LG Household & Health Care Results through 3 rd Quarter

Transcription

1 LG Household & Health Care 2005 Results through 3 rd Quarter

2 Table of Contents rd Quarter Results 2005 YTD Results through 3Q Total Company 2005 Operating Profit Trend 2005 YTD Results through 3Q Household 2005 YTD Results through 3Q Cosmetics Summary Financial Statements

3 2005 3Q Results Total Company Upward trend in total company operating profit continued in 3 rd quarter. Also, after 11 consecutive quarters of declining sales YoY, the company achieved positive sales growth. Total Company Sales Operating Profit (%) Q 2Q 3Q 4Q 16.4 (6.6%) 20.5 (8.0%) % Operating income in 3rd Quarter reached 20.5 bn won, showing YoY improvement of 25%. Operating margin as a percentage of sales improved from 6.6% to 8.0%. Sales increased YoY 4.1% largely due to growth in the cosmetics business, but also was buoyed by growth in household sales. Net profit after tax reached 17.0 bn won, reflecting YoY improvement of 40.7% Q Q 1/6

4 2005 YTD Results through 3Q Total Company Results through 3Q mark substantial progress in the execution of the company s turnaround strategy. Total Company Operating Profit (%) 60.6 (8.0%) Total company operating profit reached 60.6 bn won, a 17.7% increase YoY. Profit Sales 51.5 (6.7%) +17.7% improvement is primarily the result of: (1) emphasis on premium products and pricing in 6 core product categories of the household business, and (2) achievement of solid profitability within the prestige segment of the cosmetics business, coupled with renewed focus on fewer brands in the mass segment. Sales YoY declined slightly (-1.7%), due to ongoing efforts to improve sales quality by restructuring overseas operations, rationalizing brands, and reducing SKU s. 2/6

5 2005 Operating Profit Trend As management executes the company s turnaround strategy, quarterly results show an increasing rate of improvement. Operating Profit by Quarter % % % Q 2Q 3Q 3/6

6 2005 YTD Results through 3Q - Household Focus on the premium segment of the household goods market through new product introductions, as well as product renewals is increasing Average Selling Price, and boosting profitability. Household Operating Profit (%) 45.7 (8.8%) On a YTD basis, operating profit through 3Q in the household division reached 45.7 bn won, a 4.8% gain YoY. Operating Sales 43.6 (8.1%) % margin improved as well, from 8.1% to 8.8%. Notably, sales within the 6 core product categories increased from 62.4% in 2004 to 65.9% through 3Q. Reflecting efforts to exit low-margin business such as wholesale distribution for third parties, and to eliminate unprofitable brands and SKU s, sales declined slightly, by 3.3% /6

7 2005 YTD Results through 3Q - Cosmetics Due to rapid market share gains in both the department store channel and the home visit channel, high-margin prestige cosmetics now account for 31% of total cosmetics sales, resulting in significant profit improvement. Cosmetics Operating Profit (%) Sales 7.9 (3.4%) (6.3%) % On a YTD basis, operating profit through 3Q in the cosmetics business improved by 89% YoY, and reached 14.9 bn won. Operating margin improved as well, from 3.4% to 6.3%. Prestige segment sales grew by 64.8%, achieving market share in 3Q of 7.3%. Total cosmetics sales increased slightly, by 1.6%. Market share in department stores increased to 7.0% in 3Q from 5.3% in In the home visit channel, market share rose to 7.1% in 3Q from 3.7% in /6

8 Summary Financial Statements P/L (Unit: bn won/%) Amount (%) Amount (%) Sales COGS Gross Profit SG&A Operating Profit Non-operating gain Non-operating exp Recurring Profit Tax Net Income B/S Asset Cash & cash equivalents Amount (%) Amount (%) Trade receivables Inventories Fixed assets Investments Liability Trade payables Borrowings Capital Captital stock Additional paid-in & other capital Sept. 30, 2005 (Unit: bn won/%) Dec. 31, Retained earnings /6

9 Thank you! Auditing for the 3Q 2005 financial results has not been finalized. Figures in this earnings release are subject to change during the independent auditing process. This presentation contains forward looking statements which are based on management s assumptions and estimates. The forward looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in this presentation. Potential risks and uncertainties include, but are limited to, such factors as general economic conditions, foreign exchange fluctuations, and any change in the relevant laws and regulations.