"Enhancing Corporate Value"... LG Innotek and LG U+ Announce Mid- to Long-Term Plans

LG Begins Full-Scale Value-Up After Executive Appointments
Innotek Targets ROE Increase to 15% by 2030
Achieves Over 8 Trillion KRW in Growth Business Sales
Uplus Cancels 100 Billion KRW of Treasury Shares
Expands Shareholder Return Policy

LG Innotek and LG Uplus jointly announced mid- to long-term plans on the 22nd to enhance corporate value. Following personnel changes among presidents and executives, LG has embarked on a full-scale value-up initiative.

LG Innotek disclosed a corporate value enhancement (value-up) plan that includes improving return on equity (ROE) to over 15% by 2030, achieving sales of over KRW 8 trillion in growth businesses, expanding dividend payout ratio by 20%, and strengthening ESG (environmental, social, and governance) management. To raise ROE, the company plans to implement strategic production site restructuring, enhance cost competitiveness through artificial intelligence (AI) and digital transformation (DX), and improve cash generation and asset operation efficiency. It will undertake company-wide activities to improve profitability and strengthen profit generation capabilities by business segment.

In addition, LG Innotek aims to grow sales in growth businesses to over KRW 8 trillion. The company plans to accelerate core autonomous driving businesses and foster new AI and semiconductor businesses such as flip-chip ball grid array (FC-BGA) to advance its business structure and secure mid- to long-term growth engines. In the substrate business sector, it will pursue strategic customer partnerships and diversify sales structures based on competitive advantages in core technologies such as stacking and patterning.

LG Innotek plans to gradually expand dividends, raising the current dividend policy?which maintains dividends at over 10% of consolidated net income?to 15% by fiscal year 2027 and 20% by 2030. Furthermore, LG Innotek is strengthening ESG management, prioritizing climate change response by setting ambitious goals such as achieving ‘2030 RE100’ and ‘2040 carbon neutrality’ and actively pursuing them.

Moon Hyuk-soo, CEO of LG Innotek, stated, "We will continuously enhance shareholder value by improving profitability and growing our growth businesses to increase corporate value."

LG Uplus also announced a value-up plan on the same day, including expanding shareholder return policies such as canceling KRW 100 billion worth of treasury shares. The company plans to improve net profit margin up to 6.5% by strengthening B2B (business-to-business) profitability through AI data centers. ROE is targeted to rise to 8?10%, and shareholder return ratio is expected to reach up to 60%. To achieve these goals, LG Uplus will accelerate business structure transformation through AI technology. It plans 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, LG Uplus will focus on nurturing AI data centers to achieve annual data center sales growth rates of 7?9% or more. In the B2C (business-to-consumer) sector, it will strengthen profitability through a digital-based distribution structure transformation strategy. Through this, the company aims to improve net profit margin from 5.4% last year to between 6% and 6.5%.

LG Uplus also set a goal to reduce its debt ratio, which stood at 130% last year, to around 100% before the expected introduction of 6G, thereby improving cash flow and solidifying financial stability.

Yeom Myung-hee, Chief Financial Officer (CFO) of LG Uplus, said, "We will faithfully implement the mid- to long-term value-up plan while successfully achieving business transformation as an AI transformation (AX) company."