LG bares vision of transforming company to smart life solutions brand

LG Electronics just revealed its vision of transforming from a global home appliance brand to a "smart life solutions company."

William Cho, LG CEO

LG sets goals for brand transformation, financial growth

During a speech on Monday, LG CEO William Cho outlined the company’s vision built on three growth engines: pursuing new platform-based service businesses through the advancement of the business portfolio, accelerating business-to-business (B2B), and exploring new business areas such as electronics vehicle charging and digital health.

Cho identified key points the company will focus on to attain its mid to long-term growth targets. These are electrification, servitization, and digitalization.

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, Cho said. We will establish a brand-new LG by reinventing the way we work and communicate toward this goal.

The LG executive also mentioned the company’s financial goals. He said the brand will achieve Triple 7, which encompasses an average growth rate and operating profit of 7 percent or more as well as an enterprise value to EBITDA ratio of 7.

With the goal of raising sales from KRW 65 trillion last year to KRW 100 trillion (around PHP 4 trillion) by 2030, we will establish ourselves as a company that is properly recognized by the market and customers, Cho explained.

When it comes to customer experience, LG said it will work on transitioning to a platform-based service business model, acceleration of B2B areas, and procurement of new growth engines based on competitive edge.

The proportion of these three pillars in sales and operating profit is seen to increase to more than 50 percent by 2030.

By the same year, LG said it also aims to invest more than KRW 50 trillion (around PHP 2 trillion) for the qualitative growth of the business, including the advancement of the business portfolio led by the three growth engines. This also includes an R&D investment of more than KRW 25 trillion (around PHP 1 trillion), facility investment of more than KRW 17 trillion (around PHP 730 billion), and strategic investment of KRW 7 trillion (around PHP 300 billion).

Cho said LG is also accelerating the expansion of its B2B business.

The company said that its understanding of customers and know-how to communicate with customers will be expanded to commercial, mobility, and virtual spaces.

Aside from these, LG said it is also driving ESG management activities to fulfill its responsibilities as a global corporate citizen.

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