LG Display Co., Ltd. Q4 FY2024 earnings call

• OLED-Centric Business: Continued structural upgrade; smartphone panel shipment expansion drove revenue and earnings improvement, with rigorous cost savings and operational efficiency contributing to earnings turnaround.
• Business Plans:
  • Mobile OLED: Secure competitive edge with future technologies, utilize production infrastructure for expanded shipment and model diversification.
  • Medium IT Segment: Respond to competition with global customer base and differentiated technologies, focus on cost innovation.
  • IT OLED: Expect year-over-year growth in 2025 due to tandem OLED's unique low power profile, focus on operational efficiency.
  • Large OLED Business: Diversify product lineup, drive shipment expansion, sustain quality-driven growth with cost savings.
  • Auto Business: Gradual auto market recovery, stable customer portfolio, aim to win orders from EV and internal combustion engine vehicles.
• CapEx: Conservative stance, prioritize strengthening business fundamentals and financial soundness; CapEx in 2024 was KRW 2.2 trillion, estimated low to mid KRW 2 trillion for 2025.

In Q4 2024, mobile and others accounted for 42% of the revenue mix with revenue of KRW 7,832.9 billion. IT segment revenue was down 28% Q-on-Q due to downstream demand sluggishness. TV segment revenue posted Q-on-Q and Y-o-Y growth, accounting for 22% of the revenue mix, driven by OLED TV panel shipment expansion. Auto segment revenue increased mid-10% Q-on-Q and Y-o-Y, with an 8% share of the revenue mix. OLED share of total revenue reached 60% in Q4, a record high, up 2 percentage points Q-on-Q and Y-o-Y.

• Q1 2025: Area shipment to decline mid-single-digit Q-over-Q due to TV panel seasonality; ASP per square meter expected to fall mid-10% range Q-on-Q for smartphone panels, but performance strong vs typical first quarter.
• 2025 Outlook: Expect year-over-year growth in IT OLED due to tandem OLED's unique value; depreciation ending in second half 2025 for large OLED fab in Guangzhou to positively impact bottom line.

• Macro Uncertainties: Delayed demand recovery in downstream markets, global trade environment volatility impact business performance.
• Market Volatility: Uncertainties in auto market, especially EV segment with subsidy scaling down affecting auto display business.
• Competition: Heightened competition in smartphone panel business, especially for North America-based strategic customers.

Q: Strategies for smartphone panel profitability and share of wallet against North America customer, impact of entry-level model on seasonality and bottom line A: Focus on future-proof technologies, mass production competitiveness, cost innovation. Diversification of smartphone models helps minimize production line loading rate gaps, expecting 20% year-over-year shipment growth. Entry-level model may help mitigate seasonality impact.

Q: Outlook for IT OLED business in 2025 after tablet OLED underperformance A: Expect year-over-year growth in 2025 due to tandem OLED's low power and tandem technology fit for IT devices, but specific supply and market share targets not disclosed due to customer confidentiality.

Q: Strategies for large-panel OLED bottom line comparing 2024 vs 2025, impact of depreciation ending A: TV market uncertainties persist. 2024 had rigorous cost innovations. Depreciation ending in second half 2025 for large OLED fab in Guangzhou will positively impact bottom line; focus on cost competitiveness, optimal fab operation, and strategic customer expansion.

Q: Focus technologies and product segments for future growth, mid-to-long-term depreciation trend A: Focus on improving business fundamentals, financials, and stable profitability. For eighth generation IT OLED, will respond when market signals improve. Depreciation in 2024 was ~KRW 5.1-5.2 trillion; in 2025, expected to decline to ~KRW 4.3 trillion as some fabs finish depreciation.

Q: Assessment of auto market and strategies for auto display business A: Auto market has mixed factors (economic slump, EV sluggishness, interest rate cuts, CO2 regulations). Auto display market grows, OLED expected to grow >70% Y-o-Y, LTPS LCD >20% Y-o-Y. Strong customer relationships, diverse product portfolio, aim for market share #1 based on revenue.