LG H&H Achieves 484.7 Billion Won in Sales and 57.3 Billion won in Operating Profit in Q1, 16.5% and 95.3% Year-over-Year Increases (including subsidiaries and overseas subsidiaries)

■ Headquarters’ sales (351.0 billion won), operating profit (50.4 billion won) and operating margin (14.4%) reached record highs.

■ The newly launched beverage business experienced a turnaround and became profitable. Its operating profit improved by 19.4 billion won through synergy with LG H&H.

■ The household product and cosmetics divisions achieved their highest ever sales and operating profit thanks to the steady growth of differentiated premium products.

■ Overseas businesses in China and Vietnam succeeded in establishing a presence in local markets and kicked off a growth trend as operating profit increased 73%.

Regarding first quarter performance, on the basis of consolidated statements including beverages (Coca-Cola Beverage Company) and overseas businesses, LG H&H announced that it achieved 484.7 billion won in sales and 57.3 billion won in operating profit, which translate into increases of 16.5% and 95.3% year-over-year, respectively.

In the case of headquarters, which consists of household products and cosmetics, sales increased 15.9% to reach 351.0 billion won and operating profit soared 24.6% to 50.4 billion won, while the operating profit margin stood at 14.4%. All three were the highest ever recorded.

LG H&H has commented that the sales growth and operating margin are accelerating a steady upward trend.

[Performance by business division]

● Household products

Sales increased 10.4% to 217.3 billion won and operating profit grew 11.2% to reach 26.8 billion won, which represent the strongest performance yet. This can be attributed to the steadily increasing share of premium products in its portfolio as a result of efforts to develop this category over the past three years. New products employing concepts from Oriental medicine (ReEn shampoo and Bamboo Salt Myeongyakwon) and environmental friendliness (Jayeonpong Ssatteumul, Shapran Aroma Sheet, Borrowing Earth, etc.) successfully established a presence in the market. Sanitary napkin business Body Fit and environmentally friendly bath and body care brand Beyond achieved remarkable sales growth of 61% and 59%, respectively.

● Cosmetics

Sales rose 25.5% to 136.3 billion won and operating profit soared 43.9% to reach 23.6 billion won, while the operating profit margin stood at 17.3%. All three indicators are the strongest to date.

While key brands OHUI (9%↑), Whoo (22%↑) and ISA KNOX (26%↑) showed steady growth, recently launched fermented cosmetic su:m 37 and SooRyeHan’s high-end line SooRyeHan Soo also made remarkable advances.

● Beverages

LG H&H launched its beverage business with the acquisition of the Coca-Cola Beverage Company (CCBC) in October last year. First-quarter sales amounted to 112.9 billion won, a 16.8% year-over-year increase. Achieving 8.1 billion won in operating profit, it successfully turned around to become profitable. Operating profit improved by 19.4 billion won.

The achievements in sales can be attributed to a 27% increase in sales of carbonated beverages, including Coca-Cola, as a result of efforts to enhance the competitiveness of the Coca-Cola brand and 21% growth among key non-carbonated beverage brands strongly preferred by consumers such as Minute Maid and Powerade.

The main reasons behind the improvement in operating profit are reduced product price discount rates and a less share of middle wholesalers and improved efficiency through the integration of supporting functions such as HR, finance, and procurement.

● Overseas businesses

Overseas sales in China and Vietnam increased 22.2% to reach 25.7 billion won, while the operating profit swelled 73.0% to reach 1.2 billion won.

In China, sales of Bamboo Salt toothpaste, which is the first toothpaste product in China to be certified as a renowned brand by the Chinese government, grew 37% and helped solidified its position as a premium brand. Premium cosmetics OHUI and Whoo established a presence in 46 department stores in major areas and experienced more than 100% growth, successfully earned a position in the market.

In Vietnam, successfully localized shampoo achieved 44% growth, while OHUI and Whoo soared 27% and solidified up their number-one position in the market, thereby accelerating their growth.