LG Electronics likely ahead of Whirlpool with record 2023 sales

LG Electronics Inc. is consolidating its lead over Whirlpool Corp. as the world’s top home appliances maker as the South Korean electronics maker posted record annual sales for a third consecutive year.

LG said in a regulatory filing on Thursday that its 2023 sales reached 84.23 trillion won ($63 billion) thanks to robust sales of home appliances and vehicle components, up 0.9% from 83.47 trillion won a year earlier.

With that figure, LG posted record annual sales for three years in a row.

Annual operating profit on a consolidated basis slipped 0.1% to 3.55 trillion won.

LG’s home appliance and air solution (H&A) division saw another record-setting year with 30.14 trillion won in revenue, boosted by robust sales of a suite of high-class consumer goods sold under the LG Objet Collection brand.

The segment’s operating profit surged 76% on-year to 2 trillion won.

With the latest results, LG’s H&A division’s revenue likely surpassed that of the US home appliance giant.

Whirlpool has yet to reveal its fourth-quarter and 2023 results, but in the first three quarters of last year, LG was ahead of the US firm with 4.7 trillion won more in sales revenue. LG’s operating profit was 1 trillion won more than that of Whirlpool.

Given the wide gap in nine-month figures, Whirlpool can’t overtake LG, analysts said.

LG’s vehicle component solutions business, LG’s new growth driver, contributed 10.15 trillion won in sales last year – rising for eight straight years. The division’s yearly operating profit was 133.4 billion won.

Sales from LG’s Home Entertainment division, which makes TVs, posted 362.4 billion won in operating profit on sales of 14.23 trillion won.

LG is the world’s top OLED TV maker, controlling more than two-thirds of the market.

LG’s business-to-business division posted 41.7 billion won in operating loss on sales of 5.41 trillion won.

Q4 PROFIT SURGED BUT CAME IN BELOW MARKET FORECASTS

In the fourth quarter of last year, LG saw its consolidated operating profit more than quadruple to 313.1 billion won from 69.3 billion won in the year-earlier period.

The decent quarterly earnings growth, however, came in far below the market consensus as consumer demand worldwide cooled amid persistent concerns about consumer price inflation.

Fourth-quarter sales rose 5.7% to 23.1 trillion won from 21.86 trillion won a year earlier.

LG’s fourth-quarter and full-year earnings came largely in line with its preliminary figures announced earlier this month.

The home appliance maker’s affiliate LG Innotek Co., posted record quarterly results, buoyed by its growing camera module supplies to Apple Inc.’s iPhone 15 model.

LG Innotek’s fourth-quarter operating profit tripled to 483.7 billion won.

For all of 2023, its sales increased 15.4% to 7.56 trillion won but operating profit fell 34.7% to 830.8 billion won.

VYING WITH WHIRLPOOL FOR TOP SPOT

LG competes with Whirlpool in the manufacture of home, kitchen and laundry appliances.

LG overtook Whirlpool in 2020 for the first time to become the world’s largest home appliances company in terms of sales. In 2022, it beat its US rival by operating profit as well.

Analysts said LG’s business strategy – targeting high-end consumers with tailor-made functions equipped with smart technology – has put the Korean company ahead of its rivals.

LG’s premium brand, Objet Collection, launched in 2020, features a “private appliance” concept, appealing to high-end consumers who favor tailor-made functions, design and color to their individual preferences.

LG said it will continue to focus on premium built-in kitchen appliances equipped with artificial intelligence, the Internet of Things and other state-of-the-art technology to remain competitive in the home appliance market.

Write to Chae-Yeon Kim and Ye-Rin Choi at why29@hankyung.com

In-Soo Nam edited this article.