Good morning. This is Brian Heo in charge of LG Display's IR. On behalf of the Company, let me thank all the participants at this conference call.

Today, I'm joined by the CFO, Sung-Hyun Kim; Seung Min Lim, Senior Vice President of Corporate Planning; Ki-Yong Lee, in charge of Business Intelligence; Sung Joon Bae [ph], in charge of Large Display Marketing; Won Jae Lee [ph], in charge of Medium Display Marketing; and Myoung-Kyu Kim, in charge of Small Display Marketing.

The conference call will be conducted in both Korean and English. Please refer to the provisional earnings release today or the IR Events section in the Company's website for more details on the financial results. Before we begin the presentation, please take a moment to read the disclaimer.

Please note that, today's results are based on consolidated IFRS standards prepared for your benefit and have not yet been audited by an outside auditor. I will start with 2024 Q1 business results. Revenue was KRW5.253 trillion.

It was down 29% quarter-on-quarter due to seasonality, but up 19% year-on-year, driven by shipment growth of OLED and LCD TV panels and monitor panels and the start of mass production of IT OLED panels. In terms of profitability, operating loss was narrowed Y-o-Y to KRW469 billion.

Although, there was impact of seasonality, the Company continued with work on upgrading to OLED-centered business structure and improving the cost structure. Production increased for medium and large products like OLED panels for TV and mass production began for IT OLED. Next is area shipment and ASP per square meter.

Area shipment in Q1 was 5.3 million square meters, down 5% Q-o-Q. There was impact from seasonality, but shipment of products like TV and monitor outpaced the plan, slightly overperforming on the guidance. ASP per square meter fell 27% to $7.82 largely in line with the guidance from the previous quarter.

The mix of mobile panel shrank and there was relative impact from increased shipment of medium and large products, but mass production began for IT OLED and product mix improved. Next is product revenue mix. The revenue mix of mobile and others was 28% of the total revenue, down 16 percentage points Q-o-Q due to seasonality.

This pushed up the revenue mix of other products. EV Panels revenue mix was 22%, up 4 percentage points from the previous quarter. IT was 40%, up 9 percentage points Q-o-Q. On general growth in monitor shipment and the start of IT OLED mass production. Auto was 10%, up 3 percentage points.

Revenue mix of OLED products excluding the seasonality was 47%, up 2 percentage points year-on-year. Next is on the financial position and key metrics. Cash and cash equivalents stood at KRW3.225 trillion. Since the paid in capital increase in Q1, debt to equity ratio was 279%, improved by 29 percentage points from the previous quarter.

Net debt-to-equity ratio was 145%, improved by 7 percentage points. Next is Q2 guidance. Area shipment is expected to grow by mid-20% level Q-o-Q from increased shipment of medium and large products like TV and IT and full-fledged mass production of IT OLED.

ASP per square meter is expected to decline slightly by a low single-digit percentage due to the change in the product mix. Next, CFO, Sung-Hyun Kim will walk us through the key highlights..

Good morning and afternoon. This is the CFO, Sung-Hyun Kim. Thank you for joining our conference call. Uncertainties in the external environment continue affecting macroeconomic factors like consumption, which is prolonging the soft demand across panel products.

For the short-term, business performance will remain volatile due to factors like seasonality, but the Company is trying to build a secure revenue structure for the mid- to long-term.

We are trying to strengthen business competitiveness, lay the foundation for future businesses and establish a stable revenue structure by focusing company-wide attention on activities to upgrade the business structure, improve the cost structure and operational efficiency. Now allow me to explain the Company's plan and strategy per business area.

In large OLED, we will strengthen our customer portfolio and solidify our position in the premium TV market with a focus on ultra-high definition, ultra-large products applied with META Technology 2.0 with higher luminance.

We also aim to improve profitability, based on cost innovations and volume expansion resulting from improvement in yield, productivity and material costs.

In the IT OLED segment under medium IT, we are currently mass producing the products that utilize Tandem OLED, characterized by superior durability and performance like long life, high luminance and low power. We plan to secure business results by ramping up production in earnest in Q2 and running the business on track as planned.

This will not only help consolidate our position in the market based on stable mass production and technology leadership, but also to build the fundamentals for our business upgrade.

In the small mobile business, we will keep driving our market share in high-end smartphones by actively utilizing the expanded capacity of 45,000 and growing the shipment and mix of high value add products. Next is auto business.

We have technological competitiveness and differentiated product portfolio in such products as P-OLED and ATO based on Tandem OLED technology and high-end LTPS LCD.

Demand may be volatile in the short-term, but we will keep working to win new orders and drive business performance based on our differentiated product and technology portfolio, reliable production capability and close customer relations.

Particularly in auto OLED, we are accelerating business expansion with the goal of further building up our position as the world's number one auto display player by winning new customers, new orders and revenue. Last is on our investment activities.

As has been reiterated, our CapEx is focused on essential investment and order-based business that is less susceptible to external environment and likely to yield quick returns. Investment this year is planned at KRW2 trillion level, a further reduction from last year's KRW3.6 trillion.

Although the market and external environment remain uncertain and volatile, we will try to sustain the improvement trend in our quarterly business performance and earnings through the aforementioned measures, as we aim to reach a turnaround in the second half, led by a higher mix of OLED-centered high-end products.

We are also working to strengthen our financial soundness and improve our fundamentals by utilizing non-strategic assets, such as the sale of idle real estate disclosed today. Thank you very much for your attention. That brings us to the end of earnings presentation for Q1 2024. We will now take your questions.

Operator, please commence with the Q&A session..

[Operator Instructions]. The first question will be provided by Sung Eun Kim with Meritz Securities. Please go ahead with your question..

Thank you very much for the presentation. Now I have questions about the financial structure as well as cash liquidity, probably the two most important questions in today's environment.

Now, the Company's financial statement shows that the net borrowing at the end of Q1 was KRW13.8 trillion, and we see that the net borrowing has been remaining at the KRW13 trillion level since from a year ago, and which appears to be a bit on the higher side considering the current circumstances.

Now, there has been the paid in capital increase and also there have been reports of the intention to sell-off the Guangzhou LCD to sell-off the Guangzhou LCD TV fab.

And I wonder whether there are any target financial ratios for the Company for the end of this year as well as next year? And also, aside from the sell-off of the Guangzhou LCD TV fab, are there any large-scale cash in events that have been planned for the sake of stabilizing the financial ratios?.

This is the CFO responding to your questions. I see that the question is stemming from very good understanding of the specifics of the Company. And yes, as has been rightly mentioned, the net borrowing has been remaining almost flat for the past few quarters.

And also as the questioner has pointed out, it is a bit burdensome given the current circumstances. Now for the past two years, the Company's profitability has not been so robust, but as you would also be fully aware, our financial activities have been consistently ongoing despite the other circumstances.

Now, you also mentioned the sell-off of the Guangzhou LCD TV fab. So basically, what the Company can do now is to keep strengthening our activities to maximize our business efficiency and effectiveness. So what we can do is improve the soundness of our assets.

And for the assets that are deemed not to be strategic, then we can perhaps try to turn them into other types of assets. I did mention that we have been consistently carrying on financial activities, but then I would say that, at the fundamental level the best financial response would be to for our businesses to produce profits.

With regards to that, our continuous efforts have been reiterated several times. I do not believe that, they merit, my repeating at this point. We will continue with our efforts to improve our fundamental business performance, and we are now beginning to see some signs of getting good results out of it.

Based on the results as well as the continued business performance, we will also be coming up with our financial plan accordingly..

The following question will be presented by Dong-Won Kim from KB Securities. Please go ahead with your question..

Thank you for taking my question. It is going to be on the Guangzhou LCD Fab. Now the market is quite keen on the sell off of the Guangzhou LCD Fab for such purposes as improving the financial ratios and also the potential use of the investment funds.

But also at the same time, some TV set makers recently requested volume increase from LG display to hedge their reliance on Chinese makers.

Then based on the recent improvement in the LCD TV market, are there any changes to the Company's plan on the sell off of the Guangzhou LCD TV fab? If not, meaning that, if the current plan is to continue, then I would just like to ask for a broad update on the Guangzhou LCD Fab sell off.

For example, the time line of the expected sell off as well as the plan for utilizing the proceeds..

This is the CFO again responding to your question. Now a few years back, the Company announced our decision to suspend our large LCD business and since then we have been executing this plan through a number of steps.

So, this means that what we are intending to do is not about improving the financial ratios or making more proceeds available to be used, but this is part of our execution of what was determined strategically. Now in terms of the substance of the decision, so we have shared with the market about the path that we intend to take.

But in terms of the specific approach, I must admit that perhaps we have not been fully clear yet. And neither will I be clear this time, but what I can tell you is that we are working very hard and the outcome might be better than what we expect. But in terms of the timing, we would have to wait and see.

But again, in terms of the specific approach, please understand that we cannot be specific at this time..

The following question will be presented by Eunho Kim from IBK Investment and Securities. Please go ahead with your question..

Thank you for taking my questions. I will be asking about the sales environment. Now since a few years back, we see that, the large OLED has been increasing and also it is like -- sorry, the large OLED is likely to expense year-over-year, especially thanks to the new customer and also the increased volume for the new customer.

And also, the LCD IT products and the IT OLED are likely to be the main drivers of performance improvement this year along with the large OLED.

So, then what is the Company's projection for the demand for the mid-sized LCD products? Also, if possible, what is the Company's projection for the panel prices as well? The second question is, as was explained during the presentation, the Company started the mass production of IT OLED and it seems as if the volume is set to increase quite rapidly in the second quarter of this year.

Then with the IT OLED, what is the Company's goal in terms of the annual production? And also, the Company has been putting a lot of stock on the order-based business. The Company has great vision for the order-based business.

What is also the Company's expectation of the performance coming out of this?.

This is Won Jae Lee in charge of Medium Display Marketing responding to the first part of your question. Now for the mid-sized LCD market, there has been negative growth recently because of some macroeconomic environment and impact.

But then more recently, what we are seeing is, signals of growth in the sales of monitors, especially in the B2C market, in developed markets and in the emerging markets as well. Along with the rise in the TV panel prices, the prices of IT panels have also been increasing.

We expect the demand to start picking up in 2025 and on, on the back of the replacement cycle coming up and also with improved IT consumption environment among the businesses. As a result, we believe that, starting from the second half of the year, the market environment is going to start improving..

And this is Myoung-Kyu Kim in charge of Small Display Marketing responding to your question about the OLED panels for IT. But before I give my answer to this particular question, please understand that regarding the specifics about our mass production plan, we cannot disclose them because of because they involve client situations.

And now for the IT OLED, based on our technology leadership, we have begun the mass production as was mentioned in the first quarter based on our plan, and we are currently moving on without a hitch.

And in terms of the upgrade to our business structure, it is something that can further strengthen the Company's business fundamentals, and we are looking forward to seeing the results out of these efforts..

The following question will be presented by Sung Eun Kim from Qiuom Securities [ph]. Please go ahead with your question..

Thank you for taking my question, which is on P-OLED. Now the North American customer has been seeing sluggish sales in the Chinese region. And as a result, I understand that there have been some, let's say, concerns about the supply chain overall, especially regarding the annual demand.

And also, given the fact that the smartphone market has become saturated and the competition continues to intensify. So, are there any changes to the Company's target annual shipment for 2024? And also, in the past two years, there have been some issues, especially in the early stage of supply.

So, what is the Company's competitive strategy to further strengthen your position as the vendor among the customers and to secure reliable profitability?.

This is Myoung-Kyu Kim in charge of Small Display Marketing responding to this question. Now once again, please ask for understanding that I cannot disclose details or specifics with regards to the customer.

Now based on the expanded production capacity and strength and capability, we believe that, the panel shipment is going to grow year-on-year, which is also going to translate into improvement in revenue and profit. Now, we have a system in place to collaborate very quickly with customers in technology, production and operations.

Also, on the yield and productivity side, we have also built up more advanced experience much more so than before. We believe that this places us in a very good position to supply our products on a timely manner and continue to broaden our performance..

Please do contact us at the IR team for any additional questions. Thank you..