Image Source = Yonhap News
[아시아경제 김흥순 기자, 정현진 기자] LG Electronics achieved record-high performance last year as demand for home appliances and IT devices increased due to the spread of untouch (non-face-to-face) due to Corona 19.
LG Electronics announced on the 29th that last year’s consolidated operating profit increased 31.1% year-on-year to 3.19 trillion won. This is the first time that annual operating profit has exceeded 3 trillion won. Sales also reached a record high of 6,262 trillion won, a 1.5% increase from the previous year.
In the fourth quarter of last year, operating profit increased by 538.7% year-on-year to 650.2 billion won, and sales during the same period rose 16.9% year-on-year to 18,780.8 billion won. The operating margin is 3.5%. Sales, operating profit, and operating margin were all the highest in the fourth quarter. Sales exceeded 18 trillion won for the first time in the previous quarter.
Household appliances, driving maximum performance
By division, the H&A division in charge of household appliances showed outstanding performance. Annual sales reached 22 trillion 271 trillion won and operating profit 2,352.6 trillion won, respectively, achieving record highs. The annual operating margin (10.6%) also recorded double digits for the first time. The company explained that the sales of new home appliances represented by steam appliances such as stylers, dryers, and dishwashers increased, and the sales of the rental business expanded.
The electrical equipment business (VS) suffered from the shutdown of automakers in North America and Europe early last year. However, with the normalization of operations from the second half of the year, demand for auto parts returned to recovery, and sales of new projects increased.
2021 LG OLED TV lineup[사진=LG전자 제공]
Consumer electronics and TV boom in the fourth quarter of last year, smartphone stagnation
In the case of the H&A division, the fourth quarter of last year’s performance by business division was 5,5402 trillion won in sales and 299.6 billion won in operating profit, the highest in the fourth quarter. Sales at home and abroad showed double-digit growth compared to the same period last year, respectively, and operating profit increased 145.2% compared to the same period last year.
The HE division, which is in charge of the TV business, recorded sales of 4.283 trillion won and operating profit of 204.5 billion won in the fourth quarter of last year. Sales increased in major markets such as North America and Europe, recovering to 4 trillion won in sales in eight quarters. Operating profit increased by 102.5% compared to the same period last year due to the increased sales portion of premium products such as OLED TVs and nanocell TVs, although LCD (liquid crystal display) panel prices increased significantly.
The MC business division, which is in charge of smartphones, posted an operating loss of 248.5 billion won in the fourth quarter of last year, which increased from the previous quarter. On the other hand, the VS division reduced its operating deficit in the fourth quarter of last year to 2 billion won, brightening the prospect of a turnaround this year. In addition, the BS Business Division, which is in charge of business-to-business transactions (B2B), recorded sales of KRW 1.5 trillion and operating profit of KRW 70.3 billion.
Strengthening advanced technologies such as AI, 5G and mobility this year
LG Electronics plans to create growth and change based on customer value by incorporating core technologies such as artificial intelligence (AI), 5G, Internet of Things (IoT), and mobility in all business areas this year. The company plans to expand sales of premium products such as sanitary appliances, space appliances, and OLED TVs, and actively respond to the demand for products caused by the spread of Untact.
However, it is expected that the market environment will be a burden for household appliances. The H&A division said, “We plan to maintain profitability through appropriate response to market changes to maintain sales growth and improve cost structure and optimize resource input.”
The TV market expects global demand to continue as the time spent at home increases. The HE business division plans to increase sales and maintain profitability by expanding sales by focusing on premium products such as OLED TVs, nano cell TVs, and ultra-large TVs.
The VS Business Division is planning to secure the basis for generating profits to turn profits this year. In addition, in order to increase business competitiveness, the company plans to strengthen its vehicle software capabilities and stabilize’LG Magna E-Powertrain’ (tentative name), a joint venture for electric vehicle parts, early.
The BS Business Division plans to expand sales and improve profitability with competitive products. The IT business will actively respond to increased demand from face to face, and the information display business will focus on targeting specific major customer groups such as education and companies. The solar power business also set a goal to expand sales by strengthening product competitiveness.
The mobile business of the MC division, which has accumulated a deficit of 5 trillion won for several years, is considered to be the time to make the best choice by calmly judging its current and future competitiveness. LG Electronics said, “We are carefully examining the direction of business operation with all possibilities open now.”
Reporter Kim Heung-soon [email protected]
Reporter Jeong Hyun-jin [email protected]