Last year’s sales of 63,2638 billion and operating income of 3,191.8 billion
In the fourth quarter, sales increased by 16.9% and operating profit by 536.6%.
Premium home appliances lead the record high
LG Electronics achieved the best performance ever last year. It set new records in annual sales and operating profit. Non-face-to-face demand increased due to the spread of the novel coronavirus infection (Corona 19), and the sales of premium products such as new home appliances and OLED TVs increased significantly.
In the fourth quarter of last year, LG Electronics also recorded a record-high quarterly in sales. Meanwhile, Jinx’Sanggo Ha-Je’, whose performance in the second half was slower than in the first half, also broke.
○4th quarter back feeling… Highest performance ever
LG Electronics announced on the 8th that it was tentatively counted last year to have sales of 63,2638 billion won and operating profit of 3.191.8 billion won. It exceeded both the sales of 62.3 trillion won in 2019 and the operating profit of 2.7 trillion won in 2018.
Last year, LG Electronics’ sales and operating profit increased 1.5% and 31%, respectively, compared to 2019 (sales 62,306 billion won and operating profit 2,432.9 billion won). Since 2017, when it posted sales of 61.396.3 billion won, it has continued its sales march over 60 trillion won for four consecutive years. The operating margin reached 5% for the first time. This is due to the decrease in in-person marketing costs and the increase in online sales.
It is an analysis that LG Electronics’ record-breaking performance was mainly due to expanding sales in the fourth quarter. Sales in the fourth quarter were 18,782.6 billion won, up 16.9% from last year. This is the highest quarterly record. During the same period, operating profit was 647 billion won, a 536.6% increase from the same period last year.
○New home appliances lead, TV pushes
The spearhead of the highest performance was the H&A (Home Appliance & Air Solution) business headquarters in charge of the home appliance business. Although the performance of each business division was not disclosed on the same day, it is known that sales of new home appliances such as clothing managers increased, resulting in annual sales of about 22 trillion won and operating profit of 2.3 trillion won. Only in the fourth quarter, when sales were relatively low, recorded sales of over 5 trillion won, the highest ever. The HE (Home Entertainment) business headquarters in charge of TV is reported to have recovered 4 trillion won in sales in eight quarters. This is the influence that 48-inch OLED TVs became popular.
LG Electronics’ performance has been good in the first half of each year, but has been showing a tendency to falter in the second half. Although LG Electronics ranked first in the world’s home appliances in the first half of the year, after a large-scale event such as’Black Friday’, it gave the top spot to Whirlpool in the US.
Last year, LG Electronics ranked first in sales on a cumulative basis in the third quarter. This time, it is analyzed that LG Electronics will have beaten Whirlpool in the fourth quarter as well. The variable is the exchange rate. The strong won is not favorable for LG Electronics.
○ This year’s battlefield performance is expected to improve
LG Electronics’ future new growth business, the VS (electrical equipment) business division, decreased its losses for the second consecutive quarter.
Last month, LG Electronics announced the establishment of a powertrain joint venture with Magna International, Canada, the world’s third largest auto parts company. With this, it is possible to complete the electrical equipment business portfolio (powertrain, light, infotainment). It is reported that the MC division, which is in charge of the mobile phone business, had poor 4Q results.
In the stock market, it is predicted that this year, LG Electronics will break the record once again. The consensus, the average of the earnings estimates for securities companies, is sales of 67,3123 billion won and operating profit of 3,6563 trillion won. Some securities firms are expected to exceed 4 trillion won in annual operating profit.
Kim Ji-san, head of the Research Center at Kiwoom Securities, said, “Non-face-to-face and home demand is expected to continue throughout the first half of the year.”
Reporter Lee Soo-bin [email protected]