LG Household & Health Care Reports Record Operating Profit of KRW 1.2209 Trillion in 2020

[Asia Economy Reporter Seungjin Lee] LG Household & Health Care achieved its highest annual performance last year despite the difficulties caused by the novel coronavirus disease (COVID-19).

LG Household & Health Care announced on the 27th that it recorded sales of 7.8445 trillion KRW and operating profit of 1.2209 trillion KRW in 2020, marking increases of 2.1% and 3.8% respectively compared to the previous year. Net profit for the period grew 3.2% year-on-year to 813.1 billion KRW, achieving growth for 16 consecutive years.

The total cosmetics sales, combining beauty and daily beauty, reached 5.5524 trillion KRW, with operating profit of 964.7 billion KRW. Due to increased profits and resulting cash inflows, the debt ratio improved by 13.0 percentage points from 53.3% at the end of the previous year to 40.3%.

In particular, the fourth-quarter sales increased by 4.0% year-on-year to 2.0944 trillion KRW, operating profit rose 6.3% to 256.3 billion KRW, and net profit increased 6.6% to 142.6 billion KRW, achieving the highest-ever fourth-quarter performance.

Looking at the fourth-quarter performance by business division, the beauty (cosmetics) business recorded sales of 1.3245 trillion KRW, down 0.9% year-on-year, while operating profit increased 5.4% to 225.4 billion KRW. Thanks to the strong performance of luxury cosmetics, the results were favorable compared to the market. In China, sales grew 41% in the fourth quarter and 21% annually, driven by the results of continuous investment in digital channels.

The HDB (household goods) business posted fourth-quarter sales of 423 billion KRW, up 23.6% year-on-year, and operating profit of 10 billion KRW, up 7.4%. This was the result of focusing on differentiated premium brands such as ‘Doctor Groot’ and ‘Belman’. Especially in the e-commerce market, the expansion of direct online malls, strengthened online marketing activities, and active use of live broadcasts contributed significantly. In the Chinese market as well, premium brands led sales growth, increasing the proportion of online sales.

The Refreshment business (beverages) achieved fourth-quarter sales of 346.9 billion KRW, up 3.7% year-on-year, and operating profit of 20.9 billion KRW, up 17.1%. Despite the challenging business environment caused by COVID-19, which restricted external activities at the end of the year, sales and profits grew in the off-season, supported by the brand power of major brands such as ‘Coca-Cola’, ‘Monster Energy’, and ‘Seagram’s’.

LG Household & Health Care stated, "For the first time since starting the business, we achieved first place in the domestic market across all three businesses: Beauty, HDB, and Refreshment," adding, "Despite the COVID-19 crisis, strong performances in global markets such as China and the United States minimized the impact of the crisis."