LG Electronics CEO William Cho has announced that by 2030, 52% of the company's revenue and 76% of its profits will come from the business-to-business (B2B) sector. Subscription services, the webOS platform, heating, ventilation, and air conditioning (HVAC), and automotive businesses are expected to drive LG's future growth.
According to ET News and Hankyung reports, Cho made these remarks at the 2024 Investor Forum in Seoul. He highlighted that in the first half of 2024, 35% of LG's revenue was generated from the B2B sector, contributing 55% of the company's operating profit. LG is currently undergoing a corporate transformation, shifting its focus towards the B2B sector and aiming to expand beyond its traditional growth engine of home appliances.
In recent months, Cho has met with investors in South Korea and abroad to discuss LG's business structure changes and share the progress of its 2030 Future Vision, announced in July 2023. At that time, he outlined a "777 goal," aiming for an annual average growth of 7% in both revenue and operating profit, and a sevenfold increase in enterprise value by 2030.
In the first half of 2024, LG achieved an 8% increase in revenue, a 6% operating profit margin, and a fourfold increase in enterprise value. The company identified four core growth drivers: subscription-based home appliance businesses, IoT platform services based on webOS and smart homes, and B2B businesses such as air conditioning, automotive, and smart factories. Additionally, new ventures like robotics and EV chargers are expected to contribute significantly to LG's growth.
Two years after launching a subscription service for large home appliances, LG's appliance subscription service revenue surged to KRW1.13 trillion (US$850 million) in 2023, surpassing the 1 trillion won mark.
LG expects webOS revenue to reach KRW1 trillion in 2024, a fourfold increase compared to 2021, making it another "unicorn" business after the subscription-based home appliance services. By expanding webOS and diversifying its product portfolio, LG aims to build an ecosystem that includes smart TVs, automobiles, smart displays, and digital signage.
Additionally, LG unveiled plans to invest significantly in the global market and enhance its content competitiveness through partnerships with leading content companies. The company is set to invest an additional KRW1 trillion by 2027. LG is also targeting the HVAC business for AI data centers as a key growth area.
Cho further emphasized that by 2030, more than 50% of LG's revenue and 75% of its operating profit will be derived from these four core business areas. These new focus areas are expected to be the cornerstone for increasing LG's enterprise value.
