LG hits record 2025 sales as tariffs & EV slowdown bite

LG Electronics has reported record consolidated revenue for the second consecutive year, reaching AUD 88.6 trillion for the full-year 2025. Despite this growth, the company posted an operating profit of AUD 2.46 trillion, representing a year-on-year decline. Management attributed the squeezed margins to significant external pressures, including cost burdens arising from U.S. tariffs and a global cooling in electric vehicle (EV) demand. Performance was further impacted by increased marketing investment for display-based products and substantial one-off expenses related to organisational restructuring.

A significant portion of these one-off costs, totalling several hundred million Australian dollars, was incurred during the second half of the year. The company confirmed that these charges primarily stemmed from company-wide voluntary retirement programmes aimed at improving workforce efficiency. While these measures weighed on the 2025 bottom line, LG anticipates they will foster a more flexible and competitive cost structure over the mid- to long term.

Amidst these challenges, the Home Appliance Solution and Vehicle Solution divisions remained strong pillars of the business. Both units achieved their tenth consecutive year of growth since 2015, serving as the primary engines behind the record-breaking revenue. LG continues to position these sectors as its core growth drivers, even as it navigates a volatile global economic landscape.

B2B Focus

LG reported progress in what it described as strategic growth areas. It highlighted B2B operations, non-hardware businesses and direct-to-consumer channels, including subscription models and online sales.

The company reported B2B revenue of AUD 23.9 billion, up 3 percent year-on-year. It also said combined B2B operating profit from Vehicle Solution and Eco Solution exceeded AUD 1 billion for the first time.

LG said revenue from subscription-based business models rose 29 percent year-on-year and approached AUD 2.4 billion. The company referenced subscription-based models in the context of its direct-to-consumer channel expansion.

Home Appliances

LG's Home Appliance Solution unit reported record-breaking revenue of AUD 25.98 billion and an operating profit of AUD 1.27 billion. The company noted that revenue reached an all-time high, adding that operating profit saw a slight year-on-year increase when one-off costs were excluded. To mitigate the impact of U.S. tariff-related pressures, the unit focused on production footprint optimisation, strategic pricing adjustments, and targeted cost-improvement initiatives.

The company set out priorities for 2026 for the Home Appliance Solution unit. It said it planned to expand its AI-powered appliance lineup and strengthen its presence in emerging markets. It also referenced built-in appliances, component solutions, AI Home platforms and home robotics as areas of ongoing development.

Media Business

The Media Entertainment Solution unit posted revenue of AUD 19.32 billion and an operating loss of AUD 746.6 million. LG said performance reflected a year-on-year decline. It attributed the result to delayed demand recovery and intensifying competition in the global display market.

For 2026, LG said the unit planned to strengthen its product lineup across OLED and LCD segments. It referenced offerings incorporating Micro RGB technology. It also pointed to lifestyle-oriented products including StanbyME and Easy TV.

LG said its webOS-based advertising and content business was expected to maintain solid growth. It connected that expectation to content investment and expanded partnerships.

Vehicle Solutions

The Vehicle Solution unit reported revenue of AUD 11.07 billion and operating profit of AUD 555 million. LG said both figures were record highs. It attributed performance to strong conversion of order backlog.

LG said it expected near-term uncertainty in global automotive demand amid heightened macroeconomic volatility. It said the unit planned to reinforce collaboration with OEM partners and improve operational efficiency, while continuing work on future mobility solutions. LG referenced software-defined vehicles and AI-defined vehicles.

Eco Solutions

The Eco Solution unit reported revenue of AUD 9.26 billion and operating profit of AUD 643.6 million. LG said revenue increased year-on-year. It added that operating profit rose slightly when excluding one-off costs.

In its outlook for 2026, LG anticipates a surge in demand for high-efficiency solutions, particularly within international markets. The company highlighted its focus on heat pumps utilising eco-conscious refrigerants as a primary growth area.

Furthermore, LG intends to capitalise on the burgeoning AI sector by pursuing opportunities in data centre cooling. To this end, the company is accelerating the commercialisation of next-generation liquid cooling technologies and broadening its strategic partnerships to develop advanced immersion cooling solutions.

Costs And Competition

LG attributed the decline in operating profit to increased marketing expenditure for display-based products, a move necessitated by intensifying competition and a sluggish recovery in market demand. This performance was further tempered by one-off costs associated with organisational optimisation. Despite these headwinds, the Home Appliance Solution and Vehicle Solution units sustained their decade-long growth trends.

LG also highlighted its B2B and subscription models as vital components for long-term resilience, even as it acknowledged persistent near-term uncertainty across the global display and automotive sectors.

Next Update

LG said it would hold a Korean and English conference call and issue materials ahead of that session. The company said it would discuss the full-year and fourth-quarter 2025 results and provide additional detail on business performance and outlook.