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May 24, 2024

LG CEO vows to elevate shareholder benefits

PUBLISHED : March 26, 2024 - 17:31

UPDATED : March 27, 2024 - 11:43

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LG Electronics Chief Executive Officer Cho Joo-wan speaks at a general shareholders meeting held in LG Twin Towers in Seoul on Tuesday. (Yonhap)

LG Electronics Chief Executive Officer Cho Joo-wan vowed "winning" changes and growth to overcome continuing uncertainties in the business environment at the regular shareholders meeting on Tuesday.

Organizing this year's shareholders event under the concept of "openness," the chief came to present the company's mid- and long-term strategies to shareholders for the first time. The event was livestreamed for the first time as well.

"(LG Electronics) is a ‘brave optimist' and we believe in the fact that opportunities exist in uncertain situations and that the answer is in the market and the customers. We will create growth and changes that can win business,” LG Electronics CEO Cho Joo-wan said.

"Uncertainties in the market and supply will continue this year, but we will overcome the limitations of the current business structure and organize our business strategy and operation system."

LG Electronics also announced a new shareholder return policy raising the dividend payout ratio for the next three years through 2026. The new policy increases payouts to twice a year from the previous year-end plan and designates the minimum dividend amount to 1,000 won (75 cents) irrespective of business performance.

The plan also includes a hike in the dividend payout rate by 5 percentage points, from over 20 percent of the consolidated net profit to over 25 percent.

As one of the key business items, Cho explained platform-based services and his vision for expansion.

"LG Electronics sells over 100 million products annually, and considering that the life cycle of one product is about seven years, we can say there are approximately 700 million units of LG products in use worldwide," Cho said. "We will leverage this massive base of 700 million units to venture into platform business."
The CEO also explained that the advertising and content revenue generated from webOS, LG's smart TV platform, would easily reach 1 trillion won this year.

Expanding its portfolio in the business-to-business sector is also crucial for future growth, Cho said, adding that the company will actively be making investments in the automotive solutions business and the rapidly growing air conditioning business.

Speaking to reporters after the shareholders meeting, Cho also hinted at mergers and acquisitions plans.

“We are planning to make stake investments, and we will be able to announce them soon,” Cho said. “We also have M&A deals under discussion. We will pursue M&As and seek new growth drivers involving platforms and B2B (business-to-business) transactions.”

Elaborating on the company's metaverse and augmented reality business, Cho also highlighted that LG's strength in content services will create synergy.

"LG Electronics has the potential to build good devices," Cho said. "It is clear that global IT giants would want to work with a partner that has a large group of users. Global IT firms are coming to us."

The company will also be launching its house care robot, the Smarthome AI Agent Q9, and transparent OLED TV by early next year, the CEO added.

By Jo He-rim (herim@heraldcorp.com)
The Korea Herald

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