Effect of Expanding Sales of Premium Products Such as Objet Collection and OLED TVs
On the 7th, LG Twin Tower in Yeouido, Seoul, ahead of LG Electronics' preliminary announcement of its fourth-quarter management performance for last year. According to the securities industry, LG Electronics is expected to record sales in the 20 trillion won range and operating profit in the 800 billion won range in the fourth quarter, driven by strong sales of home appliances and TVs. Photo by Kang Jin-hyung aymsdream@
[Asia Economy Reporter Park Sun-mi] LG Electronics achieved consolidated sales of KRW 74.7216 trillion and operating profit of KRW 3.8638 trillion last year. Sales increased by 28.7% compared to the previous year, surpassing KRW 70 trillion for the first time. In particular, the Home Appliance & Air Solution (H&A) division's sales exceeded KRW 27 trillion, overtaking Whirlpool to claim the title of the world's number one home appliance brand.
On the 27th, LG Electronics announced that sales grew significantly thanks to the expansion of premium product sales such as hygiene appliances, space interior appliances, and OLED TVs, as well as growth in major overseas markets. Strengthening business competitiveness based on product competitiveness and differentiated customer value also had a positive impact on strong sales.
All business divisions recorded their highest annual sales last year. Combined sales of the H&A division and the HE (TV) division exceeded KRW 40 trillion for the first time. In particular, the H&A division achieved sales of KRW 27.1097 trillion, continuing its upward trend for six consecutive years. The VS (Vehicle Components) division also surpassed KRW 7 trillion in annual sales for the first time.
Even looking at the fourth quarter results alone, they were the highest ever. LG Electronics’ fourth-quarter sales were KRW 21.0086 trillion, a 20.7% increase compared to the same period last year. Quarterly sales exceeded KRW 20 trillion for the first time.
The H&A division recorded fourth-quarter sales of KRW 6.5248 trillion and operating profit of KRW 157.1 billion. Sales increased evenly across all global regions, with double-digit growth compared to the same period last year, driven by growth in advanced overseas markets such as North America and Europe. However, operating profit decreased by 44.8% year-on-year due to cost increases from rising raw material prices and logistics expenses.
The HE division achieved sales of KRW 4.9858 trillion and operating profit of KRW 162.7 billion. This was driven by increased sales of premium product lines such as OLED TVs and large-sized TVs. In particular, despite a decline in global TV demand, sales of OLED TVs increased significantly.
This year, uncertainties are expected to continue due to the resurgence of COVID-19 variants, rising raw material prices and logistics costs, and exchange rate fluctuations. Therefore, LG Electronics plans to focus its capabilities on securing profitability through premium strategies and thorough global supply chain management.
LG Electronics stated, "Although growth in the global home appliance market may slow compared to the previous year, demand for premium appliances will remain high. We plan to strengthen sales of premium appliances with product competitiveness and expand overseas sales of new appliances centered on hygiene appliances to continue the sales growth trend." They also said they plan to secure stable profitability through optimizing resource input costs and continuous cost improvements.
Additionally, they added, "We plan to expand the sales proportion of premium products, including OLED TVs which have the industry's largest lineup, to secure steady profitability along with sales growth."
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