centric design
is the very DNA of LIXIL.
Through the exchange of
ideas across markets and
disciplines, our designers
continue to create
products that make a
tangible difference in
peoples’ lives. As a result,
our products have been
globally recognized for
their designs.
Meaningfully
Designed
Products
LIXIL uses the time-honored
Japanese tradition of
“monozukuri” to create
products of the highest quality
at competitive costs. Our
production sites have shifted to
platform-based production to
quickly meet changing
demands while lowering capital
investments. In addition, our
global production system and
supply chain ensure deliveries
without disruption.
“Monozukuri”
Manufacturing
Platform
LIXIL features a global
footprint of sales
channels and numerous
brands and does
business in over 150
countries worldwide.
Coupled with our global
capabilities, we are able
to tailor our products to
meet local demand and
expand our gained
knowledge and product
ideas to other regions.
Global Sales
Infrastructure
LIXIL features numer-
ous powerful brands in
our industry, with each
brand having its own
voice with consumers.
To better leverage this
recognition, we have
created sub-brands
further specialized in
niche markets, with the
goal of enhancing
brand equity for the
long term.
Unrivalled
Portfolio of
Brands
LIXIL plays an important
role in combating climate
change and preserving
the environment. We have
launched a wide range of
initiatives in procurement,
production and operations
to reduce carbon
emissions, conserve
water, and use resources
more efficiently. We are
also working to achieve a
circular economy.
Sustainable
Resource
Management
In response to a challenging
operating environment, we are
implementing structural reforms. In
terms of profitability, we are
targeting a 10% core earnings
margin over the long term. From
the perspective of financial
soundness, we set a medium-term
target of a net debt-to-EBITDA ratio
of 3.5 times or less, and
implemented return on invested
capital (ROIC) management to
improve capital efficiency.
Financial
Foundation
Long-term goal of
10 %
core earnings margin
* Scope1,2
34.7%
reduction in CO2
emissions from
FYE2019
Over 70 %
consumer recognition
rate in key markets
in each region
Present in over
150 countries
78
factories
worldwide
6 major global
in-house
design studios
* Number of
persons employed
Approx.
49,300*
employees worldwide
1
2
3
4
5
6
7
LIXIL leverages its unique financial and non-financial resources and challenges itself to create new value in line with
the LIXIL Playbook with its employees as the driving force to ensure sustainable growth and create an impact on
society.
01
12
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
DIFFERENTIATED PRODUCTS AND STRONG
BUSINESS FOUNDATIONS TO DRIVE A POSITIVE
IMPACT FOR SOCIETY AND THE ENVIRONMENT
CEO Message
Kinya Seto
Director, Representative Executive Officer,
President, and CEO
01
13
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
In recent years, the business environment surrounding our
company has changed significantly, and while we are working
to faced many challenges, including global inflation, a logistics
crisis and supply chain disruptions, we are working to
overcome these adversities to become an even stronger
organization. Guided by the LIXIL Playbook, which drives our
basic management direction, we continue to make progress
toward sustainable growth.
Most recently, the impact of high interest rates and inflation in
Europe and the U.S. has led to a greater-than-expected
decline in housing-related demand. Our industry, and our
business internationally, were significantly impacted. The
slump in the European market, traditionally our largest source
of earnings, combined with much lower-than-expected
demand for new construction in the domestic Japanese
market, led to create very challenging results for FYE2024.
The resulting lower sales and profits caused us to fall short of
our initial goals.
Weak demand in international housing markets, including
Europe and the U.S., has led to a decline in sales and
production volumes for LIXIL, and fixed costs now represent a
major impediment to profitability. Although we have been
facing strong headwinds, we fully recognize that we have
lacked the strength to resist them, and we take this seriously.
The most pressing tasks we are facing include improving the
profitability of our international business and building a robust
business foundation that will keep it secure against sweeping
global changes. Since the beginning of the fiscal year, we have
steadily carried out structural reforms to optimize personnel
allocation (mainly in Europe and the U.S.), reduce costs by
restructuring supply chains and optimize our business
portfolio.
We were able to implement these structural reforms earlier
than planned. This resulted in higher structural reform
expenses in FYE2024 but with the expectation that this will
increase our profitability in FYE2025 and beyond. I believe our
success in quickly carrying out comprehensive structural
reforms despite our dramatically changing business
environment is highly significant.
Turning to our business in Japan, the number of new housing
starts remained low, but government subsidies to encourage
retrofitting with high-performance, energy-efficient windows
helped drive renovation demand and profits. In addition to
shifts in the remodeling market, flexible price revisions and to
optimize our Japanese business have borne fruit and helped
to increase profitability.
I believe that FYE2025 will involve laying new foundations for
significant profit growth in the subsequent fiscal years. As of
now, it is unclear when an economic recovery will take place
in Europe and the U.S., and I am not optimistic about the
market outlook for the current fiscal year. I expect
international demand to remain at the same level as the
previous fiscal year, and that demand for domestic new
housing will weaken. To enhance our ability to respond to
changes and build a solid business foundation in this
challenging environment, in FYE2025 we will focus on
completing structural reforms of our international operations.
While doing so, we must remain ready to seize growth
opportunities based on differentiated products ahead of a
future recovery in market demand. We are expanding our
lineup of differentiated products that have a social and
environmental impact, and promising new core businesses are
already emerging. In FYE2025, we will focus more on creating
new innovations and will introduce and expand sales of
innovative and differentiated products with high added value.
To improve profitability, I believe that three approaches are
paramount: shifting resources to high-margin businesses,
expanding sales of differentiated products and reducing costs.
We will take these steps and promote reforms, bringing us
closer to our medium- to long-term targets of 10% core
earnings margin and 10% ROIC.
LIXIL's defining characteristics are its global, multi-brand
presence and diverse assets, created through our integration
of top brands in our industry. These are the strengths of our
Defined Challenges Amid Adversity
FYE2025: New Foundations
Fostering Unity in a Diverse Organization
01
14
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
CEO Message
company and we must continue to fully leverage these
strengths to develop our business. Meanwhile, we have been
divesting or closing non-performing assets as part of our
structural reform efforts. We have a global network spanning
more than 150 countries, a strength that enables us to rapidly
deploy a single product across multiple brands and regions,
giving us the opportunity to expand our business
exponentially.
Above all, our global employees are the driving force behind
our strategy. Accordingly, I am endeavoring to ensure that all
our employees are moving together in the same direction. We
develop multiple brands that have diverse histories and
strengths across a wide range of countries and regions,
including GROHE and American Standard. Together as One
LIXIL we are working to realize our purpose: "Make better
homes a reality for everyone, everywhere."
As a roadmap for achieving this purpose in all of our
businesses, we created the LIXIL Playbook in FYE2021,
setting out our fundamental management direction, and
establishing priorities that we must address. Since then, we
have made modifications to create the path towards realizing
our purpose by transforming our characteristics into greater
strengths and achieving sustainable growth. Even in a
business environment where the future is difficult to predict,
clearly stating the direction we should follow will enable our
employees to focus on our unified priorities as a team.
In line with the priorities set forth in the LIXIL Playbook, we
have made steady progress in simplifying our complex
organization, focusing on core businesses and strengthening
supply chains. I believe we have significantly strengthened our
capacity to react to external changes. Nonetheless, challenges
remain, particularly in our international business. We will
continue to promote structural reforms that make our
organization more resilient against changes in the external
environment.
In the “Grow” phase, we have seen positive results from our
“Optimize Japan and Drive New Growth” initiative. With the
market for new construction shrinking by the day, we have
accelerated our shift to the remodeling sector. These steps
include expanding our business in plumbing fixtures and
fittings, along with building materials such as highly insulated
windows and doors to capture a broad range of remodeling
demand.
While focusing on the Japan remodeling market, we will also
deploy domestic development resources to international
markets with potential for significant growth. We will also focus
on raising productivity and providing new value through
digitization, including the use of generative AI. Through AI
technology, we will improve our ability to respond quickly to
market and customer demands, and we will further leverage
this technology to stimulate demand.
Regarding our international business, we need to focus on
highly profitable categories in each region. For example, in the
profitable fittings category, we already boast a strong and
sizable market share in Europe, but plan to invest more
resources in the U.S., where there is significant room for
growth.
Although we have faced the challenge of a significant decline
in demand in Europe and the U.S. due to macroeconomic
factors, we will strengthen our structure to seize business
opportunities without missing opportunities, with an eye on
economic recovery in key markets. Furthermore, we will keep
capitalizing on demand in growing markets such as the
Middle East and India, where there are large population of
young people and solid housing demand is expected.
For our "Innovation" phase, we have made "Embed Robust
The LIXIL Playbook Put into Action
LIXIL Playbook
Grow
Innovate
Transform
Tackle Inflation
and Supply Chain
Challenges
LIXIL’s
Corporate
Purpose
Our
Foundation
Make better homes a reality for everyone, everywhere
Empower our people to deliver on strategy and create value
Strategic
Initiatives
Focus
Divest Non-core
Businesses
and Simplify
Organization
Impact Strategy
Global Sanitation & Hygiene
Water Conservation &
Environmental Sustainability
Diversity & Inclusion
Optimize Japan and
Drive New Growth
Grow Global
Water Business
Embed Robust
Environment
Strategy
Develop
New Core
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CEO Message
Environment Strategy" and "Develop New Core" priorities and
have already successfully expanded the development of
environmentally friendly products. In October 2023, we
launched PremiAL R100, a low-carbon aluminum extrusion
product made from 100% recycled aluminum, in Japan. This
was made possible by combining the experience and
technology we have accumulated.
The PremiAL series will make a significant contribution to the
realization of a decarbonized and recycling-oriented society.
Replacing newly smelted aluminum ingots, which require
large amounts of electricity during manufacturing, with
PremiAL, offers an effective way to reuse aluminum materials.
As modifications to the entire supply chain – including raw
material procurement – are required to significantly reduce
carbon dioxide emissions, recycled aluminum materials are
attracting attention across industries. As societal demands for
decarbonization increase around the globe, I am confident our
business is developing the potential for future profitable
growth. In the future, the PremiAL series will not be limited to
the domestic market but will be rapidly brought to Asia and
other international markets.
To understand end users’ changing needs and address their
needs in daily life, we continue to develop and launch
differentiated products. For example, KINUAMI, a foaming
shower system with an enthusiastic market reception in Japan,
will be rolled out globally, with a China launch under the
GROHE brand. KINUAMI effortlessly covers the entire body
with foam to cleanse the skin gently. This product meets a
wide range of consumer needs, including healthcare workers
who need assistance in bathing clients, thanks to the shower’s
capacity to easily switch between foam and hot water at the
touch of a button. This product is an outstanding example of
how an inclusive perspective has created new social value.
In the area of international plumbing products, the GROHE brand
will first launch Everstream, a circulatory shower system that
saves water and energy, in Europe this year. Water shortages are
spreading globally in the face of climate change and population
growth, and in many developed countries, showering and
bathing account for the majority of home water use. To address
this social challenge, Everstream, which was born out of our
desire to effectively use valuable water resources, uses
cutting-edge technology to reuse water, reducing the amount
of water used by up to 75% and the energy used to heat water
by 66% compared to conventional showers. We will continue
to introduce high value-added, differentiated products rapidly
to the market to meet diversifying customer needs and provide
new value.
With the coronavirus pandemic subsiding, it is now easier
than ever to visit our international bases. The more I speak
with our employees in each country, I realize just how much
they appreciate LIXIL's drive to develop products that have an
impact on society and the environment. Creating social and
environmental impact through innovation, with our purpose as
our starting point, will further strengthen global collaboration.
Diversity and inclusion (D&I) are essential to engender
innovation in an organization. Accordingly, we promote D&I in
order to become an organization that can autonomously
innovate and support sustainable future lifestyles. It is crucial
to create environments where employees with diverse
perspectives and values – who truly understand the needs of
our diverse customers – can fully demonstrate their abilities.
By investing in human resource development and promoting
diverse and flexible work styles, our culture fosters the
innovation that is key to LIXIL's future.
Our business environment continues to present specific
challenges. Issues such as a high percentage of sales in the
Japanese market, capital efficiency and the difficulty of
accurate forecasting due to market volatility and declining
profit margins, are all issues that can be addressed through
corporate initiatives. We are fully committed to focusing our
Differentiated Products with Societal
and Environmental Impact
Realizing Comfortable, Ideal Homes
CEO Message
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efforts on overcoming these challenges. Our goal is to build a
strong business foundation enabling our continued impact on
society and the environment through our products. We must
also be able to manufacture our products quickly, efficiently
and at a low cost.
Our mid- to long-term goal is to create a world in which buying
LIXIL products is perceived as having a positive impact on our
planet. Product lines that have a positive social and
environmental impact are central to this goal. We are aiming
for these products to comprise over half of our sales by 2030.
I am increasingly confident that we can achieve our targets of
10% core earnings margin and 10% ROIC by pursuing these
initiatives over the medium to long term in accordance with
the priorities of the LIXIL Playbook.
We have drawn a picture of how LIXIL, over the long term, can
be a company that provides the comfortable, ideal homes
everyone desires. Now, we must strengthen our foundation
during this preparatory period to ensure future profit growth,
focusing on creating innovations that offer new possibilities for
living while bolstering our competitiveness.
Helping to resolve social and environmental issues through
our business activities is a role LIXIL as a company must fulfill.
These activities will benefit society and are also extremely
important to boost the sustainability of our business. Moving
forward, we will continue to work as a united company in line
with the LIXIL Playbook to secure sustainable growth and have
a positive impact.
CEO Message
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In April 2024, I assumed the role of CFO at a time when difficult management
decisions needed to be made. By working to improve profitability and further enhance
our financial soundness and stability, we aim to support the sustainable growth of our
business. In FYE2024, we continued to face a challenging business environment from
the previous fiscal year, with rising labor costs and soaring component prices in the
Japan business and a significant decline in profitability in international operations due
to reduced demand in Europe and the U.S.
In the Japan business, while the number of new housing starts decreased, sales
for high-performance window renovation products to improve home insulation
supported sales revenue. Meanwhile, in the international business, demand for
housing-related products in the European and the U.S. markets decreased due to
increasing interest rates and long-term inflation. As a result, sales revenue decreased
by ¥12.8 billion compared to FYE2023 to ¥1,483.2 billion. The gross profit margin ratio
improved 0.5 percentage points to 31.9%. However, due mainly to sluggish global
demand core earnings fell ¥2.6 billion from FYE2023 to ¥23.2 billion.
In Japan, rising raw material and component prices continued to be absorbed by
price optimizations. In the international business, fixed costs became a significant
burden amid softening demand. The challenge to improve profitability requires action
to appropriately control variable and fixed costs.
First, to address rising variable costs, such as raw material and component prices,
we will continue our efforts to date and work to recover and improve profitability
through flexible price optimizations. In addition, we must increase profitability by
improving our product mix through sales of more profitable products by offering
differentiated products with high added value.
To reduce fixed costs, in FYE2024, we continued efforts to reduce SG&A
expenses, such as company expenses, and we promoted structural reforms in our
international businesses. In Europe and the U.S., we optimized personnel allocation,
restructured the supply chain, and optimized our business portfolio. In FYE2025, we
plan to continue structural reforms, streamline excess facilities primarily by optimizing
the supply chain, and complete our major structural reforms for this fiscal year.
Amid these circumstances, we plan to achieve sales revenue of ¥1,570.0 billion
FYE2024 in Review and Financial Priorities for FYE2025
CFO
Message
CREATING A STRONGER FINANCIAL
STRUCTURE THROUGH INCREASED
FREE CASH FLOW AND
IMPROVED CAPITAL EFFICIENCY
Mariko Fujita
Executive Officer, Executive Vice President,
Finance, Treasury, M&A, IR, and CFO
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（1）Profit for the year attributable to owners of the parent
（2）Ratio of equity attributable to owners of the parent to total assets （3）Net profit/Core earnings
PBR
0.8
times
ROE
-2.2%
PER
—
As of March 31, 2024
1.6%
Core earnings
Revenue
-60.0%
Net profit(1)
Core earnings
0.8 times
Revenue
Total assets
×
×
×
❶
❷
❸
Net profit margin
Total assets
turnover
2.9 times
Total assets
Capital(2)
❹
Financial leverage
Current situation
・ Core earnings margin
Profit margins have deteriorated primarily due to sluggish demand in the
international markets
・ Net profit to core earnings ratio(3)
Deteriorated due to the recording of other expenses from structural reforms
・ Total assets turnover
No significant change
・ Financial leverage
Recently generally stable
Understanding of issues
1. Improve core earnings margin
Optimize prices, lighten assets, and improve profitability of international operations
2. Promote structural reforms
Maximize effects after the execution of structural reforms and ensure appropriate
tax management
3. Improve asset efficiency
Reduce inventory assets and optimize the business portfolio
4. Appropriate financial leverage
Maintain appropriate financial leverage
Countermeasures
(¥ billion)
Dividend (as a percentage of adjusted EBITDA)
Strengthening growth investment and financial foundation
0
1,200
800
400
FYE2020
FYE2021
FYE2022
FYE2023
FYE2024
FYE2025
plan
16%
27%
31%
18%
30%
20%
Adjusted EBITDA
Shareholder Return Policy
This is a policy of determining profit distribution based on a comprehensive assessment of various factors
pertaining to overall management, including periodic earnings, cash flow, retained earnings, and financial
structure. LIXIL determines how to use retained earnings in consideration of the cash flow situation,
prioritizing growth investments such as capital investment for the purpose of strengthening
competitiveness (including new product development, streamlining, and IT investment), in addition to
strengthening the
financial structure. Our
basic policy is to
provide stable
dividends to
shareholders over
the long term and to
determine the annual
dividend based on the
mid-term EBITDA
level, while flexibly
implementing share
buybacks.
In April 2024, the Company announced a new Shareholder Return policy, and modified the contents
to be more in line with actual conditions. Based on this policy, the dividend for FYE2025 is expected
to be ¥90 per share.
We are currently laying the foundation for future growth through innovation and have no plans for
large-scale acquisitions or capital investments. In addition, we have no immediate plans for major
borrowing or capital raising and will instead seek to increase operating cash flow through growth
investment, including intangible assets such as IT, human resources, design, and brands that can
bring long-term sustainable growth. For this we have a target capital expenditure which is set at
approximately ¥65.0 billion. We will seek to generate the funds necessary for growth investment by
optimizing our asset portfolio.
We are committed to enhancing our capital efficiency and reducing interest-bearing debt
through our asset-light strategy, with mid-term targets of a net interest-bearing debt-to-EBITDA ratio
of 3.5 times or less and a ratio of equity attributable to owners of the parent to total assets* of 35% or
more.
and core earnings of ¥35.0 billion for FYE2025.
As the business environment surrounding LIXIL continues to be challenging, we must take quick
and appropriate action. By steadily implementing the measures outlined above, we will ensure
financial stability while working to achieve sustainable growth and purpose.
As our mid-term goals, we aim to achieve a core earnings margin of 7.5%, a net interest-bearing
debt-to-EBITDA ratio of 3.5 times or less, and a ratio of equity attributable to owners of the parent to
total assets of 35% or more. In addition, as our long-term financial indicators, we aim to achieve a
core earnings margin of 10% and a return on investment capital （ROIC） of 10%.
As of March 31, 2024, our price-to-book ratio （PBR） remained at 0.8, and we will work on
improving profitability to enhance ROE. To achieve this, we will work to improve our core earnings
margin by optimizing prices, implementing an asset-light strategy, and improving the profitability of
our international operations. In addition, we expect the implementation of structural reforms will
improve profitability and boost our net profit figure.
Actions to Better Focus on Cost of Capital and Share Price
Policy on Capital Allocation and Shareholder Return
*Equity ratio under Japanese GAAP
Ensuring Financial Stability
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CFO Message
ROIC* Tree
* ROIC = Operating profit × (1 – Effective tax rate) / (Working capital + Fixed assets)
*As a result of reviewing the CCC calculation method in FYE2024, the figure for FYE2023 has been adjusted accordingly.
Actions
Optimization of business portfolio
Improvement
of gross profit
margin
Improvement
of CCC
Improvement
of working
capital turnover
Optimization of
capital
investment;
improvement
of fixed asset
turnover ratio
Improvement
of core
earnings
margin
Reduction of
SG&A
expenses
Expansion of international business sales
Price optimization
Improvement of production efficiency
Improvement of payback ratio and
payment processing site
Retention control; inventory optimization
Optimization of payment terms
Improvement of production efficiency
Improvement of business efficiency
Management of investment hurdle rates and
enhancement of post-investment monitoring
Optimization of investment amounts
Implementation of structural reforms
Review of real estate holdings; sale of idle real estate
Strengthening of project management
Reduction of cash on hand and interest-bearing debt
Review of unprofitable businesses
Tax management
Improvement
of ROIC
Improvement
of core
earnings after
tax
Improvement
of invested
capital
efficiency
ROI
management
Maintenance
and optimization
of fixed assets
We introduced ROIC management globally in 2019 and have been increasing the incentive to achieve
results by incorporating ROIC into performance metrics. Targets are set within each organization by
employing ROIC tree diagrams, managing the process and reporting progress monthly.
We are working to improve our gross profit margin to overcome changes in the business environ-
ment. In relation to pricing, we are shifting to high-value-added and differentiated products, including
an expansion of our lineup of environmentally friendly products. In addition, we are taking steps to
be able to set prices in a more flexible manner. On the cost side, we are working to reduce produc-
tion costs through an asset-light approach to promote the reduction of fixed expenses.
Improving Capital Efficiency through ROIC Management
Improvement of gross profit margin:
In addition to enhancing productivity through the use of digital technology, we have been
consolidating and optimizing showrooms and sales offices, relocated and downsized our
headquarters, and optimized personnel allocation, especially in Europe and the U.S. We will continue
to reduce fixed costs and improve capital efficiency by further promoting the use of digital tools to
increase productivity and utilizing shared services for back-office operations.
We will ensure fair and appropriate practices in tax payment and tax management.
In FYE2024, the cash conversion cycle (CCC) increased by 18.1 days year-on-year to 107.2 days*,
mainly due to a longer inventory turnover period as part of a strategic buildup of inventory to stabilize
product supply. In FYE2025, however, in light of the recent resolution of supply chain issues, we will
focus on improving inventory turnover by reducing inventory levels to March 31, 2022 levels.
We have been introducing investment evaluation guidelines that target improved investment
efficiency. We apply hurdle rates for investment decision-making that are calculated for each project
and depend on the investment goal. These take into account the differences in country risk and the
inflation rate of the relevant market (e.g., for companies in Japan, the hurdle rate is set at 10%).
In line with our policy of adopting an asset-light approach to improve capital efficiency, we
implemented the closure of a factory in the Asian region and the liquidation of a business in the U.S.
in FYE2024, as part of our broader structural reforms,. In FYE2025, we will continue to pursue an
asset-light approach with measures to restructure the supply chain.
In FYE2024, net interest-bearing debt increased by ¥41.0 billion year-on-year to ¥552.7 billion. The
primary factors were an increase in working capital due to an acceleration of payments to suppliers
in accordance with our Declaration for Building Partnerships. In FYE2025, we aim to reduce
interest-bearing debt and improve our financial position by enhancing free cash flow from the second
half of the fiscal year.
Reduction of SG&A expenses:
Tax management:
Improvement of CCC:
ROI and ROIC management:
Maintenance and optimization of fixed assets:
Reduction of cash on hand and interest-bearing debt:
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CFO Message
CPO Message
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Jin Song Montesano
Director, Representative Executive Officer,
Executive Vice President,
Human Resources, Communications,
External Affairs, and
Impact Strategy, and
Chief People Officer
LIXIL’s corporate purpose of making better homes a reality for
everyone, everywhere, governs the decisions and actions not
just of our management team but all our employees. We are
steadfastly passionate about building better living environments
and making a positive impact in the world.
In April last year, we transitioned from a Corporate
Responsibility Strategy to our Impact Strategy, to more
accurately articulate our proactive, holistic approach and
further accelerate our initiatives that go beyond the boundaries
of corporate responsibility and obligations. Our Impact
Strategy sits at the foundation of our LIXIL Playbook, and the
philosophy and commitments are integrated into our core
business operations. Focusing on measurable impact and
accountability, we aim to have a positive impact for society
and the environment while pursuing stronger financial results.
Over the past year, our employees have gradually
internalized and embraced the concept of Impact Strategy.
The shift has already made a difference in our people and
culture as we accelerate our drive to be a proactive,
solutions-oriented organization.
At LIXIL, our employees are the ultimate drivers in creating
long-term corporate value. Thus, enriching human capital is
critical for us to become a more innovative and agile
organization that can deliver against our goals. With the
Global People Strategy as the roadmap, we have been on a
journey of transformation, enhancing employee experience,
embedding inclusion into our DNA, and elevating talent across
the organization.
To enhance employee satisfaction and engagement, we
prioritized revamping our people policies, especially in Japan,
Enriching Human Capital
ENRICHING HUMAN CAPITAL AND
FOSTERING INCLUSION TO
GENERATE BUSINESS RESULTS
AND LASTING IMPACT
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CPO Message
where traditional ways had set boundaries to how people
worked. We opted to remove the barriers and adopt hybrid,
flexible workstyles, allowing our employees to continue
contributing to LIXIL while fulfilling their personal
responsibilities and interests. At the same time, we created
networking and relationship-building opportunities to ensure
that employees felt a sense of belonging and that their voices
were being heard and valued. We have also been nurturing an
inclusive culture by training and enabling managers to activate
and foster D&I within their teams. I am pleased that our
approach has worked well in promoting greater autonomy and
inclusion amongst female employees in Japan, which is
evident in the inclusion scores of our employee survey, LIXIL
Voice.
Furthermore, we have employed an integrated approach to
leadership and succession planning to ensure that we have a
strong pipeline of talented people who can play an active role in
leading teams and making critical impact. As our employees
are our most important asset and engine of our value creation,
we must invest in their development to succeed as an
organization. We are committed to fostering a culture of
learning and providing an environment where all employees,
from new graduates to executives, can learn and grow.
It is our diverse workforce that is driving innovation at LIXIL,
and enabling the company to have a positive impact. While we
continue to enhance diversity and inclusion, and enrich
human capital, our progress is evident in generating new
innovations and businesses and in furthering our progress
against the three core pillars of the Impact Strategy.
Our people strategy offers opportunities for colleagues to learn
and grow, creating an environment where everyone is
empowered to pursue their ideas and generate new value for
LIXIL. For example, Hydrific was born as a direct result of the
program that we developed together with Tuck School of
Business for our senior executives and high-potential leaders.
An incubation venture with the mission to make water
conservation easy and fun, Hydrific launched its first product
in March, Droplet, a state-of-the-art ultrasonic sensor that
monitors household water usage from a single location.
We also rolled out a key component of the Tuck program,
the Three Box Solution as a common language for innovation
across the organization. This intrigued an engineer to apply
and present her new product idea - a customizable cat wall.
She was given the green light to launch Nyanpeki as a new
product category for the housing business. She now oversees
the entire business, from new product development to
marketing and sales development.
Our social business, SATO, continues to expand access to
adequate and equitable sanitation and hygiene solutions with
a diverse portfolio of products. SATO has focused on
diversifying its footprint through partnerships with local
governments and humanitarian organizations. These
collaborations have enabled the installation of SATO products
in schools, healthcare facilities, community toilets, refugee
camps, and other locations used by many people, expanding
the impact per product compared to the initial focus on home
installations.
Our sanitation initiatives outside SATO are also starting to
make an impact. Following years of collaboration with the Bill
& Melinda Gates Foundation and a four-year partnership with
the Georgia Institute of Technology, LIXIL has been named the
first commercial license partner of the Generation 2
Reinvented Toilet （G2RT） technologies. G2RT is designed to
operate independently of traditional infrastructure, such as
sewer systems and latrine pits to dispose of waste and provide
an accessible, sustainable sanitation solution.
As for LIXIL Public Partners （LPP）, we continue to work
with local governments in the U.S. to understand how we can
bring novel technologies into communities where current
solutions don't work and pair that with our core products,
such as water-efficient fixtures and fittings. It is critical that the
public and private sectors work together to tackle the global
sanitation challenge, so we are delighted that our CEO has
joined the Global Leadership Council of the UN's Sanitation
and Water for All program, which is working with governments
around the world to secure broader political commitment into
water and sanitation.
Next year marks the target year for LIXIL’s ambitious goal
of improving the lives of 100 million people through safe
sanitation and hygiene. I am pleased to report that LIXIL’s
sanitation initiatives have positively impacted approximately 68
Innovative New Products and Services
Global Sanitation & Hygiene
Impact Achieved by Our Employees
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CPO Message
million people in 45 countries as of March 31, 2024. We
remain committed to achieving our goal and are confident we
can make it happen.
To expand the positive impact LIXIL can make on global
environmental issues, in FYE2023, we announced mid-term
targets towards achieving the LIXIL Environmental Vision
2050. This March, LIXIL became the first Japanese company
in the Building Products Sector to receive Net-Zero Standard
approval from the Science Based Targets initiative (SBTi),
based on our long-term target to reach net-zero carbon
emissions by 2050. LIXIL's near- and long-term targets have
now been approved by the SBTi, meeting the quantitative and
qualitative criteria. We have already made tangible progress
against these targets, as outlined in the Strategy section of this
report. （p.50 – p.56）.
To highlight a couple of examples of our progress in
product innovations in environmental sustainability, we
launched the Green Window initiative in Japan in November
2023. The concept of Green Window is to recommend the
most suitable and sustainable window option to our
customers, factoring in the diverse climates across different
regions of Japan, to reduce CO2 emissions optimally over the
entire window lifecycle while catering to customer needs and
comfort. We are also launching the water-recirculating shower
GROHE Everstream, which we announced last year, to select
partners in Europe this summer. This innovative technology
hygienically treats, reheats, and reuses water to create the
shower experience that people expect while consuming only a
quarter of the water and a third of the energy typically
required by conventional showers.
We have made significant progress in implementing our D&I
strategy. As managers shape the culture of the organization
and play a central role in driving greater inclusion, it is
imperative that they live and own D&I. Therefore, we shifted
the accountability of driving D&I at LIXIL from HR to each
business from FYE2024. Over the year, 125 workshops were
held globally to enhance understanding of how to use the D&I
guidebook. These manager-led sessions were attended and
well received by approximately 6,000 managers. In Japan, we
also rolled out a long-term, self-paced development program
designed to help managers become coaches and people
developers by developing essential skills to become more
inclusive and lead their teams to success.
Our D&I initiatives are clearly making a difference. I am
pleased to report that in the People Organizational Development
review held in FYE2024, we have identified 187 employees as
high-potential successors for key roles across the company,
with females constituting 57 （30.5%） of this group. These
strategic and forward-thinking actions have resulted in
outcomes such as the development of a talent pool for key
positions, an increase in the number of successors, and a rise in
the promotion rate of women across the company.
LIXIL’s drive to foster an inclusive and equitable workplace has
been noticed globally. We were incredibly proud to be
recognized by Forbes as one of the World’s Top Companies for
Women in 2023, ranking 46th of the top 400 companies
worldwide, first amongst the companies headquartered in
Japan, and second within the Engineering / Manufacturing
Industries globally. In Japan, we were selected as one of the
Nadeshiko Brands for our excellence in advocating women’s
empowerment in the workplace for the 8th time and ranked in
the TOP 10 Companies in Japan in Equileap’s Gender Equality
Global Report and Ranking 2024. We were also recognized for
the second consecutive year as a constituent of Group 1 （the
highest Gender Equality Scores group） of the Morningstar®
Japan ex-REIT Gender Diversity Tilt IndexSM and as a White
500 （large enterprises category） company under the Ministry
of Economy, Trade and Industry’s Certified Health &
Productivity Management Outstanding Organizations
Recognition Program.
In other recognition, LIXIL was included in CDP’s Climate
Change A List this year for the first time. We also received the
highest MSCI ESG rating of AAA for the second consecutive
year for effectively managing the most significant ESG risks
and opportunities in the Building Products industry. Furthermore,
LIXIL was included in the Dow Jones Sustainability World Index
（DJSI World） for the fifth consecutive year, the DJSI Asia
Pacific for the seventh consecutive year, and the S&P/JPX
Carbon Efficient Index, for the sixth consecutive year.
Adopting people-centric policies, fostering inclusion, and
implementing our Impact Strategy have transformed LIXIL into
an organization seen as progressive and forward-thinking. We
are committed to continuing this path of becoming an
inclusive and agile organization so that we are well positioned
to deliver results in our business activities while making a
sustainable and lasting impact.
Water Conservation &
Environmental Sustainability
Diversity & Inclusion （D&I）
Recognized as a Progressive Organization
(From the left)
Executive Officer, Executive Vice President,
Marketing and Digital, and Chief Digital Officer
Number of shares of the Company owned 33,174
Number of phantom stocks held 27,471
Yugo Kanazawa
Executive Officer, Executive Vice President,
Legal, Compliance, and Corporate Audit, and
Chief Legal and Compliance Officer
Number of shares of the Company owned 6,527
Number of phantom stocks held 7,978
Shoko Kimijima
Executive Officer, Executive Vice President,
LIXIL WaterTechnology (LWT) Japan
Number of shares of the Company owned 30,580
Number of phantom stocks held 20,903
Hiroyuki Oonishi
Executive Officer, Executive Vice President,
Finance, Treasury,M&A, IR, and CFO
Number of shares of the Company owned 3,920
Number of phantom stocks held 3,620
Mariko Fujita
Director, Representative Executive Officer,
President, and CEO
Number of shares of the Company owned 625,627
Number of phantom stocks held 226,017
Kinya Seto
Executive Officer, Executive Vice President,
LIXIL International
Number of shares of the Company owned 0
Number of phantom stocks held 201,208
Bijoy Mohan
Director, Representative Executive Officer,
Executive Vice President, Human Resources,
Communications, External Affairs,
and Impact Strategy, and Chief People Officer
Number of shares of the Company owned
99,985
Number of phantom stocks held
57,813
Jin Song Montesano
Executive Officer, Executive Vice President,
LIXIL HousingTechnology (LHT)
Number of shares of the Company owned
27,306
Number of phantom stocks held
21,897
Satoshi Yoshida
* The number of Company shares and the number of Phantom Stocks held are as of June 1, 2024.
EXECUTIVE OFFICERS (As of June 19, 2024)*
01
24
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
02
26
27
28
29
30
31
36
43
46
47
49
50
57
59
61
MEGATRENDS AND THE CURRENT ENVIRONMENT
PRINCIPAL RISKS AND COUNTERMEASURES
LIXIL’S IMPACT
MEDIUM-TERM TARGETS
MANAGEMENT DIRECTION
PLAYBOOK LOOK BACK
OUR FOUNDATION
LIXIL’S CORE BUSINESSES
IMPACT STRATEGY
LIXIL’S MATERIAL ISSUES
GLOBAL SANITATION & HYGIENE
WATER CONSERVATION & ENVIRONMENTAL SUSTAINABILITY
DIVERSITY & INCLUSION
HUMAN RIGHTS
RESPONSIBLE SUPPLY CHAIN MANAGEMENT
STRATEGY
CONTENTS 02
25
03
GOVERNANCE
04
DATA
01
OVERVIEW
02
STRATEGY
LIXILの
価値創造プロセス
01
02
04
03
0
1.
L
IX
IL
の
P
ur
p
o
s
e（
存
在
意
義
）
0
2.
源
泉
と
な
る
資
本
0
3.
価
値
創
造
へ
の
取
り
組
み
0
4.
生
み
出
す
価
値
Make better homes a
reality for everyone,
everywhere
Make better homes a
reality for everyone,
everywhere
LIXIL’s Purpose
The world is faced with numerous social issues, ranging from climate change to water and resource shortages. These issues transcend national boundaries and are increasing in complexity.
Furthermore, LIXIL’s business environment is changing, and our corporate activities are exposed to various actual and potential risks, including heightened geopolitical risk. We are working to
minimize the impact of these risks on our corporate activities, while accurately anticipating long-term megatrends, effectively identifying opportunities for future value creation, and implementing
strategies as set out in the LIXIL Playbook.
MEGATRENDS AND THE CURRENT ENVIRONMENT
Principal Risks and Countermeasures
Risks and Opportunities
・
・
・
・
・
・
・
・
・
・
・
・
・
・
・
Environment
(climate change, water, resources)
Disasters, accidents, and infectious diseases
Procurement of raw materials
New product development
Competition and product pricing
Information and cybersecurity
Acquisition and development of human resources and
promotion of diversity
Risks
Opportunities
Climate change
Water and resource shortages
Heightened geopolitical risk
Supply chain disruptions
Growing global middle class
Maturing Japanese market
Accelerating digitalization
The changing world of work
・
・
・
・
・
・
・
・
Megatrends
Medium-term Targets
P.29
P.27
26
03
GOVERNANCE
04
DATA
01
OVERVIEW
02
STRATEGY
LIXIL’S VALUE
CREATION PROCESS
Demonstrate design and technology leadership
Growing worldwide consumer demand for
water purification technology and innovative
water-saving products and services
Development of platform-based production
Restructure organization to enhance responsiveness
Increased demand for improved sanitation
and comfortable housing as disposable
income increases
Growth opportunities in the renovation business in Japan
Create business opportunities for transformation
Develop into an innovative organization that attracts
a diverse range of highly motivated people
0
1.
L
IX
IL
’S
P
ur
po
se
02
. T
he
R
es
ou
rc
es
W
e
Re
ly
O
n
03
.
Th
e
W
ay
W
e
Cr
ea
te
V
al
ue
0
4.
T
he
V
al
ue
W
e
Cr
ea
te
Business risks
Risks relevant to
FYE2024
Risks
Countermeasures
Strategic risks
1
Changes
in the
economic
environment,
fluctuations
in exchange
rates and
interest rates
Impact of fluctuations in global demand and prices
Rising raw material prices,
logistics costs, and energy costs
Significant fluctuations in new housing starts
Fluctuations in foreign exchange rates,
rising market interest rates
Timely price optimization
Increase sales in mid- and high-end product markets, enhance renovation market strategy
Structure a stable supply system
Monitor foreign exchange rates
Efficient and stable financing
2
Geopolitics
Rapidly rising prices for raw materials, energy and
transportation costs, and procurement risks
Logistical supply disruptions and delays
Increased impact from global inflation and policy interest rates
Changes in national policies, laws and regulations
11
Disasters,
accidents,
and
infectious
diseases
Operational
risks
12
Information
and
cybersecurity
Risk Map and Comments
High
Impact
Low
Medium
High
Risks that have increased in materiality or
emerged since the previous fiscal year
Risks with the same degree of materiality as in the previous fiscal year
Risks that have decreased in materiality since the previous fiscal year
Strategic risks
Operational risks
Medium
Low
Possibility of occurrence
11
1
15
13
6
3
7
4
5
12
14
2
Please visit our website for more information on LIXIL’s strategic and operational risks and countermeasures.
https://www.lixil.com/en/investor/strategy/risks.html
Business risks
Risks relevant to FYE2024
Strategic risks
（1）
（2）
（3）
（4）
（5）
（6）
（7）
（8）
（9）
（10）
（11）
（12）
（13）
（14）
（15）
Changes in the economic environment, fluctuations in exchange rates and interest rates
Geopolitics
Development of new products
Procurement of raw materials
Environment (climate change, water, resources)
Business restructuring
Competition with competitors and product prices
Acquisition and development of human resources and promotion of diversity
Sales channels
Brands
Disasters, accidents, and infectious diseases
Operational risks
Information and cybersecurity
Intellectual property
Likelihood of deferred tax asset recovery
Regulatory environment and requirements
10
8
9
Suspension of production activities in Japan and/or international markets
Suspension of production and sales among business partners
Workforce contraction due to deteriorating employee health
Formulate and regularly review business continuity plans
Establish a crisis management task force in case of emergency
Collaborate with external experts to respond to emergency situations
Business disruptions due to
communication network failures
Loss of social trust and significant costs
due to personal information leaks
Establish an Information Security Committee to develop
internal rules and regulations and implement countermeasures
Strengthen ransomware countermeasures such as regular
backups and employee education
Continuously monitor for unauthorized access by a specialized team and establish
a rapid initial response and business recovery system in case of emergency
Appoint a Data Protection Officer in accordance with the EU General Data Protection Regulation (GDPR)
and establish a process for handling personal information
Strengthen the supply system within the region
Measures to prevent supply chain disruption
Utilize and strengthen procurement functions through emergency response
relocation and action plan creation for contingency situations
Understand political and economic conditions and
monitor legal and regulatory changes
LIXIL identifies risks that may impact business activities, performs a company-wide risk assessment once a year, and selects material risks for the group based on assessment results. Material
risks and assessment results are reported by the Risk Management Department at headquarters to the Risk Management Committee for resolution, and the committee determines the priority of
risks to be addressed and performs monitoring. Risks are categorized into strategic risks and operational risks. Strategic risks encompass a wide range of perspectives, including medium- to
long-term perspectives such as management policies, business strategies, and Impact Strategy, as well as the perspectives of stakeholders, while for operational risks, risk owners are responsible
for promoting measures. Throughout these activities, the group is increasing its transparency of risk management by disclosing its material risks and measures.
PRINCIPAL RISKS AND COUNTERMEASURES
27
03
GOVERNANCE
04
DATA
01
OVERVIEW
02
STRATEGY
Innovate
Grow
Transform
Focus
Strategic Initiatives
LIXIL PLAYBOOK
Global Sanitation
& Hygiene
Water
Conservation &
Environmental
Sustainability
Diversity
& Inclusion
Impact Strategy
Increased corporate value
Impact on LIXIL
Core earnings margin
7.5% 10.0%
Medium-term target:
Long-term target:
By FYE2030
50% 30%
Ratio of female
directors and
executive officers
Ratio of female
managers
worldwide
Gender
equality
in recruiting new
graduates
in Japan
P.57
Diversity & Inclusion
*1 Baseline year FYE2019 *2 By FYE2026 *3 By FYE2025 (All targets are for FYE2031, unless otherwise noted)
100
million people
By 2025 improve access to
sanitation for
Ratio of energy- and
water-saving faucets
and toilets sold
100%
(Japan)
Total water savings from
water-saving products
2billion m3 per year
*3
Use of recycled aluminum
100%
Ratio of high-performance
windows sold for new
detached houses
(Japan)
100%
*2
Resolution of
social issues
Impact on society
Net interest-bearing
debt-to-EBITDA ratio
3.5 times or less
Ratio of equity attributable to
owners of the parent to total assets
35% or more
ROIC10%
Scope 1 & 2
CO2 emissions
-50.4%
*1
Scope 3
CO2 emissions
*1
-30%
Committed to achieving our purpose, generating sustainable growth, and creating value, we
aim to improve corporate value by pursuing business activities and growth and by
contributing to the resolution of social and environmental issues.
P.31
P.46
P.30
LIXIL’S IMPACT
28
03
GOVERNANCE
04
DATA
01
OVERVIEW
02
STRATEGY
(Years ending March 31)
Medium-term target
Long-term target
2025 (Forecast)
Core earnings
margin:
1.7%
ROIC:
1.5%
Core earnings
margin:
1.6%
ROIC:
0.9%
Core earnings margin:
10%
Core earnings margin:
7.5%
Net interest-bearing
debt-to-EBITDA ratio:
3.5 times or less
Ratio of equity
attributable to owners of
the parent to total assets: 35% or more
Core earnings
margin:
2.2%
ROIC:
1.4%
Long-term target
ROIC:
10%
Long-term target
Medium-term target
2023
2024
LIXIL has formulated the LIXIL Playbook as a roadmap (management direction) for achieving medium-
to long-term targets. LIXIL is steadily implementing the strategies in the Playbook to enhance its
competitive advantages and to transform into a highly profitable company.
These initiatives require us to respond flexibly to changes in the rapidly evolving business environ-
ment of recent years by allocating resources appropriately and at the right time.
LIXIL therefore announces the execution of strategies in accordance with the LIXIL Playbook as a
forecast for every fiscal year, and conducts reviews to measure progress and confirm validity.
MEDIUM- TO LONG-TERM TARGETS
29
03
GOVERNANCE
04
DATA
01
OVERVIEW
02
STRATEGY
Any successful team requires a shared vision, achievable goals and a clear strategy. The LIXIL Playbook ensures that everyone in the company knows what we want to achieve and how to get there.
It provides the roadmap for how we will achieve sustainable growth and value creation, and our corporate purpose of making better homes a reality for everyone, everywhere.
The Playbook is an evolving document. As our operating environment
continues to rapidly change, we updated our LIXIL Playbook in
FYE2023 to ensure we stay on course to becoming a sustainable
company. Today, we are focused on five key strategic initiatives,
including “Embed Robust Environment Strategy” and “Tackle
Inflation and Supply Chain Challenges,” which were newly added.
Our Impact Strategy, which forms part of the foundation supporting
all five strategic initiatives of the Playbook, clarifies LIXIL’s programs
to help address some of the most pressing global issues where we
can drive positive change. Integrating our Impact Strategy into our
business strategy enables us to focus our efforts on securing growth
and enhancing corporate value. The strategy, based on three core
pillars, represents not just our commitments as a global corporation
but is fundamental to how we will improve profitability, enhance
brand equity, and create long-term value.
In addition to the Impact Strategy, the foundation of the LIXIL
Playbook also covers other fundamental aspects of business
including our Global People Strategy, as well as digital transformation,
intellectual property strategy, focus on design, governance, risk
control and compliance as important constituents of ESG.
Updating the LIXIL Playbook
The Foundation of the LIXIL Playbook
Grow
Innovate
Transform
Tackle Inflation
and Supply Chain
Challenges
LIXIL’s
Corporate
Purpose
Our
Foundation
Make better homes a reality for everyone, everywhere
Empower our people to deliver on strategy and create value
Strategic
Initiatives
Focus
Divest Non-core
Businesses
and Simplify
Organization
Impact Strategy
Global Sanitation & Hygiene
Water Conservation &
Environmental Sustainability
Diversity & Inclusion
Optimize Japan and
Drive New Growth
Grow Global
Water Business
Embed Robust
Environment
Strategy
Develop
New Core
MANAGEMENT DIRECTION
30
03
GOVERNANCE
04
DATA
01
OVERVIEW
02
STRATEGY
Progress on the Key Initiatives of the LIXIL Playbook
Succeeding in a fast-changing world requires more than just
the ability to act nimbly. It also requires a steady and
consistent strategic approach. In LIXIL’s case, that strategy is
encapsulated in the LIXIL Playbook, introduced in FYE2021
and updated in FYE2023 based on the changing business
environment. The Playbook sets out the steps needed to
achieve our medium- to long-term goals and, ultimately, fulfill
LIXIL's corporate purpose. It also serves as a critical tool to
ensure corporate alignment as we move forward.
The Playbook is built around four stages of strategic direction:
Focus, Transform, Grow and Innovate.
We saw that the first critical step was to divest non-core
businesses that distracted us from our most promising areas
for growth, and to simplify the corporate structure. These have
been largely completed, allowing us to move on to the next
important areas.
A new area of emphasis is addressing inflation and supply
chain. We are optimizing procurement and production to
different regions, such as supplying products to the United
States from Mexico instead of China due to duties, higher
freight costs, and longer lead-times. The global transportation
network is continuously being optimized to reduce costs and
improve agility to mitigate disruptions such as the Red Sea
crisis.
We achieved cost reductions through changes in the
materials we use and by significantly reducing inventories in
FYE2024 that were built up as a protection against supply
shortages. We continue to optimize supply capabilities to
respond to varying and changing demands in different
regions.
We have also refined our business strategies for both Japan
and global water business to focus on new areas of
growth. With the support of government subsidies, sales of
insulating products to conserve energy have shown solid
growth, becoming an important driver of Japan revenue. In
the Japanese bathroom sector, the ratio of renovations now
exceeds 50% of all spending as we cater to the growing
number of Japanese households seeking to renovate their
homes.
We have also enhanced the differentiation within our
products to make them stand out and help create the proper
level of pricing pressure against other commoditized products
in the market.
With two years of high interest rates and inflation in
Europe and America, housing demand has been sluggish,
reducing demand for new home fixtures.
This has affected both sales and profitability, while
subdued economic growth and a real estate downturn in
China have affected profits.
In response, we have accelerated planned changes in the
work of LIXIL International after a thorough review and are
now targeting an upturn for this fiscal year and beyond.
By weaving our environmental strategy into our core
operations and placing a heightened focus on innovation, we
aim to establish new game-changing technologies, products,
and business models.
The lineup of environmentally friendly products and
solutions is expanding on schedule and is making a positive
difference in both our profitability and our social and
environmental impact.
New product development continues to show the
innovations unique to LIXIL. The Everstream shower cleans
and reuses hot water while showering. The Droplet water
monitor helps to lower water consumption, while the next
generation Reinvented Toilet will process waste at the source.
Grow:
● Optimize the business in Japan and drive new growth
● Grow Global Water Business
Transform:
● Tackle inflation and supply chain challenges
Focus:
● Divest Non-core Businesses and Simplify Organization
Innovate:
● Embed Robust Environment Strategy
● Develop New Core
LIXIL PLAYBOOK LOOK BACK
Grow
Innovate
Transform
Tackle Inflation
and Supply Chain
Challenges
Strategic
Initiatives
Focus
Divest Non-core
Businesses
and Simplify
Organization
Optimize Japan and
Drive New Growth
Grow Global
Water Business
Embed Robust
Environment
Strategy
Develop
New Core
31
03
GOVERNANCE
04
DATA
01
OVERVIEW
02
STRATEGY
LIXIL International strengthens its shift to Fittings and Faucets
Taking clear actions to set the international business on a path to recovery
This past year saw continued volatility in key international markets, with cost-push inflation and a rise in interest
rates leading to a sharp downturn in the housing construction and home-improvement markets in the United States
and Europe. These external headwinds had a severe impact on LIXIL’s global water business, prompting the company
to take action in its strategic plan to make the segment a key part of long-term growth.
As a part of these new measures, planned changes to the business
structure have been accelerated. These include closure of
loss-producing business lines, optimization of personnel allocation
and reconstruction of the supply chain. A key element is to
transform the fixed-cost base to make it more agile to manage future
demand volatility with the right level of resources. The measures
under this expedited timeline have meant related costs of ¥12 billion
in the fiscal year ending March 2024, but will accelerate an
expected ¥6 billion in savings to be gained in FYE2025.
An important part of this is on the production side. As One
LIXIL, we have enhanced our in-house production capabilities
and elevated quality by broadly applying the LIXIL Monozukuri
Way. This initiative has unified previously distinct
manufacturing groups by product categories, creating a more
cohesive production process. Concurrently, under our
asset-light model, we are strategically increasing our reliance
on global supplier partners to expand our fittings supply. This
dual approach allows us to maintain control over key
manufacturing processes while optimizing our resource
allocation and capital investment.
These moves are part of the broader long-term plan for LIXIL
International (LI) that operates our global water business.This
supports the Playbook and outlines LI's asset and investment
direction. This Long-Term Plan framework sees a stronger focus on
more profitable categories, such as faucets in the US market, and
drive innovation and technology leveraging the global GROHE brand.
Additionally, LI aims to secure further growth in its core
categories within Europe and growth markets like the Middle East.
The company is placing a renewed focus on its core markets,
especially the developed economies in Europe including Germany,
France, and the Netherlands, as well as the huge potential of the
U.S. market. These traditionally strong markets offer the best
opportunities for a turnaround in LI’s profitability.
Each of these markets is different and LIXIL’s global reach gives the
company a unique understanding of the best strategies to pursue in
each case.
In Europe, professional designers and installers are often key
influencers in the purchase decision for water-related products. The
company has been strengthening its relationship with this important
stakeholder group through commercial loyalty as well as training
programs to help develop clear advocacy for GROHE products
amongst this audience.
LIXIL PLAYBOOK: GROW PHASE
Grow
Innovate
Transform
Tackle Inflation
and Supply Chain
Challenges
Strategic
Initiatives
Focus
Divest Non-core
Businesses
and Simplify
Organization
Optimize Japan and
Drive New Growth
Grow Global
Water Business
Embed Robust
Environment
Strategy
Develop
New Core
448.4
496.9
476.4
43.4
378.1
31.2
390.3
32.1
22.3
1.8
FYE2020
FYE2021
FYE2022
FYE2023
FYE2024
（￥billion）
■Revenue
■Core Earnings
Performance of International Water Technology Business
Advancement of structural reforms and
growth strategies
Focusing on measurements aligned with
market characteristics and needs
01
32
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
TAKING CLEAR ACTIONS TO SET THE INTERNATIONAL BUSINESS ON A PATH TO RECOVERY
As part of this relationship-building, this stakeholder group has
been involved in the development of new product design to
overcome potential installation issues and speed up the installation
process. As just one example, installers in Europe and elsewhere are
currently facing labor shortages, especially for trained technicians.
To help alleviate this problem, LIXIL’s GROHE brand has
recently launched a new, pre-installed behind the wall shower frame
which can be installed quicker, but also with a lower skill level, while
still guaranteeing proper functioning and durability.
By delivering a shower frame part to the customer site in a
pre-assembled state, the required installation time is reduced by up
to three hours, a valuable saving for an installation business lacking
personnel.
For the critically important U.S. market, a different
approach is required. In addition to the outreach to
professional installers, a strong retail strategy is necessary to
help tap into the consumer home development market. Brand
recognition is of course vital, and under the “One LIXIL”
program we can offer the differentiated but complementary
brands of GROHE and American Standard, a powerful lineup
that cannot be matched by the competition.
American Standard is traditionally strong in sanitary
ceramics, such as toilets. In the fittings sector, offering new
and bold colors are increasingly important to meet consumer
tastes.
Meanwhile, faucet sales have historically been lower in
the US market, representing just under 20% of total revenue,
as opposed to more than 70% in the European market. This
represents a solid, long-term opportunity to leverage LIXIL's
brand portfolio to make further inroads into this high-margin
business area. It is also a prime example of how the European
style of GROHE can be brought in to attract a new set of North
American customers.
While ensuring a strong base of core markets, opportunities in
emerging markets are also being nurtured. For the
fast-growing economies of Asia Pacific, our uniqueness lies in
our multi-brand, multi-category strength. We provide all our
leading global brands, GROHE, INAX and American Standard.
For the Middle East, we are looking at an expansion of
production capacity and the development of showrooms.
The target is to turn the global water business from a core
earnings contribution of ¥1.8 billion in FYE2024 to ¥18.5
billion in FYE2025 on the way to a full recovery. “We will
proceed to establish an organization that quickly collects the
needs of the end-consumer and delivers products that meet
demand promptly," said Bijoy Mohan, Leader, LI.
GROHE has launched a pre-installed behind the wall shower frame
(image: GROHE Everstream)
LIXIL is expanding sales of fittings and faucets in the U.S.
Grow
Innovate
Transform
Tackle Inflation
and Supply Chain
Challenges
Strategic
Initiatives
Focus
Divest Non-core
Businesses
and Simplify
Organization
Optimize Japan and
Drive New Growth
Grow Global
Water Business
Embed Robust
Environment
Strategy
Develop
New Core
Intensifying business expansion in Asia-Pacific and
Middle East emerging markets
01
33
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
Long before the urgency of climate change became a daily
concern, LIXIL was pioneering the production of structural
aluminum. This is a vital component of modern construction,
but its production consumes a large amount of electricity and
therefore carries a heavy environmental cost.
The solution to this dilemma is PremiAL. With over 25
years of innovation in recycling technology and a strong
network of partners, we've excelled in the lifecycle
management of aluminum. Introduced just two years ago in
2022, it was initially able to employ 70% recycled aluminum,
producing a high-quality product that attracted considerable
attention from a range of industries, driven by the urgent need
to reduce CO2 emissions across the entire supply chain.
In 2023, we introduced PremiAL R100 that is 100%
recycled, a notable achievement in any use of recycled
products. The result is a significant reduction in CO2
emissions and the strong support for its use by a wide range
of companies, including one of Japan’s biggest construction
companies and a major convenience store group. Automakers
and industrial parts manufacturers have also expressed a
strong interest in PremiAL in order to help in their own
programs for decarbonization.
To meet this increasing demand, production sites have
been expanded. Initially limited to the Oyabe factory in
Toyama Prefecture, PremiAL production has expanded to five
separate plants, including three in Japan and two more
located in Thailand and Vietnam.
To drive innovations that address rapidly changing societal
and environmental challenges, collaboration with specialized
partners is increasingly critical. Our dedication to
environmental sustainability is reflected in our innovative
'X-Water' project. Developed from INAX's extensive expertise
in ceramics, this incorporates advanced ceramic filters and
activated carbon technology directly into our faucets. By using
this sophisticated water purification system, we minimize our
ecological footprint by reducing the need for bottled water and
lowering plastic waste and CO2 emission of transportation.
Advancing circular economy with the expansion of
PremiAL low-carbon recycled aluminum material
“Mineral in water” from the faucet with Greentap
LIXIL PLAYBOOK: INNOVATE PHASE
Production process of PremiAL, a low-carbon aluminum extrusion
Grow
Innovate
Transform
Tackle Inflation
and Supply Chain
Challenges
Strategic
Initiatives
Focus
Divest Non-core
Businesses
and Simplify
Organization
Optimize Japan and
Drive New Growth
Grow Global
Water Business
Embed Robust
Environment
Strategy
Develop
New Core
Accelerating Growth through Innovation for a Sustainable Future
New innovative products that can improve the lives of people around the world are the lifeblood of LIXIL and the key
to our long-term prosperity. We have already brought to market a wide range of products that only LIXIL could create.
We aim to have a positive impact on society and the environment, while also achieving sustainable growth.
Laboratory of one the biggest Japanese construction companies using
PremiAL R70 for construction material (perspective drawing)
01
34
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
Building on our established expertise in water purification
technology, LIXIL has collaborated with the beverage giant
Suntory Group to further elevate the water experience through
Greentap.
LIXIL provides the high-performance water filter-equipped
plumbing fixtures, while Suntory has developed the mineral
bottles and cartridge units containing botanical mineral
extracts to deliver mineral water from the faucet.
Greentap offers clear benefits to all of the stakeholders.
For consumers, delicious and healthy pure water is available
at just ¥33 per litter. For LIXIL and Suntory, additional
cartridge sales represent an ongoing revenue stream. In order
to combat counterfeiting, all cartridge sales take place only
through LIXIL’s official online store. This approach is
augmented by the employment of IoT, in which the faucet
signals when it is low on mineral extract and automatically
generates an order for a new cartridge, with the timing set to
arrive before supplies run out.
Sales take place mainly through national electronics
stores, an increasingly popular venue for purchase of many
types of small home appliances.
Showers and baths account for a significant portion of
household water consumption, putting a strain on municipal
water supplies and leading to usage cutbacks in many urban
areas. Under our GROHE brand, we have developed the
Everstream shower system, which allows for guilt-free
showering.
Everstream can reduce the amount of water used by
75% and the energy to heat water by 66% compared to
conventional showers. This new approach to showering shows
that adapting to climate change can come without
compromising on comfort.
Everstream will be launched in Europe in 2024, with
subsequent rollouts in other markets now being planned.
These innovative products are just a few of the exciting new
developments taking place at LIXIL.
Others include the KINUAMI showering system, which
uses foaming soap to provide a simple and satisfying
showering experience for the elderly. It also helps improve
lifestyles in an aging society. Excess water usage in the home
is spotted through the Droplet water monitoring device,
helping to promote water conservation while also saving on
water bills.
Each product offers benefits to society and the
environment through better use of precious resources. For
consumers, ongoing consumption costs are lowered, and for
LIXIL, each represents a new revenue stream that offers
pricing power due to the high level of product differentiation.
We are confident that the expansion of these unique products
and lifestyle solutions will improve profitability in a sustainable
manner.
Grow
Innovate
Transform
Tackle Inflation
and Supply Chain
Challenges
Strategic
Initiatives
Focus
Divest Non-core
Businesses
and Simplify
Organization
Optimize Japan and
Drive New Growth
Grow Global
Water Business
Embed Robust
Environment
Strategy
Develop
New Core
GROHE Everstream shower
An exciting new era
ACCELERATING GROWTH THROUGH INNOVATION FOR A SUSTAINABLE FUTURE
Droplet, a smart home water monitor
Greentap
01
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02
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03
GOVERNANCE
04
DATA
GLOBAL PEOPLE STRATEGY
At LIXIL, we believe that our people are the ultimate driver of our value creation. Our Global People Strategy is our roadmap to empower our employees, transforming into a more
innovative, agile LIXIL, capable of delivering against our goals.
Since its establishment in 2021, the Global People
Organization (GPO) Strategy has been instrumental in driving
transformation at LIXIL. This strategy is designed to empower
our employees to effectively execute the strategies outlined in
our LIXIL Playbook. Our mission is to transform LIXIL into an
innovative and inclusive community that empowers everyone,
everywhere. To achieve this, we have identified five strategic
pillars that guide our efforts.
We implement holistic, strategic, and leader-led efforts across
LIXIL. Our belief is that inclusion is the goal and that diversity
will be the result that follows. Everyone from senior executives
to managers and employees must understand why Diversity &
Inclusion (D&I) matters to LIXIL’s future competitiveness and
recognize the close relationship between an active D&I culture
and an innovation culture.
We will more effectively enable LIXIL’s transformation and
establish the innovation culture we need to build for our
future. Our efforts to build foundational infrastructure for our
talent programs will enable us to leverage our global scale
through the harmonization of human resource systems and
processes.
We put people at the heart of our work to enhance the
employee experience. This process starts with our effective
employee listening program, LIXIL Voice. Direct access to
timely data, analytics, and reporting will empower people
managers to leverage insights to support the Career Journey of
their teams and to proactively discuss their development.
We are building a stronger model and framework for people
data and governance at LIXIL. Key to this is establishing global
systems and processes that will enable consistent and
transparent reporting and decision-making.
We redefine the evolving role of HR at LIXIL as the Company’s
needs evolve, and prioritize specific HR competencies that will
deliver a world-class employee experience.
Among all these 5 pillars, Embed inclusion into our DNA,
Elevate talent across the enterprise, and Enhance employee
experience are specifically designed to strengthen our human
capital and ensure the continued success of our organization.
OUR FOUNDATION
II. Elevate talent across the enterprise
III. Enhance employee experience
I. Embed inclusion into our DNA
IV. Strengthen HR corporate governance
V. Transform HR to transform the business
01
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OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
LIXIL Playbook
Transform LIXIL into an innovative and inclusive
community that empowers everyone, everywhere.
Updated Annually to align with business dynamics
COMPANY
CONTEXT
GPO
MISSION
GPO
STRATEGIC
PILLARS
GPO
ANNUAL
PRIORITIES
OUR
PURPOSE
THREE
BEHAVIORS
Embed inclusion
into our DNA
Enhance
Employee
Experience
Elevate
talent across
the enterprise
Strengthen HR
corporate
governance
Transform HR to
transform the
business
MAKE BETTER HOMES A REALITY
FOR EVERYONE, EVERYWHERE
MAKE BETTER HOMES A REALITY
FOR EVERYONE, EVERYWHERE
OUR FOUNDATION
GLOBAL PEOPLE STRATEGY
We believe that inclusion is the goal and that diversity will be the result that follows. While we are committed to achieving gender equity at LIXIL by setting KPIs, we also take proactive measures
to implement targeted programs for managers to activate Diversity and Inclusion (D&I) in their teams.
To promote a culture of true inclusion at LIXIL, we have
embarked on a new phase of our D&I journey in FYE2024.
This phase involves shifting the accountability of fostering
inclusion from HR to the broader business and business
leaders. A key aspect of this transition is the introduction of
our own Leader's Guide to Advancing D&I, accompanied by a
series of targeted workshops led by business / function
leaders, for managers.
We have chosen to focus on managers because they play
a pivotal role in shaping the organizational culture. Only
inclusive managers can effectively cultivate an inclusive
culture within their teams. All 125 workshop sessions were
facilitated by managers themselves, utilizing real-life case
studies from LIXIL. Over the course of eight months, we
successfully trained around 6,000 managers, and the
feedback received was overwhelmingly positive.
This workshop was conducted as part of the 'GROW:
Great Managers at LIXIL' program, which was initially
launched in Japan in October 2023. Recognizing the critical
role that our managers play in fostering team culture and their
significant impact on employee engagement, this long-term
and self-paced program aims to transform managers into
coaches and people developers. The program provides a
comprehensive learning experience that focuses on seven
core practices, including 'Building an Inclusive Workplace
Environment.' It equips managers with essential skills to
promote inclusion and drive team success.
Enhance Human Capital: Embed inclusion into our DNA
Enabling managers to foster inclusion
Leader’s Guide to Advancing D&I
D&I Workshop
GROW: 7 Skills
37
01
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02
STRATEGY
03
GOVERNANCE
04
DATA
Enhance Human Capital: Elevate talent across the enterprise
To enable LIXIL's transformation and cultivate the innovation culture, we are committed to investing in our people by establishing a robust infrastructure for our talent programs and
fostering a learning culture.
In addition to creating an inclusive culture, what truly sets
sustainable companies apart is the presence of a strong pool
of talented individuals who are prepared to assume critical
leadership positions. It is vital to ensure that our top talent is
placed in roles where they can thrive, supported by the
necessary structures for success. Managers, as custodians of
their teams, play a crucial role in recognizing and nurturing
talent within their ranks.
At LIXIL, we have implemented a rigorous process called
People and Organization Development (POD), which involves
collaboration with executive officers and leaders from around
the world. This talent mapping initiative is of utmost
importance for the resilience of our organization. Our CEO,
CPO and other executive officers devote a significant amount
of time to delve deeply into talent reviews and engage in
robust discussions with leaders to align our people strategy
with the ever-evolving needs of our organization.
Through the POD process, we gain valuable insights into the
distribution of talent across all aspects of our business and
identify areas where talent gaps exist. This enables us to
discuss the succession pipeline, high-potential talent, and
female talent nominations. In FYE2024, 712 successors and
187 high-potential talents were identified in LIXIL globally.
Through this POD process, we are seeking to create an
inclusive working environment, and promote talent
development that considers diversity of all types including
gender, nationality, race, and career.
This enables us to ensure business continuity even in
times of emergency and to build a future-fit system for
strategically selecting successors. We devise and implement
training plans for each of the listed successors that are
designed to build their individual strengths and address
development areas by providing business assignments and
job transfer opportunities and by offering leadership training.
The insights gained through the POD process inform our
learning and development efforts, which are essential for
fostering organizational growth and cultivating innovation.
At LIXIL, we recognize that a culture of learning is integral to
building a stronger talent base and navigating change with
agility. We are committed to cultivating a workforce that is
eager to learn, evolve, and develop by providing them with the
flexibility and tools necessary for learning and development.
To support our learning culture, we offer a range of
innovative programs, such as our collaboration with the Tuck
School of Business at Dartmouth and our manager-focused
training program called GROW. Additionally, a growing
proportion of our employees have access to LinkedIn
Learning, which provides self-paced learning modules and
collaborative cohort-based sessions. These programs cover a
wide range of topics, from foundational skills to advanced
career accelerator programs. This targeted approach to
learning not only enhances our resilience but also strengthens
our competitive edge.
Building a learning culture
Integrated Approach to Leadership & Succession Planning
OUR FOUNDATION
GLOBAL PEOPLE STRATEGY
01
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
38
Enhance Human Capital: Enhance the employee experience
Employee experience starts with effective employee listening. Our hybrid and flexible work styles promote greater autonomy and inclusion for all, especially female employees in Japan.
In response to the seismic shifts in workplace dynamics
brought about by the COVID pandemic it is crucial that every
individual feels represented and valued within our community.
Employee expectations have evolved, necessitating companies
to adapt to new paradigms. At LIXIL, we have carefully
examined the needs of our workforce through employee
listening. In order to foster a more enriching employee
experience, we have revamped our people policies, especially
in Japan, which is our largest market in terms of sales and
employee presence, placing a strong emphasis on
engagement, well-being, and a sense of belonging.
After thorough consideration, we have embraced a hybrid
model as the optimal solution for our globally dispersed teams.
By offering greater flexibility, we are able to accommodate our
employees' diverse lifestyles and life stages, empowering them
to maintain their contributions while managing personal
responsibilities such as caregiving. Importantly, this shift is not
about compromising productivity or performance; rather, it is
about ensuring that our workforce remains engaged and
motivated to perform at their best.
Employee feedback indicates that we are moving in the
right direction. A survey conducted in Japan revealed that
80% of desk-based employees were coming to the office less
than once per week. Additionally, approximately 9 out of 10
female employees in their 30s and 40s, when childcare and
senior caregiving duties are most prevalent, expressed a
desire to continue working remotely. Furthermore, we have
observed a clear increase in the inclusion score for this
demographic through LIXIL Voice, our employee survey, with
the inclusion score for our female talent in their 30s in Japan
rising by 3 percentage points over the past two years.
By championing people-centric policies, we have
positioned LIXIL as a progressive and forward-thinking
workplace, setting us apart as a unique employer of choice.
While remote work offers undeniable benefits, we also
recognize the importance of in-person interaction for building
relationships and networks. To address this, we have
implemented targeted initiatives to facilitate physical
networking and connection-building opportunities, particularly
for new hires and recent graduates.
Removing barriers to work
OUR FOUNDATION
GLOBAL PEOPLE STRATEGY
01
39
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
(%)
58
54
50
FYE2022
FYE2023
Female in 30's
Female Avg.
Female lnclusion Score Trend in Japan
FYE2024
55
54
53
52
Key Beneficiaries
Consumers
Business Partners
Employees
IoT Products
IoT Business Models
Employee Engagement
Communications
Education
Improve
Productivity
Digital Services
Consumer Marketing
Consumer Insight
Transform
Existing
Businesses
Develop
New Businesses
Growth Drivers
Enterprise-level Organization
Regional & Business-level
Organization
IT Organization
Information Security
Committee
LIXIL-CSIRT
Cyber
security
Foundation
Enterprise-level
Infrastructure
IT Infrastructure
Go beyond the norms of a traditional manufacturer through digital means
that bring us closer to the consumer and empower our people
DX Mission
Consumer-centric and Agile Organization
Outcome
Through the effective use of advanced digital technology, we
can enhance the customer experience, streamline the
processes for sales and distribution, and realize greater
efficiency from dealer to customer.
With further customer convenience in mind, the LIXIL
Online Showroom has started offering customer service using
AI voice recognition for people who are hearing impaired or
whose native language is not Japanese. Also, the Easy Plan
Selection online service quickly creates a personalized project
plan and cost estimate along with 3D images. In our call
centers, we have introduced AI technology that automatically
recognizes and summarizes interactions with customers,
improving productivity. By developing automatic response
services, such as creating FAQs and chatbots, we plan to
further improve our services.
LIXIL is working to develop new businesses utilizing digital
technology.
The LIXIL Toilet Cloud, an IoT service that enhances the
efficiency of public toilet cleaning, continues to evolve and help
to reduce facility management costs.
In our housing division, we are offering an increasing number
of applications of technology in detached houses, such as
electric shutters, front doors, and self-cleaning bathtubs
connected to our Life Assist 2 smart home system. We also
added IoT services to our new Greentap mineral water purifier
system launched in April 2024.
At LIXIL, we are advocates for the democratization of digital
technology, and we are working to enable employees without
expertise to transform the way they work. We are accelerating
these activities by implementing the LIXIL Ai Portal, which
uses generative AI technology to improve the quality and
efficiency of operations. We also offer a no-code development
tool for developing unique business applications, as well as
DEJIRAKU, a digital educational program accessible to
anyone.
With a basic policy of providing a flexible working style that
includes working from home, we are strengthening
information security measures and protection of personal and
confidential information under the leadership of the
Information Security Committee headed by the Chief Digital
Officer. As cyberattacks targeting the Company continue to
increase, we are also implementing a Zero Trust model to
strengthen security.
LIXIL is improving the customer experience through digital
transformation. To that end, we believe it is crucial to
proactively incorporate digital technology into the way we
work to also enhance the employee experience.
Transforming existing businesses
Developing new businesses
Increased engagement and productivity
Cybersecurity initiatives
Digital Transformation （DX）
OUR FOUNDATION
01
40
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
Developers
March
2024
December
2023
September
2023
June
2023
March
2023
December
2022
September
2022
June
2022
March
2022
December
2021
September
2021
applications
applications
Developers
●
0
1000
3000
5000
7000
3000
2000
1000
0
Our new household water tap purifier system, Greentap,
which allows the user to enjoy cold water with added minerals
and was developed in collaboration with Suntory Beverage &
Food Limited, also makes use of digital technology.
This service frees you from having to buy bottled water,
storing the containers, and cooling in the refrigerator. By
linking the system with the
Greentap app, it detects the
remaining amount of minerals
available and allows the user to
order a replacement set
automatically. In this way, IoT can
be used to support a smart
lifestyle for our customers.
The LIXIL Toilet Cloud service is an innovative toilet
maintenance solution that uses IoT technology to help facility
managers with maintaining public toilets. AI technology
developed by LIXIL is used to monitor restroom usage and
design and direct the optimal cleaning work process in
real-time based on facility characteristics. This enables a
significant reduction in cleaning costs and also helps alleviate
labor shortages.
Since the initial launch, its features have been
significantly upgraded. Current systems can detect toilet clogs,
be centrally controlled via an app, and provide instructions to
refill liquid soap. In addition to enhancing cleaning efficiency,
it improves the employee experience of workers to help
prevent turnover. This innovative sanitary equipment with new
features is being introduced in an increasing number of
facilities, and by employing digital technology to transform
operations and
maintenance tasks, we
are helping create more
comfortable and clean
public toilet spaces
while reducing
maintenance costs.
At LIXIL, we are promoting the use of digital technology
including generative AI to enhance organizational agility.
Our work in this area includes an in-house team of engineers
developing generative AI tools to improve productivity. These
tools are embedded in everyday office applications to improve
the quality and efficiency of tasks, such as an autocomplete tool
in email software. Over 4,500 employees use these tools on an
everyday basis. We also offer a full range of educational content
and have created an environment where employees of all levels
of digital literacy can use AI with confidence. Our DEJIRAKU
digital education program, in particular, provides employees
with digital technology and knowledge. These are important in
improving productivity and business transformation through a
training menu
developed by the
Digital Department
with business
needs in mind.
At LIXIL, we have introduced no-code tools that enable
development of applications without the need for
programming languages. This provides an environment where
employees with no expertise can develop and operate their
own business tools as citizen developers. The democratization
of digital technology, where individuals review their own work
and promote digitalization through ingenuity and creativity, is
rapidly spreading.
For example, our aluminum profile inventory app, which
uses image recognition AI, can recognize images taken in the
aluminum profile storage area and count and tally the number
of profiles, thereby greatly improving productivity.
To promote the democratization of digital technology to
the frontline, all executives at LIXIL have taken the lead in
developing their own app and shared it with our employees.
This sparked a realization among employees that they could
contribute as well, leading to a shift in corporate culture.
Three years after its introduction, both the number of
developers and applications continues to increase, and as of
March 31, 2024, there were 7,854 developers and 2,778
applications in operation.
Solution for more efficient public toilet
maintenance
Fully utilizing generative AI in work
Using IoT for more comfortable living
Initiatives to Improve Customer Experience (CX)
Initiatives to Improve Employee Experience (EX)
Citizen developers fostering
a new corporate culture
OUR FOUNDATION
DIGITAL TRANSFORMATION (DX)
01
41
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
Number of developers and applications of No-Code Tool
CX
CX
EX
EX
Our past intellectual property strategy efforts have been highly praised, and we received
the Commissioner of the Japan Patent Office Award at the FY2024 Intellectual Property
Achievement Awards, as a company that actively utilizes the IP rights system.
External Evaluation of Intellectual Property Strategy
While LIXIL protects its unique, differentiated values by safeguarding its intellectual property
rights, it also works to achieve industry-wide standardization of advanced technologies that are
important for society.*1 These include areas such as antibacterial technology.
Intellectual Property and Standardization
*1 To build an environment that helps various businesses enter new markets through the openness of
technology and know-how by standardization. One of the measures to maximize Total Addressable Market
(TAM: the entire market size that a business may acquire). Reference: Ministry of Economy, Trade and Industry,
“Market Formation Guidance,” published in March 2022.
At LIXIL, we have implemented our intellectual property (IP) strategy to support the
execution of management strategies through the acquisition, utilization, and risk
management of IP rights, with the aim to maintain competitiveness realizing a long-term
business advantage and high profitability.
LIXIL's approach to intellectual property strategy
At LIXIL, we respect the intellectual property of others and have established mechanisms to avoid and
prevent significant business risks associated with third parties’ IP rights. We are also continually
investing in our technology, design, brand and other intellectual properties and protecting the
differentiated value that is the source of our competitive advantage. Through this we can ensure our
business success and high profitability over the long term.
One such product, PremiAL R100, has enabled us to achieve use of 100% recycled aluminum
backed by over 25 years of research. PremiAL is expected to contribute to market growth and significant
revenue in the future. Our company works to protect the differentiated value of our recycled aluminum
manufacturing technology by keeping its relevant intellectual property confidential as a trade secret.
Furthermore, KINUAMI is a groundbreaking product transforming the water from the showerhead into a
dense silk foam with the simple press of a switch. Our company
lawfully leveraged the intellectual property of another company to
expedite product commercialization.
Additionally, our IP strategies have been formulated to strengthen
our business strategy by analyzing the market and IP information.
Our company possesses intellectual property capabilities not only in Japan but also at key locations in
international markets. In line with the expansion of our business in international markets and to
implement IP strategies from a global perspective, we have established a global organization that
integrates international IP functions with the headquarters’ Intellectual Property Division. This will
strengthen the execution of our IP strategy in international markets where long-term growth is expected.
Initiatives to strategically protect and exploit intellectual property
Building a global framework to strengthen IP strategy
Please visit our website for more information on our intellectual property strategy.
https://www.lixil.com/jp/investor/strategy/ip_index.html
Grow
Innovate
Transform
Tackle
Inflation and
Supply Chain
Challenges
LIXIL’s
Corporate
Purpose
IP sector
mission
Make better homes a reality for everyone, everywhere
Support the acquisition, utilization, and risk management of intellectual
property rights to enhance the execution of management strategies, and
contribute to sustainable competitiveness
Strategic
Initiatives
Focus
Divest Non-core
Businesses
and Simplify
Organization
Optimize
Japan
and Drive
New Growth
Grow
Global
Water
Business
Embed
Robust
Environment
Strategy
Develop
New
Core
INTELLECTUAL PROPERTY STRATEGY
OUR FOUNDATION
01
42
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
LIXIL WATER TECHNOLOGY - JAPAN
Evolving the core technologies that we have developed over a
century of history, and developing monozukuri manufacturing to
offer a completely new experiential value
In 2024, LIXIL’s Japan water and tile business celebrated its 100th anniversary
since the establishment of Ina Seito Co., Ltd. This century of history is the
history of innovation, and LWT Japan Business remains committed to
delivering new value to our customers. We will maximize our collection of core
technologies and monozukuri (craftsmanship) manufacturing capabilities, and
continue to create innovations. We will keep on contributing to the
environment and society, while also achieving sustainable business growth.
Executive Officer, Executive Vice President, LIXIL Water
Technology (LWT) Japan
Hiroyuki Oonishi
•
•
•
•
•
Continue to strengthen core technologies and monozukuri
manufacturing capabilities, and expand our businesses globally
Create designs that extend a product’s life and recyclability
Promote the circular use of resources
Use digital technologies and AI in each operational process
Structure a stable supply system based on BCP
Key Strengths
•
•
•
•
•
Continued growth in the renovation market
Increasing need for environmentally friendly products, reflecting
growing awareness of ethical consumption
Evolving needs and lifestyle practices relating to bathing and water purification
Increasing demand for new products and services that are aligned with
an increasingly aging and urbanized society
Increasing demand for the shower toilet in international markets such as China and
Asian countries
Opportunities
•
•
•
•
•
Decrease in new housing starts in Japan
Further increases in human resources costs and logistics,
material, and energy prices
Deterioration of the component procurement environment
Supply chain disruptions due to changes in the global
situation
Shortage of logistics driver and skilled labor
Risks
Challanges
•
•
•
•
•
Combined global capabilities managed by core global team
Highly regarded and clearly differentiated house of brands
Comprehensive portfolio of products that are ideal for renovation
Extensive nationwide sales and distribution network in Japan
Strong cooperative structure with suppliers
Revenue of the Japan business of
LIXIL Water Technology (LWT),
which provides water-related
products, grew slightly year-on-year
to ¥420.5 billion. This was
impacted by a slump in the
number of new housing starts,
despite the effects of price
optimizations and an increase in sales of renovation-related products. Core
earnings fell 16.4% to ¥20.9 billion, and the core earnings margin was 5.0% (down
1.9 percentage points). This was attributable to a decrease in gross profit due to
stagnant demand in new housing starts, which outweighed the benefits of price
optimizations and a reduction in fixed costs.
We have been steadily progressing with strengthening our business foundation,
with ongoing measures to improve operational efficiency. We will strive to further
strengthen our business foundation, and move forward with structural reforms in
manufacturing and the supply chain. As for sales, we think the stagnant demand in
Japan for new housing will continue, and so we will shift our focus to housing
renovations. We are creating new value through innovations that add
environmentally conscious elements to our core technologies. These new
technologies, combined with the traditional core technologies. Once we have
developed these new technologies, together with the core technologies we have
developed throughout our history, we will accelerate the expansion of their use both
in Japan and worldwide. Working with LWT international businesses, we will move
forward with the development of key priority technologies, expand sales of the
shower toilet in the Asia region, promote the use of international suppliers, and
expand the export of tiles, among other initiatives.
Summary of results for FYE2024
Strategy and Countermeasures
LIXIL’S CORE BUSINESSES
4.8%
439.0
21.0
FYE2023
FYE2024
6.0%
5.0%
418.4
420.5
25.0
20.9
Revenue
(¥ billion)
Core earnings
(¥ billion)
Core earnings margin
(%)
FYE2025
（Forecast）
01
43
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
LIXIL WATER TECHNOLOGY - INTERNATIONAL
Executive Officer, Executive Vice President, LIXIL International
Bijoy Mohan
An unparalleled portfolio of brands, agile manufacturing capability,
and innovation continue to drive LIXIL’s global growth. With a clear
strategy in place, we are well-positioned to grow sustainably in
international markets.
In FYE2024, LIXIL's international
business saw a 4.1% year-on-year
revenue decline to ¥476.4 billion,
attributed to subdued demand amid
elevated interest rates and inflation.
All regions, including Americas,
EMEA, APAC, and Greater China,
experienced reduced revenue in
local currency terms. Core earnings dropped by ¥20.1 billion to ¥2.2 billion due to
decreased volumes, albeit partially mitigated by cost-saving efforts. FYE2024
witnessed the initiation of various profitability improvement measures, encompassing
operational enhancements, with plans for further implementation in FYE2025 to
bolster performance.
Our strategic focus revolves around robust measures aimed at expanding our market share while
fostering sustainable growth. We prioritize enriching our multi-brand portfolio by strategically
expanding into profitable product categories and bridging any existing gaps in every region we operate
in. Moreover, we strive to elevate our average sales price by continually innovating, delivering
high-value offerings, and ensuring product differentiation.
Recognizing the diverse needs of each region, we tailor our brand and channel strategies
accordingly, optimizing consumer engagement and satisfaction at every touchpoint. We aim to
captivate consumers early in their buying journey, enhancing their overall experience through seamless
interactions and personalized solutions.
By strengthening market segmentation, we ensure precise alignment with the unique needs and
desires of each segment, thereby maximizing customer satisfaction and loyalty. Moreover, we remain
committed to reducing our environmental footprint across products, services, and operations, fostering
a sustainable future for all. Leveraging LIXIL's cutting-edge technologies, we continually bolster global
innovation platforms to drive transformative growth and shape a brighter tomorrow.
Summary of results for FYE2024
Strategy and Countermeasures
Key Strengths
•
•
•
•
Addressing the challenge of operational flexibility including
stronger cost variabilization
Reduce time-to-market for innovative products
Strengthen change management practices
Successfully competing in the war for talent during a period
of low performance and short-term incentive
(performance-linked compensation) payouts
Challenges
•
•
•
•
•
Deteriorating housing markets in the core regions Europe,
the Americas and China
Increase in material and labor costs
Supply chain challenges
Commoditization of products
Skilled labor shortages
Risks
•
•
•
•
Increased demand for sustainable products due to heightened
environmental awareness, cost of energy, and water scarcity
Design, colors, and finishes to leverage the individualization and
personal home spa themes
Growing demand for solutions that improve health, hygiene, and
well-being and allow for ”aging in place”
Increasing need for easy-to-install sanitary products or inclusion of
installation services
Opportunities
•
•
•
•
•
•
Truly international market coverage with significant sales in
more than150 countries across the Americas, EMEA, APAC,
and Greater China
Highly regarded and clearly differentiated house of brands that
can fill product gaps in each region
Comprehensive product portfolio covering luxury to entry segments
A global supply chain and production footprint
Strong innovation pipeline with focus on enhancing consumer
experience and sustainability
Award-winning in-house design team
3.6%
519.0
18.5
Revenue
(¥ billion)
Core earnings
(¥ billion)
Core earnings margin
(%)
FYE2023
FYE2024
FYE2025
(Forecast)
4.5%
496.9
22.3
0.4%
476.4
1.8
01
44
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
LIXIL’S CORE BUSINESSES
LIXIL HOUSING TECHNOLOGY
Make better homes and reduce environmental impact through
innovation
We will continue with initiatives to realize decarbonization and the recycling
of resources, and offer products and solutions with a high environmental
value such as GREEN WINDOW, PremiAL, and revia. Backed by large-scale
government subsidies for window renovations, we have also been moving
forward with energy-saving housing renovation, as well as focusing on
making houses more low-carbon. For new detached houses, we have set a
target to achieve a 100% ratio in the sale of high-insulation windows. We
are striving to reduce our environmental impact while also achieving
business growth.
Executive Officer, Executive Vice President, LIXIL Housing
Technology (LHT) Japan
Satoshi Yoshida
Key Strengths
•
•
•
•
•
Growing demand for environmentally responsible products, reflecting
growing awareness of ethical consumption
Increasing interest in high-performance housing, driven by government
subsidy projects and more stringent energy-saving standards
Growing demand for new products and services suitable for Japan’s
aging population
Growing market for highly affluent consumers
Increasing need for differentiated products due to population growth
and rising income levels in Asian markets
Opportunities
•
•
•
•
Decrease in new housing construction in Japan
Further increases in human resources costs and logistics,
material, and energy prices
Deteriorating component procurement environment due to
the depreciation of the yen and geopolitical risks
Shortage of workers as skilled labor ages
Risks
•
•
•
•
Cultivate an even stronger “challenger” mindset to create new value
Strengthen our ability to shift from mass production to meeting a
diversity of needs
Flexibly shift resources toward growth areas
Establish new workstyles and promote digital transformation
Challenge
•
•
•
•
•
•
Leading market share in residential sash and door, and exterior product market sectors in Japan
Leadership in low-carbon, sustainable materials for housing and buildings
Products and technical capabilities to improve the insulation of doors and
windows and throughout the entire building of existing houses
Innovative product development made possible through advanced technologies
and global design capabilities
Simple organizational structure that facilitates the rapid development,
manufacture, and sale of products
Strong cooperative structure with suppliers
LIXIL Housing Technology (LHT), which
provides housing and building materials,
remained generally flat at ¥596.4 billion. While
LHT successfully captured growing demand for
renovation, its revenue was affected by the
downturn in new housing starts. Core earnings
significantly increased by 85.4% from the
previous fiscal year, reaching ¥35.9 billion,
reflecting the impact of price optimization
measures to mitigate rising costs. Additionally, sales of high-insulation windows, bolstered by government
subsidies, contributed considerably to the increase in profit. The core earnings margin stood at 6.0%,
representing a 2.8 percentage points increase from the previous year. The proportion of sales attributed to
domestic renovations climbed by 3.5 percentage points year-on-year, accounting for 38% of total sales.
Built on our technical and design capabilities developed and superior digital
devices, and with ongoing product development that requires a low investment
based on platform-based production, we will focus on both the housing market and
also outside of the housing sector in areas that are steadily growing. Also, we will
further cultivate the international markets, expand sales in the renovation market,
and accelerate business development-oriented initiatives that offer products with a
high environmental value such as PremiAL and GREEN WINDOW. To speedily
implement these initiatives, we will carry out a detailed evaluation of the strengths
and weaknesses of LHT in achieving growth, and be even more proactive in
collaborating with partner companies to develop products and services, as we
continue to transform and innovate our businesses. Furthermore, we will continue
to invest in new businesses such as revia, which we believe will be a future source
of our business, and remain dedicated to providing our customers with completely
new proposals.
Summary of results for FYE2024
Strategy and Countermeasures
LIXIL’S CORE BUSINESSES
623.0
38.0
6.1%
598.2
596.4
19.4
35.9
3.2%
6.0%
Revenue
(¥ billion)
Core earnings
(¥ billion)
Core earnings margin
(%)
FYE2023
FYE2024
FYE2025
(Forecast)
01
45
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
Commitment
Material
Issues
Three
Strategic
Pillars
Metrics and
Targets
LIXIL's Purpose is to make better homes a reality for everyone, everywhere.
We do this through actions and innovations designed to create positive impact in the world, today and tomorrow.
*1 Baseline year: FYE2019 *2 By FYE2026 *3 By FYE2025 (All targets are for FYE2031, unless otherwise noted)
We promote the responsible use of energy, water and natural resources.
From our operations and throughout our product lifecycle, we minimize our
ecological footprint and scale innovation to help our partners and consumers
protect the environment today and for generations to come.
We promote diversity and inclusion, starting with building an equitable
workplace. By leveraging the knowledge and perspectives of our diverse
employee base and together with stakeholders, we stimulate innovation and
collaboration that enables everyone to live more comfortably and healthily
and reach their full potential.
We innovate viable products, solutions, and business models to elevate
standards of living through improved sanitation and hygiene.
GLOBAL SANITATION & HYGIENE
Sanitation and Hygiene for All
WATER CONSERVATION &
ENVIRONMENTAL SUSTAINABILITY
Zero Carbon and Circular Living
DIVERSITY & INCLUSION
Inclusive for All
● Conservation of Biodiversity
● Talent & Development
● Product Safety
● Customer Satisfaction
● Employee Safety & Wellbeing
● Ethics & Integrity
● Human Rights
● Supply Chain Management
● Corporate Governance
● Risk Management
● Stakeholder Engagement
● Information Security
● Tax Transparency
● Responsible Marketing & Advertising
Priority
● Diversity & Inclusion
● Global Sanitation & Hygiene
● Climate Change Mitigation and Adaptation ● Water Sustainability ● Circular Economy
● Environmental Impact of Product Lifecycle ● Environmental Management
● Diversity & Inclusion
● Global Sanitation & Hygiene
● Climate Change Mitigation and Adaptation
■ Waste recycling rate 90%*2
■ Use of recycled aluminum 100%
● Circular Economy
Improve sanitation and hygiene
for 100 million people around
the world by 2025
■ Scope 1 & 2 CO2 emissions -50.4%*1
■ Scope 3 CO2 emissions -30%*1
■ Product ratio of energy- and water-saving
faucets and toilets in Japan 100%
■ Product ratio of high-performance windows
for new detached houses in Japan 100%*2
● Water Sustainability
■ Water use efficiency +20%*1
■ Total water savings from water-saving products
2 billion m3/year *3
By FYE2030
■ 50:50 for Board & Executive Officers
■ 30% female managers across LIXIL
■ Maintaining gender parity in newly
graduate recruitment (Japan)
LIXIL’s Impact Strategy outlines three core pillars: Global Sanitation & Hygiene, Water Conservation & Environmental Sustainability, and Diversity & Inclusion. These areas represent the most
pressing global issues where we can drive significant impact by leveraging our expertise. Reflecting on what we can do now and in the future, we decided to incorporate our Impact Strategy into
our broader business strategies, utilize our expertise and scale in water and housing products, and explore ways to cooperate with employees, partners, local communities, and other
stakeholders.
IMPACT STRATEGY
OUR FOUNDATION
01
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OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
Our Material Issues
Other Material Issues
●Conservation of Biodiversity
●Talent & Development
●Product Safety
●Customer Satisfaction
●Employee Safety & Wellbeing
●Ethics & Integrity
●Human Rights
●Supply Chain Management
●Corporate Governance
●Risk Management
●Stakeholder Engagement
●Information Security
●Tax Transparency
●Responsible Marketing & Advertising
*1 Refer to the updated 'Global Sanitation & Hygiene: LIXIL’s Impact Methodology (June 25, 2024)'
*2 Baseline year FYE2019 *3 Excluding products used for hot tub filling or full-body bathing that are not intended for use as energy- and water-saving faucets
*4 Excluding products designed for housing complexes *5 Aluminum alloy 6063 *6 As of March 31
*7 Directly hired employees only (Japan and overseas) However, this excludes sold subsidiaries and domestic subsidiaries with less than 100 employees
*8 Verified by an independent third party in June 2024 in the 'LIXIL ESG Databook 2024 (Preliminary Data Disclosure: Environmental and Social Performance Data)'
*9 New college and graduate school graduates who joined LIXIL Corporation on April 1, 2024
Key priorities
Target year
Metrics and targets (quantitative targets only)
FYE2024 results
Global Sanitation
& Hygiene
By 2025
Improve sanitation and hygiene for 100 million people
around the world by 2025
Approx. 68 million people*1
Climate Change
Mitigation and
Adaptation
By FYE2031
*10 By FYE2026
*11 By FYE2025
・ Scope 1 & 2 CO2 emissions: -50.4%*2
・ Scope 3 CO2 emissions: -30%*2
・Ratio of energy- and water-saving faucets*3 and toilets*4 sold (Japan): 100%
・Ratio of high-performance windows sold for new detached houses (Japan): 100%*10
・ -34.7%
・ -15.2% (FYE2023)
・Faucets: 94.1%
Toilets: 99.4%
・ 93%
Water
Sustainability
・ Water use efficiency: +20%*2
・ Total water savings from water-saving products: 2 billion m3 /year*11
・ +16.0% (FYE2023)
・ 1.5 billion m3 (FYE2023)
Circular
Economy
・ Improved waste recycling rates: 90%*10
・ Use of recycled aluminum: 100%*5
・ 88.1% (FYE2023)
・ 78%
Environmental Impact
of Product Lifecycle
Included in the above
—
Environmental Management
—
—
Diversity &
Inclusion
By FYE2030
・ 50:50 for Board & Executive Officers*6
・ 30% female managers across LIXIL*7
・ Maintaining gender parity in new graduate recruitment (Japan)
・ 31.3%
・ 17.1%*8
・ 44.8%*9
In August 2024, we plan to publish the full LIXIL ESG Databook including environmental and social performance data for
FYE2024 with another third-party assurance.
For more information, visit https://www.lixil.com/en/impact/data/performance.html
At LIXIL, we pursue our purpose to “make better homes a reality
for everyone, everywhere.” To that end, we have determined
material issues that we, our stakeholders, and society in general
consider to be of the highest importance for achieving our
company’s sustainable growth and improving corporate value for
driving progress on sustainable development. We are working to
resolve these issues through our business activities while
monitoring the progress against our goals.
LIXIL’s material issues are determined by selecting and
evaluating issues from both a risk and opportunity perspective,
taking into consideration LIXIL’s Purpose, Value Creation
Process (VCP), management direction, Impact Strategy,
stakeholder needs and expectations as well as current social
circumstances and challenges, via the assessment process
described on page 48. We regularly review these material issues
to accommodate any changes in LIXIL’s immediate business
environment and our society’s expectations at large.
Positioning of Our Material Issues and Our Approach
LIXIL has identified material issues that we and our stakeholders consider to be of the highest importance, and we are working to resolve these issues.
Global Sanitation & Hygiene
Water Conservation &
Environmental Sustainability
Diversity & Inclusion
Three Pillars of Our Impact Strategy
LIXIL’S MATERIAL ISSUES
OUR FOUNDATION
IMPACT STRATEGY
01
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OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
In FYE2021, we renewed our materiality assessment
conducted in FYE2016 and identified our material issues
based on the process to the right. LIXIL endeavors to conduct
the renewal of its materiality assessment approximately every
three years. To ensure a robust and regular evaluation of our
approaches to our Impact Strategy, LIXIL takes into account
the complementary nature of its enterprise risk management
and material issue review processes. We review our material
issues, particularly the associated impact, risks and
opportunities at least once a year and update them where and
when necessary.
LIXIL positions its most material issues as priority issues.
These include issues in which LIXIL can have a significant
impact on stakeholders and society at large by leveraging our
strengths and taking proactive measures. They also include
issues where we need to double our efforts based on
stakeholder needs. The risks and opportunities are assessed
in accordance with the evaluation criteria of ESG-rating
organizations.
Our most material issues are deeply related to the three
pillars of our Impact Strategy, and we will continue to advance
various initiatives with a focus on these ‘priority’ material
issues.
Material Issues Assessment
Material Issues Assessment Process
・Select potential issues by referencing the evaluation criteria from ESG-rating agencies (DJSI and MSCI), as
well as global standards such as SASB, GRI and UN SDGs, and insights from stakeholders.
・ Define and assess the impact of each potential issue according to established materiality evaluation criteria
Selection of
the issues
IDENTIFY
Discussion on
the issues
DISCUSS
・ Validate the selected issues by executive officers
・ Finalize and prioritize material issues incorporating feedback received from the executive officers
and considering their impact on society and LIXIL
・ Secure approval for the identified material issues from the Board of Executive Officers
Detailed evaluation of
the issues
REFINE
As part of our periodic materiality assessment renewal, we will consistently review and update our material
issues in accordance with the process outlined above.
・Assess the significance of each potential issue from a risk perspective within
the Impact Strategy Committee (formerly the Corporate Responsibility Committee)
・Execute interviews with leaders and subject matter experts from key business units and corporate functions
Our Europe business will be required to adhere to the
Corporate Sustainability Reporting Directive (CSRD) and
present the material data and information in line with the
European Sustainability Reporting Standards (ESRS). This
comprehensive set of disclosure requirements encompass a
variety of environmental, social, and governance issues that
our Europe business will annually report on from the fiscal
year ending (FYE) March 2026.
To align with these new reporting mandates, LIXIL
initiated a significant project at the beginning of last year to
prepare for the CSRD implementation. We are currently
finalizing the double materiality assessment and are taking the
essential next steps to meet the reporting requirements for our
Europe business in accordance with the CSRD guidelines.
Preparing for Mandatory ESG Reporting
OUR FOUNDATION
IMPACT STRATEGY
01
48
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
GLOBAL SANITATION & HYGIENE
OUR FOUNDATION
IMPACT STRATEGY
An estimated 3.5 billion people lack access to safely managed
sanitation services, including 419 million people practicing open
defecation. Roughly 2 billion people lack basic handwashing
facilities at home. The current rate of progress in solving this
issue would need to be quadrupled in order to meet the UN SDG
6 (i.e., clean water and sanitation for all) by 2030.*
LIXIL set the target of improving sanitation and hygiene for
100 million people around the world by 2025 through the
introduction of innovative and affordable toilet and handwashing
solutions. As of March 31, 2024, an estimated 8.6 million SATO
products have been distributed across 45 countries, improving
the sanitation and hygiene conditions of approximately 68 million
people. Our SATO brand, along with the LIXIL Public Partners
(LPP) and other collaborative initiatives, is one of the primary
drivers for achieving our ambitious goal. SATO products’
deployment that was initially targeted for household use, has
expanded to areas including schools, public toilets, and refugee
camps. SATO’s affordable solutions are complemented by
value-added products that help improve quality of life over time,
while creating market demand for products. The progress of
SATO business activities is reported to the Global Sanitation &
Hygiene Council, which oversees the strategies and initiatives to
address global sanitation and hygiene issues. The Council reports
to LIXIL’s Board of Executive Officers through the Impact Strategy
Committee.
LIXIL Public Partners is LIXIL’s first dedicated public sector
engagement platform, established to explore synergies and
expand collaboration with the public sector. Building on our
existing SATO initiatives, LPP works with governments, NGOs,
and academic institutions to deliver innovative products and
solutions in sanitation.
To maximize our impact, we work closely with influential
international and local organizations, specialized agencies, NGOs,
and business partners that have expertise in water and sanitation,
including UNICEF, USAID, and FINISH Mondial. Through these
partnerships, we are developing products that meet local needs,
establishing local production facilities and sales hubs, and
facilitating skills development, while creating demand through
sales promotion and awareness-raising activities.
LIXIL partners with Georgia Institute of Technology (Georgia Tech)
and the Bill & Melinda Gates Foundation to bring a
game-changing solution to communities that lack access to
sanitation infrastructure. The Generation 2 Reinvented Toilet
(G2RT) developed by Georgia Tech is an accessible, sustainable
sanitation solution that does not require connection to traditional
sanitation infrastructure such as public sewerage or septic tank
systems. In FYE2024, LIXIL has been granted the first
commercial license by Georgia Tech to bring the G2RT, into
affordable, durable, and practical products ready for real-world
use.
Promote and enable access to safe sanitation and hygiene for all by offering innovative viable products, solutions, and business models.
Our Strategy and Progress
Scaling-up Impact through Collective Partnership
LIXIL Public Partners (LPP)
Fostering Cross-sector Partnerships
* Progress on household drinking water, sanitation and hygiene, 2000-2020,
WHO/UNICEF Joint Monitoring Programme
https://data.unicef.org/resources/progress-on-household-drinking-water-
sanitation-and-hygiene-2000-2020/
The G2RT neutralizes waste within the appliance itself without the need to
be connected to a traditional sewage treatment infrastructure
Installing of SATO products.
01
49
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
LIXIL has designated Water Conservation and Environmental
Sustainability as one of the strategic pillars of the Impact
Strategy, and the following six have been included as its
material issues.
The LIXIL Environmental Vision 2050 declared a commitment
to Zero Carbon and Circular Living. By 2050, we set the target
to achieve net-zero carbon emissions and preserve water and
natural resources in operations, housing, and lifestyle
solutions for future generations to become a leading company
in environmental sustainability.
Among the material issues listed above, LIXIL established
Climate Change Mitigation and Adaptation, Water
Sustainability, and Circular Economy as focus areas in
realizing its vision. As a springboard for promoting these focus
areas, we have been striving to reduce our environmental
burden across the product lifecycle and to strengthen our
company-wide environmental management. We are also
advancing initiatives to conserve biodiversity, that serves as a
common foundation for the three focus areas.
To further accelerate our efforts to achieve the LIXIL
Environmental Vision 2050, we have included the embedding
of our robust environmental strategy into our business as a
key strategic management initiative. This goes beyond fulfilling
our corporate responsibilities by reducing the environmental
burden of our business and product in use, but also in
creating new value and maximizing LIXIL's impact. In line
with this approach, we have formulated comprehensive and
strategic approaches for the focus areas and defined three
phases - Our Operations, Our Value Chain, and Expanding
Our Impact - setting mid-term targets for each.
1. Our Operations:
Business processes that include activities at our production
sites, offices, and sales bases, and involve our employees and
residents in the surrounding areas.
2. Our Value Chain:
Our value chain refers to a series of processes including
activities related to products and services that we procure,
such as mining and processing of raw materials, as well as
activities related to products and services that we sell, such as
packaging for transportation, logistics, and end use of our
products. This involves interaction with external stakeholders,
such as our business partners and end users.
3. Expanding Our Impact:
This goes beyond the production and end-use phase of our
products in the value chain, and extends to providing
solutions that address the environmental challenges of the
world. It also means contributing to the future of the planet by
going beyond the framework of our business.
LIXIL has set mid-term targets by phase for each of the
three focus areas.
LIXIL Environmental Vision 2050
Three Phase Approach
LIXIL is driving efforts to conserve energy, water, and other natural resources across procurement, production, distribution processes, and in the end use, and disposal of its products and services.
• Climate Change Mitigation and Adaptation
• Water Sustainability
• Circular Economy
• Environmental Impact of Product Lifecycle
• Environmental Management
• Conservation of Biodiversity
WATER CONSERVATION & ENVIRONMENTAL SUSTAINABILITY
01
50
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
CLIMATE CHANGE MITIGATION AND ADAPTATION
Achieve Net-Zero GHG Emissions through Our Business Operations,
Products, and Services
WATER SUSTAINABILITY
Enhance the Environmental Value of Water Resources by Saving,
Circulating, and Purifying Water
CIRCULAR ECONOMY
Help Transition to a Circular Economy and Preserve Natural
Resources for Future Generations
OUR FOUNDATION
IMPACT STRATEGY
LIXIL Environmental Vision 2050 seeks to strengthen
company-wide management to reduce environmental risks and
expand environmental benefits we offer to society.
LIXIL has established a governance system in which the
Board of Directors oversees the entire sustainability process. We
have also established an Environmental Strategy Committee
(ESC), chaired by the Chief Environmental Impact Officer (CEIO)
who is appointed by the Board of Executive Officers. At regular
meetings held at least once a quarter, the ESC formulates and
implements environmental strategies, including determining rules
and policies relating to environmental governance, deliberating
and deciding measures to address risks and opportunities due to
climate change and other environmental issues, and managing
and monitoring company-wide environmental targets. The details
of the debate and any resolutions are reported to the Impact
Strategy Committee. Decisions on matters of significance or
special importance are elevated to the Board of Executive Officers
for discussion and approval, and then elevated to the Board of
Directors for discussion and oversight.
Furthermore, in addition to establishing the LIXIL
Environmental Sustainability Principles as a guideline for all
employees and senior managers, including directors and
executive officers, we are also working to strengthen our
environmental governance through internal environmental audits,
employee education, and internal evaluation systems.
Environmental Governance
* The Environmental Strategy Council from FYE2025.
Environmental
Medium-Term Targets
OUR FOUNDATION
IMPACT STRATEGY
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DATA
Scope 1 & 2
Baseline year
Nineteen percent of global energy-related CO2 emissions are from
direct emissions by the building and construction materials industries,
and another 18% are due to indirect emissions from the use of
buildings and homes in use.*1 LIXIL set long-term targets to reduce
CO2 emissions to net zero by 2050 by reducing the environmental
burden of our operations and providing environmentally sound
products and services. This long-term target became the first in the
Japanese building materials industry to receive SBT Net Zero approval
in March 2024.*2 We announced our Transition to a Low-Carbon
Society in April 2024, defining measures and actions by phase: Our
Operations, Our Value Chain, and in Expanding Our Impact.
Furthermore, LIXIL's commitment to reducing CO₂ emissions is
not limited to its business processes, products and services, but
extends across society. We provide solutions for users to take
measures against natural disasters or to prevent heat stroke, helping
them adapt to climate change.
By FYE2031, LIXIL set the target of reducing CO2 emissions from our
business sites (Scope 1 ＆ 2) by 50.4% (vs. FYE2019). Aside from
thorough energy-saving measures at our plants and offices, we are
working to improve energy efficiency and reduce energy consumption
by encouraging electrification, or to 100% renewable electricity, or from
petroleum-based fuels to natural gas, and converting to hydrogen fuel.
In addition, we have solar power generation facilities operating at six
factories in Japan and a total of 15 including overseas. These facilities
use on-site Power Purchase Agreements (PPAs) with additionality,
which encourages further investment for new renewable energy
facilities. In 2024, our renewable energy ratio reached 28.3%.
By FYE2031, we set the target for reducing CO2 emissions from our
supply chain (Scope 3) by 30% (SBT WB-2ºC level*3) (vs. FYE2019).
With the increasing demand to reduce CO2 emissions throughout the
lifecycle of buildings, which include direct emissions related to building
construction and indirect emissions during building use, we are
working with our suppliers to cut emissions in procurement and
logistics, and by designing energy-efficient products. We are also
shifting towards the use of low-carbon raw materials and components,
recycled materials, and by further promoting reusable product designs.
In FYE2024, with the aim of cutting CO2 emissions in our
procurement, we held briefings on calculating emissions for
approximately 400 major suppliers in Japan, and additional sessions to
provide emissions calculation tools to those interested in starting
carbon emissions calculations.
LIXIL has set targets for increasing the product ratio of
high-performance windows for new detached houses to 100% by
FYE2026, and the product ratio of energy- and water-saving faucets
and toilets to 100% by FYE2031. We are seeking to expand our
impact to mitigate climate change by providing highly insulated
windows and front doors; introducing high-performance construction
methods for reinsulating entire homes including walls, ceilings, and
floors; providing water-saving products; offering products with
energy-creating functions and associated services; and with our
IoT-driven delivery boxes. In FYE2024, we launched GREEN WINDOW,
a sales strategy that provides
recommendations on energy-saving
window products to match regional
climate characteristics in Japan. Using a
lifecycle assessment, we can calculate
the product’s total CO2 emissions.
Our Approach
Our Operations
Expanding Our Impact
Our Value Chain
We are promoting climate change mitigation and adaptation through company-wide initiatives across our business processes, products and services to achieve LIXIL's net-zero CO2 emissions
target and by solutions that contribute to energy efficiency and CO2 emissions in end-use.
TW, a triple-glazed high-performance hybrid window （TOSTEM brand）
*3 A Science Based Target (SBT) level of well below 2ºC to keep global
temperature rise to well below 2ºC above pre-industrial levels
*1 United Nations Environment Programme
(https://globalabc.org/our-work/tracking-progress-global-status-report)
*2 LIXIL Becomes First Japanese Building Products Company to Receive SBT
Net-Zero Approval for 2050 Zero CO₂ Emissions Target
(https://newsroom.lixil.com/20240403_sbt_netzero)
CLIMATE CHANGE MITIGATION AND ADAPTATION
OUR FOUNDATION
IMPACT STRATEGY
01
52
OVERVIEW
02
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03
GOVERNANCE
04
DATA
Approximately 2.2 billion people currently lack access to safe
drinking water at home*1 and it is estimated that by 2050,
more than 5 billion people worldwide will face water
shortages.*2 Due to the growing population among other
factors, total household use of water has increased six-fold
since the 1960s.*3 LIXIL seeks to promote water sustainability
by encouraging the responsible use of water in business
processes and providing safe, better-tasting water for everyone
to enjoy the full benefits of water, today and tomorrow.
LIXIL set targets for improving water use efficiency (water
intake/production output) by 20% until FYE2031 (vs.
FYE2019). At water-scarce sites, we take appropriate steps to
improve water efficiency, recycle water, and manage
wastewater. In FYE2023, we used approximately 660,000m3
of recycled water. In addition, we conduct annual surveys to
identify water risks at all 83 of our production sites that use
water in their manufacturing processes and take measures
based on the survey results at each site. We also participate in
the Corporate Engagement Program by the Science Based
Targets Network (SBTN) and help formulate guidelines for
water risk assessments. At our factory in Thailand, where the
risk of water shortages is high, we adopted a water circulation
system for recycling rainwater and factory wastewater. We
continually optimize our water consumption at our sites, and
reduced our annual industrial water usage by approximately
72,700m3 in FYE2024 (vs. FYE2023).
LIXIL has set the target to contribute to a global reduction of
2 billion m3 per year in water consumption by FYE2025. We
help reduce the water consumption by end users through
various products and services such as energy- and
water-saving faucets and toilets, and IoT-enabled water
leakage prevention solutions such as smart controllers.
LIXIL is working to reduce the risk of groundwater
contamination by increasing access to safe sanitation facilities
and safer water. LIXIL Public Partners (LPP) is an organization
that seeks to strengthen cooperation between the public and
private sectors, and is currently conducting trials to introduce
wastewater-treatment facilities and water-efficient fixtures and
fittings in rural areas of the U.S. that lack access to public
sewage systems. In areas with access to tap water, we are
introducing water purification faucets and cartridges to
provide safer and better-tasting water. With the aim to
introduce differentiated filtration products that are tailored to
each market, we conduct water-purification research and
development at X-Water Fab Tokoname (Tokoname, Aichi)
andX-Water Lab Tokyo (Tokyo) in Japan and at other sites and
bases around the world.
LIXIL leads the water industry by elevating and creating environmental value for water through its conservation, circulation, and purification technologies.
WATER SUSTAINABILITY
Our Operations
Our Value Chain
Expanding Our Impact
WATER SUSTAINABILITY
GROHE Everstream, a shower system that
makes it possible to recycle water
*1 Progress on household drinking-water, sanitation and hygiene 2000-2022:
Special focus on gender(https://www.who.int/publications/m/item/progress-on-
household-drinking-water--sanitation-and-hygiene-2000-2022---special-focus-on-
gender)
*2「2021 State of Climate Services: Water 」(https://library.wmo.int/idurl/4/57630)
*3 WorId Resources Institute.(WRI)： Domestic Water Use Grew 600% Over the
Past 50 Years
(https://www.wri.org/insights/domestic-water-use-grew-600-over-past-50-years)
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It is estimated that the world’s consumption of resources will
double by 2050.* At LIXIL, we carry out circular production
and waste reduction across the entire product lifecycle, from
procurement of raw materials, including metals, timber, resin,
and ceramics, through to manufacturing, product use,
disposal, and recycling. We do this through the sustainable
use of raw materials and a design design approach geared
toward reducing resource use or considerate of product reuse.
While the amount of plastic waste has more than doubled
worldwide over the past 20 years, the recycling rate remains at
a stubbornly low 9%. Fueled by the LIXIL Plastics Action
Statement announced in FYE2021, we are working to reduce
plastic use, recycle plastics, and develop alternative materials.
By FYE2026, LIXIL has set a target for increasing the recycling
rate of its waste generated from in business sites to 90%,
globally. We are enhancing the resource efficiency at our
plants by improving manufacturing processes for raw material
use and waste reduction, by promoting the recycling of waste
generated, and by converting wood chips into biomass fuel.
With the goal of promoting the sustainable use of resources
and reducing waste across our entire value chain, we are
working to minimize the use of new resources by increasing
the ratio of recycled or renewable materials used in our
products, such as aluminum, recycled resin and wood.
LIXIL has set a target for increasing the ratio of recycled
aluminum used in the housing business to 100% by
FYE2031. In FYE2024, we launched PremiAL R100, which is
made from 100% recycled aluminum, as well as GREEN
WINDOW, a sales strategy proposing window products
focusing on resource efficiency and energy savings that
effectively reduce CO₂ emissions by matching regional climate
characteristics in Japan.
We are also working to reduce single-use plastic
packaging, expand our supply of resource-efficient products
designed for durability and reuse, and creating circular
systems that encourage product-to-product recycling.
As part of our efforts to develop circular materials, and to
promote the effective use of difficult-to-recycle waste plastics,
in FYE2023, we developed a circular material called revia,
that combines most types of waste plastics, including
composite plastics, and waste wood generated from the
demolition and repair of buildings. To contribute to the
realization of a circular economy, we working to build
ecosystems that spans across procurement to production,
sales construction and collection of waste plastics through
collaboration with stakeholders, including public partnerships.
LIXIL is expanding company-wide sustainability and circularity of raw materials throughout the entire lifecycle of products across its procurement, production, end-use and disposal.
Our Approach
Our Value Chain
Our Operations
PremiAL R100, a low-carbon aluminum profile made from 100%
recycled aluminum
* With resource use expected to double by 2050, is better natural resource use
essential for a pollution-free planet, UN Environment Programme
(https://www.unep.org/news-and-stories/press-release/resource-use-expected-
double-2050-better-natural-resource-use)
Expanding Our Impact
CIRCULAR ECONOMY
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Overview
Reference
Governance
P.67
Corporate Governance at LIXIL
P.59
Human rights
P.93
Stakeholder Engagement
Strategy
P.50
Climate change, water and resources
P.76
Risk Management
P.51
Environmental Medium-Term Targets
ESG Data
Risk and
Impact
Management
Metrics
and Targets
Please see this disclosure report for more details.
*TNFD Forum: https://tnfd.global/engage/tnfd-forum/
LIXIL announced our endorsement of the Task Force on Climate-related Financial Disclosures (TCFD) in March 2019. Since FYE2022, we have been publishing disclosures based on the TCFD
recommendations. In December 2023, LIXIL endorsed the Task Force on Nature-related Financial Disclosures (TNFD) recommendations and joined the TNFD Forum.* We also registered as a
TNFD Early Adopter in January 2024.
In FYE2024, we integrated our environmental disclosures based on TCFD and TNFD recommendations to include climate change, natural-capital and biodiversity which were previously part of
our disclosures in association with environmental issues.
RESPONSE TO TCFD AND TNFD RECOMMENDATIONS
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LIXIL’s Board of Directors receives biannual reporting on progress against targets and action plans for environmental issues and other material issues from the
Board of Executive Officers for discussion and oversight. Deliberations on measures to address risks and opportunities associated with climate change and loss
of nature and biodiversity, as well as discussions on the management and monitoring of company-wide targets are conducted by the Environmental Strategy
Council (ESC) *. Decisions on these matters are made by the Impact Strategy Committee, and the Board of Executive Officers then discusses and approves
targets and action plans.
*Former Environmental Strategy Committee
Recognizing the link between human rights and environmental issues, including natural capital and biodiversity, the LIXIL Human Rights Principles was
established to show our commitment to build business activities on a fundamental respect for human rights. We spare no effort to engage all our stakeholders in
dialogue on human rights issues connected to our business activities, including our employees and customers, suppliers and other business partners,
shareholders and investors, and people living in the local communities where we operate.
LIXIL conducts scenario analyses to identify the risks and opportunities that climate change poses to its value chain. Under the 1.5ºC and 4ºC scenarios, we
identified the transition risks due to changes in policies, regulations, and markets brought about by climate change, as well as the physical risks such as
extreme weather events, to determine their financial impact. Recognizing that climate change issues are connected to water and recycling of resources,
biodiversity, and other environmental issues, we are working on initiatives that reflect them in our environmental strategies.
To identify the dependencies and impacts on natural capital and biodiversity across our value chain, as well as the risks and opportunities, we carried out
assessments based on the LEAP approach recommended by TNFD. The key risks and opportunities identified by the LEAP approach have been found to be
associated to our climate initiatives, and we have confirmed that our efforts to address nature-related issues have already been reflected in our strategies.
For climate- and nature-related dependencies, impacts, risks, and opportunities, LIXIL identifies key risks and opportunities and assesses their impact under
the direction of the ESC. After judging the importance of each business risk, we plan and implement countermeasures at all levels of organization and monitor
their progress for continuous improvement.
LIXIL discloses its performance according to its set metrics to assess and manage climate- and nature-related dependencies, impacts, risks, and
opportunities. We also disclose our performance by the indicators set for our medium-term targets toward achieving the LIXIL Environmental Vision 2050.
* Based on TCFD's scenario analysis
*1 Financial impact calculation is based on the assumption that a carbon tax (using IEA’s estimates of carbon prices considered necessary to achieve the 1.5ºC target) is imposed on Scope 1 and 2 carbon emissions.
*2 Average loss is calculated based on the following steps: (1) identified any production sites with flood risks (based solely on production site location; risk mitigation measures set forth in our business continuity plans (BCP) are not
incorporated), using the World Resources Institute’s (WRI) Aqueduct Floods tool and hazard maps provided by Japanese municipalities; and (2) multiplied two factors: the number of days of stalled operations for sites in each inundation
height zone indicated in Japan’s Ministry of Land, Infrastructure, Transport and Tourism (MLIT) Manual for Economic Evaluation of Flood Control Investment; and the daily production volume of each site.
*3 Profit calculated based on the share, price, and profit margin of key products. This calculation assumes an increased ZEH percentage of new and existing housing in 2030 to achieve the Japanese government’s 66% CO2 reduction target for
the residential sector by 2030.
*4 Excluding use-phase emissions from products that indirectly consume energy such as hot water supply during use.
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Risk
Transition
Physical
(acute)
Physical
(chronic)
Opportunities
(1) Increased operating costs due to
introduction of carbon taxes
¥10 billion*1
Financial impact not calculated
due to lack of parameters
necessary for quantification
•Improve energy use efficiency
•Expand the use of renewable energy
•Strategic capital investment
•Verify implementation of decarbonization technologies
CO2 emissions reductions by
FYE2031 (vs. FYE2019)
•Scope 1 & 2 CO2
emissions: -50.4%
•Scope 3 CO2 emissions: -30%
Recycling rate of waste to
90% globally by FYE2026
•Improve water use efficiency at our business sites by 20% by
FYE2031 (vs. FYE2019)
•100% product ratio of high-performance windows for new
detached houses in Japan by FYE2026
•100% product ratio of energy- and water-saving faucets and
toilets in Japan by FYE2031
Ratio of recycled aluminum used to 100% by FYE2031
Through water-saving products, global reduction of 2 billion m3
per year in water consumption by FYE2025
•Net Zero Scope 1, 2 and 3
emissions by 2050
•Procurement of low-carbon materials and components
•Promote resource-conscious design
•Supplier engagement
•Effective and circular use of resources at our plants
•Compliance with environmental policies
•Internal audits based on ISO 14001
•Promote business continuity planning (BCP)
•Systematic facility investments and upgrades
•Improve efficiency of water usage and
introduce water circulation systems
•Promote water risk management at our plants
•Develop and promote eco-friendly products
(high-performance windows, solar photovoltaic systems,
high-efficiency housing, energy- and water-saving faucets
and showers, etc.)
•Develop and promote low emission products using recycled
materials (resin window frames, artificial wood decks, etc.)
•Same as (5)
•Develop and promote disaster prevention and mitigation products
(storm shutters, sun blinds, storage of electricity, Resilience Toilet, etc.)
•Develop and expand sales of water-saving and water-purifying products
•Help provide safe water and reduce the risk of water pollution
—
—
—
—
—
¥1.5 billion*2
Financial impact not calculated
due to lack of parameters
necessary for quantification
Financial impact not
calculated due to lack of
parameters necessary for
quantification
No additional
tax burden
¥20 billion*3
Maintain
current
trends
(2) Increased raw material and component
procurement costs due to market
changes
(3) Lack of compliance in regard to introduction
and tightening of laws and regulations related
to the environmental impact of our plants
(4) Loss of sales opportunities arising from damage to our plants
due to typhoons, floods, etc. caused by climate change
(5) Loss of sales opportunities arising from the suspension of
operations at the Company's plants due to a decrease in available
water resources, such as from droughts, water pollution, etc.
(6) Increased demand for energy-saving
products and services for new ZEH
construction and energy-efficiency
remodeling
(7) Increased demand due to changes in consumer
preferences regarding environmentally friendly
initiatives, such as products using low-carbon
materials, increasing the percentage of recycled
materials used and raising the water recycling rate
(8) Increased demand for products related
to disaster preparation, response, and
recovery
(9) Increased demand for products and
services that help conserve water or
improve water quality
Estimated financial impact
1.5ºC scenario
4ºC scenario
Risk and opportunity category
Strategic response
Strategic response Metrics and targets
Strategies to address environmental issues including climate change, natural capital and biodiversity
TCFD
●
TNFD
●
●
●
●
●
●
●
●
●
●
●
LIXIL is committed to providing innovative products and
services that meet the diverse needs of customers in order to
realize its goal of making better homes a reality for everyone,
everywhere. To achieve sustainable growth by ensuring a truly
customer-centric approach and realizing innovation that meets
diverse needs, we believe it is important to build inclusive
environments that enable a diverse range of employees to
demonstrate their true potential. To that aim, we actively
promote D&I.
In March 2020, we established a global department
responsible for developing company-wide measures for
promoting D&I. In FYE2021, we set up the D&I Committee
consisting of our CEO as chairperson and other executive
officers and leaders, and updated our D&I Strategy and
promotion measures. Our D&I promotion has now shifted
away from the formulation of company-wide strategies and
measures into a new phase of activity led by individual
departments. Therefore, from FYE2025, we decided to
change the members of the committee, including the
chairperson, from executive officers to department heads who
will participate in lively discussions and promote initiatives
based on the latest situation in each of their departments. To
mark this changed format, the name of the organization will
be changed from the D&I Committee to the D&I Council.
On a quarterly basis, updates on the initiatives driven by our
D&I strategy that are discussed and deliberated in the D&I
Council, are then reported to the executive officers through
the Impact Strategy Committee. This facilitates timely
resolutions to accelerate the momentum of D&I initiatives
within LIXIL.
Our D&I Strategy seeks to embed a culture of inclusion
across LIXIL and to achieve gender equity by FYE2030.
Recognizing the challenges our company faces, such as the
gender pay gap and low proportion of female managers, we
formulated an action plan to achieve our targets, and we are
implementing measures that incorporate D&I perspectives into
our HR policies, talent development, and improvement of
workplaces.
LIXIL’s Global People Strategy focuses on three main
pillars designed to strengthen human Embed inclusion into
our DNA, Elevate talent across the enterprise, and Enhance
employee experience. These initiatives are also important for
achieving the medium-term goals for our D&I strategy.
Our employees are the major driving force behind our
value creation. LIXIL aims to meet diversifying customer needs
by leveraging any innovations generated by employees
demonstrating their true potential through these initiatives. We
will also promote numerous internal and external
collaborations to help ensure everyone can live a healthy and
comfortable life regardless of age, gender, and level of
disability.
Aiming to create an inclusive society that enables diverse
groups of people to live invigorating lives while respecting
those around them, we promote Universal Design (UD) that is
easy for everyone to use, and conduct awareness-building
activities that foster understanding of D&I.
Our Strategy
LIXIL aims to help realize an inclusive society by meeting diversifying customer needs through innovations that leverage the knowledge and perspectives of our diverse workforce, and by taking
initiatives on awareness-raising activities to promote understanding of diversity & inclusion (D&I).
DIVERSITY & INCLUSION
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We added inclusion as one of the outcome indicators in our
LIXIL Voice employee opinion surveys, and are visualizing
progress and implementing measures based on the results of
the survey to help achieve our declared goal of establishing an
inclusive culture.
• Employee Resource Groups (ERGs): We launched five ERGs
on a global scale focusing on gender equality,
multiculturalism, disabilities, working parents and
caregivers, and LGBTQ, and implemented various activities
to help build an inclusive environment. We assigned an
executive officer to each group to support the group’s
activities as an executive sponsor.
• D&I Promotion Program: We conduct workshops on utilizing
the Leaders’ Guide to Advancing D&I.
Since April 2022, in pursuit of further empowering women
and establishing a merit-based workplace where individuals
are evaluated regardless of age, gender, or nationality, we
have been implementing a new human resources system that
adopts a job-based grade system in Japan.
For managers, we have revised the grade system based
on duties and responsibilities, and introduced a system that
more strongly reflects individual contributions and
performance in compensation decisions. In addition, we have
abolished the work location-specific employment system
(regional wages), which had typically been utilized by more
female employees than male employees. LIXIL is accelerating
efforts to correct gender imbalances through these changes
by, for example, eliminating wage differences that reflect the
possibility of future job transfers and adopting a merit-based
compensation system that corresponds to individual job duties
and responsibilities.
Meanwhile, we have incorporated a D&I perspective into
our People & Organizational Development (POD) process to
help develop better succession plans for key positions, and
are working to identify and nurture promising female talent
throughout the company. As a follow-up POD measure, we
launched the Female Talent Outreach Program in FYE2024
that seeks to improve the leadership skills of specifically
selected talents.
We are working to expand mechanisms for supporting flexible
workstyles, childbirth, childcare, and nursing care and to
cultivate the right atmosphere to enable employees to
maintain a high level of performance throughout different life
stages.
In Japan, we are implementing various measures to
achieve a 100%* rate for paternity leave among male
employees by 2025. We distribute relevant information on the
19th day of each month, designated as the day for promoting
better understanding of childcare leave. We are also working
to promote awareness and understanding of male childcare
leave. In FYE2024, we implemented some decisive measures
that included setting up an advice desk and encouraging
eligible male employees to take childcare leave.
LIXIL defines our UD concept as “Good for One, Good for All,
Good for a Lifetime,” and provides housing and water-related
products, such as the Body Hug Shower, that suit diverse
ways of living. We are also conducting research and making
proposals for public toilet systems that everyone can use
comfortably and with peace of mind, and offer an A-SPEC
cloud-based service that leverages our expertise and proposal
experience to public toilets free of charge which are designed
automatically.
In addition to providing training on UD for our employees, we
offer outreach classes for elementary school students and
participatory classes where students get to learn about
diversity through parasport activities. We also share
information on our UD website and LIXIL Public Toilet Lab
website as part of our effort to help create an inclusive society.
Promoting Diverse and Flexible Work Styles
Promoting Broader Understanding of D&I
Working to Establish an Inclusive Culture
Promoting Universal Design (UD)
Empowering Women and Ensuring Meritocracy
in the Workplace
Universal Run participatory class: Learning about diversity through sports
* The target only covers directly hired employees and encompasses our
internal Spouse Birth or Childcare Leave (Papa’s Childcare Leave)
system.
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Key Activities Designed to Strengthen Our Commitment
LIXIL’s business activities are built on a fundamental respect
for human rights. The LIXIL Human Rights Principles are
founded in accordance with international standards, including
the International Bill of Human Rights, the International
Labour Organization (ILO) Declaration on Fundamental
Principles and Rights at Work, and the United Nations (UN)
Guiding Principles on Business and Human Rights. We also
promote efforts to respect the rights of all humans, including
those of children based on the approach of the Children’s
Rights and Business Principles developed by UNICEF. If there
are any discrepancies between the internationally recognized
standards and local laws and regulations, we adhere to the
higher commitment. If any contradictions exist, we seek a way
of respecting international standards while complying with
local laws and regulations.
LIXIL Human Rights Principles stipulate key human rights
issues, such as prohibiting discrimination, forced labor and child
labor, respecting freedom of association and collective
bargaining, and ensuring decent wages and working hours. The
principles also clearly state that we comply with laws and
regulations regarding human trafficking, equal pay for equal
work, immigrant labor, etc. In addition, the principles state that
we also expect our business partners, including suppliers, to
support and adopt similar principles.
LIXIL periodically reviews and updates the principles to
continue to become a better protector of human rights. In
FYE2022, we revised the Human Rights Principles with the
approval of the Board of Executive Officers and approval of the
Board of Executive Officers, which were then signed by the
CEO. Within this, we specified in more detail the
establishment of our governance structure, the key human
rights issues identified in FYE2021, and our human rights due
diligence process. We also implemented the concern-raising
system for people to raise concerns and demonstrated our
overall commitment to reducing human rights risks.
LIXIL Human Rights Principles >
In addition to establishing our Human Rights Principles, LIXIL has
identified key human rights issues as 'areas of focus' to manage and
mitigate potential risks. We are intensifying our efforts to advance
these key areas of focus by establishing a well-defined priority order.
This is derived from regular human rights risk surveys conducted
with our employees, ensuring that our strategies are informed and
focused.
• Provide equal opportunities and prohibit discrimination
• Prohibit forced and child labor
• Respect freedom of association and collective bargaining
• Ensure decent wages and working hours
• Ensure occupational health and safety
• Prohibit harassment
• Legal, fair, and transparent acquisition and use of personal data
LIXIL has established the Human Rights Due Diligence Task
Force, comprising members from a broad range of
departments. In addition, the executive officer in charge of
legal, compliance, and corporate auditing oversees progress
on human rights issues through a governance structure. We
are using these systems to strengthen our company-wide
human rights due diligence and promote transparent
reporting. Any important policies and measures relating to
human rights due diligence are reported to the Impact
Strategy Committee when required and, in turn, the Impact
Strategy Committee reports to the Board of Executive Officers
and the Board of Directors.
LIXIL’s Key Human Rights Issues
Our Governance
Human Rights Principles
Based on the LIXIL Human Rights Principles, we strive to uphold the human rights of all stakeholders, including customers, suppliers and other business partners, residents living near our
factories and offices, and our employees.
HUMAN RIGHTS
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FYE2016
Formulated the LIXIL Human Rights Principles
FYE2018
Established Human Rights Due Diligence Task Force
Implementation of "Questionnaire on Human Rights and Compliance"
Implementation of "Questionnaire on Human Rights and Compliance"
FYE2021
Identified LIXIL’s seven key issues as focus areas for
mitigating potential human rights risks
FYE2022
FYE2023
FYE2024
• Appointed the executive officer in charge of legal, compliance,
and corporate audit to oversee human rights issues
• Revised the Human Rights Principles, which were approved
by the Board of Executive Officers and signed by the CEO
• Conducted a human rights survey of all global employees
(including indirect employees)
Human Rights Due Diligence Process
Maintain a clear grasp of
human rights issues we face
by communicating with
stakeholders, and determine
our human rights principles
and key issues. Reflect
human rights elements in
other corporate principles
and policies.
Conduct human
rights risk assessment
across our operations
and supply chain, the
results of which will
be analyzed and
evaluated by the
Human Rights Due
Diligence Task Force.
Pinpoint any human
rights issues within
LIXIL based on the
results of our human
rights risk
assessment, and
implement measures
to reduce human
rights-related risks.
Regularly
disclose relevant
information
through our
website.
Concern-raising system
Commitment
Assessment
Remediation
Reporting & disclosure
Engagement with stakeholders
Conducting consistent human rights training
We seek to mitigate human rights risks by analyzing and
assessing potential risks using the following human rights due
diligence process.
In FYE2022, we conducted a human rights survey of all global
employees, including indirect employees, and, from FYE2023,
we included some questions on key human rights focus areas
in the LIXIL Voice, our annual global employee opinion survey.
These surveys have helped confirm potential human rights
risks, such as discrimination, excessive overtime work,
harassment, and the handling of personal information. We
have analyzed the causes of such risks and taken preventative
measures. In FYE2024, we continued the good work started in
FYE2023 by implementing the following initiatives to
strengthen in-house education and training. We also focused
on enhancing measures to optimize working hours and
prevent overworking, and encourage employees to take
holidays and annual leave.
• Members from the Human Rights Due Diligence Task Force
who are responsible for promoting business and human rights
at LIXIL took part in UNDP Business and Human Rights
Academy training and an individual guidance session with
human rights experts (in October 2022 and January 2023).
• Conducted business and human rights training with an
external expert for directors and executive officers, from
which videos and materials (in Japanese and English) were
made available to all employees via internal social media (in
March 2023)
• Published a video montage of messages about human rights
from our global leaders, including the CEO (in November
2022)
• Strengthened communication via internal social media where
all employees can access by sharing information and
knowledge about human rights more frequently (now done
once per month on average throughout the year)
• Regularly conducted awareness-building and/or training
programs for all employees on topics such as compliance,
information security, D&I, and harassment (throughout the
year)
In addition to surveys on human rights, we also conduct
occupational safety audits, employee opinion surveys and
responsible procurement surveys as part of our efforts to
identify and mitigate potential human rights risks in our own
business and our wider supply chain.
LIXIL has established a concern-raising system that is
operated in accordance with its policies on confidentiality,
prohibition of retaliation, and procedures for reporting
concerns.
We receive concerns through the LIXIL Compliance
Hotline – Speak Up!, which is available online in 18 languages
and accessible to all group employees, including those at
subsidiaries outside Japan, and external stakeholders such as
suppliers and other business partners. In Japan, we also
provide a reporting channel with external lawyers serving as
contacts. We accept anonymous reporting through either
channel.
Concern-Raising System and Grievance Mechanism
Our Human Rights Due Diligence Process
Concern-Raising System>
Data on reports of possible compliance issues: See p.84
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*1 Not fixed yet as the scope is now under reconsideration.
We base our procurement on the Ten Principles of the United Nations
Global Compact (UNGC) in the four areas of human rights, labor,
environment, and anti-corruption. In accordance with the UNGC principles
as well as our Procurement Principles and our Global Policy on Third Party
Compliance for Suppliers, we seek to build sound partnerships with global
suppliers to carry out procurement activities. Based on the LIXIL Human
Rights Principles, we strive to ensure that our business partners and
suppliers uphold human rights within their own organizations.
Our Supplier Code of Conduct has been translated into multiple
languages and distributed to suppliers, requiring them to respect human
rights, observe international labor standards, conserve the global
environment, and ensure fair business conduct.
Additionally, we created Green Procurement Guidelines outlining our
policy and standards for procuring parts and materials that exert the least
impact on the environment. In Japan, we endorsed the objectives of the
“Conference on Promoting Partnership Building for the Future” promoted
by the Cabinet Office and the Small and Medium Enterprise Agency, and
announced the “Declaration for Building Partnerships.” Following
guidelines set by the Japan Fair Trade Commission and other government
agencies, we established our Policy on Arrangements for Appropriate
Transaction Prices in January 2024 to share with our business partners
and throughout the company. Going forward, we plan to monitor the
policy’s implementation on an ongoing basis to ensure its proper use.
To select new suppliers and monitor existing suppliers, we assess their
status on the required sustainability initiatives in our Supplier Code of
Conduct. For suppliers determined from the assessment to require
remediation, we conduct site visits, online interviews, and provide other
opportunities for dialogue to discuss remediation plans and offer support in
carrying them out. If remedial action has not been taken within a given
time period, or if it has proven to be difficult to mitigate or prevent negative
impacts on human rights or the environment, we may consider the option
of ending our business relationship.
At LIXIL, we identify important suppliers based on whether they provide a
critical component/product, the difficulty of getting substitutes, the scale of
transactions in monetary terms and other factors. For the suppliers we
have identified, we give priority to conducting a responsible procurement
survey and monitoring, as well as providing remediation and offering
support. Survey results form part of the basis for selecting suppliers or
determining whether to continue business with an existing partner. For
suppliers that are classified as high risk because their conformity rates are
substandard, we provide site visits, education, and other forms of
individual guidance.
In FYE2024, we held briefings on LIXIL’s procurement activities and
emissions accounting for approximately 400 of our major suppliers in
Japan, who are collectively responsible for the top 80% of our total CO2
emissions. At the same time, we provided Scope 1, 2, and 3 calculation
tools and held briefing sessions on how to use them for suppliers intending
to start calculating CO2 emissions. Going forward, we intend to continue
providing support for further carbon reductions through discussions with
individual suppliers. We are also planning to collaborate with our suppliers
outside Japan.
Members of LIXIL’s headquarters procurement department oversee
purchasing compliance training session for buyers at operating sites in
Japan and overseas three times a year. At least one of these training
sessions is focused on human rights.
We are committed to promoting responsible procurement that upholds the environment and human rights, and strengthening partnerships with suppliers.
Management Framework for Responsible Procurement
Our Approach
Company Training - Human Resource Development for Buyers
Responsible Procurement Survey, Remediation, and Support
Cutting Carbon Emissions Across the Supply Chain
Please click on the links below for related policies and guidelines:
LIXIL Procurement Principles >
Supplier Code of Conduct >
Green Procurement Guidelines >
Declaration for Building Partnerships (Japanese only) >
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Scope: Suppliers to LIXIL Corporation and its subsidiaries.
Figures in parentheses represent the number of applicable companies.
Japan: Procurement by operating sites in Japan
Overseas: Procurement by operating sites outside Japan
Responsible Procurement Survey Results
Distribute
Procurement
Principles, follow up
on survey results
and related activities
KPI
FYE2024
Coverage ratio
(based on
purchased
amount)
Total
conformity
rate
Improvement
rate
Targets
90%
90%
90%
−*1
100%
Results
90%
(1,216)
90%
（427）
92%
91%
100%
Japan
Overseas
Japan
Japan
Overseas
Activities
RESPONSIBLE SUPPLY CHAIN MANAGEMENT
OUR FOUNDATION
IMPACT STRATEGY
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03
04
DATA
GOVERNANCE
01
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70
71
72
73
75
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MESSAGE FROM THE CHAIRPERSON OF THE
BOARD OF DIRECTORS
THE BOARD OF DIRECTORS’ EFFECTIVENESS
EVALUATION
COMPOSITION OF THE BOARD OF DIRECTORS
LIXIL BOARD OF DIRECTORS
CORPORATE GOVERNANCE AT LIXIL
GOVERNANCE REFORM
SUPPORT SYSTEM FOR OUTSIDE DIRECTORS
MESSAGE FROM THE CHAIRPERSON OF THE
NOMINATION COMMITTEE
MESSAGE FROM THE CHAIRPERSON OF THE
AUDIT COMMITTEE
MESSAGE FROM THE CHAIRPERSON OF THE
COMPENSATION COMMITTEE
EXECUTIVE COMPENSATION
MESSAGE FROM THE CHAIRPERSON OF THE
GOVERNANCE COMMITTEE
INTERNAL CONTROL SYSTEMS AND
COMPLIANCE
GOVERNANCE
CONTENTS 03
03
Themes
Main agenda items
Growth Strategy
and Improving
Corporate Value
Corporate
Governance
Impact
Strategy
Promotion
Other
Key Themes
Main Agenda Items of Board of Directors for FYE2024
Note: Excludes agenda items related to financial results
• Periodic reports and discussions from three statutory
committees and the Governance Committee (CEO
succession plan, outside director succession plan,
response to the Board of Directors’ effectiveness
evaluation, etc.) (monthly)
• Reports on progress of initiatives in priority areas based
on impact strategy (global sanitation and hygiene, water
conservation and environmental sustainability, diversity
and inclusion) (September and March)
• Status of material management risks and risk
management initiatives (October)
• Status of cyber risk response (December)
• Direction of shareholder return (September, February,
March, etc.)
• Discussions on the progress of the LIXIL Playbook for each
business (confirmed in monthly executive officer reports)
• Discussions on initiatives for achieving mid-term
growth strategy and goals (November and March)
• Discussions on challenges and opportunities for
achieving long-term growth (March)
We will continue our deliberations at the Board of Directors,
while sharing the following perspectives with our stakeholders.
Continuous evolution of governance
Corporate governance is the foundation for the sustainable growth in
corporate value. For several years, the Board of Directors has worked
on establishing and strengthening this foundation. As a result, our
governance has received increasing recognition from external parties.
However, rather than being complacent with the status quo, we are
working to further solidify and evolve our foundation.
Further growth over the medium- to long-term
The business environment surrounding LIXIL is drastically
changing, and this is also affecting our current performance.
We will pay close attention to the response of the executive
team to these changes, and we will make sure that the
measures are not merely short-term.
Our goal is to improve sustainable corporate value.
However, even if it affects short-term performance, we will not
neglect investment necessary for sustainable growth. We will
also consider an approach to dividends based on medium- to
long-term performance outlooks.
Fostering innovative product sectors
In recent years, LIXIL has focused on bringing to market
innovative products and services unique to our company.
While the sales volume may be small at the present, we
expect significant growth in the future, and these materials
and products could potentially become our driving force and
core businesses in years to come. The Board of Directors will
exercise its supervisory function from the perspective of
fostering medium- and long-term business and assess the
potential of those new businesses.
Embodying human capital management
The idea a human capital strategy that views human resources as
capital instead of a cost is gaining traction. Rather than just paying
lip service, the Board of Directors is moving forward with concrete
discussions about the action to take and the changes to be made. In
addition, we are increasingly focusing on diversity and inclusion from
the perspective of enhancing our capital.
Creating an impact on society and the environment
The Board of Directors will pay close attention to its efforts to realize a
decarbonized, recycling-oriented society, including significantly
reducing CO2 emissions and energy consumption in housing as well
as utilizing recycled materials. In other words, we will work to solve
societal issues through our business activities.
Yuji Nishiura
Chairperson of the Board of Directors
MESSAGE FROM THE CHAIRPERSON OF THE BOARD OF DIRECTORS
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We will engage in deliberations aimed at sustainable growth
while valuing the fundamental principles of our approach.
The evaluation is performed to confirm the effectiveness of the Board of Directors and the committees, and to identify medium- to long-term issues with regard to improving their effectiveness.
THE BOARD OF DIRECTORS’ EFFECTIVENESS EVALUATION
Initiatives and Priority Issues for
FYE2025
Evaluation Results for FYE2024
Results summary
(evaluation by
outside specialist)
Board of Directors’ Members in FYE2025
(As of June 19, 2024)
Directors not
concurrently
serving as
executive officers
Directors with and without
concurrent position
as executive officers
2 : 8
Directors
concurrently
serving as
executive
officers
Outside directors
ratio
2 : 8
Outside
directors
Internal
directors
Male to female
ratio
6 : 4
Male
Female
Nationality
9 : 1
Japanese
Foreign
nationals
Member
Independent
directors
Meetings
convened
Attendance
Kinya Seto
Sachio Matsumoto
Jin Song Montesano
Masatoshi Matsuzaki
○
Jun Aoki*
○
Shigeki Ishizuka*
○
Shiho Konno
○
Mayumi Tamura
○
Yuji Nishiura
○
Daisuke Hamaguchi
○
Mariko Watahiki
○
15
15
15
15
12
12
15
15
15
15
15
15
15
14
15
12
12
15
15
15
15
14
Board of Directors’ Members, Meetings Convened,
and Attendance in FYE2024
* Appointed June 21, 2023
It was confirmed that the effectiveness of LIXIL’s Board of Directors is
ensured.
However, it was also confirmed that there is room for improvement to
discuss how to improve corporate value, such as by holding substantive
discussions and ensuring adequate communication between supervisors
(directors) and executives (executive officers, etc.)
① Whether progress on the three priority issues of the previous fiscal year
has been achieved
② How well the Board of Directors is operating, with a focus on improving
corporate value from a medium- to long-term perspective
③ Assessment of issues related to the composition of the Board of Directors
and committees from a medium- to long-term perspective
① Secure and materialize the established oversight
system
② Further support to integrate outside directors
③ Enhance communication among directors and
between directors and executive officers
Implemented an evaluation carried out by an external specialized agency
(distribution of questionnaire to Directors and Executive Officers and individual
interviews of Directors)
As a result of deliberations by the Governance
Committee, the following priority issues were
set for further improving the effectiveness of
the Board of Directors and its committees. The
Company will move forward with measures to
resolve these issues.
Main focuses
and objectives
during
evaluation
Priority issues
Skills Required of Directors
The Board of Directors needs to be comprised of personnel who have abundant experience and specialized knowledge, etc. in order
to appropriately supervise the Company’s execution of business. The Nomination Committee has determined the experience,
knowledge, and expertise that it believes to be particularly important, as set forth on page 16 and below under "Skill Item" ("Skills") for
the reasons set forth in " Reason for Choice of Skill Item" below, and it believes that it is important for the Board of Directors as a
whole to be provided with those skills. Under its corporate Purpose of “making better homes a reality for everyone, everywhere”, the
Company is proceeding with initiatives aimed towards both society and achieving sustainable growth through the strategic initiatives
and Impact Strategy laid out in the “LIXIL Playbook,” which is its medium-to-long-term management direction. Toward that end, the
Company believes that in order for the Board of Directors to effectively fulfill its supervisory function with respect to the execution of
business, from the perspective of “sustainability” should be considered as the “attitude or perspective” that all directors should
possess, rather than considered to be “skills.” We expect that the supervisory function will be demonstrated through all expert skills
such as “Practical Experience in Corporate Management,” “Accounting, Finance, or M&A,” “Risk Management,” and “Human
Resources, Development, or Labor.”
COMPOSITION OF THE BOARD OF DIRECTORS
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(Background color) : Indicates the skills that the Nomination Committee expects outside directors to demonstrate in particular.
● : The following criteria are used to identify the skills items that each director possesses.
Skills
Criteria
Reason for Selecting Skills
Kinya Seto
Jin Song
Montesano
Mariko
Watahiki
Mayumi
Tamura
Daisuke
Hamaguchi
Yuji
Nishiura
Shiho
Konno
Ryusuke
Ohori
Shigeki
Ishizuka
Jun Aoki
Sufficient knowledge to offer recommendations and
advice to the Board of Directors on activities such as
manufacturing, technology, R&D, etc.
Knowledge of
manufacturing,
technology, and R&D
Experience in an executive role such
as a CEO in a business corporation
Practical experience in
corporate management
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Experience in an overseas business
for a certain period of time
(about three years)
Experience in global
business and management
Sufficient knowledge to offer recommendations
and advice to the Board of Directors on
activities such as accounting, finance, M&A, etc.
Knowledge of accounting,
finance, and M&A
Sufficient knowledge to offer recommendations
and advice to the Board of Directors on
activities such as sales, marketing, etc.
Knowledge of sales
and marketing
Sufficient knowledge to offer recommendations
and advice to the Board of Directors on
activities such as IT, digital, etc.
Knowledge of IT and digital
Experience in external affairs with government
agencies and as a policy committee
member for national or various organizations
Experience in negotiating
with government agencies
Sufficient knowledge to offer recommendations
and advice to the Board of Directors on activities
such as legal affairs, compliance, etc.
Knowledge of legal
and compliance
Sufficient knowledge to offer recommendations
and advice to the Board of Directors on
activities such as risk management, etc.
Knowledge of
risk management
Sufficient knowledge to offer recommendations and
advice to the Board of Directors on activities such as
human resources training, development, labor, etc.
Knowledge of human
resources training,
development, and labor
Experience, knowledge and expertise required of the Company's directors
The Company clarifies the skills possessed by each director candidate based on the following criteria and identifies those skills that the Nomination Committee particularly expects the candidate to
demonstrate with respect to outside directors.
To ensure sustainable growth of the Company and improvement of corporate value from a medium- to long-term perspective, we
provide effective oversight based on high-level corporate management experience to implement strategies set out in the LIXIL Playbook
and promote management through appropriate risk taking while considering profitability and growth based on the cost of capital
To ensure sustainable growth of the Company and improvement of corporate value from a medium- to long-term
perspective, we provide effective oversight on formulating financial strategies to build a strong financial base,
promote growth investments (including M&A) based on the cost of capital, and achieve stable profit returns
To build and oversee a fair and transparent governance and compliance system,
which forms the foundation for sustainable growth of the Company and improvement
of corporate value from a medium- to long-term perspective
To ensure sustainable growth of the Company and improvement of corporate value from a medium-
to long-term perspective, we accurately identify apparent and latent risks and provide effective
oversight to support appropriate risk taking and decisive decision-making in management execution
To oversee the advancement of our global human resources strategy from the perspective of human
capital management by focusing on incorporating inclusion into the foundation of the Company,
investing in human resources development, and enhancing the employee experience
To provide effective oversight on responding to changes in market and customer
trends, utilizing a wide brand portfolio, and optimizing business operations
To provide effective oversight of the steady implementation of strategies set out in the
LIXIL Playbook, value creation through innovation, development and manufacture of
products and services, and promotion of quality improvement
To provide appropriate oversight of information security systems, digital transformation
(DX) of existing business, development of new businesses, and implementation of
management strategies contributing to improved productivity.
To ensure sustainable growth of the Company and improvement of corporate value from a medium- to long-term perspective, we provide
effective oversight based on high-level corporate management experience to implement strategies set out in the LIXIL Playbook and
promote management through appropriate risk taking while considering profitability and growth based on the cost of capital
To aim to resolve social issues through our products, services, and business
processes and support governance, which is the foundation of our corporate activities
COMPOSITION OF THE BOARD OF DIRECTORS
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LIXIL BOARD OF DIRECTORS
(As of June 19, 2024)*
* The number of Company shares and Phantom Stocks held are as of June 1, 2024.
Outside Director
Chairperson of the Board of Directors,
Member of Nomination Committee,
Member of Compensation Committee,
and Member of Governance Committee
Number of Company shares owned: 0
Number of Phantom Stocks held: 2,625
Yuji Nishiura
Outside Director
Chairperson of Audit Committee and
Chairperson of Governance Committee
Number of Company shares owned: 0
Number of Phantom Stocks held: 2,625
Daisuke Hamaguchi
Director, Representative Executive Officer,
President, and Chief Executive Officer
Number of Company shares owned: 625,627
Number of Phantom Stocks held: 226,017
Kinya Seto
Outside Director
Chairperson of Compensation Committee,
Member of Nomination Committee, and
Member of Governance Committee
First-class architect
Number of Company shares owned: 0
Number of Phantom Stocks held: 2,625
Jun Aoki
Outside Director
Member of Audit Committee, and
Member of Governance Committee
Lawyer
Number of Company shares owned: 0
Number of Phantom Stocks held: 2,625
Shiho Konno
Outside Director
Member of Nomination Committee,
Member of Audit Committee, and
Member of Governance Committee
Number of Company shares owned: 0
Number of Phantom Stocks held: 0
Ryusuke Ohori
Director, Representative Executive Officer,
Executive Vice President
Human Resources,
Communications, External Affairs, and
Impact Strategy, and Chief People Officer
Number of Company shares owned: 99,985
Number of Phantom Stocks held: 57,813
Jin Song Montesano
Outside Director
Chairperson of Nomination Committee,
Member of Compensation Committee,
and Member of Governance Committee
Lawyer
Number of Company shares owned: 5,000
Number of Phantom Stocks held: 2,625
Mariko Watahiki
Number of Company shares owned: 0
Number of Phantom Stocks held: 2,625
Mayumi Tamura
Outside Director
Member of Audit Committee, and
Member of Governance Committee
Profiles and reasons for nomination of directors
are available on our corporate website.
www.lixil.com/en/about/board/
Outside Director
Member of Audit Committee,
Member of Compensation Committee, and
Member of Governance Committee
Number of Company shares owned: 0
Number of Phantom Stocks held: 2,625
Shigeki Ishizuka
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Impact Strategy Promotion and Risk Management Structure
For further details regarding the Company’s corporate
governance, internal control systems, and other related
matters, please visit our corporate website.
www.lixil.com/en/about/governance/
LIXIL Corporation
Board of Directors
Chairperson of the Board
Shareholders’ Meeting
Group companies (Japan/International)
Each Committee
Investment Review Committee
Compliance Committee
Management Control/
Supervision
Alignment
Appointment/
Removal
Appointment/
Removal
Report
Audit
Decision on
compensation
Decision on proposal for
election/dismissal of
Directors
Election/
Dismissal
Report/Advice
Appointment/
Removal
Election/
Dismissal
Decision on
compensation
Election/
Dismissal
Report
Report
Report
Audit
Audit
Alignment
Alignment
Alignment
Audit
Audit
Audit
Audit
Report/
Alignment
Compensation and Benefits Committee
Information Security Committee
Stock Sale and Purchase Review Committee
Internal
audit divisions
Financial Auditors
Directors
Governance Structure As of June 19, 2024
Dedicated Auditors (Company Auditors) (Major subsidiaries in Japan)
Governance Committee
(Monitoring and supervision of
Corporate Governance)
Board of Executive Officers
Representative Executive Officers/Executive Officers
Compensation Committee
Audit Committee
Nomination Committee
(Each Division)
Corporate Functions
Business divisions
such as
Technology division
Supervision
Execution
Diversity & Inclusion Council
Environmental Strategy Council
Global Sanitation & Hygiene Council
Risk Management Committee
Impact Strategy Committee
Report
Report
Formulation and approval of strategy and policy
Report
Approval
Board of Directors
Board of Executive Officers
Global Sanitation &
Hygiene Council
Environmental
Strategy Council
Diversity & Inclusion
(D&I) Council
Other ESG-related taskforces
Approval and supervision of strategy and policy
Progress reports from the cross-functional
taskforces focused on ESG-related topics
(e.g. Human Rights)
Impact Strategy Committee
Chairperson: Executive Officer responsible for the Impact Strategy
Members: Executive Officers and Senior Managers
At LIXIL, corporate governance is founded on execution of the business by
management and oversight of management's actions by the Board of
Directors. Directors. However, the Board of Directors’ role goes beyond
resolving important policies and simply supervising management execution.
The board facilitates the construction of a framework to establish an
environment that supports risk-taking by management and to ensure
decision-making is transparent, fair, quick, and decisive. During this fiscal
term, the Board of Directors has been working to create a common
understanding of the “ideal way of oversight” for the Board of Directors.
Subsequently, the Board of Directors prioritizes topics that contribute to
improving corporate value from a medium- to long-term perspective as agenda
items, oversees the appropriateness of risk management and implementation
of reforms and other aspects, and provides guidance as needed to ensure
sustainable growth and improved corporate value of the Company.
The Board of Directors is responsible for reviewing the Impact Strategy
formulated by the executive team and approving it as a policy, and verifies
whether this policy is aligned with LIXIL’s management strategies (in terms of
allocation of management resources to priority areas such as investments in
human capital or intellectual property; business portfolio composition; and
other aspects).
CORPORATE GOVERNANCE AT LIXIL
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• Introduced and disclosed skills matrix for the Board of Directors
• Established the Governance Committee
• Changed the composition of three statutory committees and the Governance
Committee to solely independent outside directors
• Established CEO succession plan
• Conducted mutual nomination ballot of outside directors
(overseen by an external organization)
• Approved annual budget for Board of Directors and committees’ activities*1
• Implemented training for directors and executive officers (training sessions, site visits, and others)
and systematized orientation for directors and executive officers at the time of their appointment*1
• Implemented assessment of executive officers by an outside professional organization
Construction of
governance
structure
Initiatives to
strengthen
Board
effectiveness
• Outsourced evaluation of
the effectiveness of the Board
of Directors to a specialized
external organization*2
• Increased the number of
outside directors to seven
(ratio of outside directors: 70%)
• Increased the number of
outside directors to eight
(ratio of outside directors: 73%)
• Guidelines for the action of
outside directors established
as internal regulations
• Revised basic policy on internal
control systems (strengthening the
authority of the audit committee over
the internal audit department, etc.)
*1 Conducted annually since then *2 Outsourced at least once every three years thereafter *3 Transitioned from Corporate Responsibility Strategy to Impact Strategy in 2023
Promoting sustainability
• Approved Corporate Responsibility
Strategy policy*3
• Approved transition to
Impact Strategy
2021
2022
2023
Strengthening the perspective of “effectiveness and transparency”
(Years ended March 31)
Site Visits and Training Sessions
We hold training sessions given by outside lecturers for all officers
at least once a year. In addition, we conducted site visits for
outside directors, such as presentations on new technology and
product exhibitions in various business areas, as well as visits to
our IoT showcase home “MILAIE LABO,” The home is built based
on the concept of future living spaces.
Providing Information for Substantive Discussions by
the Board of Directors
We are implementing the following measures to deepen under-
standing of LIXIL’s businesses and promote substantive Board
discussions.
(1) Preliminary briefings on important topics
(2) Provision of basic information about the LIXIL group, including
internal glossary, production systems, personnel composition, etc.
Providing Information to Newly Appointed Outside
Directors
Shortly after assuming office, outside directors receive guidance
about their responsibilities from executive officers. In addition,
outside directors participate in inspections of key facilities, such as
primary factories in Japan and flagship showrooms.
Outside directors at the LWT Japan new technology review meeting
The following activities are regularly held to deepen the understanding of LIXIL’s various businesses and important management issues.
GOVERNANCE REFORM
Support System for Outside Directors
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Cross-Shareholdings and Balance Sheet Amounts*
Balance sheet amounts (¥ million)
Proportion of total equity (%)
* Cross-shareholdings held by the Company related to listed shares
Category
FYE2021
FYE2022
FYE2024
Number of
cross-held
stocks
Listed
53
49
44
Unlisted
102
98
82
Total
155
147
126
Balance
sheet
amounts
(¥ million)
Listed
50,317
38,733
35,670
Unlisted
1,330
1,313
1,313
Total
51,647
40,046
36,983
FYE2023
47
88
135
27,236
1,570
28,806
Cross-Shareholdings
FYE2021 FYE2022 FYE2023 FYE2024
28,806
40,046
9.3
6.5
4.6
36,983
5.7
51,647
■ Board of Directors
15
■ Nomination Committee
13
■ Audit Committee
14
■ Compensation Committee
14
■ Governance Committee
8
■ Investment Review Committee*2
27
■M&A Committee*3
24
■ Compliance Committee
4
■ Risk Management Committee
1
■ Impact Strategy Committee
4
■ SATO Advisory Board*4
4
■ Environmental Strategy Committee*5
4
■ Compensation and Benefits Committee
6
■ Information Security Committee
4
■ Group Credit Committee*3
5
■ Stock Sale and Purchase Review Committee
6
■ Diversity and Inclusion Committee*6
1
■ Board of Executive Officers
15
Number of Meetings Held during FYE2024*1
Status of Cross-Shareholdings
The Company maintains cross-shareholdings in cases where it is
deemed necessary in terms of facilitating sales activities or as part
of external alliances required for the Company’s business activities.
Every year, we conduct a comprehensive evaluation of each
cross-held stock in terms of the status of business dealings between
the issuer and the Company, the total amount invested, and
whether the cost of capital matches the benefits and risks of the
holding. The Board of Directors subsequently verifies the content of
these evaluations. Due to changes in the LIXIL group’s operating
environment, we are working to reduce cross-shareholdings in
cases where reevaluation indicates that the rationale for the cross
shareholding is no longer valid. As a result, as of March 31, 2024,
the total number of (listed) cross-held stocks was 44.
Made decisions on matters specified by law, basic management policies, and
important management matters, while deliberating on medium- to long-term
growth strategies and strategies to improve corporate value. In addition,
oversaw the conduct of duties of directors and executive officers.
Coordinated the advancement of LIXIL's sustainability commitments by overseeing the execution of
priority initiatives and ensuring the development, alignment and achievement of goals within the Impact
Strategy. The Committee also led the management of LIXIL's material issues and maintained robust
communication with the Board of Directors, the Board of Executive Officers and relevant councils.
Made decisions on the content of proposals to be submitted to the Shareholders’ Meeting
regarding the election and removal of directors. Reported its opinion to the Board of
Directors after due consideration and deliberation, such as on the election, appointment,
removal, and dismissal of candidates for executive officer, executive officer with
responsibility, and Representative Executive Officer, and on the appointment and dismissal
of the Chairperson of the Board, members, and chairpersons of each committee.
Continually enhances the Company’s corporate governance, discusses or
advises the Board of Directors on matters such as reviewing and amending the
LIXIL Corporate Governance General Policy, and manages the implementation
of the evaluation of the effectiveness of the Board of Directors.
As the decision-making body responsible for the execution of business
activities in accordance with the basic policies approved by the Board of
Directors, this Board decided on important matters relating to the execution of
business in the Company and the LIXIL group of companies as a whole.
Deliberated and made decisions on material investments (excluding those relating
to M&A), financing, and matters relating to the establishment, reorganization, and
restructuring of subsidiaries (conducted by the Company and its subsidiaries)
within the authority delegated by the Board of Executive Officers.
Deliberated and made decisions on matters relating to M&A (including
divestment of business) conducted by the Company and its subsidiaries,
within the authority delegated by the Board of Executive Officers.
Reviewed and provided guidance on SATO’s overall business strategy and key operational
issues such as annual targets and strategic plans, internal and external partnerships, and
risk management. The SATO Advisory Board was dissolved at the end of FYE2024. A
new governance structure was put in place, with business review occurring under LIXIL's
business governance, and the impact progress and other LIXIL initiatives happening in
this area reported through the Global Sanitation & Hygiene Council.
Established and implemented environmental strategies, including the formulation of regulations and
policies related to environmental governance, deliberation and decision-making on measures to address
environment-related issues, and management and monitoring of group-wide environmental targets.
Supervised formulation and implementation of basic diversity and inclusion
policies and roadmaps throughout the LIXIL group of companies.
Resolved the important compliance strategy and plans as well as reported on
training and promotional activities of the LIXIL group of companies.
Made decisions regarding compensation and benefits structures for executives as well as
employees of the Company and the LIXIL group of companies and executives' individual
compensation, except for the matters to be exclusively resolved by the Compensation
Committee, while monitoring HR policies in terms of compensation and benefits.
As the committee responsible for decision-making on fundamental matters
related to group-wide information security and data privacy, decided on and
approved relevant policies, resolved issues, approved implementation of
countermeasures, and conducted measures to ensure awareness.
Resolved and deliberated on credit management related to business transactions
with third parties conducted by the Company and its subsidiaries in order to
accelerate decision-making and enhance effectiveness of governance.
Conducted reviews and examined insider trading regulations in order to prevent
rule violations as well as to fulfill the Company’s social responsibilities as a
business in the event that officers or employees give prior notification they will
be engaging in the sale or purchase of the Company’s shares and others.
Deliberated on uncertain events (risks) that could present opportunities or threats to the achievement of our
business objectives, considered the need for measures and formulated response strategies, and also reported
on company-wide risk management to the Board of Directors and the Board of Executive Officers.
In addition to auditing the conduct of duties by directors and executive officers, discussed and
made decisions on auditing policy, auditing plans, and the content of proposals to be submitted
to the Shareholders’ Meeting regarding the election and removal of financial auditors.
Made decisions regarding the compensation of directors and executive officers and
their individual compensation received from the Company as consideration for duties.
*1 We hold the committees not only in-person but also through appropriate methods such as the use of web-conferencing system.
*2 As of April 2024, the functions of the M&A Committee and the Group Credit Committee have been consolidated. *3 As of April 2024, merged into the Investment Review Committee.
*4 Currently the Global Sanitation & Hygiene Council. *5 Currently the Environmental Strategy Council. *6 Currently the Diversity & Inclusion Council.
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04
DATA
* Since June 19, 2024
*1 Appointed June 21, 2023 *2 Resigned June 19, 2024
Member
Meetings convened
Attendance
Yuji Nishiura(Chairperson)
13
13
Jun Aoki*1
10
10
Masatoshi Matsuzaki*2
13
13
Mariko Watahiki
13
13
Member
Mariko Watahiki(Chairperson)
Jun Aoki
Ryusuke Ohori
Yuji Nishiura
Nomination Committee Members, Meetings Convened, and Attendance in FYE2024
Nomination Committee Members*
in FYE2025
Outlook on Long-term Issues and Direction of
Initiatives
The Nomination Committee implemented initiatives to realize
a transformation of the management team for the next
generation to ensure sustainable growth of the Company.
(1) Smooth replacement of chairpersons based on the
succession plan for outside directors
(2) Smooth transition to a new executive structure
(3) Deliberations regarding the appointment of the CEO and
dialogue with the current CEO
(4) Confirmation of understanding of the next generation of
human resources and status of their development
Specific Initiatives and Progress in FYE2024
The initiatives to realize a transformation of the management
team for the next generation proceeded as planned. In
FYE2024, we particularly focused on the smooth replacement
of chairpersons based on the succession plan for outside
directors and the smooth transition to a new executive
structure. One specific example is the implementation of a
succession plan with an emphasis on maintaining the strong
corporate governance structure developed over the years. This
is based on the plan for the smooth replacement of outside
directors that was formulated in the previous fiscal year.
Another example is the smooth transition of our structure to
transform the management team for the next generation. This
has been facilitated through dialogue between executives and
next-generation talent. We have also monitored the
development of next-generation leaders. Through these
activities, we have built the foundation for transforming the
management team for the next generation and further
improved the quality of the Board of Directors and each
committee. In FYE2024, these initiatives resulted in the
retirement of the Representative Executive Officer (Vice
President CFO), appointment of a new executive officer,
succession of the Chairperson of the Board of Directors and a
committee chairperson, and appointment of one new outside
director candidate (retirement of one outside director).
Key Initiatives and Future Direction
The Nomination Committee will implement activities to
achieve sustainable qualitative improvement of corporate
governance and realize a transformation of the management
team for the next generation. Specifically, we will take the
following actions:
(1) Deliberate regarding the appointment of the CEO and
monitor next-generation talent development based on the
CEO succession plan
(2) Identify management personnel who will lead the next
generation and expand the list of executive officer
successor candidates
(3) Formulate a succession plan for outside directors to
implement further qualitative improvement of the Board
of Directors
Mariko Watahiki
Chairperson of the Nomination Committee
MESSAGE FROM THE CHAIRPERSON OF NOMINATION COMMITTEE
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* Since June 19, 2024
Audit Committee Members, Meetings Convened, and Attendance in FYE2024
Audit Committee Members*
in FYE2025
Member
Daisuke Hamaguchi(Chairperson)
Shigeki Ishizuka
Ryusuke Ohori
Shiho Konno
Mayumi Tamura
Member
Meetings convened
Attendance
Daisuke Hamaguchi*(Chairperson)
9
9
Shigeki Ishizuka*
9
9
Shiho Konno
14
14
Mayumi Tamura
14
14
* Appointed June 21, 2023
Outlook on Long-term Issues and Direction of
Initiatives
The role of the Audit Committee encompasses various tasks
including auditing the execution of duties of directors and
executive officers, ensuring the proper establishment and
operation of internal control systems, and overseeing the audit
procedures and reappointment assessment of accounting
auditors. Since the start of the new audit committee in July
last year, we have been working to strengthen organizational
audits with the aim of enhancing the efficiency and
effectiveness of our audit procedures. To accelerate these
efforts, we have individually established priority themes,
leveraging the expertise of each Audit Committee member,
and are working to realize an ideal system through discussions
with internal and external stakeholders.
Specific Initiatives and Progress in FYE2024
The Audit Committee convenes on a monthly-basis prior to the
Board of Directors' meeting, and in FY2024, the committee
met 14 times. Under the annual auditing plan, there were four
opportunities for exchanging opinions with the representative
executive officer and CEO and four interviews were held with
executive officers. Members of the committee also attended
important internal meetings, such as those of the Board of
Executive Officers.
At the monthly Audit Committee meetings, the Corporate
Audit Division and the Compliance & Ethics Division presented
reports, and the committee members gave directions as
appropriate. Also, four meetings of company auditors assigned
to group companies were held to confirm the status of internal
control implementation by each subsidiary and to share
group-wide auditing policies. During discussions with
accounting auditors, we exchanged detailed information on
the trends in sustainability information disclosure standards
and Key Audit Matters (KAM), and deepened our
understanding of goodwill assessment procedures and the
audit situation overseas.
In addition to the above audit activities, each Audit
Committee member proactively worked on priority themes,
such as establishing rules for reappointing accounting
auditors, strengthening the internal audit system, and
reviewing the effectiveness assessment process for internal
control systems, with the aim to strengthen organization
audits. As a result,we were able to achieve positive results.
Key Initiatives and Future Direction
The composition of the FYE2025 Audit Committee was
decided at the Board of Directors’ meeting that took place
after the Annual Shareholders’ Meeting held on June 19,
2024. We will continue to develop and enhance our group
audit framework both domestically and internationally and
conduct transparent, efficient, and effective audit activities in
order to strengthen our organizational auditing.
Daisuke Hamaguchi
Chairperson of Audit Committee
MESSAGE FROM THE CHAIRPERSON OF THE AUDIT COMMITTEE
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03
GOVERNANCE
04
DATA
* Since June 19, 2024
*1 Appointed June 21, 2023
Member
Meetings convened
Attendance
Mariko Watahiki(Chairperson)
Jun Aoki*1
Yuji Nishiura
14
14
10
10
14
14
Member
Jun Aoki(Chairperson)
Shigeki Ishizuka
Yuji Nishiura
Mariko Watahiki
Compensation Committee Members, Meetings Convened, and Attendance in FYE2024
Compensation Committee Members*
in FYE2025
Outlook on Long-term Issues and Direction of
Initiatives
For LIXIL, which has a global footprint in the housing materials
and equipment sectors through multiple brands, it is crucial to
have a competitive advantage in each market. Therefore,
executive compensation plays a part in “strategic choices” to
ensure the acquisition of talented personnel across diverse
markets.
As executive compensation is an important management
choice, it is required to function as a key lever in corporate
management. For this reason, it is crucial for the
Compensation Committee to fully understand the CEO's
expectations and evaluation of each officer and to confirm that
executive compensation is conducive to increase corporate
value which is a common objective for all stakeholders. In
addition, it is extremely important to ensure transparency in
the decision-making process and to be accountable for the
fairness of the treatment.
Therefore, the Compensation Committee, based on
objective data on compensation levels in each market and
advanced case studies of executive compensation provided by
external specialized agencies, engages in discussions with
management and revises the executive compensation system
as necessary, and determines the individual compensation for
each director and executive officer after verifying its validity
and fairness.
Specific Initiatives and Progress in FYE2024
In FYE2024, we have deliberated from the perspective of
whether the compensation system is fair and reasonable and
accountable to all stakeholders.
In particular, the Compensation Committee has recognized the
importance of motivation to achieve performance targets, and
deliberated and made revisions as necessary after discussions
with management on the nature of compensation mix and
incentive compensation.
In FYE2024, Performance-linked Compensation was not
provided to executive officers, and due to the severe
performance in FYE2024, we have decided not to increase
the Annual Base Salary for executive officers and outside
directors in FYE2025, with the exception of certain executive
officers with changes in role and responsibility.
Key Initiatives and Future Direction
Amid drastically changing economic and social conditions, we
will continue our activities while monitoring whether the
executive compensation system is functioning appropriately as
a strong motivator for the management team to work together
to create sustainable corporate value.
Jun Aoki
Chairperson of Compensation Committee
MESSAGE FROM THE CHAIRPERSON OF THE COMPENSATION COMMITTEE
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Stock-linked
Compensation
50%
Performance-linked
Compensation
25%
Annual
Base Salary
25%
President
Chairperson
Allowance
4%
Stock-linked
Compensation
22%
Annual
Base Salary
74%
Outside
Directors
Stock-linked
Compensation
25%
Performance-linked
Compensation
25%
Executive
Vice
Presidents
Note: The compensation of executive vice presidents and outside directors are
the median values.
Business Target Achievement Rate for FYE2024
Payout Rate According to Business Target Achievement Rate
Business
target items
Ratio versus
all business
targets
Target
Result
Business target
achievement rate
([Result ÷ Target] × 100)
0.9%
56.25%
¥23,162 million
57.91％
¥-13,908 million
‐126.44％
1.94％
Performance-linked
Compensation
Base amount of
Performance-linked
Compensation
＝
×
Payout rate according
to business target
achievement rate
Annual
Base Salary
50%
ROIC
40%
1.6%
Core earnings
30%
¥40,000 million
Net profit
30%
¥11,000 million
Business target achievement rate for all items
Total of each business target achievement rate
multiplied by ratio versus all business targets
(
)
Business target
achievement rate
Payout rate
Less than 50%
0%
50% or more but
less than 100%
Same as business target
achievement rate
100% or more but
less than 150%
([Business target achievement rate
– 100] × 2 + 100)%
150% or more
200%
Compensation Basic Policies
The compensation for directors and executive officers shall be
determined in accordance with the following basic policies.
• Foster improvement of short-, medium-, and long-term
business results and sustainable corporate value.
• Attract and retain the best talent who are necessary to foster
business growth globally.
• Determine compensation through a fair and reasonable
decision-making process that will provide accountability to
shareholders, employees, and all stakeholders.
• Consider and discuss compensation based on the economic and social
situation, our business condition, and objective indexes based on survey
results conducted by external specialized agencies and advice of external
specialized agencies at the Compensation Committee.
• Individual compensation shall be managed in consideration
of role and responsibility, business performance, experience
and difficulty of securing personnel, etc.
Compensation Structure
The compensation structures for directors who monitor and supervise
the Company’s management, and for executive officers who are
responsible for the performance of business, shall be separate. When
a director concurrently serves as an executive officer, the compensa-
tion system for executive officers shall be applied.
Compensation Mix
The Compensation Committee determines compensation for each officer based on
the role and responsibility, business performance, experience and difficulty of
securing personnel, etc. for each individual, as well as ESG action targets, etc. for
each individual in line with the purpose of the compensation basic policies. The
committee sets a higher ratio of Stock-linked Compensation to total compensation
for officers who are expected to contribute significantly to improving corporate
value from a medium- to long-term perspective, especially through structural
reform or initiatives related to ESG issues.
The chart below shows the base amount for Performance-linked Compensation
and Stock-linked Compensation, which are different from the actual amount paid.
Annual Base Salary
Annual Base Salary shall be determined individually, based on role and
responsibility, business performance, experience and difficulty of
securing personnel, etc. of each officer, while using the survey results
conducted by external specialized agencies and comparing compensa-
tion levels with domestic and foreign companies of similar business
scale, in line with the purpose of the compensation basic policies.
Performance-linked Compensation
To encourage executive officers to work together to achieve single-year
management goals and to ensure that they are fairly and equitably
rewarded in accordance with the results of their performance,
Performance-linked Compensation is calculated based on the compa-
ny-wide performance targets as a basis for calculating the payout rate.
The base amount of Performance-linked Compensation shall be
calculated by multiplying the Annual Base Salary by the coefficient that is
set based on the role and responsibility, etc. of each executive officer, in
line with the purpose of the compensation basic policies. Business targets
in FYE2024 included ROIC, core earnings, and profit for the year
attributable to owners of the parent (net profit), the same as in FYE2023.
In accordance with the table below, the payout rate for FYE2024 was 0%
as business target achievement rate did not reach 50%.
There is no Performance-linked Compensation in the compensation
system for non-executive directors.
EXECUTIVE COMPENSATION
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Notes:
1. Amounts based on Japan standard.
2. The total amount of Compensation shown above are stated as consolidated compensation, which are the total amount of Compensation paid by the Company
and the Company’s subsidiaries. The amount in parentheses is the total amount of Compensation paid by the Company.
3. The amount of Annual Base Salary for outside directors includes chairperson allowance.
4. Performance-linked Compensation and Stock-linked Compensation are the amounts that should be recorded as expenses for FYE2024.
Officer title
Total amount of
compensation
(¥ million)
Stock-linked Compensation
Total amount of compensation by type (¥ million)
Number of
officers
receiving
Annual Base
Salary
Performance-linked
Compensation
Phantom Stock
Restricted Stock Compensation
Other
Outside
directors
Executive
officers
Total
178
(178)
144
(144)
34
(34)
ー
ー
ー
ー
ー
10
1,060
(955)
621
(516)
213
(213)
225
(225)
1
(1)
8
1,238
(1,133)
765
(660)
247
(247)
225
(225)
1
(1)
18
Total amount of compensation of Directors and Executive Officers for the Fiscal Year ended March 2024
Stock-linked Compensation
The Company has been applying Stock-linked Compensation
in order to encourage directors and executive officers to
deepen their shared interests with shareholders and work to
create corporate value over the medium- to long-term.
Stock-linked Compensation consists of the Phantom Stock
Plan, which is a stock-linked monetary compensation plan
applied for directors and executive officers from FYE2020,
and the Restricted Stock Compensation Plan, which is applied
for executive officers from FYE2024. The ratio of the Phantom
Stock Plan and the Restricted Stock Compensation Plan for
executive officers is, in principle, 50% for each.
Stock-linked Compensation I: Phantom Stock Plan
In this compensation plan, the Company grants Phantom Stock
to directors on the day of the Annual Shareholders’ Meeting, and
to executive officers on the first day of the fiscal year.
The number of Phantom Stock granted shall be determined
by dividing the base amount (which is calculated by multiply-
ing the Annual Base Salary by the coefficient set based on the
role and responsibility, etc. of each officer) by the stock price*
at the time of grant in line with the purpose of the compensa-
tion basic policies. The holding period of Phantom Stock is
one year for directors and three years for executive officers,
and the vesting amount shall be determined by multiplying the
stock price* at the time of vesting by the number of Phantom
Stock held. In summary, the amount of compensation
increases or decreases in accordance with changes in the
stock price during the holding period.
Stock-linked Compensation II: Restricted Stock
Compensation Plan
In this compensation plan, the Company allots, in principle,
shares of restricted stock within two months of the first day of
the fiscal year. The number of shares allotted shall be
determined by dividing the base amount (which is calculated
by multiplying the Annual Base Salary by the coefficient set
based on the role and responsibility, etc. of each officer) by
the stock price* at the time of allotment in line with the
purpose of the compensation basic policies. The transfer
restriction shall be, in principle, lifted when the executive
officer leaves office. However, if the executive officer remains
an officer under the Companies Act, the transfer restriction
shall be lifted when the person retires from that position.
Stock Ownership Guidelines
The Company has introduced Stock Ownership Guidelines
from FYE2024, which provide recommendations for the
number of the Company’s shares to be held by executive
officers during their term of office.
Malus and Clawback Provisions
With regard to Performance-linked Compensation and
Stock-linked Compensation, if there has been any material
accounting error by the Company or the Board of Directors
determines that there has been a material violation, etc. by the
officer concerned, the Compensation Committee may decide
to reduce or cancel pre-vested compensation and/or demand
the return of post-vested compensation based on such
reasons.
* The average closing price of the Company’s stock for the 30 business days prior to
each of the grant dates and the vesting date shall be used.
* In principle, the average closing price of the Company’s stock for the 30 business
days prior to April 1, the first day of the fiscal year, shall be used.
Representative executive officers: Three times the amount of Annual Base Salary
Other executive officers: One time the amount of Annual Base Salary
EXECUTIVE COMPENSATION
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*1 Resigned June 19, 2024 *2 Appointed June 21, 2023
Member
Meetings convened
Attendance
Masatoshi Matsuzaki*1 (Chairperson)
Jun Aoki*2
Shigeki Ishizuka*2
Shiho Konno
Mayumi Tamura
Yuji Nishiura
Daisuke Hamaguchi
Mariko Watahiki
8
8
7
7
7
7
8
8
8
8
8
8
8
8
8
8
Governance Committee Members, Meetings Convened, and Attendance in FYE2024
Member
Daisuke Hamaguchi(Chairperson)
Jun Aoki
Shigeki Ishizuka
Ryusuke Ohori
Shiho Konno
Mayumi Tamura
Yuji Nishiura
Mariko Watahiki
Governance Committee Members*
in FYE2025
* Since June 19, 2024
Outlook on Long-term Issues and Direction of
Initiatives
The Governance Committee complements the Board of
Directors and the three statutory committees and works with
them to enhance the Company’s corporate governance.
Furthermore, the Governance Committee leads the
effectiveness evaluation of the Board of Directors. This
evaluation is conducted to ascertain the Board's efficiency
and that of each committee, as well as to identify areas for
improvement (follow-up issues) to further enhance their
effectiveness. As the Governance Committee is composed
entirely of outside directors, it also provides a forum for free
discussion to promote mutual understanding among outside
directors, such as sharing an awareness of issues within the
Board of Directors and committees.
Specific Initiatives and Progress in FYE2024
The Governance Committee is a non-statutory standing
committee that meets at least once a quarter and as
necessary based on the annual agenda. In FYE2024, the
committee met a total of eight times.
In response to the previous fiscal year’s follow-up issue of
establishing ideal oversight of LIXIL’s Board of Directors, the
outside directors discussed and reached a consensus on what
is expected of outside directors. Based on this, they
deliberated on key topics requiring oversight and established
these as agenda items for the Board of Directors.
In planning and implementing the effectiveness
evaluation of the Board of Directors in the current fiscal year,
the committee identified key items to confirm the progress of
follow-up issues from the previous year and the progress on
how well the Board of Directors is operating with a focus on
improving corporate value from a medium- to long-term
perspective, and all committee members reviewed the content
of the questionnaire.
Key Initiatives and Future Direction
During the effectiveness evaluation of the Board of Directors in
the current fiscal year, the Governance Committee identified
the need to enhance communication among directors and
between directors and executive officers, and to establish and
concretize a supervisory system. This year, the Governance
Committee will further accelerate the development of a shared
understanding to contribute to improved company
governance, especially with a foundation for enhanced
communication. In this way, outside directors with different
areas of expertise can engage more fully in discussions at
Board of Directors meetings.
Daisuke Hamaguchi
Chairperson of the Governance Committee
MESSAGE FROM THE CHAIRPERSON OF THE GOVERNANCE COMMITTEE
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Risk Management Initiatives (Years ended March 31)
2018
2020
2019
2021
2022
2023
2024
Developed
and rolled
out crisis
management
handbook
Worked to
optimize
Business
Continuity
Plan in Japan
Transitioned
to an online crisis
management
task force at
headquarters
Implemented
COVID-19
countermeasures
Established task
force in Europe
to respond to
recent geopolitical
risks
Established a BCP
for cyberattacks
Identified material risks for FYE2020
at the Board of Executive Officers’
meeting
Established a Workplace group to
share and discuss risks on political,
geopolitical and social trends
Identified risks that
may impede the
achievement of
goals for material
issues
Established a crisis
management task force
at headquarters in response
to the 2024 Noto Peninsula
Earthquake
The following information is available on our website.
Business Risks
https://www.lixil.com/en/investor/strategy/risks.html
Risk Management
Approach and Structure
LIXIL and its group companies utilize enterprise risk
management (ERM) across the group to ensure business
continuity and stable development. As part of this drive, we
have compiled our Risk Management Global Policy for all
employees and executive officers that are broadly based upon
the international ISO 31000 standard for risk management
systems and the international COSO ERM Framework. We
have also established various operational rules and regulations
to build an effective risk management system.
The Chief Legal & Compliance Officer (CLCO) oversees
the management and development of the group’s risk
management frameworks and systems. The CLCO chairs the
Risk Management Committee, which reports any important
matters that emerge during its deliberations to the Board of
Executive Officers as the immediate supervising group. The
Board of Directors receives regular reports from the CLCO and
oversees the progress of risk management initiatives. The
Audit Committee also receives reports from the Risk
Management Department as part of its role in overseeing
effective risk management.
Risk Management Initiatives
The group identifies risks that might impact its business
activities and conducts annual group-wide risk assessments.
Based on the assessment results, we then select risks that are
important to us as a group. The results of the risk
assessments and the list of material risks are reported by the
head office Risk Management Department to the Risk
Management Committee for resolution. The Committee places
the risks in order of priority and monitors them.
These risks are classified into strategic risks and
operational risks. Strategic risks are broadly scrutinized from a
medium- to long-term perspective in terms of management
policy, business strategy, and Impact Strategy, as well as from
the perspective of our stakeholders. In the case of operational
risks, The risk owners are presumably responsible the
measures to respond to these risks. The group strives to
enhance the transparency of its risk management by
disclosing information on material risks and countermeasures
with due consideration of the level of risk appetite and
tolerance.
Business Continuity Management and Planning
The group recognizes the importance of business continuity
and promotes business continuity management (BCM) to
ensure the continuation and swift recovery of business in the
event of an emergency while minimizing damages. We have
also compiled rules and guidelines that serve as our basic
crisis management policy, and have strengthened the
business continuity plans (BCP) to be followed in the event of
a crisis, such as a large-scale natural disaster or cyberattack.
These policies and plans are reviewed and updated
periodically. If a crisis were to occur that was considered to
exceed a specific level in terms of scale or significance, a
crisis response headquarters would be established at the head
office to guarantee a prompt initial response and escalation.
INTERNAL CONTROL SYSTEMS AND COMPLIANCE
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Compliance Initiatives (Years ended March 31)
2018
2017
2020
2019
2022
2023
2024
2021
Introduced risk countermeasures
in subsidiaries in Japan
Strengthened compliance training
and implemented e-learning
Revised LIXIL Code of Conduct
Global rollout of short
training videos
Held compliance
survey on globally
unified platform
Revised the LIXIL
Human Rights Principles
Conducted global
research skills training
Distributed
video on
how to use
Speak Up!
correctly
Reorganized the
Compliance division
globally
Revised Supplier
Code of Conduct
Strengthened cooperation
with audit divisions
Held compliance survey on
globally unified platform
Held compliance
survey on globally
unified platform
Held compliance
review
Initiated compliance review
Held group-wide compliance
events for the first time
Unified Concern-Raising
System globally
Revised Global Policy
on Anti-Corruption
and Detailed Rules
for Gifts and
Entertainment
Compliance
LIXIL Code of Conduct
The LIXIL Code of Conduct (the “Code of Conduct”) is a set of rules
to be adhered to by all officers and employees worldwide in order to
undertake business activities appropriately and with shared values
and ethics. The Code of Conduct is available in 19 languages and is
regularly updated. Every year, the Company conducts training and
requires all company officers and employees to pledge to comply
with the terms of the Code of Conduct. Furthermore, global policies
and detailed rules aligned with the Code of Conduct have been put in
place for specific fields posing a high risk.
LIXIL Human Rights Principles
The LIXIL group reviewed the LIXIL Human Rights Principles in June 2021,
and made revisions to strengthen governance and efforts to respect human
rights, and to improve the transparency of processes for addressing human
rights issues and fulfilling accountability responsibilities.
Compliance System
In addition to the Compliance Committees of the LIXIL group and
affiliates in Japan, Compliance Committees have been
established in each region. These committees provide a platform
for reviewing initiatives and discussing countermeasures. LIXIL
has worked to enhance risk management and further solidify the
compliance culture and system of LIXIL and its group companies.
The new system promotes efficiency and standardization of
programs at the global level.
Corporate Culture
LIXIL group management is working to raise compliance awareness
and embed a culture of compliance through measures such as
video messages about compliance from management. We also
conduct educational events such as contests in Japan and globally
so that employees can increase their compliance awareness in an
engaging setting at their own pace.
Education and Training Programs
The LIXIL group provides training on compliance and on laws and
regulations for new employees, new managers, and executives.
Programs are also conducted for all officers and employees on global
policies. The LIXIL group has developed effective education and
training programs suited to the risks of each area. In addition, the
LIXIL group publishes newsletters and distributes information via the
Workplace platform, and strives to continue cultivating employees’
knowledge and awareness of compliance.
Review Process
Employee awareness surveys (LIXIL Voice) with questions on
compliance and human rights are completed annually by employees
worldwide to gain an understanding of the permeation of the group’s
compliance measures and human rights initiatives. The results are
reported to both the Compliance Committee and the Impact Strategy
Committee to promote efforts to cultivate a compliance culture and
reduce human rights risks.
Concern-Raising (Whistleblowing) System
and Grievance Handling System
We operate the 24-hour concern-raising system Speak Up! with the aim of
gathering information on compliance breaches, taking measures to
prevent fraudulent and unlawful behavior, and responding quickly where
action is required. Since 2017, the number of compliance concerns
received has totaled between 300 and 400 per year for Japan and
international operations combined. To facilitate greater understanding of
how to use it and how the process works after a report is made, we
produced animated videos, and we also periodically conduct programs to
publicize the system. When a concern is reported, depending on the
nature of the concern, the relevant department conducts an investigation,
analyzes trends, and takes proactive measures such as organizational
improvements and employee education to prevent wrongdoing and
violations.
For further details regarding the Code of Conduct, please visit our corporate website.
https://www.lixil.com/en/about/governance/pdf/LIXIL_CoC_en.pdf
For further details regarding the Code of Conduct, please visit our corporate website.
https://www.lixil.com/en/impact/society/h_rights.html
Human Rights: See P.59
Responsible Supply Chain Management: See p.61
INTERNAL CONTROL SYSTEMS AND COMPLIANCE
01
77
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
Internal Audit Initiatives (Years ended March 31)
Strengthened unification
of internal audit chain
of command within
the global headquarters
Enhanced functions
for improving group
governance
Increased sophistication
of internal audit through
digital technologies
Aligned the assessment st
andards of internal audit
Transferred Global
Corporate Audit Staff
(GCAS)
Inappropriate
activities by
domestic
subsidiaries
2018
2017
2020
2019
2022
2021
2023
2024
Reorganized Corporate
Audit into a network-based
organization
Expanded the
scope of
internal audit
for domestic
subsidiaries
Enhanced internal
audit functions
Began internal audits
of corporate responsibility
in the SATO business and
other businesses
Began utilizing data for
predictive analysis
Data integration and consolidation⇒Aggregation and visualization⇒
Predictive analysis⇒Automation and optimization
Information
Intelligence & Insight
Future areas to tackle
Active areas to date
Data analysis
Data aggregation
Data linkage
Stage5
Stage4
Stage3
AI*
BA*
BI*
Stage2
Stage1
Able to perform
advanced
machine-based
analysis
Able to find rules
from data and
perform
predictive analysis
Able to visualize and
analyze data based
on trends
Able to accumulate
data in a form
that can be utilized
Able to
acquire data
* BI: Business intelligence BA: Business analytics AI: Artificial intelligence
Internal Audit
How LIXIL and Its Group Companies See Internal Audit
Corporate Audit, a corporate function, is responsible for
managing the internal audit organizations of all LIXIL group
companies in Japan and international markets, and ensures
that all audits are conducted in a unified and comprehensive
manner by integrating the internal audit chain of command.
(At the end of March 2024, the number of people involved in
the internal audit organizations of all LIXIL group companies
totaled 62.) Corporate Audit is responsible for carrying out
traditional internal audit processes such as accounting audits,
operational audits, and assessments of internal controls.
Additionally, it reviews internal audit systems and processes in
order to help achieve sustainable group-wide growth,
strengthen governance as well as internal controls, and
contribute to the development of human resources.
Corporate Audit’s overall mission is to provide quantitative
value that contributes to strengthening the management
foundation and quickly addresses changes in the internal and
external environment through internal audit operations.
Initiatives to Ensure the Effectiveness of Internal Audits
All audit organizations of LIXIL group companies, including
our global teams, report to the leader of Corporate Audit, who,
in turn, ensures detailed information is shared in a timely
manner. Furthermore, Corporate Audit reports audit results
each quarter to the Board of Executive Officers (management
meeting comprised of executive officers) and attends regular
meetings of the Audit Committee (comprised of outside
directors), reporting on audit results, specific risk information,
awareness of issues relating to group governance, and other
matters directly to the Audit Committee. In terms of
organization, Corporate Audit operates under the executive
officer in charge of internal audit, acts in close cooperation
with the Audit Committee while taking into account the
committee’s instructions and advice, and makes regular
reports directly to the external auditors. This structure ensures
the independence and objectivity of audit functions. We plan
to further improve group governance by increasing
opportunities for internal audits to evaluate effectiveness at the
request of the Audit Committee.
Initiatives Launched to Audit Compliance and
Non-financial Information
Corporate Audit has been emphasizing internal audit
programs related to compliance in recent years. This has
involved enhanced cooperation with the Compliance
Department to confirm that group companies are properly
managed to preclude violations of laws and regulations,
reduce corporate risks and increase reliability. In addition,
Corporate Audit in Europe has been piloting an Environment,
Health and Safety (EHS) program. To supplement designated
third-party external certification, local members are
conducting trials of sample-based audits. Initiatives in these
areas require a medium- to long-term outlook, and will help
prevent fraudulent acts and corruption, improve the integrity
of operations, and enhance compliance awareness among
management and employees.
Further Accelerating the Digitalization of Internal Audits
To improve the sophistication and efficiency of audits, audit processes
that leverage digitalization are becoming more important.
To achieve this, we are strengthening data visualization and trend
analysis, and we are venturing into data-based predictive analysis.
INTERNAL CONTROL SYSTEMS AND COMPLIANCE
01
78
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
04
80
81
83
85
91
93
95
96
97
CONSOLIDATED 11-YEAR SUMMARY
FINANCIAL HIGHLIGHTS
NON-FINANCIAL HIGHLIGHTS
REVIEW AND ANALYSIS OF OPERATING
RESULTS AND FINANCIAL POSITION
PRINCIPAL GROUP COMPANIES/
GLOBAL MANUFACTURING AND SALES SITES
STAKEHOLDER ENGAGEMENT
BASIC POLICY FOR INVESTOR RELATIONS
SHAREHOLDER INFORMATION
CORPORATE DATA
DATA
CONTENTS 04
03
04
DATA
GOVERNANCE
01
OVERVIEW
02
STRATEGY
04
79
Years ended March 31
2014
2015
2016
2017
2018
2019
2020 ＊7
2021 ＊7
2022
2023
2024
Results of Operations
Net sales (JGAAP) / Revenue (IFRS)
¥1,628,658
¥1,705,427
¥1,890,450
¥1,633,229
¥1,829,344
¥1,692,432
¥1,514,449
¥1,378,255
¥1,428,578
¥1,495,987
Operating income (JGAAP) / Core earnings (IFRS)
69,080
51,722
70,069
89,781
76,046
54,485
52,290
57,288
64,875
25,745
Operating income margin (JGAAP) / Core earnings margin (IFRS) (%)
4.2
3.0
3.7
5.5
4.2
3.2
3.5
4.2
4.5
1.7
Operating profit (IFRS)
48,041
39,011
69,251
59,107
49,011
32,010
35,842
69,471
24,903
Net income (loss) (JGAAP) / Profit (loss) for the year attributable to owners of the parent (IFRS)*1 20,952
30,864
（25,605）
42,503
54,581
（52,193）
12,518
33,048
48,603
15,991
Research and development expenses
17,380
18,211
25,523
26,089
27,875
28,188
27,508
23,975
22,864
23,536
Capital expenditures
64,321
61,454
72,083
68,215
69,953
67,639
68,635
68,498
48,634
55,349
Depreciation and amortization
49,168
50,404
62,205
60,701
64,661
68,502
105,557
84,786
80,722
81,900
EBITDA*2
124,822
102,126
132,274
146,441
140,707
120,053
134,832
137,895
145,597
107,645
Cash Flows
Cash flows from operating activities
83,533
98,563
121,085
132,531
116,362
69,351
157,701
151,043
118,296
15,005
Cash flows from investing activities
（218,333）
（119,041）
19,122
（58,052）
（52,606）
（72,328）
（41,314）
（54,151）
（24,805）
（29,319）
Cash flows from financing activities
153,144
46,618
（154,403）
（79,899）
（43,843）
1,579
（153,285）
（93,425）
（108,094）
19,839
Cash and cash equivalents, end of year
139,039
147,708
129,646
121,563
138,751
141,421
95,862
111,061
100,404
106,677
Financial Position
Total assets
1,786,294
1,915,427
2,130,120
2,042,165
2,107,131
2,059,544
2,091,529
1,741,814
1,782,882
1,853,534
Net assets (Net of non-controlling interests) (JGAAP) / Equity attributable to owners of the parent (IFRS)*3
593,487
583,747
524,806
547,244
616,897
533,656
502,165
552,271
612,385
625,433
Net assets (JGAAP) / Total equity (IFRS)
601,795
590,855
537,308
559,431
649,573
567,167
535,137
554,767
614,968
627,720
Net interest-bearing debt
463,479
559,971
697,413
638,345
549,159
584,537
736,689
484,444
424,299
511,723
Per Share Data
Net income (loss) per share (JGAAP) / Earnings (loss) per share (IFRS) (EPS) (¥)*1
¥72.06
¥105.80
¥（89.33）
¥148.01
¥189.13
¥（179.98）
¥43.15
¥113.92
¥167.21
¥55.54
Net assets per share (JGAAP) / Equity attributable to owners of the parent per share (IFRS) (BPS) (¥)
2,041.34
2,038.56
1,828.84
1,902.18
2,128.77
1,839.59
1,730.99
1,902.89
2,106.30
2,178.77
Dividends per share (¥)
55
60
60
60
65
70
70
75
85
90
Key Indicators
EBITDA to sales ratio (%)*2
7.7
6.0
7.0
9.0
7.7
7.1
8.9
10.0
10.2
7.2
ROE (%)
3.6
5.3
（4.6 ）
7.9
9.4
（9.1 ）
2.4
6.3
8.3
2.6
ROA (%)
1.3
1.7
（1.3 ）
2.0
2.6
（2.5 ）
0.6
1.7
2.8
0.9
Total assets turnover (times)
0.9
0.9
0.9
0.8
0.9
0.8
0.7
0.7
0.8
0.8
Equity ratio (JGAAP) / Ratio of equity attributable to owners of the parent to total assets (IFRS) (%)
33.2
30.5
24.6
26.8
29.3
25.9
24.0
31.7
34.3
33.7
Dividend payout ratio (%)
76.3
56.7
—
40.5
34.4
—
162.2
65.8
50.8
162.0
Net debt-to-equity ratio (%)*5
78.1
95.9
132.9
116.6
89.0
109.5
146.7
87.7
69.3
81.8
Number of employees*6
51,419
—
60,677
59,248
61,140
62,940
61,634
51,879
51,640
51,501
Stock Indicators
Stock price (closing), end of year (¥)
¥2,846
¥2,847
¥2,295
¥2,825
¥2,376
¥1,478
¥1,345
¥3,075
¥2,290
¥2,177
Market capitalization
890,952
891,265
718,459
884,378
743,817
463,086
421,414
963,456
717,501
625,038
Price earnings ratio (times)
39.5
26.9
—
19.1
12.6
—
31.2
27.0
13.7
39.2
Price book-value ratio (times)
1.39
1.40
1.25
1.49
1.12
0.80
0.78
1.62
1.09
1.00
¥1,483,224
23,162
1.6
16,351
（13,908）
24,339
52,873
81,330
104,492
45,794
（27,680）
30
20
18
16
（3,673）
124,485
1,886,595
642,511
644,338
552,707
¥（48.43）
2,237.53
90
7.0
（2.2）
（0.7）
0.8
34.1
—
Dividend to adjusted EBITDA ratio (%)*4
31
86.0
49,310
¥1,877
539,097
—
0.84
IFRS
(¥ million)
*1 Figures are after amortization of goodwill (JGAAP).
*2 EBITDA is calculated under JGAAP as operating income + depreciation and amortization + goodwill amortization, and
under IFRS as core earnings + depreciation and amortization.
*3 Equity attributable to owners of the parent is calculated under JGAAP as total net assets – stock acquisition rights –
non-controlling interests.
*4 Newly established from 2024. Adjusted EBITDA is core earnings + depreciation (adjusted for the amount of
depreciation recorded as a cash outflow due to the application of lease accounting under IFRS)
*5 The net debt-to-equity ratio is calculated as net interest-bearing debt ÷ total equity based on the fiscal year-end.
*6 The number of employees from FYE2016 is on an IFRS basis, the definition of which differs from the number under JGAAP.
*7 Permasteelisa S.p.A and LIXIL VIVA’s business is classified as “discontinued operations” due to the decision to divest. For
comparison, FYE2020 results are also rearranged in the same way.
Note: Under JGAAP, figures of less than ¥1 million are truncated, while under IFRS, figures of less than ¥1 million are rounded.
JGAAP
CONSOLIDATED 11-YEAR SUMMARY （LIXIL Corporation and Consolidated Subsidiaries）
01
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
80
Revenue
■■ Japan ■■ International
(¥ billion)
2,000
1,500
1,000
500
0
2020
2021
2022
2023
2024
1,483.2
975.2
508.0
(¥ billion)
（%）
80
60
40
20
0
2020
2021
2022
2024
1.6
8
6
4
2
0
2023
23.2
(¥ billion)
60
30
0
-30
-60
2020
2021
2022
20
10
（%）
0
-10
-20
2023
2024
-13.9
-2.2
■■ Core earnings (left)
●● Core earnings margin (right)
■■ Profit (loss) for the year attributable to owners of the parent (left)
●●ROE (right)
Core earnings / Core earnings margin
Profit (loss) for the year attributable to owners of
the parent / ROE
(¥ billion)
600
400
200
0
2020
2021
2022
2023
40
（%）
30
20
10
0
2024
449.6
30.3
(¥ billion)
2,400
1,200
0
-1,200
-2,400
2020
2021
2022
2023
4
2
0
-2
-4
（%）
2024
-0.7
1,886.6
■■ SG&A expenses (left)
●● SG&A ratio (right)
■ Total assets (left)
●●ROA (right)
SG&A expenses / SG&A ratio
Total assets / ROA
Revenue decreased by 0.9% year-on-year to ¥1,483.2 billion. Factors
included sluggish demand in global markets despite foreign-currency
translation gains due to a weaker Japanese yen.
Core earnings decreased by 10.0% year-on-year to ¥23.2 billion. Factors
included rising costs due to inflation and the effect of a decrease in
revenue especially in international business.
Annual dividends remained at ¥90 per share. Dividend to adjusted
EBITDA ratio was 31%
* Adjusted EBITDA is core earnings + depreciation and amortization
(adjusted for the amount of depreciation and amortization recorded due to
cash outflows related to the application of lease accounting under IFRS).
Profit for the year attributable to owners of the parent decreased by ¥29.9
billion year-on-year to a deficit of ¥13.9 billion, primarily due to the
recording of restructuring costs, an increase in financial expenses, and
higher tax expenses.
SG&A expenses increased by 1.5% year-on-year to ¥449.6 billion, and the
SG&A ratio increased slightly. Factors included the effect of higher
personnel costs, including the foreign currency impact. despite various
cost-reduction initiatives.
Total assets increased by ¥33.1 billion year-on-year to ¥1,886.6 billion.
Factors included the effect of foreign currency translation resulting from
the weaker Japanese yen despite progress in inventory reduction.
Dividends per share /
Dividend to adjusted EBITDA ratio
●● Adjusted EBITDA ratio (right)
(¥)
200
150
100
50
0
2020
2021
2022
（%）
40
30
20
10
0
2023
2024
31
■■ Dividends per share (left)
90
FINANCIAL HIGHLIGHTS LIXIL Corporation and Consolidated Subsidiaries (Years ended March 31)
01
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
81
2023
36.7
22.6
2024
EBITDA / EBITDA to sales ratio
Equity attributable to owners of the parent /
Ratio of equity attributable to owners of the parent
■■ EBITDA (left)
●● EBITDA to sales ratio (right)
■■ Equity attributable to owners of the parent (left)
●● Ratio of equity attributable to owners of the parent to total assets (right)
(¥ billion)
200
150
100
50
0
2020
2021
2022
7.0
104.5
2024
（%）
16
12
8
4
0
2023
（%）
(¥ billion)
800
600
400
200
0
2020
2021
2022
2023
60
40
20
0
(¥ billion)
（%）
800
600
400
200
0
2020
2021
2022
200
150
100
50
0
552.7
86.0
2024
2023
(¥ billion)
40
30
20
10
0
2020
2021
2022
2023
2024
(Times)
6
4
2
0
2020
2021
2022
5.3
2023
(¥ billion)
40
30
20
10
0
2020
2021
2022
EBITDA to sales ratio decreased by 0.2 percentage points year-on-year to
7.0%, primarily because of lower core earnings amid the challenging
external environment.
Net interest-bearing debt increased by ¥41.0 billion year-on-year to
¥552.7 billion due to factors including an increase in working capital.
Ratio of equity attributable to owners of the parent to total assets
increased by 0.3 percentage points to 34.1%. Factors included the effect
of foreign currency translation resulting from the weaker Japanese yen
despite a ¥58.8 billion increase in interest-bearing debt.
While IT investment increased, capital expenditures decreased due to
improved investment efficiency and a drop in investment in distribution
facilities in international markets in the previous fiscal year.
Notes: 1. Excluding the impact of IFRS 16 Leases applied from FYE2020
2. Changed reporting segments from FYE2023
Net interest-bearing debt-to-EBITDA ratio increased from 4.8 times to 5.3
times. Factors were the increase in net interest-bearing debt and the
decrease in profitability.
Depreciation was mainly associated with developing LIXIL’s groupwide IT
systems and maintaining and upgrading facilities. Depreciation at LWT
increased due to the foreign currency impact of depreciation and
amortization in international markets, and decreased at LHT because of
the consolidation of production bases in the previous fiscal year.
Notes: 1. Excluding the impact of IFRS 16 Leases applied from FYE2020
2. Changed reporting segments from FYE2023
■■ Net interest-bearing debt (left) ●● Net debt-to-equity ratio (right)
●● LWT
●● LHT
●LBT
● H&S
●● LWT
●● LHT
● LBT
● H&S
Net interest-bearing debt /Net debt-to-equity ratio
Capital expenditures by business segment
Net debt-to-EBITDA ratio
Depreciation by business segment
Former segments
Former segments
New segments
New segments
2024
2024
34.1
642.5
32.5
17.9
FINANCIAL HIGHLIGHTS
01
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
82
CO2 emissions from operational activities
(Scope 1 & 2)*2
Environment
(Thousand t-CO2)
（%）
1,200
400
0
0
-40
2019
(Baseline year)
2022
800
2019
(Baseline year)
2022
2023
（%）
10
0
20
30
■■ Scope 1(left) ■■ Scope 2(left)
●● Carbon intensity per unit of output (right)
Ratio of electricity usage from
renewable energy sources*2
(People)
2022
2023
20
60
40
80
（%）
60
40
20
0
0
2024
44.8%
78
（%）
20
15
10
5
0
2022
2023
We continue to focus on attracting high-potential women and aim to achieve
gender parity in new graduate recruitment in Japan
We have set a target of 30% female managers across the organization
by FYE2030.
■■ Number of female new graduates recruited (left)
●● Ratio of female recruitment (right)
●●LIXIL and its subsidiaries (including overseas) *7
●●LIXIL Corporation
Ratio of female new graduate recruitment
(Regular employees)*5
Social
Ratio of female managers*6
2023
2024
-27.5
740*1
315*1
425*1
2024
28.3
2024
17.1*1
6.9*1
FYE2023
FYE2024
Ratio of high-performance windows sold for new detached
houses (Japan)
High-performance
windows
90.0%
93.0%
FYE2023
FYE2024
Ratio of energy- and water-saving faucets*3 and
toilets*4 sold (Japan)
faucets
92.3%*
94.1%
toilets
99.2%
99.4%
By seeking to increase energy efficiency and utilize renewable energy to further
reduce CO₂ emissions, we achieved a 34.7% reduction in CO₂ emissions and a
27.5% reduction in emission intensity per unit of output. (Baseline year:
FYE2019)
By switching to renewable energy for electricity used at our business sites, we
achieved a ratio of 28.3% at the end of FYE2024.
In FYE2022, we revamped all window lineup in our effort to reach a 100%
product ratio of high-performance windows for new detached homes by
FYE2026.
LIXIL's energy- and water-saving faucets, water-saving showers, toilets, and
other products contributes to efficient daily use. In Japan, we have set targets
to reach 100% product ratio for energy- and water-saving faucets and toilets by
FYE2031.
* Updated with finalized data collection through retroactive recalculation that
we conduct as part of accurately assessing the impact of our environmental
activities
NON-FINANCIAL HIGHLIGHTS (Years ended March 31)
LIXIL’s sustainability policies and initiatives are on p.46.
In August 2024, we plan to publish the full LIXIL ESG Databook including environmental and
social performance data for FYE2024 accompanied by additional third-party assurance.
https://www.lixil.com/en/impact/data/performance.html
01
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
83
2023
2024
*4 Excluding products designed for housing complexes
*6 Directly hired employees only.
Gender pay gap*1
Note: Pay includes base salary, overtime, other allowances and bonus. Regular
employees include managers, non-managers, senior employees, and
employees assigned from LIXIL to other companies. Employees assigned
from other companies to LIXIL are excluded. Contract workers include
part-time and temporary employees. Temporary staff hired through
agencies are excluded. The gender pay gap at global-basis is 80.3%.
We are replacing the existing system with our new personnel system
in a phased manner from April 2022 and aiming to bring about a
compensation scheme that reflects job value.
Ratio of male employees who took childcare leave*6
Note: Including LIXIL's own paid childcare leave system for male
employees
We are aiming to achieve a 100% acquisition rate for paternity and
male parental leave by FYE2025.
Internal directors
3
Outside directors
8
98.8 %
The Board of Directors consists of eleven members including eight outside directors and
three internal directors (including four women). The ratio of independent outside directors
was over 70%.
The Board of Directors met 15 times in FYE2024. LIXIL sets a minimum attendance rate
of 75% in its Corporate Governance General Policy.
Number and ratio of outside directors
(FYE2024)
Attendance rate at Board of Directors’ meetings
(FYE2024)
Governance
(Number)
400
300
100
0
2022
200
(Ratio per hundred employees)
1.0
0.8
0.4
0
0.2
0.6
We collect information on any compliance violations, ensure early action on any wrongdoings
and violations, and implement preventive measures. No compliance violations that have a
significant impact on the Company, including serious violations of laws and regulations
occurred.
Reports of possible compliance issues
LIXIL Corporation
77.3%
87.3%*1
2024
All workers of LIXIL Corporation
59.8%
Regular employees
66.1%
Contract workers
91.6%
2023
2024
388
0.70
*3 Excluding products used for hot tub filling or full-body bathing that are not intended for use
as energy- and water-saving faucets
Scope of coverage: LIXIL Corporation and its consolidated subsidiaries (production and
non-production bases in Japan, and production bases outside Japan) With regard to
non-consolidated subsidiaries, subsidiaries operating in buildings owned and managed by
LIXIL’s operating company are treated as being part of LIXIL.
*2
*1 Verified by an independent third party in June 2024. Refer to the 'LIXIL ESG Databook 2024
(Preliminary Data Disclosure: Environmental and Social Performance Data)
*5 Scope of coverage: LIXIL Corporation, Japan Ratio of female new graduates employed
(incl. those who completed graduate studies)
*7 Excludes companies sold during FYE2024 and consolidated subsidiaries with
less than 100 employees in Japan. (Calculated based on the job grade system
of each operating company.)
NON-FINANCIAL HIGHLIGHTS
01
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
84
FYE2023
FYE2024
Increase/Decrease
Rate of change
Revenue
1,496.0
1,483.2
-12.8
-0.9%
Gross profit
（％）
468.6
31.3%
472.7
31.9%
+4.1
+0.5pp
+0.9%
—
Selling, general and administrative expenses
442.9
449.6
+6.7
+1.5%
Core earnings*1
（％）
25.7
1.7%
23.2
1.6%
-2.6
-0.2pp
-10.0%
—
Overview of Financial Results for FYE2024
(¥ billion)
*1 Equivalent to operating profit in JGAAP
In the fiscal year ended March 31, 2024 (FYE2024), the
Japanese economy showed signs of a gradual recovery, as severe
behavioral restrictions eased with the shift of the classification of
COVID-19 to category 5. At the same time, social and economic
activities continued to normalize, including a recovery in personal
consumption, as well as rising inbound demand. However,
ongoing inflation in the economy overall as well as the continuing
rapid depreciation of the Japanese yen, which is partly
attributable to the widening interest rate gap between Japan and
the United States, and monetary tightening measures worldwide
remain risks that may put downward pressure on the Japanese
economy. The outlook for the housing sector remains uncertain,
with the number of new housing starts continuing to be weak.
Concerns over the level of housing investment from rising
mortgage interest rates and the impact of price increases for
construction materials and components have led to a continued
decline in the number of new housing starts, particularly in
owner-occupied and detached houses. At the same time, the use
of the subsidy system in the Advanced Window Renovation
Project, which is a government-created measure to support
large-scale energy savings in housing, has created substantial
demand in the window renovation market centering on insulation
products. This program will continue to expand in scale and be
applied in the next fiscal year.
In the global economy, a sense of economic stagnation
remains due to geopolitical risks, such as the prolonged
Russia-Ukraine conflict, an unstable situation in the Middle East,
and difficult US-China relations. Within economic policy, there
are concerns over the prolonged global monetary tightening
measures to curb inflation, sluggish real estate markets, and
concerns about the economic outlook in China due to a decline
in consumer confidence. Meanwhile, in Europe and the U.S.,
high interest rates remain even though there has been an easing
in rate increases. Recent speculation about rate cuts, which
could provide a boost to consumer sentiment necessitates a
close monitoring of the situation.
Overview of Operating Results
Overall Business Results in FYE2024
In FYE2024, we continued to face a challenging business
environment from the previous consolidated fiscal year, with
rising labor costs and soaring material prices in Japan
businesses and a significant decline in profitability in
international businesses due to reduced demand in Europe and
the U.S.
In the Japan business, while the number of new housing
starts decreased, demand for renovations including
high-performance insulated windows supported sales revenue.
Meanwhile, in the international business, demand was sluggish
for housing-related products in the European and U.S. markets
due to higher interest rates and prolonged inflation. As a result,
revenue decreased by ¥12.8 billion compared to FYE2023 to
¥1,483.2 billion. The gross profit margin ratio improved 0.5
percentage points to 31.9%; however, due mainly to sluggish
demand in international markets, core earnings fell ¥2.6 billion
compared to FYE2023 to ¥23.2 billion.
For the Japan business, rising raw material and component
prices continued to be absorbed by price optimizations. As for
the international business, fixed costs became a significant
burden amid softening demand. The challenge to improve
profitability requires action to appropriately control variable and
REVIEW AND ANALYSIS OF OPERATING RESULTS AND FINANCIAL POSITION
01
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
85
FYE2023
FYE2024
Increase/Decrease
Rate of change
Water Technology
Business (LWT)
Revenue
915.3
896.9
-18.4
-2.0%
Core earnings
47.3
22.7
-24.5
-51.9%
（％）
5.2%
2.5%
-2.6pp
—
Housing Technology
Business (LHT)*1
Revenue
598.2
596.4
-1.8
-0.3%
Core earnings
19.4
35.9
+16.5
+85.4%
（％）
3.2%
6.0%
+2.8pp
—
Consolidation
adjustments, etc.*2
Revenue
-17.5
-10.1
+7.4
—
Core earnings
-40.9
-35.4
+5.4
—
Total
Revenue
1,496.0
1,483.2
-12.8
-0.9%
Core earnings
25.7
23.2
-2.6
-10.0%
（％）
1.7%
1.6%
-0.2pp
—
Overview of Financial Results by Segment
(¥ billion)
*1 Following a review of the management system, profits and losses of overseas subsidiaries, which were previously attributed only to LHT, have been reclassified to LWT
starting from the fiscal year ended March 2024.
*2 “Consolidation adjustments, etc.” correspond to the difference between the total of Japan and international revenue/core earnings, and the figure shown in the “Total” row.
fixed costs.
First, to address rising variable costs, such as raw material
and component prices, we will continue our efforts to recover
and improve profitability through flexible price optimizations.
Additionally, we need to increase profitability by improving our
product mix through sales of differentiated products that offer
higher profit margins.
To reduce fixed costs, in FYE2024, we continued our efforts
to reduce SG&A expenses, such as head office expenses, and we
promoted structural reforms in our international businesses. In
Europe and the Americas, we streamlined staffing, restructured
the supply chain, and optimized our business portfolio. In
FYE2025, we plan to continue structural reforms, streamline
excess facilities primarily by optimizing the supply chain, and
complete our major structural reforms.
As the business environment surrounding the LIXIL
Corporation and its consolidated subsidiaries (together, “the LIXIL
group”) continues to be challenging, we must take quick and
appropriate action. By steadily implementing the measures
outlined above, we will ensure financial stability while working to
achieve the Company’s sustainable growth and purpose.
Overview of Operating Results for FYE2024
The financial results FYE2024 were as follows: In the Japan
business, despite higher sales for renovation products that are
centered on higher insulation for windows and supported by
subsidy programs, the decline in the number of new housing
starts continued to significantly impact results. In the
international busines, particularly in Europe and the U.S., there
was a substantial decline in demand due to higher interest rates
and prolonged inflation. Due to these and other factors, revenue
declined to ¥1,483.2 billion (down 0.9% year-on-year). In
relation to profitability, the Company continued its efforts to
implement structural reforms, sales price optimization, and
measures to improve profitability both in the Japan and
international businesses. However, these efforts were not enough
to offset the negative impacts of further cost increases from
sustained high material and component costs and rising energy
prices, and reduced revenue from weakened demand and
stagnant market conditions, particularly in the international
business. Due to these and other factors, core earnings totaled
¥23.2 billion (down 10.0% year-on-year). Due to various factors
such as an increase in other expenses associated with structural
reforms, operating profit was ¥16.4 billion (down 34.3%
year-on-year). Profit before tax from continuing operations was
¥6.7 billion (down 66.3% year-on-year), which was also due to
the impact of increased financial expenses from rising interest
rates, among other factors.
In addition to an increase in income tax expenses due to a
temporary decline in profitability, the Company posted a loss for
the year from discontinued operations related to Permasteelisa
S.p.A., a previous consolidated subsidiary of the Company that
was sold in September 2020. As a result, the loss for the year
attributable to owners of the parent, after deducting
non-controlling interests, amounted to ¥13.9 billion (compared
with a profit of ¥16.0 billion in the previous fiscal year).
REVIEW AND ANALYSIS OF OPERATING RESULTS AND FINANCIAL POSITION
01
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
86
Non-current
liabilities
573.6
Equity
627.7
Current
liabilities
652.2
Liabilities
and equity
1,853.5
March 31,
2023
March 31,
2024
March 31,
2023
March 31,
2024
Current
assets
730.8
Non-current
assets
1,155.8
Assets
1,886.6
Current
assets
744.5
Non-current
assets
1,109.0
Non-current
liabilities
647.7
Equity
644.3
Current
liabilities
594.6
+33.1
Liabilities
and equity
1,886.6
(of which, impact of
foreign currency
translation:+102.3）
(of which, impact of
foreign currency
translation:+102.3）
Consolidated Financial Position
(¥ billion)
+33.1
Assets
1,853.5
Water Technology Business
For the Water Technology Business, despite the continued
impact from a decline in new housing demand, revenue in the
Japan business rose slightly from the previous year due to
effective price optimizations and continued strong sales of
renovation-related products, among other factors. Meanwhile,
revenue in the international business declined year-on-year.
Despite the impact of currency translation due to the
depreciation of the Japanese yen, there was a significant decline
in demand due to the prolonged high levels of interest rates,
particularly in Europe and the U.S., and continued inflation,
which led to a worsening investment appetite in housing. As a
result, revenue decreased to ¥896.9 billion (down 2.0%
year-on-year).
Despite reductions in SG&A expenses and an increase in gross
profit from price optimizations both in the Japan and
international businesses, these efforts were not enough to offset
the impact of a decline in sales and the burden of fixed costs.
As a result, core earnings decreased significantly to ¥22.7 billion
(down 51.9% year-on-year)
Housing Technology Business
For the Housing Technology Business, revenue declined slightly
to ¥596.4 billion (down 0.3% year-on-year). This was due to the
substantial impact of the decline in new housing demand,
similar to the Water Technology Business, and resulted despite
the effectiveness of continued price optimization and the
significant growth in renovation-related demand to make homes
more efficient and enhance people’s lifestyles, and to protect the
environment from the introduction of a national large-scale
subsidy program.
Core earnings significantly increased to ¥35.9 billion (up 85.4%
year-on-year) from a stronger gross profit margin on the back of
renovation-related sales and timely price optimization. Costs were
controlled by an "asset-light" approach at production sites and
measures to tackle sustained increases in component costs and
energy prices.
Overview of Financial Position (As of March 31, 2024)
We need to establish a stable financial foundation in order to achieve
medium-to-long term and sustainable growth.
In striving to improve profitability and strengthen our financial
structure, we are committed to enhancing our capital efficiency and
reducing interest-bearing debt through an asset-light approach, with
our mid-term targets of a net interest-bearing debt-to-EBITDA ratio of
3.5 times or less and a ratio of equity attributable to owners of the
parent to total assets of 35% or more.
Assets, Liabilities, and Equity as of March 31, 2024
Total assets as of March 31, 2024 were ¥1,886.6 billion, an increase
of ¥33.1 billion from the end of the previous consolidated fiscal year.
Current assets decreased by ¥13.8 billion from the end of the
previous consolidated fiscal year to ¥730.8 billion. This decline was
due to a strategic adjustment of inventories, offsetting the positive
impact of foreign currency translation, an increase in cash on hand,
and an increase in trade and other receivables associated with the
end-of-period holidays. Meanwhile, non-current assets increased by
REVIEW AND ANALYSIS OF OPERATING RESULTS AND FINANCIAL POSITION
01
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
87
FYE2024*1
106.7
48.0
-29.9
-3.7
3.4
124.5
FCF*2
181
Working capital
Depreciation
-44.2
81.3
CAPEX*3
-52.9
Note: Profit before tax: -0.8*1
FYE2023*1
100.4
15.0
-29.3
19.8
0.7
106.7
Cash and cash equivalents
at the beginning of the year
Other*4
Net cash flows from
operating activities
Net cash flows from
investing activities
Net cash flows from
financing activities
Cash and cash equivalents
at the end of the year
Cash and cash equivalents
at the beginning of the year
Other*4
Net cash flows from
operating activities
Net cash flows from
investing activities
Net cash flows from
financing activities
Cash and cash equivalents
at the end of the year
FCF*2
-143
Working capital
Depreciation
-52.9
81.9
CAPEX*3
-553
Note: Profit before tax: 18.5*1
Cash Flow Status and Cash Balance
(¥ billion)
*1 Includes discontinued operations *2 Free cash flow = Net cash flows from operating activities + Net cash flows from investing activities
*3 CAPEX = Purchase of property, plant and equipment + Purchase of intangible assets (Excluding the purchase of assets classified as right of use assets under IFRS 16 Leases)
*4 Other = Effects of exchange rate changes on the balance of cash and cash equivalents held in foreign currencies + Net increase (decrease) in cash and cash
equivalents included in assets classified held for sale
124.5
-677.2
March 31,
2023
Net
interest-bearing
debt
March 31,
2024
-552.7
106.7
-6,184
-511.7
Cash and cash equivalents
(¥ billion)
Interest-bearing debt
¥46.8 billion from the end of the previous consolidated fiscal year to
¥1,155.8 billion. This was mainly attributable to an increase in
goodwill and other intangible assets resulting from the effect of
foreign currency translation.
Equity amounted to ¥644.3 billion and the ratio of equity
attributable to owners of the parent to total assets was 34.1% (up 0.4
percentage points from the end of the previous consolidated fiscal
year).
Overview of Cash Flows (As of March 31, 2024)
Cash and cash equivalents as of March 31, 2024 were ¥124.5
billion, an increase of ¥17.9 billion from the end of the previous
consolidated fiscal year, after accounting for exchange rate
differences and other factors.
Cash Flows from Operating Activities
Net cash provided by operating activities increased to ¥48.0
billion (up ¥33.0 billion year-on-year). Major factors included a
decrease in taxes paid and changes in working capital
(including changes related to inventories, trade and other
payables, and trade and other receivables), despite a decrease
in profit before tax from continuing operations.
Cash Flows from Investing Activities
Net cash used in investing activities decreased to ¥29.9 billion
(down ¥0.6 billion year-on-year). Major factors included the
purchase of property, plant and equipment and intangible assets
associated with capital investments. This was partially offset by
the positive impact of temporary income from the sale of
cross-shareholding shares and the absorption-type split of a
subsidiary.
Cash Flows from Financing Activities
Net cash used in financing activities decreased to ¥3.7 billion
(down ¥23.5 billion year-on-year). Factors for this included the
proactive procurement and repayment of interest-bearing debt,
both short-term and long-term, as well as the payment of
dividends and lease liabilities.
REVIEW AND ANALYSIS OF OPERATING RESULTS AND FINANCIAL POSITION
01
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
88
Outlook for FYE2025
While the economic environment is expected to
continue to pick up for both Japanese and
international markets, uncertainties remain from
issues including geopolitical risks, such as
international conflicts and the presidential election in
the United States, as well as sluggish real estate
markets, inflation, and the direction of interest rates.
Consequently, the future outlook remains uncertain.
In this business environment, the LIXIL group has
taken decisive actions aligned with the strategic
initiatives outlined in the “LIXIL Playbook.” The LIXIL
group has continued structural reforms, especially
aimed at the pressing issue of recovering the
profitability of its international business operations.
These include optimizing personnel allocation in
Europe and the United States, further reviewing the
business portfolio such as the streamlining of
loss-making entities, and restructuring the supply
chain. We anticipate these initiatives will further
improve profitability from FYE2025.
To enhance financial performance and achieve
sustainable growth, the LIXIL group remains focused
on serving consumers with more differentiated
products while also delivering a positive impact for
society and the environment. Concurrently, a
transformation is underway to turn the Company into
an agile, entrepreneurial organization, through
accelerated digital transformation and the building of
an inclusive culture that can drive innovation and
seeks new avenues for growth.
We are beginning to see the results of our efforts to
strengthen our business foundation, and our path to
long-term growth remains unchanged. We will further
enhance the value we provide to our stakeholders, and
ultimately realize our group’s purpose of making better
homes a reality for everyone, everywhere.
Forecast for the FY Ending March 2025
• Revenue: ¥1,570.0 billion (up 6% year-on-year)
• Core earnings: ¥35.0 billion (up 51% year-on-year:
Core earnings margin 2.2%)
• Operating profit: ¥25.0 billion (up 53%
year-on-year)
• Profit before tax: ¥15.0 billion (up 125%
year-on-year)
• Profit attributable to owners of the parent
¥8.0 billion(- year-on-year)
• Dividends: The Company plans to pay an annual
dividend of ¥90 per share, consisting of interim
and year-end dividends of ¥45 each
The above forecasts for FYE2025 are based on the
information available to the Company as of the date of
publication, and include risks and uncertainties.
Actual results may differ from the forecasts above due
to various factors.
REVIEW AND ANALYSIS OF OPERATING RESULTS AND FINANCIAL POSITION
01
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
89
0
1
2
3
4
5
6
ROE*1
ROIC*2
Revenue
Net interest-bearing debt-to-EBITDA ratio
Ratio of equity attributable to
owners of the parent to total assets*3
Core earnings margin
(%)
FYE2022
FYE2023
FYE2024
1.7
1.6
2.2
(Forecast)
(¥ trillion)
FYE2022
FYE2023
FYE2024
1.2
1.3
1.4
1.5
1.6
1.50
1.48
1.57
(Forecast)
(%)
FYE2022
FYE2023
FYE2024
15
20
25
30
35
34.3
33.7
(Forecast)
(%)
FYE2022
FYE2023
FYE2024
-10
-5
0
5
10
8.3
-2.2
1.3
(Forecast)
(%)
FYE2022
FYE2023
FYE2024
FYE2025
FYE2025
FYE2025
0
2
4
6
8
1.5
0.9
1.4
(Forecast)
4.5
(Times)
FYE2022
FYE2023
FYE2024
FYE2025
FYE2025
FYE2025
2
3
4
5
6
2.9
5.3
4.6
(Forecast)
2.6
4.5
1.43
4.8
*1 Figure before the effect of share buybacks announced on April 30, 2024 *2 Calculation: Operating profit × (1 – Effective tax rate) / (Working capital + Fixed assets) *3 Equivalent to “equity ratio” under JGAAP
34.0
34.1
REVIEW AND ANALYSIS OF OPERATING RESULTS AND FINANCIAL POSITION
01
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
90
Name
Location
Paid-in
capital
(¥ million)
Equity owned
by the holding
company(%)
Business
segment
LIXIL Total Service Corporation
Sumida-ku, Tokyo
100
100 LWT, LHT
TM.S Corporation
Shinagawa-ku, Tokyo
60
100
LWT
Dinaone Corporation
Chuo-ku, Tokyo
90
100
LWT
LIXIL Europe S.à r.l.*1
Luxembourg
€ thousand
57,143
100
LWT
Grohe AG*1
Düsseldorf, Germany
€ thousand
60,885
100
LWT
Other 47 affiliate companies of LIXIL Europe S.à r.l.
—
—
—
LWT
ASD Holding Corp.*1
USA New Jersey
US$ thousand
412,962
100
LWT
15 affiliate companies of ASD Holding Corp.
—
—
—
LWT
A-S (China) Co., Ltd.
China Shanghai
US$ thousand
30,000
100
LWT
LIXIL Vietnam Corporation
Vietnam Hanoi
VND million
743,386
100
LWT
LIXIL（Thailand）Public Co., Ltd.
Thailand Pathumthani
THB million
277
99
LWT
LIXIL AFRICA HOLDINGS (Pty) Ltd.*1
South Africa Krugersdorp
ZAR million
2,926
100
LWT
LIXIL (China) Investment Co., Ltd.*1
China Shanghai
CNY thousand
450,605
100
LWT
Taiwan LIXIL Water Technology Corporation
Taiwan Taipei
NT$ thousand
282,677
100
LWT
LIXIL Living Technology (Suzhou) Corporation
China Suzhou, Jiangsu
CNY thousand
395,464
100
LWT
LIXIL Sanitary Fitting Manufacturing (Suzhou) Corporation
China Suzhou, Jiangsu
1,730
100
LWT
LIXIL India Sanitaryware Private Limited
Andhra Pradesh, India
INR thousand
81,787
100
LWT
LIXIL Total Hanbai Corporation
Shinagawa-ku, Tokyo
75
100
LHT
G TERIOR Corporation
Shinagawa-ku, Tokyo
316
100
LHT
LIXIL Housing Research Institute, Ltd.
Shinagawa-ku, Tokyo
100
100
LHT
Name
Location
Paid-in
capital
(¥ million)
Equity owned
by the holding
company(%)
Business
segment
Asahi Tostem Exterior Building Materials Co., Ltd.
Shinagawa-ku, Tokyo
100
80
LHT
LIXIL Renewal Corporation
Sumida-ku, Tokyo
100
100
LHT
LIXIL TEPCO Smart Partners Inc.
Sumida-ku, Tokyo
450
60
LHT
LIXIL Toyo Sash Shoji Co., Ltd.
Sumida-ku, Tokyo
100
100
LHT
Kuwata Co., Ltd.
Suma-ku, Kobe, Hyogo
30
100
LHT
LIXIL REALTY, Corp.*2
Taito-ku, Tokyo
160
100
LHT
Oita Tostem Co., Ltd.
Oita, Oita
50
100
LHT
Nishi Kyushu Tostem Co., Ltd.
Saga, Saga
30
100
LHT
GHS Corporation
Shinagawa-ku, Tokyo
100
100
LHT
LIXIL Living Solution Corporation
Shinagawa-ku, Tokyo
100
100
LHT
LIXIL Home Finance Corporation
Chiyoda-ku, Tokyo
500
100
LHT
LIXIL INTERNATIONAL Pte. Ltd.*1
Singapore
30,565
100 LHT, LWT
TOSTEM THAI Co., Ltd.*1
Pathumthani, Thailand
THB million
2,767
100
LHT
LIXIL GLOBAL MANUFACTURING VIETNAM Co., Ltd.
Dong Nai, Vietnam
4,310
100 LHT, LWT
LIXIL Manufacturing (Dalian) Corporation
China Dalian, Liaoning
US$ thousand
43,500
100
LHT
LIXIL WINDOW SYSTEMS PRIVATE LIMITED
INR thousand
858,318
100
LHT
PT. LIXIL ALUMINIUM INDONESIA
Jakarta, Indonesia
IDR million
173,617
75
LHT
40 other companies *2,3,4
*1 Specified subsidiary
*2 Among other companies, LIXIL India Private Limited is a specified subsidiary.
*3 LIXIL Africa (Pty) Ltd. is an insolvent company with liabilities of ZAR 1,455 millions in excess of assets
as of March 31, 2024.
*4 Among other companies, Sonitech Corporation is no longer a subsidiary of the Company due to
the transfer of its shares on December 1, 2023.
Consolidated Subsidiaries
PRINCIPAL GROUP COMPANIES (As of March 31, 2024)
01
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
91
Equity-Method Affiliates
Name
Location
Paid-in
capital
(¥ million)
Equity owned
by the holding
company (%)
Business
segment
Sanyo Homes Corporation*1
Nishi-ku, Osaka, Osaka
Business segment
Housing Technology
5,945
27 ＊2
—
39 other companies
*1 The company submits securities reports.
*2 “Equity owned by the holding company” shows the ratio of the number of shares owned by the
Company to the total number of issued shares (excluding treasury stock) of Sanyo Homes Corporation as
of March 31, 2024.
Number of showrooms
Number of factories
Japan
China/
Asia Pacific
EMEA
84
Americas
1
11
21
Home reform shops and reform
network members in Japan
11,721stores
Homebuilding franchise
members in Japan
182stores
Japan
84
International
33
117
sites
* Seven of the LHT factories also manufacture commodities for buildings.
Japan
Americas
Europe
China/
Asia Pacific
LWT
20
12
4
20
LHT
17 *
—
—
5
Japan
37
International
41
78
sites
GLOBAL MANUFACTURING AND SALES SITES (As of March 31, 2024)
PRINCIPAL GROUP COMPANIES
01
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
92
Employees
Local
Communities
NPOs, NGOs,
and Educational and
Research Institutions
Government Authorities
and Industrial Associations
Customers
Suppliers
Shareholders
and Investors
LIXIL has positioned improving the quality of people’s lives and solving social issues through proactive and active
engagement with stakeholders as one of our material issues. We are committed to proactively engaging in dialogue with all
of our stakeholders, including customers, business partners, members of the communities where our operational facilities
are located, shareholders and investors, and our employees and their families, and engaging in business activities that
have a greater positive impact on society.
We incorporate customer opinions into our products,
services, and business operations and provide timely and
appropriate disclosure on our products and services. We
offer customer support by phone, email, at 117 showrooms
worldwide, and via online showrooms globally.
Customers
Customer Satisfaction >
Suppliers
Supply Chain Management >
We strive to build and maintain strong relationships with our
suppliers by facilitating two-way communication. Based on the
results of our responsible procurement surveys, we share our
Procurement Principles, recognize current circumstances,
and follow through on promised improvements. We also hold
regular meetings with suppliers to share information on
regulatory trends and new procurement strategies.
STAKEHOLDER ENGAGEMENT
01
93
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
Shareholders
and Investors
We held 397 discussions this year with investors around the world to help promote
sustainable growth and enhance corporate value. Every year, we hold an online ESG
briefing for investors, where we explain our strategies to sustainably enhance our
corporate value, including our Value Creation Process, Impact Strategy, and
governance structure, as well as answer questions from the audience. We disclose
timely and transparent information in English and Japanese through our Integrated
Report, our investor relations web pages, and the Tokyo Stock Exchange website.
Shareholders and Investor Relations > LIXIL ESG Briefing (2024) >
Employees
LIXIL boasts approximately 49,300 employees. We strive to
create an inclusive and inspiring working environment that
incorporates employee opinions expressed through regular
global employee opinion surveys or discussions between
the labor union and the company.
Diversity & Equal Opportunity > A Rewarding Workplace >
NPOs, NGOs,
and Educational and
Research Institutions
We partner with non-profit
organizations (NPOs),
nongovernmental organizations
(NGOs), and educational and
research institutions to facilitate
research and solution development as
well as to give seminars.
Government Authorities
and Industrial Associations
Engaging in vigorous and transparent dialogue with government authorities and
municipalities is necessary to shape a sustainable society. As part of this process,
we are involved in several industrial and business associations whose missions
include engaging with public authorities on behalf of their respective industries,
including building materials equipment and housing-related products. Participating
in these associations helps keep us up-to-date with current and pending changes
in laws and international agreements that may affect our business.
Local
Communities
LIXIL operates 78 factories worldwide. As a responsible corporate citizen, in addition to respecting local cultures
and customs and creating responsible products and jobs, we also contribute to the development of the
communities in which we operate. We hold community dialogues at factories and sales bases in Japan as well as
community briefings and in-person and online factory visits to encourage communication with local residents.
LIXIL employees also teach classes on social issues such as sanitation, the environment, and diversity at local
schools. In addition, in response to the growing social interest in the SDGs, we are implementing the LIXIL x
SDGs NEXT STAGE initiative that seeks to convey information about LIXIL’s SDGs activities to people in Japan.
LIXIL × SDGs NEXT STAGE (Japanese only) ＞
S TA K E H O L D E R E N G A G E M E N T
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DATA
The Company's investor relations （IR） activities facilitate
communication with the Japanese and international capital
markets, thereby helping to enhance corporate value. These
IR activities convey messages from senior management to
markets while providing senior management with feedback
from markets in an unflagging effort to boost corporate value.
Based on the timely disclosure rules of the Tokyo Stock
Exchange, the Company discloses important information,
including decisions, events, or information regarding accounts
settlement, that might affect investment judgments. It is also
the Company's policy to disclose information that does not fall
under the timely disclosure rules as proactively and fairly as
possible, in order to better meet investors' needs.
Activities for FYE2024
● Communicated management messages to the markets
（for institutional investors and analysts）
Earnings briefing sessions: 4 (quarterly)
One-on-one meetings: 397
Briefing sessions regarding management strategy and
business strategy: 3
Small meetings: 2
Investor conferences participated in: 5
Social gathering with shareholders: 1
● Feedback from markets to the Company
Reported on IR activities at Board of Directors: Regularly,
as well as 4 times/year after earnings briefing sessions
Exchanged opinions with business divisions on business
condition and market outlook: Regularly
Shared information with management via email: Regularly
Investor Relations
www.lixil.com/en/investor/
Selected as a constituent of the
FTSE4Good Index by FTSE Russell （June
2023, seven consecutive years）
LIXIL’s 2050 long-term net-zero targets
verified by the Science Based Targets
initiative （SBTi）, first in Japan’s building
materials industry （March 2024）
Selected as a constituent of the DJSI World for
five consecutive years and the DJSI Asia Pacific
for seven consecutive years, created by S&P
Global (December 2023)
Selected as a component of the
Nadeshiko Brand initiative for
the eighth time, jointly
conducted by the Ministry of
Economy, Trade and Industry
（METI） and the Tokyo Stock
Exchange （March 2024）
Selected as an
Environmentally Sustainable
Company at the ESG
Finance Awards Japan
sponsored by the Ministry of
the Environment （February
2023, two consecutive years）
Selected as the “DX Grand Prix
Company 2024” jointly
awarded by the Ministry of
Economy, Trade and Industry,
the Tokyo Stock Exchange, and
the Information-Technology
Promotion Agency, Japan.
(May 2024)
Selected for all six ESG indices adopted by Japan’s
Government Pension Investment Fund (GPIF)
Earned a place in CDP’s
Climate Change A List
(February 2024)
Received ‘Top 10% S&P Global CSA Score’ in
the S&P Global Sustainability Yearbook 2024
(February 2024)
https://www.lixil.com/en/about/evaluation.html
External Recognition (From April 2023 to June 2024)
Produced by MSCI Research as of
February 2024
Certified as a Health & Productivity Management
Outstanding Organization under the Certified Health &
Productivity Management Outstanding Organizations
Recognition Program, a joint initiative of the Ministry of
Economy, Trade and Industry and the Nippon Kenko
Kaigi, Japan; selected as a White 500 enterprise,
recognized among the top 500 under the large enterprise
category (March 2023, two consecutive years)
Major External Recognition: Global
Major External Recognition: Japan
Major Selected Indices
(consecutively selected as of June 2024)
*Please refer to our website for disclaimers.
Received a rating of AAA in the MSCI ESG
Ratings (March 2024, two consecutive
years)
*Please refer to our website for disclaimers.
BASIC POLICY FOR INVESTOR RELATIONS
01
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02
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03
GOVERNANCE
04
DATA
95
Major Shareholders (Thousand shares)
Name of shareholder
Number of
shares held
Ratio of
shareholdings
The Master Trust Bank of Japan, Ltd. (Trust Account)
48,512
14,887
12,687
7,463
6,757
5,364
3,824
3,620
3,248
3,056
16.89%
5.18%
4.42%
2.60%
2.35%
1.87%
1.33%
1.26%
1.13%
1.06%
＊
SSBTC CLIENT OMNIBUS ACCOUNT
(Standing Proxy: The Hongkong and Shanghai Banking Corporation Limited Tokyo Branch)
Custody Bank of Japan, Ltd. (Trust Account)
＊
JPMorgan Securities Japan Co., Ltd.
LIXIL Employee Stock Ownership
NORTHERN TRUST CO. (AVFC) SUB A/C AMERICAN CLIENTS
(Standing Proxy: The Hongkong and Shanghai Banking Corporation Limited Tokyo Branch)
Nippon Life Insurance Company
(Standing Proxy: The Master Trust Bank of Japan, Ltd.)
JP MORGAN CHASE BANK 385781
(Standing Proxy: Settlement & Clearing Services Department, Mizuho Bank, Ltd.)
STATE STREET BANK WEST CLIENT – TREATY 505234
(Standing Proxy: Settlement & Clearing Services Department, Mizuho Bank, Ltd.)
LIXIL Client Stock Ownership
Number of Shares and Shareholders
Number of shares authorized
1,300,000,000
Number of shares outstanding
(Excluding treasury stock of 59,323 shares)
287,152,467
Number of shareholders
171,398
Stock Trading Volume (Thousand shares)
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
June
2019
October
2019
April
2020
October
2020
April
2021
October
2021
October
2022
April
2022
April
2023
October
2023
April
2024
0
A Financial institutions
79,492
B Domestic companies
31,116
C Overseas investors
71,029
D Individuals and others
105,514
E Treasury stock
59
Total
287,211
Distribution of Ownership Among Shareholders (Thousand shares)
A
B
C
D
E
Total
287,211
thousand
shares
Share Price Movement*
-40%
-20%
0%
20%
40％
60％
80％
100％
June
2019
October
2019
April
2020
October
2020
April
2021
October
2021
October
2022
April
2022
April
2023
October
2023
April
2024
* Relative stock price trend based on the closing stock price as of June 30, 2019.
LIXIL stock price
Nikkei 225
Notes: In addition to the above, LIXIL Corporation holds 59 thousand shares of treasury stock.
Shareholding calculations exclude treasury stock.
* indicates a trust service arrangement
SHAREHOLDER INFORMATION (As of March 31, 2024)
01
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
96
Statements made in this integrated report with respect to plans, strategies, and future performances that are not historical facts are
forwardlooking statements. LIXIL Corporation cautions that a number of factors could cause actual results to differ materially from those
discussed in the forward-looking statements.
In addition to the Company profile,
sustainability initiatives, and the
latest news, our corporate website
also contains sections covering
the Company’s recent business
initiatives and insights from the CEO.
Our IR website offers comprehensive
content for shareholders and other
investors, including information
regarding financial results, streaming
video of results briefings, and
performance data.
Our corporate website introduces
LIXIL’s Impact Strategy and
initiatives around the world in order
to contribute to achieving the SDGs,
under our corporate purpose: “make
better homes a reality for everyone,
everywhere.”
Company Name
LIXIL Corporation
Established
September 19, 1949
Registered Office
Osaki Garden Tower, 1-1 Nishi-Shinagawa 1-chome,
Shinagawa-ku, Tokyo 141-0033, Japan
Paid-In Capital
¥68,530 million
Fiscal Year End
March 31
Employees
Consolidated employees: 49,310
Financial Auditors
Deloitte Touche Tohmatsu LLC
Overview of Major Businesses
The Company manufactures and sells building materials
and housing equipment for housing and buildings, and
operates housing-related businesses as well as related
services
Common Stock Listings
Tokyo Stock Exchange Prime Market
Nagoya Stock Exchange Premier Market
Transfer Agent and Special Management of Accounts
Mitsubishi UFJ Trust and Banking Corporation
Annual Shareholders’ Meeting
Normally held in June
LIXIL Online Information
Corporate Website
https://www.lixil.com/
Financial Information
https://www.lixil.com/en/investor/
Non-Financial Information
https://www.lixil.com/en/impact/
Overview of Information Disclosure
Please visit our website for more information on these subjects.
Cautionary Statement with Respect to Forward Looking Statements
Reports
Website
● Integrated Report
● ESG Databook
● TCFD and TNFD Report
● Corporate Governance Report
A report that integrates key
financial and non-financial
information
Financial Information
Non-Financial Information
● Annual Securities Report
● Information for shareholders and
other investors
● LIXIL's Impact (Sustainability)
● Corporate Governance Information
CORPORATE DATA (As of March 31, 2024)
01
OVERVIEW
02
STRATEGY
03
GOVERNANCE
04
DATA
97
www.lixil.com
2024.06.27
TSE Securities Code: 5938
LIXIL Corporation