Good afternoon. I'm Brian Heo, in charge of IR team at LG Display. On behalf of the company, thank you all for joining us today in our first quarter 2025 earnings call.

Today, I'm joined by our CFO, Kim Sung-Hyun; [Indiscernible], who is the VP of Business Management; [Kim Joo Dong] VP in charge of Finance; [Lee Ki-Yong] In-charge of Business Intelligence; [Kim Yong Duck], VP of Large Display Planning and Management; [Ahn Yu Shin], in charge of Medium Display Planning and Management; [Baek Soon Yon] in charge of Small Display Planning and Management; and last but not least, Son Ki Hwan, VP of Auto Marketing.

This call will be conducted in both Korean and English. And for more details, please refer to the provisional earnings that was just disclosed or the IR Events section on the company's website. Also, before we begin, please take a moment to read the disclaimer.

As a reminder, please note that today's results are based on consolidated IFRS standards prepared for your benefit and have yet to receive an audit by an outside auditor. Let me start by running through the business results for Q1 of 2025.

Despite the usual seasonality seen during the first quarter across different product segments, driven by OLED-centric business structural upgrade, coupled with $1 FX impact adding to the positives, revenue reported a solid KRW 6,065.3 billion, which is an increase of 15% on a year-over-year basis.

Coupled with increase in revenue share of our OLED products following business structural upgrades and stringent cost savings and operational efficiency activities continuing, despite it being a slow season and unlike typical trends seen in the past, operating profit reported KRW 33.5 billion, sustaining the profit-making streak since last quarter.

This is an improvement of KRW 509.2 billion on a year-over-year basis and KRW 1,131.8 billion versus Q1 of 2023, which is quite noteworthy and that we were able to generate profit in the first quarter for the first time in 8 years, except for the special period during the COVID pandemic.

Q1 EBITDA was KRW 1,231.3 billion with EBITDA margin rate at 20%, which is at its highest since Q3 of 2021. Next is area shipment and ASP per square meter.

Area shipment in Q1 was down 19% Q-on-Q on the back of seasonality impact on mid- to larger panels, while on a year-over-year basis, driven by panel shipment expansion for OLED TV and notebooks, there was 1% increase. ASP per square meter recorded $804, which is down by 8% Q-on-Q.

Considering how prices tend to fluctuate during the first quarter, the decline was very much mitigated, thanks to robust OLED performance. Moving on to product revenue mix. On subdued seasonality, mobile and others revenue dipped 8 percentage points Q-on-Q, reaching 34%, while revenue share of other product segment expanded on a relative basis.

IT segment revenue share was up 7 percentage points Q-on-Q, recording 35%, underpinned by increase in shipment of OLED panels for IT. TV segment revenue was flat Q-on-Q at 22%, while auto segment revenue mix increased 1 percentage point Q-on-Q, accounting for 9%.

OLED mix out of total revenue increased 8 percentage points year-on-year, reaching 55%, as we continue to see expanded outcome from the company's transformation of OLED-centric business portfolio. Next is financial position and key metrics. Cash and cash equivalents, as stated in Q1 financial statement is KRW 982.3 billion.

But if we were to include back cash held by China's Guangzhou LCD plant, which has been classified under assets held for sale in terms of actual cash and cash equivalent that the company owns, it will amount to KRW 2,372.8 billion. Next is Q2 guidance.

Generally, we see area shipment to uptrend during the second quarter, but following discontinuation of LCD TV business, we expect second quarter area shipment to decline by around mid-20%. And conversely, ASP per square meter is expected to rise by around 20% level. Next, I invite our CFO, Kim Sung-Hyun, to run through the highlights..

Good afternoon. I'm Kim Sung-Hyun, the CFO. Thank you all for joining our earnings call today. Aside from uncertainties in the downstream market, various factors continue to emerge such as the shifts in the global trade environment.

Although we face heightened level of volatilities in the business backdrop, we were able to drive meaningful results by way of sustaining the profit-making streak even during the first quarter, which is known to be a slow season.

This is a result of our strategies that solidified our fundamentals, including the OLED-centric structural upgrades, rigorous cost innovations, which gradually drove better performance.

Although external uncertainties may persist for the time being, we are beginning to see tangible results from the efforts that we've placed behind strengthening core competitiveness. And as such, we will continue to endeavor to achieve a turnaround in annual profit and further grow the size of that profit.

Next, moving on to plans and strategies for each business domain, OLED for mobile has won greater trust from the customers and based on stronger production capabilities, we've been able to continuously expand our presence in the high-end market.

Going forward, underpinned by competitive capabilities in technology and stable supply, we plan to enhance core competitiveness such as quality and cost to drive and sustain shipment expansion. Also, by responding nimbly to fast-changing market, we will prepare in a structured way to be ready for future technologies.

For the medium IT segment, we will be closely monitoring how the market moves and be agile in responding to changes in the downstream market. In IT OLED, there is clear and distinctive user value that tandem OLED offers with its outstanding performance and durability features, including low power, longer life and high luminance.

Thus, we expect there to be year-over-year growth in shipment in 2025. And supported by technological leadership and stable mass production experience that's been accumulating over the years, we will further solidify our market position and effectively respond to changes in the environment.

In IT LCD segment, we will leverage differentiated high-end LCD technologies, including IPS Black and next-generation oxide to deliver optimized products that meet customer needs in each product segment.

And by collaborating with global top-tier customers, who are spearheading the high-end segment of the market, we will respond to competition and drive results. Also, through rigorous cost-based innovation and operational efficiency efforts, we plan to sustain bottom line enhancement.

In large panel business, following the closing of sale of Guangzhou LCD TV plant, revenue from large panel may start to decline starting in the second quarter of this year, as LCD TV revenue will no longer be captured. But through this strategic decision, we are able to place greater focus on OLED-centric structural upgrades.

For large OLED business, underpinned by distinctive value of OLED, we are solidifying our market presence in the high-end segment, as we maintain close collaboration with global customers in order to expand differentiated and premium product portfolio, including gaming monitors and Gen 4 OLED TVs, whose values such as low power and high luminance are even more improved, we expect positive performance hence will follow.

We will also continue to run efficient operational strategy and cost-cutting efforts to respond nimbly to changing demand and consequently drive mid- to longer-term volume growth, coupled with quality-driven growth accompanied with profitability enhancements. Next is auto business.

Although volatility can be spotted across the overall auto market, in-vehicle display adoption continues to expand and accelerated shift towards larger-sized panels works to the advantage of the demand for our core products, OLED and LTPS LCD.

For the auto business, we will fortify our position as global #1 in terms of differentiated products and technology portfolio, which includes plastic OLED, ATO, high-end LTPS LCD. And coupled with sustainable growth, we plan to build up a stable earnings structure. Lastly, on investment activities.

Investment last year amounted to KRW 2.2 trillion and investment in 2025 is expected to be around mid- to low KRW 2 trillion, in line with the communication made last quarter. We maintain profit-focused business operations.

And as we are mindful of changing external environment and ensuing fluctuations in demand, we adhere to the principle of keeping to a conservative stance when it comes to reviewing and running the investments.

We will fully maximize the use of our infrastructure that we currently own and be prudent in making CapEx spend and -- CapEx spend and profitability will be of utmost priority when we make new investment decisions in the future. Thank you..

This ends the key highlights for the first quarter of 2025 earnings. We will now begin the Q&A. Operator, please proceed..

[Operator Instructions] The first question will be provided by Dongwon Kim from KB Securities..

My first question, I would like to understand as to whether there are any changes that you are able to identify in the downstream market as well as in your customers with regards to the United States tariff that is quite hotly debated of recent. And also, would like to know as to how LG Display could respond to such development.

Second question is, as per the disclosure made on April the 11th, there was a disclosure on the sales proceeds with regards to the sale of LCD TV plant at Guangzhou.

Is there any information that you could update us on?.

This is the CFO. I will take your question. With regards to the imposition of the United States tariff, I understand that the direction going forward is towards imposing such tariffs. As you would appreciate, a tariff policy does not singly target the tariff per se.

There are multiple issues that are relevant in terms of the relationship that a country has with another. And I believe that tariff policy is used as a means to deal with those multiple array of issues. In a nutshell, what I mean to say that there is quite a bit of volatility that is embedded in the implementation of the tariff policy per se.

And as you would know, basically, it is rare that our product would directly be exported into the U.S. market.

As you know, the companies that are directly facing the tariff issue are the set makers, and we are hence very closely monitoring as how the set makers will determine their production base going forward and the strategies related to their production base.

But as far as we know and based upon what we had researched as of today, we understand that there are no set makers at this point, who have changed their production base strategy. And so, what we know is that in terms of how the policy is actually going to play out into the future, which direction that it will take, it is still open to fluctuation.

It has not yet been completely determined. So hence, there are certain uncertainties.

That is why we are very closely observing and following what is happening with regards to the policy implementation, and we will come up with an appropriate countermeasure to deal with the developments that take place to make sure that we control the situation that we don't lose out on any business opportunity or that we don't -- so the developments don't undermine our profitability.

I believe one of the things that you'll be most interested in is whether there are any critical issue points across our SCM, our supply chain. I can tell you that there are no critical issues that at this point, we believe will exist.

And also, in terms of any pressures on our pricing, we believe that there is no price pressures that will be exposed to because of this issue. Yes. And then moving on to the second question about the sale of the entity that we have, the LCD TV plant at Guangzhou.

As per our disclosure that we have previously made, the amount of the sales proceed is the correct amount. There is almost no change to the figure that we had previously disclosed. And we've been informed that as of April the 1st, CSOT is running that plant at full capacity, meaning that the plant is currently running without any significant issues.

And in terms of the sales proceed, we are being paid, meaning we are receiving that payment as per the payment schedule. And so, with regards to this sales transaction, I can tell you that more or less, the whole transaction is now closed. So in the first half of the year, we are looking forward to a meaningful amount of cash into the company.

Second part, I'm sure you're also interested as to where we will be using this sales proceed. The company's thoughts are that we would not be concentrating the use into one specific area. So we will not be using the whole amount to one certain area.

We are mindful of different aspects in terms of urgency of certain business and preparations for the future and the operation. Now based upon the assumption that all of those factors that there are no issues, we will be making the decision as to where we will invest that amount. So let me backtrack on this and just give you a clear message on this.

Basically, in terms of the cash flow requirements for our operations, we are able to fund that through the operational activities. So the sales proceeds that we will get the cash flow that will come in, we will use part of it in improving the financial standing.

And also, the need to -- there may need to be some investments that we make to better prepare for the future and to strengthen our business capabilities in terms of the OLED business..

Next question, please..

The following question will be presented by [Indiscernible] from IBK Investment & Securities..

I would like to ask you 3 questions. Although the CFO gave us a quite good explanation on this, I just would like to follow up by asking the external uncertainties does not seem very good.

So I would like to understand whether you have made some adjustment into your business plan outlook going forward and particularly in relation to your strategic customers. Second question also regards to your strategic customers. There seems to be a heightened level of competition amongst the suppliers.

We'd like to know whether that is impacting the amount of volume shipment that you're making to each of these customers or whether you are exposed continuously to any pressures -- downward pressures on ASP? And then the third question is, in the second half, we always used to get new products.

There is a rumor in the market that the new products will all be based on LTPO technology.

If that is the case, what good news would that be for LG Display?.

Yes. Hello. I'm in charge of Small Display. Responding to your question, yes, there is definitely uncertainties coming out of the tariff-related developments. But basically, the customers are at this point, diversifying their production base. And so, we expect that multiple companies will continue to pay close attention to how things go going forward.

In terms of the smartphone business that we engage in, we have very strong capabilities, and our strategic position is quite robust. So we are running our business as per our original business plan. But having said that, there may be downstream market volatility.

So we are in close communication with our customer base, and we are fully prepared to nimbly respond to changes in the market.

And competition amongst the suppliers and vendors have always existed, but we were able to prove our differentiating points by -- through timely supply of the products and volume to our customers and also through making appropriate preparations for upcoming future technologies.

And through continuous cost innovations and strengthening of quality, as well as other competitive factors, we were able to expand the volume that we supply. And through such commitments, we will effectively respond to competitive landscape.

So despite the fact that the first half of the year is usually the slow season, thanks to the trust that we have from our customers and our strategic positioning as well as our production capabilities, we expect there to be a year-over-year increase in volume.

In the second half of the year, we will continue to see more expansion through the shipment volumes, especially coming out of the new models. So we expect to achieve a Y-o-Y performance that is on par with what we've seen in the previous year..

Next question, please..

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

I just have 2 very simple questions. Since you've discontinued your LCD TV business, for your large business, I take it that you have to focus on your OLED business.

But in light of the uncertainties in the demand and the fact that the high-end market segment is currently stagnant, I would like to understand what strategies you have in place? Second question is that on top of the tariffs as well as uncertainties in the market, I would like to know as to whether that drove any changes to your overall shipment plan..

Yes. My name is Kim Jong Duck. I'm VP in charge of Large Display. I will take your first question on the profitability side. Basically, I can divide that into 2 pillars. We operate our business under a profit-centric operational stance, and it's made up of 2 pillars.

First, in terms of responding to what the customers need, we are focusing and providing a differentiated product portfolio that has distinct product specifications as well as sizes. So by strengthening the portfolio, we will be responding to the need. And the second pillar has to do with an ever stringent cost savings effort.

So through these 2 approaches, we are committed to stay in line with the plan towards the objective of enhancing the business performance.

And the second part of the question, yes, we've decided to discontinue the LCD business, which means that in our large panel OLED business, we will focus our efforts to further enhance and notch up that business, and things are going as planned.

So looking overall at our large panel OLED business, because of the existing uncertainties in the market, we have linked the -- we have linked actual demand of the market on to the capacity, the operation -- the operating capacity of our business. And also, we've taken cost-cutting activities to the extreme. That's the second part.

And third, we've strengthened our cooperation with the global customer base. And fourth, we have expanded and differentiated LG Display's very distinctive products such as OLED monitors. So through these different efforts, we are really strengthening our earnings structure.

So from a mid- to longer-term perspective, we're seeking to drive growth in terms of volume, which will bring us a steady performance. So OLED is actually at the top of the product lineup at the top-tier customers and OLED itself has a top-tier positioning in the market.

We do expect that there will continue to be competition against LCD, but underpinned by the very distinctive value that only OLED can offer, we are committed to strengthening its positioning in the high-end segment of the market.

Regarding your question on tariff, our CFO has provided you with the overview of the high-level explanation regarding tariff. But with respect to the changes in the tariff policy that hinges on the TV set, there's been some mixed impact.

But I can tell you that for now, in terms of the large panel business, the TV set business, the impact at this point, we believe, is quite limited. But going forward, subject to how the tariff policy is actually going to play out into the future, the entities that will directly be impacted are the set makers.

So we are committed to doing our best to make sure that we secure flexibility in terms of supply against our customers..

We'll take the next question..

The following question will be presented by [Sung Kim from Kiwoom Securities]..

I will ask 2 questions on your IT panel business. The demand for IT panels and the uncertainties is continuing and persisting. So what is your outlook for the IT product demand by each different product segment for year 2025? Second question is not just LG Display, but your peers have all been able to up their technology standards.

So the standard itself has become very elevated.

So how do you differentiate yourself in the market? How can you continue to sustain your competitiveness in the high-end segment of the IT market? And also, do you have -- with regards to the IT LCD efficiency planning, what are some of the ways for you to improve on your profitability as you go forward?.

Yes. I am [Ahn Yu Shin]. I'm in charge of Medium Display. Responding to your question, originally, we were looking forward to some positive impact coming from the replacement demand and the discontinuation of Window 10 having and triggering the market demand in the high end as well as the B2B market.

But at this point, with the talk of the reciprocal tariff that will be imposed by the U.S. and with the prolongation of the macroeconomic uncertainties, we do need to closely and continuously monitor how the demand dynamic changes as we go into the future.

So depending on the decision on the imposition of the tariff by different countries and the extent of that tariff, the actual impact could surface in quite differently depending on which product segment you're talking about and depending on different geographies. So there are potential for continuous volatility to emerge in the downstream market.

So we are committed to very closely communicating with our customers in regards to the market situation and respond accordingly. So we have technological edge in terms of high-end LCD technology that includes the IPS Black and next-generation oxide technology as well as in tandem OLED that's known for high luminance, low power and long life.

And underpinned by the technological strength, we are able to offer the most optimized portfolio that best fits the needs of the customer for each of the product segments, and that is the way in which we respond to competition.

Now going forward, our forecast is that there will be growth from the OLED monitor market on top of the AI PC growth from a mid- to longer-term perspective.

And hence, we believe that our capabilities in the mid- to large OLED, especially on high picture quality and low-power solutions, our competitiveness will be further solidified, as we move into the future.

So by bringing such differentiated technologies to bear on the products that we offered, we will be able to continuously lead the market as we have a very solid base of Tier 1 customer base, and that really works to our advantage.

So across the entire IT segment, the level of competition between and amongst the panel providers is becoming more fierce.

However, through very stringent cost innovation as well as operational -- achievement of operational efficiencies and really focusing on our top-tier customer base and through strengthening the partnership that we have, we will continuously and gradually notch up our profitability..

We will take the final question before we close..

The last question will be presented by [Indiscernible] from UBS..

My question relates to your auto business.

Can you provide us some color on what your take is for your short-term and mid- to longer-term outlook for your auto business? And also, what's the forecast for LG Display's auto business growth and profitability going forward?.

Yes. I am, [Son Ki Hwan], I'm VP in charge of Auto Marketing. If you look at the greater auto market, we are in the gradual recovery phase, but there are certain issues that have newly emerged such as the tariff issue as well as the slowing of the EV growth and the OEMs in Europe and U.S. have been experiencing quite a bit of stagnation.

Because of all these factors, this year, we expect that it will be quite difficult for the overall auto market to report more than 90 million units of vehicles.

But having said that, fortunately, if you look at in-vehicle display, regardless of whether a car is an EV or IC, we see on a per vehicle basis, the percent of adoption of such displays is increasing, and we see accelerated speed of shift to a larger panels.

And so, we are looking forward to growth -- continuous growth this year of LTPS LCD and OLED market. So the auto business since 2020 for the past 4 years, it posted a growth on a CAGR basis of around 10% over the past 4 years. So from a mid- to longer-term perspective going forward, at least for 3 years to come, we're expecting a steady growth trend.

And compared to our peers and competitors, we were successful in transitioning to LTPS LCD and supported by large-scale OLED orders, we hence expect and project there to be steady growth.

In particular, for our OLED display product, we started with customers in Europe and U.S., and now we were able to expand to customer base in Korea and Japan as well. So going forward, in 3 years' time, we are expecting to triple the revenue compared to where we are today.

And going forward, we will actively leverage new technologies such as pillar-to-pillar display, switchable privacy and tandem, which are OLED and LCD differentiated technologies that we have supported by these new techs, we will further strengthen our top line revenue, as well as our bottom line and solidify our leadership in the market..

This brings us to the end of the earnings call for first quarter of 2025. If you have any unanswered questions or additional questions, please feel free to contact us at the IR team. Thank you very much..