SEOUL, Jan. 8, 2024 — LG Electronics Inc. (LG) today announced its preliminary earnings results for the fourth quarter and full-year of 2023.
LG reported an annual consolidated revenue of KRW 84 trillion, marking the third consecutive year of achieving the highest annual revenue, and an annual operating profit of KRW 3.5 trillion. These figures demonstrate a resilient business performance, approaching the results observed during the prior period of pent-up demand, despite challenges posed by delayed demand recovery from the economic slowdown as well as heightened market competition.
The historic high in annual revenue can be attributed to the robust fundamentals of LG’s core businesses and the growth experienced in B2B sectors. Notably, the compound annual growth rate (CAGR) of LG’s revenue over the last three years stands at over 13 percent. Additionally, the annual operating profit demonstrated a solid performance, reaching levels comparable to the preceding year.
LG’s effective management performance in the face of a challenging external environment is particularly noteworthy, setting it apart within the industry. Strategic efforts to enhance the business portfolio, including the early identification of market turning points to drive high growth in B2B sectors, played a pivotal role. Business model innovation, such as diversifying from hardware-oriented businesses to platform-based service business, also contributed to maintaining stable profitability.
In the home appliance & air solution business, LG is expected to have achieved an annual revenue milestone of KRW 30 trillion. Strategic market approaches, such as expanding volume zone lineups while retaining premium leadership to address demand polarization, played a key role in this success. B2B expansion in areas like HVAC, components and built-in appliances further contributed to overall growth. Going forward, LG will concentrate efforts on strengthening core competencies in product and manufacturing competitiveness, while accelerating changes in business models, including direct-to-consumer (D2C) and subscriptions, to prepare for the future. The company will also accelerate efforts to evolving its smart home solutions, reflecting the value of “Zero Labor Home,” by expanding the lineup of home appliances embedded with operating systems.
The vehicle component solutions business is anticipated to have exceeded KRW 10 trillion in annual revenue within a decade of its establishment, becoming one of LG’s core businesses. The average operating rate of production facilities has surpassed 100 percent since last year, driving growth. Starting this year, LG will intensify efforts to secure capabilities in the evolving trend of software-defined vehicles while aiming for growth in volume. Leveraging differentiation technologies accumulated in home appliances and IT, the company plans to enhance in-vehicle experiences while accelerating the efficiency and synergy of the entire business, including EV components and headlamps.
Despite challenges in key markets like Europe, the home entertainment business experienced meaningful growth in webOS content and services. This year, the expansion of the webOS ecosystem will extend beyond TVs to encompass smart monitors, in-vehicle infotainment and other areas, further broadening the business scope. From a product perspective, LG will significantly strengthen both the top-tier OLED lineup and the QNED lineup, following a dual-track strategy to lead the premium market.
The business solutions company is concentrating on the early commercialization of key areas such as EV charging and robotics. As a leader in LG’s B2B business, the segment aims to accelerate the shift from supplying single products to integrating and providing adjacent solutions. With a significant proportion of new businesses within the organization, investments are prioritized for future preparations rather than short-term management performance.
It is important to note that these figures represent tentative consolidated earnings based on the Korean International Financial Reporting Standards and are provided as a service to investors before LG Electronics releases its final earnings results. The official announcement of confirmed results, including the net profit for the year 2023 and the management performance of each Company, is scheduled for later this month.
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Source: LG Pressroom
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