2003 1Q RESULTS. Contents Business Results 1~2 Household Products 3~4 Cosmetics 5~6 Key Financials 7...
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Transcript of 2003 1Q RESULTS. Contents Business Results 1~2 Household Products 3~4 Cosmetics 5~6 Key Financials 7...
2003 1Q RESULTS
Contents
Business Results 1~2
Household Products 3~4
Cosmetics 5~6
Key Financials 7
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. In addition, an independent auditing is not required for quarterly financial statements.
Business Results – quarterly trend
29.2
(11.2%)19.6
(7.9%)
36.1
(12.9%) 22.8
(9.4%)
33.2
(11.7%)25.1
(9.2%)
37.4
(12.7%)
2.9
(1.2%)
24.7
(8.6%)
O.P.(Margin)
O.P.(Margin)
SalesSales249.0
279.5
243.8
284.8274.1
294.1
249.3
285.9
259.6
(KRW bn)
(KRW bn)
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
2001 2002 2003
While displaying the seasonal trend in general, LG H&H’s operation was affected bythe overall economic slowdown in 4Q, 2002. However, business results were improved in 1Q, 2003.
1
Amount q-o-q y-o-y
Sales 285.9 15% 0% 249.3 284.8
G.P 144.9 39% -5% 104.3 153.1
O.P 24.7 752% -26% 2.9 33.2
R.P 25.0 681% -23% 3.2 32.5
1Q 20034Q 2002 1Q 2002
Sales of KRW 285.9bn and operating profit of KRW 24.7bn were recorded in 1Q, 2003. A sales increase of 0.4% and a O.P decrease of ∆25.6% y-o-y were observed.However, sales and profit improvements remained at a satisfactory level q-o-q.
Earning Forecast for 1Q, 2003
Earning Forecast(KRW bn)
Results Analysis
Negative market growth from weak consumption
- Household products 6 major category market: 6% △
- Cosmetic market: 12% △
Increased marketing cost from intense competition
- Lowered selling prices for some products
- Increased sales commissions
New products and premium brands cultivation
- Increase in advertising / packaging / sample expenses
(y-o-y)
2
17.2
(10.1%)10.3
(6.4%)
24.4
(12.6%)16.5
(10.2%)
20.3
(10.9%)14.5
(8.2%)
28.7
(14.1%)
8.0
(4.8%)
18.7
(9.7%)
O.P.(Margin)
O.P.(Margin)
SalesSales
159.7
193.9
162.3
186.7176.5
203.2
168.2
193.3
170.1
(KRW bn)
(KRW bn)
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
2001 2002 2003
Household Products Results-quarterly trend
The seasonality caused by the Lunar New Year & Korean Thanks Giving holidays is shownin the Household Products results. Despite the negative growth in the major product category markets, sales growth remained solid in 1Q, 2003.
3
Amount q-o-q y-o-y
Sales 193.3 15% 4% 168.2 186.7
G.P 77.8 41% -2% 55.3 79.1
O.P 18.7 134% -8% 8.0 20.3
1Q 20034Q 2002 1Q 2002
Earning Forecast(KRW bn)
Results Analysis
Negative market growth from weak consumption
- Personal care market: 13% △
- Home care market : 1%
Increased marketing cost from intense competition
- Advertising & promotion cost increased
New & premium brands cultivation
- Lemoning/Claren/6 strategic brands marketing expenses
increased
* Lemoning: laundry bleach Claren : dental whitening product
(y-o-y)
Earning Forecast for 1Q, 2003
Sales of KRW 193.3bn and operating profit of KRW 18.7bn were recorded in 1Q, 2003. A sales increase of 3.5% and a O.P decrease of ∆7.9% y-o-y were observed.However, sales and profit improvements remained at a satisfactory level q-o-q.
4
12.1
(12.9%)
9.7
(10.2%)
11.8
(13.0%) 6.4
(7.5%)
13.0
(12.4%)10.7
(10.6%)6.7
(7.1%)△3.1
(△3.7%)
5.9
(6.3%)
영업이익 ( 율 )영업이익 ( 율 )
매 출 액매 출 액 95.2 91.185.6
104.8100.8 94.1
82.9
93.493.8
1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q
2001 2002 2003
Since 1Q, 2002, sales displayed a downward trend. However, sales & operatingprofit bounced back in 1Q, 2003.
Cosmetics Results-quarterly trend
O.P.(Margin)
O.P.(Margin)
SalesSales
(KRW bn)
(KRW bn)
5
Amount q-o-q y-o-y
Sales 93.4 13% -11% 82.9 104.8
G.P 67.5 36% -12% 49.8 76.3
O.P 5.9 - -55% (3.1) 13.0
1Q 20034Q 2002 1Q 2002
Negative growth of major distribution channels
- Specialty shops : 20% △
- New type door to door: 34% △
Continued channel shift by consumers
- Causing increased promotional expenses
New & premium brands cultivation
- Increased marketing expenses for
The Whoo / Ohui / Isa Knox brands
Earning Forecast for 1Q 2003
Sales of KRW 93.4bn and operating profit of KRW 5.9bn were recorded in 1Q, 2003, a decrease of ∆10.9% & ∆54.6% respectively y-o-y.However, sales and profit improvements remained at a satisfactory level q-o-q.
Earning Forecast(KRW bn)
Results Analysis(y-o-y)
6
2001 2002 1Q 2003
Assets 646.6 678.1 680.0
[Current] 232.5 242.8 258.8
(Cash) 40.7 28.2 44.9
[Fixed] 414.1 435.3 421.2
Liabilities 414.1 406.9 418.6
[Current] 314.7 327.9 338.3
[Long Term] 99.4 79.0 80.3
Shareholder's Equity 232.5 271.2 261.4
[Capital Stock] 88.6 88.6 88.6
Debt/Equity 178% 150% 160%
Borrowing/Equity 88% 64% 47%
Net Borrowing/Equity 71% 53% 30%
2001 2002 1Q 2003
205.4173.0
122.9
Borrowings
2001 2002 1Q, 2003
Key Financials (KRW bn)Borrowings
(KRW bn)
By maintaining stable cash flows and disposing non business related assets such as stakein LG Investment & Securities, borrowing of KRW 50.1bn was additionally reduced.At the end of 1Q, 2003, net borrowings to equity ratio declined to 30%.
Key Financials
Short Term
Current Maturities
Bonds
Long Term
Total
27.3
95.1
50.0
33.0
205.4
70.0
80.7
-
22.3
173.0
20.0
80.7
-
22.2
122.9
(164.7)(144.8)
(78.0)
NetBorrowings
7