Press Release

LG H&H reports 3Q14 results; net sales reached 1,230 billion won, and operating profit reached 150 billion won. Versus 3Q13, net sales grew +6.8%, and operating profit grew +3.2%.

October 22, 2014 - LG Household & Health Care, Ltd. (CEO: Suk Cha) reported 1,230 billion won in sales (+6.8% yoy), and 150 billion won in operating profit (+3.2% yoy). Despite enlarged scope of ordinary wage, slow consumption from remaining impact of the Sewol Ferry disaster, and negative impact of Chu-suk (Korean Thanksgiving) gift-set returns from early Chu-suk timing, total company delivered all-time high quarter results.

3Q 2014 Results

10-Year Trend of 3Q Sales and Operating Profit

In household goods, sales decreased 1.3% yoy to 409 bn won, and operating profit increased 3.0% yoy to 58 bn won. Due to early Chu-suk holidays in 2014, all of the gift-set returns were fully reflected in 3Q 2014, while the returns were reflected in both 3Q and 4Q in 2013, resulting in negative sales growth.

In cosmetics, sales increased 22.6% yoy to 480 bn won, and operating profit increased 24.4% yoy to 64 bn won. Sales delivered higher growth than the market through (1) 72% yoy growth of major prestige cosmetics brands including ‘Whoo’, ‘O HUI’, ‘SU:M’, and ‘belif’, and (2) 11% yoy growth of ‘TFS’. While prestige cosmetics recorded high growth in all the channels, DFS channel increased 216% yoy, and started regional expansion into overseas DFS. In September, ‘Whoo’ became #1 sales brand among all of the cosmetics brands in major DFS.

In beverage, sales decreased 1.4% yoy to 342 bn won, and operating profit decreased 25.4% yoy to 28 bn won. Sales recorded a slight negative growth due to (1) slow consumption from the Sewol Ferry disaster impact, and (2) unfavorable weather condition with late rainy season.