Lg Elec S/Gdr 144A

Good morning and good afternoon. Thank you for joining LG Electronics Earnings Release Conference Call for the second quarter of 2022. This conference call will start with a presentation on the earnings results, followed by a Q&A session, at which time, if you wish to ask a question, you will need to press star N1 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 LJ Electronics Earnings Release Conference Call for the second quarter of 2022. With me are representatives of each business management division, Mr. Young Won Seo from Home Appliance and Air Solutions, Mr. Jung Il Lee from Home Entertainment, Mr. Ju Young Kim from Vehicle Component Solutions, Mr. Chung Hyun Park from Business Solutions. We are also joined by Mr. Sangho Park from Global Business Management Group, Mr. Hongsoo Lee from Accounting Division, and Mr. Jonghyun Park from Finance Division. Please note that all statements we will be making today regarding the financial results of the second quarter are subject to change in accordance with the results of the external review. I would also like to remind you that uncertainties in the market and changes in strategies may cause our results to be different from the outlooks and forward-looking statements made today. Today, I will outline the overall performance results of the second quarter of 2022 and the outlook for the third quarter. After that, each division will take turns to deliver its business results and outlook. Now, let me start with the consolidated financial results of the second quarter of 2022 and the outlook for the third quarter. Consolidated sales of the second quarter was 19.5 trillion won, and operating profit was 792.2 billion won. Despite the decline in global TV demand, sales grew 15% year-on-year on the back of increased sales in premium appliances and revenue growth in vehicle component business with easing of OEM production disruptions. Though there was upward pressure on expense with rising raw material and logistics costs, We maintain solid profitability attributable to the turnaround in VS and top line growth in the appliance business. I will now briefly review the second quarter performance of each business. H&A recorded 8.1 trillion won in sales, 432.2 billion won in operating profit, and 5.4% in profitability. HE recorded 3.5 trillion won in sales, and 18.9 billion won in operating loss. VS recorded 2 trillion won in sales, 50 billion won in operating profit, and 2.5% in profitability. VS recorded 1.5 trillion won in sales, 14.3 billion won in operating profit, and 0.9% in profitability. Each business will later share its respective business results and outlook in detail. Let's move on to the profit and loss and cash flow of the second quarter. In terms of profit and loss, reflecting financial income and expense, equity method gain and loss, other non-operating income and expense, corporate income tax, and income and loss from discontinued operations, we posted $338.1 billion in net income. Next, on cash flow. Q2 cash flow from operating activities was $1.8 trillion, and cash flow from investment activities was negative 922.7 billion won, resulting in net cash flow of 984.8 billion won. When reflecting cash flow from financial activities of negative 121.3 billion won, cash balance at the end of Q2 came to stand at 6.5 trillion won, 863.5 billion won increase from the previous quarter. Next is the key financial position and indicators for the second quarter of 2022. As of the end of the second quarter, assets did at 55.4 trillion won, liability at 32.1 trillion won, and equity at 23.3 trillion won. In terms of leverage ratios, net debt to equity, liability to equity, and debt to equity all decreased quarter on quarter and year on year, and we continue to maintain a healthy financial condition. Next is the outlook for the third quarter. In terms of the business environment, uncertainties are expected to persist due to geopolitical risks stemming from the prolonged Russia-Ukraine conflict, worsening inflation, and declining consumer sentiment. Amidst this environment, we will actively address the polarized demand through improved product mix with focus on premium products and expansion of cost-competitive mass-tier products. We will drive profitable growth by enhancing sales in VS and boosting contents and advertisement revenue. We predict third quarter revenue to grow year on year on the back of solid sales of appliances and top line growth in vehicle components. We seek to secure profitability through efficient resource management and product mix improvement. We will move on to the second quarter results and third quarter outlook by business. But before that, I would like to state that upon closing the solar panel business at the end of June, Following our announcement on discontinuing operations last February, all related profit and loss have been reflected in income and loss from discontinued operations from the Q2 earnings release, in line with accounting guidelines on discontinued operations, and past performance results have also been restated. Now the business results and outlook starting with H&A. Let me share the second quarter results of H&A. We recorded sales of $8.1 trillion, of 18% year-on-year led by growth in overseas markets, notably North America. Though the revenue growth in overseas markets acted as an upside factor for profitability, operating profit decreased year-on-year due to rising raw material and logistics costs. Next is the outlook for the third quarter. With worsening inflation and waning consumption of consumer goods in the market, demand for home appliances is expected to slow. causing the competition among market players to further intensify. Amidst this environment, we seek to expand premium model sales and strengthen the competitiveness of our volume zone models to continuously scale the business. We will raise selling prices and reduce costs to secure profitability. I will share the second quarter results of HE sales declined year-on-year due to sluggish sales in major advanced markets impacted by the decrease in global TV demand. Despite improved material cost with panel price drops, operator profit decreased year-on-year due to declining revenue and increased marketing spending to address the intensifying competition. Now let me share the outlook for the third quarter. In the market, As concerns of a global recession continue to shrink market consumption, competition is projected to further intensify. Accordingly, we will enhance revenue by expanding sales of premium products such as OLED TVs and proactively capturing opportunities provided by the upcoming World Cup. We plan to secure profitability through efficient marketing spending. Let me share the second quarter results of VS. Sales grew year on year to stand at 2 trillion won thanks to proactive efforts to address additional demand from OEMs by effectively managing the supply chain. We moved into profit on a quarterly basis on the back of revenue growth and ongoing efforts to improve cost structure. Next, the outlook for the third quarter. While the automotive chip shortage is expected to gradually ease, Uncertainties in the external market stemming from inflationary pressures and geopolitical risks are expected to persist. So by strengthening cooperation with automotive OEMs and better managing the supply chain, we will actively respond to rising demand and we will continuously improve cost structure and minimize risk from uncertainties in the market to maintain top line growth and profitability. I will share the second quarter results of BS Q2 sales increased year-on-year, led by recovery in B2B demand and consequent top-line growth in information display, but sales decreased somewhat against the previous quarter due to slowing sales following the peak season for PCs in Q1. Despite that strong performance in ID, operating profit decreased year-on-year, impacted by the intensifying competition due to reduced IT demand and a hike in major components and logistics costs. Now let me share the outlook for the third quarter. IT demand is expected to decline, with concerns of a global recession and COVID entering the endemic phase. B2B demand is expected to rise, supported by the base effect from last year, though growth may slow compared to past projections. We will build on the sales growth momentum and continue to secure profitability by continuously identifying potential B2B projects in diverse verticals and gaining more project wins. That brings us to the end of the second quarter earnings release and outlook for the third quarter. We will now take questions. Operator, please commence with the Q&A session.

Now, Q&A session will begin. Please press star and 1 if you have any questions. Questions will be taken according to the order you have pressed the star and 1. For cancellation, please press star and 2 on your phone. The first question will be provided by Dongwon Kim from KB Securities. Please go ahead with your question.

Yes, thank you for the question. I have two questions about VS. First of all, I would like to ask for your detailed opinion on the performance of the medium-term performance of the VS business by dividing it into infotainment, LG Magna, and GKW. Next, I would like to ask if the recent power trend of LG Magna and GKW Thank you for taking my questions. I have two questions to be answered.

First, I would like to ask for your mid- to long-term projections on the vehicle component business. Could you elaborate in detail on infotainment, LG Magna, and ZKW?

My second question is also to the VS business.

I understand that recently, LG Magna e-powertrain, together with ZKW, decided to establish plants in Mexico, and they are making active investments at the moment. Could you tell us about the background of such an investment? Is it because you have secured new clients in North America, or because you expect the order intake growth to remain high?

Yes, I will answer to the VS Department. The VS Department has established a basis for continuous growth based on more than 60 trillion won of revenue at the end of last year. Based on the medium-term strategy for each business based on market change, we will openly advocate the leadership of the Global Automobile Corp.

I would like to answer your first question. VS Company is confident that we are equipped with a sound foundation of growth based on over 60 trillion KRW order backlog as of last year. And based on the mid-to-long-term strategy of each business, we will work to strengthen our position as a global vehicle component provider.

The infotainment business is a company that has been actively involved in the development

To start with infotainment, we have developed integrated cockpits based on software capability and enhanced our cybersecurity related business. And as a result, we are expecting growth of mid to high team level based on strategy to expand products with high added value.

The EV component business will accelerate growth by approximately 50% level through securing business capability and diversifying customer and product portfolio based on cooperation with Magna. Last but not least, the vehicle lamp business. We are working to achieve continuous growth based on sound profitability with large volume consumer or product mix structure and better operating capabilities.

expected growth rate is in the mid to high teens. Thank you.

I would like to answer your second question regarding investment in the Mexico plant.

The United States is asking OEMs and Tier 1 suppliers to satisfy their United States-Mexico-Canada agreements, or USMCA conditions, in order to invigorate their EV industry and create jobs.

For this purpose, the Party has promoted the establishment of the Mexico Factory in order to secure more business opportunities for the future. Mexico Factory investment is not only for North American OEMs,

As a result, we have decided to build a plant in Mexico in order to have a competitive edge in winning orders in the future and to secure more business opportunities. We are currently expecting our investment in building the Mexico plant to bring greater chances of supplying not only to North American OEMs, but also to Korean and Japanese OEMs that are targeting the U.S. market.

Thank you.

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

Thank you for the question. H&A H&A H&A H&A H&A H&A

Thank you for taking my questions. I have two questions to HE and H&A. My first question regards to home entertainment. The global TV demand is remaining low, leading to high level of channel inventory. What are your projections on sales and profitability of TV market overall? and of HE Company on the second half of this year, especially with expectations regarding the major sports event. My second question regards to H&A. It seems that your revenue is higher than competitors. However, your profitability fell more sharply versus your competitors. In this context, how do you manage to maintain the revenue gap with competitors? On the other hand, Why is it that your profitability fall more sharply compared to your competitors?

I would like to answer your question regarding home entertainment.

Ever since we've enjoyed profitability during the pandemic, now we're seeing greater inventory level as TV demand went down because of inflation and rise in interest rates. As we are seeing higher channel inventory, especially in advanced markets, including North America and Europe, we have taken fine actions following the global economic situation and TV market trend, adjusting our production volume in the second quarter. In other words, we have normalized the channel inventory level so far.

In the second half of the year, we expect the consumer mentality to be weakened due to global inflation and uncertainty in the market. However, sports events such as the Qatar World Cup in November However, we do expect sales levels to recover in the second half thanks to upcoming events such as the Qatar World Cup planned in November and Black Friday season. Based on in-depth understandings and taking a look at the opportunities that lie in front of us in the second half,

Next, H&A will answer your question.

Let me answer your second question on H&A. Last year, for the first time, we were ahead of Whirlpool, our major competitor, in terms of sales revenue.

and the revenue gap in Q1 is widening further. We expect this gap to remain in our Q2 results as well.

We are going to continue to focus on enhancing our premium models

and we are going to also focus on the volume zone. Also, we will continue to enhance business capabilities for not only essential home appliances such as refrigerators and washers, but also for products with hygienic features such as dryers and dishwashers. And we will constantly work on differentiating ourselves by offering new products and services, including the upgradeable home appliances that we have launched early this year.

Despite revenue growth, the impact of soaring raw material and logistics costs was not sufficiently offset, leading to a decline in profitability year-over-year.

That said, our profit margin still remains above the average profit margin of our key competitors.

Next question, please. The following question will be presented by Loco Kim from Hana Financial and Investment. Please go ahead with your question.

Hello, I'm from Hana Securities. Thank you for the opportunity to ask a question. I will ask two questions. First of all, in terms of the current situation, the price of our main products in the second half of the year has risen, but it is still a burdensome situation, and in the case of demand, it is expected to continue to decline. I wonder how you are looking at it in terms of the current situation and if you have any related response strategies. Thank you for taking my questions. I have two questions. My first question is on corporate-wide operations.

The cost pressure and the sluggish demand for key products are expected to persist into the second half. So in this context, what is your outlook and can you share your response measures? And my second question is on H&A. As retailers' inventory days increase, there are growing concerns over the company's profitability in the second half. In relation to this, can you give us an update on your inventory levels and how much of an impact will it have on your profitability?

On the raw material side, uncertainty persists.

Partly driven by an extended conflict in Ukraine, but we're continuously hedging risk through futures trading and enhanced partnerships with key channels. At the same time, we're working on improving the fundamental cost structure, for example, by adopting more cost-saving materials.

And in terms of demand, you're concerned about inflation-related consumer demand, which is affected by the decline in actual purchase power. On the demand side, there are concerns over slowing demand for home appliances and TVs as rising inflation weighs on consumers' purchasing power.

In response to this, based on detailed strategy for each region and segment, we will continue to expand sales of premium home appliance products in advanced markets such as North America, where robust growth is expected. At the same time, we are going to continue the growth momentum by enhancing the competitiveness of mass-tier products in emerging markets.

And in addition, through the expansion of the OLED TV line-up and the expansion of the pan-side activity,

Also, we will be fully prepared to respond to the peak season, including the World Cup, through the expansion of OLED TV lineup and aggressive promotions.

As for the vehicle component business, we expect to see additional demand as the shortage of automotive semiconductors is showing signs of easing.

Also, driven by increased investments in infrastructure, the B2B business environment, including digital signage, is expected to improve. And we're going to leverage this to drive corporate-wide revenue growth and profitability.

Yes, I will respond to the H&A department. In the first half of 2022, the distribution stock has maintained its proper level of distribution and is managed at a stable level of distribution.

Let me answer your second question on H&A. The distribution inventory of the first half of 2022 remains at appropriate levels and is being managed at stable levels. As the sales forecast of retailers for the second half vary by region, We are adjusting the supply volume in a timely manner in line with changing sales projections. We are exercising sound inventory management by expanding supply for regions that have the growth momentum while reducing supply in regions where sales are expected to decline. Therefore, we believe excess inventory will have little impact on our profitability.

Next question please.

Next question is from SK Kim from Daiwa. The following question will be presented by S.K. Kim from Daiwa Capital Market. Please go ahead with your question.

Thank you for the question. I have two questions. The first question will be about HE. The second question will be about Warrior. The first question is about COVID-19 situation. Elec S & Gdr 144A will continue to operate. Please tell us what the company's opinion and response strategy is about this. Second, if you look at the performance up to the second quarter of this year, there was a significant reflection of the one-way effect of the first quarter, and this year, the in-attack performance that is connected to the performance seems to be quite positive. In fact, except for this part, I would like to know if there is anything that can be expected from the company in the second half of the year and next year when we look at the performance in the second half of the year.

Thank you for taking my question. My first question is on home entertainment. I understand that LG Electronics witnessed high performance during the past two years under the COVID-19 pandemic thanks to the strong pent-up demand in the consumer electronics such as home appliances and TV. With both reopening trends and global inflation in the market, There are heightened concerns of your performance in the consumer sector declining from this year into 2023. Could you share your projections and countermeasures? And my second question is on corporate-wide operations. Taking a look at the results until the second quarter, we have witnessed one-off effect in the Q1 and the strong performance of LG Innotech. and excluding the two, the performance for the year 2022 is expected to be weaker compared to last year. And in this context, can we expect any sort of upside in terms of the company's performance in the second half and beyond?

Yes, I will answer your question. I would like to ask you a question on home entertainment.

It is true that the market demand is projected to go down until 2023 due to the end of the pandemic and global economy slowdown, despite the rising demand trend that we had witnessed during the past two years.

In this situation, the party continues to talk, but one statement that strengthens its acquaintances in the premium market centered on OLED TV, Under these circumstances, we have three major pillars to bring qualitative growth to our business. First, strengthening our sense in the premium market with our OLED TV lineup.

Next, differentiating customer experience, and lastly, strengthening platform business.

First of all, in terms of strengthening the premium market value centered around OLED TVs, the competitors have already released QD OLEDs for a long time, but as time goes by, the demand for the premium market is increasing to some extent this year, and I think it will continue to increase. So the company To start with, we would like to maintain strong leadership in the OLED TV market that is expected to show rapid growth

thanks to our competitor's entry with its QD OLED into this market. And as a pioneer of OLED TVs, LG Electronics would like to provide a differentiated LG OLED TV experience to our customers, so that they can actually experience the difference. And we believe that this will enable us to strengthen our stance in the premium market.

Secondly, we would like to introduce a product

Next, we will continue to differentiate our products and services so that it satisfies our customer needs. We are working on to bring fundamental changes that can reflect our customers' opinions and thoughts to our products and services in order to go hand-in-hand with the customer experience transition from simply viewing to make actual use of TVs. So, we will bring LG's innovative form factors such as Stand By Me and content and services to fit in the super personalized era and lock in our fans.

Lastly, we will take a software-centric perspective to boost platform business growth. We have been nurturing our revenue growth and content and services through webOS-based smart TVs.

and our plan is to integrate all sort of screen experience from various devices as well as TVs and to further expand our business portfolio with enhanced business model, adding advertisement and so on.

Yes, that's all.

Thank you.

Yes, I will answer the previous part. As you understand, our business environment in the second half of the year Let me answer your question on corporate-wide operations. As you know, uncertainty surrounding the business environment caused by global inflationary pressures

First, from a B2C perspective, in the North America region, and the premium products we have, the key markets and products that maintain relatively strong growth

In response to this, from a B2B perspective, we are going to maximize leverage by solidifying our competitive presence backed by premium products in core markets including the North American region,

where we're maintaining relatively robust growth. At the same time, as mentioned before, we're going to continue to explore additional sources of income including content and ad revenue based on our TV platform competitiveness.

And from a B2B point of view, we are continuing to increase the sales of electric vehicles in order to meet the demand for additional orders. Also, from B2B perspective, with the shortage of automotive semiconductors showing signs of easing, we will be fully prepared to respond to additional orders from the OEMs and thus expand sales.

And by actively responding to the new orders of digital signage and hotel TVs that are showing signs of full recovery, we aim to capture additional revenue opportunities.

Next question, please.

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

Yes, thank you for the question. My name is Woo Dong-jae. The first question is related to the interest rate. Despite our good performance in the past few years, the difference in income is still at the level of 10 trillion won. However, the interest rate is rising recently,

Thank you for taking my questions. I have two questions. My first question is on corporate-wide operations. For the past several years, you had very strong results, but in spite of that, your debt amounts to 10 trillion won. and as the interest rates are soaring, it is likely that your finance costs will also increase in line with that. And then I have a follow-up. What is your response to this? Let me answer your first question on finance costs. As most of our debt has long-term fixed interest rates, there has been little increase in the finance costs triggered by rising interest rates. For new borrowing, though, we expect to see an increase in the interest expense driven by rising interest rates. But we're going to minimize the increase in our finance costs through low-interest funding utilizing various sources of funding.

On the other hand, as our deposits have variable interest rates,

We expect rising interest rates to drive up the interest income, offsetting the increase in finance costs associated with new borrowing.

That's all. Thank you. In terms of TV, we saw a sharp increase in sales, especially in the second quarter. Unfortunately, it seems to have turned into a deficit. We've been looking for a premium product with a high ASP and margin compared to competitors with OLED TV. In particular, Samsung is using QD OLED and Sony is using Samsung panel, so it seems that high-end OLED TV is coming out. In the midst of that, the TV market seems to have come into a very downturn, as I said earlier. So, the strategy for this My second question is on home entertainment. As you mentioned, the sales in the second quarter dropped a lot and this is leading to negative results.

And I know that you are in the market with premium OLED TVs with high ASP and margins. However, at a time when your competitor jumped in as a market player with their QD OLED and it seems to be a very high-end product, and at a time when, as mentioned, the TV market is not so promising, could you tell us about your strategies and how to operate and how to countermeasure this situation.

Yes, I will answer the question.

When the competitor QD OLED was announced, the competitor used a strategy to promote our OLED TV in order to protect the LCD TV market. I would like to answer your question on HE. We focus on the fact that when our competitor first unveiled its QD OLED TVs,

They finally recognized the value of OLED and scrapped the strategy they used to proceed and scrapped to diminish OLED TVs that they were pursuing in order to secure the LCD TV market. And back then, we delivered our message that we do welcome their entry into the OLED TV market during the last IR callings.

So taking a look at our competitors, they have very limited

In terms of product power, we have significantly strengthened the new line-up called OLED EVO this year.

And the resolution is 8K and 4K in terms of resolution. The size is also down to 97 inches in the second half of the year. From 42 inches to 97 inches. And the form factor will also be released in the second half of the year. Bandable gaming, interior TV, In terms of these various products, I think that it can actively respond to the QD OLED of the competitor. It's not a competitor. To tell you about our strategy, I believe that our product is very superior.

We have launched OLED EVO this year and also we have launched various products with resolutions in 8K, 4K and size from 42 inches to 97 inches and we're planning to launch this new sizes in the second half and we have other form factors such as bendable gaming TVs and terrier TVs and I believe that our lineup will be strong enough to deal with the market, and we are trying to provide an array of options to our customers so that they can experience furthermore and feel the differentiated product. And I do believe that our strategy will work. Thank you.

And regarding market recovery, Basically, due to the extreme demand, the increase in distribution in the market has greatly affected us in the second quarter. That's not just us, but the TV set industry has been affected by it. As I said before, if distribution is normalized to some extent, we also think that OLED's premium strategy is effective. And I'm telling you about the market recovery sector.

Of course, the demand dropped dramatically. However, we also have impact in the high channel inventory level within the market. However, this is not only limited case to LG Electronics, but all TV market has experienced such difficulties. And as mentioned previously, I believe that the channel inventory may be normalized soon, and we still can work on with the premium strategy we have been working. And we believe that this may lead to greater profitability.

Next question, please.

Next question is from Mr. Kwon from DB Financial and Investment. The following question will be presented by Mr. Kwon from DB Financial and Investment. Please go ahead with your question.

I have a question for the BS business department. After the end of the Taehang River disaster, In the second half of the year, we will expand our business based on IT devices. I wonder how we should draw the vision of the BS business department after the completion of the Terran River Panel business. For example, how much will you target the sustainable growth of the business department and how much will you expand the business? I would like to ask you about the future prospects of the BS business department.

Thank you for taking my question. I have one question on BS. So the solar panel business is terminated by the end of the first half of this year. And starting from the second half, the BS division will mainly operate in the IT and ID sector. So my question is, what is your outlook after the closure of the solar panel business? Please share the strategy and outlook of the BS division. For example, what would be the appropriate level of margin and profitability after the closure of the solar panel business? So please share your outlook.

Yes, I will answer your question. After the end of the solar panel business, the B.S. Department has been working on products such as gaming monitors, grand PCs, Let me answer your question.

In terms of product, going forward, the BS division will continue to achieve above industry average profitability through high-end focused product portfolios, including gaming monitors, gram PCs, and digital signage and hotel TVs.

And in terms of growth potential, as you mentioned, we will be focusing on our IT business and ID business. And I hope you understand that

We are reaching a right balance between B2C and B2B.

IT's B2C business is focused on high-end products, and we believe it will continue to grow as market demand grows. And the information display business, the B2B business, will continue to develop and expand the pipeline of customized vertical products,

In terms of our B2C business of the IT business, we are going to focus on high-end products and as the demand for high-end product is growing, we believe we will grow in line with that. And in terms of our ID business in B2B, we will focus on providing tailored product for each vertical and thereby expanding our pipeline. Thank you.

Thank you. Next question, please.

The next question is from JJ Park of J.P. Morgan. The following question will be presented by JJ Park from J.P. Morgan. Please go ahead with your question.

Thank you for the question. I have a question for the V.S. division. Elec S & Gdr 144A

I have one question to V.S. You talked about sales growth and I believe that you have backlogs until this end of this year. And when talking about backlog, could you confirm whether this is a like already fixed figure or it may change according to customer requests?

Yes, I will reply to the V.S. department. As reported in recent articles, the company has collected 8 trillion new projects in the first half of the year,

As covered in the media recently, we have one new project that amounts to 8 trillion KRW in the first half of the year, and our order backlog level remains in the mid-60 trillion KRW level. To tell you in detail, infotainment products account for 60%, while EV components and vehicle lamps account for 20% each, building up the order backlog.

Yes, I understand the question related to the reliability of the backlog. If you look at the characteristics of what we call a water supply, we are a platform water supply, so we have a lot of water supply in the infotainment, motor, Elec S & Gdr 144A

And I believe that you were asking questions about our soundness of the backlog. And when we talk about order backlogs, we provide a platform to our clients. And we have made contract in providing entertainment, modern, and lamps. And about the detailed volume, it changes according to how much our OEM companies will sell afterwards. The confirmed factor is that we will provide the component to our OEM companies, and about the detailed volume, it may change furthermore. Thank you.

Thank you, and do you have any further questions?

Currently, there are no participants with questions. Please press star 1, star, and 1 to give your question.

Please ask any questions if any.

If there's no further questions, that brings us to the end of LG Electronics earnings release conference call for the second quarter of 2022. For further questions, please contact the IR team. Thank you.