LG Display Co., Ltd.

Good afternoon.

This is Daniel Lee in charge of LG Display's IR.

On behalf of the company, I would like to thank all the participants for joining our conference call today. Today, I am joined by our CFO, D.H.

Seo, Hee-yeon Kim, Senior Vice President of Corporate Strategy Group, Seung-min Lim, Vice President of Corporate Planning, Stephen Ko, Vice President of TV Marketing, Jae-young Kwon, Vice President of IT Strategy and Marketing, and Ki-hwan Son, in charge of Auto Marketing.

금일 실적 설명에는 약 1시간 동안 국영문 통합 방식으로 진행될 예정이며, 2020년 4분기 경영 실적 및 1분기 전망에 이어서 질의응답 순서로 진행하도록 하겠습니다.

Today's conference call will be conducted for one hour in both Korean and English, starting with a presentation on the financial results of Q4 2020 and the company's outlook, which will then be followed by a Q&A.

4분기 실적과 관련된 상세 자료는 Please refer to the IR presentation document in the company's website for more details on the financial results of Q4 2020.

For those joining through the webcast, please refer to the details on the widget on your screen.

And before we begin the presentation, please take a moment to read the disclaimer.

And also please note that today's results are based on consolidated KIFR standards prepared for your benefit and have not yet been audited by an outside auditor.

그러면 지금부터 4분기 실적을 발표하도록 하겠습니다.

With that said, we will now start with the presentation on Q4 2020 earnings results.

먼저 4분기 경영 실적에 대해 말씀드리겠습니다.

Let me first start off with our business performance in Q4.

Revenue was up 11% on quarter, reporting 7,460,000,000 won.

Strong demand for TV and IT products and increases in shipment for OLED and P-OLED drove the top-line growth.

The sales value of the high-value products and the strategic challenges that have been focused on the business sector have gradually come to an end, and we have recorded 68.5 billion won, which is improved by 52.5 billion won compared to the previous quarter.

Driven by robust shipment of high-value ad products and as strategic tasks for each of the businesses where we placed a strong focus started to bring visible results, operating profit was up 521 billion on quarter, to report 685 billion won.

Operating margin was 9%, with EBITDA margin at 24%.

Due to a revision of the tax law, there was a reversal of deferred corporate tax credit with net profit reporting 621 billion won.

Next is on area shipment and AESP.

Q4 area shipment was up 5% on quarter to report 8.7 million square meters.

On growth in large OLED and small to mid-sized mobile panel shipment and higher LCD panel prices,

Blended ASP was up 12% on quarter and 30% on year, reporting $790.

The company's production capacity remained flat Q on Q. Next is on Q4 revenue breakdown by product segment. In terms of the revenue breakdown, IT panel accounted for the highest portion at 37%, TV panels 29%,

while Mogul and others accounted for 34%, up 5 percentage points on-quarter, driven by higher shipments for small to mid-OLED panels.

Next is on the company's financial position and ratios.

The company's cash and cash equivalent as of Q4 end was 4.3 trillion won, and the inventory was 2 trillion 170 billion won, down 230 billion Q on Q. Q4 borrowings on the financial statement fell 305 billion won compared to the third quarter. For the financial ratios, liabilities to equity ratio was 175%, current ratio 101%, and net debt to equity ratio came in at 77%, all posting an improvement on a Q over Q basis.

현금 흐름의 경우 전분기 대비 9,290억원 증가하여 기말 현금은 4조 2,970억원을 기록하였습니다.

Cash flow was up 929 billion won on quarter coming in at 4 trillion 297 billion won as of the Q4 end.

마지막으로 자사의 2021년 1분기 가이든스입니다.

Lastly, on company's guidance for Q1 2021.

We project Q1 area shipment to be flat Q1Q, and blended ASP is expected to decline by a high single digit due to seasonality.

Next is presentation by the company's CFO, D.H. Seo.

Good afternoon, this is D.H. Seo, CFO of LG Display.

Before presenting on Q4 performances, I would first like to wish all of you, our shareholders, investors, and analysts, all good health as we are in the midst of the COVID-19 pandemic.

Q4 saw Q1Q growth in shipment for large OLED and plastic OLED panels for mobile, and with good demand for TV and IT products,

LCD panel price continued an uptrend. As such, revenue was up 11% on-quarter and 16% year-over-year.

In terms of profit, the increase in output volume and the effect of evaluation and mix improvement were meaningful, and the profit was increased by 5,215 billion won compared to the previous quarter, and it was greatly improved compared to the previous quarter.

In terms of the P&O, we've seen increase in shipment volume as well as meaningful improvements in the product mix, which drove operating profit of $521.1 billion Q1Q. And on an year-over-year basis, there was a sizable improvement with a turnaround to profit.

In particular, the growth in production based on the stable operation of the OLED TV panel and plastic OLED business, 의미 있는 성과 개선 효과가 나타났습니다.

In particular, with the new OLED fab in Gwangju ramping up production, which led to growing panel sales for OLED TV, and based on increase in production under Pinterest stable management of the plastic OLED business, we were able to bring meaningful performance improvements.

또한, 재택문화 확산 및 인도어 액티비티 증가로 인한 기회의 요인으로 차별적 경쟁력을 보유한 IT 부문은

Also, leveraging opportunities from the spread of the remote working increase in indoor activities with its distinctive competitive edge, IT business continues to report stable performances. And on top of that, LCD TV has also contributed to profitability improvements.

Underpinned by such results, Q4 EBITDA margin reported 24%, highest ever in 15 quarters.

Next is on the guidance for Q1 2021.

Compared to a typical seasonality, we expect demand for TV and IT products to stay solid in the first quarter.

While we expect area shipment to stay flat queue-on-queue, blended ASD is projected to decline by upper single-digit on product mix changes on the back of seasonality.

The first quarter of this year is expected to have a strong market demand, but we will continue to monitor the business environment more closely and respond to unexpected changes due to inflation and seasonal factors.

Although overall we expect solid market demand in Q1 compared to the past, unexpected volatilities may surface driven by FX rate and seasonality factors. As such, we will closely monitor and respond accordingly to business environment. Next is on update and outlook for each business segment.

After the new Guangzhou SAV came online, sales have been quite good as we continued on with steady shipment.

As such, Q4 OLED TV panel shipment was around 1.6 million units, which is up 50% on-year.

The more positive thing is that the original and differentiated value of OLED is clearly recognized by the final consumers. With the change in lifestyle due to COVID-19, the role of TV has been expanded, and the exact quality, such as eye health, OLED's unique value has been further highlighted, and the position in the high-end TV market has been further strengthened.

What is more encouraging is that the end consumers are clearly seeing the distinct value that is intrinsic to OLED. COVID-19 has brought on changes to people's lifestyles, with TV taking on a greater part of that lifestyle, and the value that OLED offers in terms of precise and accurate picture quality, design, healthy eyes have been highlighted,

further solidifying its positioning in the high-end TV market. Based on this, we are targeting 7 to 8 million annual unit sales in 2021.

Supported by expanded product lineup, we will set up a solid positioning, respond to diverse consumer needs, and in so doing, we'll strengthen the company's earnings base.

Plastic OLED-centered mobile business is aiming to build a stable business structure this year. We will build a stable business structure this year. We will build a stable business structure this year. 전년 대비 보다 개선된 성과를 만들도록 노력하겠습니다.

For the mobile business, this year we plan to further strengthen stable operational bases around plastic OLED. Based on strengthening of internal capabilities, productivity enhancements, and customer relationships, we will minimize off-season volatilities seen in the first half of the year and will endeavor to bring better year-over-year results.

다음으로는 IT와 LCD TV 부문입니다. Next is on IT and LCD TV.

For IT, where we have differentiated competitiveness underpinned by strong production capabilities and close relationship with our customers, we expect to further strengthen product and market leadership and continue to generate earnings profit.

LCDTV 부문도 변화된 수요 환경과 고객 요구에 유연하게 대응하며 기회를 최대화하는 방향으로 운영해 나가고자 합니다.

For LCDTV, we will be flexible in addressing changes in the demand dynamics and customer requirements to fully leverage opportunities presented.

끝으로 재무관리 활동입니다. That topic is on the financial management.

Up until the first half of the year, on the back of continuing trend of the so-called untapped or contact-free environment, we expect overall market demand to remain solid with seasonality impacting certain products. However, depending on how COVID-19 plays out, volatility may resurface. We will be nimble in responding to opportunities and at the same time closely monitor risk factors

and engage in flexible yet stable financial management activities.

2020 CapEx was cut from the previous level to mid-2 trillion won level, and we will keep to the investment principle of spending CapEx within the EBITDA level. As you've seen, we saw meaningful improvements in key financial ratios for Q4, and we will continue to sustain the improvement in financial stability.

Thank you for your attention. 다음은 질의응답 시간을 갖도록 하겠습니다. 오퍼로이드께서는 질의응답 안내를 부탁드립니다.

지금부터 질의응답을 시작하겠습니다. 질문을 하실 분은 전화기 버튼의 별표와 1번을 눌러주시기 바랍니다. 질문을 취소하시려면 별표와 2번을 눌러주시면 됩니다. 원활한 회의 진행을 위하여 질문은 한 분당 두 가지 이내로 부탁드립니다. Now, Q&A session will begin. Please press star 1, that is star N1, if you have any questions. Questions will be taken according to the order you have pressed the number star 1. For cancellation, please press star 2, that is star and 2 on your phone. In order to allow as many Q&A chances as possible within the restricted time, we would appreciate only two questions per each participant. The first person to ask a question is Kim Yeon-soon of Hana Financial Investment. The first question will be provided by Hyunsoo Kim from Hana Financial Investment. Please go ahead, sir.

Yes, hello. I am Hyunsoo Kim from Hana Financial Investment. Thank you for the opportunity to ask a question. First of all, congratulations on your good performance. There are two questions. First of all, I would like to ask a question about your performance in the fourth quarter and your future LCD collection. First of all, The performance of the fourth quarter was very good. Overall, the performance was good, but I would like to ask you to explain what was the driving force of the performance improvement for each department. And the second question is about the supply of LCDs. Recently, domestic companies have been extending the LCD line operation. According to this, we will look at whether there are any changes in the supply in the second half of the year

I would like to first congratulate you on recording such a great result. I would like to pose two questions. First, on the more details relating to your Q4 earnings performance, and second question would relate to the demand dynamics around LCD. So my first question is this. We see that your Q4 results have been quite good. I think this is largely driven by a very positive and favorable market backdrop. But could you provide us with a more breakdown driver behind the business performances for each of your business areas? My second question relates to the demand dynamics surrounding LCD. We've seen domestic players actually extend to the running of their LCD FAB lines. We'd like to understand what impact this will have on your second half, on the second half demand dynamic going forward. And in line with that, could you also share with us what your projections are with respect to the LCD panel price going forward?

Yes, I will first answer the first question. I know that you want more detailed information on the quarter's performance. But basically, as I just explained, in the third quarter, as sales increased, there was a lot of change in the mix structure of products with high profitability. This was the biggest influence. The second is, as you all know, the increase in LCD evaluation in general. This also had an impact. There were some negative factors in terms of profit, but I can say that it was a factor that covered that part and made it profitable. In general, the increase in sales volume, the improvement of the mix, and the improvement of some products, Yes, I would respond to your first question.

You've asked for more detail regarding the Q4 earnings. Basically, as I have previously explained, compared to the third quarter, we've seen improvements on the top-line revenue. And basically, this is largely driven by the fact that we were able to change the product mix much faster product mix towards more highly profitable products. Second is with respect to the overall increase in the selling price or the ASD of the LCD. That was also another driver. So driven by these two factors that brought about improvement, what these factors did was actually more than compensate for the negative impact that FX rate changes had on our P&L. So at the end of the day, that actually improved our P&L and profit. So once again, to sum it up, basically we were able to increase the sales volume, the top-line revenue, able to improve on the product mix, and also increase the pricing. And once again, all of these three factors were able to offset any negative impact from FX movement and really contributed to improving of our profits.

Next, I will answer the second question. In terms of competition,

According to your second question, I understand your question has to do with our domestic competitor actually extending the operation of their domestic fab and what impact that would have on the LCD demand dynamic and also on the price projections.

I think we need to decide on the demand side and the supply side. As I said before, the demand situation in the second half of the year will affect the demand in the second half of the year.

In terms of the demand and supply dynamics, we would have to carve out those two. So if you look into the second half of the year, first on the demand side, we believe that how the COVID impact actually plays out going forward will have an impact on the demand side.

From a public point of view, some of the competition's domestic sales have been activated. There is no exact information whether it will continue in the middle of the year or in the middle of the year, but when I think about it as continuing for a year, rather than the extension operation of domestic competitors, I know that some of the competitors in China are preparing for ramp-ups, but I think it will be more influenced by the timing and size of the 10th generation factories.

Now, on the supply side, you've mentioned that our domestic competitor have decided to actually extend the operation and running of the domestic fab, but whether they would do so up until the end of the year or whether they would stop mid-year, it's not clear at this point. But assuming that they will run the fab on a full year basis, I think that comparing the impact of that to the Chinese competitors ramping up and even making preparations to run the 10G FAB. We understand that some have actually started to wrap up the 10G FAB, but I think the timing and the size of that will have a bigger impact.

So, in the end, I think the price will come out of the balance. Because these parts are working in a complex way, I don't want to say that the price is going to go up or down, but rather than the first half, as we go to the second half, So all in all, the whole pricing mechanism is contingent on the balance between supply and demand.

And basically, there are multiple factors that come into play and so it would be difficult to predict the absolute level of pricing going forward. But as we enter into the second half from the first half of the year, we think that in terms of supply and demand dynamics, the tightness will somewhat be improved, meaning the tightness will be mitigated, and that will have impact on the pricing.

I would like to make a brief comment on that. We have been working on the LCD structure innovation among the three strategic projects. The key is that IT projects that are competitive are increasingly discriminated against, and the parts that are relatively less competitive have come in a direction that we are reasonably improving. However, even if the situation changes, we have strengthened our system, so I think we have the strength to cover the mobility in our company.

To elaborate on that, one of our key three strategic tasks include structural innovation for our LCD business. And the whole key to this is that we will further strengthen the differentiating factor of our competitive business, like the IT business, and for the less competitive business areas, we will rationalize and make improvements. So even if the demand and supply dynamic changes, because we were able to enhance the fundamentals and the resilience of our business, we will be able to cover for any potential volatilities that may surface.

We will take the next question, please. The next question will be provided by Kim Dong-won from KB Securities. Please go ahead, sir.

Yes, thank you for the question. I have two questions for OLED. First, we plan to operate the white OLED panel line this year. We are considering additional evidence for the Guangzhou line to achieve 7-8 million units this year. Secondly, it is related to plastic OLED. Thank you. I would like to ask you two questions on your OLED business.

First, it has to do with your white OLED panels. You've mentioned that your plan is to ship out 7 to 8 million units. I would like to understand whether you then have plans to go about adding more capacity to your Guangzhou fab. Second question has to do with the plastic OLED business. Can you provide us with what your projection is regarding the total shipment of P-OLED on an annual basis for this year, that is? And can you provide some color as to your earnings direction forward?

First of all, I will answer the first question.

Yes, let me address your first question.

I understand it has to do with the large OLED panels, especially 2021, our plans regarding how we're going to operate these panel lines. And also, in order to achieve the 7 to 8 million target we've communicated, do we have any plans on the Quanto line? I understand that to be your question.

In terms of the 7 to 8 million target we've communicated, we have about 80,000 targets in Paju. 80,000 targets are being kept up through various production projects. 80,000 targets and Based on the assumption that we will need to sell 7 to 8 million units on an annual basis,

If you take into consideration our Paju capacity, which currently the 80,000 is the capacity, but through productivity enhancement activities, we were able to further up that capacity to a certain extent. And with regards to the Guangzhou new farm that we currently have, the capacity is 60,000. So if you did the addition, it is 140,000 plus maybe a little more. So with this capacity, it is possible for us to support that 7 to 8 million unit sales.

In the first quarter, we will have to monitor the sales volume of OLED TVs. As I mentioned earlier, OLED TVs have essential values that customers understand. We are also looking at the possibility of sales of set customers for OLED TVs. Looking at the sales volume in the first quarter, if we can make more than 8 million sales this year, at that time, There are still a few things that need to be improved, such as 30 more Gwangju OPEBs. If Gwangju OPEBs go to 90,000, it will be possible to digest more than 8 million OPEBs. We will take a closer look at the market situation and inform you next time.

So what we plan to do is we plan to closely monitor the sales trend of the OLED TVs. As I've previously mentioned, our consumers are now clearly understanding the intrinsic value that OLED actually offers them. And also from the set customer's perspective, the set maker's perspective, they see the positive potential with respect to their OLED TVs. So we will closely watch how the Q1 trend actually plays out. And if at a point in time we feel that we would need to support 8 million of OLED panels, then, you know, we currently at Guangzhou, there is some preparation that has been taken place, of course, with some more enhancement or improvement, but we will be able to add about 30,000 more and the capacity. And if the Guangzhou Fab is run and utilized at that level, Guangzhou Fab capacity will increase to 90,000. And then we will be able to amply support that 8 million requirement. And so it will be quite important for us to very closely look at and observe and monitor the Q1 trend. And when the time comes, we will once again communicate with you on the details.

I will answer the second question. In terms of the plastic OLEDs, the specific number is related to our customers, so it is a bit difficult to tell you. However, in the last, especially in the second half of the year, the way we look at it is There was a concern that we might not be able to compete in terms of the quality, performance, and cost of the plastic OLEDs. In the latter half of the year, we were able to turn our Kepa into a full-size model. Responding to your second question on plastic OLED, the specific numbers, I won't be able to share that with you because it requires our customers, so please do understand.

But as you know, last year, as we entered into the second half, it was true that some expressed their concerns whether we, in terms of our PO-led business, in terms of its quality, yield, and cost, whether we would be able to counter the competition that we were facing from our competitors. But the second half experience of last year gave us the confidence that we ran our capacity at a full level And we were still able to bring about quality, stability, yield, and cost. And it gave us the confidence that we could actually do it. And we were also able to provide that confidence to our customers as well.

This year, we have a task to level up the foundation that we have been working on. If I were to make projections for this year based on all the hard work that we've put in to really lay a firm basis

For this year, it will be important for us to bring one level up, to bring a notch up in terms of what we already have. So, of course, we would have to closely look at what the sales trend looks like from our customer's side, and that will, of course, have an impact on our results. But we think that on an year-over-year basis, we would be able to expect quite sizable improvement.

Yes, we will move on to the next question, please. The next question will be provided from SK Kim from Daiwa Capital Market.

Thank you for the question. First of all, congratulations on your good performance. I have two questions for you. The first question is, in this year's TV market, Samsung Electronics and LG Electronics will lead the mini-LED TV market. Compared to the existing LCD TV, the premium segment will be greatly expanded in terms of thickness and quality improvement. Accordingly, especially in the case of Samsung Electronics, OLED TV and In terms of premium, I think it will be promoted a lot. According to the release of these mini-LED TVs, as CFO said earlier, the sales of OLED TVs will reach more than 7 million this year. I would like to ask for your opinion on whether it will be an obstacle or pressure in terms of price. You have achieved very good results in the fourth quarter. If you look at the situation in the first quarter now, it seems that the sales of smartphones in the strategic trading line are very good, and the demand and price of LCD TVs are still in a favorable environment. I think the guidance was a bit conservative. Thank you, and I also congratulate you on your good earnings performance.

I would like to also pose two questions. First, this year, TV makers like Samsung Electronics and LG Electronics have announced that they will focus on making mini-LED TVs. So in terms of how thin it is or in terms of picture quality, it is superior vis-a-vis the LCD. We think that Mini-LED will further expand the positioning of the premium segment. And Samsung, I think, will start to very strongly promote that it will be able to actually narrow the gap that it had with OLED on the premium side. And so do you believe that the launch of the Mini-LED is going to be a hurdle for you in your pursuit of achieving the 7 million, above 7 million OLED TV sales, and do you expect that there will be some price-related pressures? Second question, your Q4 earnings was very good, and I think that for Q1 as well, especially if you look at your strategic customers, the mobile phone sales is expected to be quite strong as well, and also the LCD TV in terms of demand and pricing, the backdrop seems very positive. So your guidance seems to be quite conservative. May we expect an upward revision of the guidance? I am Stephen Koh, VP of TV Marketing.

First of all, when we look at the display technology, we can see that the display technology If you look at mini LED from the whole

display evolution paths. So looking back at that evolution path, it starts with CRT, LCD, and then the next generation, which is OLED. So does mini-LED fit into any of these evolutionary paths? We think that it is actually an adjustment that is made on the LCD technology on the backlight side. So one would have to question whether that actually represents an evolutionary step forward. We think that it is just a type of LCD. To compare mini-LED vis-à-vis OLED head-to-head may not be all that appropriate, but I would still like to echo what our CFO has said in terms of the value that's offered by mini-LEDs.

We believe that the value of OLED has been more strengthened and is receiving a new spotlight.

Definitely, that was triggered by the COVID-19 pandemic era, and people were able to, during the pandemic, really understand the value that OLED was offering, and we think that that will still be valid in the post-COVID era.

There is definitely an increase in viewing time due to COVID-19, but another thing we need to look at is the fact that the way of enjoying video content is changing. In particular, I think the development and growth of streaming services are very important.

There are some backdrop changes. The fact that because of COVID, people's time spent on watching TV has definitely increased. But also on top of that, the way people enjoy and consume video content have also changed. We've seen streaming services grow, and also the respective subscriber numbers also go up. We think that these types of changes have been quite critical.

In that sense, the main value of the big screen display In terms of image quality, the bright TV has always been considered as a good TV, but now, the accurate display, Hollywood film producers are 100% making and editing movies through OLED, and I think that is the key to the actual superiority of OLED that pursues natural reality.

So in terms of what's happening, in the past, the way people understood the value that was offered by large size, large area screen was picture quality. And they thought that brighter color rendering was what was good. But nowadays, they understand that when it comes to picture quality, accurateness is important and all the Hollywood studios and production houses are 100% using OLED to edit their videos and do all these other works. So these days, the accurateness of that picture quality and natural reality that is actually conveyed by the OLED screen is considered to be the intrinsic superiority that this technology will offer.

The second point I would like to emphasize is that consumers will be able to see It is a solution to the pain point that we feel while watching. In particular, as OLED has been watching streaming services and for a long time, we recently surveyed in the second half of last year, as a result of the survey in the United States, the United Kingdom, China, and Korea, the biggest pain point No. 1 was the concern about the eyes, the concern about the eyes, and in this regard, OLED has been the most successful international certification organization in 2019, 2020, and 2021. The second point I would like to emphasize is that

there were certain pain points that consumers have experienced when they were watching these large panel displays. And based on the survey results that we took in U.S., U.K., China, and Korea, when people were watching these displays over an extended period of time by watching streaming services, OLED definitely has been proven to be less harsh on one's eyes. So there's a global accreditation or certification agencies who have issued for 2019, 2020, as well as for 2021, that OLED is the most safest display in terms of eye health and comfort. And also a U.S. agency called EyeSafe has also issued that announcement. And also a lot of eye doctors in the United States actually recommend people using OLED displays So OLED has been proven to be most safe and comforting to human eyes. And so this is a value that's been very much highlighted during the COVID pandemic period, and we think that this value will stay feasible and valid even in post-COVID era.

마지막으로 OLED 진화에 대해서 말씀드리겠습니다. OLED가 13년 처음 출시한 이후로 지금까지 많은 진화를 해오고 있는데, 그게 단순히 It's brightened up, and beyond the competition of spec, the design is differentiated, and it's differentiated from mini LEDs. In addition, the application development in various areas, such as gaming, education, conference, subway, airplane, and car, is simply beyond the home field,

Last but not least, if we look at the evolution and development of OLED, since its first launch back in 2013, it had gone through many cycles of evolution. So it actually transcended just a mere improvement in brightness or resolution or certain technical specification. It was able to really bring about differentiation in terms of design, setting itself apart compared to other technologies like mini LED and others. And also there was integration and further application development in different areas such as gaming, education, conferencing, subways, transportation, et cetera. All through this evolutionary process, OLED was able to prove to others that the intrinsic value that it actually offers, and it was also able to further solidify the value offering. And so we believe that in terms of the sales of seven to eight million units that we projected for ourselves, it is feasible for us to look forward to that figure.

Then the second question is answered by CFO.

It was a question about whether it can be adjusted higher than the expected time consensus of the first quarter of this year. It is quite difficult and difficult for me to answer the number. However, as you saw the flow of Q3 and Q4 last year, As a result of the efforts of all of our members, the risk has been reduced. In terms of structure, the probability of the change in profit has been significantly reduced.

This is the CFO again responding to your second question. You've mentioned whether we have any plans to further revise upwards our guidance in terms of the Q1 performance as compared to the market consensus. I would have to say that it would be difficult for me to, at this point, specify a certain figure. Having said that, if you look at our P&L trend, Q3 and Q4, All the difficult factors that weighed in on our P&L, thanks to the endeavors and efforts of the company and the employees, we were able to mitigate somewhat that risk. So in terms of the structural aspect, for our volatility on the P&L to actually go up, we can say that we were able to eliminate those negative factors.

Compared to the previous year's 4Q, as I mentioned earlier, we are expecting a similar number of sales. However, I think the product mix will change due to seasonal factors. I think the change will affect the sales. We are anticipating a technical decrease in sales. . . . . . In terms of our projections for this year, starting Q1, compared to Q4 of last year, we expect the area shipment to remain flat

But the seasonality factor would, of course, impact the product mix changes, and product mix changes, in turn, would have impact on our top line revenue. So there could always be a top line decline due to some of the technical factors. However, in terms of volatility, and if you look at the overall trend of ASP and FX rate, although the direction is quite positive, that those could always work as either an opportunity or a risk factor for the company. So we think that for Q1, it will be very important for us to manage these important factors. Thanks to a very committed effort of all of the employees of the company, we were able to really build out a solid base to bring about turnaround in profit. And I can tell you that we will continue to commit and exert our utmost efforts so that we can further improve profitability.

The next question will be provided by Nicholas Godoa from UBS. Please go ahead, sir.

Good afternoon. Thanks for taking my questions.

The first one is related to your LCD capacity in Korea. You've delayed so far the closure of P7 for 4GEN7, and I think you were suggesting earlier that the production there would last potentially until the middle of this year. Could you update us on the status as to whether this is still the base case or you could actually keep that production going for longer than that? And secondly, regarding the plastic OLED market, what is your view on the likely further adoption of OLED in the tablets market beyond the existing position of OLED on the Android side? And would you participate into that segment if it was to grow?

Thank you.

First of all, thank you for answering my question. My first question is about the domestic LCD production kappa. As far as I know, P7, the 7th generation factory, is closed. As I heard earlier, it seems that it will continue to operate until mid-year this year. So, would you like to make an additional update? If there is a change in how long you will continue to use it in the LCD production line, please let us know in preparation for the past plans. The second is related to OLED. How do you foresee OLED adoption in the tablet market in the future? Do you think it will go to the current level, or if the market itself expands and grows, how far do you think you will step into the market and participate?

First of all, I will tell you about the first question. We received a question about the operation status of the LCD factory Kepa in Paju, Korea. We are based on Paju's 8th generation factories and 7th generation factories that produce TVs. Most of the 8th generation factories are being converted to IT and some are in the process of being converted. We plan to use the 8th generation factories to cover IT. As I said before, the 7th generation factories align the market situation and the needs of customers. Responding to your first question,

On the domestic Paju LCD capacity, we base this on the TV panel, so we have the Gen 7 and Gen 8. If you first look at the Gen 8 capacity, the conversion to manufacturing IT products have been almost complete, and there are some other additional preparations, and IT products are being manufactured from Gen 8 capacity. So the Gen 8 FAB is going to cover the IT product offering. In terms of Gen 7, as we've communicated previous year as well, we will align ourselves with the changes in the market situation as well as our customer needs. And we expect there to be some changes in terms of the demand and supply balance and dynamics. So we will closely monitor how things play out and we'll also consult and discuss with our customers so that Without any additional resource investment, within the level of headcount and capacity that we already have, we will be fully flexible in responding to any needs.

Yes, I am Hyun Kim.

I'm SVP of Corporate Strategy Group. I'm responding to the adoption of OLED and tablet.

As you already know, we have two types of OLED technology. The small type has plastic OLED, and the large type has white RGB technology. Based on that, we have already released a foldable laptop based on PO, and a white RGB based on a 55-inch, 48-inch gaming monitor.

So as you already know, when it comes to our OLED technology, there is plastic OLED technology for small form factor or small size displays and larger displays which require white RGB technology. And based on these technologies, we've already launched a foldable notebook or laptop using plastic OLED. And using white OLED, we launched a gaming, four gaming displays, 55-inch and 48-inch displays.

OIL ENGINE can be applied to various IT products because it can freely change the thin, light, and design form factor other than the quality characteristics. We believe that these parts are actively being prepared for technical preparation and market tapping that can actively respond to the market with our PO and White RGB technology. Therefore,

In terms of OLED, of course, there is the superb picture quality, but it is much thinner and lighter, and it is much more flexible in terms of designing different types of form factors. So it is very optimal to apply to different suite of IT products. For our PO, plastic OLED, and white RGB, we are positioned and poised to very aggressively and actively respond to any market requirement, and we are very tapping into the market quite actively. So whatever spec specification is required by our clients and customers, we are fully prepared and ready to meet the customer needs. Due to the time constraint, we will now take the last and the final question.

The last question will be provided by Woo Dong-jae from Bank of America. Please go ahead, sir.

Yes, thank you for the last question. Then I will ask a financial-related question. First of all, Even though the stock price is very good today, it has fallen a lot. There was a discussion about the exchange rate of 20,000 won, which you issued last year, and the dilution of 10%. So does that affect it? Then, in relation to this, since our financial performance has improved, How do you deal with it? That's the first question. The second question is that there are only 2 billion cash flow services in the market. In a way, China has completed the Guangzhou FAB and has not invested 30,000 more. China has also completed the E6 6th generation OLED FAB and PLUS OLED. Thank you.

Yes, I would like to ask you some questions on the financials. Despite the fact that your earnings performance was quite positive, we've seen your equity price actually dip today. Is that because of the impact of the convertible bond, which we issued previously, because the converting price, I understand, is 20,001, and there is a possibility of about 10% dilution. So do you have any plans, maybe preemptively, since your performances were quite good, to actually do share buybacks, if that is an option? Second question is, in terms of your capital planning and if you look at your cash flow, your CapEx investment was only around $200 billion, it seems, with the finishing up of the Guangzhou FAB investment, and also you have not yet made investments for that additional 30,000 capacity. So is it... right for us to assume that if there are no new CapEx requirements, that your quarterly CapEx spending is going to be low, as we have seen in this quarter's figures? Or are you holding up on investment relating to the future needs? Because if we look at the cash outflow, it seems to be quite low in terms of investment. So is that something for us to expect going forward, or is this something that is one-off or temporary?

First of all, I would like to answer the first question. In terms of CB, we are also checking the possibility of stock exchange. As you know, CB is being traded in the market. So we are monitoring the price of the trading. There was a pattern where the trade price of the 12th was a little bit better than the stock. That's why the 12th holders don't seem to feel the need for the 12th stock to change. So, as the 12th is now actively traded, it seems that there is no need for the stock to change. Even though today is a very good time, So responding to your first question, in terms of whether there is possibility of the CB holders to actually convert that to shares,

We are closely monitoring and checking of that possibility. Currently, CB is traded on the market, and CB price is considered to be one of the leading indicators in terms of the equity movement. So CB holders at this point in time, we believe that they do not feel the necessity to actually convert that holding into the equity of the company. So currently, CB trading is taking place quite actively, and so... Despite the fact, well, your question was that despite the fact that the earnings performance good, the equity price had not really risen or actually had declined. On the back of that, is that because of the CB? Now, I won't be able to confirm that one way or the other. We have not yet checked that, but we think that there is not big of a possibility for the CB holders to actually convert their holdings to equity.

Thank you. The capex issue was used last year in the second half of the second week, but as I said in the IR, we have invested in large-scale OLEDs, so in the future, we will use capex a lot more because there is no additional investment in large-scale investment. It's in the spring. Some of our investments are for big projects. We develop factory operations and new models, and then we modify some of the equipment to fit the new model. We continue to invest in these areas. It seems that these areas were most of the 20-year CAPEX. If we don't make large-scale investment decisions, I think we will be in a situation where we can make enough investments in the EBITDA domain. So, in general, in the future, we will try to create additional business opportunities

responding to your second question on capex last year we have our capex spending was in the mid to upper two trillion korean won as we have previously communicated to our ir meetings We have already made investments into large-scale OLED investment projects. So without any significant investment or add-on investments, CapEx will remain at a low level. And that premise still holds as of today. And also, when it comes to investment, there are two different types. One is investment for large projects and also investment for developing new models and retrofitting equipment to produce those new models. And basically, it is this latter type of investment that made up the 2020 CapEx spend. So if we are to assume that there isn't going to be any significant or large project that entails a significant level of investment, we can say that we will be able to stay within the EBITDA level. Going forward, we will decide where to make investment depending on the additional business opportunity that we identify.

So CapEx may fluctuate depending on those situations.

Before 2020, Ernie's conference call for LG Display. Thank you for joining us today. And for those of you who were unable to submit your questions due to the time constraints, please do not hesitate to contact our IR team and we will be happy to respond to those questions. Thank you.