LG Electronics Achieves Record First Quarter Revenue 'Solid Performance'... Operating Profit at 1.3 Trillion Won (Comprehensive)

LG Electronics posted solid results, recording the highest-ever first-quarter sales despite global demand sluggishness, driven by strong B2B (business-to-business) and home appliance sales, as well as the expansion of its subscription business.

LG Electronics announced on the 5th that its consolidated operating profit for the first quarter of this year was preliminarily estimated at 1.3329 trillion KRW, down 11% from the same period last year.

LG Electronics. Photo by Jinhyung Kang aymsdream@

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Although operating profit declined due to rising material costs and intensified market competition, the company recorded first-quarter operating profits exceeding 1 trillion KRW for five consecutive years since the first quarter of 2020. Sales reached 21.0959 trillion KRW, up 3.3% compared to the same period last year. This is the highest first-quarter sales figure in history.

The results largely aligned with market forecasts, which predicted sales of 21.3178 trillion KRW, up 4.42% year-on-year, and operating profit of 1.3328 trillion KRW, down 10.99%. LG Electronics explained that the introduction of new business models such as subscriptions and the expansion of the B2B business, which has significant growth potential, served as the driving force to overcome uncertainties such as delayed market demand recovery.

Additionally, the differentiated market strategy of expanding the product and price range of the volume zone (Volume Zone ? the area with the largest consumer demand) lineup in response to market demand polarization also proved effective.

Although detailed results by business division were not disclosed on this day, it is analyzed that the cash cow home appliance business drove growth as premium new products such as the clothing care device ‘All New Styler’ and the all-in-one washer-dryer ‘Wash Combo’ launched in the first quarter received positive market responses.

Strategies targeting the volume zone tailored to regional characteristics and demand changes in overseas markets are also evaluated to be yielding results. Expansion of B2B sectors such as HVAC (heating, ventilation, and air conditioning systems), built-in appliances, and component solutions continues steadily. In the automotive electronics business, the order backlog secured so far is gradually translating into sales growth. The order backlog is expected to exceed 100 trillion KRW in the first half of this year, up from the mid-90 trillion KRW range at the end of last year.

The TV business launched the 2024 model with significantly enhanced artificial intelligence (AI) performance, followed by continued growth in the WebOS content and service business. Despite prolonged TV demand sluggishness and fierce competition among companies, the decline in TV sets (finished products) is being offset by profits from the WebOS-centered platform and services, which utilize hundreds of millions of products worldwide as platforms.

LG Electronics’ performance growth is expected to continue for the time being. The home appliance business is projected to record sales growth in the first half of the year compared to the previous year, driven by strong sales of premium products and mid-to-low-end (volume zone) lineups. There are also forecasts that the home appliance business, which accounts for about 55% of annual operating profit, will record its highest operating profit in three years since 2021.

LG Electronics plans to accelerate the paradigm shift in home appliances by expanding its subscription business, which allows customers to choose appliances and product management services they desire, and to actively promote the evolution into ‘Empathy Intelligence’ appliances that provide differentiated customer experiences. In the automotive electronics sector, the vehicle infotainment business, which accounts for the largest sales share, plans to expand differentiated products this year while focusing on securing software capabilities.

LG Magna e-Powertrain, which succeeded in turning a profit last year, is accelerating growth by expanding orders in the European and Asian markets, while its vehicle lamp subsidiary ZKW plans to simultaneously secure next-generation product capabilities and improve business structure efficiency. In the TV business, the ‘dual-track’ strategy led by OLED TVs and premium LCD QNED TVs will be actively pursued. The WebOS platform business, which can expect higher profitability than product sales, aims to grow into a trillion-KRW scale business this year. In the Business Solutions (BS) sector, LG Electronics said it will continue investing in future growth areas such as commercial display business competitiveness, robotics, and electric vehicle charging, accelerating early commercialization of promising new businesses.

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