The South Korean fast-moving consumer goods (FMCG) major announced its 2023 full-year results on January 31.
The results painted a challenging picture for the company. It reported that sales decreased by 5.3% to KRW6.81tn (USD5.1bn), while operating profit declined by 31.5% to KRW487bn (USD365m).
The company said that despite the lacklustre figures, 2023 “laid a foundation for building domestic and global competitiveness”.
It added that it sees 2024 as an “inflection point for growth” which it will achieve by strengthening its core competitiveness.
The company aims to enhance its market position through a multipronged strategy.
Domestically, it plans to introduce innovative products and broaden its product portfolio and reach a diverse range of consumers.
It is also expanding market dominance by tapping into new channels and cultivating its smaller brands.
Furthermore, it aims to strengthen performance in the health and beauty channel, with a specific emphasis on increasing presence in the derma beauty and makeup categories.
Boosting overseas business
LG H&H also highlighted the significance of its business in China, where the focus was on mid-to-long term brand equity development in China.
It also underscored its goal to expand in the premium market while strengthening its position in the luxury market.
It also noted the importance of “reducing volatility” in China’s travel retail market.
In addition to China, LG H&H said it was working to grow the US presence of its beauty and personal care brands.
It also said it hoped to expand its business in Japan and South East Asia.
The company said it would push investments in brands such as belif, The Face Shop, and Physiogel.
At the same time, it noted the importance of launching brands that can meet local needs.
Lastly, it said it would “aim for Avon business turnaround”.
LG H&H acquired Avon North America for $125m in cash to expand its reach into North America.
With this strategy, the company announced that it expected to grow by a single digit in 2024.
FY2023 declines
The beauty division, which consists of brands like The Whoo, Sum37, and OHUI, declined by 12%.
This was attributed to the weak China demand.
According to the firm, China travel retail sales decreased by double digits.
“During the quarter, the DFS channel, which was negatively impacted by weak consumer sentiment and other factors, reported a double-digit decline in sales.”
However, domestic sales saw growth as it saw increased sales in the health and beauty retail and online channels.
Furthermore, the home care and daily beauty business, which consists of brands such as Physiogel, Dr. Groot, and Perioe, dipped by 1%.
The company observed soft demand domestically and overseas.
However, there was steady growth for brands such as Physiogel and Euthymol.
The former was buoyed by the launching of its the Red Soothing AI Repair Cream for sensitive and damaged skin.