Mid-to-Long-Term Goals and Corporate Value Enhancement Plan
Achieving ROE of 8-10% and Shareholder Return Rate of 60%
Accelerating Business Structure Transformation with AI Application Across the Board
LG Uplus has decided to expand its shareholder return policy, including the cancellation of treasury shares worth 100 billion KRW. It also announced plans to improve net profit margin up to 6.5% by strengthening profitability in business-to-business (B2B) through AI data centers and other initiatives.
On the 22nd, LG Uplus disclosed its plan to enhance corporate value, which includes mid-to-long-term financial goals and achievement strategies, as well as shareholder return plans.
First, the company presented a mid-to-long-term plan to raise its return on equity (ROE) to 8-10% and achieve a shareholder return ratio of up to 60%. As of last year, LG Uplus’s ROE was 7.5%, and the shareholder return ratio was 43.2%.
Return on equity is a key profitability indicator that shows how much profit a company generates with its equity, calculated by dividing net income by total equity. The shareholder return ratio refers to the proportion of dividends and treasury share repurchases relative to net income, indicating how much of the company’s profits are returned to shareholders.
To achieve these goals, LG Uplus will accelerate its business structure transformation through AI technology. The plan is to reorganize around high-profit businesses while introducing AI across all business areas to increase productivity and maximize resource allocation efficiency.
In particular, in the B2B sector, the company will focus on nurturing AI data centers to achieve an annual data center sales growth rate of 7-9% or more. In the business-to-consumer (B2C) sector, profitability will be strengthened through a digital-based distribution structure transformation strategy. Through these efforts, the company aims to improve its net profit margin, which was 5.4% last year, to the 6-6.5% range.
The shareholder return ratio is expected to increase to as much as 60%. First, LG Uplus is considering canceling treasury shares worth approximately 100 billion KRW that were repurchased in 2021. Alongside this, it will flexibly pursue treasury share repurchases and cancellations.
As of last year, the debt ratio stood at 130%, and the company has set a goal to reduce it to around 100% before the anticipated introduction of 6G, thereby improving cash flow and strengthening financial stability.
Yeom Young-hee, LG Uplus Chief Financial Officer (CFO), stated, "We will successfully achieve business transformation as an AI transformation (AX) company while faithfully implementing our mid-to-long-term value-up plan."
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