Press Release

- Achieved 1.1725 trillion won in sales, a 13.5% increase

- Highest ever sales and operating profit

- 280.3 billion won in sales and 21.3 billion won in operating profit in Q4

⊆ In household products, sales increased due to growth in new businesses such as Beyond and sanitary napkins, and in environmentally friendly premium products.

⊆ In cosmetics, sales of high-end products targeting women over 40 increased sharply, and differentiated new products such as O&L, su:m 37 and By Terry earned a place in the market.

⊆ Goals for 2008 include at least 10% growth in sales and a 20% increase in operating profit.

Regarding its 2007 performance, LG H&H announced that it achieved 1.1725 trillion won in sales and 126.4 billion won in operating profit. Sales and operating profit increased 13.5% and 35.1%, respectively, over the previous year. Both sales and operating profit reached a record high. Operating profit, in particular, maintained the 30% per annum growth level it has achieved since 2005.

This may be attributable to the growth of new businesses, including bath & body products Beyond and premium sanitary napkin Body Fit, and increased sales of environmentally friendly premium products. Meanwhile, in the cosmetic sector, sharp growth among products targeting women over 40 and the early market success of differentiated new products such as O&L, su:m 37 and By Terry contributed to strong performance.

LG H&H explained, “This is a result of consistent efforts to secure market leadership through premium products since 2005. Growth accelerated when we initiated a growth strategy in 2007 that involved cultivating new business, customers and markets that stand apart from our competitors.”

Sales reached 280.3 billion won in the fourth quarter, marking a 16.0% year-over-year increase, while operating profit increased 36.6% to stand at.21.3 billion won.

[Performance by business division]

⊂ In the household goods division, sales increased 8.9% over the previous year to reach 752.9 billion won and operating profit rose 21.9% to 73.7 billion won.

Sales are attributable to strong growth among new business groups such as bath & body brand Beyond (76%∧) and premium sanitary napkin Body Fit (50%∧). In addition, premium brands like Bamboo Salt and ReEn Shampoo and distinctive new environmentally friendly products such as “Borrowing Earth” garnered a positive response from consumers and achieved steady growth.

⊂ In the cosmetics division, sales increased 23.8% to reach 432.7 billion won and operating profit grew a whopping 58.9% to reach 52.7 billion won.

In addition to the steady growth of four major brands ？ OHUI, Whoo, ISA KNOX and SooRyeHan ？ OHUI and Whoo products targeting women over 40 (OHUI The First and Whoo Jinyul) experienced remarkable growth. Another key factor was the early success of differentiated new products, including OHUI’s new color make-up line O&L, su:m 37 fermented cosmetics, and premium color make-up brand By Terry.

[2008 Business Plan]

LG H&H has set its sights on minimum 10% growth in sales and 20% in operating profit in its household product division and cosmetics division this year.

⊂ In the household product division, LG H&H will expand leading brands by developing top-rate products with enhanced functionality and emotional appeal.

⊂ In the cosmetics division, the company plans to secure four large brands with sales at the 100 billion won level by continuously developing brands sold through the department store and door-to-door sales channels into high-end brands and converting its mass market brands into premium ones.

⊂ Beverage business launched with the acquisition of Coca-Cola Korea Bottling Company (later renamed Coca-Cola Beverage Company).

- Profit structure to be improved through the synergy of consolidation with LG H&H’s business infrastructure.

- The presence of Coca-Cola, the world’s number one carbonated beverage, will be stepped up further

- In the non-carbonated beverage category, the company plans to achieve a 5% operating profit margin this year and raise this to 10% within the next 2？3 years by launching various premium beverages to capture the premium sector.