On January 31, South Korea’s leading fast-moving consumer goods (FMCG) company announced its full-year financial results for 2023.
The result revealed a difficult situation for the company. It reported that sales decreased by 5.3% to 6.81 trillion won (US$5.1 billion) and operating profit decreased by 31.5% to 487 billion won (US$365 million).
Despite the lackluster numbers, the company expects to “We laid the foundation for building national and global competitiveness.”
It added that it sees 2024 as a “tipping point for growth”, which will be achieved by strengthening its core competitiveness.
The company aims to strengthen its market position through a diversified strategy.
Domestically, we plan to introduce innovative products, expand our product portfolio and reach a diverse range of consumers.
We are also expanding our market power by developing new channels and nurturing smaller brands.
In addition, we aim to strengthen our performance in the health and beauty channel, with particular focus on increasing our presence in the derma beauty and makeup categories.
Strengthening overseas business
LG H&H also emphasized the importance of its China business, focusing on developing medium- to long-term brand assets in China.
The company also emphasized its aim to expand in the premium market while strengthening its position in the luxury market.
We also mentioned the importance of: “Reduce volatility”” in China’s travel retail market.
In addition to China, LG H&H said it is working to increase the presence of its beauty and personal care brands in the United States.
The company also said it is aiming to expand its business in Japan and Southeast Asia.
The company said it will move forward with investments in brands such as belif, The Face Shop and Physiogel.
At the same time, he also mentioned the importance of launching a brand that can meet local needs.
Finally, I said this:We aim to revitalize Avon’s business.”
LG H&H has acquired Avon North America for $125 million in cash to expand its footprint in North America.
With this strategy, the company announced that it expects single-digit growth in 2024.
Decrease in FY2023
The beauty category, which includes brands such as The Who, Sam37 and OHUI, fell 12%.
This is said to be due to sluggish demand in China.
Travel retail sales in China fell by double digits, the company said.
“During the quarter, the DFS channel was negatively impacted by weak consumer sentiment and other factors, reporting double-digit sales declines.”
However, domestic sales increased due to increased sales in health and beauty retail and online channels.
Additionally, the home care and daily beauty business, which includes brands such as Physiogel, Dr. Groot and Perioe, also fell 1%.
The company observed weak domestic and international demand.
However, brands such as Physiogel and Euthymol grew steadily.
The former received a boost from the launch of Red Soothing AI Repair Cream for sensitive and damaged skin.