LG Electronics has declared its vision to transform from its current position as a top global home appliance brand to a ‘smart life solutions company’ that can connect and expand customers’ experiences while driving for global annual revenues of KRW100 trillion (A$115 trillion) by 2030.
In a landmark speech at the LG Sciencepark in Seoul, South Korea, CEO William Cho outlined the bold vision built on three growth engines: pursuing new platform-based service businesses through the advancement of its business portfolio, accelerating business-to-business (B2B) and exploring new business areas such as electronics vehicle charging and digital health.
He identified electrification, servitisation and digitalisation as key inflection points LG will focus on to achieve rapid mid-to-long term growth.
“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 home appliance brand that provides quality products. We will establish a brand-new LG by reinventing the way we work and communicate toward this goal,” Cho said.
Highlighting the company’s financial objectives, he added: “We will achieve Triple 7, which encompasses an average growth rate and operating profit of 7% or more, as well as enterprise value to EBITDA ratio of 7. With the goal of raising sales from KRW65 trillion last year to KRW100 trillion by 2030, we will establish ourselves as a company that is properly recognised by the market and customers.”
Cho said LG will focus on the transition to the platform-based service business model, acceleration of B2B areas and procurement of new growth engines based on competitive edge as three pillars to focus on customer experience. By 2030, the proportion of these three pillars in sales and operating profit is expected to increase to more than 50%.
The company plans to invest more than KRW50 trillion by 2030 for the qualitative growth of the business, including the advancing of the business portfolio led by the three new growth engines. This includes R&D investment of more than KRW25 trillion (A$57 trillion), facility investment of more than KRW17 trillion (A$19 trillion) and strategic investment of KRW7 trillion (A$8 trillion).
Cho highlighted how LG is accelerating company-wide changes from corporate culture to brand communication at every customer contact point with the goal of becoming a brand that “warms the hearts of customers and puts smiles on their faces” while enabling customers to feel the value and philosophy of Life’s Good. The company is also driving ESG management activities to fulfill its responsibilities as a global corporate citizen.