LG announces second-quarter 2023 financial results

SEOUL, 28 July 2023 — LG Electronics Inc. (LG) today announced second-quarter 2023 consolidated revenue of KRW 20 trillion (USD 15 billion) with operating profit of KRW 741.9 billion (USD 563 million).

The company recorded the highest second-quarter revenues in company history. The second-quarter results underscore the success of the company’s strategy to drive continuous growth while strengthening its business competitiveness. The record revenue reflects the company’s actions to fundamentally improve its business structure by pursuing new platform-based service businesses and continuously expanding the business-to-business (B2B) segments. Profitability also was strong, although operating income was 6.3 percent lower than the second quarter last year, primarily due to a one-time second-quarter 2023 provision.

The company plans to drive further profitability improvements by optimising efficiencies and by preemptively meeting market demands through enhanced demand forecasting and manufacturing competitiveness. LG also plans to continuously strengthen its online brand store and direct-to-consumer businesses.

The LG Home Appliance & Air Solution Company generated second-quarter revenues of KRW 7.99 trillion (USD 6 billion) and an operating profit of KRW 600.1 billion (USD 456 million). Despite intensified market conditions, the business unit recorded strong profitability on the back of increased sales of high-demand products such as air conditioners and energy efficient heat pump-enabled products. The operating profit increased by 40 percent from the previous year, reflecting efficient cost structure management. The company will leverage its high-efficiency innovations including heat pumps and ESS as demand for green technologies grows in Europe, North America and around the world.  At the same time, the company sees the electrification trend as an opportunity for future growth in the HVAC business. In the third quarter, the company will launch new LG ThinQ UP 2.0 home appliances featuring hyper-personalisation, subscriptions and services. Certain mass-tier appliance lineups also will be expanded in response to market changes. The company plans to lead a paradigm shift in the home appliance industry by combining service-based business models with differentiated product competitiveness, while continuing efforts to increase efficiencies in production, purchasing and logistics for stable profitability.

The LG Home Entertainment Company recorded second-quarter revenue of KRW 3.15 trillion (USD 2.4 billion) and an operating profit of KRW 123.6 billion (USD 93.9 million). As challenging business conditions persist for the worldwide consumer electronics industry, the company continued to focus on improving operational efficiency and improving profitability by growing the content and service businesses based on LG’s webOS smart TV platform. The company intends to transform its TV business portfolio into a “media and entertainment service provider” by expanding content, services and advertising in differentiated products. The business unit also intends to solidify LG’s leadership in the ultra-large-screen TV market with the launch of the 97-inch LG SIGNATURE OLED M, the world’s first “wireless” consumer TV with Zero Connect technology. Also driving the premium TV market are expanded sales of the company’s popular new Lifestyle Screens.

The LG Vehicle component Solutions Company‘s second-quarter revenue was KRW 2.66 trillion (USD 2 billion), the highest second-quarter revenues in company history. However, an operating profit was KRW 89.8 billion (USD 68.2 million) excluding non-recurring expenses such as one-off provision, achieving the highest second-quarter operating profit in terms of business performance. But after the company’s operating profit margin included the one-time provision of KRW 151 billion (USD 114.7 million), related to General Motors’ recall of the Chevy Bolt EV, it resulted an operating loss of KRW 61.2 billion (USD 46.5 million). This provision reflects the increases in material costs that occurred during the recall period.

The business unit will continue its growth momentum by focusing on expanding its high value-added and high-performance business. The company’s order backlog is expected to reach KRW 100 trillion (USD 75.9 billion) by the end of the year, leading to sequential sales conversion resulting in profitable growth. In particular, in terms of profitability, it is positive that the company is experiencing economies of scale from sales expansion. As steady increase of electric vehicle demand is expected in the future, the company will actively seek new opportunities in future mobility areas, such as autonomous driving, software solutions and content, while securing stable profitability by expanding the portion of high value-added and high-performance products supplied to key automotive customers around the world.

The LG Business Solutions Company saw improved second-quarter revenues of KRW 1.33 trillion (USD 1.01 billion) with an operating profit of KRW 2.6 billion (USD 1.9 million). Both revenue and operating profit declined slightly from the same period last year due to the persistent softening of demand for IT products. From the third quarter, demand for IT products is expected to show a gradual recovery compared to the first half.  In the midst of this, LG plans to actively expand sales of monitors and laptops equipped with gaming features and OLED displays. In the commercial display business, the company will seek opportunities for further growth with customised solutions for various vertical markets, from hospitality and health care to education, retail and corporate.

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