Good afternoon. My name is Won-Jae Park from Investor Relations. Thank you for joining our earnings call for the fourth quarter of 2024. With me are CFO and EVP of LG Electronics, Chang-Tae Kim, SVP of HS Company, I-kueon Kim, SVP of MS Company, Sang -ho Park, VP of BS Company, Choong-hyun Kim, VP of Former BS Company, Dong-Cha Lee, VP of Corporate Business Management, Choong-hyun Park, VP of Accounting, Hong-soo Lee, VP of Finance, Yang Yun Kim, and Head of ESG Strategy, Seong-Min Hong. Here's today's presentation agenda. First, our CFO will outline the overall performance of the fourth quarter and the outlook for 2025. Then, I'll present the Q4 results and financial highlights. Subsequently, each business will take turns to deliver its results and outlook. After that, I'll provide a briefing on the organizational redesign of 2025.
Finally, we will conclude with an overview of our ESG activities and achievements. Please note that all statements we make today regarding the financial result of the fourth quarter are subject to change in accordance with the final audit results. Uncertainties in the market and changes in strategies may cause our results to be different from the outlooks and forward-looking statements made today. Now, let us begin with the overall performance of the fourth quarter of 2024 and the outlook for 2025.
Good afternoon. My name is Chang-Tae Kim, CFO of LG Electronics. 2024 has been a year in which solid growth in sales and stable profits were achieved despite internal and external headwinds. External factors like soaring logistics costs and fluctuating exchange rates have impacted our Q4 and second-half profitability.
However, despite a global slowdown in demand recovery, we strengthened our market position and maintained sales growth through enhanced product competitiveness and differentiated promotions. In terms of operating profit, the subscription and webOS businesses, which are at the heart of our portfolio transition initiative, contributed to offsetting rising expenses, including fixed and logistics costs. I believe this is vital for improving our business performance and achieving our mid- to long-term goals. As the global economy transitions to a geo-economic era in 2025, stronger protectionism in major markets like the U.S., concerns over persistent inflation, and delays in rate cuts are likely to heighten uncertainties. Competition is expected to intensify as the demand recovery lags, compounded by inflation-triggered cost increases that may work against us. In response to these challenges, responsive measures centered on differentiated customer value are being developed and implemented for crisis management.
Firstly, we will secure fundamental competitiveness and continue to invest in future growth areas to identify opportunities that may arise amidst industrial changes. Strategic priorities will be considered in this process, and investment efficiency will be maximized through a selective focus. We will deliver sustainable results by realigning our execution strategies to adapt to changes in the market while maintaining consistency in our mid- to long-term direction towards achieving Future Vision 2030. We will mitigate the negative impact of additional risks such as the shift toward protectionism, the reshaping of the global supply chain, exchange rate fluctuations, and rising cost pressures by optimizing our supply chain, leveraging our production flexibility, and enhancing operational efficiency. By doing so, we aim to enhance our competitive edge across our businesses and turn this crisis into opportunities for solid growth and stable profitability this year.
Lastly, we will spare no efforts in maximizing shareholder value based on our business achievements by driving diverse initiatives from our value-up plans announced last year with strong accountability.
I'll now briefly review the Q4 performance of the enterprise-wide operations and each business. LGE's consolidated financial results for the fourth quarter of 2024 are KRW 22.76 trillion in sales and KRW 135.4 billion in operating profit. H&A recorded KRW 7.41 trillion in sales and KRW 117.3 billion in operating loss. HE recorded KRW 4.37 trillion in sales, KRW 37.3 billion in operating profit. VS recorded KRW 2.65 trillion in sales and KRW 20 billion in operating loss. Last but not least, VS recorded KRW 1.24 trillion in sales and KRW 123.1 billion in operating loss. Let's move on to the profit and loss and cash flow for Q4.
Reflecting financial income and expense, equity method gain and loss, other non-operating income and expense, corporate income tax, and income and loss from discontinued operations, we posted KRW 713.7 billion in net loss. Next, on cash flow. Q4 cash flow from operating activities was KRW 1.86 trillion, and cash flow from investment activities was negative KRW 1.24 trillion, resulting in net cash flow of KRW 807.3 billion. When reflecting cash flow from financial activities of negative KRW 926.6 billion, cash balance at the end of Q4 came to stand at KRW 7.57 trillion, a KRW 119.3 billion decrease from the previous quarter. Next is the key financial position and indicators for the Q4 of 2024. As of the end of Q4, our assets stand at KRW 65.6 trillion, liabilities at KRW 40.4 trillion, and equity at KRW 25.2 trillion.
In terms of leverage ratios, specifically liability to equity, debt to equity, and net debt to equity, we are maintaining a healthy financial condition. Now, let's turn the call over to each business for its Q4 result and the outlook for 2025. We will begin with H&A. Let me present the Q4 result of the H&A business. Despite the delayed recovery of global home appliance demand, we have maintained growth through the acceleration of our subscription business and differentiated promotions in Korea. Additionally, strong sales of new models in North America and our leadership in premium products in emerging countries have contributed to year-over-year growth. Operating profit has remained at a similar level year-over-year despite the unfavorable environment, including rising logistics costs thanks to sales growth and reduced marketing expenditure. Next, I'll discuss the annual outlook for the year 2025.
The recovery in the Korea market is expected to be delayed due to internal and external variables. Growth in the overseas market is anticipated to mirror 2024, but changes in U.S. trade policies may heighten uncertainties in global trade, which has traditionally relied on distinct roles among trading countries and regions. Our goal is to drive sales by introducing products tailored to regional needs and powered by AI and expanding our volumes and segments. We also aim to sustain sales momentum by growing our online and subscription businesses. Furthermore, we will maintain operating profit at or above last year's levels by optimizing productivity to reduce manufacturing and logistics costs while strategically managing competition-related expenditures. Next, I would like to share our views on the demand for the global home appliance market in 2025.
Beginning with the first quarter earnings release in 2024, we have been sharing our annual demand forecast to enhance the market understanding of the global home appliance sector. We update this forecast twice a year in the first and second half. By sharing our views, we aim to outline where we believe global demand is headed and help the market understand our responsive strategies. Please note that the data presented in this section reflect an outlook on combined market demand for refrigerators and washing machines, not projections of our appliance revenue affected by various factors including regional market share and competition. Actual market conditions may differ from this outlook due to various factors including the macroeconomic environment. Overall, we anticipate gradual growth in the global home appliance market in 2025, with a strong improvement in the second half than in the first across most regions.
However, increased protectionism and universal tariff plans likely to be endorsed by the second Trump administration may impact the global supply chain. Concerns over inflation and a slowing pace of interest rate cuts will further complicate uncertainties necessitating our continuous and thorough monitoring of the market. In response, we have optimized our global production footprint and are implementing various strategies tailored to regional needs. To address macroeconomic uncertainties and potential demand changes, both in terms of quantity and quality, we will employ our two-track strategy to respond to bipolarizing demand. Additionally, we will pursue opportunities in emerging and untapped markets to maintain our track record of solid business results achieved despite the challenges posed by the pandemic. Next is the Q4 result of home entertainment business. Sales grew quarter over quarter as we effectively responded to peak season demand.
The figures also show a rising trend year-over-year driven by higher sales, especially in Europe, EMEA, and Asia, along with the expansion of our webOS-based advertising and content businesses. Operating profit declined quarter over quarter primarily due to increased marketing investment during the peak season. However, thanks to the high profitability of the webOS business and rising sales of all the TVs, operating profit improved year-over-year. Now, let's turn our attention to the annual outlook for the year 2025. Geo-economic uncertainties in the global market persist, compounded by risks such as a strong dollar and rising protectionism. Market demand is projected to drop slightly year-over-year in the first half, with a gradual recovery expected in the second half, resulting in an annual level comparable to that of last year.
In response, we aim to drive sales by focusing on premium products, including all the TVs and QNED, while offering differentiated customer experiences through advanced AI features. Additionally, we will continue to grow webOS sales and profitability by investing in content for better usability, strengthening our capabilities in advertising, and expanding partnerships. Next, we will review the Q4 result of the vehicle component solutions business. Despite some delays in sales realization due to stagnant demand for EVs, we sustained growth momentum in sales both quarter over quarter and year-over-year, supported by a stable order backlog. Operating profit experienced a slight year-over-year decline due to higher investment in development driven by the rise in the number of awarded projects as well as R&D for SDVs. Now, let's turn our attention to the outlook for the year 2025.
Demand for automobiles is likely to decline slightly year-over-year due to risks such as changes in U.S. tariff policies. While demand for EVs is projected to experience a modest increase compared to last year, the overall level is expected to be weaker than earlier forecast. Despite the negative impact of stagnant EV demand, we will strive to stabilize profitability by maintaining sales volume supported by a healthy level of order backlog, improving our product mix, and optimizing operational expenses. Let me present the Q4 result of BS Company. In the IT business, despite efforts to boost sales, especially in gaming monitors during the year-end peak season, revenue declined year-over-year due to intensified competition. Conversely, the IT business saw year-over-year revenue growth fueled by increased sales of strategic and incubating products as well as the fine-pitch LED series.
Operating profit also declined year-over-year, impacted by lower selling prices resulting from intensified competition along with rising logistics costs and raw material prices. Looking ahead to the full year of 2025, market conditions suggest slight growth in monitor demand for the IT business compared to last year. The demand for PCs is expected to experience an uptick fueled by the widespread adoption of AI and anticipated enterprise PC replacements as Windows 10 reaches its end of life. For the IT business, demand for LED signage and hotel TV is also expected to grow. Against this backdrop, for monitors, we will focus on selling high-value-added products such as gaming and medical monitors. For PCs, we will cater to the premium market with AI-featured products like the Gram Pro while boosting sales with new budget-friendly offerings.
In the IT business, we aim to enhance the value chain of our existing operations to grow sales and enhance profitability. To facilitate our transition into a smart life solution company that connects and enhances customer experience across various living spaces, we are redesigning our business structure in line with our portfolio strategy to enhance synergy among businesses and improve future competitiveness. We have redesigned our organizations into solution companies that offer comprehensive customer experiences, and we aligned various levels within them to improve operational efficiency and ensure future growth. H&A Company has been renamed HS Company to provide solutions that enable new and valuable experiences across diverse spaces. The air solution business from H&A has been separated to operate as a standalone entity called ES Company with the aim of growing the HVAC business to reach the top-tier category.
Considering that HE Company aims to provide the best entertainment experience to customers through diverse media devices, it has been renamed MS Company, Media Entertainment Solution Company, integrating IT and ID businesses from BS Company to create synergy across the entire display value chain. Additionally, BS Company has been rebranded as VS Company, Vehicle Component Solutions Company to highlight its commitment to delivering solutions across the entire automotive ecosystem, moving beyond just supplying components. The organizational changes will be reflected in the earnings release starting from the first quarter of 2025. Last but not least, our ESG activities and achievements. LGE is widely recognized for its sustainable technologies and products, having been named the most sustainable brand in the US for HVAC solutions and appliances by the Green Builder Sustainable Brand Index published annually by Green Builder Media, a leading North American eco-friendly construction media outlet.
We have also been designated as a laboratory of excellence for three consecutive years by the Environmental Resource Association for our analytical capabilities and reliability. In addition, we are acknowledged for various initiatives aimed at improving the quality of life for everyone. We launched six new comfort kit products designed to simplify the use of home appliances. Furthermore, we were named one of the best employers for engineers by Forbes, and our Indian subsidiary was recognized as a great place to work for two consecutive years by GPTW. We also received the Minister of Employment and Labor award for promoting public-private partnerships, reflecting our 13 years of support for social enterprises. Our ESG activities have garnered recognition, achieving the highest score in our industry group in the S&P Global CSA in 2024 and securing inclusion in the Dow Jones Sustainability World Index for 13 consecutive years.
Additionally, we received an A rating for our fourth consecutive year in the 2024 ESG evaluation by the Korea Institute of Corporate Governance and Sustainability. As a smart life solution company, we will continue to strengthen our competitiveness in sustainable products and services, along with our various initiatives aimed at improving the quality of life for all. This brings us to the end of the fourth quarter earnings release and outlook for 2025. We will now take questions. Operator, please commence with the Q&A session.
지금부터 질의응답을 시작하겠습니다. 질문을 하실 분은 전화기 버튼의 별표와 1번을 누르시기 바랍니다. 질문을 취소하시려면 별표와 2번을 누르시면 됩니다. Now, Q&A session will begin. Please press star and one if you have any questions. Questions will be taken according to the order you have pressed the star and one. For cancellation, please press star and two on your phone.
처음으로 질문해 주실 분은 KB 증권의 김동원 님입니다. The first question will be provided by Dong-won Kim from KB Securities. Please go ahead with your question.
질문 기회 감사드립니다. 저는 전사 부문과 H&A 가전 질문 한 가지씩 드리겠습니다. 먼저 트럼프 행정부의 관세 정책과 통상 환경이 변화되면서 우리 LG전자에서 예상하시는 리스크와 대응 방안이 있으시면 공유 부탁 좀 드리겠습니다. 다음은 지난해 물류비 상승이 H&A 본부 이익에 다소 부정적 영향을 끼친 것으로 보입니다. 2025년 올해 물류비 전망을 어떻게 하고 계신지 의견 말씀해 주시면 감사드리겠습니다. 이상입니다.
Thank you for taking my question. I have two questions, one for the company and one for H&A. My first question goes for the company. It is likely that the Trump administration will levy high tariffs and there's going to be changes in the trading landscape. What will the risks be and how will you counter these risks? And my second question is about home appliance business.
The year 2024 saw a rise in logistics costs, which negatively influenced the profitability of H&A. How do you foresee the trend evolving in 2025?
첫 번째 질문은 CFO께서 해 주시면 좋을 것 같고요. 나머지 각 사업 본부별 관련된 내용은 경영 관리 담당들께서 답변해 주시면 좋을 것 같습니다. 네, 트럼프 행정부의 관세 정책에 대한 영향에 대해서 말씀드리자면 아직까지 트럼프 행정부의 관세 정책의 구체적인 일정 및 관세 인상률에 대한 공식 발표가 있는 것은 아니며 최근에는 점진적인 정책 변화의 가능성도 언급되고 있는 상황입니다. 다만 대선 기간 공개된 내용과 방향성에 따르면 트럼프 행정부는 미국의 주요 무역 적자국인 중국이나 멕시코, 베트남, 한국 등에 고율의 관세를 부과할 것으로 예상되고 있습니다. 이들 국가는 LG전자의 주요 생산 기지가 위치한 지역이고 만일 여기에 자국 산업 보호를 이유로 미국 수입 물량 제한, 즉 세이프가드 조치까지 취해진다면 우리 회사가 받을 관세 영향은 더욱 커질 가능성이 있겠습니다.
The first question will be answered by our CFO.
The Trump administration has not yet officially outlined the details on tariffs, such as the timeline and rates, and recently there have been reports on the possibility of a gradual rollout of the policy. But from what has been proposed during the presidential campaign, the administration will likely impose high tariffs on countries the U.S. has large trade deficits with, namely China, Mexico, Vietnam, and Korea, which also happen to be where our major production sites are located. The effects of these tariffs on LGE will be more pronounced if the administration goes a step further to impose import quotas or safeguard measures to protect its industries.
이러한 관세 인상 시 대부분의 주요 경쟁사가 엄청난 어려움을 겪을 수밖에 없을 것으로 생각됩니다만, 당사는 제품 생산에서 판매에 이르기까지 전체 밸류 체인의 최적화를 추진하고 잠재적인 부정적 영향을 최소화하기 위해서 각 상황 전개에 따른 시나리오별 대응 방안을 수립해 놓고 있습니다.
that can respond to one product from multiple production sites and operate optimal production sites based on cost competitiveness. Additionally, when necessary, we plan to disperse volumes through pre-production and collaborate with distribution companies to minimize risks. Though a majority of our key competitors will likely face similar headwinds against such tariff hikes, we will be meticulous in our response, optimizing our entire value chain from production to sales while developing measures against various scenarios in efforts to mitigate potential consequences. With regards to goods with high tariffs imposed, we will expand our swing production where multiple sites can be utilized while running optimal production sites in light of cost advantage. In addition, we will shift global production volumes via pre-production and work with our distributors in mitigating risks.
만일 관세 인상의 수준이 본질적인 공급망 구조의 변화를 필요로 할 경우에는 당사는 업계 최고 수준의 스마트 팩토리 구축 역량과 이미 성공적으로 운영 중인 미국 내 생산 시설의 운영 노하우 등을 활용해서 생산지 이전 및 기존 생산지별 캐파 조정 등 보다 적극적인 생산지 전략의 변화까지도 고려의 범위에 포함될 수 있을 것으로 생각하고 있습니다. 감사합니다.
When the hikes in tariffs call for a fundamental change in our supply chain, we will draw on our industry-leading expertise in smart factories and know-how in successfully operating US production sites, and we will be proactive in shifting our manufacturing strategies, such as adjusting capacity or relocating in cases where such may be called for. Thank you.
물류비 영향에 대해서 전망에 대해서 H&A에서 답변드리겠습니다. 2025년 물류비는 전년 대비 소폭 개선 예상이 되고 있습니다. 이는 주로 해상 물류비 인하 역량입니다. 지난해 홍해 이슈가 연간 지속되면서 선복이 전반적으로 부족한 상황에서 하반기부터 고운임이 형성되었습니다.
비록 아직 수에즈 운하가 통항 수준으로 운영되고 있지는 않지만 25년 글로벌 선복 수요는 2.8% 증가 대비 선복의 공급은 5.4% 증가 예상이 되고 있습니다.
Your question about logistics costs will be covered by H&A. We expect logistics costs to slightly improve in 2025 thanks to reduction in sea transportation costs. As the issues in the Red Sea continued throughout 2024, general shortage of shipping capacity resulted in high freight rates. Although the Suez Canal is still not operating at normal levels, global shipping demand is projected to increase by 2.8% in 2025, while shipping supply is expected to rise by 5.4%.
따라서 25년 하반기로 갈수록 해상 운임 추가 인하가 예상이 되며 당사는 이러한 수요 공급 환경의 변화를 반영하여 해상 운임 비딩 시 25년 상반기, 즉 반기 계약 위주로 진행을 하였고 하반기 추가적인 비딩을 통해서 해상 운임 경쟁력을 확보할 예정입니다.
해상 이외의 물류비 경우에는 지속적인 개선 활동을 추진하고 있으며 매출액 대비 전년 동등 이하 수준으로 전망하고 있습니다. 이상입니다.
As a result, further reductions in maritime freight rates are anticipated as we move into the second half of 2025, and in this context, we have focused on semi-annual contracts for the first half of 2025 when bidding for freight rates. We plan to conduct further bidding processes in the second half to ensure competitive pricing for maritime transport. As for logistic costs excluding maritime transport, we are continually undertaking improvement measures and believe they will remain at a similar or lower level compared to sales of the previous year. Thank you.
다음 질문 부탁드리겠습니다.
Next question, please.
다음으로 질문해 주실 분은 대신증권의 박강훈 님입니다. The following question will be presented by Gang-ho Park from Daishin Securities. Please go ahead with your question.
질문 기회 주셔서 감사드립니다. 대신증권의 박강훈입니다. 저는 인도 IPO 한 건과 그다음에 HE, webOS에 대해서 질문드리겠습니다. 먼저 인도 법인의 IPO가 지금 추진되고 있는데요. 현재 시점에서 IPO 진행 일정이나 향후의 일정에 대해서 공유 좀 부탁드리겠습니다. 또한 IPO가 성공할 경우에는 본사로 유입되는 자금이 있을 것으로 생각이 되고 있습니다. 이 자금의 활용 방안에 대해서 회사가 생각하시는 부분이 있으면 또 공유 부탁드리겠습니다. 투자가들이 좀 관심이 많은데요. IPO 되는 인도 법인의 밸류에이션을 회사가 어떻게 생각하고 계시는지, 또 상장 이후에 적정한 시가총액을 어느 정도로 고려하시는지 좀 공유가 되면 코멘트 부탁드리겠습니다. 두 번째는 HE, webOS인데요. 미래의 어떤 성장 요인으로 저희가 평가를 하고 있는데요. 2024년도 webOS 쪽의 매출과 수익성이 어땠는지 좀 궁금합니다. 또한 이것이 2025년도에는 매출과 수익성 목표가 어떻게 되는지 또 공유 좀 부탁드리겠습니다. 만약에 어려운 환경이 있을 때 2025년도 매출과 수익성을 목표로 달성하기 위해서 회사가 생각하는 구체적인 방안이 있으시면 좀 코멘트 부탁드리겠습니다. 감사합니다.
Thank you for taking my questions. I have two questions.
One for the company and one for HE. For the company, I have the question on the Indian IPO. Could you please share on the progress and the future milestones for the Indian IPO? And when the IPO is successful, I believe there is going to be an inflow of capital. Can you please share on your plans on using the capital raised? And third, I believe there's a lot of interest from investors. Could you please share your valuation of the Indian subsidiary and as well as the market value that you see after the IPO has taken place? My second question goes for HE with regards to webOS. We believe that webOS is a future driver for growth, especially in terms of profitability. Can you please share on your performance and profitability for 2024, as well as your outlook for 2025 as well?
And in cases where the environment deems to be difficult, can you also share on how you managed to realize the goals that you have outlined? Thank you.
인도 IPO 관련해서는 IR 담당 말씀드리겠습니다. 최근 인도 시장의 성장 잠재력에 대한 투자자 관심이 굉장히 높아지고 있고, 특히 주요 회사가 IPO를 했기 때문에 더 그런 것 같습니다. 강력한 인도 시장 내 입지와 차별적 경쟁력을 보유하고 있는 LG전자 인도 법인의 IPO 가능성에 대해서도 관심이 높아지고 있다는 걸 저희도 잘 인지하고 있습니다. 저희는 지금 2024년 12월 6일 날 인도 증권거래위원회의 IPO 관련 상장 예비 심사 서류를 DRHP라고 하는데 이미 12월 6일 날 제출을 했고요. 최종 상장 여부는 시장 상황 또는 사전 수요 예측 결과 등에 따라서 결정이 될 예정입니다. 이에 따라서 당사가 보유한 인도 현지 종속 회사인 공식적인 이름은 LG 일렉트로닉스 인디아 리미티드인데 지분 15%가 매각될 예정이고 구체적인 지분 매각 금액은 아시는 것처럼 아직 확정되지 않은 상황입니다.
세부적인 답변을 대신해서 당사 인도 법인의 위상과 사업 현황, 그리고 향후 계획에 대해서 간략하게 말씀드리면 좋을 것 같은데요. 전사 관점에서 인도 저희가 진출한 지가 27년 됐습니다. 생산과 판매 전 과정을 걸쳐서 이미 현지 완결형 사업 구조를 구축했고 그중에 가전 사업은 매우 중요한 성장의 축이라고 생각하고 있습니다.
Let me answer your question on the Indian IPO. The growth potential held by India has recently attracted many interests from investors. And following the IPOs of many major South Korean companies, we too are aware of the rising public interest on the possibility of listing our Indian subsidiary, which has unique strengths in the strong Indian market. LGE filed the preliminary prospectus required for IPO, the draft red herring prospectus, with Securities and Exchange Board of India, a.k.a. SEBI, on December 6, 2024. Final decisions on going public will depend on market receptivity and results on book building.
Therefore, LGE will sell a stake of up to 15% in LGE India Limited, but details on the offering price are yet to be determined. We would like to shed some light on the current standing of our Indian subsidiary, its business, as well as future plans. For LGE, it has been 27 years since we entered the Indian market, during which we were able to build a complete local network spanning the entire supply chain from production to sales. And our home appliance business constitutes a strong pillar for growth.
2024년 가전 사업에 있어서 프리미엄 제품하고 보급형 제품 동시 공략 및 대형 디벨로퍼형 주거 사무실 수주를 많이 했습니다. 시스템 에어컨이 급성장하고 있고요. 이로 인해서 인도 법인은 10% 가까운 매출 성장과 영업 이익률도 로우틴 수준으로 전년 동기 대비해서 크게 개선되었습니다.
올해에는 인도 가전 시장 점유율 성장 및 구독 사업 진출 등을 통해서 인도 소비자의 생활 속으로 스며들 수 있는 사업 전략을 더욱 가속화할 계획입니다. 생산 캐파도 중요할 것 같은데요. 인도 시장의 수요 증가 대응을 위해 법인의 생산성 개선, 또 OEM 업체 가동률 향상, 물량을 연계한 탄력적 생산 시프트 운영 등을 통해서 안정적인 현지 생산 체제를 유지하려고 합니다. 아울러 지속적인 1등 시장 지위 유지를 위해서 인도 경제 성장에 따른 가전 제품 보급률 증가 및 정부 정책을 저희가 면밀히 지켜보면서 생산 캐파 증설 필요성도 검토 중에 있다는 말씀을 좀 드립니다. 인도 법인의 IPO 추진은 본사와 법인의 기업 가치 제고, 또 성장 전략, 그리고 이에 필요한 자금 운영 관점에서 선택 가능한 다양한 옵션 중에 하나가 될 수 있다고 저희가 잘 알고 있습니다. 구체적인 계획 또한 다각적으로 검토하고 있지만 현재까지 이와 관련돼 있는 확정된 사항은 없다고 컴플라이언스를 여러 가지 고려해 본 결과로는 말씀을 좀 드릴 수 있을 것 같습니다.
In 2024, the home appliance sector drove strong performance compared to last year, with revenue growth of nearly 10% and operating margin at low teens, underpinned by not only our strategy in targeting both premium and mass tiers, but also bullish growth of residential and commercial SAC orders from property developers. This year, we will fast forward this business momentum to penetrate into the lives of Indian consumers by gaining a larger market share and starting our subscription biz. In terms of capacity, we will ensure stability in operations of our local production through enhanced productivity of the subsidiary, greater operational efficiency of OEMs, and flexibility in shifting production aligned to volume as part of a larger effort in meeting India's rising market demand.
Furthermore, in sustaining our number one market position, we will increase the penetration of our home appliances in tandem with India's economic growth while reviewing possibilities on scaling capacity upon close monitoring of government policies. We believe that the IPO of our Indian subsidiary may serve as a potential option in terms of financing our commitment to deliver on the corporate value and growth strategy of LGE and LGEIL. Though we are reviewing the details at multiple fronts, nothing is final at the moment from a compliance perspective.
두 번째 질문, 두 번째 질문해 주신 webOS 플랫폼 사업 관련해서는 HE 본부에서 말씀을 좀 드리겠습니다. 작년 24년에 webOS 플랫폼 사업 또한 시장 측면에서 보면 경쟁이 치열해지고 있는 카테고리 시장이라는 사실이고요. 그 와중에도 LG전자는 누적 세링 기준으로 성장을 지속해 오고 있고, 그 결과 webOS 사업 모수를 2억 4천만 대까지 확대를 하였습니다.
LG전자가 직접 운영하는 무료 광고 스트리밍 TV 서비스인 FAST, 그러니까 Free Ad Supported Streaming TV에서의 우리 LG Channels 콘텐츠 경쟁력도 지속적으로 강화해 나가고 있고, 사업의 핵심이자 기반인 고객의 사용성을 지속 향상시켰습니다.
Despite heightened competition during 2024, our webOS platform business has seen a solid sales growth, with sales of webOS-based products reaching 240 million, and we have sustained upswings in our customer usability, a core pillar of our business by building on the strength we have in LG Channels, FAST services.
또한 글로벌 콘텐츠 파트너사들과 또 주요 국가의 로컬 파트너사들과도 사업적 협력을 강화하고 있고, 신규 서비스도 출시하는 등 webOS를 이용하는 고객들의 니즈에 부응하고자 지속 노력하고 있습니다. 우리 2024년도에 LG전자 제품 외에 webOS를 사용하는 타 브랜드의 스마트 TV를 1천만 대 이상 확보하였으며, webOS 이러한 결과로 외부 생태계를 지속적으로 확장해 나가고 있습니다.
We have further built on the partnerships we have with global content providers and local players in key countries, and while trying to cater to the needs of webOS customers with the launch of new services, we have also continued to broaden the webOS ecosystem, having had our webOS deployed in at least 10 million non-LGE smart TVs in 2024.
질문하신 24년도 우리 LG전자의 외부 실적에 대해서 간략히 제가 말씀을 드리면, LG전자는 작년 초에 목표로 설정했던 webOS 플랫폼 사업에서 KRW 1 trillion 매출 이상을 초과 목표 달성을 했습니다. 그 결과로 우리가 영업 이익 측면에서도 목표 수준 이상의 견조한 수익성을 확보했다고 답변드리겠습니다.
With regards to 2024 performance, let me give you a brief outline. We were able to achieve our initial target for 2024 of KRW 1 trillion in revenue with robust profitability levels above our expectations.
금년에도 이러한 외부 webOS 플랫폼 사업의 지속적 경쟁력 강화를 위해서 콘텐츠 투자를 지속적으로 우리가 선행해 나가고, LG 스마트 TV를 이용하는 고객들의 볼거리를 더욱 향상시키고자 합니다. 확보된 사용성을 바탕으로 광고 사업의 역량을 좀 강화해 나가고, 게임, 커머스 등 신사업에도 본격적으로 좀 진입을 해서 수익원을 좀 다변화해 나가고자 합니다. 그리고 이에 더해서 글로벌 우리 리딩 사업자들과도 파트너십 기회도 지속 모색해서 LG전자의 큰 축의 외부 webOS 플랫폼 사업을 끌어나가고자 합니다. 이상입니다.
This year, we will continue investing in our contents to provide our users of LG smart TVs with greater assortment of content, and the usability that we have gained will serve to not only build on our fundamentals in the advertisement biz, but also on our footsteps in diversifying our revenue stream realized from entering new spheres like gaming and commerce.
We will also continue to seek opportunities to partner with global leading players and have LEF, OES become a large pillar of our business. Thank you.
다음 질문 부탁드립니다.
Next question, please.
사례를 질문해 주실 분은 다이와 증권의 김성규 님입니다. The following question will be presented by Seonggyu Kim from Daiwa Securities. Please go ahead with your question.
예, 안녕하세요. 질문 기회 주셔서 감사합니다. 저는 H&A 쪽, 그리고 Vehicle Component Solution 사업부에 하나씩 질문 드리겠습니다. 첫 번째 질문은 최근 국내 경쟁사의 가전 구독 사업 진입을 한 것 같고, 그리고 본격화가 되고 있는 것 같은데요. 이게 시장에 어떤 영향을 미칠 것으로 보는지 궁금합니다. 그리고 또 이에 대한 LG전자의 대응은 무엇인지 말씀해 주시면 감사하겠습니다. 두 번째 질문은 아무래도 최근에 EV 수요가 부진한 것 같은데요. LG 마그나의 사업 현황, 그리고 전망, 그리고 추가로 멕시코 공장에서 지금 최근에 가동한 멕시코 공장의 매출 기여 수준은 어느 정도 되는지 말씀해 주시면 감사하겠습니다. 이상입니다.
Thank you for giving me the opportunity. I have brought two questions. My first question is about your home appliance business. I understand your Korean competitor is jumping into subscription business. How do you expect this trend to affect the market landscape, and what would be your countermeasure? My second question is about vehicle solutions. I understand that the EV demand is remaining stagnant at the moment. What is the current status and outlook of the LG Magna business, and could you please provide an estimate of the revenue contributed by the Mexico plant? 가전 구독 관련해서 H&A에서 말씀드리겠습니다. 일부 경쟁 심화에 대한 우려가 있습니다. 그렇지만 당사는 한국 가전 구독의 시장 확대와 소비자 인식의 제고에 도움이 되는 등 긍정적인 영향으로 보고 있습니다. 아울러 당사의 차별화된 경쟁력을 지속 강화할 수 있도록 가전 구독의 본질인 지속적인 케어와 다양한 고객 경험을 강화하여 당사만의 구독 브랜딩을 전개할 것입니다.
First and foremost, our group of specialized care managers provide professional services to our customers, and the differentiated customer experiences delivered through them will be a significant strength for us in the future. Additionally, we plan to continuously develop products and services suitable for subscription business. For example, care managers can take care of refrigerators with built-in filters, and products that can be easily disassembled for cleaning can make our customers recognize our value.
Our subscription is not limited to straightforward installments. It emphasizes personalized care offerings.
참고 사항으로 한 가지 말씀드리면, 가전 구독 사업의 한국 매출은 자사 가전 매출액의 27% 비중을 차지하며, 누적 매출 1조 6천억 원을 달성하여 전년 대비 50% 성장을 이루었습니다. 이는 전체적인 한국 가전 시장 역성장에도 불구하고 당사는 가전 구독 가속화에 기반한 차별화된 성과를 만들어 가고 있습니다. 이상입니다. 저기 LG 마그나 사업 관련 VS 본부에서 답변드리겠습니다. 향후 2, 3년 정도 과거 기대 대비 전기차 시장의 수요 정체 영향으로 매출 및 수익성이 당초 계획 대비 부진할 것으로 예상되나, 적극적인 수주 활동을 통한 거래선 다변화를 기반으로 전기차 시장 회복 이후 매출 및 수익성은 점차 회복될 것으로 전망하고 있습니다.
Original expectations. However, we project that our active sales and profitability will gradually bounce back after EV market recovery based on our effort to win more orders to diversify our client base.
contribution of the LG Magna Mexico plant has continued to increase every quarter in 2024, reaching 20% level in 2024, and in 2025 it is expected to increase to 50% level. That is all. LG Magna Mexico plant started mass production in September 2023, and the revenue contribution has increased every quarter in 2024, reaching 20% level in 2024. We anticipate its contribution to rise to 50% level in 2025. Thank you. We will take the next question, please.
Next question, please.
The following question will be presented by So-won Kim from Kiwoom Securities. Please go ahead with your question.
Yes, thank you for the question. I will ask about the VS business unit. Recently, the AI PC lineup has been expanding. If you have any release plans related to AI PC or differentiation strategies compared to other companies, please share them. In addition, the profitability of the VS business unit has somewhat decreased, so if there are any measures or strategies for recovering profitability, please share them. Thank you.
Thank you for taking my questions. I have brought one question to business solutions. Could you please provide me with the details regarding the release plans for AI PCs and the differentiation strategies compared to other companies? And other than this, I believe that the profitability remains low. Could you share any methods to show recovery? Thank you.
예, 저기 VS 본부 관련 질문 말씀드리겠습니다. 먼저 저 AI PC 관련해서요. 2025년 LG 그램은 온디바이스 AI인 그램 챗 온디바이스가 탑재되어 있습니다. 단순한 인공지능을 넘어서 사용자를 더 배려하고 공감하는 공감 지능으로서 더욱 혁신적인 고객 경험을 제공하는 제품을 출시할 예정입니다.
Our 2025 LG Gram is embedded with on-device AI, Gram Chat on-device. We plan to provide an even more innovative customer experience by introducing AI, not as artificial intelligence, but as affectionate intelligence, which is designed to be more considerate and empathetic towards users.
그램 챗 온디바이스는 고객의 PC 사용 기록이나 저장된 파일을 기반해서 네트워크 연결 없이 노트북 내에서 AI 연산을 수행하는 고객 맞춤 솔루션입니다. 개인과 관련이 깊은 내용을 검색하고 요약할 때는 클라우드형 AI보다도 훨씬 빠르고 안전합니다. 그리고 사용자에게 특화된 대답도 해주고 공감해 주는 공감 지능으로 업무 생산성을 높일 수 있고, 그램 링크라고 하는 그 AI 소프트웨어를 통해서 모바일 제품과 자유롭게 연결하여 언제 어디서든 스마트한 라이프를 누릴 수 있도록 하는 제품입니다.
Gram Chat on-device is a customer-centric solution that performs AI computations within the laptop based on the user's PC usage history and stored files without the need for a network connection. When searching for and summarizing content closely related to individuals, it is faster and more secure than cloud-based AI. With Affectionate Intelligence, which provides tailored responses and empathy, users can enhance their productivity.
Additionally, by connecting with AI software like Gram Link, users can enjoy a smart lifestyle anytime and anywhere with their mobile devices.
예, 그리고 클라우드형 AI인 그램 챗 클라우드는 네트워크에 연결을 해서 대형 언어 모델을 기반으로 고차원 질문에도 답을 합니다. 그리고 개인 메일이나 캘린더와 연동해서 더욱 개인화된 AI로 활용이 가능합니다.
Gram Chat Cloud, a cloud-based AI, connects to the network to answer complex questions based on large language models. It can be utilized as a more personalized AI by integrating with personal emails and calendars.
예, 저 IT 쪽 ID VS 본부 수익성 개선에 대해서 조금 말씀을 드리면, 먼저 그 코로나 이후에 좀 장기적으로 보면 IT ID 수요가 업다운이 굉장히 심하면서 경쟁이 굉장히 격화가 됐습니다. 그래서 사실 작년에도 저희가 그런 경쟁 격화 요인으로 인해서 여러 가지 좀 어려움을 겪은 부분이 있었고요.
그것 때문에 이제 뭐 금일 발표되는 적자가 좀 일부 있었습니다만, 내년 같은 경우에는 저희가 그 기본적인 그 지금 추구하고 있는 제품들의 그 프리미엄 전략 제품의 매출 비중을 강화하고, 아울러서 그 저희 VS 본부의 대부분의 그 고객들이 B2B형 제품들이 많습니다. 그래서 B2B 버티컬 쪽 시장 확장을 통해서 그 내년도에는 수익성 개선을 지속 그 만들어 갈 예정입니다.
And let me answer your question about IT ID and better profitability. After the COVID-19 pandemic, we have seen great ups and downs in IT and ID business in the long term, and this has led to an intensified competition in the market. And that's why we have gone through difficulties last year because of such fierce competition. Therefore, I believe that we are witnessing some negative figures today. However, starting from next year, we would like to focus on our premium lineup and increase the proportion of our premium products.
As many of the VS products are based on B2B business, we would like to expand the vertical line so that we can seek for greater profitability. Thank you.
다음 질문 부탁드리겠습니다.
Next question, please.
The following question will be 다음으로 질문해 주실 분은 하나증권의 김 로코 님입니다. The following question will be presented by Rok-ho Kim from Hana Securities. Please go ahead with your question.
예, 안녕하세요. 질문 주셔서 감사드립니다. 저는 간단한 질문 하나 드리려고 하는데요. 저 이번 4분기 때 기타 영업의 비용이 좀 큰 것 같습니다. 관련해서 좀 구체적인 설명 부탁드리겠습니다. 감사합니다.
Thank you. I have one simple question. So in the fourth quarter, it seems as if you have seen losses in your non-operating profit. Can you explain why?
이 질문은 회계 담당께서 해주시면 좋을 것 같습니다.
네, 그 공시 내용에 기술되어 있는 바와 같이 그 24년 영업이익은 전년과 유사한 수준을 확보하였습니다만, 그 회계 기준에 따른 자산과 부채의 평가 가치 변동분이 영업의 손익에 반영된 것이 주요한 원인입니다. 그 이러한 요인들은 그 실제 캐시아웃이 발생하는 항목들은 아니며, 특히 해외 자회사 금융 부채 평가서는 해당 자회사의 사업 성과 개선이 배경인 점을 감안해 주시면 좋겠습니다.
This will be answered from our accounting team. As disclosed, consolidated 2024 operating margin stands at levels seen last year, with changes in valuation of assets and liabilities incorporated as per the accounting standards. These factors are not actual cash outs and financial liability valuation loss of the subsidiary overseas come from their improving business performance. Thank you.
다음 질문 있으십니까? Next question, please.
현재 질문을 요청하신 분은 없습니다. 질문을 하실 분은 전화기 버튼의 별표와 1번을 누르시기 바랍니다. Currently, there are no participants with questions.
Please press star, one, star, and one to give your question.
오퍼레이터님, 지금 시간이 많이 됐으니까요. 지금 추가적으로 더 없으시면 이제 마치면 될 것 같습니다. 지금까지 LG전자 연결 기준 및 사업 본부별. 그럼 이상으로 2024년 4분기 LG전자 실적 발표 컨퍼런스 콜을 마치도록 하겠습니다. 이 시간 이후 추가적인 질문이 있으신 분은 LG전자 IR팀으로 연락 주시면 자세한 설명 드리도록 하겠습니다. 새해 복 많이 받으시고 나날이 행복하시며 건강한 2025년이 되기를 진심으로 바랍니다. 감사합니다.
This wraps up LG Electronics earnings release conference call for the fourth quarter of 2024. For any further questions, please contact the IR team. A belated New Year to everyone. Wish you the best for this year. Thank you.