LG 2004 Annual Report Download - page 42

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supplying a total of four million WCDMA
handsets to major European companies such as
Hutchison and Orange.
Our mobile handset business showed a
significant profit increase over the previous year.
Due to the launching of new products such as
MP3 phones, two and three mega-pixel camera
phones, and the outstanding sales growth of 3rd
generation WCDMA handsets, our operating
profit margin went up to 6.3%, a 1.5%p growth
over the previous year.
DIGITAL APPLIANCE
�Our Digital Appliance Division deals
with products such as air-conditioners,
refrigerators, washing machines, and vacuum
cleaners. Despite a slowdown in domestic sales
caused by stagnation in our national economy,
and the increased value of Korean currency,
Digital Appliance sales in 2004 increased 10%
to KRW 6.2 trillion. A surge in premium
products, such as commercial air-conditioning
systems, side-by-side refrigerators, and drum
washing machines, fueled the overall growth.
Exports of premium washing machines grew at a
particularly remarkable rate in 2004. Our DRUM
washing machine reached a milestone in the
North American and European markets, and we
saw a 44% growth in our washing machine
business over the previous year. This contributed
a great deal to the increase in the Digital
Appliance Division's exports.
Domestic sales of most products in the
Division were somewhat slow. However, our air-
conditioner sales increased remarkably due to
Korea's hot summer. As a result, domestic sales
in the Digital Appliance Division were up 2%
over 2003. 2004 was a year for strengthening
the market position of LG Electronics' high
brand value premium products. Commercial air-
conditioners sales, which have great potential to
enhance profitability, grew remarkably. In 2003
Sales by Division (in billions of Korean won)
2004 2003 Change
Domestic Sales 1,982 1,946 2%
Digital Appliance Exports 4,234 3,703 14%
Sub Total 6,216 5,649 10%
Domestic Sales 864 875 -1%
Digital Display Exports 4,119 3,299 25%
Sub Total 4,983 4,174 19%
Domestic Sales 472 400 18%
Digital Media Exports 3,331 3,669 -9%
Sub Total 3,803 4,069 -7%
Domestic Sales 1,624 1,411 15%
Mobile Communications Exports 7,859 4,695 67%
Sub Total 9,484 6,106 55%
Domestic Sales 1,177 849 39%
Mobile Handsets Exports 7,174 4,335 66%
Sub Total 8,351 5,184 61%
Domestic Sales 145 162 -10%
Others Exports 29 18 65%
Sub Total 174 179 -3%
Domestic Sales 5,086 4,794 6%
Total Exports 19,573 15,383 27%
Sub Total 24,659 20,177 22%
* Business results are readjusted by dividing them among the four business divisions that were newly launched in 2005.