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LG Household & Health Care reports record fourth-quarter results Sales 1.5tr won (+9.7% yoy), Operating Profit 178bn won (+20.7% yoy)
- FY 2016 Sales 6.1tr won (+14.4% yoy), Operating Profit 881bn won (+28.8% yoy)
- Balanced business portfolio consists of cosmetics, household goods, and beverage and premiumization strategy contributed to outstanding results.
January 24, 2017 – In 4Q 2016, LG Household & Health Care, Ltd. (CEO: Suk Cha) delivered the highest fourth-quarter earnings. Company reported 1.5tr won in sales (+9.7% yoy), 178bn won in operating profit (+20.7% yoy).
In spite of the headwinds including uncertainties regarding THAAD(Terminal High Altitude Area Defense) deployment, cosmetics continue to report strong growth. Sales grew 14.2% yoy to 798bn won and operating profit grew 23.1% yoy to 137bn won.
Household goods sales grew 6.8% yoy to 362bn won and operating profit grew 16.6% to 28bn won. Beverage grew 2.1% yoy to 297bn won in sales and 7.2% yoy to 14bn won in operating profit.
Sales has increased for forty-six consecutive quarters since 3Q 2005, and operating profit has increased for forty-seven quarters since 1Q 2005. Both sales and operating profit have delivered continuous growth for 12 years.
In FY 2016, the company delivered the highest sales, operating profit, and net profit of all times; sales increased 14.4% to 6.1tr won, operating profit increased 28.8% to 881bn won and net profit increased 23.1% to 579bn.
Despite unfavorable market environment, balanced business portfolio consists of cosmetics, household goods, and beverage generated a steady growth in both sales and operating profit.
Luxury brand ‘Whoo’ became the fastest growing single brand in Korea which achieved over 1tr won since its launch in 2003. Cosmetics continued to focus on premiumization to minimize volatility caused by various external factors and maintain sustainable growth.
[FY 2016 Results by Business]
In cosmetics, sales increased 24.6% yoy to 3.2tr won, and operating profit increased 42.9% yoy to 578bn won. Operating profit margin improved to 18.3% (+2.4%p) from the previous year due to high growth in Luxury Cosmetics.
Sales of luxury cosmetics grew 40% and its sales contribution increased to 69% within cosmetics. Despite market contraction coming from various uncertainties, luxury brand ‘Whoo’ achieved 1.2tr won in sales. Fermented cosmetics, ‘su:m’, which launched in China in 2016, also outperformed throughout all luxury channels and achieved 343bn won in sales.
In household goods, sales increased 5.4% yoy to 1.6tr won, and operating profit increased 9.1% yoy to 187bn won. Premiumization of both Personal and Home Care resulted in operating profit margin to grow by 0.4%p to 11.7%. Market share also increased by 1.5%p to 37.0% and strengthened market leadership as #1 player.
In beverage, sales increased 4.8% yoy to 1.3tr won, and operating profit increased 7.1% yoy to 116bn won. Operating profit margin was 8.6% which increase by 0.2%p yoy and market share also improved by 0.1%p to 29.7%.