All Numbers Up
LG Household & Health Care reports record high sales and operating profit in the first quarter of 2016. Net sales of 1.5 trillion won and operating profit of 234 billion won represent year-on-year growth rates of 16.7 percent and 30.9 percent, respectively.
LG Household & Health Care (CEO Suk Cha) reported 1.5 trillion won in sales (up 16.7 percent year-on-year), and 234 billion won in operating profit (up 30.9 percent year-on-year), which are historical highs. The results surpass the previous highest sales by 133 billion won and operating profit by 43 billion in Q3, 2015.
All three business units outperformed the market growth. For operating profit, all three business units grew more than double digit percentage year-over-year: Beauty (Cosmetics) 39.5 percent, Health (Household goods) 11.8 percent, and Refreshment (Beverage) 28.0 percent.
Sales of the Beauty products increased 25.9 percent year-on-year to 797 billion won, and the operating profit increased 39.5 percent year-on-year to 157 billion won. The operating profit margin improved to 19.7 percent, up 1.9 percentage points from the previous year.
Luxury cosmetics sales increased 39 percent year-on-year due to the strong growth of major brands. The contribution came from the traditional Korean royal beauty brand "Whoo," which grew 47 percent year-on-year, and the naturally fermented cosmetic brand "su:m," which grew 105 percent backed by strong demands from Chinese consumers.
Sales of the Health products increased 6.5 percent year-on-year to 419 billion won, and operating profit increased 11.8 percent year-on-year to 54 billion won, due to a steady growth in both personal and home care. The operating profit margin improved to 12.9 percent by increasing 0.6 percentage points from the previous year.
Sales in the Refreshment segment increased 10.1 percent year-on-year to 304 billion won, and the operating profit increased 28.0 percent year-on-year to 22 billion won. The operating profit margin improved to 7.3 percent (1.0 percentage points) from the previous year. Sales of both carbonated and non-carbonated drinks increased to improve their combined market share by 0.7 percentage points to 30.8 percent.