LG Electronics (066570) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue increased 8.5% year-over-year to KRW 21.69 trillion, driven by core businesses (home appliance, TV, IT) and incubating businesses like webOS, despite weak EV market demand.

• Operating profit rose 61% year-over-year to KRW 1.20 trillion, with margin improvement from 3.7% to 5.5%, aided by B2B expansion and cost optimization.

• Net income grew to KRW 629.5 billion, up from KRW 195.3 billion in 2Q23.

• The company is focused on balanced, qualitative growth, business model transformation, and expanding B2B, including HVAC, automotive electronics, and direct online sales.

• Innovation in business models and expansion of subscription and webOS businesses are key priorities.

Financial highlights

• Q2 net income was KRW 629.5 billion, with operating cash flow at KRW 2.6 trillion and net cash flow at KRW 1.24 trillion.

• Cash and cash equivalents increased to KRW 8.55 trillion at quarter-end, up KRW 1.5 trillion from the previous quarter.

• EBITDA reached KRW 2.04 trillion, up from KRW 1.53 trillion in 2Q23.

• Assets stood at KRW 63.13 trillion, liabilities at KRW 37.9 trillion, and equity at KRW 25.25 trillion as of Q2 end.

• Gross margin improved to 26.1% in 2Q24 from 24.4% in 2Q23.

Outlook and guidance

• Continued year-over-year growth expected in home appliance and TV, with auto parts sales recovery anticipated.

• Profitability to be maintained through global operation optimization, despite potential logistics and marketing cost increases.

• B2B business share targeted to reach 40% of sales by 2030; currently at 34-35% in H1 2024.

• Mid- to long-term strategy targets qualitative growth, business model transformation, and B2B expansion, including recent acquisition of Athom.