Press Release

LG Household & Health Care (LG H&H) announced today that operating profit for the fourth quarter last year was at 36 billion won ($30.9 million), a 45.2 percent increase from the same quarter of the previous year. Sales for the quarter ended Dec. 31 improved 12.7 percent to 363.8 billion won ($312.5 million) (see Attachment 1 for more details).

While the growth in consolidated sales was attributable to the outstanding performance across all business divisions of the company, the leap in its operating profit which increased at an even faster rate than sales, was fueled by soaring premium sales.

For the year 2009, LG H&H reported a 29 percent rise in operating profit to 198.1 billion won ($170.1 million). Sales of 1.52 trillion won ($1.3 billion) were up 12.6 percent from the previous year, and operating margin stood at 13 percent.

The company’s three business divisions―household products, cosmetics and beverages―reported annual operating profit margin of 11 percent, 15.9 percent and 9.3 percent, respectively. Each division’s business results for 2009 including sales, operating profit and operating margin were all record highs (see Attachment 2 for more information).

Quarterly Performance by Division

⊂ Household Products:

Strong performance by premium brands resulting from the company’s strategy to consolidate brands along with growing sales of new products (e.g. Beyond, Body Fit) led to an accelerated growth of household goods, whose sales had seen a slower increase compared with those of products from other divisions. In the last three months of 2009, sales increased 15.4 percent from the year-ago period to 209.6 billion won ($180 million) and operating profit soared 49.3 percent to 14.3 billion won ($12.2 million).

⊂ Cosmetics: Growing sales of high-performance prestige products and the company’s reinforced dominance over distribution channels resulted in sales of 154.2 billion won ($132.4 million) and operating profit of 21.7 billion won ($18.6 million), up 9.2 percent and 42.4 percent, respectively, compared with the same period of the previous year. Operating margin improved 3.3 percentage points to 14.1 percent.

⊂ Beverage:

As key carbonated and non-carbonated drinks had a stable growth in sales and the newly released Fanta Shaker, Glaceau Vitamin Water and DK were well received in the market, the Coca-Cola Beverage Company―LG H&H’s subsidiary whose financing is independent from the parent company―reported sales of 142.1 billion won ($122 million) and operating profit of 7.7 billion won ($6.6 million) in the fourth quarter. The figures were up 9.1 percent and 23.2 percent, respectively, from the same quarter in 2008.

For this year, LG H&H, the second biggest cosmetics manufacturer in Korea, plans to achieve a 10 percent increase in sales and a 15 percent swell in operating profit by increasing the number of THEFACESHOP outlets and adding a variety of products to the THEFACESHOP portfolio. LG H&H has recently acquired THEFACESHOP, Korea’s No. 3 cosmetic retail brand.

The company also plans to attain the targeted increases by reinforcing its dominance over distribution channels and offering unparalleled, differentiated products in its other businesses.