Top Companies Report

14. LG Household Healthcare

August 11, 2011

South Korea

www.lgcare.com


Sales: $1.8 billion


Key Personnel:

Suk Cha, chief executive officer, LG Household & Healthcare.


Major Products:

Household—laundry and dishwashing detergents, fabric softener and kitchen cleaners. Personal care—toothpaste, shampoo, soap, baby care, skin care, color cosmetics and toiletries.


New Products:

The Body body care range (body wash, body lotion, cleansing foam, soap), I Hee Care for Style hair care, Tech Handy Sheet laundry detergent sheets.


Comments:

LG Household & Healthcare (H&H) reported all-time highs for annual sales at $2.4 billion (up 27.5%) and operating profit at $30 million (up 52.0%) in 2010. The company breaks its results into three main sectors—Healthy, Beautiful and Refreshing—representing household care, cosmetics, skin care and other HBA products in the first two, with beverages in the latter unit.


Within Happi’s scope, sales within the firm’s Healthy business unit rose 15.6% to nearly $950 millon—making LG the first household business in Korea to exceed sales of one trillion won, according to the company. Within this unit, the hair care category grew by more than 30% YOY, driven by a new brand called I Hee Care for Style and ReEn, an oriental herbal concept brand. Body care sales rose 20%, bolstered by LG’s eco line Beyond (up 40%) and Say brands. This category, which also includes diaper and sanitary napkin businesses, saw its operating profit increase more than 25%.


Sales within the Beautiful business unit jumped 52.4% to more than $880 million, exceeding the 1 trillion hurdle for the first time, and operating profit jumped 103.3%. The prestige segment maintained rapid growth, according to LG, with Whoo, SU:M and Belif (a new brand) faring well. Specifically, SU:M posted 70% growth year-over-year as LG expanded its counters from 22 to 40. Within masstige, Beaute de Beautiplex, billed as upgraded version of Beautiplex, opened 117 stores. LG acquired TheFaceShop in January 2010 and has upped the number of TheFaceShop stores, adding 160 domestic doors and 54 overseas shops during the year, pushing total stores in operation at the end of 2010 to 1,194.


In 2011, LG H&H’s overall strategic objectives are to continue to focus on a premiumization strategy to provide differentiated products with a unique value proposition, and strengthen its product portfolio by extending value-oriented product lines that maximize consumer value through minimizing unnecessary packaging and ingredients. On top of solid domestic business performance, LG said it will also expand its presence in overseas markets, especially in China, by enhancing product ranges and expanding channel coverage.

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