LG Electronics Achieves Record Quarterly Revenue and Operating Profit... Strong Sales in Home Appliances and TV (Update)

[Asia Economy Reporter Su-yeon Woo] LG Electronics achieved record quarterly sales and operating profit in the confirmed results for Q1 2021. In terms of sales, this marks the second consecutive quarter of record-breaking sales following the previous quarter, and in terms of operating profit, it is the first time in 11 years and 3 quarters since Q2 2009.

On the 29th, LG Electronics announced confirmed consolidated results of KRW 18.8095 trillion in sales and KRW 1.5166 trillion in operating profit. Sales and operating profit increased by 27.7% and 39.1% respectively compared to the same period last year. The operating profit margin was the highest ever for a first quarter at 8.1%.

H&A Business Division Achieves Highest Quarterly Results

Operating profit surpasses KRW 900 billion for the first time = The H&A Business Division recorded sales of KRW 6.7081 trillion and operating profit of KRW 919.9 billion. Both sales and operating profit are the highest ever for a quarter. This is the first time the division's quarterly operating profit exceeded KRW 900 billion. The operating profit margin was 13.7%, the second highest ever for a quarter following 13.9% in Q1 last year.

Sales showed double-digit growth both domestically and overseas compared to the same period last year. Strong sales of steam appliances such as dryers, stylers, and dishwashers continued, and the steady popularity of the LG Objet Collection for space interior appliances led to an increase of over KRW 1 trillion in sales compared to the same period last year.

Sales increased evenly across all global regions, and operating profit rose 22.1% year-on-year, supported by expanded sales of premium products such as new appliances and continuous growth in the rental business.

OLED Sales Double Compared to Last Year

The HE Business Division recorded sales of KRW 4.0082 trillion and operating profit of KRW 403.8 billion. Sales and operating profit increased by 34.9% and 23.9% respectively compared to the same period last year. The operating profit margin exceeded 10%.

With TV demand recovering in major markets such as North America and Europe, sales increased by over KRW 1 trillion year-on-year, thanks to the popularity of premium products including OLED TVs, NanoCell TVs, and large-sized TVs. Notably, OLED TV sales in Q1 more than doubled compared to the same period last year. Despite a significant rise in LCD panel prices, operating profit exceeded KRW 400 billion for the first time in 11 quarters due to an increased share of premium product sales and efficient resource allocation.

Mobile Losses Widen... Automotive Business Sales Up 43%

The MC Business Division recorded sales of KRW 998.7 billion and an operating loss of KRW 280.1 billion. Sales were similar to the same period last year, but operating losses increased due to intensified global market competition.

The VS Business Division posted sales of KRW 1.8935 trillion and an operating loss of KRW 0.7 billion. Sales increased 43.5% year-on-year, driven by gradual recovery in major automobile markets such as North America and Europe and an increase in new projects in electric vehicle powertrains and infotainment. The joint venture LG Magna e-Powertrain (tentative name), established with Magna, the world's third-largest automotive parts supplier, is scheduled to launch on July 1 this year.

The BS Business Division recorded sales of KRW 1.8643 trillion and operating profit of KRW 134 billion, marking the highest quarterly sales ever. Sales of IT products such as PCs and monitors increased due to continued remote work and online education. Despite rising prices of key components and logistics costs, operating profit was secured by focusing on strategic product sales.

'Power of Home Appliances' to Continue in Q2... Increased Investment in New Businesses such as Automotive Parts

LG Electronics plans to further strengthen its market dominance in core businesses such as home appliances and TVs, while expanding investments in automotive parts and solutions, artificial intelligence, and B2B businesses to secure a competitive edge in the global market. Sales are expected to increase year-on-year in Q2, and the profit structure is anticipated to stabilize through efficient resource management.

The global home appliance market is expected to see growing demand recovery expectations, but risks remain due to intensified competition among companies, exchange rate fluctuations, rising raw material and component prices, and increased logistics costs. The H&A Business Division plans to secure profitability by strengthening localization strategies and optimizing business operations.

The TV market is expected to expand in the premium segment as people spend more time at home and demand for enjoying high-resolution content on large screens increases. The HE Business Division plans to increase sales and improve profitability by expanding the sales share of premium products such as OLED TVs, NanoCell TVs, and large-sized TVs.

The VS Business Division will actively respond to the recovery of the automobile market to maximize sales and focus on cost reduction and supply chain management to continuously improve profitability. The BS Business Division will strengthen business competitiveness by concentrating on strategic products such as PCs and monitors with competitive edge and optimizing information display solutions for each vertical (specific customer group).

Meanwhile, the MC Business Division, which is scheduled to end its mobile phone business by the end of July, will no longer reflect operating profit from Q2 onward and will treat it as discontinued operation loss.