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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
Revenue7,685.42B6,590.23M
Gross Profit4,607.37B3,950.81M
Operating income1,175.91B1,008.34M
Income before tax1,085.16B930.52M
Net income778,097.70M667.21M
EBITDA1,426.93B1,223.59M
Diluted EPS46,436.8339.81
Dividends Per Share11,0009.43
Total Assets6,493.66B5,615.17M
Total liabilities2,256.58B1,951.30M
Total equity4,146.73B3,585.74M
Operating cash flow1,139.64B977.23M
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 7,685.42B
Gross Profit 3,027.49B 3,587.41B 3,418.75B 3,970.89B 4,607.37B
Operating income 682,517.16M 880,164.61M 929,595.27M 1,040.20B 1,175.91B
Income before tax 638,450.66M 745,485.18M 861,078.57M 956,005.11M 1,085.16B
Net income 460,351.20M 568,220.98M 606,411.78M 682,743.15M 778,097.70M
EBITDA 809,583.56M 1,013.85B 1,076.00B 1,197.65B 1,426.93B
Diluted EPS 27,473.73 33,911.40 36,190.62 40,746.08 46,436.83
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 6,493.66B
Total liabilities 2,099.29B 1,881.32B 1,696.73B 1,681.85B 2,256.58B
Total equity 2,037.29B 2,532.35B 2,996.23B 3,512.06B 4,146.73B
Operating cash flow 637,804.64M 713,435.54M 735,477.19M 817,116.84M 1,139.64B
 Dec 2015Dec 2016Dec 2017Dec 2018Dec 2019
Revenue 4,707.96M 5,252.64M 5,400.33M 6,131.23M 6,590.23M
Gross Profit 2,674.92M 3,092.09M 3,024.08M 3,608.20M 3,950.81M
Operating income 603.03M 758.63M 822.27M 945.19M 1,008.34M
Income before tax 564.10M 642.55M 761.67M 868.68M 930.52M
Net income 406.74M 489.76M 536.40M 620.38M 667.21M
EBITDA 715.30M 873.87M 951.79M 1,088.26M 1,223.59M
Diluted EPS 24.27 29.22 32.01 37.02 39.81
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 5,615.17M
Total liabilities 1,790.36M 1,557.64M 1,584.92M 1,507.30M 1,951.30M
Total equity 1,737.49M 2,096.66M 2,798.78M 3,147.57M 3,585.74M
Operating cash flow 563.52M 614.93M 650.57M 742.48M 977.23M

Valuation Measures

Dec 2019
PER27.15
ROA13.22%
ROE20.31%
Operating margin15.30%
Profit margin10.12%

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. (3.4%)
  • The Vanguard Group, Inc. (1.6%)
  • Harding Loevner LP (1.4%)
  • BlackRock Fund Advisors (1.2%)
  • Norges Bank Investment Management (1.0%)
  • First State Investments (Hong Kong) Ltd. (0.9%)
  • Hermes Investment Management Ltd. (0.7%)

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.
  • LG Household & Health Care Malaysia Sdn. Bhd.
  • 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.
  • LG Vina Cosmetics 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
  • ABLE C&C
  • Revlon, Inc. Class A
  • AK Holdings, Inc.
  • CLIO Cosmetics co., Ltd
  • IT'S HANBUL CO. LTD.
  • Hankook Cosmetics Co., Ltd
  • Coreana Cosmetics Co., Ltd
  • Greencross WellBeing Corporation
  • Leaders Cosmetics Co., Ltd
  • NEXT SCIENCE Co.,Ltd.
  • DongKook Pharmaceutical Co., Ltd.
  • KODI CO., LTD.
  • VT GMP Co., Ltd.
  • Korea Cast Iron Pipe Ind. Co., Ltd.
  • DongKoo Bio & Pharm Co. Ltd.
  • Betterware de Mexico SAPI de CV
  • Prostemics Co. Ltd.
  • Wooree Lighting Co., Ltd.
Last Updated on 7 Aug, 2020

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