LG Electronics (066570) Q3 2024 earnings summary

Executive summary

• Achieved Q3 2024 revenue growth of 10.7% year-over-year to KRW 22.18 trillion, led by strong appliance sales in emerging markets, OLED TV growth, and expanding platform and subscription services.

• Operating profit declined to KRW 751.9 billion 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 increase by 2030, with ROE of at least 10% by 2027 and a revenue goal of KRW 100 trillion.

• Discontinued battery pack business in 2024, impacting reported results.

• Continued innovation in business portfolio, focusing on platform-based and B2B businesses, and acquired 80% of Athom Holding B.V. to strengthen smart home platform capabilities.

Financial highlights

• Q3 2024 consolidated sales: KRW 22.18 trillion, operating profit: KRW 751.9 billion, net income: KRW 90.2 billion, EBITDA: KRW 1,745.1 billion, gross margin: 24.3%.

• For the first nine months of 2024: revenue ₩64,967 billion, operating income ₩3,284 billion, net income ₩1,082 billion.

• Cash and cash equivalents at Q3 end: KRW 7.69 trillion, down from KRW 8.49 trillion at 2023 year-end.

• Assets at Q3 end: KRW 64.3 trillion, liabilities: KRW 39.9 trillion, equity: KRW 24.4 trillion.

• R&D expenses for the period: KRW 3,441 billion, representing 5.3% of sales.

Outlook and guidance

• Q4 expected to remain challenging due to delayed demand recovery, market uncertainties, and geopolitical risks, including U.S. election and oil price volatility.

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

• Plans to achieve year-over-year revenue growth by expanding home appliances, vehicle components, and introducing new products tailored to local markets.