-      Sales grew 2.4% yoy, Operating Profit dropped 16.9% yoy

Apr 27, 2023 – In 1Q 2023, LG H&H (The Company), Ltd. reported 1.7tr won in sales (+2.4% yoy), 146bn won in operating profit (-16.9% yoy).

Beauty and HDB sales grew 0.3% yoy and 1.9% yoy, respectively, while Refreshment sales increased 6.7% yoy to drive the Company sales growth. The Company operating profit declined due to overall cost headwinds, including increased fixed costs.

Meanwhile, overseas sales, which account for 30% of the Company sales, decreased 1.7% yoy to 500bn won.

[1Q 2023 Results by Business Segment]

▲Beauty business 1Q 2023 sales increased 0.3% yoy to 702bn won and operating profit decreased 11.3% yoy to 61bn won.

Beauty sales were flat yoy due to delayed consumption recovery in China. DFS channel reported double-digit sales growth due to low base effect, while China onshore business reported double-digit drop in sales. Operating profit declined due to persisting cost pressure and increased fixed costs. In an effort to conduct various marketing activities and augment product portfolio, Beauty offered VR experience of Royal culture through ‘The History of Whoo Digital Museum’ and released new product, ‘Micro-Active’ Line, for Sum37° with Suzy as the brand’s new muse.

▲HDB business 1Q 2023 sales increased 1.9% yoy to 563bn won and operating profit decreased 40.7% yoy to 33bn won.

HDB sales growth was led by strong sales performances of Oral Care(‘Perioe’, ‘Euthymol’) and ‘Physiogel’ in Daily Beauty. Operating profit, however, decreased due to overall cost pressure from inflation and increased fixed costs. HDB strengthened portfolio of functional products by launching new products, including hair loss symptom relief shampoo ‘Dr. Groot’ Density Intensive Care and whitening toothpaste & whitening booster for ‘Euthymol’.

▲Refreshment business 1Q 2023 sales increased 6.7% yoy to 419bn won and operating profit increased 1.3% yoy to 52bn won.

Refreshment sales grew as ‘Coca-Cola Zero’ and ‘Monster Energy’ continued to report strong sales. Sales growth was also fueled by increased sales at offline channels due to increased outdoor activities. Refreshment introduced ‘Powerade Zero’ and ‘Fanta Zero Grape and Pineapple’ to meet growing consumer demand for zero-sugar beverages.