Lotte Group recently held its 2025 IR Day to update investors on the business directions that its five major affiliates - Lotte Welfood, Lotte Chilsung Beverage, Lotte Shopping, and Lotte Chemical – would be taking in 2025.
This event was likely a move to quell concerns that arose at the end of 2024, when Lotte was faced a liquidity crisis after poor performance by the Lotte Chemical arm left the company needing to repay some KRW2tn (US$1.4bn) in corporate bonds, a crisis that Lotte averted by offering the Lotte World Tower as collateral and selling various assets.
The group also announced its FY2024 full-year financial results, with reports made in comparison to 2019 pre-pandemic levels. This included an increase in total revenue to KRW 80.1tn (US$54.8bn), a recovery to 2019 pre-pandemic levels of KRW 79.9tn (US$54.7bn); but a drop in EBITDA to KRW 6.5tn (US$4.4bn) from KRW8.4tn (US$5.7bn) in 2019.
Lotte has announced various strategies for each of its affiliates, and for Lotte Welfood this includes an increased focus on its India business and high-value product innovation, amongst others.
“Lotte has had high dependence on revenue from just several specific business units, which resulted in high EBITDA volatility for the group,” Lotte Group Chairman Shin Dong-bin told the floor during the event.
“This is why we are now enhancing our portfolio, with the emphasis on securing a balanced business portfolio and stable revenue structure through restructuring, strengthening existing businesses, and investing in new growth engines.
“Within the food business, we currently have 50 factories and 313 stores across 14 countries such as India, Pakistan, Vietnam and more – in 2025 we are working on a One INDIA strategy which involves integration of local operations and expanding our regional coverage.
“We will also be expanding Lotte brand awareness by fostering our Mega Brands in India, including Lotte Krunch, Lotte Shark Bar, Lotte Peppero and more, in addition to launching more new products under these brands.”
There is also a push to improve domestic sales and profits despite Lotte already being one of the largest food and beverage brands in the country.
“We will be making a positioning shift towards high value-added products, and work to strengthen our position as the No. 1 health and wellness foods brand in Korea,” the company added.
“This will include the pioneering and expansion of more Casual H&W products, which refers to products under our existing brands but with a H&W value addition such as sugar-free ice creams and low-sugar custards.
“This is in addition to the development and strengthening of more specialised health and wellness food brands such as ZERO, Easy Protein, Meal Ion and more.”
Emergency measures
Lotte has divested various non-core businesses and what it deems ‘low-efficiency’ assets since 2024 in order to avert the liquidation crisis.
This has included the sale of land at various Lotte Marts and department stores, as well as several Lotte Welfood factories.
Other major sales included its Lotte Rental car rental business, the healthcare business, its ATM business, and Korea Seven which operates 7-Eleven convenience stores locally.
