LG Household & Health Care Results for 3Q 20 LG HOUSEHOLD & HEALTH CARE HEALTHY BEAUTIFUL REFRESHING October 24, 20
CONTENTS 3Q 20 Sales and Operating Profit 3Q 20 Sales and Operating Profit by Business 3Q 20 Results by Business - Healthy - Beautiful - Refreshing Summary Financial Statements Attachment: Establishment of CheonAn Complex Audit of these results is still in progress. Figures in this disclosure are subject to change during the auditing process.
3Q 20 Sales and Operating Profit Total company in 3Q 20 delivered 1,052.2 bn won in sales (13.5% growth yoy), 131.1 bn won in operating profit (16.9% growth yoy), and 90.5 bn won in net profit (17.4% growth yoy). Sales, operating profit, and net profit reached all-time high third quarter results, and sales exceeded one trillion won for the first time for a single quarter. Accumulated sales as of 3Q YTD exceeded three trillion won as well. Sales has increased for twenty-nine consecutive quarters since 3Q 2005, and operating profit has increased for thirty-one consecutive quarters since 1Q 2005. 3Q 20 Results (K-IFRS) 7-Year Trend 3Q 2011 3Q 20 Increase 3Q Sales 3Q Operating Profit Sales 926.8 1,052.2 13.5% 926.8 1,052.2 1.1 131.1 Operating Profit 1.1 131.1 16.9% 600.7 523.2 759.3 13.5% 69.4 98.4 16.9% 55.6 Recurring Profit 105.4 3.3 17.0% 276.7 302.0 28.9 38.6 Net Profit 77.1 90.5 17.4% 06 07 08 09 10 11 06 07 08 09 10 11 2006-2007: K-GAAP Non-Consolidated, 2008: K-GAAP Consolidated, 2009~20: K-IFRS 1/6
3Q 20 Sales and Operating Profit by Business Both sales and operating profit for all business units Healthy, Beautiful, and Refreshing have maintained their upward trend in 3Q 20. In particular, as domestic and international cosmetics business delivered high growth continuously from second quarter, cosmetics business sales and operating profit contribution increased, and led total company s operating profit margin expansion. On a yoy basis, sales increased 9.4% in Healthy, 20.2% in Beautiful, and 11.9% in Refreshing. Operating profit increased 9.0% in Healthy, 25.9% in Beautiful, and 19.5% in Refreshing. % of Sales & Growth by Business Units % of Operating Profit & Growth by Business Units 13.5% 1,052.2 16.9% 131.1 Refreshing (Beverage) Beautiful (Cosmetics) 926.8 32% 31% 32% 33% +11.9% +20.2% Refreshing (Beverage) Beautiful (Cosmetics) 1.1 25% 32% 25% 34% +19.5% +25.9% Healthy (Household Goods) 37% 35% +9.4% Healthy (Household Goods) 44% 41% +9.0% 3Q 2011 3Q 20 3Q 2011 3Q 20 2/6
3Q 20 Results by Business - Healthy HEALTHY Operating Profit 39.4 30.3 28.4 44.6 49.3 53.7 9.0% Despite negative consumption sentiment and input cost increase from government s strong pressure not to raise prices, sales increased 9.4% yoy to 371.8 bn won and operating profit increased 9.0% yoy to 53.7 bn won. Main categories, including skin care, dishwashing liquid, and laundry detergent, all showed continued strong sales growth of more than 10% each. Chu-suk (Korean Thanksgiving) gift-set sales increased with new differentiated design and function focused product assortment. 07 08 Sales 232.6 210.2 09 267.2 10 300.8 11 339.8 371.8 9.4% Design and convenience focused new product launches continued this quarter, such as: (1) Tech OK Melting Sheet Laundry Detergent, sheet-type laundry detergent that dissolves in water, (2) Tech 4x Concentrate Laundry Detergent Mix, small single-usage packaged convenient laundry detergent, and (3) Elastine Dry Shampoo, an instant hair shampoo that cleans hair and scalp without water. 07 08 09 10 11 2007~2009: K-GAAP Non-Consolidated, 2010~20: K-IFRS 3/6
3Q 20 Results by Business - Beautiful BEAUTIFUL Operating Profit 44.5 Sales increased 20.2% yoy to 342.7 bn won. Operating profit increased 25.9% yoy to 44.5 bn won. 16.3 20.7 28.7 35.4 25.9% In the prestige segment, main focused brand, Su:m, delivered 34% yoy growth, and Belif delivered over 200% sales growth. The world s first refrigerated cosmetics, Frostine s (launched this May), is continuously expanding with positive response from consumers. 10.2 07 08 09 10 11 Masstige segment delivered 7% yoy growth due to strong growth in major brands, such as Beyond and IsaKnox. In particular, environmentally friendly body care brand, Beyond opened two road shops on top of 216 shop-in-shop stores in discount stores. Sales In the mass segment, TheFaceShop(TFS) sales increased 27.8% yoy, reaching 100.3 bn won. Overseas sales increased 74% to 21.0 bn won. Also, recently launched a new color brand shop VDL for both domestic and overseas markets, utilizing TFS brand shop managing know-how. 257.4 285.1 342.7 20.2% Overseas business, on top of strong growth of Ginza Stefany and TFS, is continuously increasing its sales portion from 10%(3Q 11) to 16%(3Q ). TFS has total of 2,391 stores - 1,0 stand alone stores in Korea and 1,379 points of sale (544 stand alone stores and 835 points of sale). TFS plans to expand to India with Sephora this November 1 st. 146.5 95.4 3.8 Prestige OHUI, Whoo, SU:M, Belif, Frostine, Chungyunjin, Stefany Masstige IsaKnox, LacVert, Sooryehan, Vonin, Beyond Mass THEFACESHOP, VDI 102.3 2.7 104.3 111.5 78.5 108.5 07 08 09 10 11 20% 7% 38% 2007~2009: K-GAAP Non-Consolidated, 2010~20: K-IFRS 4/6 3Q 11 3Q 3Q 11 3Q 3Q 11 3Q
3Q 20 Results by Business - Refreshing REFRESHING 4.9 07 0.2 Operating Profit Coca-Cola Bev. and others 11.8 27.2 08 09 10 11 151.3 19.2 25.1 Sales Coca-Cola Bev. and others 170.8 201.1 234.3 30.3 11.4% 265.1 13.1% Haitai Bev. 0.3 2.5 11 Haitai Bev. 72.7 Expand Profit Sales increased 11.9% yoy to 337.8 bn won with continuous growth of both Coca-Cola Beverage and Haitai Beverage. Operating profit increased 19.5% yoy to 32.8 bn won, reaching 9.7% operating profit margin with 0.6%p yoy expansion. Coca-Cola Beverage sales increased 13.1% yoy to 265.1 bn won, and operating profit increased 11.4% yoy to 30.3 bn won Carbonated beverage sales grew 14% yoy. Cola-Cola brand sales grew as regular products showed steady growth and differentiated packages including Jean Paul Gaultier special package were introduced. New product launch continued, including Schweppes and Fanta Smoothie. Non-carbonated beverage sales grew % yoy as: (1) Georgia coffee grew with strengthened product portfolio, (2) newly introduced Minute Maid Mini Glass Bottle showed strong growth, and (3) water category grew. Haitai Beverage sales increased 7.5% yoy to 72.7 bn won and operating profit further expanded to 2.5 bn won from successful main brand renewals and Sunkist Mini Glass Bottle juice strong performance. Sunkist Minute Maid 67.6 7.5% 07 08 09 10 11 11 2007~2009: K-GAAP Non-Consolidated, 2010~20: K-IFRS 5/6
Summary Financial Statements (K-IFRS) Income Statement 3Q 2011 3Q 20 3Q YTD 2011 3Q YTD 20 Sales 927 1,052 2,622 3,002 COGS 482 526 1,328 1,471 Gross Profit 445 526 1,294 1,531 SG&A and Others 333 395 971 1,155 Operating Profit 1 131 323 376 Non-Operating Loss 7 8 21 22 Recurring Profit 105 3 302 354 Income Tax 28 33 79 95 Net Profit 77 90 224 258 Balance Sheets 2011 Year-end Assets 2,369 2,875 Cash & Cash Equivalent 92 119 Accounts Receivable 327 519 Inventories 306 309 PPE 1,602 1,879 Tangible Asset 855 951 Intangible Asset 664 817 Liabilities 1,308 1,627 Accounts Payable 231 236 Other Payables 151 198 Borrowings 565 729 Short Term Borrowings 183 461 Long Term Borrowings 382 268 Total Shareholders' Equity 1,061 1,248 Shareholders' Equity 89 89 Capital Surplus 97 97 Accumulated Other Comprehensive Income Sep. 20 0-5 Retained Earnings 884 1,071 Other Capital -72-73 Minority Interest 63 69 6/6
Attachment: Establishment of CheonAn Complex LG H&H is ready to activate the long-term master plan for future growth and cosmetics globalization. To reinforce the long-term strategy, LG H&H has executed an agreement to acquire 100% of Future Corp. and its 150,000 pyeong land for 49.3 bn won. - Newly acquired land is at CheonAn, which has high accessibility from Seoul via KTX (11km from CheonAn Asan KTX station), metropolitan subway line (9km from CheonAn subway station), and CheonAn Nonsan expressway (4.5km from South Cheonan IC). The land is also located next to Haitai Beverage s CheonAn factory. With this acquisition, 280,000 pyeong (229 acre) base for future growth will be established at CheonAn, including Haitai s land.