LG Electronics unveils value-up plans, begins Indian arm IPO process
Chae-Yeon Kim
Oct 22, 2024 (Gmt+09:00)
Park Hyoung-sei, head of LG Electronics’ home entertainment division, speaks at the company’s webOS Summit 2024 in Incheon, South Korea, on Sept. 27, 2024 (Courtesy of LG) LG Electronics Inc., the world’s largest home appliances maker, on Tuesday announced plans to unlock value by accelerating its transformation into a platform-based and business-to-business (B2B) service provider.
In a regulatory filing, the company said it aims to grow its corporate value sevenfold by 2030 with an annual sales growth of 7% and an operating profit margin increase to 7%.
To enhance its value, it is considering share buybacks and treasury stock retirement to achieve a return on equity of more than 10% by 2027.
It is also seeking to raise its enterprise value to seven times its earnings before interest, tax, depreciation and amortization by 2030.
Aiming to raise up to $1.5 billion through the IPO, LG Electronics' Indian unit has hired Morgan Stanley as its lead IPO underwriter.
LG Electronics' Indian operations logged its highest-ever half-year sales -- raking in more than 2 trillion won in the first half -- since it landed in the South Asian country three decades ago.
DIVIDEND PAYOUT
By 2026, LG Electronics will return more than 25% of its consolidated net profits to shareholders in dividend payments. That is higher than its current payout ratio of 20%.
LG Electronics' thermal heat pump It forecast its consolidated sales to rise to 100 trillion won ($72.5 billion) by 2030 from 84.2 trillion won in 2023 by beefing up subscription-based services and B2B businesses such as heat ventilation and air conditioning devices, automotive electronics products and smart factory systems.
LG expects those services, including new businesses to be introduced later, to account for 52% of its sales and 76% of its operating profit.