LG Electronics outlines Future Vision 2030 at investor forum

LG Electronics is undergoing a significant transformation, aiming to become a "Smart Life Solution Company" by leveraging its expertise in home appliances.

This initiative is part of the company's "Future Vision 2030" strategy. CEO William Cho discussed the company's progress and strategic direction at an investor forum held at LG Sciencepark in Seoul.

Top executives, including CFO Kim Chang-tae and CSO Lee Sam-soo, joined CEO Cho to outline the ongoing transformation efforts to investors and analysts at the event. The meeting was also available for viewing via a live stream on LG's YouTube channel.

LG's Future Vision 2030 aims to enhance customer experiences across various sectors, including residential, commercial, mobility, and virtual platforms. Underpinning this vision are ambitious "Triple Seven" targets, which include a 7% average growth rate, a 7% operating profit, and an Enterprise multiple (EV/EBITDA) of 7.

William Cho stated, "Over the past year, we have been steadily laying the foundation for achieving our future vision, and we take pride in creating 'structural changes' and 'sustainable outcomes' in various areas. With strong confidence and a sense of responsibility, we will continue to advance towards our goals."

LG has identified four strategic directions for business portfolio innovation. The first direction involves maximising the full potential of existing core businesses like home appliances and televisions. Efforts are being made to integrate subscription services and expand direct-to-consumer (D2C) sales channels, which have led to an increase in domestic and overseas home appliance sales.

The second direction focuses on expanding platform-based service models. The company aims to generate revenue from content, advertising, and services through the wide distribution of LG products. For instance, the webOS advertising and content business has grown significantly, showing a 64% annual growth rate since 2018.

In terms of accelerating B2B business growth, LG is making strides in areas such as vehicle components, HVAC systems, and smart factories. The company plans to increase the B2B share of its total revenue to 45% by 2030. Current figures indicate that the B2B share has grown from 27% in 2021 to 35% in the first half of this year.

The vehicle component solutions business has secured an order backlog exceeding KRW 100 trillion (USD $74 billion or AUD $109 billion). LG is also expanding its production facilities globally. In the HVAC sector, high-efficiency inverter and heat pump technologies are driving growth, and the company plans to target the cooling systems market for AI data centres.

LG is also investing in emerging business areas, such as commercial robotics and electric vehicle charging solutions. CEO William Cho highlighted the growth of LG's home appliance subscription service, which surpassed KRW 1 trillion (USD $740 million or AUD $1.10 billion) in annual sales last year, describing it as a "unicorn business."

The webOS-based advertising and content business is projected to become the next "unicorn," with this year's revenue expected to exceed KRW 1 trillion (USD $740 million or AUD $1.10 billion). To support this growth, LG plans to invest over KRW 1 trillion (USD $740 million or AUD $1.10 billion) by 2027 and expand its partnerships and services.

In the HVAC sector, the chiller business is targeting the AI data centre cooling market, with an average annual growth rate of over 15% over the past three years. LG aims to leverage its expertise to address increasing demands for cooling solutions in data centres.

CEO Cho stated, "By 2030, 50% of total sales and 75% of operating profit will come from B2B, platform-based, and new businesses. We will ensure that LG's new value proposition is recognised by all stakeholders, securing sustainable growth and profitability over the long term."