LG Electronics announced that its consolidated revenue for the first quarter of 2024 was 21.959 trillion won, with an operating profit of 1.3329 trillion won.
Revenue reached its highest level for a first quarter ever. The introduction of new business models, such as subscriptions, and the significant growth opportunities in its B2B (business-to-business) sector have been key to overcoming uncertainties like delayed market demand recovery. From a product perspective, LG maintained strong competitiveness in the premium market by highlighting differentiating factors such as AI, energy efficiency, and design. Additionally, the company’s strategy to enhance its product and price coverage of the volume zone lineup, responding to the polarization of market demand, has also proven effective.
Despite intensified market competition, operating profit also showed steady profitability. Operating profit for the first quarter exceeded 1 trillion won for the fifth consecutive year since 2020. The qualitative growth driven by the content/service business utilizing hundreds of millions of products globally, as well as direct-to-consumer (D2C) sales, positively contributed to overall operating profit. Efforts to stabilize resource investments, raw material and logistics costs, and achieve flexibility in global production operations have also contributed to stable profits.
The home appliance business, which serves as a cash cow, has seen growth driven by premium new products launched in the first quarter, such as the clothing care product ‘All New Styler’, the all-in-one washer-dryer ‘Wash Combo’, and the versatile and high-capacity washer-dryer ‘Wash Tower’. The strategy of expanding the volume zone lineup to meet the changing demand characteristics of overseas markets is achieving good results. The expansion of B2B sectors like HVAC (heating, ventilation, and air conditioning) and built-in solutions is also steadily continuing.
LG plans to accelerate its home appliance paradigm shift through subscription services that allow customers to choose their desired appliances and services that fit their lifestyle. In preparation for the AI appliance era, LG is also pushing for an evolution towards empathetic intelligence appliances that go beyond simple artificial intelligence, offering more differentiated customer experiences.
The automotive business is showing progressive revenue growth based on the substantial backlog of orders it has secured. The backlog is expected to exceed 100 trillion won this first half of the year, up from the mid-90 trillion won range at the end of last year. The vehicle infotainment segment, which accounts for the majority of revenue, plans to focus on expanding differentiated products while enhancing software capabilities. LG Magna e-Powertrain, which successfully turned to profitability last year, aims to accelerate growth through an increase in orders from the European and Asian markets, while the automotive lamp subsidiary ZKW plans to secure next-generation product capabilities while streamlining its business structure.
The TV business has seen sustained growth in webOS content/service following the release of new products for 2024, which have significantly enhanced AI performance. LG will fully deploy a dual-track strategy featuring the world’s top OLED TV and premium LCD QNED TV starting this year. Additionally, LG aims to cultivate the webOS platform business into a significant revenue-generating venture with expectations of high profitability from product sales.
The business solutions sector continues to innovate customer experiences with strategic products such as the LG Gram with on-device AI and gaming monitors. This year, LG will not only secure competitiveness in the commercial display business but also continue investments in future growth areas like robotics and electric vehicle charging, while accelerating the early realization of promising new ventures.
The provisional results for Q1 announced this time are based on the Korean International Financial Reporting Standards (K-IFRS). LG Electronics plans to announce its consolidated net profit for the first quarter of 2024 and performance by business unit during the earnings presentation scheduled for later this month.
By Lee Sang-jin daedusj@autodiary.kr