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| Cho Joo-wan, CEO of LG Electronics, announces the company's goal of achieving annual sales of $77 billion by 2030 during a press conference at LG Science Park in Seoul, Wednesday. Courtesy of LG Electronics |
CEO vows to transform company into smart life solution provider
By Baek Byung-yeul
LG Electronics aims to achieve 100 trillion won ($77 billion) in sales by 2030 by transforming itself into a smart life solution company, going beyond its existing brand image as a home appliance maker, its CEO said, Wednesday.
To that end, LG will earmark 25 trillion won for R&D, 17 trillion won for facility investments and 7 trillion won for strategic investments over the next eight years, totaling over 50 trillion won until 2030.
"LG Electronics will become a Smart Life Solution Company that connects and extends customers' experiences in every space of their lives, from home and commercial spaces to the virtual reality world such as metaverse," Cho Joo-wan, CEO of LG Electronics, said during a press conference at LG Science Park in Seoul.
The CEO said the company came up with the vision in line with major changes taking place in the global business environment.
"In the end, all the answers we are looking for can be found in the market and customers. I have spent a lot of time and effort traveling to 23 countries around the world since I took the CEO seat early last year and noticed three remarkable changes that are occurring such as servitization, where products and services combine to create new value, digitalization that many companies are pursuing and the rapid electrification trend of the automotive market," Cho said.
To respond to these global market changes, the company aims to innovate its business model in the non-hardware sector and grow in the business-to-business (B2B) sector, such as the automotive electronics business. New business areas that the company aims to take on will be digital healthcare and electric vehicle (EV) charging, which are areas with high potential.
"By doing so, we will achieve 'triple seven' in 2030, which is an average annual growth rate of more than 7 percent, operating profit margin of more than 7 percent and growing corporate value more than seven times and increase sales to 100 trillion won from 65 trillion won last year," the CEO said.
The company plans to transform its revenue model from hardware sales to a recurring model that combines hardware, content and services.
In the TV business, LG plans to invest 1 trillion won over five years to strengthen the content competitiveness of LG Channels, the company's exclusive and free streaming service, to provide differentiated experiences to users of its smart TVs.
LG Channels has grown from 20 million users in 24 countries in 2022 to 48 million users in 29 countries this year. The company will further increase the third-party supply of its webOS platform, its own smart TV operating system, and supply it to various platforms such as automobiles as well as other TV makers.
In the B2B sector, LG said it aims to become a top 10 global automotive electronics company by doubling the sales of its vehicle component solutions (VS) unit to 20 trillion won by 2030. The VS unit supervises the in-vehicle infotainment system business and succeeded in turning a profit in 2022 with an operating profit of 169.6 billion won.
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