LIXIL : Sustainable Value Chain Management

LIXIL Group Corporation Annual Report 2016

R&D Investment

The LIXIL Group is expanding investment in R&D to enhance the range of globally competitive products.

R&D Expenses

(¥ million)

30,000 25,523

Innovation and Design

Our products are winning awards for outstanding performance and design.*

20,000

10,000

0 12 13 14 15 16

Note: Years ended March 31

As a product manufacturer, we are pursuing manage- ment efficiencies through sustainable value chain management. Through value chain innovation, we will earn the trust of customers and society as a responsible business, while developing our management and internal human resources to enhance our organizational creativ- ity and prepare for further growth in the future.

Value Chain

Input

Research and Development

* Awards won in recent years

Red Dot Design Award, Product Design 2016:

LIXIL's SATIS G type tankless bidet toilet, American Standard Brand's Edgewater kitchen faucets collection, and GROHE's Aquatunes waterproof speakers and Grohtherm 800 thermostatically controlled shower

International Forum (IF) Design Award 2016:

LIXIL's electric water heater with automatic faucets and GROHE's AquaSymphony ceiling showers and Essence New Collection faucets

GOOD DESIGN Awards 2015 (U.S.):

GROHE's Aquatunes waterproof speakers and Essence New Collection, Eurocube Joy Collection, and Eurosmart New Collection faucets

Green Good Design Awards 2015 (U.S.):

GROHE's Grohe Power Box and Eurosmart CE faucets

GOOD DESIGN AWARD 2015 (Japan):

LIXIL's Bisai exterior light, SAMOS X window, electric water heater with automatic faucets, Cubia single-lever basin mixer, LF-WF340S single-lever basin mixer,

Navish kitchen filter faucet, FS-WCH120 mono-type boiling water faucet, and ARATECT seismic-resistance renovation construction method GROHE's Eurodisc Joy Collection faucets

2015 Energy Conservation Award (Chairman's Prize, Energy Conservation Center, Japan):

LIXIL's AIR MEISTER hybrid ventilation system

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LIXIL Group Corporation Annual Report 2016

Input

Procurement

Production Sales and Product Use

Waste

thousand metric tons

YoY

-9.1%

Water Discharge

million m3

YoY

+3.9%

Output

CO2 Emissions

Raw Materials / Parts and Materials

Manufacture / Sales (Scope 1 and 2)

million t-CO2

thousand t-CO2

YoY

+2.9%

YoY

-3.5%

Note: For further details regarding the Group's Corporate Responsibility activities and outcomes, please refer to the Sustainability section of our corporate website. The scope of the data differs from the scope of the consolidated financial data, and a portion of the data in the website has received the independent practitioner's assurance. For details, please refer to the following URL:

http://www.lixil.com/en/sustainability/environment/ev_performance.html

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LIXIL Group Corporation Annual Report 2016

At GROHE's faucet producing Hemer plant in central Germany, about 80% of 5,000 metric tons of brass used annually is now collected from internally and externally collected recycled material, making use

of the plant's in-house alloy smelting blast furnace.

Recycled material usage ratio of

Procurement

Production

Estimated annual power generating capacity of roughly

LIXIL is actively utilizing unused land and building roofs by operating mega solar power plants. The LIXIL Chita solar power facility, which is one of five sites in Japan, began operations in April 2016. The facility can generate power of about 6,000MWh annually, sufficient to meet the power consumption needs of 1,200 households.

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LIXIL Group Corporation Annual Report 2016

HILTI INNOVATION CENTER, SCHAAN | LIECHTENSTEIN

©Bruno Klomfar Fotografie

Introduced by Permasteelisa, mfree-S CCF (moisture free Sustainable Close Cavity Façade) curtain walls feature double- skin glass walls with compressed-air internal cavity. The Permasteelisa Group's proprietary technology offers outstanding performance from the perspectives of energy efficiency, com- fort, and aesthetic appeal. Buildings that have installed these curtain walls have benefited from these qualities, and many have received green building ratings, such as LEED* and BREEAM.*

* Leadership in Energy & Environmental Design and Building Research Establishment Environmental Assessment Method, respectively

LEED certification for

over 40buildings

since 2008

Sales and Product Use

Heat transmission coefficiency of

0.55W/m2·K

LIXIL, which has around 50% of the window sash market in Japan, is committed to raising the thermal efficiency of window sash and promoting the shift

to higher-value-added products to curb household energy consumption in Japan. Introduced in January 2016, our LEGARIS sash windows provide superior thermal insulation performance.

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