LG Display Co., Ltd.

Hello, I'm Team Leader Heo Seok of LG Display AR. I would like to thank everyone who participated in the 3-minute performance announcement conference call in 2024. In today's conference call, CEO Kim Sung-hyun of CFO, Managing Director Lim Seung-min of Business Management Group, Managing Director Kim Kyu-dong of Finance, Managing Director Lee Ki-young of Business Intelligence, Managing Director Kim Jong-deok of Big Project Management, Managing Director Ahn Yoo-shin of Middle Project Management,

Good afternoon. I am Brian Hall in charge of LG Display's IR team. On behalf of the company, thank you to all the participants for joining us today in our third quarter 2024 earnings call. Today I have with me our CFO, Sunghyun Kim, Seungmin Lim, Senior Vice President of Corporate Planning, Kyudong Kim, Vice President of Finance, and Ki-young Lee, in charge of business intelligence. Jong-duk Kim, vice president of large display planning and management. Yu-shin Ahn, in charge of medium display planning and management. Seung-ryong Paik, in charge of small display planning and management. And Ki-hwan Son, VP of auto marketing.

The conference call will be conducted in both Korean and English. For more details, please refer to the provisional earnings disclosed today or the IR events section on the company's website. Also, before we begin, please take a moment to read the disclaimer.

Also, as a reminder, today's results are based on consolidated IFRS standards prepared for your benefit and has yet to receive an audit by an outside auditor.

지난 3분기는 IT용 제품의 전방시장 불확실성이 지속되며 일부 제품군에서의 출하 조정이 있었으나,

We now begin with the earnings results for the third quarter of 2024. Against the backdrop of uncertainties continuing in the downstream IT product market, there was adjustment in shipment for certain product lineup, while we saw a rise in small panel shipment, including smartphone panels, which had a positive impact on this quarter's results.

As such, Q3 revenue posted 6,821.3 billion won, recording 2% Q over Q growth.

And on greater impact from OLED-centric business portfolio transition, there was 43% year-over-year growth.

In terms of P&O, we are seeing results

materialized from OLED-centric business structure upgrades, while activities around corporate-wide cost savings and operational efficiency gain continue to drive an uptrend in performance.

The loss of sales in the third quarter is 806,000 won, and in terms of performance, the loss of sales in the third quarter is more than 150,000,000 won. In Q3, hence, operating loss came in at 80.6 billion won, including one-off expense of more than 100 billion won related to ERP program, which took place during the quarter.

But even with this cost impact, we narrowed the loss versus previous year, and it's also worth noting one positive fact, that despite greater market uncertainties, there has been significant profitability improvement year over year.

3분기 출하 면적은 노트북 PC, 태블릿 등 중형 IT 제품군의 출하가 계획 대비 하회하며, 전분기 대비 3% 감소하였으나,

Next is on area shipment and ASP per square meter. Third quarter area shipment declined 3% Q over Q due to lower shipment of mid-sized IT products, i.e. notebook PCs and tablet versus the guidance. While on a year-over-year basis, higher TV panel shipment drove Area shipment growth of 32%. In terms of ASP per square meter, there was an increase of 6% Q over Q to $825 on the back of shipment growth in small OLED products, including panels for smartphones.

Next is product revenue mix. In Q3, mobile and others accounted for the biggest portion of the revenue mix at 36%.

This was driven by growth in small product shipment, including smartphone panels, which was up 13 percentage points Q over Q and 10 percentage points year over year, and we expect there to be a creative Q over Q expansion in the fourth quarter.

ITB 문의 매출 비중은 전분기 대비 감소한 33%로 전방 수요 부진으로 업황 회복이 늦어지는 가운데 제품별 출하 변동성도 높게 나타나고 있습니다. The sales of the TV segment have been maintained without any major changes, and the sales of the 3rd quarter recorded 23%. The sales of the auto segment have been growing continuously for the past year, but there was a difference in the plan for each quarter, so in the 3rd quarter, it recorded 8%, which decreased by 1% compared to the previous quarter. The overall sales of OLED products increased by 16% compared to the previous year, and the

IT segment revenue was 33%, less than the previous quarter, on the back of sluggish downstream demand, which is slowing down industry's overall recovery, which in turn is driving higher volatilities across different product lineups. TV panel revenues stayed relatively flat, with no fluctuations accounting 23% of the revenue mix in Q3. Auto segment revenue is sustaining its annual growth trajectory, but in Q3 it accounted for 8% of the revenue mix, down by 1 percentage point Q over Q due to the differences arising from quarterly shipment planning. OLED share out of the total revenue increased 16 percentage points year over year and up 6 percentage points Q over Q, reaching 58%. as we continue to solidify the benefits of business structure upgrades.

As we continue to solidify the benefits of business structure upgrades,

next is on the financial position and key business metrics q3 cash and cash equivalent was 1 trillion 787.7 billion won after accounting for assets of china's guangzhou fab which was reclassified under assets held for sale So if we were to include back this item, total cash and cash equivalent will amount to 2 trillion 75.1 billion won. Part of the borrowings was also separately classified under held for sale, which explains the Q over Q change, while asset and liabilities are all inclusive of held for sale line items. Debt to equity ratio and net debt to equity ratio recorded 297% and 156% respectively, which is somewhat of an increase Q over Q. Next is the fourth quarter guidance.

Next is on Q4 guidance. We continue to see uncertainties in the downstream market for IT products, which may cause shipment volatilities depending on the product segment.

But on shipment expansion for TV and notebook PC panels Q over Q, we project mid-single-digit percent growth. ASP per square meter is also expected to rise by mid-single-digit percent, driven by growth in smartphone panel shipment following the trajectory of the previous quarter. Next, I will turn it over to our CFO, Sung Hyun Kim, who will walk you through the key highlights.

Good afternoon. I'm CFO Sung Hyun Kim. Thank you for joining our earnings call today. Despite sluggish downstream demand and high volatility seen in the external environment, the company was able to drive business performance on a sustained basis

underpinned by stronger fundamentals following the OLED-centric structural upgrades. We are also focusing our capabilities around gains in operational efficiency and improvement in profit, supported by rigorous cost innovation activities.

As I explained earlier, this third quarter's performance reflects the cost of employment related to希望퇴직, but except for this, the actual business performance

As previously mentioned, Q3 earnings reflects one-off ERP-related expense, but excluding this impact, we saw business performance improve both on Q-over-Q and year-over-year basis in a meaningful way.

For your information, the cost of the first quarter was more than $1.5 billion, Please note that one-off expense reflected in Q3 results amount to around mid-100 billion won, and although we cannot disclose the headcount number and details of the ERP program

We expect there will be more than 100 billion won of annual labor cost reductions following the implementation of this year's efficiency program. In the fourth quarter, we will continue to scale up business structure around OLED to drive improvements in fundamentals and business performance and ensure earnings stability through company-wide activities such as operational efficiency gains against the backdrop of highly uncertain and volatile macro environment.

Next, I will talk about business planning and strategy.

Next, moving on to plans and strategies for each of our business domains.

For medium OLED business, underpinned by stable supply and technology leadership, we will solidify our business competitiveness. For ITOLED, we will keep reinforcing our leadership in tandem OLED technology known for superior durability and performance

like long life, high luminance, and low power, and plan to build up an efficient framework that can maximize the use of current production infrastructure in step with the changing market environment.

Mobile OLEDs will continue to grow in sales and profit by actively utilizing enhanced production capabilities and production capabilities.

OLED for mobile will leverage stronger production capacity and capabilities to drive shipment expansion and also secure top-line growth and profitability through product diversification.

대형 OLED 사업은 고객들과의 긴밀한 협업을 바탕으로 초대형, 초고화질 뿐만 아니라 사용자의 건강까지 고려한 인체 친화적 제품, 게이밍 모니터 등 In large OLED business, based on close collaboration with customers, we plan to expand on high-end differentiated product lineup

such as gaming monitors and ergonomic products incorporating even the health related needs of the users, on top of focusing on ultra large and ultra high definition products. We will also push forward with quality centric growth that drive bottom line enhancements by innovating the operational structure around cost savings and efficient production and sales strategies underpinned by end user demand.

Next is the auto business sector. The electric vehicle market growth rate is slightly reduced, and some changes in the entire market are being determined, so we will continue to carry out small business activities on the entire vehicle, including domestic vehicles, based on a solid customer relationship with a distinguished product technology portfolio such as plastic OLED, ATO, high-end LTPS, and LCD.

Next is the auto business. Although EV market growth seems to have dampened and there are, to a certain extent, signs of downstream volatility, based on robust customer relationship and our differentiated product and technology portfolio, like the P-OLED, using the tandem technology, ATO, and high-end LTPS LCD, we will make sure there are no interruptions in winning orders across not only EVs but IC vehicles. Our plan thus is to build out stable earnings structure through cost competitiveness and by expanding customer segment and increasing share of OLED products.

Next, I would like to talk about investment activities.

Next is on the company's investment activities. With external uncertainties continuing for longer and higher volatilities seen on the demand side, we will take on a conservative approach in running and reviewing the CapEx plans.

For the time being, it is a priority to strengthen the business quality and financial stability and secure stable profitability, so we will use the existing infrastructure as much as possible and carefully invest in new and expanded investment. In this way, the investment in the future will take into account the economic environment and demand growth,

For the time being, our priority is placed on strengthening business fundamentals, financial soundness, while securing steady stream of profitability. We plan to maximize use of current infrastructure while cautiously proceeding with new investments for expansion. Under this overarching approach, in full consideration of external environment and demand growth, we will be enhancing investment efficiency by focusing on ordinary recurring basis investment and essential investments required for business structure upgrades and for gaining of technological competencies.

CapEx for the year, hence, is expected to be in the mid-2 trillion level, down by around 1 trillion won year over year, as CapEx plan will be managed based on the cash flow generated under a profitability-centric approach. Despite continuing market and external uncertainties and volatilities in the end user demand,

Through profitability-centric business operations, underpinned by the outcomes of business structure upgrades and operational efficiency gains, we will continue to bring gradual improvement in earnings as we go forward. Thank you. That brings us to the end of the earnings presentation for Q3 of 2024. We will now take your questions, and I would like to ask the operator to please commence with the Q&A session.

Now Q&A session will begin. Please press star one, that is star and one if you have any questions. Questions will be taken according to the order you have pressed the number star one. For cancellation, please press star two, that is star and two 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 question will be provided by Dongwon Kim from KB Securities. Please go ahead with your question.

Thank you for taking my question. I have two questions that I would like to ask. The first one is your plans in terms of the use of the cash proceeds that you will get from the sale of the Guangzhou LCD TV set plan.

I'd like you to provide some color as to how you would be making use of the proceeds. And after the inflow of the cash, what impact would that have on your financial metrics? My second question is, including the assets that are currently classified under held for sale, it seems your cash and cash equivalents amounts to around $2 trillion. And also it seems there's been some change compared to the previous number. Can you provide some explanation with regards to the difference?

This is the CFO responding to your question. After we made our disclosure on September 30th, there had been a series of news articles that followed. Now, I also personally had very closely read and followed those articles, but I have to say that none of these articles clearly portrayed or accurately portrayed how things were. According to this, the analysts seem to have not understood the clear structure, so even if I don't go into detail, I will tell you a little bit about how the deal was made, how the settlement was made.

And I believe that is one of the reasons why the analysts are also having a difficult time understanding the clear structure of this deal and the transaction. So today, I would like to take the opportunity to provide you with the explanation regarding how the deal was structured and how the payment is actually going to be settled without disclosing all the specifics.

In the last conference call, I said it might take some time.

In the previous conference call, I mentioned that the whole process may take some time, and I said as such because if you look at the whole deal process, up until the time that the deal actually closes, there was a certain step that will be quite time-consuming.

On September 30, the SBA contract was signed, and if I briefly talk about the process that will be carried out in the future, there is a process that we need to get approval from seven countries related to corporate cooperation.

It is actually right and true that dated September the 30th, we executed an SPA, Share Purchase Agreement, and there is another process that would have to follow after the execution of the agreement, which is that we need to receive approval from seven different countries with regards to the combination of the company entities.

It is only after we go through this merger approval can we actually arrive at the closure of this deal, and then the relevant payment will be made to us, and then we will be able to finalize the whole deal process.

And in terms of the timing of this, basically our goal is to finish and finalize the process by the end of the first quarter of next year. And basically this is the reason why I had previously mentioned that the whole process may be time consuming.

And I think there was also

A bit of a misunderstanding with regards to the price, the amount of the deal. As you know, when it comes to an M&A deal, even if the asset is a same asset, the M&A deal structure can take many different forms.

In fact, the M&A deal can take many different forms.

As a matter of fact, the whole sale or sell-off process for this asset had actually began in the early summer of 2023. So in the process of going through this deal, we went through a bidding process in 2024, and we were able to shortlist the preferred potential buyers, and that fact had, as you know, been disclosed.

The reason why the bidding process is different from the other deals is that the amount we declared as 1.8 billion won In the end of December of 23rd, we received a bid at the end of December of 23rd based on the equipment, equipment, land, and assets we had.

Now, regarding the bidding process and the price-setting process, unlike other types of deal, the 10.8 billion yuan, the figure that we had previously disclosed, was based off of December end 2023 figure, including the facilities, the equipment, the land, the asset, as well as the liabilities and working capital. Once again, just to elaborate and highlight, it was based off of end of 2023 figure.

So I mentioned that closing is expected to happen in first quarter of 2025 and one of the

special thing to know for this particular deal is that with regards to the asset value, which is the facilities and the production asset, it is valued as of end of 23, and it is from that point on that this asset is not going to depreciate.

And so how this whole payment is going to be settled is the difference between the liabilities, the working capital, and the borrowings

as of December end of 2023 and the figure as of at the closing of 2025. So it is only the difference in this amount that will be subject to the settlement, the payment settlement.

Therefore, you can say that the management performance of the 24-year CA is mainly reflected in the settlement. which means that the earnings performance and the business performance that is generated by the CA entity, which is the Gwangju LCD TV Fab, is going to be reflected

And basically, in the year 2024, the entity had actually turned around in profit. So basically, what that goes to show is that compared to the amount and the price that we had previously disclosed, I can assure you that that number is not going to decline.

Yes, well, based on this logic, you can guess what you want to guess. Because of the relationship that we have not finished sales for 24 years, So I think it would be helpful for you to make your projection based upon the rationale and the logic that I have just laid out. But since we have not yet closed the fiscal year 2024 accounts yet,

Once the whole deal is closed, there may be some difference in the actual price, actual payment that will be received. So once we make that payment finalized, we will be able to come back to you and provide you with more details.

It's something you need to evaluate in the market, but in itself, it's a good thing that both buyers and sellers win each other.

At the end of the day, the market will assess as it wishes, but from my perspective, I believe that this actually is a deal transaction that is both a win-win for the buyer as well as the seller.

Hello, this is Kim Gyudong.

This is Kim Kyu-dong, VP of Finance. I will respond to your question about cash and cash equivalent. So starting this year, we have seen improvement in our business performance. And through equity increase, we were able to stabilize our financial position. And we are also gaining more visibility in terms of future uptrend in corporate earnings. So as such, we are going to focus our efforts on optimizing the appropriate level of cash that we hold in order to reduce the any financial expenses and also to allow for a further uptrend or further improvement in financial structure. Since we have in place a structure that allows us to respond to changes in liquidity and to eliminate any mismatch in cash held by different geographies as we can employ and use global cash pooling mechanism. And hence, we believe that with the cash at about 2 trillion level, we will be able to operate our business quite steadily.

We also have sufficient access to various financing methods through the financial markets, including borrowings or loans from banks and also issuance of corporate debt.

All going forward, we are going to optimize our financing portfolio as well as our internal cash flow generation capabilities so that we could have a laser focus on improving our financial position.

Next question, please.

The following question will be presented by Hyun Nam Goong from Shinhan Investment and Securities. Please go ahead with your question.

Yes, hello. First of all, thank you for the question. I would like to ask a question related to smartphones. Recently, if you look at the trend of competitors, it is expected that the share price competition will be more severe in the future. So, in preparation for this, the smartphone business strategy In order to strengthen the business capacity and increase the value of the company, it seems necessary to manage the upper season, but I am curious about what can be done to stabilize it. And secondly, I am curious about the main business of LGD, which is the business of smartphone sales, profit size, and the way to continuously expand the proportion. Lastly, there is a lot of interest in foldable recently,

Thank you for taking my question. My question relates to your smartphone business. Recently, there seems to have been more heightened competition amongst your peers for this business segment. We'd like to understand what your thoughts are regarding the competition that you're seeing to gain wallet share of your customers. We'd like to know what your strategies are in order to respond to such competition. What's your strategy? And also, I believe that you would need to manage seasonality, especially regarding the first half of the year. What are your plans to further enhance companies' value and also to strengthen your business capabilities? And then the second part of the question is that as LG displays core business, what is your plan to further grow the top-line revenue, the profit, as well as its share out of your total revenue mix. My last question relates to recent interest and emergence of the foldable product. There seems to be heightened interest around this product segment. What is LG Display's plan for this product segment? If you could provide some color, that would be appreciated.

Hello, this is Baek Seung-nyong. I'm in charge of small display planning and management. Responding to your question, yes, you are correct. We see supply competition heightened across different providers.

but our panel shipment continues to show an uptrend, and our product mix around the new models is also strengthening. So we have seen our capabilities regarding technological leadership around the high-end products actually improve over the years, and we have steady supply capabilities. Hence, we expect that still going forward, we will be able to show a continuous uptrend in terms of performance.

When you look at the smartphone business, it is inevitable due to the product cycle that there is, to a certain extent, seasonality factor. But at LG Display,

Through diversifying our product models and also further growing and expanding the volume, we are going to increase the FAB utilization so that we may minimize the gap that we see between first half and second half of the year.

If you look at the mix from the small businesses in 2021, the revenue mix was 26%. It increased to 33% in year 2023. So this has been on a growing trend.

Going forward, we will continue to make most out of our current production infrastructure and diversify the models as well as increase the shipment so that we may drive improvement in product mix so that we can ensure top-line growth and secure bottom-line profitability.

We expect that there will be a certain proportion of market regions in high-end products, such as form factor changes, The environment of the global economy is in a state of uncertainty, and demand is changing significantly, so we want to respond to the fold-up by comprehensively calculating the demand for different products and the speed of market growth. Currently, the company is supplying global customers with laptop foldable products, and we are also reviewing and monitoring the demand for the market and applying it to other products. Since we are accumulating technology and marketing experience, we believe that there is room to respond if there are requests from customers.

Regarding the changes in the form factor, particularly around high-end products, we do expect there is a specific space for these types of high-end products in the total market. However, with the continuation of the macro uncertainties as well as heightened volatilities that we are seeing on the demand side, we are very closely monitoring the acceptance of these differentiated and unique products as well as the pace of market growth as we adjust and respond accordingly. At this point in time, we are mass producing and supplying notebook foldable product to one of the global customers. We are once again very closely monitoring the user response and acceptance, and we are also experiencing more broader application of these product segments. And in so doing, we're building our own technological as well as mass production experience. And when our customers make the request, we have the ample capabilities to respond accordingly.

Next question, please. The following question will be presented by Sunwoo Kim from Merit Securities. Please go ahead with your question.

Hello, this is Sunwoo Kim from Merit Securities. I would like to ask you a question about demand. As you can see, IT product uphang recovery delay is in the long run, and it seems that high-priced products are being affected more than expected. Especially in the second half of the year, the demand for tablet OLED and the decrease in panel chihuahua seems to be prominent. Please tell us what kind of changes you are seeing in relation to the outlook and plans we have seen so far.

Thank you for taking my question. My question relates to the demand side. We see that the recovery for the IT product industry is slower than expected, and also it is quite stagnant as we speak. And I think this is having a bigger impact on the higher end, more pricier product. As we entered into the second half of the year, we also see a very clear downward trend In terms of demand for tablet OLED as well as panel shipment, we would like to know if you therefore had changed your forecast for the future.

Now, we still believe that we have the differentiated edge and competitiveness when it comes to tablets.

that is developed based off of the tandem technology because it provides a lower power and longer life characteristics.

Now, having said that, because we see continuing macro uncertainties,

and also delayed recovery in the overall IT device demand, and especially for the high-end product as well, we are in the process of adjusting our original shipment plan. But still, since we are in the midst of the fourth quarter, it is a bit too early for us to provide you with a clear-cut direction as to what our annual shipment volume will look like.

Next question, please.

The following question will be presented by Kyuha Lee from NH Investment and Securities. Please go ahead with your question.

Please go ahead with your question. Thank you for taking my question. I'm from NH Securities. I have two questions that I would like to ask. I would like to know what your price projection is going forward,

in line with the panel as well as the set demand assumptions that you have in place. Has there been any significant changes compared to your original forecast? And also we see the sluggishness in the ITLCD demand actually being prolonged. When do you think that things will start to normalize and what is LG Display's countermeasures and response so that you could actually drive improvement and profitability? My next question is if you could just share with us what the key characteristics are for your product at the same and compared to your peers at the same product segment as well as the price range for the IT LCD and your and also in terms of your IT businesses mid to longer term plan.

Yes, this is Gi-young Lee from BI. First of all, when it comes to demand, I am Lee Ki-young in charge of business intelligence responding to your question about the demand. Now compared to our early year outlook, the TV set market we are expecting is going to contract

versus our original expectation. But conversely, for the IT set and panel market, mostly around the low-end, low-price point products, we are seeing some signs of slight recovery.

In the case of TV, the overall TV set demand recovery is still being supported. In the case of the OLED TV market, we expect it to be somewhat stabilized compared to last year due to the efforts of supply and supply throughout the channel. Looking at first the TV market, the demand from the TV set market is currently being delayed.

But if you specifically look at the OLED TV market, we had worked on clearing up the inventory. So on a year-over-year basis, we believe that the performance is going to be more stabilized compared to the past. And for the panel segment, with the fall in the downstream inventory level, the overall TV panel growth was in the low single digit, whilst for the OLED TV panels, we expect to see an outperformance compared to the overall market growth.

Now, during the second quarter, because there was big global sporting event, we saw a one-off TV panel price uptick,

However, this does not mean that there was any structural changes on the demand side, so we do not expect any significant ups and downs or fluctuations when it comes to panel prices.

It seems that there is still a lot of uncertainty to judge the real recovery of the IT market this year. Both SET and PANEL data are confirmed to be positive compared to last year, but there was a slump due to global logistics issues, It's too uncertain at this point in time for us to be definitive of any meaningful recovery in the IT product market this year. We are sensing some positive market data

on a year-over-year basis for the set and the panel business, but this number actually includes the impact that we've seen in Q2, a tipping impact because of the global logistics issue, and also we are seeing some migration and transition around the lower end of the B2C market, the general purpose, the commoditized products, Hence, that seems to be where we are at this point. But in terms of the B2B and high-end product demand, at this point, we are very closely monitoring how the market plays out.

The main factors that affect demand recovery are B2C demand changes due to the rise in interest rates, B2B demand expansion due to the increase in corporate IT spending, Windows 10 termination, and AIPC demand expansion. Just to elaborate on some of the factors that may impact the demand would be the changes in the B2C demand with the rate cut environment as well as increases in companies' IT spending which may further expand B2B demand

And at the same time, with Windows 10 releasing its final version and it being terminated, as well as increases in the demand for AI-based PCs, which will trigger a replacement demand, we think that these factors may work as, and we hope that these factors work as some catalyst. So there may be some quarterly changes regarding the IT panel prices, but even if there are, we expect it to be not too significant.

Hello, I'm Ahn Jung-shin, the head of the IT Planning Department. I'd like to answer your question about the IT LCD operation strategy. It is difficult to accurately predict and judge the current market situation, such as the speed of demand for each IT product is high and the movement is high for each price range, but the company has been working hard to reduce the cost of low-income products Hi, this is Anyu Shin.

I'm in charge of medium display planning and management. Responding to your question on different IT product segment and demand, ensuing demand for those segments, we see differences across different product price points. And so it's very difficult for us to make very accurate prediction as to what will happen in the market. Having said that, the company has really focused on profit over the years and endeavoring to reduce cost and also to reduce the products that are low margin and to grow the share of high-end products underpinned by our technological competitiveness and based upon our partnership with customers.

When the time comes for full-fledged IT demand recovery, supported by our differentiated unique capabilities and product competitiveness,

We expect that in the high-end segment of the market, we will be able to expand and solidify our positioning, which will then translate into improvement and profitability.

We will take the final question before we end today's call.

The last question will be presented by Sohwan Kim from QIUM Securities. Please go ahead with your question.

Hello, I'm Sohwan Kim from QIUM Securities. I have a question related to large OLED panels. It is expected that large OLED panels will be improved compared to last year, and it is expected that some of them will be discontinued next year. In order to continue to grow large OLED panels in the future, Hello, I am Kim So Won from Kium Securities.

I have a question relating to your large OLED tunnel business. If you look at the shipment, we are looking forward to an year-over-year increase going forward, and come next year, your depreciation period would also end. So aside from improvement in the macro backdrop, in order for you to sustain the growth for these large OLED business, what are some of the efforts that the company is currently planning on?

Hello, I'm Jongdaek Kim, and I'm in charge of project planning. Regarding the question, I'd like to talk about the set-up of the finished product and the set-up of the finished product.

Hello, I am Kim Jong-Dok, VP of Large Display, and I will provide you with the explanation separating the panels that we supply for the finished product set as well as our panel business separately.

First of all, as I mentioned earlier, the overall situation of the TV is that growth is limited.

Now first, if you look at the TV set company, the overall total growth is limited at this point.

Which means that our customers are focused more on the premium, the high-end, the OLED products.

And they are also undertaking some of the value-up improvements, applying that to TV sets by incorporating AI feature.

And also, if you look at the total set market from a supply chain perspective, the inventories have become more healthier. So under this overarching backdrop, if you look at our large-sized OLED panels, year-over-year basis, we are seeing better performance.

Now, in order to further drive meaningful improvement from an earnings perspective, at this point, our division in the large OLED business is currently making preparations to further enhance competitiveness. 그리고 눈 건강 관련해서도 제품 기술에 대한 준비를 하고 있는 상황입니다. A good case to note is that we're making some technological preparations, especially called the meta technology, and also developing technology for eye health, eye safety. So we have been able to communicate this recently to the market.

In order to improve the revenue structure, we are making a lot of effort to improve the internal cost.

So, we are placing the most priority on the transition to a structure where we can create revenue in the future.

It's a situation where we're preparing for a meaningful profit-making improvement along with the end of the triangle next year.

So our priority that we have placed is on transitioning into a profit-making structure. We will also base our fab operation and really focus on efficiency in terms of fab operation, production, sales, as well as cost reduction. All of this underpinned by the demand that we see from the market. And as you've mentioned, our depreciation will come to end next year. And we, in this process, will come up with meaningful ways to further improve on our profitability. Thank you. This brings us to the end of the third quarter 2024 earnings conference call of LG Display. Thank you very much for joining us today. And if you have any unanswered questions, please feel free to contact us at the IRT. Thank you.