LG Display Co., Ltd.

Good morning and good evening.

Thank you all for joining the conference call for the LG Display earnings results. This conference will start with a presentation followed by a Q&A session. If you have a question, please press star and one on your phone during the Q&A. Now we will begin the presentation on LG Display's first quarter of fiscal year 2026 earnings results.

Hello, I'm Kim Kyu-dong, the financial manager of LG Display. In the first quarter of I would like to express my gratitude to everyone who attended today's conference call. Today's conference call was attended by CEO Kim Seong-hyeon, CEO Cho Seung-hyeon, CEO Kim Jong-deok, CEO Ahn Yu-shin, CEO Baek Seung-yong, CEO Song Ki-hyeong, and CEO Kim Hyo-kyung of Business Intelligence.

Good afternoon. This is Kim Kyu-dong, Vice President in Charge of Finance and Risk Management Division at LG Display. Thank you for joining our first quarter 2026 Urgence Conference Call. Joining us today are CFO Kim Sung-hyun, Vice President Cho Seung-hyun in charge of Business Control and Management, Vice President Kim Jong-duk in charge of Large Display Planning and Management, Ann Yushin in charge of Medium Display Planning and Management, Vice President Baek Seung-yong, in charge of small display planning and management. Vice President Son Ki-hwan, in charge of auto marketing.

And Kim Yoo-kyung, leader of the business intelligence team.

Today's conference call will be conducted in both Korean and English. For detailed performance-related materials, please refer to our disclosure or the investor relations section in the company website. Please refer to the disclaimer before we begin the presentation.

Today's conference call will be conducted Please be informed that the financial figures presented in today's earnings release are consolidated figures prepared in accordance with international financial reporting standards.

These figures have not yet been audited by an external auditor and are provided for the convenience of our investors.

그럼 2026년 1분기 경영실적에 대해 말씀드리겠습니다.

I will now report on the company's business performance in Q1 2026.

1분기 매출은 계절적 비수기라는 외부 요인과 지난해 1분기 LCD TV 사업 종료로 인한 기저효과가 있음에도 불구하고 안정적인 OLED 제품 출하와 우호적인 환율 상황이 유지되면서 전년 동기 대비 9%,

Revenue in Q1 was 5.534 trillion won, down 9% year-over-year and 23% quarter-on-quarter, on the back of stable OLED product shipment and favorable exchange rate, and despite such external factors as the seasonality, and the base effect coming from the discontinuation of the LCD TV business in Q1 last year.

Operating profit was 146.7 billion won, rising YOY,

driven by strengthened business structure and sustained OLED performance.

Operating profit margin was 3%, and EBITDA margin was 21%.

Net income recorded a loss of 575.7 billion won due to the impact of FX translation loss on foreign currency debt as the high exchange rate persisted.

Next is area shipment and ASP trends. 이는 계절적 비수기 영향에 더해 당사가 지속적으로 추진해온 중형 제품군 위주의 저수익 모델 효율화에 기인합니다.

Area shipment in Q1 was 3.2 million square meters, down 21% QOQ. On top of the seasonality, there was continued push by the company to streamline low-margin models, primarily in the mid-size product line.

면적당 상가의 경우, As for ASP per square meter, it fell 4% QOQ.

due to the seasonal decline in small panel products with relatively high price per square meter. But at $1,244, it was up 55% YOY thanks to the rising share of OLED as a result from the company's business structure upgrade efforts. Next, I will discuss the revenue breakdown by product category.

TV was 16%, and IT, 37%.

Mobile and others segment accounted for 37%, down 3 percentage points, QOQ, as the market entered into seasonality.

Auto, which is relatively less season-sensitive, took up 10%, up 3 percentage points, QOQ.

The OLED product group accounted for 60% of total revenue, up 5 percentage points YOY.

We believe that through our persistent internal push to enhance our business structure and shift to an OLED-centric company,

We have established a structure that can generate meaningful performance despite unfavorable externality.

Next is financial position and key metrics.

Cash and cash equivalents in Q1 was 1.525 trillion won.

Largely unchanged QOQ.

Of the main financial ratios, current ratio was 74%, almost flat QOQ, with debt-to-equity ratio at 251% and the net debt-to-equity ratio at 157%. While there have been temporary fluctuations quarter-on-quarter due to adjustment in our borrowing portfolio and the impact of exchange rates, we plan to further strengthen our financial soundness in the long term.

Next is Guidance for Q2.

Total area is expected to grow by low 10% level QOQ, driven by shipment increase, mainly in large size panels. As for the price per square meter, it is expected to fall by low to mid 10% due to lower shipments resulting from mobile products seasonality, which typically command higher price per square meter.

Next, I would like to hear from the CFO, Kim Sung-hyun.

I will now turn the call over to our CFO, Senior Vice President Kim Sung Hyun. Good morning and afternoon. This is the CFO, Kim Sung Hyun.

Thank you for joining us at this conference call.

Despite the seasonality in Q1, we were able to remain profitable for three months in a row thanks to our years-long internal efforts such as initiatives to transition to a business structure based on OLED and high-end strategic customers, as well as the innovation of cost and improvement of operational efficiency.

Furthermore, we have significantly enhanced business stability and competitiveness,

By increasing the share of OLED out of total revenue to 60%, a 5 percentage point increase YOY.

이렇듯 과거 대비 확실하게 개선된 사업 체질은 회사가 추구하는 지속가능한 수익 창출 구조에 탄탄한 기반이 되어 지속적으로 사업 성과를 개선해 나갈 수 있는 동력이 될 것으로 기대합니다.

The clearly improved business fundamentals will serve as the solid foothold for a sustainable profit-generating structure that the company aspires for and will be the driving force behind our continued improvement in business performance. We will keep working to ensure stable OLED-centered product shipments and expansion of business performance.

However, if we look at the external environment, the uncertainty in the market is increasing more than before. In addition to the rise in semiconductor prices, the increase in global demand, the rise in energy prices, and the increase in the scale of uncertainty in the market, such as supply and demand, are continuously increasing.

But looking at the external environment, uncertainties today are higher than ever before. The scope and scale of these uncertainties continue to grow, including not only rising semiconductor prices but also declining global demand, rising energy costs, and supply chain disruptions, making it difficult to estimate their full impact at this point.

Accordingly, we believe that close monitoring of the external volatility and uncertainties along with the ability to respond swiftly

are essential capabilities that the company must possess and that the situation requires more cautious approach.

Meanwhile, even as external uncertainties persist,

It is highly positive that our competitiveness in high-spec products, which is our strength, is increasing, and that technological barriers are rising along with it.

On the other hand, we will work hard to strengthen the technical distinction through military efforts to ensure financial stability and to achieve sustainable results that meet the expectations of the market and customers.

Even as we seek optimal response to external uncertainties, we will strive to secure financial soundness and achieve sustainable results that meet the expectations of the market and our customers based on a company-wide effort to strengthen our technological differentiation.

Next, I would like to briefly talk about business area planning and strategy. Next, allow me to briefly outline our plans and strategies by business segment.

In this small-sized mobile business, we will flexibly respond to our customers' diverse technical needs based on our technological leadership and reliable supply capabilities. We will also efficiently utilize our existing production infrastructure to ensure seamless preparation for the future.

Chungyeong is actively responding to customer demand based on Tandem OLED and high-end LCD technology, which ensure different competitiveness. In the mid-size business, we plan to continue improving profitability by focusing on high-value added products,

actively responding to customer demand with our differentiated competitiveness in tandem OLED and high-end LCD technology. We also intend to keep improving our product portfolio with a focus on profitability to further enhance production efficiency.

The large-scale business is also planning to expand its premium product group based on its white OLED technology and increase its price competitiveness. In large panel business, we plan to strengthen our premium product lineup based on our white OLED technology while also expanding our range of price competitive products.

And in monitor business, where the shift to OLED is accelerating rapidly, we intend to grow our OLED business and focus on acquiring customers by expanding our gaming product lineup, which incorporates our proprietary technology.

In the motor business, the competition is getting more and more fierce, but we will continue to work to strengthen the market position based on products and technology portfolios that are different from each other.

And in auto, where competition is increasingly fierce, we will keep solidifying our market position based on our differentiated product and technology portfolio.

Finally, a few words on our investment.

We maintain the principle of allocating CapEx primarily toward essential current investment and future-proof technology investment.

We intend to respond to the future market and customers by strengthening the technology competitiveness and growth base in the same context.

The investment disclosed last afternoon in new OLED technology infrastructure was also decided in this context. We plan to strengthen our technological competitiveness and growth foundation by continuing to upgrade our OLED technology as a way to respond to future market trends and customers' demand.

At the same time, our work to optimize investment efficiency will continue unchanged.

CapEx in 2026 is expected at around 2 trillion won. We will continue to build up a decision-making framework that enables a prudent yet flexible response by finding the right balance between preparing for future growth and ensuring financial soundness.

Thank you.

This concludes our presentation of business highlights for Q1 2026. We will now take your questions.

Operator, please commence the Q&A session.

Now Q&A session will begin. Please press star 1, that is star and 1, 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 question will be provided by Kango Park from Daishin Securities.

Please go ahead with your question.

Yes, hello. I'm Park Kang-ho from Daishin Securities. Thank you for the opportunity to ask a question. I would like to ask a question about the investment that was announced yesterday. About 1.1 billion won of oil day investment, I would appreciate it if you could explain the details in more detail. Recently, there has been a lot of talk about the fact that domestic competitors are exclusively supplying foldable products to North American smartphone companies. I am very curious as to whether the investment plan we announced yesterday is a new investment in response to this or a new investment in the form factor. Thank you for taking my question, which is on the disclosure of new investment that was made yesterday.

So the disclosure was for about 1.1 trillion won in OLED. And so my question is, can the company provide more details about this disclosure? And recent media reports have mentioned that another company is exclusively supplying into foldable products. Is the disclosed investment for new form factors to counter this? And if that is the case, then what is LGD's business strategy regarding foldable smartphones and its market entry?

This is the CFO. Allow me to respond to your first question.

As everyone would know, in the industry, we see that the technological development is really accelerating at a remarkable pace. And the importance of technology is also translating into the competitiveness of companies. So all the companies are now struggling and really competing against each other to secure the competitiveness.

As I have already said, the company will continue to focus on the OLED business. As a result, if the company prepares for the OLED new technology and has many strengths in the technology competition, Now, as has been reiterated several times, the company is focused on the OLED business.

Accordingly, the more ready we are with new OLED technologies and the more technologically competitive we are, then there will be more business opportunities coming our way and we will be able to maintain our competitiveness across the industry.

That's why we decided to invest in a new facility. I'd like to tell you more in detail, but the new technology applied by the company is directly linked to the new technology applied by the client, so we don't have any more information.

And yes, the company has made disclosure about new facility investment within this context. And as for the specifics, I would love to share more of them, but then given the fact that our new technology directly translates into new technologies for our customers, please understand that I am not in the position to discuss them further.

This is Baek Seung-yong in charge of small display planning and management and allow me to respond to the question about the foldables. Our position and perspective on foldable devices remain unchanged.

Foldables offer consumers differentiated values through a new form factor. and there are growing market expectations that they will be the new growth driver. But until we gain visibility into market size, pace of growth, and our own opportunities, our strategy will be to grow performance by maximizing production and sales of existing products.

If a new opportunity is found in the smartphone field, we will prepare a supply system after carefully examining the usability of differentiated products and the market growth rate,

If clear opportunities are identified in the smartphone sector, we will prepare a supply system after carefully reviewing such factors as market acceptance of differentiated products and growth rate. And we will then try to build on our mass production experience in mid-sized foldable devices to expand new business opportunities in the smartphone sector. We will take the next question.

The following question will be presented by Jimmy Yoon from UBS Securities.

Please go ahead with your question. I would like to ask a question about the entire panel business. According to the lack of memory semiconductor supply, the price has risen, and recently, due to the Middle East crisis, market uncertainty is expanding due to the rise in the price. As a result, it is expected that the possibility of a change in production quality and demand will increase, and the pressure on the price of customers due to the rise in the price will increase. In relation to this, the demand influence you see My question is regarding the overall panel business.

Today we see that the memory shortage is driving up memory prices and oil price is also surging following the Middle East conflict. Such mounting uncertainties may trigger more concerns regarding potential production disruptions in the tech value chain shifts in demand, rising cost, and price pressure from customers. What is the expected impact on demand and what will be the company's response?

Yes, I'm Seung-hyun Cho from Business Management. Following the issue of memory and semiconductor supply shortage, the industry as a whole is experiencing increased uncertainty, I think you'll be able to see the situation getting bigger and bigger. However, if we divide the first half of the second half and look at the first half first, in the first half of the second half, due to memory or semiconductor supply shortage concerns, there is a certain amount of free demand for customers. And I'm sure there will be some large-scale sports event effects planned. In the second half, there will be some large-scale sports event effects planned. There will be some large-scale sports event effects planned. This is Cho Seung Hyun in charge of business control and management.

Now, it is true that the market today is facing growing uncertainties stemming from the memory shortage and the impact of the geopolitical conflict. But I believe that we have to look at the first half and the second half of the year separately. Now, in the first half, we are seeing some pull in demand due to concerns over memory supply. And with the scheduled major sporting events coming around, there is expected to be some positive impact. Now, going into the second half of the year, considering factors such as component price hikes, set price changes, and macro uncertainties, Coming from the Middle Eastern situation, we will have to be more cautious in our approach to market changes.

The market is becoming more and more uncertain, but the impact varies from company to company, from customer to product structure, and the impact varies from company to company, and the impact varies from company to company, While external uncertainties are increasing across the market, the impact varies slightly by company depending on their customer and product structure.

The impact of rising chip prices is more pronounced in the mid to low-end product segments. meaning that the impact on global customers with relatively strong SCM competitiveness is likely to be quite limited. It might even be an opportunity for them.

We will continue to monitor demand changes and supply and demand trends based on the high-end product line-up

So against the risk of growing volatility, we will closely monitor changes in demand and trends in component supply and demand. We will collaborate with customers and focus more on cost innovation, drawing from our global customer portfolio and established high-end product lineups. and successfully navigate these challenging market conditions. We will take the next question.

The following question will be presented by Jonghun Jang from Samsung Securities. Please go ahead with your question.

Hello, I'm Jonghun Jang from Samsung Securities. Thank you for the question. I would like to ask a similar question. Due to the recent war between the U.S. and Iran, the overall price of parts is rising, so as you said in the CFO's model, the business performance has also increased. In this part, you mentioned Jong-seung in front of us. In terms of the large panel, the operating strategy we are preparing and going to respond to

my question is similar with some of the previous questions now there has been some uncertainties in the business as the CFO has mentioned with the pronounced effect of the Yes, I'm Kim Jong-Duk, Director of Activity Management.

In the case of large-scale businesses, this year, the price of components centered on raw materials and semiconductors has risen, and in the case of OLED TV, it is continuously strengthening the global leading company and high-end brand lineup. In addition, we are planning to expand the medium-sized OLED TV lineup to secure stable revenue structure and diversify.

This is Kim Jong-Duck in charge of large display planning and management. For our large panel business, amid industry volatility this year, such as rising prices of commodity, as well as the components like semiconductors, we plan to establish a stable revenue structure and strengthen our fundamentals by enhancing our high-end OLED TV lineup with leading global set makers, and also by expanding our mid- to low-end OLED TV lineup.

With this in mind, the OLED monitor market for high-end gaming is rapidly changing from LCD to OLED, and we are planning a meaningful growth of about 20% this year in the first 10% of the total output. And for the OLED monitor segment, the high-end gaming monitor market is very rapidly shifting from LCD to OLED, and the share

out of our total shipment is likely to grow very significantly from low 10% last year to around 20% this year. So our product and customer strategy will be about maximizing our business performance and opportunities through an optimized production share between TVs and monitors and to keep solidifying our market leadership.

Next question.

Thank you. We'll take the next question.

The following question will be presented by Won-suk Jeong from M-Securities.

Please go ahead with your question.

Hello. I'm Won-suk Jeong from IAM. I have two simple questions for you. You've been talking about the uncertainty. I think one of the main factors of profitability improvement, including the first quarter of this year and the year-round, is the decrease in interest rates in IT. Overall, the demand is uncertain, and I'm curious when you will achieve a black-and-white transition. I also have two brief questions.

Now, we have been discussing uncertainties a number of times so far. But now, yes, as the uncertainties continue, I believe that perhaps cutting losses from the IT business has made a significant contribution to the company improving profitability, YOY, and also for the year. Then as the uncertainties continue, then when does the company believe that you will be able to turn around to profitability? And also looking at the OLED new investment disclosure yesterday, it seems as if the company is also increasing OLED investment into new technologies. Now, given the fact that the other companies are also looking into the investment for the 8th Gen, IT, OLED, and so forth, so what is the company's plan for investment down the road?

I'm Ahn Joo-shin, and I'm in charge of the central planning department. As the war in the U.S. and other major environmental disasters continue, This is Ahn Yushin in charge of medium display planning and management.

Now the ongoing uncertainties in the external environment, including the U.S.-Iran conflict, makes it difficult to expect a recovery in the IT sector this year. To prepare for increased demand volatility in the second half due to rising commodity prices and prices of components like semiconductors, we are securing supply flexibility and closely monitoring the situation.

The first quarter saw a decrease in sales and water sales compared to the previous quarter, but we improved our income through internal activities such as strengthening the product mix. Although sales and shipment volumes decreased YOY in the first quarter, profitability improved

thanks to internal initiatives like strengthening our product mix. For the year, we will focus on high-end differentiated products based on long-established customer trust, technological competency, and responsiveness, and further upgrade our high-end focused customer structure and maximize opportunities with a select and focused approach tailored to customer demand. which will keep up our trend of improving profitability.

IT OLEDs are rapidly changing from LCDs to OLEDs, starting with tablets to monitors, so I know that the interest and expectation in the market has increased recently. IT products have diverse customers and different product specs, so I think it is important to secure demand that can run a web.

And regarding IT OLED, as the transition from LCD to OLED accelerates, starting with tablets and extending to monitors, we are aware of the growing interest in the market as well. IT products have A diverse customer base and product specifications and having sufficient demand to keep the fab running is crucial. To do that, we need to meet consumer needs for technological capabilities and price competitiveness as well.

Because of the uncertainty of the foreign economy and the situation of higher demand variability, We will carefully approach the time when the demand for the previous OLED products becomes more clear. Until the demand for the investment decision is assured, we will use the currently available infrastructure as efficiently as possible, and we are reviewing various ways to prepare for the future market. We will prepare to respond as soon as possible to the demand for the market.

As the period of uncertainty and high volatility in demand continues, we intend to proceed cautiously until there is clearer demand visibility for OLED in the downstream. Until we have enough visibility to make investment decisions, we plan to utilize our existing infrastructure as efficiently as possible. We are actively exploring various strategies to prepare for future opportunities And they will be ready to respond in a timely manner when the market begins to fully take off.

We will take one last question.

The last question will be presented by Hyunwoo Park from Shinhan Investment and Securities. Please go ahead with your question.

Hello, I'm Park Chan-woong, a member of the SINANCHO. Thank you for your question. Following last year, you said that you will be applying for a postgraduate degree this year. How much do you expect this postgraduate degree to be? I'm curious about when you're going to apply. And one more thing. I'm curious if there's a possibility that this type of postgraduate degree or one-time cost will continue to occur. Yes, that's it.

The company is reportedly implementing voluntary retirement this year again following last year. So what is the expected scale of this adjustment, and when will this be reflected? Will there be more of this type of workforce adjustment and one-time cost in the future?

Yes, like what was said in the press, this year, the workforce adjustment will be implemented. Yes, so as have been reported in the media, there is going to be another round of

workforce adjustment this year. And this is part of the company's effort and transition to an OLED-centric company. So along with this, we have been upgrading our business structure and improving our product portfolio and strengthening our cost structure and also undertaking cost innovation.

The shareholders are also feeling a lot of fatigue because of the repeated situation. In order to increase the continuity of the company through competitiveness, we decided that it was a necessary process and made a long-term decision.

Now, we are aware of the sense of fatigue that the shareholders might be feeling as the similar event continues to repeat itself. And for the short term, yes, this will be something that will incur cost to the company. And this is the kind of decision that requires very cautious approach as well. But we also see this as a necessary process for the company to remain sustainable.

And we have made this decision from a long-term perspective.

And as this is an internal company process, the specific terms cannot be disclosed, for which I ask for understanding. But then there have been some fairly detailed reporting by the media as well. But again, the program is still ongoing. It's not been concluded yet. So as for the specific overall cost or the scale, it is too early to tell.

So far, it has not been a very desirable situation for the company to carry out this hope-raising repeatedly. And since it is something that needs to happen, Now, yes it is true that

having the repeated implementation of the voluntary retirement by no means is desirable for the company either. But if it does have to happen, then it better happen within a short period of time so that the sense of stability will be restored among our members. And that is why we are offering a much strengthened package this time around. And this is part of the company's plan to...

make sure that this does not have to happen again in the near future.

Now, the second quarter for the company historically has been a period of poor financial performance.

The company has been planning to expand the 2nd quarter through structural adjustment, business structure adjustment, and asset reduction innovation. The company has been planning to expand the 2nd quarter through to the second quarter. Nevertheless, the company has made a decision to become a better company in the long term and to become a more sustainable company, so I hope you will take a look at the situation that is currently taking place with a positive view.

Now, of course, we had undertaken some business restructuring, business realignment, and also cost innovation efforts. And as a result of these series of efforts, we were planning and expecting profitability in the second quarter of this year. And that is how the business was managed as well for at least one month. So we were expecting to see profits in the second quarter. And despite that, of course, we continue to try to become a better company, a more sustainable company for the longer term. So on that note, I would also like to ask for a more positive view from the shareholders and investors as well.

Thank you. This concludes LG Display's Q1 2026 earnings conference call.

We thank everyone for joining us today. Should you have any additional questions, please contact the IR team. Thank you very much.