LG H&H, Reports 1.6tr won in Sales, 176bn won in Operating Profit
May 11, 2022 – In 1Q 2022, LG H&H (The Company), Ltd. reported 1.6tr won in sales (-19.2% yoy), 176bn won in operating profit (-52.6% yoy).
Excluding the impact of the China business, sales grew 3.9% yoy, and operating profit fell 5.6% yoy due to a surge in raw material prices amid Ukraine crisis.
Beauty struggled to grow due to the unfavorable influence from China, which was difficult in both political, economic and social aspects. However, HDB and Refreshment continued solid performance, partially offsetting the impacts from the China business. China market continues to face difficulties due to lockdown measures in big cities.
The company signed a contract to acquire ‘The Crème Shop’ last month to further expand its beauty business in North America and it is also continuing efforts to diversify the market portfolio, such as preparing for full-scale growth in North America by enhancing local marketing and sales capabilities.
[1Q 2022 Results by Business]
▲Beauty business recorded sales of 700bn won and operating profit of 69bn won due to the unfavorable impact from China, where difficulties continued due to the Zero-Covid policy. Excluding China business, 1Q sales and operating profit decreased 6.4% and 0.7%, respectively. Even in a difficult market environment, major luxury brands such as ‘Whoo’, ‘SUM’, ‘O HUI’, ‘belif’ and ‘CNP’ continued to launch new products, and made various attempts such as opening digital galleries and issuing NFTs.
▲HDB business sales increased 6.1% yoy to 553bn won, and operating profit decreased 16.6% yoy to 55bn won. Premium brands with solid demand, such as ‘Elastine’, ‘Veilment’, and ‘Physiogel’, and home care brands with market leading positions led sales growth. Premium brands achieved high growth, but operating profit declined due to cost burdens caused by rising raw material prices and logistics costs.
▲Refreshment business sales increased 9.9% yoy to 393bn won, and operating profit increased 2.6% yoy to 51bn won. ‘Coca-Cola’, which showed high growth, and ‘Monster Energy’, which recorded double-digit growth following last year, drove the growth. Non-carbonated drinks ‘Powerade’ and ‘Toreta!’ led the growth by broadening the range of choices for health conscious consumers.