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LG Electronics will also overtake Corona 19 in the fourth quarter. In the third quarter, consumption, which had been stagnant in the first half, soared in the second half and set a new record in operating profit through the ‘spent’ effect. It is a strategy to find. It also plans to lay the foundation for medium and long-term growth of the overall business, including digital capabilities.
LG Electronics said in a conference call for 3Q results on the 30th: “There is still a risk of economic volatility, such as tightening measures to restrict movement due to concerns about the reproliferation of Corona 19, but new ones will be created. business opportunities according to changes in consumption patterns due to the spread of non-face-to-face trends. Expected. ”
He added: “(In the fourth quarter), we expect a better performance compared to the previous year by strengthening online sales and marketing strategies. We plan to focus on strengthening global brand awareness by turning the crisis into an opportunity.”
LG Electronics posted sales of 16,919.6 billion won and an operating profit of 959 billion won in the third quarter. This is an increase of 7.8% and 22.7%, respectively, compared to the previous year. Sales ranked second in the prior quarter and operating profit was the highest in the third quarter. The outlook for the fourth quarter is also clear. The consensus for Q4 earnings is sales of 17.35 billion won and operating profit of 56.1 billion won. Compared to the same period last year, this was an increase of 7.7% and 397.2%, respectively.
Home appliances, the backbone of LG Electronics’ business, are expected to maintain growth in the first half of next year. The appliance posted an operating profit of 671.5 billion won and a double-digit operating margin of 10.9% in the third quarter. As the demand for hygiene and healthcare appliances increased and the demand for replacement of traditional appliances by ‘home economics’ increased, he also mentioned that “(in the short term) Corona 19 was more of an opportunity.”
An LG Electronics official said: “We will actively respond to the needs of consumers who have expanded the launch of new products by considering household appliances and hygiene and health care appliances according to the household economy as a factor. growth ”. After the third quarter, we plan to maintain double digit sales growth or more, optimize the inflow of resources and ensure profitability over the previous year. ”
The TV division is expected to intensify competition due to the peak season later this year, but will continue to improve profitability by expanding sales of premium products such as organic light-emitting diode (OLED) televisions. The policy will be implemented according to fluctuations in panel prices. Strengthen online strategies such as specialized online products and digital marketing. He also presented a positive outlook, saying: “Compared to competitors, premium sales are increasing and market dominance is gradually strengthening.”
An LG Electronics official said, “We plan to further strengthen specialty online products and digital marketing,” saying, “This is a positive sign as premium sales are increasing and market dominance is gradually strengthening in comparison with competitors. A strategy to gain market share in quality and expand dominance. To be continued. ”
The MC business division in charge of smartphones accelerates the deficit improvement by expanding the 5G line, strengthening cost competitiveness and targeting Huawei’s gap due to US sanctions. Also in the third quarter, the Operating losses were significantly reduced to 100 billion won, amid losses for 22 consecutive quarters, maintaining a positive atmosphere.
An LG Electronics official said: “We will strengthen our 5G line in major markets such as North America and Latin America to expand sales and constantly improve our business structure.” “We will expand our sales.”
As for Huawei’s sanctions, “the competition between companies trying to fill Huawei’s sales gap (unlike the US sanctions) will be quite fierce.” In Europe, 5G and a new form factor will be used to identify Huawei’s gap and promote additional sales. ”
VS’s Business Division in charge of electrical equipment has delayed performance improvement due to the aftermath of Corona 19, but plans to maximize sales by thoroughly managing the supply chain and ensuring profitability by improving the cost structure. Amid the recovery of the finished car market, high growth is expected in the connectivity field and the electric vehicle parts business. It seeks cooperation with advanced companies in the electric vehicle sector to strengthen its orientation in the Asian and North American markets.
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BS Business Division plans to actively respond to IT product sales opportunities, expand sales of strategic products such as premium digital signage, and strengthen the competitiveness of solar module products. With the spread of non-face-to-face trends, demand for IT products such as laptops and monitors will continue to rise, but investment in information displays and solar modules is expected to decline and price competition to intensify.
An LG Electronics official said: “Next year, it is difficult to expect as much demand as before Corona 19, but in the medium and long term, we will start operating a portfolio to become number one in the global market,” said a LG Electronics official. I will try in various ways to achieve continued market growth by internalizing digital capabilities. ”
