LG Electronics said it will push to expand sales in the Global South (emerging markets such as India, the Middle East, Latin America, and Africa) in its core business areas, while seeking a rebound in results by growing new business models such as subscriptions and platforms and increasing the share of B2B businesses centered on vehicle components and heating, ventilation and air conditioning. With weakness in the TV business and lingering macroeconomic uncertainty, the company plans to speed up a transition in its business structure focused on regional portfolio diversification and qualitative growth.
At its 2025 fourth-quarter earnings conference call on the 30th, LG Electronics said, "Global economic uncertainty, delayed demand recovery, tariff effects, and pressure from rising component costs continue," but added, "In our core businesses, we will secure sales growth momentum through our Global South strategy, and we will sustain qualitative growth by expanding the share of new business models such as subscriptions and platforms, as well as B2B businesses such as vehicle components and heating, ventilation and air conditioning."
On a consolidation basis, LG Electronics posted fourth-quarter sales of 23.8522 trillion won and an operating loss of 109.0 billion won, swinging to a loss for the first time in nine years since the fourth quarter of 2016. The company said delayed demand recovery and intensifying competition in display-based product lines, including TVs, expanded marketing expense burdens, weighing on results. Non-recurring expenses related to voluntary retirement in the second half were also reflected. For the full year, sales were 89.2009 trillion won and operating profit was 2.4784 trillion won.
By business unit, the HS (home appliances) division reported fourth-quarter sales of 6.2543 trillion won and an operating loss of 171.1 billion won. The MS (TV and media) division recorded sales of 5.4301 trillion won and an operating loss of 261.5 billion won, affected by weak demand and declining average selling prices. In contrast, the VS (vehicle components) division posted sales of 2.7964 trillion won and operating profit of 158.1 billion won, benefiting from smooth conversion of order backlogs into revenue.
For the full year, the HS division recorded sales of 26.1259 trillion won and operating profit of 1.2793 trillion won, while the MS division swung to a loss with sales of 19.4263 trillion won and an operating loss of 750.9 billion won. The VS division delivered record results with sales of 11.1357 trillion won and operating profit of 559.0 billion won.
LG Electronics also expects uncertainty to persist over improvements in TV business performance this year. On the 2026 TV market, the company said, "There are expectations for demand improvement due to global sporting events such as the Winter Olympics and the World Cup, but negative demand factors from macroeconomic uncertainty and rising prices of some components also remain," adding, "Market demand will grow slightly from the previous year or remain at a similar level." On the possibility of turning a profit within the year, it said, "Given the competitive environment and cost variables, it is difficult to conclude at this time."
The supply environment for memory semiconductors was also cited as a cost burden factor for some product lines, including TVs. LG Electronics expects memory semiconductor supply constraints to continue for the time being and said cost burdens and pressure to raise selling prices are growing, especially for product lines with high memory content. The company said it will secure volumes and stabilize the supply chain through cooperation with major memory partners, while minimizing the impact through selective price adjustments, additional cost reductions, and a premium-focused portfolio.
Regarding the HS division, a North American in-region production strategy was mentioned to address tariff and supply chain risks. LG Electronics said, "Since Oct. last year, we have added Mexicali, Mexico, as a production site, and we are operating three production bases for the North American market, including Tennessee in the United States and Monterrey in Mexico," adding, "We are increasing the supply ratio by maximizing supply capacity (CAPA) through productivity improvements at production sites." It continued, "By adding production sites and improving productivity at existing sites, we expect to expand the in-region supply ratio to 60% this year."
The home appliance subscription business is also maintaining steady growth. LG Electronics said, "As competition in the domestic appliance market shifts toward subscriptions, we maintained stable growth through continued expansion of large-appliance subscriptions and service upgrades," adding, "As a result, subscription business sales surpassed 2 trillion won, securing a solid market position." Overseas, it said, "Building on existing corporate infrastructure, we expanded into Taiwan and Singapore, including Malaysia and Thailand, achieving sales growth of more than 40% from the previous year."
AI-related B2B businesses were also presented as a mid- to long-term growth pillar. LG Electronics said, "Although it was a generally difficult year for the chiller business last year, orders related to data centers grew to about three times the previous year," adding, "This year, we expect significant order and sales growth through full-scale order expansion and the supply of chillers to overseas data centers already secured." It added, "Based on 'One LG' capabilities, we are strengthening data center cooling solutions, and the goal of 1 trillion won in total chiller business sales, including the data center business, by 2027 is on track."
Meanwhile, LG Electronics recently received an upgrade in its corporate credit rating from global credit rating agency Moody's, from Baa2 to Baa1. The company said, "This reflects the market's assessment of our business portfolio transition and stable financial management capabilities," and expected the upgrade to have a positive impact on future business operations and investment conditions.