LG Electronics (CEO Cho Joo-wan) achieved record-high sales last year. Over the past four years, the compound annual growth rate (CAGR) of LG Electronics’ consolidated sales exceeded 10%. In the previous year, LG Electronics’ cumulative sales on a consolidated basis were recorded at 87.7442 trillion won, with a year-on-year increase of 6.66%, while operating profit was documented at 3.4304 trillion won, reflecting a year-on-year decrease of 6.1%. Despite various external uncertainties in recent years, LG Electronics maintained robust fundamentals and achieved steady growth, according to analyses.
Particularly last year, changes in business models such as subscription services for home appliances and direct-to-consumer (D2C) approaches solidified their position as driving forces in overcoming the limitations of their core businesses. The growth of the B2B (business-to-business) sector also continued to contribute to the expansion of company-wide sales.
Concerning operating profit, although challenging situations persisted, profitability remained stable on an annual basis. Despite unexpected costs rising from global shipping rate hikes in the latter half of last year and one-time expenses associated with inventory rationalization under uncertain business environments, the company’s annual performance indicates positive qualitative growth driven by the restructuring of its business portfolio.
In the fourth quarter of last year, consolidated sales reached 22.7775 trillion won with an operating profit of 146.1 billion won. This year, LG Electronics plans to accelerate qualitative growth based on business portfolio innovation. They will focus on strengthening the fundamental competitiveness of their business in quality and cost, while also concentrating efforts on securing a healthy profit structure through fixed-cost efficiency.
The home appliance sector, serving as both a core business and cash cow, is expected to surpass sales of 30 trillion won for the second consecutive year. This is driven by the expansion of AI-based appliances and the volume zone lineup, as well as the diversification of business models to include subscriptions and D2C in response to changing customer demand. Growth in B2B areas such as HVAC (heating, ventilation, and air conditioning), built-ins, and component solutions is also consistent.
This year, the subscription business will be actively expanded from markets like Korea, Malaysia, and Taiwan to Thailand and India to continuously generate opportunities. The HVAC business, which makes up the largest portion of the home appliance B2B sector, will be operated as an independent business unit to drive its ascent to a global top-tier comprehensive air conditioning company.
Despite an ongoing delay in overall demand recovery for the TV business, demand in premium markets like Europe is gradually rebounding. The webOS advertising and content business is expanding its ecosystem to TVs, smart monitors, and in-car infotainment systems. From this year, they aim to accelerate the expansion of their advertising and content business base by strengthening the approach to volume zones tailored to regional demand in overseas markets alongside the dual-track strategy of OLED and premium LCD lineup QNED.
Following last year’s organizational restructuring, from this year, screen-based businesses like IT and ID products will be managed under the Media Entertainment Solution (MS) business unit, generating synergy in both hardware and platform businesses.
The automotive component business is slightly impacted by the ongoing temporary slowdown in demand for electric cars but is expected to have surpassed an annual sales figure of 10 trillion won for the second consecutive year. In particular, they continue stable growth and solidify their market position in the core product area of automotive infotainment (telematics, AVN, displays, etc.). This year, they will focus on sustainable operations centered on profitability while prioritizing the transition to Software Defined Vehicles (SDV) as part of future preparations.
The recently announced provisional results are based on the Korean International Financial Reporting Standards (K-IFRS). LG Electronics plans to unveil their confirmed results, including 2024 consolidated net income and management performance by business unit, at the earnings briefing scheduled for the end of this month.