LG Electronics Inc Q2 2023 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Dongwon Kim - KB Securities Co., Ltd., Research Division - Analyst : [Interpreted] I have 2 questions. And my first question is about Vehicle Solutions. Can you share your new order intake of first half and your projections on order backlog of the overall year? Do you think you can achieve the target of KRW 100 trillion this year? And also, it would be appreciated if you can share the breakdown of your backlog and the increasing trend of each category. My second question is about BS. What is your profitability estimation for the third quarter and the whole year? Do you see a momentum of profitability improvement in the second half? Unidentified Company Representative [Interpreted] Let me answer your question about Vehicle Solutions. LG Electronics order backlog amounts to over KRW 80 trillion at the moment and is expected to reach close to KRW 100 trillion at the end of 2023. In detail, infotainment accounts for 60% of total order, while other items, including EV components and lamps account for approximately 40%. We are expecting continuous and rapid growth on our order backlog amount considering the accelerating transition to electric propulsion. Thank you. Let me answer your second question regarding Business Solutions. Our plan for IT business is to deploy sales growth strategy with OLED gaming monitor, grow online business, and tap into B2B project opportunities in the Korean PC market to secure a strong market position. Our first half sales dwindled due to factors like negative growth in the market, but we are working on to achieve year-over-year growth in the second half. Interpreted For information display, we plan to actively identify business opportunities in main verticals, including corporate, retail and hotel, and create diverse demand in education, broadcasting and virtual production to expand sales growth. Interpreted For robot business, we have ground its size until the second quarter, focusing on service delivery robots by cooperating with major partners in Korea. And starting from the third quarter, we will prepare to enter the overseas market. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 27, 2023 / 7:00AM, 066570.KS - Q2 2023 LG Electronics Inc Earnings Call Interpreted For EV charging business, we are introducing products in the third quarter to enter the domestic EV charging infrastructure market. We will increase investment in product portfolio and R&D to internalize core technologies, and we are making preparation for presales activities and production setup in the U.S. to enter the North American market in 2024. Thank you.

Question: Kangho Park - Daishin Securities Co. Ltd., Research Division - Analyst : [Interpreted] I have 2 questions, one on Home Compliance and Air Solutions, the second one on vehicle solution. To start with my first question, I believe that the global consumption is showing a slow recovery, and it will continue in the second half. As you have mentioned, LG Electronics has been well implementing strategies to bring differentiation through premium lineups and to expand the volumes on target customers. Based on your strategy, do you think you can witness year-on-year revenue growth in the second half? Or do you have any new strategies to drive growth? My second question is about Vehicle Solutions. As you just covered, you are expecting your order backlog to increase from KRW 80 trillion to KRW 100 trillion by year-end. As your order backlog hikes like this, it seems to be necessary for you to expand production capacity. Do you have any plans to make huge investments in 2023 or 2024? Unidentified Company Representative [Interpreted] Let me answer your question in regards to H&A. Along with the polarizing consumption trends, we would like to continue focusing on premium lineup differentiation and targeting the volume zone. Throughout such strategy, we expect our revenue to show a turnaround to the rising curve in the second half. In addition, we would like to enhance competitiveness, expand price coverage and strengthen promotion, marketing and supply so that we can provide optimized strategy per region. To add more colors on our regional strategy in Korea, we plan to strengthen lineup in the volume zone per channel to continue online revenue growth and to expand into the rental business area to intensify future growth momentum. In North American market, we would like to focus on seasonal promotions compared to our competitors, especially focusing on new models that are equipped with cost competitiveness. Last but not least, we will utilize flexible production site management in the European market to fully leverage our competitiveness seeking for revenue growth and productivity enhancement Thank you. Unidentified Company Representative [Interpreted] I would like to answer your question about Vehicle Solutions. In order to cope with hiking order backlog and regional production, we're planning to make continuous investments in production site expansion. Adding more colors, our smart business is currently establishing new production site in Mexico to deal with North American market and has plans to make investment in our existing production sites in Vietnam and Poland. Touching upon LG Magna, Other than the existing plant in Korea and China, the company will soon start operating its Mexico plant to cover North America market. Continuous investment will be made and new plant is under establishment to deal with the European market. Thank you.