Sales Surpass First 80 Trillion... H&A and VS Divisions Both Achieve 'Record High'
Outstanding Performance in Electric Components Business... "Securing High-Value, High-Profit Product Orders"
[Asia Economy Reporter Moon Chaeseok] LG Electronics surpassed annual sales of 80 trillion KRW for the first time last year. This was due to record-high sales in both its core business of home appliances and its future growth engine, the automotive components (electric and electronic devices for vehicles) business.
On the 27th, LG Electronics announced that its consolidated sales last year reached 83.4673 trillion KRW, a 12.9% increase compared to the previous year. This marked a double-digit growth rate for two consecutive years. Operating profit recorded 3.551 trillion KRW, down 12.5%.
LG Electronics emphasized that surpassing 70 trillion KRW in sales in 2021 and 80 trillion KRW last year despite concerns over an economic downturn is proof of the company's strong fundamentals. The decrease in operating profit was attributed to weakened consumer sentiment due to global inflation and interest rate hikes.
Outstanding Performance in Core Home Appliances and Future Automotive Business
LG Electronics highlighted the significance of the H&A (Home Appliance & Air Solution) division and the VS (Vehicle Components) division achieving record-high sales.
The H&A division posted sales of 29.8955 trillion KRW, showing high growth for seven consecutive years. The premium strategy was analyzed as effective. Key products include WashTower, Craft Ice refrigerator with ice water dispenser, and Styler. Operating profit stood at 1.1296 trillion KRW, down from the previous year due to increased logistics and raw material costs.
The VS division, responsible for the automotive components business, recorded sales of 8.6496 trillion KRW last year. Operating profit was 169.6 billion KRW. Its share of total sales exceeded 10% for the first time. LG Electronics explained, "Although semiconductor supply was delayed, stable supply chain management allowed us to respond swiftly to market demand," adding, "The results reflect investments made over the past decade."
Additionally, the HE (Home Entertainment) division, which handles the TV business, recorded sales of 15.7267 trillion KRW and operating profit of 5.4 billion KRW. Sales and operating profit declined compared to the previous year due to decreased TV demand. A consolation is that the content and service business based on LG Smart TV’s webOS platform grew nearly tenfold in four years.
The BE (Business Solutions) division, which conducts B2B (business-to-business) operations, achieved sales of 6.0903 trillion KRW and operating profit of 25.2 billion KRW. The increase in sales by double digits compared to the previous year was attributed to growth in the information display business.
"Focus on Securing Additional Growth Engines This Year as Well"
LG Electronics stated that it plans to focus on securing significant market opportunities and additional growth engines this year. This aligns with CEO Jo Joo-wan’s emphasis on pursuing "winning growth."
The H&A division plans to actively expand its "UP (UP) Appliances" in key overseas markets this year. This means exporting services that add new functions even after product purchase. The aim is to expand the ultra-connected smart appliance ecosystem centered on LG’s appliance platform, ThinQ. The premium strategy, which positions high-quality products as the flagship, will also continue. In particular, with logistics and raw material prices stabilizing, the division plans to seize this opportunity to continue cost improvement activities and secure profitability steadily.
The VS division’s goal this year is to increase production capacity for electric vehicle drive components supplied to global automakers to realize "economies of scale." It expects the automotive components business to grow significantly starting this year. As of the end of last year, the order backlog reached 80 trillion KRW. The division plans to actively pursue orders this year by promoting high value-added and high-performance products.
The HE division plans to actively expand the webOS platform content and service business. The BS division aims to strengthen competitiveness in premium IT products such as gaming monitors and Gram laptops.
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