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Consumer Non-Durables

LG Household & Health Care

Company Background

LG Household & Health Care is one of the largest household goods and cosmetics manufacturers in South Korea and ranks second in cosmetics in the country after AmorePacific Group. The company's cosmetics sales via duty-free shops have increased steadily due to a growing number of visitors from abroad. In addition, it has recently been active in mergers and acquisitions of domestic and foreign cosmetics brands. These factors have helped the cosmetics division gain a higher percentage of consolidated sales than the household goods division.

In 2001, LG Household & Health Care was established as a spinoff from LG Chem, taking over the cosmetics business from its parent LG group, one of South Korea's global conglomerates, which started out as a cosmetics producer. The company is built around three core divisions: detergent and other household goods, cosmetics and soft drinks, and its overseas operations focused on cosmetics.

The company is enjoying brisk demand for its high-end cosmetics brands at home and in China, including the Whoo line, based on traditional Korean herbal medicine, and Sum 37, a brand that uses naturally-fermented plants from around the world, at home and in China. The Face Shop, the low-cost brand acquired by LG Household, has proved popular with young Asian consumers. Meanwhile, the Korean company is preparing to keep pace with the era of an aging society through its Japanese subsidary, EverLife, that sells inner beauty products and health products.

LG Household & Health Care Vice Chairman Cha Suk-yong, who previously worked for U.S. consumer products maker Procter & Gamble, serves as CEO of the South Korean company. The company is vigorously pursuing new product development under the leadership of Cha, who is noted for his P&G-style management approach emphasizing innovation.

Business Summary

LG Household & Health Care Ltd. engages in the production and sale of household goods and cosmetic products. It operates through following divisions Beauty, Health and Refreshment businesses. The Beauty business division provides anti-aging cosmetic products. The Health division markets healthcare, skincare and household products. The Refreshment division provides soda, juice, energy drinks and other beverages. The company was founded on April 3, 2001 and is headquartered in Seoul, South Korea.

Financial Highlights

Dec 2019 KRWUSD
Revenue7,685.00B6,589.86M
Gross Profit4,768.00B4,088.54M
Operating income1,176.00B1,008.41M
Income before tax1,092.00B936.38M
Net income788,000M675.70M
EBITDA1,427.00B1,223.64M
Diluted EPS----
Dividends Per Share11,0009.43
Total Assets6,494.00B5,615.46M
Total liabilities2,257.00B1,951.66M
Total equity4,147.00B3,585.97M
Operating cash flow1,140.00B977.54M
Currency in KRWCurrency in USD

Historical Data

 Dec 2015Dec 2016Dec 2017Dec 2018Dec 2019
Revenue 5,328.49B 6,094.05B 6,105.13B 6,747.53B 7,685.00B
Gross Profit 3,027.49B 3,587.41B 3,418.75B 3,970.89B 4,768.00B
Operating income 682,517.16M 880,164.61M 929,595.27M 1,040.20B 1,176.00B
Income before tax 638,450.66M 745,485.18M 861,078.57M 956,005.11M 1,092.00B
Net income 460,351.20M 568,220.98M 606,411.78M 682,743.15M 788,000M
EBITDA 809,583.56M 1,013.85B 1,076.00B 1,197.65B 1,427.00B
Diluted EPS 27,473.73 33,911.40 36,190.62 40,746.08 --
Dividends Per Share 5,500 7,500 9,000 9,250 11,000
Total Assets 4,214.63B 4,502.16B 4,778.51B 5,275.87B 6,494.00B
Total liabilities 2,099.29B 1,881.32B 1,696.73B 1,681.85B 2,257.00B
Total equity 2,037.29B 2,532.35B 2,996.23B 3,512.06B 4,147.00B
Operating cash flow 637,804.64M 713,435.54M 735,477.19M 817,116.84M 1,140.00B
 Dec 2015Dec 2016Dec 2017Dec 2018Dec 2019
Revenue 4,707.96M 5,252.64M 5,400.33M 6,131.23M 6,589.86M
Gross Profit 2,674.92M 3,092.09M 3,024.08M 3,608.20M 4,088.54M
Operating income 603.03M 758.63M 822.27M 945.19M 1,008.41M
Income before tax 564.10M 642.55M 761.67M 868.68M 936.38M
Net income 406.74M 489.76M 536.40M 620.38M 675.70M
EBITDA 715.30M 873.87M 951.79M 1,088.26M 1,223.64M
Diluted EPS 24.27 29.22 32.01 37.02 --
Dividends Per Share 4.85 6.46 7.96 8.40 9.43
Total Assets 3,594.41M 3,727.57M 4,463.61M 4,728.33M 5,615.46M
Total liabilities 1,790.36M 1,557.64M 1,584.92M 1,507.30M 1,951.66M
Total equity 1,737.49M 2,096.66M 2,798.78M 3,147.57M 3,585.97M
Operating cash flow 563.52M 614.93M 650.57M 742.48M 977.54M

Valuation Measures

Dec 2019
PER28.35
ROA13.39%
ROE20.57%
Operating margin15.30%
Profit margin10.25%

Key executives

  • Vice Chairman & Chief Executive Officer: Suk-Yong Cha
  • Chief Financial Officer & Director: Hong-Gi Kim
  • Chief Technology Officer: Seon-Gyu Park
  • Head-Legal & Compliance Support: Jun-Sik Han
  • MD & Head-Household Goods Research: Sang-Min Lee

Shareholders

  • LG Corp. (34.0%)
  • National Pension Service of Korea (7.8%)
  • LG Household & Health Care Ltd. (6.1%)
  • T. Rowe Price International Ltd. (3.6%)
  • The Vanguard Group, Inc. (1.5%)
  • BlackRock Fund Advisors (1.3%)
  • Harding Loevner LP (1.1%)
  • Invesco Advisers, Inc. (1.1%)
  • Norges Bank Investment Management (1.0%)
  • Vontobel Asset Management AG (0.8%)

Contact Details

  • Website:http://www.lgcare.com
  • Address: LG Gwanghwamun Building, 58 Saemunan-ro, Seoul, 03184, South Korea
  • Phone: +82.2.3773.1114

Related Companies

  • MiGen Story Co. Ltd.
  • Rucipello Korea, Inc.
  • K&I Co., Ltd.
  • Zenisce Co., Ltd.
  • Johnson & Johnson Pte Ltd. /Oral Care Brand/
  • LG Household & Health Care America, Inc.
  • New Avon LLC
  • LG Household & Health Care Ltd. (Taiwan)
  • CNP COSMETICS Co. Ltd.
  • R&Y Corp.
  • Diamond Pure Water Co., Ltd.
  • Future Co., Ltd.
  • Ginza Stefany Cosmetics Co. Ltd.
  • Beijing LG Household Chemical Co., Ltd.
  • TAI GUK PHARM Co. Ltd.
  • VOV Cosmetics Co., Ltd.
  • Everlife Co., Ltd.
  • Face Shop Korea Co., Ltd.
  • Coca-Cola Korea Bottling Co. Ltd.
  • Hai Tai HTB Co., Ltd.

Competitors

  • KT & G Corporation
  • IT'S HANBUL CO. LTD.
  • ABLE C&C
  • Revlon, Inc. Class A
  • AK Holdings, Inc.
  • CLIO Cosmetics co., Ltd
  • Coreana Cosmetics Co., Ltd
  • Hankook Cosmetics Co., Ltd
  • Leaders Cosmetics Co., Ltd
  • Naturecell Co., Ltd.
  • NEXT SCIENCE Co.,Ltd.
  • DongKook Pharmaceutical Co., Ltd.
  • KODI CO., LTD.
  • Korea Cast Iron Pipe Ind. Co., Ltd.
  • VT GMP Co., Ltd.
  • DongKoo Bio & Pharm Co. Ltd.
  • Prostemics Co. Ltd.
  • Wooree Lighting Co., Ltd.
Last Updated on 20 Feb, 2020

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