Sales: $4.1 billion
Key Personnel: Suk Cha, chief executive officer and vice chairman.
Major Products: Cosmetics—Whoo, O Hui, SU:M37, Belif, Beyond, Dermalift, ChungYoonJin, Tuneage CNP, Isa Knox, Sooryehan, Lacvert, Cathycat, Vonin, Carezone, The Saga of Xiu, The Face Shop, VDL, VOV, Philosophy, Makeremake; Hair Care—Elastine, Reen, Organist, Phyto Derma, Silk Therapy; Oral Care—Perioe, Bamboo Salt; Cleaning—Homestar, Safe, Jayeonpong, PongPong; Skin Care—On The Body, Gentology; Laundry—Saffron, Hanip, Tech, Super Ti, Fiji, Oxygen Clean; Air Care—Happybreeze, Partel, Healing&Nature, Véilment.
New Products: SU:M 37 secret eye cream; LG Farouk hair care (joint venture), Reach oral care (acquisition).
Comments: LG continues to chug along, posting double-digit gains again. Corporate sales rose 24.6% last year, and operating profits jumped nearly 43%. Profit margin improved 18.3% and the company credited prestige cosmetic sales for much of the gains. Sales of luxury cosmetics grew 40% and its sales contribution increased to 69% within cosmetics. Prestige cosmetic sales were led by perennial topseller, Whoo, which achieved sales of more than $1 billion last year. Meanwhile, fermented cosmetics brand SU:M, which debuted in China last year, nearly topped the $300 million mark in sales, according to LG.
Household product sales rose 5.4% last year to $1.3 billion. Operating profit increased 9%, as consumers flocked toward premium formulas. LG’s household care market share reached 37%, as the company maintained its No. 1 position in Korea.
In October, LG expanded its presence in the hair care category by forming a joint venture with Farouk Systems (No. 49 in Happi’s Top 50, July 2017). The JV, LG Farouk, is expected to expand and enhance the presence in both Korean and international hair care market through synergy from R&D and marketing leadership. Under terms of the agreement, LG will have an access to Farouk’s network in North America such as hair salons and beauty specialty stores to introduce premium hair care products as well as a variety of cosmetics. In addition, LG Farouk will strengthen its brand portfolio in Korea by introducing more brands in shampoo, colorants and hair styling products. This isn’t the first time that LG has teamed up with Farouk. In 2013 LG introduced Farouk’s Silk Therapy brand into Korea.
Late last year, LG acquired the Reach oral care business in the Asia Pacific market from Johnson & Johnson. A purchase price was not disclosed. The move is expected to enhance LG’s oral care business in existing markets such as Korea, China, Taiwan, Japan and Vietnam, and in new markets such as Australia, New Zealand and India. According to LG, the global oral care market rose 5.5% CAGR during the past five years and global sales topped $40 billion in 2015.
In 1Q 2017, corporate sales rose 5.4%. It marked the 47th consecutive quarter that sales increased. Moreover, operating profit increased 11.3%. Cosmetic sales increased 7.2%, driven by big gains in luxury cosmetic sales. Household sales increased 2.7% in Q1.