- LGES marks KRW 25.6 trillion in
consolidated revenue and KRW 1.2
trillion in operating profit in 2022
- 2023 goal set at 25-30 percent increase in annual revenue, with
over 50 percent increase in capital expenditure
- The company to concentrate on four key initiatives to respond
to the rising battery demands and effectively target the North
American market
SEOUL,
South Korea, Jan. 26,
2023 /PRNewswire/ -- LG Energy Solution (LGES; KRX:
373220) today announced its 2022 whole-year and fourth quarter
earnings, posting record-high annual consolidated revenue and
operating profit.
At the conference call, the company also revealed its 2023
revenue target to increase the annual revenue by 25 to 30 percent
from the previous year, through the expansion and stable operation
of global manufacturing facilities, as well as increasing sales in
the North American region.
For the full year, LGES reported KRW 25.6
trillion in consolidated revenue and KRW 1.2 trillion in operating profit, marking an
on-year increase of 43.4 percent and 57.9 percent respectively.
"A record-high annual revenue was made possible, as battery
shipment has increased across all product line-ups in our proactive
response to the increased demands for EVs and power grid energy
storage systems (ESS)," explained Chang Sil
Lee, CFO of LG Energy Solution at the conference call. "We
have also expanded the reflection of major cost increase into the
average selling price (ASP), which also played a role in achieving
a notable performance last year." Lee added, "Thanks to economies
of scale led by sales growth, cost saving achieved through
improving productivity, and expanding price-competitive metal
sourcing, annual operating profit has also shown a significant
growth compared to the previous year."
LGES also reported its fourth quarter financial results of
KRW 8.54 trillion in consolidated
revenue and KRW 237.4 billion in
operating profit. The fourth quarter revenue of 2022, marking a
record-high, increased by 12 percent from the previous quarter
(KRW 7.65 trillion) and by 92 percent
year-on-year (KRW 4.44 trillion),
driven by increased EV battery sales for major customers,
production ramp-up at the GM JV (Ultium Cells) plant in
Ohio, and volume growth in ESS for
power grids.
"Despite positive effects of economies of scale led by shipment
growth and continuous improvement in productivity, the fourth
quarter operating profit has seen a temporary drop on quarter due
to one-off factors such as the recognition of employees' incentives
in line with the sound annual financial results and incremental
expenses for ESS battery replacement," explained LGES. "Excluding
the one-off impacts, the operating profit remained similar to the
previous quarter."
- Aiming for 25 to 30 percent revenue growth in 2023
LGES also announced it will pursue 25 to 30 percent increase in
the annual consolidated revenue in 2023. The company also plans to
increase its capex by more than 50 percent from the previous year's
KRW 6.3 trillion.
"We aim to meet our annual target revenue mainly through the
expansion and stable operation of global manufacturing facilities,
as well as sales expansion in the North American region," explained
LGES. "We will also continue to enhance the operating profit by
improving the cost curve and advancing differentiations in product
competitiveness."
LGES has continued to strengthen its strategic partnerships with
global automakers throughout the year by starting the ramp-up at
the GM JV (Ultium Cells) plant in Ohio, as well as announcing new joint ventures
with Stellantis and Honda. Now, the company plans to further expand
its global production capacity to 300GWh by the end of this
year.
With this goal in mind, LGES will proactively increase the
production capacities of its manufacturing facilities in
North America, Europe, and Asia. In North
America, where the fastest growth in EV market is expected,
the company's production capacity is expected to reach 55GWh,
thanks to the operation of two Ultium Cells plants in Ohio and Tennessee. In Poland and Asia (including South Korea and China), the production capacities are also
expected to expand to 90GWh and 155GWh, respectively.
The company's order backlog has recorded KRW 385 trillion at the end of last year.
- Four Key Initiatives to Respond to the Rising Global Battery
Demand
LGES forecasted this year's global battery market demand will
reach 890 GWh, a 33 percent increase from the previous year
(670GWh).
By region, North American battery market is expecting the
fastest growth of mid-to-high 60 percent range, thereby leading the
expansion of the whole global battery market. European and Chinese
markets are also expected to expand by mid-40 percent and mid-20
percent, respectively.
To proactively respond to the increase in the global battery
demand, LGES will concentrate on four major initiatives: 1)
promoting product competitiveness, 2) materializing smart
factories, 3) establishing supply chain management system, and 4)
securing future readiness through developing next-generation
battery technologies and new business areas.
"Based on our strong execution we will continue to further
reinforce our products' competitive advantage and global operation
expertise, thereby providing the world-best customer value," said
Youngsoo Kwon, CEO of LG Energy
Solution.
About LG Energy Solution
LG Energy Solution (KRX: 373220), a split-off from LG Chem, is a
leading global manufacturer of lithium-ion batteries for electric
vehicles, mobility, IT, and energy storage systems. With 30 years
of experience in revolutionary battery technology and extensive
research and development (R&D), the company is the top
battery-related patent holder in the world with over 25,000
patents. Its robust global network, which spans North
America, Europe, Asia, and Australia, includes
battery manufacturing facilities established through joint ventures
with major automakers such as General Motors, Stellantis N.V.,
Hyundai Motor Group, and Honda Motor Co., Ltd. At the forefront of
green business and sustainability, LG Energy Solution aims to
achieve carbon neutral operations by 2050, while embodying the
value of shared growth and promoting diverse and inclusive
corporate culture. To learn more about LG Energy Solution's ideas
and innovations, visit https://news.lgensol.com.
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SOURCE LG Energy Solution