“Reducing low-profit businesses and expanding AI”… LG Display’s Jeong Cheol-dong: COGS ratio from 98% to 86%

LG Display is seeing improved financial performance driven by cost-saving innovations implemented since CEO Jeong Cheol-dong assumed leadership. The company has successfully lowered its cost of goods sold (COGS) ratio, a key indicator of profitability, demonstrating a more efficient operational structure.

In 2023, LG Display's COGS ratio stood at a high 98.4%. However, through focused efforts on cost reduction, this figure was brought down to 86.9% by the end of last year. The trend continued into the first half of the current year, with the ratio further decreasing to 86.3%. This substantial reduction means that for every 100 won in sales, the company now spends approximately 86 won on costs, compared to nearly 98 won previously.

This strategic shift involves scaling back lower-margin businesses while expanding investments in artificial intelligence (AI) related ventures. By optimizing its cost structure and focusing on more profitable areas, LG Display aims to enhance its overall financial health and competitiveness in the challenging display market.