LG Electronics, Dual Drive in Home Appliances and Automotive Parts... Record Annual Sales for 3 Consecutive Years (Update)

Last Year's Consolidated Sales 84.2278 Trillion
Growth Trend: 74 Trillion → 83 Trillion → 84 Trillion
Electric Vehicle Segment 12%... First 10 Trillion Breakthrough

LG Electronics has set a new annual sales record for the third consecutive year. The performance of home appliances and the automotive components (electric and electronic equipment for vehicles) sectors boosted the overall company results. In particular, the VS (Vehicle Solutions) Business Division achieved sales of 10 trillion KRW for the first time in 10 years since the establishment of the VC Business Division (the former name of the VS Division) in 2013.

On the 25th, LG Electronics announced consolidated provisional sales of 84.2278 trillion KRW and operating profit of 3.5491 trillion KRW. The annual sales are the highest ever. Following 73.908 trillion KRW in 2021 and 83.4673 trillion KRW in 2022, the company achieved records for three consecutive years. Annual operating profit decreased by 0.1% compared to the previous year. The highest operating profit record was 4.058 trillion KRW in 2021. Until early last month, securities market consensus estimates predicted that the company could break the operating profit record, but this was thwarted by the off-season effect in the home appliance sector in the fourth quarter.

LG Electronics emphasized the significance of continuing growth for eight consecutive years in both the cash cow home appliance sector and the future growth business of automotive components, despite challenging external conditions such as economic recession and decreased demand. The combined sales scale of the home appliance and automotive components businesses at LG Electronics exceeded 40 trillion KRW last year, up from about 18 trillion KRW eight years ago. During the same period, the share of these two businesses in consolidated sales rose from 32.5% to 47.8%.

Jo Joo-wan, President and CEO of LG Electronics.
[Photo by Yonhap News]

By business division, the H&A (Home Appliance & Air Solution) Division recorded sales of 30.1395 trillion KRW last year. New models such as subscriptions were introduced to the mature home appliance business. The B2B share was expanded. Last year’s operating profit increased by more than 76% year-on-year to 2.0078 trillion KRW. This year, the company will accelerate changes in business models such as D2C (Direct-to-Consumer). It will increase the adoption of home appliance operating systems (OS) and actively expand subscription businesses combining appliances and services in overseas markets. The company will speed up the construction of smart home solutions reflecting the value of 'housework liberation.'

The VS Division recorded sales of 10.1476 trillion KRW and operating profit of 133.4 billion KRW last year. It has shown eight consecutive years of growth since it began disclosing performance in 2015. Its share of total consolidated sales was 8.8% in 2019, 10.0% in 2020, 9.1% in 2021, 10.4% in 2022, and 12.0% last year. Along with external growth based on accumulated order backlogs, the division plans to pursue qualitative growth this year. It will focus all efforts on securing SDV (Software-Defined Vehicle) capabilities in the vehicle infotainment (IVI) business. LG Magna e-Powertrain will enhance product capabilities and stabilize overseas production bases early to improve customer responsiveness. ZKW plans to expand orders for premium products and improve business operation efficiency.

The HE (Home Entertainment) Division recorded sales of 14.2328 trillion KRW and operating profit of 362.4 billion KRW last year. Thanks to the webOS platform-based content and service business, operating profit increased significantly from 5.4 billion KRW the previous year. This year, the division will strengthen both OLED and LCD QNED lineups simultaneously to target the premium market. It will accelerate its transformation into a media and entertainment company. The webOS ecosystem will expand from TVs to smart monitors and vehicle infotainment, focusing on strengthening content competitiveness. The webOS platform business aims to grow into a trillion-KRW sales business.

The BS (B2B) Division recorded sales of 5.412 trillion KRW and an operating loss of 41.7 billion KRW last year. Sales slightly decreased from 6.0903 trillion KRW the previous year due to delayed IT demand recovery and reduced investments by major companies. Profitability declined as investments in future growth areas such as robots and electric vehicle chargers increased. The division turned to a loss from an operating profit of 25.2 billion KRW in 2022. This year, it will focus on sales activities led by IT product lineups such as gaming monitors and LG Gram Pro.

LG Electronics plans to consistently pursue a future-oriented business portfolio transformation this year as well. The company stated, "Under the leadership of the newly established Overseas Sales Division directly reporting to CEO Jo Joo-wan through last year’s organizational restructuring, we will focus on additional growth in emerging markets with high growth potential and expand product coverage within those markets."