LG Electronics recorded the highest ever sales of 87.7 won last year… 4th quarter was sluggish (comprehensive)

Potential to surpass 30 trillion won in home appliances and 10 trillion won in electronics for two consecutive years
“Improve business quality such as home appliance subscription, D2C, B2B, etc.”

Last year, it overcame negative factors such as sluggish demand, increased logistics costs, and increased external uncertainty and broke its record-high sales record. LG Electronics maintained its solid company fundamentals, but was confident that it had strengthened its growth engine (momentum) by diversifying its business portfolio, including home appliance subscription, direct-to-consumer sales (D2C), and business-to-business (B2B).

LG Electronics announced on the 8th that its consolidated operating profit last year was provisionally calculated to be KRW 3.4304 trillion, a 6.1% decrease from the same period last year. Sales increased 6.7% over the same period to KRW 87.7442 trillion, breaking the record. The previous record was 82.5215 trillion won in 2022.

LG Electronics said its consolidated sales compound annual growth rate (CAGR) for the past four years has exceeded 10%. In particular, he emphasized that by changing business methods such as home appliance subscription and D2C last year, he had overcome the limitations of the existing home appliance sales business, which had been criticized as being unprofitable. It was determined that the continued growth of the B2B business contributed to increasing sales.

Regarding its annual performance, LG Electronics explained, “Sales have broken the record, and profitability (operating profit) is at a stable level.”

First of all, home appliances, which serves as the main business and cash cow, is likely to exceed 30 trillion won in sales for two consecutive years. It was believed that the expansion of the lineup of empathic intelligence (AI) home appliances and volume zones, as well as the diversification of business methods such as subscription and D2C in line with changes in customer demand, were effective. He said that growth in B2B areas such as heating, cooling and air conditioning (HVAC), built-in, and parts solutions is also steady. This year, we plan to expand our subscription business from Korea, Malaysia, and Taiwan to Thailand and India. The goal of the HVAC business is to become a world-class air conditioning company through an independent business headquarters system.

In the TV business, demand recovery is slow globally, but demand in premium markets such as Europe is gradually recovering. The webOS advertising and content business is expanding its ecosystem to include TVs, smart monitors, and vehicle infotainment. Starting this year, we will strengthen our OLED (Organic Light Emitting Diode) and premium LCD (Liquid Crystal Display) lineup QNED ‘dual track’ strategy and volume zone targeting tailored to the demand of each overseas region.

The electronics (automotive electrical and electronic equipment) business was affected by the electric vehicle chasm (temporary slump in demand), but is expected to exceed 10 trillion won in annual sales for two consecutive years. In its flagship vehicle infotainment (telematics, AVN, display, etc.), the company is solidifying its market position and continuing to grow steadily. This year, in preparation for the future, we plan to focus on converting to software-oriented vehicles (SDVs) and strengthening our internal stability through profitability-oriented operations.

LG Electronics announced that its consolidated operating profit in the fourth quarter of last year recorded 146.1 billion won, a 53.3% decrease compared to the same period last year. Sales increased by 0.2% to 22.7775 trillion won. Operating profit was significantly lower than the 397 billion won expected by securities analysts posted on financial information company FnGuide. Sales were similar to the expected 22.5055 trillion won.

Detailed performance by business division has not been disclosed, but consolidated subsidiaries

LG Innotek

Except for this, there is a possibility that there would be a deficit. Home appliances appear to have made profits at the break-even point due to the off-season and the burden of logistics and marketing costs. There is a possibility that TV may have turned into a deficit due to increased marketing costs at the end of the year and slowing demand. Performance in the electronics business is also expected to be lower than expected, reflecting sluggish demand for electric vehicles.

LG Electronics explained that its operating profit in the fourth quarter of last year decreased due to increased logistics costs. LG Electronics said, “In the second half of last year, unexpected surges in global shipping rates and one-off costs for inventory consolidation considering the uncertainty of the business environment occurred, which had a slight impact on profitability.”

LG Electronics evaluated itself as having achieved some success in not only breaking its sales record last year but also improving its business structure. LG Electronics said, “Looking at the company’s annual management performance, it is positive that qualitative growth is continuing due to the reorganization of the business portfolio. This year, we will further accelerate qualitative growth and strengthen the fundamental competitiveness of the business, such as quality and cost, while streamlining fixed costs.” “We will do our best to secure a sound profit structure,” he said.

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