LG has announced financial results for the third quarter and they are the second best of this period in the history of the South Korean group, with revenues of $15,775 million and an operating profit of $759 million. Good results driven by its main home appliance business and vehicle solutions business, one of the company’s future growth drivers along with what comes from the growing commitment to B2B.
Third quarter operating profits increased by more than 30% both year-on-year and quarterly. The innovation of the company’s business model, which combines non-hardware-based solutions – such as content and subscription services – with traditional hardware products – such as home appliances and televisions – has contributed decisively to this high profitability. By developing and acquiring new growth engines, LG intends to invest in other types of businesses, which not only show great potential, but can also create synergies with existing ones within the company.
LG and its B2B strategy
The good financial results reflect the progress and execution of plans for 2030 of the company. A vision that has led to solid revenues and profits despite the prolonged economic slowdown. The pillars of the 2030 strategy announced last July focus on B2B expansion, the innovation of non-hardware business models, as well as the development and acquisition of new growth engines that allow LG to go further from an appliance company to become a Smart Life Solutionscapable of connecting and expanding various spaces and experiences.
Revenue growth was greatly enhanced by the expansion in B2B, including auto parts and HVAC systems, a key factor that has notably influenced this second-highest third-quarter figure in the company’s history. B2B revenue grew significantly to approximately 35% of total income of this year.
It is observed that B2B segments are less influenced by economic conditions than B2C, so thanks to this condition we can expect stable revenues and profits once this line of business is consolidated. Another merit is the “lock-in” effect that helps promote the development of a solid and long-term relationship with clients and consumers.
In this sense, LG plans to develop new growth opportunities in this area to go beyond the mere supply of B2B products, as well as expand business solutions to offer high added value in relation to the products supplied. The goal is to increase B2B revenue to more than 30,482 million dollars by 2030.
LG will continue to focus on accelerating its business portfolio transformation efforts in the fourth quarter, seeking to maintain high growth in B2B with vehicle component solutions leading the way, while increasing sales of key product lines through as the high season of the end of the year approaches. At the same time, the company plans to optimize efficiency through better demand forecasting to maintain stable profitability in the future.
