Lg Elec S/Gdr 144A

Good morning and good afternoon. Thank you for joining LG Electronics earnings release conference call for the third quarter of 2020. This conference call will start with a presentation on our earnings results followed by a Q&A session. At which time, if you wish to ask a question, you will need to press star and one on your telephone. I would now like to hand the conference over to the first speaker. Good afternoon. My name is Sangbo Shim from Investor Relations. Thank you for joining LG Electronics' earnings release conference call for the third quarter of 2020. With me are representatives of the Financial Planning Division of each business, Mr. Lee Kwon Kim from Home Appliance and Air Solutions, Mr. Jin Oh Ha from Home Entertainment, Mr. Dong Myung Seo from Mobile Communication, Mr. Koon Tae Kim from Vehicle Component Solutions, Mr. Kyu Sun Hwang from Business Solutions, We are also joined by Mr. Mingyu Kim from Accounting Division, Mr. Chongyi Li from Business Planning Division, and Mr. Hyunkyu Lee from Finance Division. Please be noted that all statements we will be making today regarding our financial results of the third quarter are subject to change in accordance with the result of the external review. I would also like to remind you that uncertainties in the market and changes in strategies E E E E E E E Consolidated sales of the third quarter was 16.9 trillion won and operating income was 959 billion won. Consolidated sales recorded high growth quarter-on-quarter and year-on-year driven by pent-up demand increase of home appliance and TV as well as increase in premium product sales despite the COVID-19 pandemic. As for profitability, we achieved third quarter record high thanks to recovery of vehicle component demand and increase in major product sales such as home appliance and TV. I will now briefly review the third quarter performance of each business. H&A recorded $6.2 trillion in sales, $671.5 billion in operating income, and 10.9% in profitability. AG recorded 3.7 trillion won in sales, 326.6 billion won in operating income, and 8.9% in profitability. MC recorded 1.5 trillion won in sales and 148.4 billion won in operating loss. GS recorded 1.7 trillion won in sales and 66.2 billion won in operating loss. And lastly, BS recorded $1.5 trillion in sales, $77 billion in operating income, and 5.2% in profitability. Further details by business will be covered in later slides. Let's move on to the profit and loss and cash flow of the third quarter. In terms of profit and loss, our net income reflecting financial income and expense, equity method gain and loss, other non-operating income and expense, and corporate income tax posted 649.2 billion won. Cash flow from operating activities of the third quarter was about 1.6 trillion won and cash flow from investment activities was negative 511.2 billion won. As a result, net cash flow amounted to 1.1 trillion won and when reflecting 57.2 billion won of cash flow from financial activities, cash balance at the end of the third quarter was about 6.6 trillion won and increased by 1.1 trillion won quarter on quarter. Next is the key financial position and indicators for the third quarter of 2020. As of the end of the third quarter, our assets stood at 49.4 trillion won, liability at 31.6 trillion won, and equity at 17.8 trillion won. As for leverage ratios, liability to equity increased quarter on quarter as account payable increased to respond to supply mount resulting from demand recovery, but debt to equity and net debt to equity decreased quarter on quarter. Next is fourth quarter outlook. In terms of business environment, there still exists industrial activity uncertainty risk due to slow recovery of the real economy and COVID-19 global risk spread along with the re-strengthening of movement restriction. Nonetheless, low interest rate trend and additional physical policies to boost the economy will be maintained for the time being. And new business opportunities coexist as non-face-to-face trend expands and consumer spending pattern changes. Accordingly, it is predicted that COVID-19 pandemic will serve as a momentum to raise brand awareness. Efforts to expand online sales, new growth products, and OLED TV sales will be continued to maintain growth momentum. And through efficient resource management, fourth quarter sales and profitability is expected to stand higher than the same period of last year. Now, let's move on to the third quarter results and fourth quarter outlook by business. First is H&A. The third quarter results of H&A. Sales shifted back to growth trend in both Korea and overseas. Sales recorded 6.2 trillion won, an increase of 15% year on year. In terms of profit, It improved significantly year-on-year and recorded a double-digit base driven by sales growth in all regions and cost structure improvement. In the fourth quarter, competition in the market is expected to intensify due to delayed recovery of emerging market demand caused by the prolonged COVID-19 situation and the beginning of the fourth quarter promotion season. However, sales is expected to maintain a double-digit growth rate following the previous quarter with the gradual improvement of the business environment. And we plan to focus on achieving profitability similar or higher than that of the previous year by conducting cost optimization activities. Let me share the third quarter results of HE. sales increased year-on-year driven by demand increase in advanced markets such as North America and Europe, and also increased in online sales and premium product sales such as OLED and NanoCell TVs supported the jump. In terms of profit, it improved year-on-year thanks to sales growth and premium product sales increase even though there were cost-aggravating factors caused by LCD panel price increase. Now, let me share the outlook for the fourth quarter. Market is expected to grow during the high-demand season, but risk factors such as intense price competition and increase in LCD panel price is also predicted. We plan to achieve profitability similar or higher than that of the previous year by expanding the sales proportion of premium TVs such as OLED, NanoCell, and large-size TVs strengthening online sales and enhancing efficiency of resource management such as marketing expense and inventories. That is all. Let me share the third quarter results of MC. Sales increased by 17% quarter on quarter driven by gradual recovery in global demand and increased sales in major markets such as North America and South Central America. but remained at the similar level year-on-year due to supply issues caused by 4G chipset shortage. In terms of profit, although marketing expense slightly went up due to new model launch, it improved quarter-on-quarter and year-on-year thanks to increased efficiency of production sites and cost-saving effect of ODM expansion along with solid sales in mass tier models. Now the fourth quarter outlook. With the launch of 5G smartphones from competitors, 5G market is expected to show a significant growth, and market demand is expected to increase quarter on quarter, and demand is predicted to recover to the level of the fourth quarter last year. With the launch of the new form factor, LG Wing, we will focus on expanding sales by strengthening mass tier lineups focusing on target markets such as North America and South Central America and also improve our profit structure through continued operation efficiency. Let me share the third quarter results of VS. Sales increased by 24% year-on-year as automobile manufacturers in North America and Europe, our main OEMs, have resumed production in COVID-19 pandemic situation. and as a result, demand for vehicle components is recovering. As for profit, operating income improves slightly year-on-year, driven by sales growth, resulting from vehicle components' demand recovery and cost management efforts, such as material and fixed cost reduction. For our fourth quarter outlook, recovering the automobile market to pre-COVID-19 level is predicted to be delayed, however, connected and Electric vehicle business sectors are expected to show high growth. Accordingly, we will maximize sales through intense supply chain management to respond to market recovery trends and improve product structure through ongoing cost management. Let me share the third quarter results of BS. Sales increased by 13% quarter-on-quarter despite difficulties in B2B business thanks to the non-contact trend created from the prolonged COVID-19 pandemic but decreased by 2% year-on-year. In terms of profit, operating income decreased quarter-on-quarter and year-on-year due to sales decline and increased price competition. In the fourth quarter, Amid the prolonged COVID-19 pandemic and contact-free environment, we will see increase in market demand in certain product groups related to contact-free and new normal trends, but business opportunities and trends such as reduced corporate investment and fierce price competition will both exist. We expect those to grow year-on-year as we actively tap into sales opportunities of products related to non-face-to-face services, expand strategic product sales, improve product competitiveness, and strengthen online marketing activities. That brings us to the end of the third quarter earnings release and fourth quarter outlook. We will now take questions.

The first question will be provided by Dongwon Kim from KB Securities. Please go ahead with your question. Yes, hello. I am Dongwon Kim from KB Securities. Thank you for the opportunity to ask a question.

I would like to ask a question to the V.S. business department, which is a power supply department and a power supply department. First of all, traditionally, the performance of LG Electronics in the fourth quarter is due to an increase in supply burden and marketing costs, Elec S & Gdr 144A

My question is on a corporate-wide basis and on VS. Traditionally, LG Electronics tend to have lower performance in the fourth quarter due to the burden from inventory and the increase of marketing expense. So could you explain the overall direction you expect for the results in the fourth quarter this year? And my question related to VS is, do you expect a turnaround next year? And if so, through what activities do you believe you can achieve this, if you could explain based on your strategy and outlook for next year?

Yes, I will answer the previous four questions first. Regarding the performance of the fourth quarter, as I mentioned in the beginning of the fourth quarter, Let me answer your question on the corporate wide side. Regarding your question on our performance for the fourth quarter, like I explained in my outlook presentation, due to the

Non-face-to-face trends brought on by COVID-19, we believe that the online sales will increase, and we will have activities with stronger performance in the new category appliances and OLED TV together with efficient resource management, and this will lead to meaningful results.

Currently, COVID-19 is spreading in major countries including Europe.

However, the fact that the COVID-19 is spreading once again in major countries including countries in Europe and the partial countries showing a resumption to the lockdown measures will be a risk to our business.

Elec S & Gdr 144A

However, we have made efforts to maintain stable and sound channel inventory and execute our marketing expenses based on sellout and manage these risks and also make continuous efforts to escape from this trend of having lower performance in the fourth quarter. So I do believe that we will be able to show improved results year on year this year. Let me answer your question regarding the turnaround for VS.

In 2020, due to the impact from COVID-19, based on our backlog, there was disruption to sales, which delayed the improvement to our operating loss. In the third quarter, we are seeing the market recovering and we are maintaining growth in our sales.

And as we made preparations for the new projects, compared to the growth in the market, we are maintaining high growth of 20%.

And we have made structural efforts

to strengthen our software capabilities and improve in terms of our fixed costs, so we believe that we will be able to achieve a turnaround from the third quarter 2021.

Let me explain about the strategy we have for VS Business.

The overall trend and the direction we are taking with our strategy has not changed.

Based on the electric vehicle portfolio since last year, we have strengthened

GKW LAMP

And for the ZKW LAMP business, we have the strategy of expanding our business areas from the existing European regions to include OEMs in Asia and North America as well.

Next question, please. The next question will be presented by SK GIM from Daiwa Capital Market. Please go ahead with your question.

Thank you for the question. First of all, I would like to congratulate you on your good performance. I have two questions for H&A and H&E. Elec S & Gdr 144A And on the H side, the TV sales have increased a lot in the third quarter, and the sales of premium products have also increased a lot, so it seems that sales have grown a lot. However, in terms of profitability, if you look at the sales of English products, online sales have increased and premium products have increased, but it is about the same level as last year. I have first question regarding H&A. Due to impact of COVID-19, more people are working from home. As a result,

The demand for household appliances are replacing not just demand for new growth appliances, but also the demand for traditionally considered white goods. So do you think the solid performance of demand is a temporary improvement, or do you think this is a fundamental trend that can be sustained until the end of next year? And my second question is to the HE side. In the third quarter, your TV sales have increased and also premium product sales have increased as well. So overall, the TV business has recorded a higher sales performance. However, if you look at the profitability with online sales spending and also the proportion of premium product sales increasing, your OI rate is only the level of last year. So if you look at the competitors, they have recorded a high margin with the TV products. So why do you think you have this low profitability? And can you also forecast the full quarter of TV business?

HNA, .

I will answer for the H&A business. In the first quarter, due to the impact of COVID-19, our demand has been some and toned down. In the second half, however, we are going to see an increase of pent-up demand. In the following year, we expect that the demand level will go up compared to this year, but it won't be easy to pick up to the level of pre-COVID-19, and we believe that it will take a longer time to reach that level.

Nevertheless, H&A business is expecting a higher demand going forward

That is driven by our consumer needs for the product with hygiene and healthcare functions and also the demand for customizable design products. And we are going to expand the hygiene and healthcare factors going forward and we will continue to launch new products that can meet the ever-changing market needs and consumer needs as well.

I will give you an answer for the TV business.

You talked about the competitor side having a higher profitability compared to our profitability, and also I also reviewed the materials related to this data, and that was because of the difference of sale volume, and the competitor actually recorded a higher volume in the third quarter compared to the fourth quarter.

However, in terms of competition, I do not think that we should judge the profitability or sales size of one quarter in general.

Considering this competitive landscape, I think it is not desirable to determine only looking at the single-quarter profitability and sales performance. as we see that the impact of COVID-19 will continue from the second quarter of this year to the third quarter in the first quarter and second quarter of next year. and we are managing our business performance in the long term.

And in comparison with the competitor, we are seeing this is a positive sign that we are continuing to strengthen our market presence

and also the share of premium product sales.

Yes, that's all.

Yes, we will take the next question. The next question is from Jung Woo Go from NH Investment and Securities. Please go ahead with your question.

Yes. Hello, I'm Ko Jung-ho from NHK. Thank you for the opportunity to ask a question. I would like to ask a question about the H business and the BS business. First of all, I think online revenue is emphasized a lot in relation to the H business. Elec S & Gdr 144A Elec S & Gdr 144A Thank you. I have questions regarding HE and BS.

For HE, I think the online sales is getting emphasized a lot. So could you explain the proportion of online sales in the third quarter? And compared to the existing previous online trend, how do you see the online sales going to be going forward? And for BS? Could you explain the sales trend for IT business including PC and monitor for the third quarter? And I believe there would have been some impact from COVID-19, so could you explain about that and also the business outlook?

Related to the sales proportion coming from online channels, I believe we all know that

In the current situation, it can only be that online sales proportion will increase.

According to the information that we have, we believe that

Similar to the market and competitors, and for LG as well, we are seeing a continuous increase in the online trend year-on-year, growing up to 50% as well, and we believe that in this environment, this trend will continue. So considering this situation, we will strengthen overall activities related to online, for example, with online specialized dedicated products for online channels and strengthening digital marketing capabilities.

So let me answer your question related to BS.

Like you mentioned, it is true that we were able to achieve meaningful growth in terms of the sales in the third quarter year-on-year and quarter-on-quarter related to our IT business, including the monitor and PC products.

Elec S,

This comes from the strengthening of our product competitiveness in our strategic products such as gaming monitor and grand PC, and also with the non-face-to-face trends with the prolonged COVID-19 impact, there are more stay-at-home activities related to work and schooling linking into the demand for monitor and PC products, so this contributed to our performance.

We expect to continue this growth centered around the demand created by the COVID-19 situation and the demand for high specification products not only into the fourth quarter but also the first half of next year. We plan to maintain this growth in sales by maximizing the customer value we provide by strengthening the competitiveness with differentiation in our strategic products, enhancing the user convenience and quality.

I'll take the next question, please. The next question will be presented by Lee from Samsung Securities. Please go ahead with your question.

Thank you for the opportunity to ask a question. This is a question from the MC Business Department. The competitive advantage of Huawei is weakening due to the economic crisis. Is there any sign of a rebound?

I have questions related to MC business. Due to restrictions on Huawei, we think that competitiveness of Huawei is getting weaker. So do you expect any gains from this? And also, can you share the shipment volume and strategy for your smartphone business?

Due to restrictions on Huawei, the cell phone sales of Huawei in the market is expected to decrease dramatically and in order to capture this

We are expecting there will be a fierce competition amongst the phone makers. Due to restrictions of Huawei in the US, Korea, and Japan, we are not expecting almost no impact in our company. However, in LATAM region, including Mexico, we are trying to replace this empty slot of Huawei with our more competitive master products and customer trust, and also we are going to drive up our sales with our cell phones. And in the Europe region, by leveraging 5G and new form factor, we are targeting to gain this vacant slot and create additional sales for our business.

Let me talk about our corporate strategy for the next year. In the next year, we plan to expand the 5G supply line-up by price range from the middle price to the lowest price and actively drive up the sales of supply products by expanding the 5G supply line-up.

Based on the competitiveness and cost that we earn through OEM production, we are getting a very positive feedback for our mass gear product, which has more advanced competitiveness in terms of design, multi-camera, and large screen. And next year, we are going to continue to expand our 5G lineups, ranging from the low-end to mid-end. And through this, we are going to increase our sales of mass-gear models, and at the same time, we are going to improve profitability.

Please understand that I am not allowed to give you any specific numbers.

The next question will be presented by Won Jae Park from Mirae Asanteo. Please go ahead with your question.

Yes, thank you for the opportunity to ask good questions. I will ask two questions. The first is, as COVID-19 has recently spread to the European center, I think you are more curious about next year. I would like you to share with us how you expect the business environment next year at LG Electronics. The second is CapEx.

I have two questions. First, we are seeing a recent resurgence of COVID-19 in the European region. So I believe many people have questions about that. So could you explain the business environment as you see it going into next year? And second, My question is related to CAPEX. How do you expect the CAPEX levels to be next year?

First, I would like to answer about the current situation. Currently, the market is still in a state of high uncertainty, so it is difficult to predict the business environment in 2021. However, in terms of the economic environment, based on the IMF, which was announced in October, Let me answer your question.

Due to the high uncertainty in the market, it's difficult to provide an outlook related to 2021. However, if you look at the economic environment, based on the economic growth estimates announced by IMF in October, next year the economic growth is expected at 5.2% globally, and in particular for emerging markets such as China, India, Russia, and Brazil, the estimated economic growth stands at 6.0%, for Korea 2.9% and for advanced countries 3.9%. So, we do believe that the market environment will show considerable improvement.

However, it is expected that the real-estate economy will still need a few years to return to its previous state before COVID-19. In addition, we expect that there will still be difficulties in terms of demand improvement next year as consumers' purchasing power will be weakened due to the increase in long-term unemployment centered on major developed countries.

However, we believe that it will take years before the real economy can recover to the pre-COVID-19 levels, and we are seeing permanent job loss increase in advanced countries, and this is undermining the purchasing power of customers. So, we believe that there will be some difficulties in seeing an improvement in the demand.

In terms of the competitive environment, in order to control the limited demand, And if you look at the competitive environment, we believe that the competition will intensify as companies try to secure their limited

demand and unlike this year the marketing expense including promotion costs will go up so we believe that we will need much efforts and strategies to maintain our profitability. In the case of LGE, based on the enhanced brand awareness that we built up this year, we will continue to launch products in a timely manner to the market in line with the changing trends and customer needs to enhance our profitability and in this way we will increase our sales and profitability.

Let me answer your question related to capex. As a general rule, we do try to maintain our capex levels within the EBITDA levels

So for next year, we believe the capex levels will be similar to this year at the mid 2 trillion won levels.

I'll take the next question, please. The next question will be presented by Nicola Godoa from UBS. Please go ahead with your question.

Good afternoon, and thanks for taking my questions. They both relate to the TV business. The first one is the TV business has actually performed well considering COVID-19 and if anything it looks like LG Electronics has gained share. How sustainable do you think this is into 2021 considering pressure on disposable income and considering that perhaps some of the demand may have been pulled in And secondly, regarding TVO pricing margins, could you quantify going forward the negative impact from LCD panel price increases, which seems to be continuing into the fourth quarter and could be continuing next year? And is this offset by OLED panel price declines or over-cost savings in order to maintain the profitability? Thank you.

I have a question for the TV business. Despite the COVID-19 impact, LG Electronics' TV performance has recorded good results. At the same time, LG Electronics is increasing its market share. Do you think this will continue until 2021? And do you think this will continue even in a situation where some of the demands may disappear? Elec S & Gdr 144A Elec S & Gdr 144A

As you can see from our performance of TV products, in the quarter, recovery of the advanced market demand

has contributed to an increase of sales and profitability.

In particular, when we pursue the improvement of sales and profitability, we focused on expanding sales of premium segment

which is different from the current market trend.

We are trying to think carefully regarding until when this solid demand trend will continue as you have said.

We are going to make a decision based on a lot of market research and internal analysis in greater detail. I will take your second part of question.

You asked about the forecast of the panel prices increase and also its impact on our profitability.

Regarding the panel price, depending on which firm or which agency comes up with the forecast, actually the result is different based on various perspectives.

However, what's common amongst the research reports, they're saying that the growth will

go up until this year and stay unchanged or go down until the next year.

However, since our TV business has experienced a drop in the panel price several times in the past, we will proceed with a policy on the market and customers that suits them, and we plan to achieve overall sales and profitability while simultaneously carrying out profitability and premium sales.

However, in the past, our TB business has experienced a lot of panel price fluctuations. Therefore, we are going to execute an appropriate policy according to the market and customer situation, and we are going to pursue a profitability improvement at the same time the increased sale of premium segments, and thereby we will continue to make improvements both in profitability and sales.

Next question, please. The next question will be presented by J.J. Park from J.P. Morgan. Please go ahead with your question.

Samsung and Sony all grossed more than 70% to 80% with QoQ. I don't know how much the opinion was grossed based on the news, but what I'm curious about is whether all the major companies gained market share or whether the market itself has really increased more than that. Thank you.

I will ask my questions. Related to TV in the third quarter, it seems that shipment has increased for Samsung and Sony as well, and they have grown 70% to 80% QOQ. I'm not certain about the LGE numbers, but it seems like you have grown as well. So does this mean that the market share has gone up for all major three companies? And does that mean then that the market in the third quarter has increased its pie that much to that level? My second question related to DKW, What are the synergy effects you have enjoyed after acquiring ZKW? You mentioned about combining the headlamp and the tail lamp businesses and having access to global OEMs, so could you provide an update on the progress to these activities?

TV 말씀드리겠습니다. Let me answer related to the question on TV. I think it is true that overall the market has grown whether in terms of quantity or in terms of amount

Although the specific numbers may differ depending on the institute that provides the perspective, I believe that based on quantity, the market has grown 20% to 50%.

I don't know about the data for September, but if you look at the GSK data for up to August,

It shows that Samsung Electronics takes up the biggest increase in market share, and LGE and Sony, so our first-tier makers, are also taking up a large market share. So I think maybe I can provide a clearer picture including the fourth quarter and the year-end outlook in our next conference call.

Let me answer on your question related to ZKW. There were two purposes in us acquiring JKW. The first is to secure growth and expand our business portfolio as a latecomer to the vehicle component market.

and secondly, we are trying to maximize the synergy effects we could have in terms of the technology operations and the expansion and access to market.

Last year, we have already completed the integration of the GKW Headlamp and LG Electronics Rear Lamp business. GKW's business experience and know-how are applied to the rear lamp, and we are currently conducting premium-class product production.

We have already completed combining the head lamp business of ZKW with LG's existing rear lamp business last year, and we have already secured projects by enhancing our competitiveness in the rear lamp business based on the experience and know-how that ZKW brings on.

In order to strengthen the product competitiveness, ZKW is developing a new light source through joint development with LG Electronics. To strengthen the product competitiveness, we have entered into joint development with JKW to seek new light sources. And in terms of our business operations as well, based on the sales and

procurement capabilities that we have. We are seeking further cooperation for local OEMs and partners and we are seeking new markets and new possible projects.

Next question please.

The next question will be presented by Jongjae Woo from Bank of America. Please go ahead with your question.

Elec S & Gdr 144A As many analysts have asked about your corporate strategy for the next year,

I want to understand your corporate strategy in the long term. If you look at the performance of the second quarter, your performance has improved due to your efforts to reduce expenses and in the third quarter, your profitability went up due to an increase of sales. Looking at your business in the long term, I don't think it is appropriate to aggressively enter into the market with big volume for the TV and home appliance products, and it will have a risk to reduce ASP and margin. And like a cell phone, if you have your market share taken by other players, then you will have smaller amount of economies of scale, and that will make you in a difficult situation. So what is a big picture for home appliance and TV that the LGE management is drawing? And do you think the market share gain is more important? Or do you think that it is more important to improve the product mix with low volume and maintain your high-price policy?

Yes, I will answer H&A first. As I said, the recovery of demand should not be solved in the short term, but we believe that the market environment has gradually improved. Currently, in the case of H&A, it maintains a growth rate of more than the number of shareholders, which is in the short term, but the profit rate is also about 9% in the past three years.

So let me give you an answer for H&A business. As you said, in the short term, we are not seeing a recovery of demand. However, we are seeing that the market environment is making gradual improvements. And in H&A business, we are maintaining a solid double-digit growth. In the short term, if you look at our short-term performance for the previous three years, our profitability was as high as 9%.

We forecast that

Until the first of next year, we will be able to maintain the current sales growth level, and for the profitability, until the first of next year as well, we will be able to maintain the current level.

So, I will explain the short-term and the medium-term part separately. In the short term, we are focusing on the business growth of major businesses, such as refrigerators and washing machines, which were abused by COVID-19. Let me explain about your question in the short term and in the mid to long term respectively. First, in the short term, we are going to focus on our major business such as refrigerators and washing machines.

Elec S & Gdr 144A Elec S & Gdr 144A Elec S & Gdr 144A Elec S & Gdr 144A Elec S & Gdr 144A Elec S & Gdr 144A for the incubating and strategic product other than the major product we are going to continue to maintain and secure competitive edge with our product which features hygiene or healthcare functions and we are going to accelerate the growth by expanding the area of a b2b infrastructure

That was about our efforts related to hardware.

But we will also internalize our digital capability and expand data-based products and services, which is driving the changes of the market currently. And we will do our utmost to maintain a solid and stable growth going forward.

Elec S & Gdr 144A

The direction of TV business in the mid to long term is clearly the same as that of the home appliances business. Furthermore, what we have been doing in the market is that we try to gain the market share through qualitative growth and then we again expanded our market presence.

Next question, please. Currently, there are no participants with questions.

Please press star and 1 to give your question.

It seems that there are no further questions. So with this, we will end the third quarter 2020 earnings release conference call for LG Electronics. If you have additional questions, please contact our IR team. Thank you.