LG Group affiliates unveil value-up plans

LG Group affiliates— LG Display Co., LG Innotek, LG Chem Ltd., and LG Energy Solution Ltd. —unveiled their ambitious growth strategies on Friday, focusing on profitability, strategic sector expansion, and increased shareholder returns.

LG Display aims to return to profitability in 2024 by emphasizing high-end organic light-emitting diodes (OLEDs) and implementing cost-cutting measures.

The company plans to reduce its debt to 13 trillion won while channeling investments into restructuring initiatives to streamline operations.

LG Innotek seeks to elevate its return on equity (ROE) from 12% in 2022 to over 15% by 2030.

Aiming to diversify its portfolio, the company targets over 8 trillion won in sales from new business sectors such as automotive electronics and high-value semiconductor substrates.

To enhance shareholder value, it plans to increase its dividend payout ratio to 15% by 2027 and 20% by 2030.

LG Chem has set a revenue target of 50 trillion won by 2030 (excluding LG Energy Solution), with 50% of sales projected to come from its three growth pillars: sustainability, battery materials, and pharmaceuticals. 

The company aims to increase its ROE to over 10% by 2028 and is considering raising its dividend payout ratio to 30% if it achieves positive cash flow and an ROE of 10% or higher.

LG Energy Solution plans to double its sales by 2028, surpassing 2022’s 33.7 trillion won.

Excluding the benefits from the Inflation Reduction Act (IRA), the battery maker aims to achieve an EBITDA margin in the mid-10% range through process innovation and a focus on profitability-centered orders.

The company will also diversify its EV customer base, explore new applications, and strengthen its non-EV portfolio to sustain growth

Write to Jeong-Soo Hwang at hjs@hankyung.com