LG will close its smartphone business, which accounted for nearly 6 per cent of total revenue, in 2021. The closure of this segment had little impact on the company. LG’s electronics revenue increased by more than 16 per cent year on year in Q1 2022, reaching a new high of $14.48 billion. Strong demand for premium products in international markets generated 46 per cent of this revenue. The figures for LG Innotek are not included in this analysis.
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The revenue generated by the vehicle solution business increased sequentially. Vehicle sales have been hampered globally by component shortages, but LG is benefiting from a slight rebound.
It has also signed agreements with leading automakers such as Mercedes-Benz to provide ADAS and cockpit solutions. LG’s other businesses grew in Q1 2022, in addition to the electronics and vehicle solution segments.
Product sales in the B2B segment have increased steadily. Furthermore, LG’s energy-related solutions (LG Chem) business, which has been incorporated into other segments, contributed to a significant increase in revenue. Price increases on certain high-demand products also contributed to Q1 2022 revenue growth.
LG’s electronics revenue could have been higher if the latest COVID-19 lockdowns in China and the Russia-Ukraine war had not occurred. In addition, the limited supply of a few key raw materials and increased logistics costs hampered production.
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LG Electronics Revenue Q1 2022: Financial Highlights
Consumer electronics revenue was $10.03 billion, a 3.2 per cent increase year on year. This segment accounted for nearly 69 per cent of total revenue. Revenue from the vehicle solutions segment was $1.56 billion, up 13.3 per cent year on year. This segment accounted for 10.8 per cent of total revenue. LG reduced this segment’s losses by 33 per cent in just two quarters by strengthening business risk management and continuously improving the cost structure across products.
The adoption of newer and more advanced technologies across segments bodes well for LG Electronics’ future. Plug-in for Intelligence Equipment (PIE) and Machine-learning based Vision Inspection system (MAVIN) technologies are assisting the company in minimizing material loss and logistical delays. All of these developments will have a positive impact on not only the financial results for the upcoming quarter of LG’s Electronics Revenue but, other verticals as well.
We anticipate increased business in the vehicle solutions segment as demand for smart car technology combined with increased demand for in-vehicle connectivity grows. As the market leader in this segment, LG will capitalise on its position by forming various joint ventures and partnerships that will increase its future revenue generation from this segment.
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LG, in addition to providing automotive hardware solutions, has recently acquired TISAX and Cybellum, bringing it into the automotive software solutions space. Aside from the electronics and vehicle solutions segments, LG’s other segments, such as energy storage and sales, have seen significant growth.
Varushi Yadav
I'm a 4th-year law student at the University of Petroleum and Energy Studies, along with that I'm a creative content writer. So far I have written law-related articles, I like to explore more and I'm always ready to learn more.