LG Electronics Inc
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LG Electronics Inc
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Good morning and good afternoon. Thank you for joining LG Electronics earnings release conference call for the first quarter of 2023. This conference call will start with a presentation on the earnings results, followed by a Q&A session. [Operator Instructions] I would now like to hand the conference over to the first speaker.
Good afternoon, my name is Sang Bo Sim from Investor Relations. Thank you for joining LG Electronics earnings release conference call for the first quarter of 2023. With me are representatives of each business management Mr. I-Kueon Kim from Home Appliance & Air Solution; Mr. Jeong-hee Lee from Home Entertainment; [ Mr. Ju Yong Kim ] from Vehicle Component Solutions; [ Mr. Dong Cheol Lee ] from Business Solutions. We are also joined by Mr. [indiscernible] from Global Business Management Group, Mr. Sang Ho Park from Corporate Business Management Division; [ Mr. Hyungyu Lee ] from Finance Division; and Mr. Hong-Su Lee from Accounting Division.
Please note that all statements we will be making today regarding the financial results of the first quarter are subject to change in accordance with the result of the external review. I would also like to remind you that uncertainties in the market and changes in strategies may cause our actual results to be different from the outlooks and forward-looking statements made today.
Today, I will outline the overall performance results of the first quarter of 2023 and the outlook for the second quarter. Then each division will take turn to deliver its business results and outlook. After that, I will share our ESG activities and achievements.
Now let me start with the consolidated financial results of the first quarter of 2023 and the outlook for the second quarter. Consolidated sales of the first quarter was KRW 20.4 trillion, and operating profit was KRW 1.5 trillion. Q1 revenue decreased year-on-year due to slow global demand in TV and IT stemming from weakened consumer sentiment. However, we are successfully improving our business portfolio through qualitative growth on the back of significant expansion in B2B businesses such as vehicle components and system air conditioners and continued revenue increase from non-hardware business.
Despite the impact from sluggish sales, stable profitability was recorded across all businesses, thanks to enhanced operational efficiency secured through cost structure improvement and efficient spending and efforts to reduce expenses, including logistics costs.
I will now briefly review the first quarter performance of each business. H&A recorded KRW 8 trillion in sales, KRW 1 trillion in operating profit and 12.7% in profitability. HE recorded KRW 3.4 trillion in sales, KRW 200.3 billion in operating profit and 6% in profitability. VS recorded KRW 2.4 trillion in sales, KRW 54 billion in operating profit and 2.3% in profitability. BS recorded KRW 1.5 trillion in sales, KRW 65.7 billion in operating profit and 4.4% in profitability. Each business will later share its respective business results and outlook in detail.
Let's move on to the profit and loss and cash flow of the first quarter. In terms of profit and loss, reflecting financial income and expense, equity method gain and loss, nonoperating income and expense, corporate income tax and income and loss from discontinued operations, we posted KRW 546.5 billion in net income.
Next, on cash flow. Q1 cash flow from operating activities was KRW 1.1 trillion, and cash flow from investment activities was negative KRW 1.6 trillion, resulting in net cash flow of negative KRW 409.4 billion. When reflecting cash flow from financial activity of KRW 898 billion, cash balance at the end of Q1 came to stand at KRW 6.8 trillion, a KRW 488.6 billion increase from the previous quarter.
Next is the key financial position and indicators for the first quarter of 2023. As of the end of the first quarter, assets stood at KRW 57.5 trillion, liability at KRW 34.1 trillion and equity at KRW 23.4 trillion.
In terms of leverage ratios regarding liability to equity, debt to equity and net debt to equity, we are maintaining a healthy financial condition.
Now the outlook for the second quarter. In terms of the business environment, uncertainties are mounting in the market triggered by geopolitical risk such as the U.S. Chinese relations and Russia-Ukraine conflict, concerns of an economic downturn due to continued interest rate hikes and instability of the financial system prompted by monetary tightening. We will accelerate the transition to a business structure for sustainable growth by diversifying our business portfolio and create sound profitability through preemptive risk management and efficient spending.
We expect to grow the top line year-on-year in Q2 by actively responding to air conditioner demand in the peak season and securing steep growth in vehicle component sales. We expect operating profit to increase year-on-year on the back of revenue growth and stable profitability across all businesses.
Now let's move on to the first quarter results and second quarter outlook by business. We will start with H&A. Let me share the first quarter results of H&A. Revenue recorded a slight growth year-on-year as we apply differentiated distribution strategies and expanded the B2B business despite weakening demand for appliances caused by deteriorating economic conditions. Operating profit increased significantly year-on-year despite increased marketing spending entailed to address competition in the market on the back of reduced expenses, including logistics costs, together with active efforts to improve the cost structure.
Next is the outlook for Q2. Demand for appliances is expected to decline as consumption continues to shrink due to concerns of an economic downturn subsequently leading to further intensified competition in the market. Amid this environment, we will continue to achieve top line growth in B2B with eco-friendly, energy-efficient air solutions and proactively respond to shifts in demand by launching price-competitive strategic models in the volume zone to maintain our position in the market.
We plan to secure stable profitability through stringent cost measures such as obtaining stable material prices and reducing fixed costs and enhanced efficiency in spending, including marketing expenses.
I will share the first quarter results of HE. Sales declined year-on-year impacted by reduced TV demand in Europe due to the protracted Russia-Ukraine conflict and sluggish consumption brought on by elevated uncertainties in the global economy. Despite the impact from sluggish revenues, we recorded sound profitability turning around to be in the flat with a significant growth from the previous quarter and a slight increase year-on-year through efficient supply of raw materials and enhanced efficiency in spending including marketing expense.
Now let me share the outlook for the second quarter. In the market, recovery of TV demand delayed due to concerns of a global economic slowdown, competition in the premium product segment is projected to get fiercer, and there are also concerns of a possible cost increase regarding LCD TV panel prices. Accordingly, we'll secure growth momentum by strengthening competitiveness in mass-tier TVs as well as launching the new OLED evo and driving webOS platform business.
We seek to maintain solid profitability through accurate demand forecasting and better production operations, stable raw material prices and efficient cost spending.
Let me share the first quarter results of VS. Sales grew by a large margin year-on-year, thanks to increased sales volumes from high order backlogs and stable supply chain management for key components, including automotive semiconductors. Operating profit continued to be positive, improving both year-on-year and quarter-on-quarter on the back of revenue growth from new projects and enhanced efficiency in business operations.
Next, the outlook for the second quarter. Uncertainties regarding demand for vehicle components continue to exist in the market with concerns being raised over demand in the global auto market as consumer sentiment is contracted. However, the transition to electric vehicles is increasing steadily. We will maintain high top line growth by securing new orders and managing the supply chain. We will seek to improve profitability based on product mix improvement and operating leverage effects.
I will share the first quarter results of BS. Sales decreased year-on-year, impacted by dampened demand in the global IT market, but increased quarter-on-quarter on the back of Q1 peak season effects and increased sales in B2B business, including hotel TVs. Operating profit decreased year-on-year due to the drop in revenue but turned around to be in the flat quarter-on-quarter through expanded sales of Gram PCs in the peak season and active efforts to enhance spending efficiency.
Now let me share the outlook for the second quarter. IT demand is expected to continue on a downward path up to the first half of the year, though there are expectations of a slight pickup from the second half. Information display is projected to maintain a growing trend, though the pace of growth may be somewhat slower. We will strengthen our product lineup by launching differentiated products such as Gram Ultra-Slim, secured growth momentum in ID business by identifying potential demand in diverse verticals and drive new businesses, such as EV charging solutions. We will continue to secure profitability by optimizing spending.
Last, but not least, let me share our ESG activities and achievements. We are actively seeking to grow eco-friendly business as we pursue revenue growth through energy efficient, eco-friendly products such as heat pumps and ESS. We are reducing carbon emissions in the use stage of major products by developing innovative technologies that help enhance energy efficiency and launching products that adopt these technologies.
A recognition of our efforts, LG Electronics has been named 2023 ENERGY STAR Partner of the Year Sustained Excellence by the U.S. EPA and DOE this year. This is the 10th time that LG Electronics has been named Partner of the Year since 2012 and represents the level of recognition we are receiving from external partners for our achievements as we lead to address global climate change.
Moreover, we seek to protect the marine ecosystem and address the climate crisis through new upgrade features via our upgradable appliances. The microplastic care option first released in washing machines in early February reduces emission of microplastics that are 20 micrometers or bigger by 70% compared to standard options. And the energy saver option on dishwashers is expected to reduce energy consumption by 20% compared to standard options.
We are also pursuing a circular economy by expanding the use of recycled materials in major products. Recycled materials are already applied to many of our products such as refrigerators, styler, dishwasher and -- mini. We aim to expand the scope to Styler Shoecase and Shoecare and OTV this year and used a total of 600,000 tons of recycled plastic by 2030. We will continue to provide innovative customer experiences by offering products and technology aligned to ESG values and turn these into business opportunities as we lead ESG efforts to build a better life for all.
That brings us to the end of the first quarter earnings release and outlook for the second quarter. We will now take questions. Operator, please commence with the Q&A session.
[Foreign Language]
[Operator Instructions] The first question will be presented by Kangho Park from Daishin Securities.
[Interpreted] First of all, I would like to congratulate LG Electronics for delivering solid numbers for your business performance despite this difficult business environment. I have two questions, one for H&A business and the other for corporate-wide operations.
First, for H&A. Your first quarter operating income recorded 12.7%, and it is a very impressive number. However, when it comes to the second quarter and due to the second half, there still are a lot of uncertainties in the market demand and the market prospect looks quite murky. In the first quarter, you benefited from improvement in cost structure, including logistics cost and raw material prices. Do you believe that you'll be able to keep benefiting from this impact in the second half? Will you be able to maintain this high profitability into the second half?
My second question regards the corporate-wide operation. Historically, LGE showed this typical seasonality of having high numbers in their first half and low in the second half. In the second half, do you think you'll be able to break out of this trend and have a -- and secure high annual profit based on the prospects of the recovery in the economy and continuous improvement of your business?
[Interpreted] Let me answer the -- let me answer your question on H&A business first. It's true that we have posted double-digit numbers, and this is a record high number for our business. Uncertainties in the market brought on by financial instability in the U.S. and major countries and undermined consumer confidence are projected to persist into the second half, however, and beyond. And accordingly, competition is expected to continue to intensify.
We aim to maintain growth momentum and secure stable profitability by preemptively and flexibly responding to demand changes by region and segment.
For product strategy, we will respond proactively not only to the premium segment, which is our stronghold, but also the newly formed volume zone driven by income polarization. By regions, we'll increase sales and expand B2B in the Korean market, which made a turnaround in terms of growth while keeping our eyes on Europe and other markets that have the potential of demand recovery.
At the same time, we will innovate cost structure and enhance efficiency in logistics costs, marketing expenditure and others to make substantial improvement year-over-year and maintain stable level of profitability.
[Interpreted] Let me answer your second question on corporate-wide operation. As mentioned before, difficulties in business environments are projected to be sustained into 2023 as interest rates are kept high, increasing the possibility of economic recession and geopolitical risks continue in major markets.
There are some positive factors for our business. For example, less pressure on raw material and logistics costs and an increase in operating profit of vehicle component business. On the other hand, risks do exist as demand continues to dwindle, subsequently intensifying competition and putting pressure on marketing costs.
Against this backdrop, in the first half, LG Electronics will focus on risk management based on profitability amidst the drop in consumer demand and prepare for the possible improvement of demand in the second half by strengthening our business fundamentals. This will enable us to maintain annual growth momentum and secure solid profitability.
For our profitability, we did tend to show seasonality of high in the first half and low in the second because of the characteristics of our products, including AC and as promotions are concentrated on end-of-the-year peak season. But in recent years, we have successfully improved the business structure to offset the effect from this trend by growing B2B business, enhancing regional portfolio and promoting online sales. We'll continue to exert our best to stabilize quarterly profitability by improving inventory management based on accurate demand forecast and expanding sales and footprint of B2B products.
[Foreign Language] The next question will be presented by Dongwon Kim from KB Securities.
[Interpreted] I have two questions on HE and VS. First, on HE. With competitors joining the OLED TV market, concerns arise that LG Electronics market presence could weaken like MS drops and its marketing spend could increase against competitors undermining profitability. What is your strategy to respond to that potential?
My second question is turning to VS. Can you give us an update on your current backlog and the proportions of each main business? Can you also share your targeted backlog for the VS division in each of the main businesses as of the end of 2023, if possible?
[Interpreted] Let me address the first one on HE. OLED TV's growth is likely to be limited due to TV demand slowdowns compared to pre-COVID levels, and our MS could fall due to competitors' entries into the OLED business. But we expect their entry help expand the market scale as a whole, and thus, we're confident in our #1 leadership as an OLED pioneer.
Our profit protection strategy is to diversify business portfolio by expanding our business areas into platform and becoming the #1 brands in premium TVs with our OLED line at the center on the back of our operational capabilities improvements.
On the operations side, we will secure a sound level of profitability through ASP increases and cost [ fee ] being driven by premium product expansion. Considering our regional competitiveness and market outlook, we'll improve our ASP and product mix, maintain appropriate levels of inventory and further the efficiency of cost inputs in order to improve profitability.
With regards to the diversification of our business portfolio, we will have more competitive content and services while providing an unrivaled experience with webOS, so that we drive towards a highly profitable platform business to address slowing demand within hardware.
[Interpreted] To the second part of your question on VS, we currently have a backlog of over KRW 80 trillion. In terms of each business shares of the total backlog, infotainment takes up a percentage in the mid-60s; EV component, around 20%; and automotive lamp in the mid-teens range.
We want to continue growth momentum year-over-year with more order intakes going into 2023. On each business' shares, we expect the EV component business to continue to take up a larger share in the future based on the high growth within the EV markets and the synergies with the JV LG Magna EPT.
[Foreign Language] The next question will be presented by Jong Jin Park from JPMorgan.
[Interpreted] First of all, congrats on a good quarter. In the first quarter, your profits actually increased. My first question is on VS. The demand within the automotive market is expected to be sluggish in a tighter consumer spending environment and recession. Do you expect there to be an impact on VS division's long-term revenue guidance?
And my second question regards H&A business. Recent collapse of U.S. banks and high interest rates likely to undermine consumer confidence. I am aware of the fact that LGE is focusing on high-end segments but are you making any changes in demand forecast for home appliance against this unfavorable environment?
[Interpreted] I will start with the first part on VS. We are aware of the concerns over the vehicle component and automotive demand declines led by recent increases in interest rates and subsequent worries over economic slowdowns. However, some major OEMs are expected to drive demand with incentive expansions. And we don't see any seismic change in market research firm's recent forecast -- our customers' production plans.
On parts supply, some continued headwinds of the chip shortages are likely to get resolved pretty much from 2024 when a number of foundries complete their construction of production facilities bringing OEMs productivity and cost competitiveness to the upside. So in the mid- to long term, our revenues are likely to stay in previous outlook ranges showing midterm-level CAGR since we can expect rising EV-related demand along with accelerating trends towards ex-EV.
[Interpreted] Let me answer your question on H&A business. Russia-Ukraine war, slowdown of global economy, high inflation and other unfavorable factors continue. Market demand for refrigerators and washing machines dropped by 3.4% in 2022. And in the fourth quarter of the year, we saw 10.3% decrease in demand, and the trend continues. Moreover, consumer confidence is further eroded as financial instability in the U.S. deepens. All of which points to one conclusion, it will be difficult to expect demand recovery for a while.
Some do expect demand to rebound starting from the second half. However, it will take time before people really see an improvement in their disposable income. Even those things may get better in the second half, the speed of recovery will be gradual.
Another change that influences our business is demand polarization. Premium segment continues to show healthy level of demand. On the other hand, mid-income consumers who are experiencing a drop in their disposable income are now showing a different pattern of consumption from the past. We now tend to scale down, focusing more on key features of products and this is leading to a formation of a volume zone.
In order to get market leadership despite this unfavorable circumstances, we'll tap into mass tier and ODM models to attract the volume zone segment and keep our competitive edge. At the same time, we will continue to strengthen our position in the premium sector, where prices tend to be rigid so that we can deliver on our strategies of securing stable production volumes and protecting profit.
[Foreign Language] The next question will be presented by SK Kim from Daiwa.
[Interpreted] First of all, congratulations on your performance for this quarter. I have two questions, one for the corporate-wide operation and the other for HE business.
First, corporate-wide operation. My first question regards the growth engine for the overall business of LG Electronics. And -- they be linked with the -- your typical profitability pattern of high in the first half and low in the second half. Ever since you have withdrawn from the smartphone business, there are some concerns over your business that this move might have weakened your growth engine for the future. So regarding this, can you share with us your current investments in future technologies and direction for new business?
My next question is on the outlook of and current status of your China inventory. It's my understanding that you proactively adjusted your China inventory and your China inventory got back on track at the end of 2022. So can you please share the current status of and the outlook on your sellouts? Can you also share the kind of status of in-house inventory levels like panel and finished products and also channel inventory?
[Interpreted] Let me answer your question regarding corporate-wide operation. To strengthen our growth momentum, first, we are securing the full potential of existing business. And second, we are entering new business areas with significant growth potential to build future-oriented business portfolio. At the same time, we are not only investing in developing future-oriented in-house grown technology but also actively preparing for future through inorganic measures such as M&A and joint venture.
Let me talk about what we are doing in order to secure the full potential of our traditional main business. First, for H&A business, we are expanding sales in B2B, such as system air conditioners built in, and rental and adopting new business models related to smart appliances, such as ThinQ and upgradable appliance.
For TV business, we aim to deploy webOS platform further to grow the ecosystem. And our goal based on the platform is to widen our business portfolio to advertisement and content to secure growth momentum.
For vehicle solution, which is our key growth engine, tapping into the accelerated market shift towards EV and our differentiated key technologies in electricity, electronics and communication, we will continue to introduce innovative and high value-added products to the market, such as large-screen digital cockpit, AI connected smart lamp and IPGM e-Powertrain with integrated driving parts and widen our customer bases to strengthen our foothold in the market.
Last, but not least, for new business, our activities in technology and product development in high-potential areas like robots and EV charging solutions are now in full swing, and we continue in our search for new business opportunities.
[Interpreted] Let me run it down for the HE item. Although the total sellouts are expected to fall year-over-year in the front half of this year due to downward demand trends, we have hedged ourselves against this inevitability by aligning sellouts, sell-ins that are closely associated with [indiscernible] demand outlook and total production volumes. And we expect to maintain a sound level of channel inventory and improve wOS year-over-year.
For product segment, OLED channel inventories have improved Y-o-Y and wOS similar to that of last year in the first half. And in UHD and FHD, both channel inventory and wOS are expected to improve Y-o-Y in the front half of 2023.
Per region, channel inventory and wOS are likely to worsen slightly Y-o-Y in Korea and the U.S. due to demand declines and fierce competition on which we are going to work more closely in the first half. But the figures are to improve Y-o-Y in Europe and the CIS region.
[Foreign Language] The next question will be presented by Hyung Wou Park from SK Securities.
[Interpreted] Hello, everyone. This is Park Hyung Wou from SK. I have two questions. First -- my first question is on HE division's strategy. It's especially about OLED. When I look at LG Electronics, we can often find many articles about OS. How much does the webOS need platform business contribute to your earnings? Does it actually contribute to your earnings? And are you also optimistic about the growth potential of the business?
My second question is on VS division's demand. LG Electronics has put its vehicle component business in the forefront, while other automotive parts suppliers expected EV parts demand to hover below market expectations all year this year. So sometimes they said it's a bit disappointing. What drives the gap? That's it.
[Interpreted] Let me take the first part on HE. With the rise in content supplies like OTT services combined with various applications and services, the value of smart TVs has risen as a media platform that provides customers with lots of things to see and enjoy based on a TV optimized OS.
Within this environment, we have established platform ecosystem where we have a competitive edge with 190 million users data in addition to our unrivaled UI and media play performance and reliable and scalable webOS platform. And that has brought together various partners and developers. By aligning with webOS smart TV users, we have further detailed new business models that link with various content, services and targeted ads.
Our platform business has posted more than double the revenue growth year-over-year for 2 consecutive years despite the pandemic. And as of Q1 this year, its growth rate stood at over 40% year-over-year.
To broaden the ecosystem of our platform business, we have sold our webOS Smart TV platform to multiple regional TV makers, partnering with more than 200 companies as of Q1 2023. Going forward, we will focus our business capabilities and strategies on continuing to create more business value in content services and targeted ads based on the device expansions.
[Interpreted] Let me answer your question on VS. First of all, as to the demand outlook, it's likely to differ based on respective product portfolios and prediction metrics.
Regarding our VS division though, when compared to other automotive parts suppliers, our business portfolio is in good health, which is comprised of EV-related products and connected car components where the market is presently expanding.
In these business areas, we have sought to expand our order intakes and fortify our market presence versus other automotive parts suppliers. Just to echo, we have provided high value-added products with advanced frequently used and optimized UI for our OS based on our many years of B2C experience trying to better understand our end customers in addition to our competitive technologies in electrics, electronics and telecommunications.
[Foreign Language] The next question will be presented by Simon Woo from Bank of America.
[Interpreted] My first question is on Vehicle Component Solutions. Your backlog is now posting about KRW 80 trillion in your top line growth seems pretty good. However, your operating profit seems to be stagnant at 1% to 2%. What's the reason? Can you also walk us through your strategy to achieve mid-single digits of operating profits?
And my second question regards H&A business. You have mentioned in the -- you have mentioned several times in the past that your rental business, including water purifier is quite significant in its size. Could you share with us your current sales status and annual target for the business? And how's your business doing in overseas markets?
[Interpreted] Let me address the first one on VS. First of all, in regards to the outlook on VS division's profitability, we expect to see -- we expect to continue seeing flow-through in a profitability gradually getting us into the positive following last year. I think you now have some concerns over our operating profit. The prices have risen and operating -- operational prep costs have also risen to address new projects. Therefore, the profit increase in rate has been a bit low relative to the growth rate of our top line.
However, we are now discussing sharing cost burdens on a positive note with our OEMs, our customers based on our strong relations with them. In addition, we are going to improve that further because we expect greater tailwinds in terms of our products and product mix improvements and top line growth.
We will further raise it this year by improving cost structures more proactively across our operations like improving SCM and production efficiency along with volume ramp-up.
[Interpreted] Let me answer your questions regarding H&A's rental business. Last year, rental business recorded KRW 860 billion in revenue. And we expect our rental business to grow by about 10% year-over-year for this year. Growth in domestic rental market as a whole is actually slowing down. However, we have confirmed the possibility of renting out large appliances. And based on our differentiated product and service competitiveness, we will secure growth momentum by expanding categories that have high entry barrier. For example, large appliances that can be taken apart and collected for cleaning.
We are resuming overseas rental business, which has been on hold during the pandemic, focusing on the Malaysian market. We started to look into infrastructure in the first half of last year. And in the second half, laid the foundation for robust business by introducing self-care model and financial lease.
Better customer experience and a drop in monthly rental fee has led us to post continuous growth trend since the second half of last year. Since we are still at the early stage of the business in order to focus on identifying scalable business model, we plan to expand rental service in succession from water purifiers to air purifier, styler, air conditioners and vacuum cleaner by the end of this year.
In mid- to long run, based on the success we build in the Malaysian market, we will strategically consider expanding our operation to other countries.
[Foreign Language] The next question will be presented by Eun Young Ko from HI Investment & Securities.
[Interpreted] I have two questions, one for H&A and the other for Business Solutions. First, for H&A business. You have been mentioning about the importance of volume zone. And is your strategy of expanding volume zone translating into improvements in actual numbers, for example, market share?
And my second question. The new business area includes robot and EV chargers for BS Solutions -- for Business Solutions division. Please share with us the current progress and mid- to long-term growth plan for this new business category.
[Interpreted] Let me answer your question on the H&A business. The volume zone strategy, which we adopted in the second half of last year is now delivering tangible results in the business. For example, with the introduction of new strategic models in this year, the company recorded a double-digit growth in revenue and profitability.
We were able to achieve a healthy level of sales compared to the competition despite global demand crunch mainly because B2B products, including system AC, posted high growth and our strategy to focus on the volume zone has been proving to be effective.
As income polarization and uncertainties in global demand are projected to continue, we will strengthen product road map for volume zone, including in-house manufactured mass-tier models and ODM products and consider ways to strengthen local supply to lay the foundation for our volume zone business.
[Interpreted] Let me answer your questions regarding Business Solutions, robots and EV chargers. First, robot business. Based on our technologies and capabilities on indoor, autonomous driving and multi-robot operations, we are pursuing business in delivery and logistics in the commercial robot market.
For serving robots, we are working with a major telco company in Korea, and we are looking forward to seeing meaningful increase in market share for this year. For logistics, we are having discussions with not only major logistics centers in Korea, but also with diverse global players.
In mid to long term, we would like to tap into the already established food and beverage segment as our volume zone and by making inroad into overseas logistics market, we aim to secure capabilities as a solution provider for automation of delivery and logistics robots. To do so, we will strengthen partnership with diverse industry and come up with a solution business model by expanding technologies related to robots and creating synergy with sister company.
Next is EV chargers, since the acquisition of Apple Mango, development and production site has been set up in Pyeongtaek Digital Park, and we are preparing to introduce slow and quick chargers to the domestic market in the second quarter.
We're also preparing to complete product lineup to enter the U.S. and global markets in the mid- to long run. Rather than being a simple provider of charging devices, our ultimate goal is to grow as a solution provider who can provide differentiated solutions that cover hardware, software and service and identify diverse services based on the partnership with charging operators.
[Foreign Language] Currently, there are no participants with questions. [Operator Instructions] [Foreign Language] [Operator Instructions] Once again, currently, there are no participants with questions. We will wait for a second until there is another question.
[Interpreted] That brings us to the end of LG Electronics earnings release conference call for the first quarter of 2023. For further questions, please contact the IR team. Thank you.
[Statements in English on this transcript were spoken by an interpreter present on the live call.]