LG RELEASES SECOND-QUARTER 2025 FINANCIAL RESULTS

Manal Saleh

Building a Stronger Foundation for Long-Term Qualitative Growth Through Portfolio Shifts and Operational Resilience

Riyadh, July 29, 2025 — LG Electronics Inc. (LG) today announced consolidated revenue of KRW 20.74 trillion and operating profit of KRW 639.4 billion for the second quarter of 2025.

Both revenue and operating profit declined year-over-year, primarily due to continued global market softness, increased tariff burdens driven by changes in U.S. trade policy, and intensified competition. Rising costs, including logistics expenses, also weighed on overall profitability compared to the same period last year.

Despite these challenges, the Home Appliance Solution (HS), Vehicle Solution (VS) and Eco Solution (ES) Companies delivered strong performance, each posting year-over-year increases in both revenue and operating profit. All three Companies achieved their highest-ever second-quarter results. In particular, the VS Company recorded its best quarterly revenue and operating profit in history.

Meanwhile, the Media Entertainment Solution (MS) Company reported an operating loss, primarily due to lower TV sales and increased marketing spend. However, its webOS platform-based advertising and content business continued to generate stable profits, increasingly contributing to the Company’s overall performance.

Building Stronger Foundation for Qualitative Growth

LG continues to strengthen its business fundamentals by focusing on B2B segments such as vehicle components and HVAC systems, non-hardware businesses including subscription services and the webOS platform, and direct-to-consumer (D2C) operations via its online platform, LGE.COM.

In Q2 2025, B2B revenue – including vehicle, component and smart factory solutions, as well as HVAC – rose 3 percent year-over-year to KRW 6.2 trillion. Revenue from the home appliance subscription business increased 18 percent, reaching KRW 630 billion.

These segments remain central to the company’s ongoing portfolio transformation. The B2B business is less susceptible to demand volatility and benefits from strong entry barriers due to solution-based customer relationships. Non-hardware businesses offer recurring revenue and high margins, while the D2C channel enhances profitability and brand equity.

Q2 2025 Results & Outlook by Company

LG Home Appliance Solution (HS) Company

The HS Company posted second-quarter revenue of KRW 6.59 trillion and operating profit of KRW 439.9 billion, achieving its highest-ever second-quarter performance. Despite soft consumer demand, tariff pressures and rising freight costs, the Company maintained strong global competitiveness. Its dual-track strategy – targeting both premium and mass-market segments – continued to drive solid results. The subscription model business continued its rapid expansion. Operational efficiencies and production optimization helped offset increased costs and support profitability.

Looking ahead, market recovery is expected to remain gradual amid heightened competition. The Company will focus on expanding its subscription and D2C businesses and pursue additional cost improvements to help mitigate U.S. tariff impacts. While logistics cost pressures are projected to ease slightly compared to late 2024 and early 2025, the Company plans to carefully manage marketing expenditures to sustain or exceed last year’s level of operating profit.

LG Media Entertainment Solution (MS) Company

The MS Company posted second-quarter revenue of KRW 4.39 trillion and an operating loss of KRW 191.7 billion, primarily due to softened demand leading to lower TV sales and increased marketing expenses in response.

Going forward, the Company will focus on enhancing operational efficiency across all business segments. It plans to expand its presence in Global South markets such as India, where demand remains relatively strong. Continued growth is also expected in the webOS platform business, with new content offerings in areas such as gaming and digital art.

LG Vehicle Solution (VS) Company

The VS Company generated record second-quarter revenue of KRW 2.85 trillion and operating profit of KRW 126.2 billion – the highest in its history. Performance was supported by a robust order backlog and increased OEM vehicle sales, particularly in Europe.

A strategic shift toward premium in-vehicle infotainment (IVI) systems significantly enhanced profitability, while operational efficiency improvements in electric vehicle components and lighting systems further bolstered results. Moving forward, the Company will focus on strengthening relationships with key customers and maintaining profitability through ongoing efficiency gains.

LG Eco Solution (ES) Company

The ES Company achieved second-quarter revenue of KRW 2.64 trillion and operating profit of KRW 250.5 billion, marking a record for second-quarter performance. This growth was driven by strong demand for residential air conditioners in Korea and continued expansion in the commercial and industrial HVAC segments. Higher sales volumes boosted operating leverage, leading to improved profitability.

Looking ahead to the second half of the year, the Company aims to capture replacement demand for high-efficiency products while expanding its product portfolio to support long-term growth. It also plans to explore new opportunities in emerging sectors such as AI data centers by enhancing its commercial HVAC and industrial chiller capabilities – including systems for power generation – and scaling up its liquid-cooling solutions business.