Company Aims to Advance Business Portfolio by Transitioning to Platform-Based Service Business Model, Accelerating B2B Business and Procuring New Growth Engines
SEOUL, July 12, 2023 — LG Electronics (LG) declared its vision to transform from its current position as a top global home appliance brand to a “smart life solutions company” that can connect and expand customers’ diverse experiences while driving for global annual revenues of KRW 100 trillion by 2030.
In a landmark speech today at the LG Sciencepark in Seoul, South Korea, CEO William Cho outlined the bold vision built on three growth engines: pursuing new platform-based service businesses through the advancement of business portfolio, accelerating business-to-business (B2B) and exploring new business areas such as electronics vehicle charging and digital health. The CEO identified electrification, servitization and digitalization as key inflection points LG will focus on to achieve rapid mid- to long-term growth.
“LG will continue to pursue its bold vision to transform and leap forward as a smart life solutions company that connects and expands customers’ various spaces and experiences, rather than resting on its current position as the best home appliance brand that provides quality products,” said CEO Cho. “We will establish a brand-new LG by reinventing the way we work and communicate toward this goal.”
The CEO also highlighted the company’s financial objectives. “We will achieve Triple 7, which encompasses an average growth rate and operating profit of 7 percent or more as well as enterprise value to EBITDA ratio of 7,” said the CEO. “With the goal of raising sales from KRW 65 trillion last year to KRW 100 trillion by 2030, we will establish ourselves as a company that is properly recognized by the market and customers.”
Cho said LG will focus on the transition to the platform-based service business model, acceleration of B2B areas and procurement of new growth engines based on competitive edge as three pillars to focus on customer experience. By 2030, the proportion of these three pillars in sales and operating profit is expected to increase to more than 50 percent.
The company plans to invest more than KRW 50 trillion by 2030 for the qualitative growth of the business, including the advancing of the business portfolio led by the three new growth engines. This includes an R&D investment of more than KRW 25 trillion, facility investment of more than KRW 17 trillion and strategic investment of KRW 7 trillion.
The company is also accelerating the expansion of its B2B business, the CEO explained. LG’s rich understanding of customers as well as the know-how to communicate and empathize with customers that have been accumulated in the B2C business, which has seen continuous innovation over the past 65 years, will be fully expanded to commercial, mobility and virtual spaces.
Cho highlighted how LG is accelerating company-wide changes from corporate culture to brand communication at every customer contact point with the ultimate goal of becoming a brand that warms the hearts of customers and puts smiles on their faces while enabling customers to feel the value and philosophy of Life’s Good. The company is also driving ESG management activities to fulfill its responsibilities as a global corporate citizen.