⊆ Two-digit growth for nine consecutive quarters since the first quarter of 2005

⊆ Achieved 272.4 billion won in sales―11.4% growth compared to the previous year; two-digit growth continues for three consecutive quarters

⊆ Successfully completed restructuring efforts in the past two years and full-scale initiation of its growth strategy; growth continues to accelerate

⊆ In the household goods division, discount rates have been lowered, the share of premium products is increasing and new business, including Beyond and sanitary napkins, is growing

⊆ In the cosmetics division, sharp growth among premium products targeting those in their 40s or older sold at department stores and among Oriental medicine-based cosmetics, including SooRyeHan

Regarding its second quarter performance, LG H&H announced that it achieved 272.4 billion won in sales and 26 billion won in operating profit.

This can be attributed to the continued growth of premium products and the successful launch of distinctive new products. Sales and operating profit have increased by 11.4% and 37.6%, respectively, compared to the previous year. Operating profit sustained two-digit growth for nine consecutive quarters since the first quarter of 2005, while in sales it has continued for three consecutive quarters. LG H&H explained, “We successfully completed restructuring efforts that had been underway over the past two years. Beginning this year, we are seeking full-scale growth through innovation. As the strategy produces smooth progress, growth is picking up pace.”

In addition, sales increased 11.8% year-on-year in the first half to stand at 575.3 billion won and operating profit increased 33.1% to reach 66.5 billion won. The operating margin for the first half was 11.6%, the highest ever in the past five years. The operating margin in cosmetics has improved noticeably from 6.2% in 2003 to 14.0%.

Details of second-quarter performance by division are as follows.

⊂ In the household goods division, sales increased 8.6% to 171.5 billion won and operating profit swelled 40.4% to 12.6 billion won. The sales are attributable to strong growth (96%) of bath & body brand Beyond and the successful marketing of premium sanitary napkin Body Fit. The remarkable growth in operating profit is due to an improved sales discount rate, which was pursued consistently over the past two years, and a rising share of premium products.

⊂ In the cosmetics division, sales increased 16.9% to reach 104.6 billion won and operating profit 36.4% to reach 13.5 billion won. LG H&H believes that the improved sales are due to strong sales of new premium products OHUI The First and Whoo Jinyul, which target customers in their 40s and older through the department store sales channel, and new fermentation cosmetics products such as SooRyeHan Hyo and ISA KNOX Air Compact. The operating profit can be attributed to sustained growth in premium cosmetics and the sharp growth of high-end brand SooRyeHan (53%).