■ All-time highs for annual sales at KRW 2.83 trillion (up 27.5%) and operating profit at KRW 34.68 billion (up 52.0%) in 2010

■ Record operating profit margins across all businesses, including household products, cosmetics, and beverages

LG H&H fourth quarter

KRW 690.5 billion in sales and KRW 70 billion in operating profit

Up 31.6% and 104.7%, respectively

LG Household & Health Care (LG H&H) Ltd., (CEO: Suk Cha) hit a record quarterly high of 690.5 billion in sales and KRW 70 billion in operating profit, 31.6% and 104.7% year-on-year increases, respectively (see attached file).

Sales have continued to grow compared to the previous year for 22 quarters since the third quarter of 2005. Operating profit has increased for 24 consecutive quarters since the first quarter of 2005.

In the meantime, in 2010 LG H&H recorded its best-ever annual performance as sales totaled KRW 2.8265 trillion and operating profit stood at KRW 346.8 billion, up 27.5 percent and 52.0 percent year-on-year, respectively. The operating profit margin rose to 12.3%, an increase of 2 percentage points from the same period in the previous year (see second attached file).

Operating profit rose rapidly over the previous year mainly due to robust growth in both existing and new businesses, showing the highest year-on-year operating profit and profit margin in business sectors such as household products, cosmetics and beverages (see third attached file).

LG H&H surpassed KRW 1 trillion in annual sales in both the household product and cosmetics sector. It plans to reach this amount in beverages as well, eventually striking a sales balance between the three business sectors, by accelerating cold-chain products through last month’s acquisition of Haitai Beverage.

2010 Fourth Quarter Performance Results by Business

▲ In household products (HEALTHY), sales grew 18.4% to KRW 256 billion while operating profit rose sharply by 55.1% to KRW 23.5 billion, year-on-year.

The strong growth of the entire sector was led by the hair care and body care categories, centering on high-end brands such as Ihee Care for Style, and Beyond. Hexa line products in each category maximized consumer value by minimizing unnecessary packaging or ingredients and contributed additional sales without cannibalizing existing products.

▲ In cosmetics (BEAUTIFUL), sales increased to KRW 257.4 billion and operating profit soared to KRW 32.3 billion, up 54.7% and 163.6% respectively. Existing prestige brands such as O Hui and Whoo have shown steady growth, while the natural cosmetics brand Su:m has achieved remarkable progress by expanding su:m outlets at department stores. In the masstige sector, an upgraded version of Beautiplex, called BeautIJ de Beautiplex, opened 117 stores. Including the new BeautIJ stores, Beautiplex has reached 1,146 outlets.

In addition, LG H&H’s fourth high-end brand exclusively for department stores, the natural herbal cosmetics brand Belif, was successfully launched. This provides even greater opportunities for further growth.

▲ In the beverage sector (REFRESHING), sales grew to KRW 177.0 billion and operating profit surged to KRW 14.2 billion, up 24.5% and 109.2% respectively, as new non-carbonated beverage brands have shown strong sales to complement the steady growth of existing brands.

Carbonated beverage sales showed robust growth, led by flagship brand Coca-Cola, while non-carbonated beverages, including Powerade, Georgia Coffee, and Glaceau Vitamin Water, achieved rapid growth.