LG Releases Preliminary Earnings for Second-Quarter 2023
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By News Reporter
Company Sets New Records for Second Quarter Revenue and Operating Profit
Through Balanced Qualitative Growth in Core and Future Businesses
SEOUL, July 25, 2024 — LG Electronics Inc. (LG) today announced second-quarter 2024 consolidated revenue of KRW 21.69 trillion and operating profit of KRW 1.20 trillion, reflecting an 8.5 percent year-over-year increase in revenue and a 61.2 percent surge in operating profit. These figures mark new records for the highest second-quarter revenue and operating profit in the company’s history.
Key drivers of this performance include the home appliance and vehicle component sectors, both achieving their highest quarterly revenues to date. Sales from LG’s Home Appliance & Air Solution Company and Vehicle component Solutions Company combined reached KRW 11.53 trillion, up 8.2 percent from the previous year. Both Companies also reported record-high second-quarter operating profits, totaling KRW 776.1 billion, which represents a 45 percent year-over-year increase.
These results highlight LG’s balanced growth across its core and future businesses. This growth demonstrates not only external expansion but also solid profitability, contributing to qualitative improvements in overall performance.
LG continues to transform its business portfolio towards a future-oriented approach, maximizing the potential of existing businesses while securing new growth opportunities. The company is also focused on rapidly advancing high-growth potential new businesses.
The fast growth in LG’s B2B sector significantly contributes to establishing a future-oriented business structure. Despite a temporary slowdown in EV demand, the vehicle component business continues to grow, supported by a diversified client base of electric and internal combustion vehicles and a strong order backlog. Additionally, LG’s heating, ventilation and air-conditioning (HVAC) business, which includes high-efficiency chillers, is exploring growth opportunities within the AI infrastructure sector.
In the B2C domain, LG is accelerating the integration of new business models that combine traditional hardware sales with intangible, non-hardware offerings such as content, services and subscriptions. The webOS content and services business is expanding beyond TVs into IT and infotainment, with projected revenues set to surpass KRW 1 trillion this year.
Additionally, the subscription business, which merges products with services, is gaining remarkable momentum. After achieving success in Korea, LG is now expanding this subscription model internationally. Last year, subscription revenue exceeded KRW 1 trillion, with growth accelerating this year. In June, 36.2 percent of major home appliances sold at LG Brand Shops in Korea were subscription-based. This model, particularly popular among young Korean customers, is now being introduced to global markets. For example, LG has launched LG Rent-Up in Malaysia, offering subscriptions for nine products, including washing machines, dryers and refrigerators.
LG is also expediting the advancement of new businesses. The smart factory business, which combines the company’s manufacturing expertise with AI, is expected to secure orders worth KRW 300 billion this year, expanding its customer base in industries such as semiconductors and biotechnology. Furthermore, LG’s partnership with ChargePoint, North America’s leading EV charging company, is set to boost the EV charging business by combining ChargePoint’s chargers with LG’s commercial display advertising solutions, ‘LG DOOH Ads,’ creating new market opportunities.
The LG Home Appliance & Air Solution Company generated second-quarter revenue of KRW 8.84 trillion and an operating profit of KRW 694.4 billion. Compared to the same period last year, revenue increased by 11 percent and operating profit by 16 percent, marking the highest revenue for a single quarter and the strongest second-quarter operating profit to date.
In the second quarter, LG’s volume zone strategy – designed to address polarized market demand – proved effective by diversifying its product lineup and pricing to meet growing needs in emerging markets such as Latin America, the Middle East and Africa. Contributions from new business areas, including subscriptions and Online Brand Shop sales, bolstered the strong performance. Looking ahead to the third quarter, LG intends to remain agile in adapting to market shifts and to continue expanding its B2B sectors, particularly HVAC and built-in appliances. The recent acquisition of smart home platform company Athom is expected to create synergies within the home appliance sector. Additionally, LG will leverage its top-tier global manufacturing capabilities to secure robust profitability.
The LG Vehicle component Solutions Company achieved second-quarter revenue of KRW 2.69 trillion and an operating profit of KRW 81.7 billion. Revenue increased by 1 percent year-over-year, and the operating profit turned positive. This quarter’s revenue was the highest for any quarter, and the operating profit was the strongest for a second quarter.
Despite a temporary slowdown in the EV market during this period, LG saw growth by effectively addressing increased demand for premium in-vehicle infotainment products and plans to continue expanding its vehicle components business. This strategy includes increasing sales of premium new products as well as safety and convenience solutions, such as Advanced Driver Assistance Systems, in line with existing order programs.
The LG Home Entertainment Company posted second-quarter revenue of KRW 3.62 trillion and an operating profit of KRW 97 billion. Revenue increased by 15.3 percent compared to the same period last year, driven by a recovery in demand in Europe, a key market for premium OLED TVs. Growth also continued in the webOS content and service business. However, operating profit declined due to increased costs, including rising LCD panel prices.
Overall TV market demand is expected to show modest growth in the third quarter compared to last year, with premium OLED TVs anticipated to outperform the broader market. LG will aim to maintain operational efficiency by minimizing cost burdens, such as rising LCD panel prices, through increased sales of OLED TVs.
The LG Business Solutions Company reported second-quarter revenue of KRW 1.46 trillion and an operating loss of KRW 5.9 billion. Revenue increased by 9.9 percent year-over-year, driven by expanded sales of strategic products such as LED signage, electronic whiteboards and gaming monitors. However, profitability was impacted by cost increases, including LCD panel prices, and ongoing investments in growth areas like EV charging and robotics.
In the third quarter, market growth for premium products such as commercial displays and gaming monitors is expected to continue. The Company will focus on expanding sales of strategic products and improving profitability through efficient resource management.
Earnings Conference and Conference Call
LG Electronics will hold a Korean / English conference call on July 25, 2024, at 16:00 Korea Standard Time (07:00 GMT/UTC). Conference call participants should pre-register online to receive a private PIN. The corresponding presentation file will be available for download at the LG Electronics website before the call.
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By News Reporter
Company Sets New Records for Second Quarter Revenue and Operating Profit
Through Balanced Qualitative Growth in Core and Future Businesses
SEOUL, July 5, 2024 — LG Electronics Inc. (LG) today announced its preliminary earnings results for the second-quarter of 2024, reporting a consolidated revenue of KRW 21.7 trillion and operating profit of KRW 1.19 trillion.
Both revenue and operating profit exceeded market expectations, setting new records for the second quarter. Operating profit surged by 61.2 percent year-over-year, surpassing KRW 1 trillion for the first time in a second quarter. Revenue increased by 8.5 percent year-over-year.
For the first half of 2024, revenue rose by 5.9 percent and operating profit by 13 percent compared to the same period last year. LG’s first-half revenue exceeded KRW 40 trillion for the third consecutive year, and first-half operating profit surpassed KRW 2 trillion for the fourth consecutive year.
During the second quarter, LG maintained balanced qualitative growth across core businesses and future growth sectors.
The home appliance and air solution business continues to outpace industry growth. The air solutions segment, in particular, contributed significantly to the strong second-quarter performance, driven by seasonal demand.
The vehicle component solutions business is increasing its focus on premium product sales while proactively preparing for future technology advancements, including the shift to software-defined vehicles, exemplified by the introduction of LG AlphaWare.
In the home entertainment sector, premium OLED TV sales in advanced markets are gradually rebounding, despite challenges from rising LCD panel prices. Moreover, substantial sports momentum in Europe is anticipated to create more opportunities.
The business solutions sector is targeting the market with premium IT products, including the AI-on-device laptop LG gram and the world’s first variable resolution and refresh rate gaming monitor. The sector is also applying AI to commercial displays and penetrating the edutech market with customized products like electronic whiteboards. Efforts are ongoing to energize new businesses, such as robotics and electric vehicle charging.
This strong performance can be significantly attributed to LG’s strategic transformation towards a future-oriented business model. This shift has maximized the potential of existing operations and facilitated reinvestments aimed at discovering new growth engines.
The B2B business is continuing to drive this business transformation with steady growth. With AI emerging as a critical inflection point in the industry, the heating, ventilation and air conditioning (HVAC) business, particularly in chillers, is unlocking new growth opportunities in AI infrastructure, signaling a positive future outlook.
The vehicle components business, another pillar of B2B growth, maintains stable growth thanks to a robust order backlog and a balanced portfolio that includes in-vehicle infotainment, electric vehicle powertrain components, and automotive lamps, despite a temporary slowdown in electric vehicle demand.
In B2C, LG is overcoming market uncertainties and growth limits with new business models like subscription services. The subscription business currently spans 22 products, reducing initial purchase burdens and combining service solutions for continued revenue. New business models such as subscription services leverage LG’s vast product portfolio as platforms to offer content and services globally.
LG is accelerating its shift towards a customer relationship-centered business model. The recent acquisition of smart home platform company Athom marks a push towards personalization and service-oriented approaches in the home appliance business. The home appliance business is also focusing on space solution-centered paradigms and expanding Affectionate Intelligence appliances that cater to customer needs.
Meanwhile, LG Channels, the webOS flagship content service offering over 3,500 free channels in 28 countries, has surpassed 50 million users. LG is also expanding the webOS content and service business beyond TVs to include IT and automotive infotainment.
These figures are tentative consolidated earnings based on K-IFRS provided as a service to investors prior to LG Electronics’ final earnings results, including net profit. Details regarding each division will be announced officially later this month.
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By News Reporter
Company Achieves Record-breaking
First-Quarter Revenues by Surpassing Boundaries Once Again
SEOUL, Apr. 5, 2024 — LG Electronics Inc. (LG) today announced its preliminary earnings results for the first quarter of 2024, reporting a consolidated revenue of KRW 21.09 trillion and operating profit of KRW 1.33 trillion.
The company marks the highest first-quarter revenue in its history. The implementation of innovative business models such as subscriptions, along with the expansion of B2B operations, have proven to be crucial in overcoming challenges like the delayed recovery of market demand. From a product perspective, LG’s strategy to enhance the product range and price coverage of volume zone lineups, in response to market demand polarization, has demonstrated significant effectiveness. This strategy, combined with the company’s dedication to sustaining strong competitiveness in the premium market by emphasizing unique factors like AI, has played a substantial role in achieving the impressive figure.
The first-quarter operating profit has surpassed KRW 1 trillion for the fifth consecutive year since 2020. The company’s content and service business, which leverages its hundreds of millions of devices distributed globally as a platform, along with D2C sales, are driving qualitative growth and enhancing the contribution to the company’s operating profit. Measures such as resource allocation, stabilization of raw material and logistics costs and ensuring the flexibility of the global production operation system have also played a part in maintaining stable profitability.
In the home appliance & air solution business, new products like the LG Styler clothing care system, LG WashCombo All-in-One and LG WashTower have led growth, receiving positive market feedback. The strategy of expanding the volume zone lineup to cater to regional characteristics and shifts in demand in international markets has been successful. The company is also growing its B2B business, including HVAC, built-in appliances and component solutions.
LG aims to expedite the paradigm shift in home appliances by introducing subscription services that allow customers to choose appliances and product management services that suit their lifestyles. Also, as AI expands its role in customer electronics, the company is incorporating its Affectionate Intelligence into its devices and services, aiming to provide a unique customer experience that goes beyond basic AI, offering more thoughtfulness and empathy towards customers.
In the vehicle component solutions business, a secured backlog of orders is driving gradual sales growth. The order backlog is expected to exceed KRW 100 trillion in the first half of this year, increasing from the mid-90 trillion range at the end of last year. For In-vehicle Infotainment, a major contributor to sales, the emphasis this year is on bolstering software capabilities and broadening the spectrum of unique products. LG Magna e-Powertrain, having achieved profitability last year, is poised to accelerate growth by securing additional orders from the European and Asian markets. Concurrently, ZKW, a subsidiary specializing in vehicle headlamps, is strategizing to develop next-generation product capabilities while optimizing its business structure.
The home entertainment business is continuing to experience meaningful growth with the launch of new 2024 OLED TV lineup with enhanced AI performance as well as the expansion of webOS content and services. Starting this year, the company will actively deploy dual-track strategy driven by both the top-tier OLED lineup and the QNED lineup to lead the premium market. Furthermore, the webOS platform business will be developed into a scalable, high-profit business this year.
The business solutions sector continues to innovate customer experience through strategic products such as the new LG gram that comes with the latest on-device AI functions and gaming monitors. This year, the company will position itself with a competitive lineup of the commercial displays and continue to invest in future growth engines such as robots and electric vehicle charging, accelerating the early deployment of promising new businesses.
These figures are tentative consolidated earnings based on K-IFRS provided as a service to investors prior to LG Electronics’ final earnings results, including net profit. Details regarding each division will be announced officially later this month.
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By News Reporter
Highest Annual Revenue in History With Home Appliance and
Vehicle Components Showing Growth for Eight Consecutive Years
SEOUL, Jan. 25, 2024 — LG Electronics Inc. (LG) announced its financial results for the year 2023, disclosing a consolidated revenue of KRW 84.2 trillion and an operating profit of KRW 3.55 trillion. This marks the third consecutive year of achieving record-breaking annual revenue. The operating profit is also solid, approaching levels seen during the prior period of pent-up demand.
Despite challenging external factors such as an economic slowdown and reduced demand, LG’s core business of home appliances and the burgeoning vehicle components business have demonstrated remarkable resilience, maintaining continuous growth for eight consecutive years. The combined revenue of these businesses exceeded KRW 40 trillion last year, a substantial increase from KRW 18 trillion in 2015. Over the same period, the proportion of these two businesses in the total revenue has risen from 32.5 percent to 47.8 percent.
The performance is attributable to LG’s strategic efforts to enhance its business portfolio. The company successfully expanded its B2B business by identifying market turning points early on and integrated new business models, including subscription services, into existing frameworks. Furthermore, LG’s innovative content and service business model, leveraging its extensive user base of hundreds of millions of products globally, has also contributed to securing robust profitability.
Looking ahead, LG is committed to a continual transformation from a mature business-oriented structure to a future growth-oriented one. In this year, the company will concentrate its capabilities on breaking through limits to maximize its business potential. Guided by the newly established Overseas Sales & Marketing Company, LG will strive for additional growth and expanded product coverage, particularly in emerging markets where there are greater growth opportunities.
The LG Home Appliance & Air Solution Company achieved an annual revenue of KRW 30.14 trillion, marking eight consecutive years of growth and ushering in the era of KRW 30 trillion. Introducing new business models including subscription services and expanding the B2B share in areas such as HVAC, components and built-in solutions contributed to this growth. The operating profit recorded an increase of over 76 percent compared to the previous year, reaching KRW 2.08 trillion.
In the coming year, the Company will accelerate a shift in its business model towards future readiness, including Direct-to-Consumer initiatives. It aims to expand the deployment of home appliance operating systems and extend subscription services to international markets. Additionally, there will be a swift progression in building smart home solutions that reflect the value of “Zero Labor Home.” In terms of products, the Company will seek to maintain its strategic approach of solidifying the premium leadership of key products, such as washing machines and refrigerators, while swiftly expanding region-specific lineups. To sustain continuous growth in the B2B sector, especially in areas like HVAC, the Company plans to strengthen its capabilities by establishing a complete, local business operation that encompasses product development, production and sales, with a focus on the evident electrification trends in regions such as North America and Europe.
The LG Vehicle component Solutions Company achieved an annual revenue of KRW 10.1 trillion and operating profit of KRW 133 billion. In its 10th year since establishment, the Company not only surpassed the KRW 10 trillion revenue mark but also demonstrated eight consecutive years of growth since it began disclosing performance results in 2015. The share of total consolidated revenue has increased to 12 percent. This year, the Company aims to drive both external growth, leveraging a substantial order backlog, and qualitative growth in its operations. In in-vehicle infotainment, the Company is dedicating efforts to secure capabilities in the area of software-defined vehicles in response to the needs of OEMs. Drawing upon its differentiated technology accumulated in the home appliance and IT sectors, the Company will seek to further enhance the in-vehicle customer experience. In the e-Powertrain area, focus will be on strengthening product capabilities and early stabilization of overseas production bases to enhance responsiveness to customer demands. Additionally, in headlamps, there are plans to expand premium product orders while simultaneously improving operational efficiency.
The LG Home Entertainment Company recorded an annual revenue of KRW 14.2 trillion and operating profit of KRW 362 billion. The webOS platform-based content and services business solidified its position as a new source of revenue, showing a significant increase in operating profit compared to the previous year. The revenue slightly decreased amid a relatively slow recovery in demand for premium products like OLED. In anticipation of a progressive recovery in TV demand this year, the Company will seek to strengthen both the top-tier OLED lineup and the QNED lineup, following a dual-track strategy to lead the premium market. Simultaneously, the Company is accelerating its transformation into a media and entertainment powerhouse. In the current year, the webOS platform business is slated for nurturing as a significant revenue-generating venture in the scale of trillions.
The LG Business Solutions Company recorded an annual revenue of KRW 5.4 trillion and operating loss of KRW 42 billion. The revenue saw a slight decrease compared to the previous year due to delays in IT demand recovery and reduced investments from key enterprises. Increased investments in future growth areas such as robotics and electric vehicle charging had an impact on profitability. In this year, the Company is positioning itself with a competitive lineup of IT products, including gaming monitors and the LG gram Pro, and will actively seek to find business opportunities targeting distinct verticals such as government agencies and schools. As a leader in LG’s B2B business, it aims to accelerate the shift from supplying single products to integrating and providing adjacent solutions. With a significant proportion of new businesses within the organization, investments will be prioritized for future preparations rather than short-term management performance.
Earnings Conference and Conference Call
LG Electronics will hold a Korean / English conference call on January 25, 2024, at 16:00 Korea Standard Time (07:00 GMT/UTC). Conference call participants are instructed to pre-register online to receive a private PIN. To participate in the conference call, dial +82 31 810 3130, enter passcode 6418# and then the PIN. The corresponding presentation file will be available for download at the LG Electronics website before the call.
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By News Reporter
SEOUL, Jan. 8, 2024 — LG Electronics Inc. (LG) today announced its preliminary earnings results for the fourth quarter and full-year of 2023.
LG reported an annual consolidated revenue of KRW 84 trillion, marking the third consecutive year of achieving the highest annual revenue, and an annual operating profit of KRW 3.5 trillion. These figures demonstrate a resilient business performance, approaching the results observed during the prior period of pent-up demand, despite challenges posed by delayed demand recovery from the economic slowdown as well as heightened market competition.
The historic high in annual revenue can be attributed to the robust fundamentals of LG’s core businesses and the growth experienced in B2B sectors. Notably, the compound annual growth rate (CAGR) of LG’s revenue over the last three years stands at over 13 percent. Additionally, the annual operating profit demonstrated a solid performance, reaching levels comparable to the preceding year.
LG’s effective management performance in the face of a challenging external environment is particularly noteworthy, setting it apart within the industry. Strategic efforts to enhance the business portfolio, including the early identification of market turning points to drive high growth in B2B sectors, played a pivotal role. Business model innovation, such as diversifying from hardware-oriented businesses to platform-based service business, also contributed to maintaining stable profitability.
In the home appliance & air solution business, LG is expected to have achieved an annual revenue milestone of KRW 30 trillion. Strategic market approaches, such as expanding volume zone lineups while retaining premium leadership to address demand polarization, played a key role in this success. B2B expansion in areas like HVAC, components and built-in appliances further contributed to overall growth. Going forward, LG will concentrate efforts on strengthening core competencies in product and manufacturing competitiveness, while accelerating changes in business models, including direct-to-consumer (D2C) and subscriptions, to prepare for the future. The company will also accelerate efforts to evolving its smart home solutions, reflecting the value of “Zero Labor Home,” by expanding the lineup of home appliances embedded with operating systems.
The vehicle component solutions business is anticipated to have exceeded KRW 10 trillion in annual revenue within a decade of its establishment, becoming one of LG’s core businesses. The average operating rate of production facilities has surpassed 100 percent since last year, driving growth. Starting this year, LG will intensify efforts to secure capabilities in the evolving trend of software-defined vehicles while aiming for growth in volume. Leveraging differentiation technologies accumulated in home appliances and IT, the company plans to enhance in-vehicle experiences while accelerating the efficiency and synergy of the entire business, including EV components and headlamps.
Despite challenges in key markets like Europe, the home entertainment business experienced meaningful growth in webOS content and services. This year, the expansion of the webOS ecosystem will extend beyond TVs to encompass smart monitors, in-vehicle infotainment and other areas, further broadening the business scope. From a product perspective, LG will significantly strengthen both the top-tier OLED lineup and the QNED lineup, following a dual-track strategy to lead the premium market.
The business solutions company is concentrating on the early commercialization of key areas such as EV charging and robotics. As a leader in LG’s B2B business, the segment aims to accelerate the shift from supplying single products to integrating and providing adjacent solutions. With a significant proportion of new businesses within the organization, investments are prioritized for future preparations rather than short-term management performance.
It is important to note that these figures represent tentative consolidated earnings based on the Korean International Financial Reporting Standards and are provided as a service to investors before LG Electronics releases its final earnings results. The official announcement of confirmed results, including the net profit for the year 2023 and the management performance of each Company, is scheduled for later this month.
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