[Edaily KYUNG GYEYOUNG Reporter Kim Ji-woo] “The external capital markets still view us with skepticism. Secure fundamental competitiveness by staying true to the basics of our business.”

Shin Dong-bin, Chairman of Lotte Group, emphasized the importance of focusing on fundamentals to the management of the group’s affiliates at the “2026 Second Half VCM” (Value Creation Meeting, formerly the Executive Committee Meeting) on the 15th. Although the chemicals business—which had been a “troubled area” since the start of the year—has returned to profitability and the profitability of the retail and food businesses has improved thanks to the recovery of domestic demand, he urged them not to rest on their laurels but to pursue continuous innovation.

“Tradition is the starting point for innovation”

Lotte Group held its second-half VCM that day at Lotte World Tower in Songpa-gu, Seoul, presided over by Chairman Shin Dong-bin. The VCM, held twice a year—in the first and second halves—brings together about 80 people, including CEOs and division heads from the “ Lotte Corporation(004990) ” and representatives from each affiliate, to discuss the group’s management policies and mid- to long-term strategies.

Lotte Group’s financial performance has improved since the first-half VCM. According to Lotte Corporation, while the group’s revenue rose 4% from 17.9 trillion won in the first quarter of last year to 18.6 trillion won in the first quarter of this year, operating profit surged by 181% from 279.9 billion won to 787.6 billion won. LOTTE CHEMICAL CORPORATION, which played a key role in the declaration of emergency management in August 2024, has also returned to profitability. This indicates that the “profitability-centered structural reform” emphasized by Chairman Shin in the first half of the year has paid off.

Nevertheless, Chairman Shin has not let his guard down. This is based on his assessment that the external capital markets remain skeptical. He predicted that uncertainty caused by global geopolitical issues would increase in the second half of the year, while the pace of technological advancements—including artificial intelligence (AI) agents—would accelerate. Chairman Shin urged the CEOs of the group’s affiliates to analyze the situation from multiple angles using a PEST (Political, Economic, Social, and Technological) analysis framework and to approach management accordingly.

Expressing concern that the group’s business competitiveness had stagnated over the past decade, Chairman Shin Dong-bin emphasized strengthening fundamental competitiveness centered on key principles such as △selection and focus, △continuous improvement and innovation, and △adherence to management fundamentals. He believed that, as the group’s core businesses have entered a mature phase, securing fundamental competitiveness by staying true to the basics of the business is necessary to gain new growth momentum.

Following the first-half VCM, he stressed the need to streamline non-core businesses that do not align with the group’s strategic direction to secure profitability and competitiveness. He also urged the group to enhance value centered on core brands to strengthen global competitiveness. Stating that the group must adhere to management fundamentals such as customer-centricity and profit generation, he instructed that investments be executed only after thorough verification of feasibility and profitability, and within the limits of financial soundness.

It was reported that Chairman Shin concluded the meeting by presenting examples of innovation in traditional industries. He repeatedly emphasized, “Tradition should not be a ceiling that imposes limits, but rather a starting line for new innovation,” adding, “CEOs must present a clear vision, continuously improve from the customer’s perspective, boldly innovate, and ensure the organization evolves continuously.”

Review of AX Progress Across Group Companies

AI, which Chairman Shin repeatedly emphasized, was a notable focus at this VCM. AI Transformation (AX) is a major initiative being pursued company-wide by Lotte. Chairman Shin Dong-bin demonstrated his passion for the initiative by personally participating in the “CEO AI Academy” last month, where he learned how to create AI services based on Vibe Coding and develop Agent AI.

Prior to the start of the VCM, Lotte organized an “AI Agent Exhibition” to showcase the group’s progress and case studies in AX. The exhibition featured over 10 Agent AI systems developed for practical application in various business operations, including voice- and motion-recognition-based AI assistants, as well as tools for price monitoring, demand forecasting, and global market outlook analysis.

Notably, Lotte also invited an international speaker to deliver a lecture for the first time in the history of the VCM. Futurist and management consultant Doug Stephens took the stage and, drawing on his experience formulating strategies for leading global companies, reportedly gave a presentation to Lotte executives on evolving AI trends and the global market.