Press Release

- Achieved 302.0 billion won in sales, a 9.1% increase compared to the previous year

- As of the third quarter, sales and operating profit were the highest ever

- Achieved 105.1 billion won in cumulative operating profit, representing 34.8% growth

⊆ In the household goods division, sales of premium products increased, discount rates lowered, and new business, including Beyond and sanitary napkins, is growing

⊆ In the cosmetics division, sales of new high-end products, including OHUI The First, Whoo Jinyul and SooRyeHan Hyo, are improving and the share of premium products in sales is rising

Regarding its third quarter performance, LG H&H announced that it achieved 302.0 billion won in sales and 38.6 billion won in operating profit, which translate into an increase of 9.1% and 34.4%, respectively.

Third-quarter performance saw the highest operating margin (12.8%) and sales ever recorded. Growth set in motion in 2005 was further accelerated.

In addition, third-quarter cumulative sales and operating profit grew by 10.9% to reach 877.3 billion won and 34.8% to reach 105.1 billion won, respectively. Accordingly, this year’s annual operating profit is likely to set a new record high, breaking the previous record of 107.7 billion won set in 2001.

LG H&H said, “After finalizing two-year restructuring efforts last year, we began to initiate a growth strategy to generate new business, new customers and new markets using differentiation from competitors through value innovation based on realizing customer value and cost-saving. As the strategy makes smooth progress, growth is accelerated.” Details of third-quarter performance by division are as follows.

⊂ In the household goods division, sales increased 6.4% to 210.2 billion won and operating profit grew 24.0% to reach 28.4 billion won.

This may be attributable to the successful marketing of new business groups such as bath & body brand Beyond and premium sanitary napkin Body Fit, the continued growth of premium brands, including Elastine (24%∧), Bamboo Salt (24%∧) and ReEn shampoo (61%∧) and consistent efforts over the past two years to improve discount rates.

⊂ In the cosmetics division, sales and operating profit soared by 17.3% to 95.4 billion won and 72.9% to 10.2 billion won, respectively. This is due to an increase in sales of new high-end products OHUI The First and Whoo Jinyul targeting customers in their 40s and older sold exclusively at department stores and fermentation？based cosmetics such as SooRyeHan Hyo and ISA KNOX Double Effect, with a resultant higher share of premium products in sales.