LG: From Low Class To High Class PDF

**LG: From Low Class To High Class** Larry Light / 2019.10.17 / Forbes In 1995, the inexpensive, poor quality, Korean appliance and home electronics brand, Lucky Goldstar, became LG with the slogan, Life's Good. By the 2005 Consumer Electronics show in Las Vegas, LG along with its Korean competito...

**LG: From Low Class To High Class** Larry Light / 2019.10.17 / Forbes In 1995, the inexpensive, poor quality, Korean appliance and home electronics brand, Lucky Goldstar, became LG with the slogan, Life's Good. By the 2005 Consumer Electronics show in Las Vegas, LG along with its Korean competitor, Samsung, were the two appliance brands with the most innovative products on the convention floor. Since then, LG has morphed from offering low-price, standard appliances into a brand that also offers luxury appliances as well under the rubric: LG Signature. LG has created a credible, upstream elegant luxury offering that can now compete with U.S. brands Sub Zero, Viking, Wolf and European brands such as Miele. To cement its luxury position and enhance its image, LG is now marketing an upscale, luxury line called LG Signature as evidence of the epitome of form and function, the maximization of art and technology. It is not unusual to have brands fail at moving upstream. For example, Hyundai failed at marketing an upmarket line of autos an upscale brand extension of the Hyundai brand. They are trying again by spinning off Genesis as a stand-alone brand. Toyota did not even try to move its brand upmarket. They launched Lexus as a new luxury brand. It is easier to move down the price ladder less expensive brand extensions. Armani A/X is a good example of a high-end brand succeeding in marketing a more affordable line. What LG has accomplished is unusual. How did LG successfully migrate a line extension into the luxury arena? There are two important brand issues and both are evident in LG's example. First, recognizing the necessity of a long-term focus for creating a brand. Second, building a brand by leveraging a Paradox Promise, one of the best ways to address customer needs. *Focus on the Long-Term* The move towards the luxury end of the spectrum did not take place overnight. First, LG had to establish itself as a higher quality, more reliable, more desirable brand than its Lucky Goldstar heritage. LG erased the Lucky Goldstar brand and re-launched it as LG. This was not just a marketing activity. It was not merely about a new advertising campaign. The product had to be improved. This was a design and manufacturing challenge. LG did this over time, not instantly. The transformation spanned decades of brand development. In today's business environment, long-term tends to be swept under the rug of "results in-the-year-for-the-year." This attitude underpins the brand treachery of financial engineering that shifts monies from brand investment into stockholders' pockets. Spending decades to build a brand is not a beloved approach within many organizations. Activists and Private Equity firms want profits now regardless of the harm to brands. Short-term profits are what matter. LG focused on the very long-term. From 1995 to 2005, LG focused on innovating its mainstream products. LG focused on manufacturing and marketing attractive, innovative appliances, TVs, phones. They appear on the Lowe's website in the same range as Samsung, Kitchen Aid and Bosch. The development of the LG Signature line could only credibly happen after the LG brand became re-established as a quality, middle market brand. LG was patient. LG was consistent in establishing a credible reputation for reliability, quality and innovation. The brand is now recognized as a high-quality brand. Its luxury brand would build on the LG brand's reputation for quality and innovation. This year, 2019, the prestigious J.D Power report lists LG as ranking highest in customer satisfaction across all appliance categories. LG is "number one in reliability, performance, features, styling and warranty," according to the PR Newswire report of July 31, 2019. This is its third year in the number one spot. Reported by PR Newswire, J.D. Power stated that LG is the brand that received more J.D. Power awards for kitchen appliances than any other manufacturer. Additionally, LG is number one in product quality and service quality in the 2018 ACSI survey (American Customer Satisfaction Index®). For its luxury brand, LG Signature uses the brand's focus on innovation and takes it to a higher level by optimizing the artistry of design. Rather than create a new brand with no connection to the LG heritage, LG Signature brings technological innovation that is gorgeous underscoring the fact that this is not technology for the sake of technology or art for the sake of art. Brand building is ongoing. It does not stop. Brand building takes time and focus and discipline. Short-termism will not create or build successful brands such as LG. *Leverage a Paradox Promise* A Paradox Promise addresses customer-desired yet conflicting needs by delivering a brand that offers the benefits of no trade-off. A Paradox Promise offers the best of both worlds; a Paradox Promise brand provides a solution that maximizes conflicting benefits. Customers do not want to trade-off elements of a brand experience in return for gaining other brand elements. In today's world, people want brands to optimize not compromise. Promising and delivering Paradox Promises generate high quality revenue growth. Peloton indoor bikes and treadmills offer customers the chance to be part of a group while being at home alone. The Venetian Hotel in Las Vegas gives people safe adventure by allowing them to feel as if they are in Venice without actually leaving the U.S.; The Paris Las Vegas has its own Eiffel Tower, why go to Paris France? Diet Coke became a phenomenon by offering great taste with no calories. Technology is not usually considered an art form nor are technology-based products considered to be works of art. Steve Jobs realized that technology could also be beautiful. Apple products are both innovative and beautifully designed. LG Signature promotes the same Paradox Promise. LG Signature maximizes art and technology in its products. LG Signature focuses on both the engineering and the architecture of its products. A Paradox Promise is an important way to satisfy customer needs profitably. People prefer to avoid compromise. Brands that solve for conflicting needs offer an optimal, desired solution. Not every brand can accomplish what LG has accomplished. The short-termism of financial finagling does not build brands; it destroys brands. Kraft Heinz has debased and perhaps destroyed its brand portfolio. Sears is on life-support as a walking-dead zombie brand. Toys R'Us, Radio Shack and Forever 21 wound up in bankruptcy court. Brand building is big business. Brands do not have a natural lifecycle. Brands do not inevitably die. Brands can live forever, if properly managed. Take a page from the LG playbook: be disciplined, take time to do things correctly and satisfy people's paradoxical needs. https://www.forbes.com/sites/larrylight/2019/10/17/lg-from-low-class-to-high-class/\#5748e3442d4d **Will LG shut down, sell, or shrink its smartphone business?** January 21, 2021 / Korean Joongang Daily Market insiders are mapping out different scenarios for how LG Electronics could restructure its struggling smartphone business after the company admitted Wednesday that it did need to rethink the loss-making division. Analyst suggestions fall into three broad categories: Shut down, sell or downsize. Regardless of which direction the company chooses, the consensus is that any option will significantly improve the tech manufacturer's financial records and corporate valuation, prompting analysts to raise the target price of the company. An immediate closure is not likely since the move will cause short-term losses and might violate the terms and conditions of existing contracts. "Considering contracts with telecommunication companies and external manufacturing service providers, it would be hard to sell off the mobile business in the short term," said Lee Jong-wook, an analyst at Samsung Securities. But under the surface, LG Electronics appears to already be working at cutting down the division. It has reduced in-house design and development teams for cellular phones and increased outsourcing recently, according to multiple media reports. "LG will likely minimize resources for the division and rearrange personnel to move smartphone business employees to other businesses. The downsizing is also a good strategy for future sales of the division," Lee added. The electronics maker declined to comment on its plans, restating Wednesday's stance that all possibilities are still open. As LG is already highly dependent on outsourcing, at around 70 percent of phones produced last year according to market tracker Counterpoint Research, some expects think it could further expand the ratio to have all of its mid-range phones manufactured by external original design manufacturers (ODMs) while stopping production of premium models. That strategy, however, has a drawback. "\[LG\] needs to be more cautious about reorienting its focus toward budget models, because it could hurt the premium brand image that \[LG\] carved out in television and other home appliances," said Kim Ji-san, an analyst at Kiwoom Securities. Remaining on the table is sale of the division, a possibility that many analysts call the most desired result for LG. "The best scenario is selling off the business," Kim said. The analyst pushed up the target price of the company to 220,000 won (\$200) from 180,000 won. But that won\'t be easy. Although it generated operating losses for 23 consecutive quarters, the division's annual sales stood at around 4 trillion won with around 3,000 employees, meaning that if LG tries to sell the business, it\'s likely to come with a prohibitively high price tag. But that doesn\'t mean the rumor mill hasn\'t already identified a potential buyer. Local media outlets have mentioned Google, Facebook and Vietnam's biggest private conglomerate Vingroup as possible candidates. The Google rumor isn\'t new --- it was also said to be interested in buying the unit back in 2015. At the time, reports mentioned Google's smartphone ambitions and LG's strong list of intellectual property related to smartphones as the basis for a possible merger, although it turned out not true. Other media outlets say that Vingroup is in talks with LG to buy its U.S. smartphone business, although LG declined to comment. LG accounts for 13 percent of the smartphone market in the United States as of the third quarter, last year. Globally its share is around 2 percent, according to Counterpoint. LG Electronics stocks have been on a tear since the statement Wednesday. Shares soared 10.78 percent to 185,000 won on Thursday. [[https://koreajoongangdaily.joins.com/2021/01/21/business/industry/LG-Electronics-smartphone-Google/20210121185700580.html]](https://koreajoongangdaily.joins.com/2021/01/21/business/industry/LG-Electronics-smartphone-Google/20210121185700580.html) **LG ANNOUNCES 2020 FINANCIAL RESULTS** Highest Fourth-Quarter Sales and Operating Profit in LG's History, 2020 Profit Also Sets New Company Record SEOUL, Jan. 29, 2021 --- LG Electronics Inc. (LG) announced a strong year with 2020 revenues of KRW 63.26 trillion (USD 56.45 billion) and record-setting operating profit of KRW 3.20 trillion (USD 2.85 billion), an increase of 31.1 percent over 2019, driven primarily by higher sales of premium home appliances and OLED TVs as well as strong growth in vehicle component solutions. Sales in the fourth quarter of KRW 18.78 trillion (USD 16.76 billion) grew 16.9 percent from the same period of 2019 and were 11 percent higher than the previous quarter. Despite the impact of COVID-19, the quarter's operating profit of KRW 650.20 billion (USD 580.19 million) increased significantly by 539 percent compared to the fourth quarter of 2019. While COVID-19 and slow economic recovery remain concerns for 2021, LG expects the global economy to normalize under the sound fiscal policies of world governments and the successful implementation of vaccinations. In 2021, core technologies such as AI, 5G, IoT and mobility will be widely applied to various LG business areas. The LG Home Appliance & Air Solution Company ended another healthy year with record 2020 revenues of KRW 22.27 trillion (USD 19.87 billion), an increase of 3.5 percent increase from the previous year, and operating profit of KRW 2.35 trillion (USD 2.10 billion), another record. Results reflect increased sales of new appliance categories and the home appliance rental business in South Korea. Fourth-quarter revenue of KRW 5.54 trillion (USD 4.94 billion) was the highest fourth quarter in the company's history, an increase of 20 percent year-on-year with double digit growth in South Korea, North America and Europe. The LG Home Entertainment Company reported 2020 revenues of KRW 13.18 trillion (USD 11.76 billion) and operating profit of KRW 969.70 billion (USD 865.29 million), a 22.9 percent increase over the previous year. Sales in the quarter of KRW 4.28 trillion (USD 3.82 billion) were 7.9 percent higher than the fourth quarter of 2019 and up 16.7 percent from the previous quarter. Quarterly operating profit of KRW 204.50 billion (USD 182.48 million) reflected increased sales in North America and Europe. The LG Mobile Communications Company announced full-year 2020 revenues of KRW 5.22 trillion (USD 4.66 billion). Fourth-quarter sales of KRW 1.39 trillion (USD 1.24 billion) were 4.9 percent higher than the same quarter of 2019 but 9.2 percent lower than the previous quarter due to shortages of 4G chipsets and sluggish sales of premium smartphones in overseas markets. The full-year operating loss totaled KRW 841.20 billion (USD 750.63 million), reflecting increased marketing investments to support flagship devices, partially offset by fixed cost reductions due to manufacturing efficiencies. The LG Vehicle Component Solutions Company reported sales in 2020 of KRW 5.80 trillion (USD 5.18 billion), growth of 6.1 percent over 2019. Revenues in the fourth quarter of KRW 1.91 trillion (USD 1.71 billion) were 41.3 percent higher than the same quarter the previous year driven in large part by the recovery of demand in key automotive markets including North America and Europe and higher sales from new projects. The modest fourth-quarter operating loss of KRW 2 billion (USD 1.78 million) improved year-on-year and quarter-on-quarter due to sales increases aligned with the recovery of market demand in the second half, as well as improved cost management. The LG Business Solutions Company achieved 2020 revenues of KRW 6.01 trillion (USD 5.36 billion) with an operating profit of KRW 457.88 billion (USD 408.51 million) due to demand growth for IT products related to remote working and online learning. Fourth-quarter sales of KRW 1.51 trillion (USD 1.35 billion) were 4.8 percent higher than the same period of 2019, while quarterly operating profit was KRW 70.30 billion (USD 62.73 million), lower than the previous year due higher prices for major components and global logistic costs. The market for information displays is expected to improve as global demand recovers while demand for IT products continues to grow. The company's solar module business is expected to improve with increased demand for renewable energy in major developed markets. 2020 4Q Exchange Rates Explained LG Electronics' unaudited quarterly earnings results are based on IFRS (International Financial Reporting Standards) for the three-month period ending December 31, 2020. Amounts in Korean won (KRW) are translated into U.S. dollars (USD) at the average rate of the three-month period of the corresponding quarter --- KRW 1,120.66 per USD. [[http://www.lgnewsroom.com/2021/01/lg-announces-2020-financial-results/\#:\~:text=(LG)%20announced%20a%20strong%20year,as%20strong%20growth%20in%20vehicle]](http://www.lgnewsroom.com/2021/01/lg-announces-2020-financial-results/#:~:text=(LG)%20announced%20a%20strong%20year,as%20strong%20growth%20in%20vehicle) **Why LG is leaving the mobile phone business** By Steve McCaskill published April 07, 2021 LG was once a leading light of the mobile industry but has now called it a day. In the late 1990s and early 2000s, every electronics manufacturer worth its salt was making mobile phones. Mobiles were no longer an expensive business accessory, but an essential consumer good and there were huge opportunities in a market that could accommodate many entrants. Much of the innovation was hardware-centric and the period saw rapid technological advances such as cameras and colour displays, coupled with experimental form factors. But the arrival of the smartphone changed everything -- even stuffy BlackBerrys became desirable devices -- and it was inevitable that there would be casualties. Many of the pioneers of the first wave of mobile phones faded into obscurity or exited the market entirely. The demise of BlackBerry and Nokia were high profile symbols of this changing of the guard, but now as we enter a new era of 5G-driven hyperconnectivity, we can add LG to the list. LG-Unit The South Korean electronics giant was one of the leading lights of the pre-smartphone era, capable of producing innovative, eye-catching devices. In 2006, the LG 'Chocolate' was a sliding phone that became a genuine fashion item, much like the iconic Motorola Razr flip phone, and was the company\'s best-selling mobile phone of all time. Released the following year, the LG Prada\'s legacy was even greater, as it was the first ever mobile with a capactive touchscreen - showing LG was at the top of its game. This momentum didn't last forever but even as the industry consolidated around just two mobile platforms -- iOS and Android -- LG remained relevant as a manufacturer. It was even selected by Google to build its 'Nexus 4' handset, designed to be a white label reference model for its Android operating system in 2012. Meanwhile, its flagship 'G' series of handsets cemented the company' position as a solid 'number three' in the marketplace. But as the decade progressed, LG's challenges multiplied as the market became more competitive and saturated. Samsung became increasingly synonymous with the Android platform at premium price points, while more affordable yet still feature-packed devices from Chinese vendors secured huge swathes of the mid-range segment. At the top end of the market, only Huawei's long-term bet appeared to be capable of challenging the Apple-Samsung duopoly before the Chinese firm ran into political difficulties, while the likes of Oppo and Xiaomi grew fast to clean up in the mid-range segment -- especially in emerging markets. As these brands established credibility, LG's heritage became less of an advantage. Market difficulties LG's most recent flagship devices also failed to make a serious impact among consumers -- a far cry from the heady days of the Chocolate. Although one bright spot has been the US, where its devices have proved historically popular and where it remains number three, but its market share has hovered between 9% and 13% in recent times. However, with a global share of just 2% and losses running into the billions, LG had come under pressure to pull the plug. "The question during the past few months wasn't if LG would leave the mobile business, but how. Rumours had circulated that LG was in talks with various handset manufacturers about carrying on with LG-branded smartphones," said Ben Wood, chief of research at CCS Insight. "But given the high value of the LG logo on other consumer electronics products and major appliances, LG's leadership probably decided that the money offered wasn't worth the loss of control and any potential damage to its reputation." Wood suggests that the global chip shortage was also a factor: "Unlike its domestic rival Samsung, LG has undoubtedly found it hard to secure stable chip supplies and other components for its smartphones. This added hassle of bringing devices to market, and doing so at a loss, is likely to have been a major factor in LG's cut-or-continue decision. It further highlights the incredible advantages of scale: major component suppliers such as Qualcomm will cater to the likes of Apple, Samsung and Xiaomi first." There will be many who lament LG's demise. Those of us who have followed the industry have fond memories of its innovation and the diversity it brought, especially when it came to design. Meanwhile, there is clearly demand in the US where Chinese vendors are mostly excluded. but these customers will likely be served by Alcatel, HMD Global's Nokia devices or even Samsung and Apple's cheaper devices. The mobile phone market is much more mature and cut-throat that the one that LG first entered a few decades ago, and the opportunities for it are elsewhere. 5G networks (and 6G) will enable a whole world of new connected applications that go beyond a single device. The demise of LG's mobile ambitions serves as evidence of this competitiveness -- and as a warning against complacency for the current leaders. "There was a time when LG was part of an exclusive handset trinity, along with Nokia and Samsung. Now just one remains. We hope Samsung takes note on how fickle the audience can be." https://www.techradar.com/news/why-lg-is-leaving-the-mobile-phone-business **LG was a smartphone pioneer. Now it\'s quitting the business** Hong Kong (CNN Business) / April 5, 2021 LG is getting out of the \"incredibly competitive\" business of making smartphones. On Monday, the South Korean tech giant announced that it would close down its mobile phone unit after years of losses, marking the end of an era for a trailblazer in the Android world. The division is expected to be wound down by July 31, although the company may continue to sell some of its existing models after that, according to LG Electronics. The \"strategic decision to exit the incredibly competitive mobile phone sector will enable the company to focus resources in growth areas such as electric vehicle components, connected devices, smart homes, robotics, artificial intelligence and business-to-business solutions,\" the company said in a statement. LG was once one of the world\'s top smartphone makers, even making the top three back in 2013, according to research firm Strategy Analytics. But the company\'s devices have since dwindled in popularity, particularly as Chinese upstarts such as Xiaomi and Oppo have surged around the world. As of last year, LG was no longer even among the top seven players globally, according to Counterpoint Research, even though it is still the third most popular smartphone vendor in the United States, after Apple (AAPL) and Samsung (SSNLF), according to market research firm Canalys. \"LG leaves a \'small vacuum\' of global market share of under 2%,\" Neil Shah, a partner and vice president of research at Counterpoint Research, told CNN Business. That space will likely be filled by Samsung in both South Korea and the United States, as well as some smaller players, he predicted. LG had already warned about the fate of its phone business in January, saying that it was looking at all options, including a potential sale of the unit. The decision to call it quits on Monday was met with an outpouring of nostalgia on social media, where users shared photos of their first LG phones and reminisced over the company\'s willingness to innovate. \"Pour one out for LG Mobile. They\'re the reason we have \[ultrawide cameras\] in every new phone right now,\" Marques Brownlee, a tech reviewer and video producer, wrote on Twitter. (LG\'s V40 phone has been widely credited with introducing the feature to smartphones.) \"They didn\'t always ace every phone, but losing them means losing a competitor that was willing to try new things, even when they didn\'t work,\" Brownlee added. Austin Evans, a tech video blogger, noted that \"LG were never perfect but in a world of boring slabs they delivered some of the most unique phone designs, ideas and features ever.\" LG was known for pushing the envelope with its smartphones. In 2013, it came out with a curved smartphone screen, making it one of the first electronics makers at the time to debut the technology for the mass market. Two years later, the company wowed experts with the high-end photo-taking capabilities of its LG G4. CNN Business\' former tech editor David Goldman opined it \"might be the best smartphone camera on the planet.\" And last year, LG unveiled the WING 5G, a 5G-enabled smartphone that came with two screens. One of the screens could rotate up to 90 degrees, with the aim of letting users toggle different apps at the same time and multitask more easily. The company\'s last big splash came just three months ago, when it revealed a phone that could be rolled up to turn into a tablet. LG said at the time that the device would launch sometime this year, though the company confirmed to CNN Business on Monday that it won\'t now be released. \"For years, \[the\] LG smartphone was known for its unconventional and innovative features,\" Shengtao Jin, a research analyst at Canalys, told CNN Business. \"While these features helped LG differentiate itself from other mainstream brands, most consumers did not find much practical value in these features.\" But the firm won\'t crash out of the industry entirely. \"Moving forward, LG will continue to leverage its mobile expertise and develop mobility-related technologies such as 6G,\" it said in the statement. \"Core technologies developed during the two decades of LG\'s mobile business operations will also be retained and applied to existing and future products.\" Experts believe that this decision may help the company in future. LG will enjoy better growth prospects overall once it does away with the mobile business, said Shah, who described the move as \"removing the thorn\" from the company\'s \"feet.\" \"It would be wiser for LG to cut the loss and place the bet on areas that it has an advantage in, such as the display business,\" Jin added. LG Electronics\' stock closed down 2.5% in South Korea on Monday following the news. https://edition.cnn.com/2021/04/05/tech/lg-electronics-exiting-smartphone-business-intl-hnk/index.html **LG Announces 2021 Financial Results** Highest Full-Year and Fourth-Quarter Revenues in LG Electronics' History Driven by Strong Demand in Premium Home Appliances and TVs SEOUL, Jan. 27, 2022 --- LG Electronics Inc. (LG) continued its strong performance in 2021, achieving the highest annual revenues in its history with full-year sales of KRW 74.72 trillion (USD 63.16 billion). This increase of 28.7 percent over 2020 was attributed primarily to stronger sales of premium home appliances and OLED TVs. Operating profit of KRW 3.86 trillion (USD 3.27 billion) was essentially unchanged, declining 1 percent from the previous year. LG also reported record sales in the fourth quarter with revenues of KRW 21.01 trillion (USD 17.76 billion), an increase of 20.7 percent from the same quarter the previous year. Operating profit of KRW 677.7 billion (USD 572.87 million) in the quarter declined 21.4 percent from the same quarter a year earlier due in large part to factors such as higher raw material and global logistics costs. As challenging business conditions persist into 2022, LG is staying the course to strengthen competitiveness by further improving its cost structure and continuing to expand the presence of its premium appliances and TVs in the global market. The LG Home Appliance & Air Solution Company saw another record-setting year with 2021 revenues of KRW 27.11 trillion (USD 22.92 billion), an increase of 21.7 percent from the previous year, driven largely by strong performance in new appliance categories such as hygiene products. Annual operating profit of KRW 2.22 trillion (USD 1.88 billion) was 2.9 percent lower than in the previous year due to higher costs for raw materials and global logistics. Record fourth-quarter revenues of KRW 6.52 trillion (USD 5.52 billion) were 17.7 percent higher than the same period 2020. The LG Home Entertainment Company reported 2021 revenue growth of 30.6 percent to KRW 17.22 trillion (USD 14.56 billion) with operating profit increasing 18.1 percent over the previous year to KRW 1.1 trillion (USD 929.68 million), reflecting LG's success in responding to the higher demand for premium TVs during the pandemic. Revenues in the quarter of KRW 4.99 trillion (USD 4.21 billion) were 16.4 percent higher than fourth quarter the prior year and up 19.2 percent from the previous quarter owing to the growth in demand for premium OLED and large-screen TVs in key regions of Europe and North America. The LG Vehicle Component Solutions Company increased revenues by 24 percent in 2021 from 2020 to KRW 7.19 trillion (USD 6.08 billion), exceeding KRW 7 trillion for the first time. Revenues in the fourth quarter of KRW 1.68 trillion (USD 1.42 billion) declined 12.3 percent from the same quarter the previous year. Under the cloud of uncertainty created by the new COVID-19 variant, the global automotive market experienced significant disruption due to the shortage of automotive semiconductors. The LG Business Solutions Company achieved 2021 revenues of KRW 6.96 trillion (USD 5.89 billion), a 15.8 percent increase over the previous year while higher material costs and supply chain challenges resulted in an annual operating profit of KRW 144.3 billion (USD 121.98 million). Fourth-quarter revenues increased 14 percent from the same period in 2020 to KRW 1.72 trillion (USD 1.46 billion) on the back of strong demand for premium PCs and gaming monitors. An increase in cost of global logistics and slowdown of solar module sales due to increased competition contributed to a fourth-quarter operating loss of KRW 35.1 billion (USD 29.67 miillion). 2021 4Q Exchange Rates Explained LG Electronics' unaudited quarterly earnings results are based on IFRS (International Financial Reporting Standards) for the three-month period ending December 31, 2021. Amounts in Korean won (KRW) are translated into U.S. dollars (USD) at the average rate of the three-month period of the corresponding quarter --- KRW 1,182.99 per USD. Earnings Conference and Conference Call LG Electronics will hold a Korean / English conference call on January 27, 2022 at 16:00 Korea Standard Time (07:00 GMT/UTC). Conference call participants are instructed to pre-register online to receive a private PIN. To participate in the conference call, dial +82 31 810 3130, enter passcode 6418\# and then the PIN. The corresponding presentation file will be available for download at the LG Electronics website before the call. https://www.lgnewsroom.com/2022/01/lg-announces-2021-financial-results/ **LG Electronics dumping solar panel biz after mobile phone exit** By Lee Eun-joo / 2022.02.23 / Pulse News South Korea's LG Electronics Inc. is shedding another money-losing hardware business - solar panel production - against Chinese competition after it dumped mobile business of 26 years last year to focus on premium and future-growth business. LG Electronics which ascended to world's top rank in white goods last year in a disclosure Wednesday reported that the company's board on Tuesday decided to close the solar panel business by June 30. Shares of LG Electronics were trading 2.06 percent higher at 124,000 won (\$104) on Wednesday morning. LG Electronics launched solar panel business in 2010 and engaged in operations focusing on high-efficient, premium modules such as n-type and two-sided panels. The company, however, lost competitiveness versus the flood of cheaper Chinese products. Overall business environment also deteriorated on rising raw materials costs. LG Electronics' global share in solar panels stayed in 1 percent range, while sales and operating income have been on constant fall. The business's sales that stood at 1.1 trillion won in 2019 shriveled to 800 billion won in 2020. Solar panel production will continue until the second quarter given future service support and to maintain adequate inventory. About 900 employees in energy business, including 600 in solar panel business in Korea will be relocated. LG Electronics said that its business solutions company that operates solar panel business will reorganize its portfolio around the key pillars -- information technology and information display. "The company will concentrate on growth sectors and plug into a new era of sustainability through rapidly evolving products and solutions including energy storage system, energy management solutions, and other yet-to-be-announced advancements," it said. LG Electronics shuttered mobile phone business and shifted attention to automotive electronics by setting up e-powertrain joint venture with Magnam International Inc. last year. https://pulsenews.co.kr/view.php?year=2022&no=172555 **LG Bolsters Leadership in 5G Vehicle Connectivity** Global Leader in Advanced Connectivity to Supply Premium European Carmaker with Next-generation Telematics SEOUL, Feb. 25, 2022 --- LG Electronics (LG) continues to raise the ante in the automotive connectivity market with recent deals to supply 5G telematics solutions to premium European automaker. Already an established player in telematics, a field that combines several disciplines including telecommunications and vehicle parts technologies, LG's Vehicle component Solutions (VS) Company has proven that it has the technological knowhow and experience to lead the auto industry in the 5G era. According to market research firm Strategy Analytics, by 2026 approximately 67 million new vehicles worldwide will be equipped with telematics capabilities. 5G telematics communications modules, introduced only last year, are expected to account for more than 25 percent of the total vehicle telematics market by 2026. With its highly-evolved and wide-ranging core technologies, LG has already secured a competitive advantage in 5G standards, accounting for about 10 percent of global 5G standard patent approvals and ranked second globally. From vehicle-to-everything (V2X) systems to integrated hardware and software packages and in-vehicle communications gateways, LG's cutting-edge 5G telematics innovations deliver a new level of on-road connectivity and safety. An essential component in autonomous vehicles, V2X enables vehicles to communicate in real-time with other vehicles, nearby pedestrians and infrastructure to create a safer environment for all. Fast approaching the threshold for Society of Autonomous Engineer (SAE)'s Level 4 in which autonomous vehicles no longer require human interaction for operation, LG's 5G-V2X technology delivers more consistent vehicle data transmission speeds. Faster, more stable communications means vehicles can recognize and respond to a variety of road conditions and driving situations instantaneously while the high-precision positioning technology, known as Advanced Global Navigation Satellite System (GNSS), can pinpoint a vehicle's exact location to within 40 centimeters even when traveling at high speeds. Utilizing Dual SIM Dual Active (DSDA) technology, LG's solutions simultaneously support connected car and autonomous driving functionalities, enabling vehicle occupants to enjoy entertainment services, convenient functions and enhanced safety. The 3rd Generation Partnership Project (3GPP) Release 16\* 5G module boasts significantly improved performance and more reliable connections. What's more, the smart, flat antenna allows automakers to maintain the aerodynamic lines of their original designs which would have been impossible with traditional "shark fin" antennas. "Thanks to our experience and expertise in vehicle telematics, LG has been successful in winning a number of new contracts with established global automakers," said Eun Seok-hyun, president of the LG Vehicle component Solutions Company. "With solutions that are extremely easy to implement in various vehicle models thanks to our embedded modular design, LG's telematics hardware and software systems offer an unmatched level of flexibility for manufacturers and diverse services for end-users. A trusted partner to automakers worldwide, LG is helping to create a safer, better future on the world's roads with its growing portfolio of advanced mobility innovations." Source: www.3gpp.org/release-16. **LG Electronics, Magna International to jointly develop autonomous driving technologies** ========================================================================================== By Shin Ha-nee, Korea JoongAng Daily/January 14, 2023 LG Electronics and auto part supplier Magna International will jointly develop autonomous driving technologies, the electronics maker said Wednesday. The goal is to develop prototypes for autonomous driving systems, leveraging LG Electronics' infotainment technologies and Magna's specialty in the active safety system. The two companies are taking part in the upcoming CES 2023 tech fair, which is to kick off on Thursday, and plan to discuss potential cooperation with global carmakers. Ontario, Canada-based Magna has been working with LG Electronics for electric vehicle (EV) powertrain business. In 2021, the two companies formed a joint venture, LG Magna e-Powertrain, which is building a \$100-million EV component plant in Mexico. LG Electronics specializes in in-vehicle infotainment systems for connected cars, which involve various technologies and services such as telematics. A telematics system is a telecommunication device and software to store and transmit data in a vehicle. LG Electronics represented the largest share, or 23 percent of the global telematics system market in the third quarter last year, said the electronics company citing data from Strategy Analytics. Infotainment services are one of the three pillars of LG Electronics' auto part business. Other core businesses involve EV powertrains and vehicle lights. Magna supplies auto parts, from powertrains to advanced driver assistance systems (ADAS) for autonomous driving. The Canadian company recently acquired Sweden-based Veoneer's active safety business for \$1.53 billion. "With the expansion of cooperation with Magna, we expect to provide unique consumer experiences for not only global carmakers, but also for both drivers and passengers on vehicles," said Eun Seok-hyun, head of the vehicle component division at LG Electronics. LG Magna e-Powertrain's 25,000-square-meter (6.17 acres) factory, located in the city of Ramos Arizpe, Coahuila, is scheduled to begin commercial operation in 2023. It will produce inverters, motors and on-board chargers to support production at General Motors factories. LG Magna e-Powertrain is running production plants in Incheon, and Nanjing, China. JoongAng Control (JAC) also said Wednesday that it will display its EV chargers at CES 2023. JAC, a subsidiary of Lotte Data Communication, will introduce its latest ultra-fast charger for EVs at the tech fair. The charging system can be powered by solar energy and supports power sharing and plug-and-charge technology, according to the company. JAC specializes in EV charging systems, from manufacturing to installation. It introduced its Evsis charging system brand in August last year. In April 2021, the company signed a supply contract with BTC Power, a U.S. EV charging system manufacturer. [[https://koreajoongangdaily.joins.com/2023/01/04/business/tech/Korea-LG-Electronics-Magna/20230104112521348.html]](https://koreajoongangdaily.joins.com/2023/01/04/business/tech/Korea-LG-Electronics-Magna/20230104112521348.html) **LG Electronics LG Announces 2022 Financial Results** 2023.01.30 SEOUL, Jan. 27, 2023 --- LG Electronics Inc. (LG) today announced full-year 2022 consolidated revenue of KRW 83.5 trillion with operating profit of KRW 3.6 trillion. In 2022, LG achieved its highest annual revenue ever -- surpassing KRW 80 trillion for the first time in its history -- increasing 12.9 percent over 2021, when sales exceeded KRW 70 trillion for the first time. The record sales reflect continuous growth based on strong fundamentals, although full-year profitability was impacted by challenging global economic conditions. The company's revenue growth in 2022 was driven by strong demand for premium home appliances and automotive parts. For the seventh consecutive year, the appliance business unit saw significant year-over-year growth. The turnaround of LG's Vehicle components Solutions business in 2022 reflected steady improvements in the automotive industry, and this business exceeded 10 percent of LG's total revenue for the first time. The LG Home Appliance & Air Solution Company saw another record-setting year with 2022 revenue of KRW 29.9 trillion, an increase of 10.3 percent from the previous year, as a result of company's premium-focused strategy that includes unique appliances such as LG Styler™ clothing care systems, all-in-one WashTower™ laundry centers, and LG InstaView refrigerators with Craft Ice™. Full-year 2022 operating profit was KRW 1.1 trillion lower than in the previous year caused by increased marketing investments and higher logistics costs. The business unit plans to consistently pursue its premium-centered strategy by improving competitiveness of premium products as well as strengthening its mass-tier lineup, along with cost structure management to enhance profitability. In addition, the company will accelerate the expansion of smart home ecosystems by expanding upgradable appliance lineups in the overseas markets. The LG Home Entertainment Company reported 2022 revenue of KRW 15.7 trillion and operating profit of KRW 5.4 billion. Although lower global TV demand impacted revenue and operating profit versus 2021, the company's content and services business based on LG's smart TV platform has grown ten-fold since 2018. As challenging business conditions persist, the company will focus on expanding LG's smart TV platform to diversify its overall business portfolio and secure future growth engines. Furthermore, the company will maintain its competitive edge by growing the premium TV segment, such as OLED TV and QNED TV, as well as effectively managing marketing expenses. The LG Vehicle component Solutions Company increased revenue by 29.1 percent in 2022 from 2021 to KRW 8.6 trillion with a full-year operating profit of KRW 169.6 billion. The business unit's profitable growth was driven by proactively responding to higher demand from automakers. By year-end 2022, the total value of accumulated orders for auto parts is around KRW 80 trillion, reflecting the company's position as a leading supplier to the worldwide automotive industry. The company will continue its momentum by strengthening its global supply chain and will work to further increase profitability through efficient cost structure management. The LG Business Solutions Company's 2022 revenue of KRW 6.1 trillion increased 11.2 percent over the previous year driven by continuous recovery of information displays. Full-year operating profit declined, primarily due to lower post-pandemic demand for PCs and monitors. Looking ahead, the company plans to improve competitiveness of PCs and monitors, while driving stable growth in the B2B segment by developing more customized solutions. [[https://www.lgcorp.com/media/release/25868\#:\~:text=SEOUL%2C%20Jan.,profit%20of%20KRW%203.6%20trillion]](https://www.lgcorp.com/media/release/25868#:~:text=SEOUL%2C%20Jan.,profit%20of%20KRW%203.6%20trillion). **LG Electronics aims to transform into platform-based tech firm by 2030** By Ye-Rin Choi and Ik-Hwan Kim, The Korea Economic Daily/ July 12, 2023 When LG Electronics Inc. made a surprise move to ungracefully exit the mobile phone business, one of its mainstay businesses, two years ago, investors wondered, what's its next growth engine? It didn't take long for the South Korean electronics giant to come up with an answer. On Wednesday, the company unveiled a new business strategy: Transform into a platform-based tech giant from a traditional home appliance maker. With the new business goal, Chief Executive Cho Joo-wan said LG aims to achieve 100 trillion won (\$77.5 billion) in annual sales by 2030, up sharply from 65 trillion won in 2022. LG said it will invest 50 trillion won, including over 25 trillion won in R&D projects and 17 trillion won in infrastructure, through 2030 to drastically change its business portfolio and pursue "qualitative" growth. "We won't be just content with making good home appliances. We will take a bold step to transform into a smart life solution provider that connects to various consumer experiences," Cho said at a press conference at LG Science Park, its research center. Under its Vision 2030, the CEO said LG will pursue three growth drivers: increase sales of non-hardware products, promote the business-to-business (B2B) model and explore new growth areas such as electric vehicle charging and digital health. The three sectors will account for more than half of LG's annual sales and operating profit by 2030, he said. REINVENTING THE WAY LG WORKS AND COMMUNICATES "We will establish a brand-new LG by reinventing the way we work and communicate," said the CEO, who's known in the West by his English name William Cho. LG said it will invest more than 1 trillion won over the next five years to strengthen its content competitiveness and drive the growth of LG Channels, an advertisement-based free broadcast platform. With the investment, LG plans to strengthen its service platforms through media subscriptions and rentals to generate recurring profits, it said. In 2021, the company entered the TV content platform market with its own webOS software for smart TVs. The number of LG Channels users has increased to 48 million in 29 countries from 20 million in 25 countries last year. In the B2B segment, the company aims to achieve annual sales of 40 trillion won by 2030. One of the key areas LG has been nurturing in recent years is the automotive parts business. It plans to become a global top 10 vehicle component maker by doubling revenue to 20 trillion won by 2030. The order backlog of LG's vehicle component division is expected to reach 100 trillion won by the end of this year, it said. TRIPLE 7: LG'S 2030 FINANCIAL OBJECTIVE As a future growth driver, LG plans to strengthen its digital healthcare business, with its North American Innovation Center taking the lead. To expand its presence in the EV charging business, LG recently unveiled four charging systems via its affiliate HiEV Charger, which it acquired last year. LG plans to expand its EV charging business into Europe and other Asian countries next year. "We will actively seek M&As or joint venture projects for our inorganic growth," said an LG executive. If all goes to plan under Vision 2030, LG will achieve an average annual revenue and operating profit growth rate of 7% and a sevenfold increase of its enterprise value by then, he said, calling it a "triple 7" goal. [https://www.kedglobal.com/corporate-strategy/newsView/ked202307120018] **(News Focus) Samsung, LG Electronics accelerate push into fast-growing EV market** ==================================================================================== By Woo Jea-yeon, YonHap News Agency/August 11, 2023 SEOUL, Aug. 11 (Yonhap) \-- Samsung Electronics Co. and LG Electronics Inc. said Friday they will attend IAA Mobility 2023, an annual global mobility show to be held in Germany, for the first time, in a step seen as an attempt to gain a bigger share in the fast-growing electric vehicle (EV) parts market. IAA Mobility, one of the world\'s largest mobility trade fairs, is set to take place in Munich from Sept. 5-8, where industry experts and businesses discuss and share the latest automobile trends and the future of mobility. Samsung Electronics\' Device Solutions division in charge of semiconductors, Samsung Display and Samsung SDI, Samsung Group\'s display panel-making and battery-making affiliates, respectively, will attend the show. Samsung, the world\'s largest memory chip maker, is a relative latecomer in the EV market. It has, however, ramped up efforts in recent years to develop advanced chips for cars, a market that has grown significantly, fueled by higher levels of car electrification with advanced features, like artificial intelligence and 5G-based telecommunications, and a further uptake in electric vehicles. Harman, Samsung\'s automotive and audio electronics subsidiary, has reported steady growth since it was acquired by Samsung for US\$8 billion in 2016. In the three months ending in June, Harman logged 3.5 trillion won (US\$2.65 billion) in sales and 250 billion won in operating profit, bagging the largest automotive order in its history. The figures were up 17.4 percent and 150 percent from the year-ago period, respectively. In 2022, the company\'s sales and profit hit record highs, driven by rising demand for its high-end infotainment system. Samsung also aims to expand its footprint in the automobile chip market, a highly promising segment the company sees as potentially becoming one of the three biggest chip applications, along with servers and mobile. London-based research firm IHS Markit projected the global automotive semiconductor market would log an average annual growth rate of 11 percent to reach \$143 billion by 2029. At the IAA event next month, LG said it will share its vision for future mobility at its first-ever press conference, titled \"Taking Life\'s Good on the Road,\" on Sept. 4. The company said it will \"provide its vision of the in-vehicle experiences of the future and illustrate the highly advanced mobility ecosystem the company proposes to its partners and customers.\" LG\'s EV component division, consisting of in-vehicle infotainment systems, e-powertrain and headlamps, has grown at an annual pace of 30 percent since it began operations more than 10 years ago. For the second quarter, the division reported quarterly sales of 2.66 trillion won, the highest second-quarter revenue in company history. LG expected the EV unit\'s accumulative order backlog \"to reach 100 trillion won by the end of the year\" amid the explosive growth of electric vehicles. \"Cars have evolved from a transportation means to a space that serves various purposes and provides new experiences,\" LG CEO Cho Joo-wan said at a press conference last month. \"The Vehicle Solutions division aims to become one of the world\'s top players in the future mobility sector and to achieve annual sales of more than 20 trillion won by 2030 by actively responding to new mobility trends and using our insights into business-to-consumer markets,\" he said. LG Magna e-Powertrain, a joint venture between LG Electronics and Magna International Inc., will operate a new factory in Mexico next month to produce inverters, motors and on-board chargers for General Motors. Kim Dong-won, an analyst at KB Securities, forecast LG\'s EV business to contribute up to 12.3 percent of the company\'s operating profit next year, up from 4.6 percent in 2022. [[https://en.yna.co.kr/view/AEN20230811002700320]](https://en.yna.co.kr/view/AEN20230811002700320) **LG Unveils Vision for Future Mobility at IAA MOBILITY** IT TIME/ Lee Jun-sung / Sep 5, 2023 MUNICH \-- LG Magna e-Powertrain Co., a joint venture between South Korea's LG Electronics Inc. and Canada's Magna International Inc., has announced plans to build an electric vehicle parts factory in Hungary, in line with the home appliance giant\'s push to lead the world's future mobility sector. LG Magna, an EV powertrain maker, is set to start operations in 2026 producing driving motors at the facility in Miskolc with plans to manufacture other components depending on demand in the world's second-largest clean vehicle market, LG Electronics said on Monday without providing financial details on the investment. "Along with the facilities in Mexico, China and South Korea, the facility in Hungary will be critical as the company accelerates its position as a go-to mobility solutions partner in the fast-growing global EV market," said LG Magna chief executive Cheong Won-suk in a statement. The company said it chose Hungary for the site of the new factory given its accessibility to European automakers and Magna's existing facilities. Miskolc has great logistics and transportation infrastructure for the development of the automobile and machinery industries. LG Electronics launched the JV in July 2021 with Magna to ramp up its future mobility business by combining the Canadian auto parts maker's expertise in electric powertrain systems and the South Korean tech behemoth's capabilities in component development for e-motors, inverters and on-board chargers. LG Electronics has a 51% stake in the JV, while Magna holds the rest. AIMS TO LEAD THE GLOBAL FUTURE MOBILITY SECTOR The new factory in Hungary is a move to accelerate LG Electronics' efforts to transform from a home appliance giant into a global future mobility sector leader. Toward this end, the company aims to utilize its expertise and know-how from the home appliances and information technology businesses, its CEO Cho Joo-wan said. "We strongly believe future mobility should focus on the mission to deliver another level of customer experience. LG, with innovative mobility solutions, is more than committed to this mission," the CEO, also known by his English name William Cho, told a press conference at IAA Mobility in Munich. "As we are endeavoring to unlock the future of mobility, we invite all industry leaders to join us in this exciting and important journey," Cho said, keeping the door open for acquisitions in the automotive electronics sectors. LG Electronics has developed three customer experience themes for automobiles -- transformable, explorable and relaxable -- to realize its future mobility vision as it is redefining the car as a "personalized digital cave," Cho said. LG Electronics can support this shift with its displays, home appliances and digital health technologies, he added. The company has been expanding its automotive electronics businesses. Its vehicle component solutions division handles the in-vehicle infotainment sector, while ZKW Group, an Austria-based firm acquired in 2018, and LG Magna work on the car lighting and EV powertrain businesses, respectively. LG Electronics (LG) made its debut at IAA MOBILITY, one of the world\'s premier annual mobility events. During this event, LG\'s CEO, William Cho, shared the company\'s insights on the future of the mobility industry and unveiled its vision for transforming the entire mobility ecosystem, encapsulated by the theme of the press conference: \"Taking Life\'s Good on the Road.\" Earlier this year, LG outlined its ambition to become a \"smart life solution company,\" aiming to seamlessly connect and enhance the customer experience across various facets of daily life. This vision led to the introduction of ThinQ UP 2.0, an innovative solution turning home appliances into interconnected lifestyle tools. Today, LG expanded this vision into the realm of future mobility experiences. As the automotive industry rapidly shifts towards electric and autonomous vehicles, LG sees a unique opportunity to bring fresh value to mobility. The car is poised to evolve beyond mere transportation, becoming a versatile space offering diverse and personalized customer experiences. CEO William Cho stated, \"With nearly seven decades of experience in consumer-facing businesses, LG has gained valuable insights into global customer needs and living spaces. This has translated into numerous innovations in the consumer electronics industry. Leveraging our vast knowledge and expertise, we are thrilled to present our unique perspective on mobility.\" LG\'s focus on customer-centric products and services has propelled the growth of its Vehicle Component Solutions (VS) Company over the last decade. The company has successfully entered the automotive component and solutions market, earning recognition and trust from major automakers. According to market research firm Strategy Analytics, LG secured the largest share of the global vehicle telematics market last year, with 23.3 percent, and has maintained a double-digit share in the audio, video, and navigation (AVN) segment since 2021. LG\'s Approach to Future Mobility Experiences - Alpha-able LG recently conducted a study simulating the interior of an autonomous vehicle and found that most people view these vehicles as exclusive, private spaces where they can enjoy activities like work, play, and solitude. These findings align with current driver perceptions, with 72 percent seeing car travel as a solo relaxation time and 43 percent considering the vehicle cabin a meaningful personal sanctuary. Based on these insights, LG reimagines the car as a \"personalized digital cave\" and has outlined three customer experience themes - Transformable, Explorable, and Relaxable - under the umbrella concept of \"Alpha-able,\" signifying the company\'s commitment to making anything possible. Transformable Experience: Adaptable Spaces LG envisions vehicle interiors that can physically adapt to different scenarios, transforming into restaurants, offices, or even mobile theaters. To achieve this, LG will employ innovative display solutions, including transparent, flexible, and rollable displays, as well as its renowned home appliance technologies. Explorable Experience: Intelligent Content Integration In LG\'s view, future cars should understand the context of each journey, factoring in destination, duration, and more to offer tailored content recommendations. Advanced artificial intelligence (AI) and eXtended Reality (XR) technology will facilitate interactive, in-vehicle voice assistants that suggest content relevant to the estimated travel time. Augmented reality (AR) technology and transparent OLED displays will transport passengers to different locations or transform the vehicle interior. Relaxable Experience: Enhanced Comfort LG aims to create serene mobility experiences by leveraging its expertise in home appliances, displays, digital health, and other customer-related areas. Passengers can immerse themselves in virtual gardens, receive seat massages, listen to soothing music, or even access AI counseling sessions to unwind. These three themes encompass LG\'s vision for the future of mobility customer experiences, characterized by innovative technologies, services, and content tailored to customer needs. Three Key Pillars of LG\'s EV Business in the SDV Era The mobility industry is swiftly moving into the era of the software-defined vehicle (SDV), where electronic devices will create highly adaptable moving spaces. LG is preparing for this future by developing customer-specific designs that enhance mobility experiences. LG\'s mobility business focuses on three key areas: 1\. In-vehicle infotainment systems manufactured by the VS Company. 2\. Electric powertrain systems developed through the LG Magna e-Powertrain joint venture between LG and Magna International. 3\. Vehicle lighting systems created by LG\'s subsidiary, ZKW Group. These divisions empower LG with vital expertise in the fundamental technologies shaping the future of transportation. In-vehicle infotainment systems blend driving-related information and entertainment features, harnessing technologies like high-speed data transmission, digital interfaces, and big data analysis. This enables LG to provide comprehensive mobility solutions that align with the evolving requirements of the Self-Driving Vehicle (SDV) era. Expanding Mobility Vision Through EV Charging Solutions LG aims to strengthen its future mobility ecosystem by venturing into the EV charging solution business. In line with its strategy to provide optimal mobility experiences across both vehicle and non-vehicle domains, LG acquired HiEV Charger, a company with core EV charger technology. Synergy is expected with LG\'s battery business, which is poised for rapid growth. HiEV Charger has introduced four types of EV chargers that address existing limitations, incorporating LED displays for status updates, intuitive touch controls, and enhanced safety features. These chargers offer water- and dust-resistance, electrical and thermal protection during charging, connector lock detection, and remote updates, enhancing the overall charging experience. LG intends to expand its EV charging business by leveraging its expertise in manufacturing, quality control, after-sales service, and supply chain management to improve customer satisfaction. [[https://www.koreaittimes.com/news/articleView.html?idxno=124819]](https://www.koreaittimes.com/news/articleView.html?idxno=124819) **LG Announces 2023 Financial Results** LG Corporate, January 25, 2024 Highest Annual Revenue in History With Home Appliance and Vehicle Components Showing Growth for Eight Consecutive Years SEOUL, Jan. 25, 2024 --- LG Electronics Inc. (LG) announced its financial results for the year 2023, disclosing a consolidated revenue of KRW 84.2 trillion and an operating profit of KRW 3.55 trillion. This marks the third consecutive year of achieving record-breaking annual revenue. The operating profit is also solid, approaching levels seen during the prior period of pent-up demand. Despite challenging external factors such as an economic slowdown and reduced demand, LG's core business of home appliances and the burgeoning vehicle components business have demonstrated remarkable resilience, maintaining continuous growth for eight consecutive years. The combined revenue of these businesses exceeded KRW 40 trillion last year, a substantial increase from KRW 18 trillion in 2015. Over the same period, the proportion of these two businesses in the total revenue has risen from 32.5 percent to 47.8 percent. The performance is attributable to LG's strategic efforts to enhance its business portfolio. The company successfully expanded its B2B business by identifying market turning points early on and integrated new business models, including subscription services, into existing frameworks. Furthermore, LG's innovative content and service business model, leveraging its extensive user base of hundreds of millions of products globally, has also contributed to securing robust profitability. Looking ahead, LG is committed to a continual transformation from a mature business-oriented structure to a future growth-oriented one. In this year, the company will concentrate its capabilities on breaking through limits to maximize its business potential. Guided by the newly established Overseas Sales & Marketing Company, LG will strive for additional growth and expanded product coverage, particularly in emerging markets where there are greater growth opportunities. The LG Home Appliance & Air Solution Company achieved an annual revenue of KRW 30.14 trillion, marking eight consecutive years of growth and ushering in the era of KRW 30 trillion. Introducing new business models including subscription services and expanding the B2B share in areas such as HVAC, components and built-in solutions contributed to this growth. The operating profit recorded an increase of over 76 percent compared to the previous year, reaching KRW 2.08 trillion. In the coming year, the Company will accelerate a shift in its business model towards future readiness, including Direct-to-Consumer initiatives. It aims to expand the deployment of home appliance operating systems and extend subscription services to international markets. Additionally, there will be a swift progression in building smart home solutions that reflect the value of "Zero Labor Home." In terms of products, the Company will seek to maintain its strategic approach of solidifying the premium leadership of key products, such as washing machines and refrigerators, while swiftly expanding region-specific lineups. To sustain continuous growth in the B2B sector, especially in areas like HVAC, the Company plans to strengthen its capabilities by establishing a complete, local business operation that encompasses product development, production and sales, with a focus on the evident electrification trends in regions such as North America and Europe. The LG Vehicle component Solutions Company achieved an annual revenue of KRW 10.1 trillion and operating profit of KRW 133 billion. In its 10th year since establishment, the Company not only surpassed the KRW 10 trillion revenue mark but also demonstrated eight consecutive years of growth since it began disclosing performance results in 2015. The share of total consolidated revenue has increased to 12 percent. This year, the Company aims to drive both external growth, leveraging a substantial order backlog, and qualitative growth in its operations. In in-vehicle infotainment, the Company is dedicating efforts to secure capabilities in the area of software-defined vehicles in response to the needs of OEMs. Drawing upon its differentiated technology accumulated in the home appliance and IT sectors, the Company will seek to further enhance the in-vehicle customer experience. In the e-Powertrain area, focus will be on strengthening product capabilities and early stabilization of overseas production bases to enhance responsiveness to customer demands. Additionally, in headlamps, there are plans to expand premium product orders while simultaneously improving operational efficiency. The LG Home Entertainment Company recorded an annual revenue of KRW 14.2 trillion and operating profit of KRW 362 billion. The webOS platform-based content and services business solidified its position as a new source of revenue, showing a significant increase in operating profit compared to the previous year. The revenue slightly decreased amid a relatively slow recovery in demand for premium products like OLED. In anticipation of a progressive recovery in TV demand this year, the Company will seek to strengthen both the top-tier OLED lineup and the QNED lineup, following a dual-track strategy to lead the premium market. Simultaneously, the Company is accelerating its transformation into a media and entertainment powerhouse. In the current year, the webOS platform business is slated for nurturing as a significant revenue-generating venture in the scale of trillions. The LG Business Solutions Company recorded an annual revenue of KRW 5.4 trillion and operating loss of KRW 42 billion. The revenue saw a slight decrease compared to the previous year due to delays in IT demand recovery and reduced investments from key enterprises. Increased investments in future growth areas such as robotics and electric vehicle charging had an impact on profitability. In this year, the Company is positioning itself with a competitive lineup of IT products, including gaming monitors and the LG gram Pro, and will actively seek to find business opportunities targeting distinct verticals such as government agencies and schools. As a leader in LG's B2B business, it 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 will be prioritized for future preparations rather than short-term management performance. [[LG Announces 2023 Financial Results \| LG Global]](https://www.lg.com/global/newsroom/news/corporate/lg-announces-2023-financial-results/) **Fitch Affirms LG Electronics at \'BBB\'; Outlook Stable** Fitch Ratings, March 27, 2024 The affirmation reflects Fitch\'s expectation that LGE\'s weaker financial profile, largely driven by the poor performance of LG Display Co., Ltd (LGD), is likely to improve over the next 24 months. The improvement will be driven by recovering consumer sentiment from 2H24, easing pressure on the cost of production, adequate inventory levels and stable marketing costs. LGD\'s recent capital increase will help to restore the company\'s balance sheet, supporting LGE\'s proportionately consolidated leverage profile. We forecast LGE\'s operating margin to be at least in the mid-single digits over the medium term and the leverage ratio (EBITDA leverage) to improve to 2.1x by 2024 from 2.7x in 2023, although short-term improvement in operating profitability is likely to be limited amid uncertain economic conditions. *(how many years it would take for a company to pay back its debt)* KEY RATING DRIVERS Stable Home-Appliance Margin: We expect the home-appliance and air-solution segments to continue to generate stable margins, supporting LGE\'s overall margin. LGE maintains a robust position in the global home-appliance market, driven by its competitiveness in the high-end segment, a diverse product profile and strong brand. LGE\'s dual-track strategy, which targets the premium and mid-range segments, has expanded its customer base, leading to revenue and margin improvement in 2023. LGE also plans to focus on increasing B2B sales, which may improve operating stability. TV Margin Recovery Continues: LGE\'s continued shift towards the organic light-emitting diode (OLED) TV segment supports revenue growth and operating profit, making up for weak liquid crystal display (LCD) performance. It projects its OLED TV shipments to reach 3.8 million units in 2024 from 3.0 million in 2023. LGE\'s strategic shift towards a platform-based media and entertainment business that uses its own platform called webOS, aims to tap the expanding content and services market. However, meaningful improvement may require time given the challenging economic outlook. Continuous Growth in Vehicle Components: LGE\'s vehicle components solution (VS) division continues to expand, with a mid-KRW90 trillion order backlog as of end-2023. The business offers LGE diversification benefits as its revenue increased by 17.3% in 2023, to account for 12% to LGE\'s consolidated revenue. Despite concerns of a slowdown in demand in the automotive parts industry, we forecast VS\'s revenue to increase strongly by a low-teens percentage in 2024 on a larger order backlog. Continued recovery in the global auto market and increasing demand from a structural shift towards electric vehicles will support the VS margin over the longer term. Display Loss Weighs on Profitability: We forecast LGD to narrow its operating loss to around KRW500 billion in 2024, from KRW2.5 trillion in 2023, due to increasing OLED panel shipments for both large and small displays and a gradual improvement in LCD panel demand and price for IT products. However, a turnaround in operating profit is likely to be delayed to 2025 given continued oversupply in the display-panel sector amid weak consumer sentiment. Conservative Balance Sheet: Fitch estimates LGE\'s proportionately consolidated EBITDA leverage to improve to 2.1x in 2024 from 2.7x in 2023, with a gradual recovery in operating cash generation and improvement in LGD\'s operations. LGD\'s recent equity sale that raised KRW1.3 trillion will also support deleveraging. While LGE\'s capex will remain stable at around KRW4.1 trillion in 2024, LGD will keep its capex minimal at below KRW3.0 trillion as it prioritises balance-sheet strength. Fitch continues to expect LGE\'s management to tightly control the balance sheet, keeping a large liquidity buffer. DERIVATION SUMMARY LGE\'s credit profile remains supported by its solid market position in the home-appliance and TV segment and growing VS business. The exit from the unprofitable handset business has added stability to the company\'s operation in the past. LGE\'s home-appliance business was resilient during the Covid-19 pandemic and maintained a high margin due to its technological leadership, strong position in the high-end market and well-established brand name, although the recent weak economic environment has hampered recent operating performance. Robust growth prospects in the VS business, which specialises in motors, inverters and infotainment systems for the automotive industry, are also likely to support the company\'s long-term growth after component shortages in the automotive industry were resolved. We believe the business profile of LGE is comparable with that of APAC peers rated in the \'BBB\' category, Xiaomi Corporation (BBB/Stable) and Lenovo Group Limited (BBB/Stable). LGE\'s profitability is similar to the mid-single-digit EBIT margin of Xiaomi and Lenovo. LGE\'s exposure to the capital-intensive and highly cyclical display-panel business is mitigated by a stronger balance sheet and higher financial flexibility than peers. [[Fitch Affirms LG Electronics at \'BBB\'; Outlook Stable (fitchratings.com)]](https://www.fitchratings.com/research/corporate-finance/fitch-affirms-lg-electronics-at-bbb-outlook-stable-27-03-2024) **LG Moving To Appliance Subscription Model As Profits Tank** *Channelnews* / David Richards/ Apr 8, 2024 LG Electronics is looking to move to a new model to generate revenue after their recent profit fall, the move will see the Company allow consumers to get access to appliance subscriptions and TVs via an expanded subscription model. Over the weekend the business said that they plan to accelerate the shift in the home appliance paradigm by expanding its subscriptions business, which allows customers to select desired home appliances and services they want via a subscription model. The move could strip revenue from retailers, and comes as profits fell in the last quarter at LG. While Samsung profits are rolling in, archrival LG Electronics profits are falling with the business tipped to report a 11% year on year decline despite sales of its home appliances growing, one division that is struggling is their wholesale display and TVs business, despite Samsung moving to sell OLED TVs with panels sourced from LG. LG operating profit for the January-March period came in at A\$1.49 billion, down 11% from a year ago, according to the company's earnings guidance released over the weekend. But this was still above the consensus of 1.28 trillion won predicted by local analysts, at market intelligence firm FnGuide. Sales were expected to have increased 2.2 percent year on-year which would be a first-quarter record for the company. The downturn in profits comes as arch rival Samsung Electronics who will today release their new 2024 TV range in Australia, predicted a more than tenfold increase in its operating profit for the January-March period, signalling a dramatic resurgence in its semiconductor business on rebounding demand for memory chips. Samsung's first-quarter operating profit is estimated to be around A\$7.49 billion, up 931% from a year ago, according to its earnings guidance. The amount surpassed the consensus of 5.26 trillion won predicted by local analysts, as provided by the market intelligence firm FnGuide. LG management claim that the operating profit for the January-March period fell due to rising material costs and intensifying market competition. LG attributed the highest first-quarter sales result to its new business strategies, such as subscriptions from their WebOS operating system, and expanded business-to-business models meanwhile their retail consumer business struggling. Last year LG Electronics outlined its ambition to grow revenue from US\$51 billion company to US\$78 billion over the next six and a half years, due in part to advertising streamed to its TVs and subscription services for its appliances. "LG will innovate with a platform-based service business model that continuously generates profits, such as content and services, subscriptions and solutions, to the hardware-oriented businesses, which generate sales and profits at the time of purchase," the company said at the time. LG called this a "customer engagement" centred business model that relies on appliances already present in customers' homes, such as 200-million strong fleet of its smart TVs currently already in use. Those tellies, including the premium end OLED and QNED TVs, will soon have content, services and product ads expanded in an attempt to turn the company into a media and entertainment service provider. Back in 2022 LG Electronics revealed a scheme called "Evolving Appliances For You" that promised software upgrades to home appliances. The company offered the example of a family that moves to a different home, and different climate, and upgrades its clothes drier with routines suited to local conditions. The entrance to subscription media comprises part of what CEO William Cho claims is a transformation for LG to a "smart life solutions company," a goal he's hoping to hit by 2030. LG Electronics has outlined its ambition to grow revenue from \$51 billion company to \$78 billion over the next six and a half years, due in part to ads streamed to TVs and appliances. "LG will innovate with a platform-based service business model that continuously generates profits, such as content and services, subscriptions and solutions, to the hardware-oriented businesses, which generate sales and profits at the time of purchase," the company claims. LG called this a "customer engagement" centred business model that relies on the 200 million appliances and TVs already present in customers' homes. The 2024 LG TVs including the premium end OLED and QNED models, have a new webOS which has been expanded in an attempt to turn the company into a media and entertainment service provider up against free to air TV services. In 2022 LG revealed a scheme called "Evolving Appliances For You" that promised software upgrades to home appliances. The company offered the example of a family that moves to a different home, and different climate, and upgrades its clothes drier with routines suited to local conditions. The new subscription models have become the company's key driving forces in overcoming uncertainties such as delays in market demand recovery. Diversifying its home appliance product lineups, along with their premium OLED TVs boosted the company's overall sales for the January-March period, the company claimed in their lates filings. The company claims that they will pursue a dual-track strategy from this year --- focusing on OLED TVs and premium LCD QNED TVs --- to increase competitiveness in the global TV market. LG also said it will also continue investment in promising business sectors to secure future growth engines. [[LG Moving To Appliance Subscription Model As Profits Tank -- channelnews]](https://www.channelnews.com.au/lg-moving-to-appliance-subscription-model-as-profits-tank/)