LG Electronics (066570) Q3 2024 earnings summary

Executive summary

• Achieved Q3 2024 year-over-year revenue growth, driven by strong appliance sales in emerging markets, OLED TV growth, and expanding platform and subscription services, while operating profit declined due to higher logistics, LCD panel, and fixed costs from delayed EV component sales.

• Announced Value-up plans targeting 7% annual growth, 7% operating profit, and a sevenfold EV/EBITDA multiple by 2030, with ROE of at least 10% by 2027.

• Continued to innovate business portfolio, aiming for KRW 100 trillion revenue by 2030 and a shift toward platform-based and B2B businesses.

• Revenue for the first nine months of 2024 was ₩64,967 billion, down from ₩82,263 billion in 2023, reflecting a contraction in sales across several segments.

• The company discontinued its battery pack business in 2024, impacting reported results.

Financial highlights

• Q3 2024 consolidated sales: KRW 22.18 trillion, up 10.7% year-over-year and 2.2% sequentially.

• Operating profit: KRW 751.9 billion in Q3 2024, down from KRW 1,197.2 billion in Q2 2024 and KRW 950.1 billion in Q3 2023.

• Net income: KRW 90.2 billion in Q3 2024, a significant decrease from KRW 629.5 billion in Q2 2024 and KRW 485.2 billion in Q3 2023.

• Gross margin for Q3 2024: 24.3%; for the first nine months: 24.7%.

• Cash and cash equivalents at Q3 end: KRW 7.69 trillion, down KRW 862.2 billion from the previous quarter.

Outlook and guidance

• Q4 environment remains challenging with persistent demand delays, market uncertainties, and risks from slow interest rate cuts and oil price volatility, but global shipping rates are stabilizing.

• Plans to achieve year-over-year revenue growth by expanding home appliances and vehicle component businesses, focusing on high-margin products, efficient marketing, and optimized operations.

• Strategic focus on expanding AI, smart home, and vehicle component solutions, with increased investment in R&D and digital transformation.