Sustainability Management Strategy

We will continue to expand customer value by actively practicing ESG management that fulfills our responsibility to the environment and society.

Dear Stakeholders,

I would like to express my deepest gratitude for your warm affection and support to LG H&H.

Last year, our expectations for resolving COVID19 were high as vaccinations expanded. However, with the emergence of successive mutated viruses, the end of the pandemic was invisible, and challenging economic conditions such as the global supply chain crisis and the global economic slowdown continued throughout the year.

Amid these difficulties, major domestic and foreign competitors can still not recover their pre-COVID19 performance level. However, we continued to grow based on a strategy aimed at customer satisfaction and a solid brand portfolio, achieving sales and operating profit that exceeded pre-COVID19 levels last year.

I am even more proud and grateful because it is a precious result that all the family members of LG H&H created with fierceness and diligence.

Over the past two years, the pandemic has triggered the digital economy paradigm featuring ‘Ontact.’ The new 2022 will mark the beginning of the ‘Real’ Post Corona era, and I expect to see the last suffering on our way to normalization at the same time.

In times like these, we should stick to the basics. That is, we will have to focus on the customer value which we want to deliver to our customers, and base all our concerns and practices on customer value. We aim to become a ‘world-class luxury beauty company that realizes customer satisfaction through persistent innovation.’ We believe that when customers experience and are moved by the value we provide, we will be able to move closer to this goal. With our goal in mind for 2022, I will do the following with you all.

We will further focus our capabilities on the beauty business

We will steadily pioneer the global beauty market with great potential for business expansion, led by luxury brands with LG H&H's strengths. We will enhance the luxury positioning of 'Whoo', our flagship brand, by intensively fostering the top-level Hwan-yu line and the Cheonyuldan line, following the Cheongidan line. At the same time, we will grow 'Su:m37°', 'Ohui' and 'CNP' as next-generation mega brands and pioneer the global market by utilizing brands with global awareness, such as 'Physiogel', 'Eutymol', 'REACH', and 'Arctic Fox' acquired through M&A.

We will expand our overseas business centering on the North American market.

We want to continue expanding our business in the world's largest market, the United States, to become a truly global luxury beauty company. In particular we plan to strengthen the new product line further by using the fragrance and container design preferred by while maintaining the brand concept and heritage for the 'Whoo' brand, which has achieved great success in Asia, to enter the North American market. In terms of channels, we will expand our relationship with offline retailers acquired through the acquisition of 'REACH' and, at the same time, expand our business by utilizing the digital capabilities of Boinca(Arctic Fox), which we acquired last year.

We will enhance our digital capabilities.

Regardless of the realm of industry, digitalization has become an irresistible trend in the global economy and is taking root in customers' lives. Moreover, as digital natives represented by the MZ generation emerged as the leading consumer generation, the center of consumption is rapidly shifting from offline to online. In response, LG H&H will further strengthen its responsiveness at digital customer contact points. We will create practical results through a digital transformation throughout the business value chain instead of digitalizing only on a surface level. Rather than relying on the size of online sales, we will communicate directly with customers in the digital space and read trends by analyzing customer data more closely. To this end, we will continue strengthening our digital capabilities throughout the value chain, including revitalizing our direct mall business and improving product quality through prescribed development using AI while enhancing digital marketing capabilities on SNS that the MZ generation enjoys.

We will impress customers with differentiated values.

At the same time, we will revisit the basics of our business, 'thinking from the customer's point of view and providing value that customers want.' Customers expect products with excellent quality, safety, and social responsibility. However, to impress customers, we need to go beyond these basics and have genuine product efficacy and aspirations for our brands. To this end, we will try our best to provide customers with an impressive experience, which they have never felt before, by understanding customers in detail and differentiating ourselves with products suitable for them. I believe that these customer experiences will create a virtuous cycle that leads back to their aspirations for our brands.

We will complete our responsibilities as a global leader in ESG management

As a global leader in sustainability management, LG H&H will comply with the ten principles of the UN Global Compact and act more proactively to accelerate the implementation of the common sustainable development goal for humanity. As part of that, we have announced the ‘2050 Carbon Neutral Plan’ in 2022 and started a new journey towards a carbon-free world. The carbon-neutral process will become a significant core value that will drive the growth of LG H&H in the future. We will fulfill our environmental and social responsibilities for future generations and continue to expand customer value through the active practice of ESG management.

As a global luxury beauty company that realizes customer satisfaction and a world-respected sustainable management leader, LG H&H will continue its unstoppable challenges. We ask all our stakeholders for your continued interest and support in the future. Thank you.

July 2022
CEO & Vice Chairman Suk Cha
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