LG 2003 Annual Report Download - page 37

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LG Electronics Inc._Annual Report 2003 37
Message from CFO |||||||
Washing machines, in particular, was one of the major growth drivers as it posted 73% export growth.
Moreover, our high end drum-type washing machine has become so popular in Korea that it has become a
brand name synonymous with all types of drum-type washing.
Display & Media
TVs, monitors, optical storage and PDP (plasma display panel) modules comprise the major products in our
Display & Media Company. This company posted a sales growth of 10% YoY to 6.89 trillion won. PDP sales
growth of 186% YoY was one of the main driving forces as LGE made a timely capacity increase ahead of
other PDP makers, ramping up our 2nd line to become the largest PDP module supplier just when the market
began experiencing a shortage of modules.
As for TVs, LGE is benefiting from the increase in growth of the large-size TV market. Not only did our
sales increase 26% YoY, we believe LGE has built a strong technological and operational base to lead the
burgeoning digital broadcasting era. For example, we already own the patent for a key piece of technology
behind the US digital broadcasting system. In addition, our vertically integrated supply chain gives us access
to a steady and stable supply of the world’s best display components; we receive TFT LCD panels from
LG.Philips LCD, the global number one supplier of large-size LCD panels, and we source PDP modules
internally. In terms of monitors, we have reorganized our lineup to concentrate on more premium products
as LCD monitors have displaced CRT monitors as the display of choice. Also, DVD-related products like
DVD-Rom and DVD-RW are becoming increasingly dominant, replacing CD-RW as the optical storage
market rapidly evolves.
Telecommunication Equipment & Handsets
Telecommunication Equipment & Handset Company, which is comprised of handsets, telecommunication
equipments, and PCs, grew 37% YoY to 7.46 trillion won in 2003. Handsets, the largest business in this
company, posted 72% YoY growth on a unit basis, selling more than 27 million units. LGE is now is the 5th
largest handset maker in the world, moving up one notch from last year’s 6th position.
Our CDMA handsets did particularly well last year. Fortune magazine gave its top rating to the camera
phones we shipped to Verizon, the US largest wireless carrier, and we became the number one seller of
camera phones in the North American market. Moreover, on the back of our success in the North American
and Indian market we became the number one CDMA handset maker in the world.
The future of our GSM business also looks very promising. In less than two short years, we have already
made business ties with the major GSM operators such as Vodafone, T-Mobile, and Orange in Europe and
Cingular in the US, and our GSM sales increased 132% YoY.
Our systems business has suffered from contraction in the telecommunication equipment market and our
own restructuring, but we have taken the steps necessary to maintain profitability going forward. As for our
PC business, we achieved 50% sales growth due to an increase in notebook PC orders.
PROFITS
In 2003, we were able to show a significant increase in profits from the previous year. Our gross profits
increased 11% YoY to 4.83 trillion won, operating profits grew 3% to 1.06 trillion won, recurring profit rose
24% to 837 billion won and net profit surged 33% to 663 billion won.