Grohe parent company, water technologies and products specialist Lixil, has reported a rise in revenues and profits for the year ended March 31.
Revenues for its international business, Lixil Water Technologies (LWT), which incorporates Grohe, increased strongly by 19% driven by strong performances in Europe and the Americas. EMEA sales rose by 15% year on year, rising above pre-Covid levels. Sales grew in all categories and channels, with wholesale channels and e-commerce continuing to perform strongly.
Lixil Corporation reported that revenue increased 4% to ¥1.428 trillion (£9.03 billion), driven by continued strong performance in Lixil’s US and European businesses. Net profits in the full year increased by ¥15.6bn to ¥48.6bn (£310 million).
Lixil Corporation’s core consolidated earnings (profits) in Q4 decreased because of intensified increases in material costs and additional costs incurred in ensuring a stable supply of products. Core profits rose for the fiscal year, however, rising by ¥7.6bn to ¥64.8bn (£410 million) thanks to a sales increase in Europe and the Americas, price optimisation, a reduction in selling, general and administrative costs and progress in implementing structural reforms.
In its international business (LWT), which Grohe is part of, it said that core earnings increased by 39% thanks to “robust sales in the Americas and Europe”. The Americas saw a rise of 13% year on year, while the EMEA market saw a rise of 15%, rising above pre-Covid levels
To help Lixil meet the needs of its customers, Lixil’s Grohe brand launched Grohe Professional in the EMENA region, aimed at installers and their end-user clients. It also launched Grohe QuickFix, aimed at the growing DIY market.
The company also expanded its GIVE vocational training programme, aimed at encouraging the next generation of plumbers, supporting plumbing schools across the region and helping student gain work experience or placements after graduation.
Commenting on the full-year results, Jonas Brennwald, leader Lixil EMENA, commented: “I’m proud to see that even in a challenging macroeconomic environment, the EMENA region is going from strength to strength. We are confident that the Grohe brand with its differentiated go-to-market strategy will continue to contribute to the success of LIXIL.”
Lixil Group CEO KInya Seto added: “We are pleased to deliver year-on-year revenue and profit growth and have significantly improved our financial position despite the extremely challenging operational environment in the fourth quarter. Our US and European business achieved double-digit growth while our APAC business [Asia Pacific] is continuing to recover from the impact of Covid-19.
“However, soaring raw material costs, distribution costs, and response costs to supply chain disruptions weighed on our bottom line in the fourth quarter. To combat these challenges, we are taking measures including timely price increases, shifting to high-value-added products, and switching to alternative materials. We are also building a more agile and resilient supply chain and production system to deliver for our customers. At the same time, we are accelerating development of products that reduce environmental impact and contribute to a circular economy to help protect the planet and capture emerging business opportunities.
“In the last fiscal year, we made steady progress against our mid-term financial targets. This reflects the progress we have made in our strategic initiatives set out in our management direction, as well as our increased agility and resilience. While an uncertain operating environment is likely to persist, I am confident we will be able to achieve sustainable growth for the long term. With our commitment to our corporate responsibility goals, we will continue to enhance the value we create for our stakeholders and ultimately deliver on our corporate purpose of making better homes a reality for everyone, everywhere.”
Lixil is forecasting revenue for 2022/23 of ¥1.52 trillion and core earnings (profits) of ¥81bn (£510m).