Redefining the Future - LIXIL

1 0 Copyright LIXIL Group Corporation, All rights Group CorporationMid Term strategy September 15th, 2015 Redefining the Future1 Introduction of New Mid Term strategy and Mid Term Plan Based on theNew Business ModelOur Commitment Transparency Timely dialogue with shareholders and analysts Accountability performance with newleadership team for the first time Our Agenda Overview and introduction - Yoshiaki Fujimori LIXIL Water Technology - David Haines LIXIL Housing Technology - Toshimasa Iue LIXIL Building Technology - Nicola Greco LIXIL Kitchen Technology - Francois-Xavier Lienhart Wrap up - Yoshiaki Fujimori2 Transformation to One LIXIL - A Truly Global CompanyValueToday36 months+Five Company Integration & LIXIL FoundationEstablishing Platforms for Global

2 GrowthBecome a Truly Global CompanyOur VisionTo be the World s Most Valued, Innovative and Trusted Living Technology Company by 20203 Driving Innovation and Technology LeadershipLIXIL Building TechnologyLIXIL Housing TechnologyLIXIL Kitchen Technology#2 Japan Sanitary Ware #1 Japan Unit Bathroom#1 Global Water Faucets#1 North America Sanitary Ware#1 Global Curtain Wall #1 Japan Kitchen#1 Japan Window Sashes#1 Japan Exteriors#1 Japan Entrance DoorsLIXIL Water Technology4700245 Offering Growth Opportunities for LIXIL GloballyOffice + Commercial + InstitutionalResidentialConstruction spending by region (USDbn) Europe186 Mideast& Africa(1)North AmericaSouth AmericaWesternEurope1,277 Source: Global Insight as of July 2015.

3 Construction spending defined as investments into residential, office, commercial and institutional buildings in 2010 USD terms(1) Includes as the Largest Player has Significant Upside Potential from Scale Benefits While also Driving Footprint Rationalization Source: Based on internal estimates and publicly available disclosed material from peersNote: Exchange rates based on 1-year-average (1)Sales offices with same address counted as oneGlobal Sales (USDm)Global Number of Sales OfficesCountries with Manufacturing FootprintGlobal Number of Plants15,2358,5218,2896,5644,9574,0141,5 301,261934161096543219863362724231984(1) (1)(1)150+12345262423n/an/an/aGlobal SalesPowerGlobal Manufacturing Power6 Global Platform to Support New Group StructureDriving best practice and corporate governance across all technology businesses by dedicated HR, CCC, Legal, Public Affairs, IT, Corporate Audit Staff, Corporate Initiative Work Out and Six Sigma functionsGlobally Unified Corporate ExcellenceGlobally experienced management team aligned with shareholdersDomain ExpertiseLeading market positions in Water, Housing, Building and Kitchen TechnologiesIndustry innovator connecting technology.

4 Design and qualityPortfolio of leading brandsGlobal Management TeamStrong management platform based on diversity and meritocracy7 Improvement in profitability-Scale merit and operational flexibility further lowering cost Innovation in new products for growth Higher capital efficiency Faster decision-making-Shorter time-to-market Strong domain expertise with global focus Maximizing growth and cost synergies Strong intellectual global capital Better governance / accountability / risk management Delegation of authority to each businessMaximizing Domain Expertise; Leveraging the Power of Global ScaleKey BenefitsGrowth DriversLIXIL GroupLIXIL Water Technology (LWT) LIXIL Housing Technology (LHT) LIXIL Japan Company (LJC) LIXIL Building Technology (LBT) Distribution and Retail Business (D&R)Housing Services Business (H&S) LIXIL Kitchen Technology (LKT)

5 HQ Corporate FunctionsSales and Marketing Partner8 Creating ValueCreating ValueJapan Growth strategy Housing & Building MarketShift resources to growing marketsShift resources to growing marketsTotalSolutionsSalesEfficiencyGROW THNew HousingJPY15trRemodelingJPY8trNon-Reside ntialMarketJPY8trCreatingNew MarketsLeverage Ageing PopulationGrowth outlook dependent on government stimulus programLocal detached homesCondominiums and rental homesL-OneModelSixSigma9 Global Industry Leaders Accountable to Deliver GrowthHarumiMatsumuraLIXIL Water TechnologyLIXIL Housing TechnologyLIXIL Kitchen TechnologyLIXIL Building TechnologyDistribution and Retail BusinessHousing Services BusinessNicolaGrecoDavid J.

6 HainesKatsuhiroMamenariToshimasa IueFrancois-XavierLienhart10 Global People DevelopmentPursuing MeritocracyGlobalPeople and organization strategyTalent assessment (9-block)Talent developmentPromotionSuccession, retentionStrong LeaderCore LeaderDevelopment NeededPOD - People & Organization DevelopmentGELTG lobal Leadership TrainingPerformanceLIXIL ValuesLocal(Executive)(Senior)(Freshman) (Junior)GELT basicAll GenerationsLead the CompanyLead the TeamLead OneselfFind Oneself11 Copyright LIXIL Group Corporation, All rights LIXIL Mid Term Plan12 Business Portfolio Management Drives MTPLWTLWTLHTLHTLBTLBTLKTLKT0100200300400 500600700800-1%0%1%2%3%4%5%6%7%8%9%10%11 %Portfolio Development FYE2015 2018(1)GoalsFocusLWT Aim to grow into a high margin global business Sales JPY703bn; Margin10%LHT Improve operational efficiency in a down market Sales: JPY591bn; Margin 8%LBT Prioritize higher profit markets Sales JPY374bn; Margin: 6%LKT Shift to upper mid products and reform Sales JPY123bn.

7 Margin: 6%Growth+ReturnReturnGrowth+ReturnReturn (1) Based on IFRSJPYbnCE MarginImplementing ROIC management13 Aiming for Group Sales of JPY 2tr by 2018 FYE2018 MTP1,930 FYE2016 BudgetLIXIL Total2,000 LWTD&R(1)LHTLBTSALES DEVELOPMENTLKT64060837711817212337420070 3591FX Assumptions: Business Unit-Actual: USD105/EUR145; Plan: USD125/EUR140, LIXIL Total: Actual: USD110/EUR141; Plan: USD120/EUR130H&S6273 Adjustment(2)(47)(64)1,710 FYE2015 Actual396611356114168622 FYE2015-18 CAGR+ ( )+ + + + + (1)Exclude Ken Depot(2)Adjusted for intercompany sales, corporate sales eliminations, FX risk adjustments as well as D&R Ken Depot adjustmentsDriverM&AJapan New HomesSelectiveReformShare GainNew Services14 Core Earnings target of >JPY100bn by FYE2018 FYE2018 MTP75 FYE2016 BudgetLIXIL Total>100 LWTD&RLHTLBTCORE EARNINGS DEVELOPMENTLKT594114310822137048H&S47 Corporate Cost(37)(34)52 FYE2015 Actual28369 (1)105(31)FYE2015-18 CAGR+ + + + + + Assumptions: Business Unit-Actual: USD105/EUR145; Plan: USD125/EUR140, LIXIL Total: Actual: USD110/EUR141.

8 Plan: USD120/EUR130IT Investment(1)(7)0 PPA & Consolidation(14)(10)(4)FX & VAT Contingency(4)(17)0 Adjustments15 Reconciliation of New Versus Previously Announced Plan(1)Old PlanNew Plan1,7701,930 SALESFYE2018 MTPFYE2016 BudgetFYE2017 MTPCORE EARNINGSFYE2018 MTPFYE2016 BudgetFYE2017 MTP2,1101, , >100 Difference+160(150) (25)(80) sales plan for FYE2017 driven by: Lower domestic sales forecast of JPY55bn JOYOU sales adjustment of JPY80bn Ken Depot carve out of JPY30bn ASB better performance of +JPY15bnReduced Core Earnings plan for FYE2017 driven by: Impact from lower sales forecast JPY17bn and JOYOU adjustment of JPY11bn Revised FX assumption of 105 JPY/USD to 125 JPY/USD resulting in JPY16bn impact Raw material price inflation of JPY20bn SG&A cost inflation of JPY16bnJPYbn(1) Announced on May 13/6 13/9 13/12 14/3 14/6 14/9 14/12 15/3 FYE2017 JPY100bn(1)FYE2018 JPY120bn(2)

9 Continued Efforts on CCC Including Global Operations Expand Cash Conversion Cycle CCC improvement activities from Japan focus to global operations for realizing further improvement From Mar-15 Q1 Presentation New benchmark and outlook through of 13/9 14/3 14/915/3 15/9 16/3 16/9 17/3 17/9 18/3 FYE2018 63 days-22 daysImpact of JPY120bn(1)Cash generation from CCC improvement assuming reduction of working capital days from to 55 days for domestic business on JGAAP basis(2)Cash generation from CCC improvement assuming reduction of working capital days from 85 to 63 days including ASB and Grohe on IFRS basis171357101202468110510152025 FYE2013 FYE2014 FYE2015 FYE2016 FYE2017 FYE2018 Economic EffectFinancial Effect0562023494996492157100114132150010 0200300400500600700800900 FYE2013 FYE2014 FYE2015 FYE2016 FYE2017 FYE2018 BBGBJ apan Initiative: Drive Six Sigma to Drive Further Margin Improvement and Develop Talent CommentsSix Sigma is a set of techniques and tools for process improvement(1)BB: Black Belt; Team leader who is only responsible for Six SigmaGB: Green Belt.

10 Team leader who has both responsibility in Six Sigma and normal operations(2)Amount ensured by KAIZEN activity, while not directly indicated in financial statements(3)Achievement amount clearly indicated in accounting of financial statements, which is generated by KAIZEN activity Company-wide 469 Six Sigma Projects were carried out-Design & Development Process: 80 themes-Distribution & Inventory: 34 themes-Admin. in HQ, HR, Accounting etc.: 44 themes-Customers & Sales Process: 211 themes-Manufacturing & Quality: 100 themes Plan to continue training 150 GBs and 18 BBs a year reaching ~800 people trained as GB or BB by FYE2018 Cumulative number of BBs and GBs(2)(3)21113302463631799 Cumulative improving effect of JPY9bn was secured by FYE2015, and is expecting to reach JPY23bn by FYE2018 Cumulative number of projects approx.