LG 2003 Annual Report Download - page 35

2003 Performance
Due to the sluggish domestic economy, 2003 was difficult year for all firms including LG Electronics. In the
face of such difficulties, our sales grew 18% YoY breaking the 20 trillion won sales milestone for the first time
ever as strong exports growth of 32% YoY more than offset the slow domestic market. In particular, our
Handset division posted 47% YoY sales growth and our Display & Media Company grew 10% thanks to
robust Digital TV and PDP sales.
In 2003, we increased our position among the major global handset makers, leaping up to number five in
the world, up another notch from 2002. As for PDPs, we have set a solid foundation to lead this rapidly
growing market as our timely facility investments have us battling for the global top tier position in terms of
panel production.
Our profits swelled in 2003. Operating profit surpassed 1 trillion won again in 2003 to 1.06 trillion won, and
net profit surged 33% YoY to 663 billion won. Considering our strong performance in the face of a weak
domestic market, we believe that in a favorable market we can achieve even better results.
SALES
As mentioned above, our sales increased 18% YoY to 20.18 trillion won. Taking a closer look at our results
reveals the following three positive trends.
First, our overall revenue was spread out more evenly by quarter in 2003. The robust growth of handsets
and digital TVs helped to balance out the seasonality effect that has come
historically due to the concentration of air conditioner sales in the first half. We
consider the rapid growth of our core businesses, which includes handsets and
digital TVs, as the proper path for our company to become a fundamentally
strong and balanced global company.
Second, we were able to use our global network and know-how accumulated
through our global management to compensate for the slow domestic market.
While domestic sales fell 12% YoY due to the depressed Korean market in 2003,
we were still able to produce overall growth as all of our companys namely
Appliances, Display & Media and Telecommunications posted over 15% export
growth. This export growth more than made up for the decline in domestic sales.
In particular, LG Electronics’ main growth driver, the handset business, posted
an export sales growth of 84% YoY.
Third, our Telecommunication Equipment & Handset Company has surpassed
LG Electronics Inc._Annual Report 2003 35
|||||||Management’s Discussion and Analysis |||||||
We have made some accounting changes in the last two years due to our demerger and changes in revenue recognition.
To make a consistent comparison of our 2003 fiscal year with the prior year, we used the entire 2002 fiscal year figures
from January to December 2002. Our official 2002 financial statement only covers the nine-month period from April to
December 2002 due to the demerger. Also, in 2003, a minor portion of our 2nd quarter sales from raw material
(oursourcing related) and PC Buy & Sell (PC OEM) was reallocated to our 1st quarter sales. Finally, the following section
contains forward-looking statements with respect to results of operations, the financial conditions and plans and
objectives of the management of LG Electronics. Such forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause the actual results of performance of LG Electronics to be materially
different from any results or performance expressed or implied.
[ Qua rte rly S a le s T re nd ]
2003 2002
4,361 5,026
4,817
4,916
5,417
4,516
4,040
4,179
1Q 2Q 3Q 4Q
(Unit : Billion Won)