LPL - Earnings call transcript Q4 2020

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Operator

[Foreign Language] Good morning and good evening.

First of all thank you all for joining this conference call. And now we will begin the conference of Fiscal Year 2020 Fourth Quarter Earnings Results by LG Display. This conference will start with a presentation, followed by a divisional Q&A session. [Operator Instructions] Now, we shall commence the presentation on the fiscal year 2020 fourth quarter earnings results by LG Display.

Daniel Lee

afternoon. Good Language] [Foreign Lee LG Daniel IR. in-charge is Display's of This like company, all conference On the would call to our behalf of joining I thank for the today. participants Marketing. Kim, CFO, I President Seung Group; of Kwon, Marketing; President Vice Planning; and Suh; Today of by Corporate Lim, President and our IT of in-charge Ko, joined Hee Corporate Strategy am Min of Yeon Ki-Joon Vice Stephen Senior President Strategy TV Vice of Jae Auto DH Jin, Vice Marketing; call conducted the Korean of QX be conference followed and Q&A. English outlook, the of by both Today's one-hour in be company's will for results will the starting presentation XXXX then a which with and financial the to presentation Please the financial company's documents of IR website QX, the XXXX. details refer in results on for more

through the webcast on that on based also we audited by begin are results. today's to been for we that XXXX the joining on screen. auditor. With on a the those take and disclaimer. outside read will please refer the QX yet consolidated said, benefit presentation moment And details prepared results your please to earnings And the start before widget the not an with have note K-IFRS For please standards now your presentation

businesses there quarter and was products record up Let a the credit TV bring of EBITDA profit reversal deferred each and to tax with visible at X% shipment KRWXXX drove XX%. revision XX% IT off net tax KRWXXX started billion. QX. Driven of where we've billion operating results to law margin P-OLED the placed products on profit shipment value-add me the in of a increases KRWXXX with OLED a Strong Due was with reporting growth. margin task corporate up and Operating billion. focus for first and was to as on start Revenue for strong by quarter trillion. high was our performance business of demand reporting for top-line KRWX.XXX strategic robust in

shipment was was on on meters. Next is and and ASP The area company's to quarter on higher On shipment production blended X.X XX% shipment small XX% square Q-on-Q. large on to panel X% report up prices panel in up LCD OLED growth quarter year reporting QX area ASP. midsized remained mobile and and capacity million flat $XXX.

is on segment. breakdown revenue product by Next QX

of panel accounted on terms for highest breakdown, In accounted and XX%, panels mobile for shipments driven XX%, points to higher X for panels. revenue IT XX%, mid OLED at by portion while the percentage small up the TV others quarter

position trillion as Next the company's the on financial is KRW financial was XXX on company's cash and and and quarter. KRW compared XXX fell KRW the to end statement QX QX billion KRW X.XXX X.X third trillion equivalent the down was ratios. billion Q-on-Q. inventory The borrowings of cash

X.XXX flow As improvement was quarter in XXX% current basis. ratio QX as XXX Q-over-Q and end. in for Cash net a an the posting on KRW KRW came of ratios liabilities financial coming ratio trillion XX%, XXX%, all to at was on equity at billion debt-to-equity up ratio the

for seasonality. to expected due QX QX decline digits be the by blended single XXXX. on guidance project flat ASP Q-on-Q Lastly shipment company's to and is area high to We

Next is presentation DH by the company's Suh. CFO,

DH Suh

Good DH CFO LG afternoon. is Display. This of Suh,

an panel IT our and large COVID-XX OLED you TV demand in we the of first OLED products, in the health all would for shipment I performances, QX are uptrend. on like with QX shareholders, saw good wish continued analysts investors price for presenting as mobile and plastic and panel for to Q-on-Q good Before all pandemic. LCD of and growth midst

was up XX% year-over-year. XX% As on such revenue and quarter

operating to to underpinned drove LCD sizable contributed TV IT management KRW a such improvement results meaningful we've of in and Guangzhou to profitability on business report increase the in OLED improvement. the spread P&L in stable production to Q-on-Q. business opportunities based top Underpinned we ever were volume EBITDA of TV mix shipment on was in the in seen continues as as distinctive in plastic led that OLED on indoor particular performances. by XX ramping which there QX the fab working year-over-year well margin [Foreign XXX OLED also improvement an up And competitive on stable of leveraging from basis its terms profit meaningful panel the new the increase turnaround with billion increase In profit. Language] edge, performance to In And with for quarters. XX% growing a sales was production highest which improvement. of by has activities able reported of bring Also product remote

first guidance XXXX. expect solid Next we quarter. products typical TV seasonality, demand IT is to on a the the to stay for QX Compared and in for

ASP While flat projected to single-digit blended back on on to mix stay upper is we by shipment area Q-on-Q seasonality. product the expect changes decline of

QX and overall, the expect factors. surface volatilities driven seasonality may solid market past, demand by unexpected to Although compared we in FX rate

will monitor business respond and As accordingly closely environment. to we such

have Next quite we After shipment. continued steady is with for on segment. each update online, outlook the good new and fab sales on Guangzhou been came business as

the COVID-XX we precise XX% eight market. been clearly we shipment is has diverse solid consumer with that seven people's part earnings targeting greater changes annual unit Supported solidifying further panel encouraging around such more is healthy accurate which X.X end are the in highlighted What the the sales have in high-end will expanded million is on offers strengthen and quality, million Based a positioning its to TV a up so company's lifestyles TV base. product in and that lifestyle lineup, the XXXX. OLED. of by brought positioning respond value that needs in will OLED to of doing units, seeing to up this, that to eyes intrinsic on terms on and taking value As design, picture is set year. distinct consumers OLED on was QX million TV are

internal plastic year-over-year operational minimize Based on first the For in OLED. volatility plan strengthening the to business, enhancements off-season mobile seen will results. around half endeavor strengthen the will customer bring to year year of capabilities, better we this and of further productivity relationships, we and basis stable

is on IT and Next LCD TV.

earnings For leadership IT, we market -- underpinned and competitiveness by we continue where customers, relationship capabilities have product to further our production strengthen expect strong with differentiated to and close generate profit. and we

the remain TV, in year of trend the we products. management. the half financial demand continuing LCD addressing contact-free topic is on in of will overall requirements untapped opportunities Last first back until the market and so-called impacting with certain we presented. the customer flexible demand the For solid of leverage dynamics to on fully to environment, be seasonality or changes Up expect

However, depending how COVID-XX on out, volatility plays resurface. may

time We level. will level XXXX KRW of in to within to factors management the be at stable, and we keep was monitor will CapEx activities. yet nimble flexible, in same engage level X and cut closely trillion CapEx the previous EBITDA spending responding risk principle the opportunities mid to the and financial from investment

financial you meaningful sustain the stability. and seen, As to will improvements for in in Thank we QX saw improvement financial key continue ratios attention. for you've your we

Daniel Lee

of presentation XXXX. [Foreign QX to the end the for Language] That brings earnings us

your We will commence with take now please the Operator, questions. Q&A session.

Operator

Soo sir. Please [Operator provided by begin. Q&A The Now from will will ahead, first go Kim be Instructions] question Hyung Financial Language] [Foreign Hana Investment. session

Hyung Soo Kim

[Foreign Hana two recording to Language] I Hyung first to Investment. I Thank Financial would congratulate Soo questions. on I’m great a you. pose Kim result. from you like like such would

earnings performance? to QX on more demand the the to relate And LCD. relating details around First question would second dynamics

see this, QX have is question quite been So my results that first we your good.

of projections their going second share your on We've respect what half is -- price behind us you a of dynamic the LCD this driven I but your business extend would largely LCD the running breakdown the with driver like areas? second could second going will that domestic seen actually demand in players surrounding a half us dynamics line on your relates think favorable very with backdrop, positive understand forward? to performances I for demand And market impact you could business forward? to are the what panel more My by have also lines. the this provide question with and each LCD. with to fab

DH Suh

I your first to respond Language] would question. [Foreign So

had the for much Basically, on as quarter, seen we've driven products. top more mix have by we third product – highly change profitable the QX product to regarding earnings. mix revenue. detail the improvements compared You've And the that towards I were line is previously to the largely explained, able more fact this basically

was the selling LCD Second and increase is another the ASP with overall the also price of or to that driver. respect the

impact these that rate factors So that brought our driven than more about by actually negative factors two compensate had was P&L. changes for did improvement, the what these FX on

improved of the the P&L our and actually at profit. So end that day

sum once from to really were our again offset revenue, movement able able three mix the all these negative pricing. sales factors and So the to once also of it FX product on to the increase to of able basically the were contributed increase up, volume, And top we again any improve profit. impact line to and improving

our your LCD domestic also projections. understand impact the operation that price your and demand with extending fab have and on to of question their Turning dynamic domestic question the do competitor second to would actually has I what on the

would have supply to Now in terms carve of out and the two. we those demand dynamics

the into the second year. look half if of So you

on the how First going demand the an side will believe impact that out forward have the COVID on plays actually we demand impact side.

domestic at understand the whether timing extend the so or up making to think some But they side, domestic supply actually full up started the impact ramp end that a clear will the year fab. the actually even our until decided to the run size stop a to this the basis, to would on competitors of But would the XXG that mentioned ramping have they on the not of the year or have and the running of competitor run fab point. I the you've comparing that bigger do it's XXG I fab. will that assuming and operation that fab We Chinese think midyear, that whether and Now they up of impact. preparations have

all, between And there basically factors are all the demand. pricing supply into play. balance mechanism the contingent multiple and come that So on in whole is

of going mitigated tightness pricing impact be in half first into of somewhat pricing. will of of dynamics, the absolute factor the rationalize key one and we year, like the [Foreign forward. so and project tasks the three whole second business. the the from have And will make LCD our think Language] IT our But for areas, business competitive be key terms difficult that – the meaning will for will demand products strategic be on innovation it would is level competitive that To further the business, less competitive we be like of strengthen structural tightness elaborate differentiating business half improvements. enter And that the the on supply will we this our include as we the to and that to and to IT improved,

and fundamentals we dynamic the our supply business will may changes resilience the for So demand potential if able surface. because of cover to and able to that even be enhance were any volatilities we

Operator

[Foreign provided next go be Kim by will from Language] Securities. ahead, sir. Dongwon KB The question Please

Kim Dongwon

ask Language] your you. to like OLED you Thank [Foreign on two business. Would questions

your wide W has OLED do with First, panels. to

adding you you OLED ship is about whether more out total that you color with projection Guangzhou eight shipment would fab? annual as some your units. for understand to mentioned question business. provide forward? to plan then provide direction your million the an is? to your on I this us has that to to with – basis capacity is have of year to the regarding do Can plans like to can You've go Second what per your P-OLED earnings And plastic seven

Stephen Ko

to question. that communicated let achieve plans has million target what first yes, Guangzhou understand panel we your eight I the with I panels the it regarding, me And Language] to going seven how to we're do OLED to in So lines. the [Foreign have million our address order also any large plans be line? do question. especially on understand XXXX these to your operate

eight based So will million an to our annual basis. million that – assumption sell on I units need the mean on we to seven

Guangzhou is the productivity activities you have regards further but that consideration up If capacity, that were into extent. we capacity the to XX,XXX new we which a Paju certain And take to is the capacity currently through capacity, enhancement fab able with to XX,XXX. our the currently

So it did if addition you maybe the more. plus is addition a – XXX,XXX little

that support it us unit to So with eight is sales. this million capacity possible we seven for into –

is do to plan we the we plan OLED what to sales So the of closely TVs. trend monitor

now OLED potential value to understanding the from the previously offers intrinsic are customers perspective that set set they TVs. And As OLED the clearly also with makers actually perspective them. see respect positive consumers I've mentioned, the our their

closely enhancement we some and that X support and improvement be add more the be utilized we would level capacity is we of or requirement. at Guangzhou in QX XX,XXX million to panels the trend run preparation actually then more million we been will if that we taken need capacity. we support there OLED Guangzhou to plays that XX,XXX some And able out. at at then place about will what So eight has -- feel amply point Guangzhou of course in a how that watch And with the fab's currently will to time, able increase fab if to will is

will it observe when once monitor the and you we'll our for communicate closely your it to trend so quite to us at will time you, be with that comes, the and be The OLED. I -- details. important to very And because customers. with QX and requires we look the share again second on be on able Responding won't specific numbers question plastic

as please well. provide whether second some our in of And competitors. will competition that at stability to also the of from we quality understand. we its counter us as were that So their year, cost, whether facing and bring true we you gave still it. us confidence able capacity last were expressed confidence ran our gave it But that But P-OLED and do quality, experience And the that we a of concerns, it half, the into we our could second to be cost. to were we last full business, the the that customers know actually is terms level half in to confidence year yield and we our entered able able as do we about that yield terms

So level for we've work notch important for for hard up firm already year, if bring all have. a this us will this year put I it lay to the projections what a in to were up really make we to one on based in to basis, terms of be that bring

our that on the course have on side basis, sales sizable of at trend improvement. and So we would think will course, we have looks like look from a but that to closely results, of be we what year-over-year impact able our customers' quite an would to expect

will question We next move on please. to

Operator

will Capital question be S.K. from from next Kim The provided Market. Daiwa

S.K. Kim

also Thank to would earnings your post you. also good And questions. performance. like I I congratulate you two on

Electronics First makers making Samsung announced on focused mini this that will have Electronics TV and TVs. LG year like LED they

the or So picture it in expand of positioning that vis-à-vis think in further how premium LCD. it quality, of is LED is the terms terms thin superior of will the segment. We mini

– it the that to the that it I side. it has on was gap start will with promote premium to actually very narrow sometime OLED be think strongly And we'll able

believe LED launch achieving And for sales? million be that price-related expect mini is the there X – to be And million will that you some you pursuit you hurdle so in OLED do a X the the above of of going TV pressures. your do

and sales at look And demand also phone your if TV backdrop expected quite very strong good. in for positive. is mobile well. as seems QX LCD of the very earnings QX sales, well, be the your question, you especially Second pricing the customers, I as think terms was that to strategic And phone

of upward the quite conservative. guidance we guidance? be expect your So a revision May seems to

Stephen Ko

Ko, VP of am Marketing. I TV Stephen

evolution the back whole looking evolution display the you So so path, CRT starts next mini at look it path, at then the LED O-L-E-D. and OLED, with LCD generation is from if which

paths? So is We LED fit that adjustment side. actually is on into on backlight mini does any technology the made that evolutionary these of it the think a LCD

represents actually type that We whether is to question a have So one just of LCD. evolutionary would step forward. that it an think

think echo to LED. CFO I our OLED of said vis-a-vis like but that's head-to-head the We offered all by what to time in and of would not COVID numbers We've has So be quite appropriate that and still the we mini TV believe LED that fact the streaming may compare that top that COVID OLED pandemic on valid changes value But spotlight. And enjoy of There definitely people people of COVID-XX new also video to receiving think critical. will understand grow has era is be have offering. has the value that changes, also because a able up. pandemic these changed. post content triggered seen on have value Definitely the subscriber during and really We by go that OLED was still are some consume of watching people's the strengthened in the and been were spent was backdrop the way the services that, that terms more the respective that increased. types also also been era.

happening, value what's area was other in large And of they picture terms the nowadays, their large And was But it rendering in that videos studios was sized, the screen people using that are is work. the edit quality, quality. do they XXX% what thought by comes past understood So brighter Hollywood and picture when accurateness and way was OLED good. to color all important. offered houses that production the to all understand these

is will the conveyed quality that the So the actually and technology by OLED superiority it's these that reality this days, natural screen be considered that offer. intrinsic accurateness picture is of to

displays And were they streaming U.K., watching extended by watching Second to harsh that been consumers watching like were results Korea, results an we the these period experienced emphasize U.S., pain large be when certain that, would the has of on to there people these proven services, is point, displays. panel when one's China based and in survey time OLED on were less have eyes. I definitely that over took points

So there's of as who have agencies a XXXX actually in lot called U.S. agency is issued recommend Eyesafe for comfort. announcement doctors display has a a or also, and the people accreditation safest and that in of the terms that OLED OLED eye as States XXXX, eye well for global certification issued United XXXX also health using most And displays. also

comforting to most has been and proven safe OLED So eyes. to human be

a value the is back this stay era. so, had since in of but value and we post highlighted many the And we been and its launch evolution. COVID that gone even first Last this will think feasible through pandemic look during period evolution much COVID that's if very not it valid of at and XXXX, OLED development least, cycles in

to just execution actually it cetera. technical to or a gaming, apart setting resolution design, et certain And compared LED transcended technologies, as subway it about specification, of able also, was there really like and conferencing, itself or in education, development such bring areas, in So other different brightness transportation, mere in terms integration others. and mini differentiation was improvement further

was So OLED to further process, intrinsic the the to value it able actually to was all offering. solidify that others able offers evolutionary also prove value through this and it that

that ourselves, in is million million look us the so, terms figure. believe it to we for sales of to units forward And X for that, of feasible we've that to projected X

DH Suh

responding Language] your the question. to This CFO, again, is second [Foreign

QX plans me P&L further difficult compared Q have revise will specify for able at certain employees, since the P&L, said guidance were terms difficult to say company the the the of QX consensus. a that this we in our mitigate point, performance that whether any in of our at market be you and I have risk. weighed the we endeavors that, the would to, as mentioned it our efforts to if look upward factors You've and that thanks somewhat all to and to figure. Having our QX, on trends --

we P&L negative factors. structural to of say on those our terms in actually for to that, eliminate go So can up, the volatility we able the were aspect

but we So of of to QX revenue. have course impact the our changes top for mix starting area seasonality in factor shipment product would expect and this of mix terms compared the QX last impact product projections year on would the year, our in line as changes flat, remain turn to

factors. So a due there line could the decline, always some of technical to be top

terms those rate the overall the although if or an always in positive opportunity company. volatility, direction factor at a look of work that is However, risk as for trends and ASP FX you quite could the of either and

be will So of in company. all very the for important we think to effort were employees profitability. we I our solid base us that able these to in We can really very factors. terms about to commit turnaround further and – the build important so And that you for that Thanks out committed we profit. of bring QX, exert us a could tell important a of manage to will utmost for to continue efforts it improve

Daniel Lee

please. question, Next

Operator

next The Nicolas provided will by Language] be question ahead, go [Foreign Gaudois Please sir. UBS. from

Nicolas Gaudois

Good for questions. taking afternoon. Thanks my

capacity one related your LCD Korea. to is first The in

And were was regarding You've suggesting last And until further adoption think you side? delayed that this to the what would you for Could so tablets segment, case, I would update position us of secondly, your is of keep could view to that And market as going if will production beyond or the the you market that? the than ever grow? this middle the of existing the base it rate OLED on for that is far actually participate potentially plastic there year. status month OLED Thank Gen the on the still but longer into you. for likely PX in earlier, closure X. production on you

Stephen Ko

Language] Responding question. your [Foreign to first

so On we Gen based the panel which Gen X. the LCD domestic have -- we Paju and this X on TV capacity, is

Gen from additional almost there are complete. look been are capacity manufactured preparations products to the If IT the first conversion IT and other at some And manufacturing being X X you Gen have products capacity.

to going product cover the the fab Gen X is IT So offering.

and our ourselves previous will be with needs. and situation balance changes well to align And the as year in as the market of some Gen closely customers' be supply things of level expect fully X so we'll and communicated already flexible we there as in consult terms responding to that of headcount demand well, have resource that as without the so changes investment any out customers the also any terms monitor we with play we we and capacity discuss and and will In additional we've needs. will within our we dynamic how

Hee Yeon Kim

[Foreign the am Language] I I'm Group. am adoption Corporate to tablet. Kim. Yeon of responding SVP OLED Hee and of Strategy I

So -- as you on already OLED small displays and know full technology. RGB size technologies or already when and plastic displaced it comes foldable we using wide OLED And to we've these gaming displays a our using XX-inch require OLED or XX-inch. for and based technology gaming launched small larger technology, factor which launched a there is notebook a OLED laptop for plastic wide form

terms of terms there of picture different in flexible of OLED, much designing in factors. quality, it So is types more and the of superb and lighter is is form course, much but it thinner

suite So of products. it different is very optimal apply IT to to

any For plastic and and and requirement are to OLED market PO our actively quite very the we positioned to actively. very poised and tapping we into respond are wide aggressively market RGB,

fully spec whatever required and needs. prepared customers and clients is our we the meet to ready So by specification customer are

Daniel Lee

question. the constraint, take we time the will the to and final Due last now

Operator

provided of be The question by from Bank Dong-je go America. ahead. Language] Please will Woo last [Foreign

Woo Dong-je

is do seen dip equity do because we and an the good preemptively capital terms actually since flow Despite is understand Yes. your impact was not converting because any cash the XXX you that your issued actually convertible performance look of about XXXXX quite have possibility -- that of and investment earnings Language] there – finishing positive, the Second with fact yet if billion plans would made I were question that today. Is performances additional which your in seems. we've quite of Guangzhou for planning price you it that Whether is, the the on option? you your only the at was have maybe price fab bond around you of like some capacity. not your [Foreign the a investment to your that XX% is share you're investments CapEx up and ask financials. KRW XXXXX And also previously I buybacks? to if dilution? KRW questions So of

So figures, is holding going spending be in that relating to the be quite outflow, requirements at assume it are or have your seen there seems as it CapEx to in if this needs right to of that in we to are on quarter's if investment low future you up no the for look us quarterly cash new CapEx terms because is investment. we low

for So is or that something it us or one-off expect something that temporary? to is going forward, is this

Unidentified Company Speaker

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into investments made already have We investment large-scale OLED projects.

are significant projects there remain made retrofitting large CapEx also investment new developing equipment basically it models. of latter of new up a that also, at or any spend. premise low different and still the and will investments, -- when investment type comes this So is investment models CapEx XXXX it level. for actually for is to today. holds to And produce two And without that those One And add-on types. investment as investments, to

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Daniel Lee

of earnings respond us IR QX please for joining Happy today. questions hesitate our you those were XXXX those call Thank And to and submit questions. due time Thank to to to who LG For conference be you. to the for not Display. will constraint, your contact do unable for we you team,

LG Display (LPL) 27 Jan 212020 Q4 Earnings call transcript