Top Companies Report

14. LG Household Healthcare

August 6, 2012

South Korea
www.lgcare.com

Sales: $2.1 billion

Key Personnel: Suk Cha, vice chairman and chief executive officer.

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: VOV color cosmetics (acquisition), LacVert Volcanic Ash heating mask, O Hui Original Energy 100 Bluetox and Belif skin care.

Comments: Corporate sales rose more than 20% last year. Skin care accounts for 85% of company sales, with color cosmetics representing a distant second with 15% of sales. But the company hopes to boost its color sales via the October 2011 acquisition of VOV Corp., which had sales of nearly $41 million in 2010. LG paid a little more than $50 million for VOV, which is the No. 3 player in the Korean color cosmetics market.

By segment, personal care and household care sales rose more than 15% to exceed $1 billion, driven by gains in skin care, oral care, laundry care and dishwashing products. Cosmetic sales increased more than 13% to about $1.1 billion, thanks to strong sales of Whoo and Su:m skin care products, the successful launch of Belif skin care and overseas expansion of TheFaceShop.

At the same time, CEO Suk Cha, who was named Best Korean CEO for the third consecutive year by Asiamoney, told shareholders and analysts that the company will expand via four avenues:
  1. Diversifying approaches in order to win the number one spot in the cosmetics market by building a strong position in the prestige category in competitive prestige cosmetics market by strengthening Ohui and Whoo brands, expanding prestige fermented Su:m and natural herbal brand Belif, as well as new and differentiated brands.
  2. Entering new fields in the household goods business by developing more environmentally-friendly products.
  3. Accelerating efforts to become the number one player in the beverage market through the maximization of synergy between Coca-Cola Beverage and Haitai Beverage.
  4. Systemically executing solid and practical globalization schemes by focusing on growth opportunities in China, Japan and Southeast Asia.
Unfortunately, for the first time in years, gross margin slipped below 50%, falling to 49.7% in 2011. Still, overall, the good times continued into 2012, as first quarter sales jumped 17%.


 
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