LPL

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.

Good afternoon. This is Kim Kyu Dong, Vice President in charge of Finance & Risk Management Division at LG Display. Thank you for joining our first quarter 2026 earnings 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 Duck in charge of large display planning and management, Ahn Yu-shin 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. 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. I will now report on the company's business performance in Q1 2026. Revenue in Q1 was KRW 5.534 trillion, down 9% year-over-year and 23% quarter-over-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 KRW 146.7 billion, 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 KRW 575.7 billion 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.

Area shipment in Q1 was 3.2 million sq m, 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. 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. 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 KRW 1.525 trillion, 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-over-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. I will now turn the call over to our CFO, Senior Vice President, Sung-hyun Kim.

Good morning and afternoon. This is the CFO, Sung-hyun Kim. 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 지속 가능한 수익 창출 구조의 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.

당사는 앞으로도 OLED 중심의 안정적 제품 출하와 사업 성과 확대를 계속해 추진해 나가고자 합니다.

We will keep working to ensure stable OLED-centered product shipments and expansion of business performance.

다만 외부 환경을 살펴보면 현시점에서 대외 불확실성은 이전보다 더욱 높아지고 있습니다. 반도체 가격 상승뿐만 아니라 글로벌 수요 감소, 에너지 단가 상승, 공급망 차질 등 대외 불확실성의 범위와 규모가 연속적으로 증가하고 있으며, 현재 그 영향을 가늠하기 쉽지 않은 상황입니다.

By 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.

이에 당사는 대외 경제 상황의 변동성과 외부 불확실성에 대한 면밀한 모니터링 및 이에 따른 신속한 대응력 또한 회사가 필수적으로 갖춰야 할 역량이라고 판단하고, 보다 신중한 접근이 필요할 것으로 전망합니다.

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.

한편, 대외 환경의 불확실성이 지속되는 가운데에서도 당사가 강점을 지닌 고사양 제품에 대한 경쟁력이 강화되고 기술 장벽도 함께 높아지고 있는 점은 충분히 긍정적이라 할 수 있겠습니다.

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.

당사는 외부 불확실성에 대한 최적의 대응 방안을 모색하는 한편, 전사적 노력을 통해 기술 차별화를 강화하여 재무 건전성을 확보하고, 시장과 고객의 기대에 부합하는 지속 가능한 성과를 거둘 수 있도록 노력하겠습니다.

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.

다음으로 사업 영역별 계획과 전략에 대해서 간단히 말씀드리겠습니다.

Next, allow me to briefly outline our plans and strategies by business segment.

소형 모바일 사업의 경우, 기술 리더십과 안정적인 공급 역량을 기반으로 고객사의 다양한 기술적 수요에 유연하게 대응하는 한편, 현재 보유한 생산 인프라를 효율적으로 활용하여 미래 준비도 차질 없이 진행하고자 합니다.

In the 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.

중형 사업은 차별적 경쟁력을 확보하고 있는 Tandem OLED와 high-end LCD 기술을 기반으로 고객 수요에 적극 대응하여 고부가가치 제품 중심의 수익성 개선을 이어나갈 계획입니다. 또한 수익성 중심의 제품 포트폴리오 개선을 지속적으로 추진하여 생산 효율성을 계속해서 높여나갈 계획입니다.

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.

대형 사업은 당사의 White OLED 기술력을 기반으로 프리미엄 제품군을 강화하는 동시에 가격 경쟁력을 높인 제품 또한 확대해 나갈 계획입니다. 또한 최근 OLED로의 전환이 빠르게 일어나고 있는 모니터 사업에서는 당사만의 독자적인 기술을 적용한 게이밍 제품 라인업을 확대하여 OLED 사업을 확장하고 고객 확보에 주력해 나가고자 합니다.

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. 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.

모터 사업에서는 경쟁이 점차 치열해지고 있지만, 당사의 차별화된 제품과 기술 포트폴리오를 기반으로 시장 내 입지를 강화하는 노력을 지속하겠습니다.

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

마지막으로 투자 활동과 관련하여 말씀드리겠습니다.

Finally, a few words on our investment.

당사는 필수적인 경상 투자, 그리고 미래 준비를 위한 기술 투자 중심으로 Capex를 집행한다는 기조를 유지하고 있습니다.

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

전일 오후에 공시된 OLED 기술 신기술 인프라 투자 역시 이와 같은 맥락에서 결정한 것으로, 당사는 OLED 기술 고도화를 통해 기술 경쟁력 및 성장 기반을 강화하여 미래 시장과 고객 수요에 대응해 나갈 계획입니다.

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.

동시에 투자 효율화 활동은 변함없이 지속할 예정입니다. 2026년 Capex는 약 2조 원대로 예상되며, 당사는 앞으로도 미래 성장 준비와 재무 건전성 확보 사이에 적절한 균형점을 찾아 신중하면서도 유연하게 대응할 수 있는 의사 결정 체계를 확보해 나가겠습니다.

At the same time, our work to optimize investment efficiency will continue unchanged. CapEx in 2026 is expected at around KRW 2 trillion. 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.

이상으로 2026년 1분기 주요 실적 내용 발표를 마치겠습니다. 다음은 질의응답 시간을 갖도록 하겠습니다. 오퍼레이터께서는 질의응답 안내를 부탁드립니다.

This concludes our presentation of business highlights for Q1 2026. We will now take your questions. Operator, please commence the Q&A session.

지금부터 질의응답을 시작하겠습니다. 질문을 하실 분은 전화기 버튼의 별표와 1번을 누르시기 바랍니다. 질문을 취소하시려면 별표와 2번을 누르시면 됩니다. 원활한 회의 진행을 위하여 질문은 한 분당 두 가지 이내로 부탁드립니다.

Now Q&A session will begin. Please press star one, that is star and one, if you have any questions. Questions will be taken according to the order you have pressed the number star one. For cancellation, please press star two, that is star and two on your phone. In order to allow as many Q&A chances as possible within the restricted time, we would appreciate only two questions per each participant.

처음으로 질문해 주실 분은 대신증권의 박강호 님입니다.

The first question will be provided by Park Kang-ho from Daishin Securities. Please go ahead with your question.

네, 안녕하세요. 대신증권의 박강호입니다. 질문 기회 주셔서 감사드립니다. 저는 어제 투자 공시한 거에 대해서 질문드리겠습니다. 전일 1.1조원 정도의 OLED 투자 공시를 하셨는데요. 관련 내용을 좀 구체적으로 설명해 주시면 감사하겠습니다. 최근 언론 내용 등을 본다면 북미 스마트폰 업체 향으로 국내 경쟁사가 폴더블 제품을 독점적으로 공급한다는 내용이 많이 언급이 되고 있습니다. 저희가 어제 공시한 투자 계획이 이에 대응한 새로운 내용인지, 아니면 또 새로운 form factor 향의 투자인지 많이 궁금합니다. 만약 그렇다면 이 폴더블 스마트폰과 관련된 저희 LG Display의 사업 전략과 향후 시장 진입 계획이 어떠한지 궁금합니다. 관련된 내용으로 코멘트 좀 부탁드리겠습니다. 감사합니다.

Thank you for taking my question, which is on the disclosure of new investment that was made yesterday. The disclosure was for about KRW 1.1 trillion in OLED. My question is, can the company provide more details about this disclosure? 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? If that is the case, then what is LGD's business strategy regarding foldable smartphones and its market entry?

네, CFO입니다. 먼저 첫 번째 질문에 대해서 좀 답을 드리도록 하겠습니다.

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

여러분들 다 잘 아시겠지만 현재 업계에서 굉장히 기술 발전 속도가 놀랍게 빨라지고 있습니다. 그리고 그런 기술의 중요성이 결국은 회사의 경쟁력으로 전이되고 있고, 모든 업체들이 그 경쟁력을 확보하기 위해서 노력을 하고 있는 상황입니다.

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

이미 말씀드린 바와 같이 당사는 OLED 사업에 계속 집중을 하겠다고 말씀을 드렸고요. 이에 따라서 당사가 적기에 OLED 신기술을 준비를 하고 기술 경쟁력에서 많은 강점을 지니게 되는 경우에 사업 기회를 더 많이 확보하고 산업 내 경쟁력을 유지할 수 있다고 판단합니다.

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.

그래서 저희가 신규 시설 투자 계획을 결정하였고, 그것도 공지를 드렸고요. 어떤 내용인지 구체적으로 말씀을 드리고 싶지만, 당사의 신기술 적용이 결국은 고객사의 신기술 적용과 바로 연결이 되는 상황이기 때문에 저희가 더 이상의 내용은 말씀드릴 수 없는 점을 양해 부탁드리겠습니다.

Yes, the company has made disclosure about new facility investment within this context. 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.

소형 계획 관리 담당 백승용입니다. Foldable 관련해서는 제가 말씀드리겠습니다.

This is [Baek Seung-Yong], in charge of small display planning and management, and allow me to respond to the question about the foldables.

Foldable에 대한 당사의 입장과 시각은 기존과 큰 변화가 없습니다. Foldable 제품이 새로운 form factor를 통해 소비자에게 차별화된 가치를 제공하고, 새로운 시장 동력으로서의 시장 기대치가 높아져 있는 점은 알고 있습니다. 다만 당사는 시장 규모, 성장 속도, 그다음에 기회 요인 등에 대한 가시성이 확보되기 전까지 기존 제품의 생산과 판매를 극대화하여 성과를 확대하는 전략을 운영할 계획입니다.

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. 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.

스마트폰 영역에서 새로운 기회 요인이 포착된다면 차별화 제품의 수용성, 그다음에 시장 성장 속도를 면밀히 검토한 후 공급 체계를 준비하고, 중형 Foldable 제품의 양산 경험을 바탕으로 스마트폰에서 새로운 사업 기회를 확대해 나가고자 합니다.

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. We will then try to build on our mass production experience in mid-size foldable devices to expand new business opportunities in the smartphone sector.

다음 질문 받겠습니다.

We will take the next question.

다음으로 질문해 주실 분은 UBS증권의 Jimmy Yoon 님입니다.

The following question will be presented by Jimmy Yoon from UBS Securities. Please go ahead with your question.

네, 안녕하세요. 질문 기회 주셔서 감사합니다. 저는 패널 사업 전반에 대한 질문을 한 가지 드리겠습니다. 메모리 반도체 공급 부족에 따른 원가 상승에 더해 최근에는 중동 사태로 인한 유가 급등으로 시장 내 불확실성이 지금 확대되고 있는 상황입니다. 이로 인해 지금 생산 차질과 수요 변동에 대한 가능성, 그리고 원가 상승으로 인한 고객사들의 판가 압박 우려도 지금 커질 것으로 예상되고 있는데, 이와 관련해서 보시는 수요 영향이랑 대응 방안에 대해서 좀 더 구체적으로 공유주시면 감사하겠습니다.

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 costs, and price pressure from customers. What is the expected impact on demand, and what will be the company's response?

네, 경영관리담당 조승현입니다. 질문 주신 바와 같이 메모리나 반도체 공급 부족 이슈에 이어서 말씀 주신 지정학적 이슈 등 산업 전반적으로 불확실성이 상당히 확대되고 커지는 상황은 너무나도 잘 아실 것 같습니다. 다만 상반기, 하반기로 나눠서 상반기를 먼저 보면, 상반기에는 메모리나 반도체 공급 부족 우려로 인해서 고객들의 pull-in 수요가 일부 발생하고 있는 상황입니다. 그리고 예정돼 있는 대형 스포츠 이벤트 효과도 분명히 일부 있을 것으로 판단하고 있습니다. 하반기는 부품 가격 인상과 세트 가격의 변화, 그리고 중동 사태에 따른 매크로 불확실성 등 여러 가지를 고려할 때, 시장 변화에 대해 보다 신중하게 접근해야 할 것으로 판단하고 있습니다.

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. 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. 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.

시장 전반적으로는 대외 불확실성이 확대되고 있습니다만, 업체별로나 고객과 제품 구조에 따라서 그 영향이 조금씩 다르게 나타나고 있는 상황이고, 반도체 가격 상승에 따라서 이런 영향들은 오히려 중저가 제품군에서 더 크게 나타나고 있는 상황입니다. 상대적으로 SCM 경쟁력을 갖춘 글로벌 고객들이 받는 영향은 상당히 제한적일 것으로 판단되고, 오히려 이런 시장 상황을 기회로 삼을 수도 있을 것 같습니다.

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.

자사는 변동성 확대 가능성을 고려해서 수요 변화와 부품 수급 동향을 면밀히 모니터링해 나가는 동시에, 글로벌 고객 포트폴리오 및 그동안 지속해 온 또는 자사가 강점이 있는 하이엔드 제품 라인업 기반으로 고객과 적극적으로 협력하고, 원가 혁신에 보다 집중해서 어려운 시장 상황을 잘 극복해 나갈 수 있도록 하겠습니다.

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 lineup, and successfully navigate these challenging market conditions.

다음 질문 받겠습니다.

We will take the next question.

다음으로 질문해 주실 분은 삼성증권의 장정훈 님입니다.

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

네, 안녕하세요. 삼성증권 장정훈입니다. 질문 기회 감사드리고요. 저도 비슷한 맥락에서 질문을 드리겠습니다. 최근 미국, 이란 전쟁으로 인해서 전체적인 부품 가격 상승이 눈에 띄고 있다 보니 CFO께서 모두에서 말씀 주신 것과 같이 사업 불확실성도 높아진 부분들인데, 이 부분에서 특히 앞에서는 종성님 말씀해 주셨는데, 대형 패널 부분에서 저희가 지금 준비하고 대응하려고 하는 운영 전략 또는 향후에 성장성에 대한 전략을 어떻게 갖고 계신지 한번 업데이트 주시면 도움이 많이 될 것 같습니다. 감사합니다.

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 U.S. and Iran conflict, especially on the rise on the commodity prices. So far there was some discussion about the mid-size and small-size businesses, but then for the large panel business as well, then what will be the company's operational strategy as well as the growth strategy for the future? If you could provide us with an update, much helpful. Thank you.

대형기획관리 담당 김종덕입니다. 대형 사업의 경우, 올해는 원자재하고 반도체 중심의 부품 가격 상승과 같은 업황 불안정 속에서 OLED TV의 경우에는 글로벌 선도 업체하고 하이엔드 브랜드 라인업을 지속적으로 강화하고 있는 상황입니다. 거기에 중저가 OLED TV 라인업도 확대해 가면서 안정적인 수익 구조를 확보하여 내실화를 다져갈 예정입니다.

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 commodities 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. For the OLED monitor segment, the high-end gaming monitor market is very rapidly shifting from LCD to OLED. The share out of our total shipment is likely to grow very significantly from low teens% last year to around 20% this year. 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. Thank you.

We'll take the next question. The following question will be presented by Won-Seok Chung from iM Securities. Please go ahead with your question.

[Non-English content]

Now, I also have two brief questions. Now, we have been discussing uncertainties a number of times so far. 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. As the uncertainties continue, then when does the company believe that you will be able to turn around to profitability? 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. What is the company's plan for investment down the road?

[Non-English content] This is Ahn Yu-shin, 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 some components like semiconductors, we are securing supply flexibility and closely monitoring the situation. 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 focus approach tailored to customer demand, which will keep up our trend of improving profitability.

IT 제품은 고객도 다양하고 제품 스펙도 다변화되어 있기 때문에 팹을 운영할 수 있는 수요 확보가 중요하다고 생각합니다. 소비자 니즈를 충족시키기 위해서는 기술력 및 가격 경쟁력 등 여러 가지 요소를 고려해야 할 것으로 생각하고 있습니다.

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.

대외 환경의 불확실성과 이에 따른 수요 변동성이 높아져 있는 상황이 장기간으로 이어지고 있기 때문에, 전방 OLED 제품 수요의 가시성이 보다 명확해지는 시점까지는 신중하게 접근하고자 합니다. 투자 의사 결정에 필요한 수요의 가시성이 확보되기 전까지는 현재 보유한 인프라를 최대한 효율적으로 활용해 나갈 예정이며, 미래 시장 준비를 위해 다양한 방법을 검토 중에 있습니다. 시장이 본격적으로 개화된 시점에 맞춰 늦지 않게 대응할 수 있도록 준비할 예정입니다.

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 we will be ready to respond in a timely manner when the market begins to fully take off.

마지막으로 한 분의 질문을 더 받고 마치도록 하겠습니다.

We will take one last question.

마지막으로 질문해 주실 분은 신한투자증권의 박현우 님입니다.

The last question will be presented by Hyun-Woo Park from Shinhan Investment & Securities. Please go ahead with your question.

네, 안녕하세요. 신한투자증권 박현우입니다. 질문 기회 주셔서 감사합니다. 저희 지난해 이어서 금년에도 희망퇴직 신청을 받는다고 하셨는데, 이번 구조조정 규모는 어느 정도로 예상하고 계시며, 어느 시점에 반영 예정이신지 궁금하고요. 그리고 하나 더, 앞으로도 이러한 형태의 인력 구조조정이나 일회성 비용이 지속적으로 발생할 가능성이 있는지 궁금합니다. 네, 이상입니다.

The company is reportedly implementing voluntary retirement this year again, following last year. 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?

네, 언론에서 난 바와 같이 올해도 인력 구조조정을 실시하게 되었습니다. 우리 회사가 OLED 중심의 회사로 변화를 시도하고 있고, 그에 따라서 사업 구조조정도 하고 제품 포트폴리오도 구조화하고, 또 원가 혁신, 비용 개선을 계속 추진해 왔었습니다.

Yes. 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. 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.

주주 여러분들께서도 되게 반복되는 이런 상황 때문에 많이 피로를 느끼시고, 그 상황에 대해서 잘 인식을 하고 있습니다. 단기적으로는 회사도 비용이 들어가는 부분이고, 신중한 결정과 접근이 필요한 내용인데요. 경쟁력 확보를 통해서 회사의 영속성을 높이기 위해서는 반드시 필요한 과정이라고 저희는 판단을 하고 장기적 관점에서 결정을 내렸습니다.

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

내부적인 상황이기 때문에 상세 조건을 현재 말씀드릴 수 있는 상황은 아닌 것 같고요. 일부는 언론을 통해서 제법 상세한 내용이 나가기도 했습니다만, 현재 아직 프로그램이 종결이 되지 않은 상황이기 때문에 전체적인 비용의 규모나 이번에 대상이 되는 구성원의 수는 아직까지는 밝혀드릴 수 있는 상황이 아닙니다.

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

지금까지 반복적으로 희망퇴직이 실시가 되었던 것도 회사로서는 되게 바람직한 상황이 아니고, 그리고 이왕 벌어져야 될 일이라면 최대한 단기간 내에 끝나는 것이 우리 조직 구성원들도 많이 안정성을 회복할 것으로 예상되기 때문에 예전보다 강화된 패키지를 제시를 했습니다. 그 이유는 추가적으로 앞으로 더 이상 희망퇴직을 실시하지 않으려는 계획이 있기 때문입니다.

Now, yes, it is true that having the repeated implementation of the voluntary retirement, by no means is desirable for the company either. 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. 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.

사실 2분기가 고질적으로 우리 회사한테는 항상 영업실적이 좋지 않은 그런 분기였습니다.

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

그간의 구조조정과 사업 구조조정 그리고 원가 절감 혁신 활동을 통해서 이번 2분기는 사실 회사가 흑자를 계획하고 있었고, 그 기조에 맞는 운영을 한 달이나마 계속했었고, 현재 2분기까지 흑자를 기록할 걸로 사실은 예상을 하고 있었습니다. 그럼에도 불구하고 회사가 장기적 관점에서 더 좋은 회사가 되고, 더 영속성 있는 회사가 되기 위해서 내린 결정이다 보니까 여러분들께서도 긍정적인 시선으로 현재 벌어지고 있는 상황을 봐주셨으면 좋겠습니다.

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

이상으로 LG디스플레이 2026년 1분기 실적 설명회를 마치도록 하겠습니다. 참석해 주신 분들께 감사드리며, 추가 질문이 있으신 분들은 IR팀으로 연락 주시기 바랍니다. 대단히 감사합니다.

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.

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. [Operator Instructions] Now we will begin the presentation on LG Display's Fourth Quarter of Fiscal Year 2025 Earnings results.

Good afternoon. This is This is Heo Suk, Leader of the LG Display IR team. Thank you for joining our fourth quarter 2025 earnings conference call. Joining us today are CFO, Kim Sung-Hyun; Vice President, Choi Hyun-Chul, in charge of Business Control and Management; Vice President, Kim Kyu Dong, in charge of Finance and Risk Management; Lee Ki-Yong, in charge of Business Intelligence; Vice President, Kim Yong Duck, in charge of Large Display Planning and Management; and Ahn Yoo-shin, in charge of Medium Display Planning and Management, Park Sang-woo, in charge of Small Display Planning and Management and Son Ki Hwan, Head of Auto Marketing. 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. 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. I will now report on the company's business performance in Q4 2025. Shipment of panels for TVs and notebook PCs in Q4 remained solid, but there were some changes to the mix in some small and medium OLED products that lessen the usual seasonality. As a result, revenue rose slightly Q-o-Q to KRW 7.2008 trillion. Operating profit declined Q-o-Q to KRW 168.5 billion. It is owed to lower shipments of certain small and medium OLED models Q-o-Q together with one-off costs related to strengthening the company's profit structure and future competitiveness. As noted in last quarter's earnings call, for the purpose of raising the efficiency of manpower structure, costs associated with voluntary retirement program for domestic and overseas employees exceeded KRW 90 billion. In addition, fourth quarter included incentive payments as rewards to employees for achieving the company's first annual turnaround in 4 years and as motivation to further bolster the company's competitiveness. Cost for activities such as reducing low-margin products and inventory rationalization were also included in Q4 results, which were part of the initiative to adjust the company's business and product portfolio. It was intended to strengthen our profit structure and operational efficiency. Operating performance in Q4, excluding these one-off costs, expanded both Q-o-Q and Y-o-Y, demonstrating continued improvement in our business fundamentals and profitability. There was net loss of KRW 351.2 billion down Q-o-Q, primarily due to foreign currency translation loss stemming from the higher year-end exchange rate. EBITDA in Q4 was KRW 1.162 trillion, with an EBITDA margin of 16%. Next is shipment area and ASP trends. What we are seeing recently is that panel shipments by product have diverged from traditional seasonality, reflecting instead the downstream conditions, customers' inventory levels and strategic panel buying trends as well as differences in customer and/or product strategies among panel suppliers, particularly for the company, as we maintain profitability-focused product portfolio, shipment of low-margin midsized LCD models continue to shrink. Specifically in Q4, shipment area for TV and notebook PC panels grew quarter-on-quarter, while shipment for monitor and tablet panels declined. As a result, despite the strong seasonality, total shipment area rose modestly Q-o-Q to 4.0 million square meters. ASP per square meter was $1,297, down 5% quarter-on-quarter largely because shipment of certain small and midsized OLED models were concentrated in Q3. Although it fell Q-o-Q, it is up 49% year-on-year, reflecting continued progress in upgrading the business structure toward OLED and supporting expectations at the high level will be maintained going forward. Next is revenue share by product group. Overall revenue share remained largely unchanged from Q3. First, mobile and others accounted for 40% of revenue, up 1 percentage point Q-o-Q, mainly due to shifts in the product mix. IT revenue share remained almost unchanged at 36%, down 1 percentage point Q-o-Q, reflecting the deferring shipments across product categories, as described earlier. TV share out of revenue rose slightly by 1 percentage point as shipments of white OLED panels for TV and monitor increased. Auto revenue share rose to 7%, down 1 percentage point Q-o-Q. OLED products accounted for 65% of total revenue in Q4, unchanged Q-o-Q and up 5 percentage points Y-o-Y. Year-to-date, OLED share rose to 61% from 55% last year, up 6 percentage points. The continued upgrade toward OLED center business structure is steadily broadening and strengthening our growth and profitability base. Next is our financial position and key indicators. Cash and cash equivalents at quarter end were KRW 1.573 trillion, largely unchanged Q-o-Q. As we wind down nonstrategic businesses such as LCD TV and improve operating efficiency, the level of required operating capital has remained lower than in the past. Inventory at quarter end declined Y-o-Y to KRW 2.546 trillion, reflecting progress from our efficiency improvement efforts. Total debt decreased by KRW 1.886 trillion from the end of 2024 to KRW 12.664 trillion. And net debt fell by KRW 1.437 trillion Y-o-Y to KRW 11.0910 trillion. Debt-to-equity ratio improved to 243% and net debt-to-equity ratio to 141%, lower by 20 percentage points and 10 percentage points, respectively, Q-o-Q and lower by 64 percentage points and 14 percentage points Y-o-Y, further strengthening our financial soundness. I will now move on to guidance for Q1. Shipment area is expected to fall across all categories in Q1 due to seasonality. While ASP per square meter is also expected to fall slightly Q-o-Q, it will be tempered compared to the same quarters in the past due to the strong and sustained upgrade to OLED-centric business structure. Total shipment area is projected to decrease by low 20% level from the previous quarter and ASP per square meter to decline by mid-single-digit percent. Notably, ASP per square meter is expected to remain above the $1,200 line even through the seasonality of Q1 up by more than 50% Y-o-Y. I will now hand over to our CFO, Kim Sung-Hyun.

Good afternoon and evening to everyone. I am Kim Sung-Hyun, the CFO. Thank you very much for joining today's conference call. Looking back to last year's performance, our most significant achievement was delivering a meaningful scale of turnaround after 4 years, improving profitability by more than KRW 1 trillion Y-o-Y, thanks to the hard work and dedication of all our members. Despite elevated external uncertainty and volatility in global markets, we continue to expand OLED revenue share and persisted with intensive structural improvements. As a result, we reduced our loss by roughly KRW 2 trillion in 2024 versus '23 and further improved results by about KRW 1 trillion in 2025. OLED share out of revenue reached a record high of 61% for the year. It was only 32% when we began business structure upgrade in 2020 and rose to 44% in 2022, then again to 55% in 2024. We believe that we are moving much closer to the complete solidification of our OLED-centric business structure, having terminated the large LCD business with the sell-off of Guangzhou LCD plants in 2025. Allow me to explain the one-off cost in Q4. There were explanation and guidance for costs related to voluntary retirement program provided at last year's October earnings call. And the actual cost incurred roughly KRW 90 billion is largely in line with the guidance. These costs include besides workforce rationalization to strengthen our business fundamentals, local workforce adjustment costs that were incurred while trying to improve our overseas production strategies to proactively address changes in trade and tariff environment, as well as customers' production strategies. Financial impact from the voluntary retirement cost is unchanged from what we described at last quarter. The one-off costs will be offset from about 18 months after implementation and will contribute positively to future results. In addition, as mentioned as part of the Q4 performance briefing, incentive payments tied to last year's business performance were also reflected. It is to recognize our members' role in achieving the first annual turnaround in 4 years and to motivate them further going forward. The incentive is intended to further support our ability to shift towards a technology-centric company by focusing more on improving our fundamentals, build a sustainable profit structure and better achieve our future goals. Last item is the cost associated with the strengthening profitability and improving operating efficiency. It will enable the company to boost future profitability and broader push to improve operational efficiency, such as reducing low-margin products or consolidating inventory and is expected to strengthen business performance overall. Total nonrecurring cost impact in Q4 was in the high KRW 300 billion range, which is the result of the company's activities and work to strengthen our profit structure and future competitiveness. Excluding these items, Q4 operating profit was roughly mid KRW 500 billion, exceeding market expectations. It is an improvement Q-o-Q and Y-o-Y underscoring continued improvement in our business fundamentals and profit structure. Looking ahead, we expect external uncertainty and product level volatility in the downstream market to persist this year. While numerous factors persist in our business environment like macroeconomic-driven real demand, changes in the trade environment and supply chain stability, we will remain focused on stabilizing our business performance by growing our OLED business and driving cost innovation and operational efficiency activities. Next, let me briefly remark on our plan and strategy by business. For small mobile we will expand panel shipment, leveraging differentiated technological leadership and strengthened customer partnerships to enhance business performance and stability. At the same time, we will systematically execute R&D and new technology investments to grow our future opportunities. For medium-sized OLED, we will respond to high-end market demand across product segments by leveraging our technological leadership and mass production experience. We will also respond proactively to shifting market demand and customer requests by more efficiently utilizing existing infrastructure. As to the demand for OLED conversion by product, which is expected to grow, we will carefully assess market size and conversion pace to enhance competitiveness in ways that will differentiate us. For IT LCD, as reflected in recent quarterly shipment trends and results, we are keeping our focus on B2B and differentiated high-end LCD while continuing to reduce low-margin products. It is leading to meaningful profitability improvement every year. We will intensify execution of what is already underway to achieve possibility for a turnaround this year. For large panels, we will solidify our leadership in the premium market through our differentiated and diversified TV and gaming OLED panel lineup on the back of growing recognition of white OLED's competitiveness and close collaboration with strategic customers. We will expand business results and pursue rigorous cost improvement to maintain stable operations. And for automotive, we will sustain our competitive advantage and create customer value based on our market leadership and differentiated product and technology portfolio. Finally, on investment. We maintained a CapEx policy focused on investments in our future readiness and structural upgrade. After investment optimization activities, CapEx in 2025 was completed at mid KRW 1 trillion. In 2026, CapEx is expected at KRW 2 trillion level, up Y-o-Y. This includes execution of the planned investment to enhance OLED technological competitiveness and investment to strengthen OLED business and future readiness. For any new investment decision, we will communicate with the market without delay. This completes our report on Q4 business performance and review of 2025. Thank you very much.

This completes our presentation of business highlights for Q4 2025. We will now take your questions. Operator, please commence the Q&A session.

[Operator Instructions] The first question will be provided by Kangho Park from Daishin Securities.

First of all, congratulations on achieving a turnaround for the first time in 4 years. Now I would like to ask 2 questions broadly about the company overall. The first is, in 2025, the company sold off its LCD company in China and continue with the business upgrade, and it has also increased the share of OLED out of the total revenue. It has also -- which has then improved the business performance as well as the profitability. So looking ahead to this year, then it appears that the share of OLED appears to be set to keep growing, which is likely, hopefully, to keep driving up the revenue. So then my question is, what is the company's outlook for each business? And also what is the expected business performance for the year? And also for the short term, I believe what the company needs in order to quell the negative perception about LG Display is to sever the trend of entering into loss in the first half of the year. So can we expect a better trend in the first half of this year? And the second question is, the company for the past few years has been focused on improving financial soundness, for example, improving the cost efficiency and also lowering the facilities and lowering the inventory level and also improving the overall operational efficiency. Now then again, looking ahead to 2026 and also from a more mid- to long-term perspective, what is going to be the company's new strategic priorities or strategic tasks down the road? And especially for the CFO personally, what would be your priorities or what would be the important part of your action plan?

Thank you very much for the question, which was quite specific and also appear to have the answers embedded in them already. I would just like to provide my response at once based on my own interpretation of the questions. Now, of course, so far, there have been work to upgrade our business structure and also improve our operational efficiency and the results or the performance out of that is, I believe, meeting up to the -- to our commitment to the market perhaps not 100% satisfactorily, but we have done the job. But that does not mean that we can put an end to the process or the efforts that we have carried on for the past few years. Rather, they need to continue with new tasks in new phases. Now for the mid to long term, what is important and fundamental to the company is that, first of all, we need to keep growing; and second, we need to be steadfastly profitable every quarter. Now, that would be my short answer to questions #1 and 2. But then now in order to enable the points that I have just made, then there are some points that we also need to reach and allow me to explain a bit more. Now today, an important theme for the company is to turn into a technology-centric company. But then looking around to our external environment, then again in 2026, as you would all know, the environment is still full of uncertainties and also unpredictable elements. So then what should be the end goal for the company is -- so what I envision is that we need to become a normalized and competitive company. And this is because as we went through some tough times in the past few years, I see that the company has become perhaps a bit not typical and also perhaps that has eroded our competitiveness somewhat. Well, as you would know, there were losses to our capital, which made it impossible for us to pay out dividends. And we were seeing large losses up until 2 years ago. Our financial position was quite bad so much so that we had to turn to our shareholders to go into a paid-in capital increase. Now looking at last year's performance, yes, we were profitable, but not in all businesses. And what we need to do now is complete a business structure where we will be profitable in each and every one of our businesses, and so that we can also revive trust from the market. So this means that we also need to reestablish our operations inside the company and across the company. And there is no other choice but for us to continue with our business structure upgrade and operational efficiency improvement. But although the work and the efforts have to continue, I would say that the purpose has slightly become different, whereas in the past, it was more for survival. Now it is more about improving our competitiveness. Competitiveness in our technology, competitiveness in our cost, competitiveness in our products and also competitiveness in our efficient operation. So once we hit all these targets, then I believe we can once again become the market leader. So once we finish that process, then we will once again become a normalized company, win back market trust and also win back the love from our shareholders. So I have been a little bit long winded, but I would say that this is a homework that I have assigned upon myself.

The following question will be presented by [ John Hou Yoon ] from UBS Securities.

My questions are also twofold. Now first is about the mobile OLED. Now the number for the smartphone panel shipment for last year and also the target for this year. So could you share the information regarding these numbers? And also depending -- so there were some changes in the product launch cycle by the customers and also looking at the technological preparedness by competitors, what are some of the opportunity factors that the company can expect? And another question. The following question is with regards to the company overall. So following tariffs last year, this year, it appears as if the memory semiconductors trends are going to be the major factor that could affect the business performance of each business segment. So what is the company's perspective and intended response to this trend?

This is [ Park Sang Yoon ], in charge of a Smart Size Panel. Now looking back to smartphone business performance in 2025. The first half saw meaningful growth in panel shipments, largely reducing the seasonal variation between the first and second halves. In the second half, while the actual demand varied by model, the diversified product portfolio enabled our annual panel shipment target of around the mid-70 million units as planned. And typically, panel shipment jump from the third quarter to the fourth quarter, but last year stood out in that panel shipments were relatively concentrated in the third quarter. Our smartphone business is generating stable results based on enhanced capabilities across our technology, production and operations. This year, we aim to further close the gap between the first and second half while outpacing last year's growth in panel shipment. Now please understand that I am not in the position to comment on details about our customers. But what is certain is that our smartphone panel development and production capabilities are proven and recognized, and we have accumulated sufficient know-how to fully address diverse technical need. And we believe that by efficiently utilizing our existing production infrastructure, we can address swiftly and flexibly both the increasing demand and new technology readiness and grow our achievements. Now I would like to respond to the question about the impact from the memory semiconductors. Largely, there are 2 types of impact. The first is with the increase in the memory price, then there would also be a pressure on the display pricing that it could also go up. And then this could also increase the -- and for the IT, it could also increase the set price, which could a dampen demand. And also the component price could also go up, meaning that there could also be pressure from customers to lower the panel price. Having said that, the impact on the company currently remains limited, but the volatility is quite high. So we are carefully monitoring any changes in the demand as well as the trend and we'll also try to address any impact that might arise. Thank you.

The following question will be presented by Won Suk Chung from iM Securities.

They are also twofold. First, as was mentioned earlier, the rise in the memory semiconductor price could also bring some questions about the company's profitability. And so my question regarding the company's profitability is that now about the IT set, now it appears that the outlook for the downstream market for the IT set demand appears to be conservative. So what is the company's outlook for the IT business? And also what would be the possibility of seeing a turnaround? And a related second question is, now the competition appears to be investing or going into mass production with the 8.6 gen plant, but the company at this time appears to have no such plans. Then wouldn't that place the company at a disadvantage when it comes to customers' allocation? And also, what is the outlook for the IT PC OLED for this year.

For this year, the company's midsized business focused on upgrading our customer structure around global high-end clients throughout 2025, while actively reducing low-margin products. At the same time, we sustained rigorous cost innovation activities, generating meaningful improvement in profitability Y-o-Y. We anticipate this trend to continue into 2026. Now given the rising component prices driven by semiconductors, supply chain disruptions and lingering uncertainties in the broader external environment, full recovery in the market remains uncertain even in 2026, but we will strive to achieve differentiated results and profitability and future proofing. We will stick to our 2-track strategy with LCD focusing on profitability with high-end LCD and with OLED responding to new demand and preparing for new markets with Tandem OLED-based differentiated products. We are closely monitoring the potential for OLED market expansion in IT. So we are closely monitoring the OLED market expansion in IT, but there is still insufficient visibility into demand to justify an 8.6 gen investment decision and external uncertainties remain high, that could also affect demand. So for now, the company intends to monitor market conditions before making investment decisions. In the tablet OLED market that is -- that continues to open up, we have solidified our leading position based on the differentiated competitiveness of Tandem OLED technology at our 6 gen OLED fab. Monitor OLED is actively responding to the growing demand for high-end applications like gaming by leveraging our 8th Gen OLED fab. For notebook PC OLED, we are monitoring the OLED market size and the pace of demand shifting from LCD to OLED, maximizing existing infrastructure while developing future-ready technologies and mass production capabilities to retain a cost advantage even in competitive situation.

We will take one last question. The last question will be presented by [ Sung Kim ] from Kiwoom Securities.

My question is with regards to the large OLED. Now thanks to the cost improvement as well as lower depreciation and amortization cost, it appears as if the profitability has been improving since the second half of the year. So then what is going to be the outlook for the TV and monitor OLED this year? And so based on the higher demand for the TV and monitor OLED as well as the lower depreciation and appreciation -- depreciation and amortization, does the company expect the profitability to continue to improve this year? And then also, the next question is now for the TV set companies, they are continuing to see sluggish differentiation and also worsening profitability. So there may also be some pressure to lower the price, but then what would be the company's response and also what would be the company's strategy down the road to continue to secure profitability in the large panel business?

This is Kim Yong Duck, in charge of Large Display Planning and Management. Now our large panel business, despite the external uncertainties and market volatility, achieved the intended panel shipment of approximately mid-6 million level in 2025, growing nearly 8% Y-o-Y. Now the white OLED for both TVs and monitors is recognized by the market and customers for their differentiated value compared to LCD. And that is why I believe that we were able to maintain such business. Now coming into this year, we see that the uncertainty remains and also the market growth potential still remains a bit limited, but the high-end market that we are targeting with OLED maintains a 10% share of the overall market. So then in 2026, based on this projection, we plan to continue strengthening our W OLED, the white OLED lineup for TV and monitors based on partnerships with global strategic partners. And on the back of such partnership. The target for panel shipment in 2026 is set at just over 7 million to grow by around 10% Y-o-Y. And for the mid to long term, OLED TV is expected to maintain unwavering leadership in the market while expanding our performance. And for -- especially for OLED monitors, it is also expected to see continued steep growth compared to other businesses. So we will continue to effectively respond to market trends and also reach an optimal production share between TVs and monitors to continue to expand our business performance. And again, for the short term, this year, there is some positivity expected from some sporting events. But at the same time, some side effects are also expected, especially coming from the supply-demand situation of components, especially semiconductor. So for the company, as we look ahead to continued market growth, our priority lies in securing stability in our production as well as supply. Now for our large panel business, we expect the competition to continue to intensify and it is incumbent upon us to continue to strengthen our technology and also differentiate our products so that we can keep expanding our business performance. So to that end, we will continue to work closely with our customers in close partnership to make sure that we can bring about win-win to all the companies involved with improved profitability. So we will continue to discuss our strategy to that end with our customers.

Thank you very much, and that concludes LG Display's Q4 2025 Earnings Conference Call. We thank everyone for joining us today. Should you have any additional questions, please contact the IR team. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]

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. [Operator Instructions] Now we will begin the presentation on LG Display's Third Quarter of Fiscal Year 2025 Earnings Results.

Good afternoon. This is Heo Suk, Leader of the LG Display IR team. Thank you for joining our third quarter 2025 earnings conference call. Joining us today are CFO, Kim Sung-Hyun; Vice President, Choi Hyun-chul, in charge of Business Control and Management; Vice President, Kim Kyu Dong, in charge of Finance and Risk Management; Lee Kyung, in charge of Business Intelligence; Vice President, Kim Yong Duck, in charge of Large Display Planning and Management; Hong-jae Shin, in charge of Medium Display Planning and Management; Park Sang-woo, in charge of Small Display Planning and Management; and [ Hong Moon-tae ], Head of Auto Planning and Management. 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's website. Please refer to the disclaimer before we begin the presentation. Please be informed that the financial figures presented in today's earnings release are consolidated figures prepared in accordance with IFRS. These figures have not yet been audited by an external auditor and are provided for the convenience of our investors. I will now report on the company's business performance in Q3 2025. Panel shipment grew Q-o-Q across the entire OLED product line, driven by the start of seasonality and supply for new small- and medium-sized OLED products. Revenue was KRW 6.957 trillion, up by 25% Q-o-Q and up 2% Y-o-Y. Operating profit reached KRW 431 billion, improving by over KRW 500 billion Q-o-Q and Y-o-Y. The improvement resulted from the growth in shipment and portion of OLED products as well as the company's ongoing intensive cost innovation activities. The number reflects around KRW 40 billion in onetime costs related to workforce efficiency activities, excluding which the business performance stands at approximately KRW 470 billion. Net income was KRW 1.2 billion, including the impact from the foreign currency translation gain with the exchange rate rising Q-o-Q. EBITDA in Q3 was KRW 1.4239 trillion with an EBITDA margin of 20%. Next is the trend in area shipment and ASP. In Q3, area shipment fell 1% Q-o-Q despite the seasonality and growing shipment of small and medium OLED product lines. This is following reduced shipment of low-margin midsized LCD models in line with our ongoing profitability-focused product portfolio management. ASP per square meter was $1,365, up 29% Q-o-Q, slightly outperforming the guidance. It was driven by the higher-than-planned growth in shipments of small and medium OLED products. It is an all-time high, resulting in part from the rising portion of OLED. Next is revenue share by product category. Mobile and Others, which has the largest share, reached 39%, up 11 percentage points Q-o-Q, led by panel shipment growth stemming from the seasonality and preparation for new products. In IT, while revenue grew on the back of sharp expansion in shipment of OLED panel for IT, there were larger changes in revenue in other businesses. As a result, its portion fell to 37%, shrinking by 5 percentage points Q-o-Q. The TV segment's revenue share was 16%, down 4 percentage points Q-o-Q. Auto segment's share was 8%, down 2 percentage points Q-o-Q. The share of OLED products out of total revenue was 65%, up 9 percentage points Q-o-Q and 7 percentage points Y-o-Y. As we continue to expand the performance of OLED-centric business structure upgrade, its impact is further solidifying our foundation for growth and profitability. Next is financial status and main indicators. Cash and cash equivalents in Q3 stood at KRW 1.555 trillion, largely unchanged Q-o-Q. As we keep downsizing nonstrategic businesses, for example, discontinuing the LCD TV business and enhancing operational efficiency, the size of essential working capital has also decreased. Debt-to-equity ratio was 263% and net debt-to-equity ratio 151%, down 5 percentage points and 4 percentage points, respectively, Q-o-Q, further strengthening our financial soundness. Next is Q4 guidance. Continuous growth is expected in area shipment of OLED products in Q4, while LCD shipment is expected to decrease as we keep running profitability-centered product portfolio. Accordingly, total area shipment is projected to grow in low single-digit percentage Q-o-Q. And for ASP per square meter, we saw much more pronounced increase in Q3 than usual, thanks to shipment growth of small and midsized OLED driven by seasonality and preparation for new product launches. And that is also why going into Q4, we anticipate another higher level of ASP compared to average quarters. However, it is expected to decline in low single-digit percentage Q-o-Q due to some factors such as mix change in small and midsized OLED products. And now let me hand over to our CFO, Kim Sung-Hyun.

Good afternoon, everyone. This is the CFO, Kim Sung-Hyun. Let me thank you all for joining us at our conference call. Q3 this year was when we saw the results of our ongoing strategy to upgrade our business structure to be more OLED-centric and our strong initiatives for cost innovation beginning to come to fruition and manifest themselves into business performance. As mentioned earlier, Q3 saw an increase in shipment coming from the seasonality, coupled with the impact of concentrated shipment of small and medium OLED for new products, it has boosted OLED product group's revenue share up to 65%. Based on this, Q3 year-to-date business performance showed revenue of KRW 18.6093 trillion and operating profit of KRW 345 billion, continuing the trend of improvement and giving more visibility to a full year turnaround after 4 years. Despite the pressure on revenue from the discontinuation of the LCD TV business, it remained flat Y-o-Y, thanks to larger portion of OLED and premium products. Operating profit year-to-date improved by approximately KRW 1 trillion Y-o-Y. It is owed to the intense and speedy execution of strategic initiatives, including cost innovation and operational efficiency along with business structure upgrade. External uncertainties and the consequent shipment volatility are expected to persist in Q4. There still remain variables in the business environment, including macro-related real demand, intensifying competition among suppliers and supply chain stability, but we plan to address these challenges by prioritizing business efficiency initiatives. OLED products revenue share is expected to be similar Q-o-Q in Q4 with the annual share projected at a low 60% level. Incidentally, we are also planning for an additional workforce improvement program in Q4 as part of our ongoing cost innovation effort. The specifics cannot be disclosed in advance, but its impact on our financial performance is considered to be more than that of last quarter. The onetime cost occurred by this workforce improvement program will be offset after 1.5 years, providing positive impact on the business performance thereinafter. Next, let me share our plans and strategies by business segment. For small mobile business, we plan to ensure more stable operations by expanding panel shipments every year based on our technological leadership and stronger partnership with our customers. At the same time, we will keep broadening our future business opportunities by methodically implementing all future-proofing activities, including R&D and investments in new technologies. For IT OLED, which is part of our midsized business, we plan to respond to the growing demand in high-end tablet market with our Tandem OLED technology. And for the anticipated shift to OLED in the notebook sector, we will closely examine the market size and pace of change and respond effectively. Overall, we will enhance our responsiveness with differentiated approaches. Leveraging our long-standing technological leadership and mass production competitiveness, we will solidify our leading position in the market. We will also proactively respond to changing environment, including market demand and customers' requests through efficient utilization of our existing infrastructure. In IT LCD business, we remain focused on reducing low-margin products while focusing on B2B and differentiated high-end LCD segments. It is encouraging that this has led to meaningful improvement in profitability Y-o-Y. We will strengthen execution of our current initiatives to deliver improved results next year as well. For large panel business, where OLED's differentiated competitiveness is well recognized in the market, we will further solidify our leadership in the premium market with a various lineup of OLED panels offering unique value based on close partnership with strategic customers. We will continuously grow our business performance and intensify cost improvement initiatives to maintain stable business operations. Last is Auto. The market outlook is more positive than other product areas, led by expanding in-vehicle display adoption and accelerating enlargement of displays. While competition is expected to intensify, we plan to maintain our competitive edge and create differentiated customer value based on our solid market position and diversified technology and product portfolio. Finally, on investment. Our principle in CapEx execution remains unchanged, focusing on investment for future preparedness and business structure upgrade. Because our investment efficiency initiatives continue, CapEx this year is expected to be at high KRW 1 trillion range below last year's level. Moving forward, we will make prudent investment decisions while maximizing the use of existing infrastructure. New investments will be executed with profitability as the top priority. Thank you very much for your attention.

This concludes our presentation of business highlights for Q3 2025. We will now take your questions. Operator, please commence with the Q&A session.

Now Q&A session will begin. [Operator Instructions] The first question will be provided by Gang Ho Park from Daishin Securities.

Congratulations on the good performance. Now I have largely 2 questions. Now I see that in the third quarter, the performance has risen sharply, and that appears to be on the back of rising revenue from the OLED panel as well as the revenue share of the OLED panel as well. Then the question is, does the company believe that it has the kind of structure that can sustain this kind of business performance down the road? And then related to this, traditionally, the company has been sluggish in the first half because of the strategy of its strategic customer. But then given the fact that it saw a good performance in the first half of this year, then does the company believe that this marks any change in the structure of the OLED market or the OLED business? And then based on that, then what would be the outlook for next year first half and also for the whole year? And the second question is, now in 2026, it appears that the macro uncertainties will continue and also competition continues to intensify even amidst the sluggish demand in the downstream. And as a result of this, then there could be some pressure from the customer to lower the ASP. Then how does the company intend to respond if such pressure should arise? And what is the company's strategy for continuous growth for the future?

This is VP Choi Hyun, in charge of the Business Control and Management responding to your questions. Now allow me to respond to the second part of your question first. And thank you very much for your interest in the company. Now it is true that in the past few years, the uncertainty and volatility in the external environment have continued. But then the company have continued also to expand our business performance every year based on internal capabilities based on our push to upgrade our business structure to be more OLED-centric and also to continue with the cost innovation activities. And as a result, despite the various factors coming from the outside, we were able to improve our performance, and we intend to keep demonstrating more stable performance down the road. Now looking back to the performance in the past 2 years, then last year, in 2024, we were able to narrow the loss by a very big margin of KRW 2 trillion from the previous 2023. And then for this year, although we still have the fourth quarter to go, we have the projection that we will be able to improve profitability by another KRW 1 trillion this year for the year. Now looking ahead, uncertainties in the external environment are likely to persist. But then as explained earlier, based on the stronger business fundamentals as well as the ongoing efforts at cost innovation, we will continue to work to further improve our business performance next year as well Y-o-Y. And looking ahead, we will continue to maintain stable business performance. And now it is true that there has been sluggish demand in the display market downstream and also stronger competition, making it difficult for any company to go for both growth and stable management of profitability at the same time. Having said that, the company will continue to try to expand our revenue and solidify our market leadership by increasing the OLED product portion, focusing more on high value-add and high-end products from global leaders and also developing the new growth engines based on differentiated technologies. And now with regards to your question about the panel price, I take it that it is a question about our maintenance of the profitability. Now based on our strong partnership with our customers, we will continue to operate an optimum pricing strategy, while at the same time, upgrading our product mix and continuing with our cost innovation and operational efficiency activities at the same time so that we can continue to expand our profitability.

We will take the next question.

The following question will be presented by Mingyu Kwon from SK Securities.

Congratulations on the good performance. I have 2 questions, and one is about the mobile. So it seems that the -- so I'm wondering about the market reception to the launch of new models by the North American customer. Now from media reports, it seems as if the reception for the standard model is better than expected, for the air model, perhaps less so. Then what would be the implications for the LG Display? For example, will there be any changes in the expected shipments or in the market share? And then the second question is now for the smartphone panel annual shipment target and the outlook for next year. So if there is a foldable product to be launched and also given the -- so given the likely launch of the foldable product and also the intensifying competition, then what is the possibility of shipment increase in 2026? If the company believes that shipment growth in 2026 is possible, then what would be the drivers for that? And then the last question is related to the small to midsized OLED. Now because of the restructuring in the Japan Display Inc., it is understood that LG Display is now the sole supplier for the smartwatch panels. Then what will be the volume, the annual volume of supply? And also what will be the contribution to the company's revenue and profit and loss?

This is Park Sang-woo, in charge of Small Display Planning and Management. Now for the smartphone business, the company has been achieving stable performance, thanks to our stronger competitiveness with our technology and production as well as across all areas of operation. And then in terms of the response to the new models by the customer, we understand that generally, it is quite positive. But then for the different models, the actual demand could be different. So this could also translate into some changes in the shipment plan based on the market trends. And now in the first half, despite the seasonality, there was a meaningful shipment growth by over 20% Y-o-Y. And then in the second half, thanks to the diversified product portfolio and stable supply system as well as the efficiency improvement, there has been improvement in profitability as well. So for the year, we are confident that we will be able to further expand our performance from last year. Now for the company, we believe that we have already have built up the technological know-how to flexibly respond to the diversifying needs from the customer. For example, by having a stronger capability in development and mass production of smartphone panels. And also by more efficiently utilizing the current infrastructure, we will be able to respond even more speedily and flexibly to new technologies and also growth in demand for different products. And looking ahead, we will continue to create stable performance by strengthening our quality competitiveness, continuing with our cost innovation efforts and preparing for the future technologies based on our close partnership with the customer. Now about the wearable devices, they are equipped with a number of different functionalities. And also across the society, we are seeing increased interest in health overall. So it seems as if the use of these products across the consumers' lifestyle in general is going to keep going up. So we believe that the outlook for the mobile OLED product market, including the smartphones is quite positive. The company already has the best technological leadership and production capability in the smartwatch panel business. And recently, there has been a change in the supplier status in the industry, which has also resulted in the growth of panel supply volume. And we believe that this will serve to further solidify the company's position in the premium wearable market. Now in terms of the annual supply volume, revenue, profitability and other information related to them are directly related to the customer. And thus, please understand that I am not in the position to discuss the details or the specifics. But then we will continue to create stable performance in the smartwatch panel business, utilizing our technological competitiveness and leading supplier status.

We will take the next question.

The following question will be presented by John Heekyu Yun from UBS Securities.

I have a question on the small mobile product. Now the market expectation is that in the second half of 2026, the North American customer will be launching a foldable smartphone product. Now then what would be LG Display's strategy for foldable smartphone panel business? And can you also share with us the status of the company's readiness for the product and technology?

Now for foldable products, there is growing anticipation from the market on the possibility of opening up new market segments for its differentiated form factor and the new user experience that it provides. Now if the foldable smartphone market becomes well established, then the product can also become the vehicle for trying out new technologies as the flagship model. So the company is closely monitoring the smartphone market trends as well as the demand outlook and is preparing for potential market growth. But for now, our strategy is to maximize the supply volume for the existing products so that we can continue to heighten our performance until we can get better visibility into the demand growth as well as opportunities for the company. So the company continues with the series of activities to strengthen our R&D and acquire new technologies. Now in the smartphone areas, if we can come upon more clearer opportunities, then we will build up our supply structure and expand our business opportunities after carefully reviewing the market acceptance of differentiated product as well as the market growth pace.

We will take the next question.

The following question will be presented by Sun Kim from Kiwoom Securities.

I have 2 regarding the IT business. Now first, in IT, the LCD, the competition for LCD in IT is intensifying. And also, at the same time, the profitability is worsening. Then are there any plans for the company to downsize or even exit the LCD IT business as it has done so in the LCD TV? Or otherwise, what would be the strategy for the LCD IT business? And then second, now there is also outlook for growing adoption of OLED in the IT market as well. And in response to this, the -- your peers in the market are now making investment into the 8.6 Gen OLED. So what is the company's preparation or what are the company's activities in order to be ready for this potential adoption growth of OLED in IT?

This is Hong-jae Shin, in charge of Medium Display Planning and Management. Now it is true that the medium product market remains overall sluggish, but then the company has been maintaining intense cost innovation activities. And as a result, we have been moving closer to our targeted performance, for example, making gradual improvement on our profitability, thanks to our focus on the high-end LCD technologies and differentiated competitiveness coming from OLED. In LCD, we are maintaining profitability-centric business management by the select and focused approach centered on strategic customers. And utilizing the company's technological advantage and global customers' partnerships, we continue to maintain our business based on B2B and high-end lineups. While at the same time, downsizing the low-margin models and improving profitability and enhancing stability. And for OLED, in particular, the company is providing various solutions to our customers based on the 2-track strategy of addressing new demand and preparing for future market. Now based on the company's differentiated competitiveness, we continue to respond to the growing demand of high-end monitors like gaming. And as a result, we are also seeing increase in the shipment of OLED panels for monitors. Now in the notebook business, it is expected that there is going to be a gradual transition to OLED. But then the company believes that we need to see additional and clearer signs of the market size, transition speed as well as consumers' acceptance. As such, the company remains closely watching the OLED notebook market size, while at the same time, we will be utilizing the existing infrastructure as much as possible for the technologies that can apply to future products. And by doing so, we will steadily make preparation for future technologies and mass production.

We will take one last question.

The last question will be presented by Won Suk Chung from iM Securities.

Now I have a simple question about the OLED TV. So the macro uncertainties continue and also there is growing competition with the LCD products. And then at the same time, there are also reports that a domestic TV set-top company is intending to expand its OLED lineup as well. So what is LG Display's strategy and mid- to long-term target for the OLED TV business?

This is Kim Yong Duck, in charge of Large Display Planning and Management. Yes, it is true that the uncertainties in the external environment and the business environment continue. But then for the company this year, we are projecting a mid-6 million unit level of large OLED panel shipment, which is growth Y-o-Y. Now compared to the LCD, the unique value of OLED panel appears to be more and more recognized in the market. And also pricing is nearing the range of affordability, enhancing further its acceptability in the market. And as such, for next year, the company is looking forward to another growth expecting 7 million units. And in particular, the gaming OLED monitor, so the demand for the gaming OLED monitor that is produced out of the large OLED fab is seeing meaningful growth. So for the large OLED panel, so we believe that the gaming OLED monitor out of the large OLED panel shipment, the share will be around low- to mid-teen percentage this year. The company continues to strengthen the fundamental competitiveness of OLED products as we also continue to diversify our product group. At the same time, we are maintaining very intense cost innovation activities and operational efficiency activities at the same time so as to continue to improve profitability of our large panel business. Of course, I cannot mention the specific profitability of each business segment, but then the results of all these multifaceted efforts are coming together to make a bigger contribution to the overall business performance. But of course, external uncertainties persist and competition between the different products is also intensifying as evidenced by the launch of various products that are in direct competition with OLED. So in response to these changes, the company will maintain our very strong cost innovation activities and also continue to build up our partnership with global top-tier customers so that we can maintain stable business performance. And last, the company's OLED capacity is 180,000 for Generation 8, out of which we are currently utilizing 135,000 for mass production. And down the road, we intend to flexibly run the capacity in linkage to actual demand. And we also have sufficient infrastructure to flexibly respond to any additional growth in the market demand.

Thank you very much. This concludes LG Display's Q3 2025 earnings conference call. We thank everyone for joining us today. Should you have any additional questions, please contact the IR team. Thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]