LG Electronics Achieves Highest Annual Sales for 3 Consecutive Years... Expands Automotive Component Share to 12% (Comprehensive)

Last Year's Consolidated Sales 84.2278 Trillion
Electric Vehicle Segment 12%... First Time Surpassing 10 Trillion
Order Backlog Mid-90 Trillion Range... Below Expectations

LG Electronics has set a new annual sales record for the third consecutive year. The performance of its home appliances and automotive components (electric and electronic equipment for vehicles) 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. The VS Division's share of total company sales also expanded to 12%. However, the automotive components order backlog remained in the mid-90 trillion KRW range, lower than the initially projected 100 trillion KRW by the end of last year.

On the 25th, LG Electronics announced consolidated preliminary sales of 84.2278 trillion KRW and operating profit of 3.5491 trillion KRW. The annual sales figure is the highest ever. Following 73.908 trillion KRW in 2021 and 83.4673 trillion KRW in 2022, the company achieved record sales for three consecutive years. Annual operating profit decreased slightly by 0.1% compared to the previous year.

LG Electronics emphasized the significance of continuing eight consecutive years of growth in both its cash cow home appliances and its future growth business, automotive components. Combined sales of the home appliances and automotive components businesses exceeded 40 trillion KRW last year, up from about 18 trillion KRW eight years ago. During the same period, the combined sales ratio of these two businesses increased from 32.5% to 47.8%.

Jo Joo-wan, CEO of LG Electronics, introduced LG Electronics' future mobility concept 'Alphal' at CES 2024 held in Las Vegas, USA, on the 9th (local time).
[Photo by Yonhap News]

By business division, the H&A (Home Appliances & Air Solution) Division recorded sales of 30.1395 trillion KRW last year. It introduced new models such as subscriptions to the mature home appliance business and expanded its B2B share. Operating profit last year increased by more than 76% year-on-year to 2.0078 trillion KRW.

This year, LG Electronics plans to increase the adoption of home appliance operating systems (OS) and actively expand the home appliance-service combined subscription business in overseas markets. It emphasized plans to increase sales of its European heat pump business to the trillion KRW level in the mid to long term. Kim Ikwon, Executive Director of Management at the H&A Division, stated during the annual and Q4 earnings conference call, "We aim to grow the mid to long-term European heat pump heating business sales to the trillion KRW level."

The VS Division posted sales of 10.1476 trillion KRW and operating profit of 133.4 billion KRW last year. It showed eight consecutive years of growth since it began disclosing results 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. The order backlog fell short of expectations due to exchange rate variables and other factors. Kim Jooyong, Executive Director of Management at LG Electronics’ VS Division, explained during the conference call, "We expected to secure an order backlog close to 100 trillion KRW by the end of last year, but due to sourcing delays from some customers and exchange rate impacts, we secured mid-90 trillion KRW."

This year, the division plans to pursue qualitative growth alongside external growth. It will focus on securing Software-Defined Vehicle (SDV) capabilities in the in-vehicle infotainment (IVI) business. LG Magna e-Powertrain plans to enhance product capabilities and stabilize overseas production bases early to improve customer responsiveness. ZKW will expand orders for premium products while also focusing on efficient business operations.

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. LG Electronics expects TV demand to gradually recover this year. It will strengthen its OLED and LCD QNED lineups simultaneously to target the premium market. The company plans to expand the webOS ecosystem from TVs to smart monitors and in-vehicle infotainment, focusing on enhancing content competitiveness. The webOS platform business aims to grow into a trillion KRW sales business.

Regarding concerns over price increases by Chinese LCD panel manufacturers, LG Electronics dismissed any impact on supply. Lee Jeonghee, Executive Director of Management at the HE Division, said during the conference call, "The increase in market share of Chinese LCD panel manufacturers is an issue affecting the entire TV market, and it is true that our purchase ratio from Chinese manufacturers has increased, but there is no abnormality in panel supply."

The BS (B2B) Division posted sales of 5.412 trillion KRW and an operating loss of 41.7 billion KRW last year. Sales slightly declined from 6.0903 trillion KRW the previous year due to delayed IT demand recovery and reduced investments by major companies. Profitability decreased as the division increased investments in future growth areas such as robotics and electric vehicle chargers. It turned to a loss from an operating profit of 25.2 billion KRW in 2022. This year, it plans to drive sales with IT product lineups such as gaming monitors and LG Gram Pro. It will increase customized orders by customer groups such as government agencies and schools.

LG Electronics plans to consistently pursue a future-oriented business portfolio transformation this year as well. To maximize business potential (Full Potential), it will focus on "breaking through limits." The company stated, "Under the leadership of the newly established Overseas Sales Headquarters directly reporting to CEO Cho Ju-wan, established through last year's organizational restructuring, we will focus on additional growth in emerging markets with high growth opportunities and expanding product coverage within markets."

This content was produced with the assistance of AI translation services.