Press Release

Sales in Q2 reached 244.5 billion won with an operating profit of 18.9 billion won

This is largely attributable to increased sales in premium products, including OHUI and Whoo, and also improved organizational efficiency

Sales rose by 4.2% despite curbing discounts on household goods and the end to direct sales in cosmetics

Regarding its performance in the second quarter, LG H&H announced it had achieved 244.5 billion won in sales and 18.9 billion won in operating profit. Compared to the same period in the previous year, sales and operating profit have increased by 4.2% and 30.3%, respectively.

Based on steadily rising sales of new premium products such as OHUI and Whoo, as well as improved organizational efficiency, LG H&H achieved an operating margin of 7.7%, up 24% from the same period in the previous year (6.2%).

Sales continued to grow despite factors that may have caused them to slow, including a curbing of discounts applied to household goods, a complete elimination of agency inventories, and an end to direct sales in cosmetics.

Ultimately, sales and operating profit for the first half of this year both increased compared to the same period in the previous year. Sales were up 3.6% to 514.4 billion won and the operating profit increased by 24.6% to 50 billion won. The operating profit of the cosmetics division, in particular, saw remarkable growth with a year-to-year increase of 63%.

The operating margin for the first half reached 9.7%, representing its highest level since 2002.

Regarding each business sector, household goods achieved 157.9 billion won in sales and 9 billion won in operating profit for the second quarter.

Sales increased by 2.6% compared to the previous year despite factors that may have lowered sales temporarily, such as tighter controls concerning discounts and a closure of agencies. Operating profit also increased (up 15.4%) as a result of more efficient marketing spending and a steady reduction in the number of discount being offered.

In cosmetics, sales rose by 9.7% to 89.5 billion won while the operating profit went up 47.8% to 9.9 billion won from the previous year.

LG H&H explains the rise in operating profit by pointing to the continued growth in its sales (up 59%) of premium cosmetics such as OHUI and Whoo.

Despite a potential decline in sales as a result of the shutdown of its direct sales unit, the increase in sales can largely be explained by the sharp growth in sales through the door-to-door channel (up 107%) and the success of new products such as SooRyeHan, ISA KNOX Sun Balm, and LacVert Moisture Pact.