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Annual Business Report of FY 2008

2010-06-28

< Key points of AmorePacific's annual business results in FY 2008 >
* Robust sales growth goes on despite consumption slowdown due to global economic recession
- Enterprise-wide sales growth was driven by robust sales expansion across all cosmetics channels.
- AmorePacific could strengthen its ongoing market leadership in premium and mass cosmetics markets due to active investment and innovation such as new brand launching and distribution channel shift.
- Reliable sales growth brought AmorePacific to expand its overseas business profitability in Asian market, including China. 
[Cosmetics sector] 15% growing sales revenue on a year-to-year basis
* Premium channel: 8% growing sales revenue with powerful sales growth in department store and door-to-door sales channels
- Robust sales growth was driven by reinforced functionality and extended categories of major brand models such as Sulhwasoo and HERA.
- AmorePacific could take advantages of rapidly rising sales with expansion of its brand shops and functional lines.
- It also built up a line of premium men's cosmetics such as Sulhwasoo Jeongyang line and HERA Homme Advance.
* Mass channel: AmorePacific earned 31% sales growth in mass channel with high rising sales growth in specialty store channel and major supermarket channel.- AmorePacific took stronger leadership in specialty store market due to the successful launching of Aritaum (890 shops) and nationwide extended network of Innisfree (183 shops).- IOPE and Laneige have driven sales growth of both specialty stores and major supermarket channel by additional functional line buildup with premium values (Sales growth: 17% higher in IOPE and 23% higher in Laneige)- Young consumers in their 20s and 30s were attracted in launching of Hannule, a brand of Korean medicinal herb cosmetics in mass channel.[MB&S sector] 5% sales growth, year to year
- Sales revenue has been growing owing to building up a line of functional cosmetics such as launching of Ryeo, a brand of hair care shampoo made of Korean medicinal herbs, and extended categories of Happy Bath.[Overseas business] AmorePacific earned 34% sales growth in its overseas business mainly around Chinese market.
- Ever-rising year-to-year growth as high as 60% in sales revenue in Chinese market, and 184% growth in operating profit- Sales and returns have been still ever-rising high despite slowdown of sales growth in Chinese domestic market under the influence of global economic slump.- Laneige: Successful launching of premium lines, plus ever-rising sales and profit
- Mamonde: High rising sales driven by aggressive expansion of shops
* AmorePacific advanced into Asian duty-free business around Singapore and Taiwan - Ever-rising sales revenue in major Asian countries and areas such as Singapore (+64%), Hong Kong (China) (+40%), Japan (+173%) and Malaysia (+168%)
< Business plan for FY 2009 > 
* Ever-growing sales based on "niche marketing" and "development of competitive products", plus 9% growth expected in sales and 6% or higher growth expected in operating profit
[Cosmetics sector] 
- Maximize customer loyalty by developing and providing customized products and services to meet different customer needs.
- Create high added values by "competitive products" with differentiated quality enough to lead market.
- Leverage market leadership through aggressive marketing activities to turn a crisis of economic slump into business opportunities
[MB&S sector] 
- Foster key megabrands and extend high functional products to build up positions in market.
- Converge more on premium and functional products in green tea business.