034220.KS

Core Business and Profit Improvement

• Excluding one-off restructuring costs, core business profitability remained positive in Q2, with first half 2026 core profit improving more than KRW 100 billion YoY, ending a four-year streak of Q2 operating losses.
• The shift to an OLED-centric business structure, supported by technological leadership, enabled the company to minimize the impact of seasonality and one-off costs in the first half.
• Company-wide cost reduction initiatives, yield improvement, profitability-focused product portfolio adjustment, and expanded revenue through global customer partnerships have built a strong foundation for performance amid uncertain market conditions.

Strategic Priorities

• The company will continue strengthening competitiveness around two core pillars: securing top-tier technology and advancing technology-driven cost innovation.
• Beyond traditional cost cutting, the firm will implement AI and digital transformation (AX-driven innovation) across all processes from development to manufacturing to improve production capability and build a sustained long-term profit-generating business structure.
• Cost leadership is prioritized to create synergy with technology differentiation, with flexible targeted resource allocation to generate stable returns; stable profits will be used to strengthen the balance sheet, creating a virtuous cycle for market position solidification.

Segment-Specific Strategic Initiatives

• Large OLED: Strengthen premium market leadership by combining differentiated technology and cost competitiveness. Capitalize on the ongoing LCD-to-OLED shift in the monitor market to expand high-value gaming OLED monitor shipments leveraging the unique strengths of large White OLED (WOLED) technology.
• Small and medium displays: Focus on differentiated competitive technologies and high-end product positioning, leveraging stable R&D and mass production capabilities to respond flexibly to market changes. For mobile OLED, pursue profitability via new technology development, yield improvement, and cost minimization while delivering unique customer value.
• Automotive displays: Leverage a differentiated product and technology portfolio to gain market share and strengthen position in the fast-growing automotive display segment.

Investment Strategy

• The company remains focused on developing differentiated technologies across all product lines to secure future competitiveness and deliver fundamental cost innovation.
• Large-scale mass production investments are being carefully evaluated based on demand visibility, market growth confidence, customer discussions, cost competitiveness, investment costs, technological advantages, and return stability to use limited resources efficiently.
• Full year 2026 capital expenditure is expected to fall in the mid to high KRW 2 trillion range, with future investment decisions balanced to preserve financial position and long-term competitiveness.

• For Q3 2026, total area shipment is expected to increase by a mid-single-digit percentage QoQ. While shipments of large and mobile OLED products are expected to rise on positive seasonality, growth will be moderated by pull-in demand that occurred in Q2 and ongoing optimization of the IT LCD portfolio.
• Q3 2026 average price per square meter is expected to rise by a high-teen percent, driven by seasonal expansion of higher-priced mobile OLED shipments.
• Full year 2026 capital expenditure is guided to the mid to high KRW 2 trillion range, maintained from prior planning.
• Management reaffirmed its commitment to achieving the full-year performance targets set at the start of 2026, despite elevated macroeconomic uncertainty.

LG Display posted total consolidated Q2 2026 revenue of KRW 5.6121 trillion, a slight increase year-over-year (YoY) and quarter-over-quarter (QoQ). Total area shipment grew 12% QoQ to 3.6 million square meters, driven by expanded shipments of medium and large size products, while average price per square meter fell 13% QoQ to $1,079 due to seasonal declines in higher-priced mobile product shipments. By product segment: TV (includes large OLED TVs) accounted for 21% of total revenue, with QoQ revenue share up 5 percentage points on increased shipments driven by pre-event pull-in demand for sporting events; IT (including OLED gaming monitors and medium display products) accounted for 36% of total revenue; Mobile and other small displays accounted for 32% of total revenue, with QoQ revenue share down 5 percentage points due to mobile OLED seasonality; Automotive displays accounted for 10% of total revenue. Overall, OLED products made up 57% of total revenue, a slight increase YoY. On a consolidated basis, the company reported an operating loss with an operating margin of -2% (reflecting KRW 240 billion in one-off workforce restructuring costs; operating profit excluding one-off costs was positive, with significant improvement YoY), an EBITDA margin of 16%, and a net loss of KRW 418.8 billion driven by foreign exchange translation losses. The first half of 2026 delivered net profit, the first first-half profit for the company since 2021. Cash and cash equivalents as of Q2 end totaled KRW 1.452 trillion, with a debt-to-equity ratio of 260% and net debt-to-equity ratio of 156%.

• Elevated macroeconomic volatility, including geopolitical tensions, rising commodity prices, and semiconductor market disruptions, creates greater-than-usual demand uncertainty for the second half of 2026.
• Rising material and component costs (including semiconductors) are putting pressure on profitability and driving end-product price hikes that could suppress end-consumer demand.
• Greater China-based competitors are aggressively expanding competitive premium display offerings (including RGB Mini LED TVs) at competitive price points, intensifying competition in the high-end large display segment.
• Foreign exchange rate volatility has impacted the company's financial ratios and created translation losses, contributing to the Q2 net loss.
• Weak overall demand for IT devices poses a headwind to IT segment revenue and profitability in the second half of 2026.

Q: What was the size of Q2 2026 one-off restructuring costs, is the full-year 2026 outlook unchanged from the start of the year, and what is the company's second half profitability strategy amid macro risks and weak IT demand? / A: The one-off voluntary retirement workforce optimization cost recorded in Q2 was KRW 240 billion. Excluding this cost, the company achieved positive operating profit in Q2, ending a four-year streak of Q2 losses and meeting all planned Q2 targets. Management confirms the full-year 2026 outlook remains unchanged from the start of the year, and will continue to advance cost cutting and deliver differentiated technological value to hit full-year performance targets despite elevated macro uncertainty.

Q: What is the large display profitability outlook for the second half, how will LG Display maintain high-end TV share against competitive Chinese RGB Mini LED offerings, and what is the current status and capacity strategy for the growing OLED monitor business? / A: Second half large display market conditions will be challenging due to rising component costs and post-sporting event demand uncertainty, but ongoing cost innovation and production improvements will offset these headwinds. To compete with aggressive Chinese Mini LED offerings, LG Display will highlight WOLED's unique technological differentiators, expand partnerships with global premium brands, and add mid-range OLED TV offerings to solidify market leadership. OLED monitor share of large display shipments is projected to rise from ~10% in 2025 to ~20% in 2026, with further growth expected in 2027; the company will optimize production mix between TV and monitors to maximize performance, using existing capacity to meet demand rather than large new investments in the near term.

Q: How will rising semiconductor-driven IT set price hikes impact second half IT demand and profitability, and what is the mid-term strategy for IT LCD fabs as customers shift to OLED? / A: Rising component costs and end-product price hikes have created meaningful second half IT demand uncertainty. LG Display will adjust its customer mix to focus on high-end accounts, reduce exposure to low-margin products, and continue cost cutting to deliver YoY profitability improvement despite headwinds. For the shift to IT OLED, the company is currently evaluating competitive strategies that leverage existing fab infrastructure to secure cost competitiveness and efficient operations.

Q: As smartphone panel share grows, what are the plans for additional capacity investment, and how will the company mitigate profitability risk if falling panel ASPs driven by rising handset maker cost burdens impact targets? / A: LG Display will continue to efficiently utilize existing production infrastructure to meet growing demand, while carefully evaluating and executing preemptive investment in new mobile OLED technologies to maintain technological leadership. The company recognizes industry-wide pressure from rising component costs, and will sustain solid profitability through company-wide production cost innovation, while delivering timely new technology development to support customer competitiveness and strengthen technological entry barriers.