LG Display Co., Ltd. Q2 FY2025 earnings call

• The company is transitioning to an OLED-centered business, with ongoing efforts to upgrade business structure, reduce costs, and enhance operational efficiency, leading to improved fundamentals. • In the small panel mobile segment, capabilities in technology, production, and operations are strengthened, with stable smartphone business operations despite external volatility. • In the medium panel IT OLED segment, addressing new high-end market demand with tandem OLED and preparing for broader OLED transition in IT devices. • In the IT LCD segment, strengthening partnerships with global top-tier customers in B2B and high-end areas, reducing low-margin products. • In the large panel segment, solidifying leadership in premium market with OLED panels, benefiting from growth in gaming monitors. • In the Automotive segment, positive indicators from increasing adoption of in-vehicle displays, delivering differentiated value. • CapEx strategy centered on future readiness and business structure enhancement, with 2025 CapEx expected in the low KRW 2 trillion range.

In Q2 2025, sales declined by 8% Q-o-Q to KRW 5.587 trillion, a 17% Y-o-Y decrease. TV revenue accounted for 20% of total sales. Mobile and others revenue was 28% of total sales. IT segment recorded 42% of total sales. Automotive segment grew to 10% of total sales. Operating profit in Q2 was a loss of KRW 116 billion. For the first half, cumulative sales were KRW 11,652.3 billion and operating loss was KRW 82.6 billion. Q2 EBITDA stood at KRW 1.539 trillion with an EBITDA margin of approximately 19%. Shipment area in Q2 decreased by 26% Q-o-Q, and ASP per square meter increased by 32% Q-o-Q to $1,056.

• Q3 shipment area expected to decline by low to mid-single-digit percentage due to product mix changes. • ASP per square meter forecast to increase to mid-20% levels driven by seasonal increase in small- and medium-sized OLED products. • Performance improvement expected in the second half with broader profit improvements across large and small/medium OLED panel businesses. • Early loan repayments and debt reductions progressing ahead of plan, with the total debt reduction target of KRW 13 trillion level achieved early.

• Seasonal off-peak period for smartphones and termination of the LCD TV business affecting shipments. • Strong Korean won exchange rate impacting sales and operating profit. • Macroeconomic uncertainties, trade environment volatility, and U.S. tariff issues. • Sluggish global IT market affecting tablet OLED panel shipments.

Q: What is the specific content and application scope of the new OLED technology investment disclosed in June?

A: The investment of KRW 1.260 trillion is part of the strategic direction to maintain the technological gap with competitors, to be executed over the next 2 years until the first half of 2027, but specific details are confidential.

Q: To what extent do you expect performance to improve in the second half?

A: Performance is exceeding initial expectations in the first half, with the intention to continue the trend in the second half, and a level similar to the first half improvement is expected by the year-end.

Q: What is the second half outlook for the smartphone business?

A: The smartphone business continues to show expanded performance with stable operations, planning to increase volumes in the second half centered on new models, expecting to outperform last year's full-year performance.

Q: What is the shipment forecast for OLED panels for tablets in 2025?

A: Tablet OLED panel shipments are expected to increase year-over-year with improved utilization rate, but specific targets are confidential due to customer information.

Q: Any new developments regarding the recovery in IT demand?

A: Medium-sized panel product demand is expected to grow slightly, with the LCD business focusing on B2B and high-end areas and monitoring the transition of OLED demand.

Q: Operational plan for the medium panel LCD business and profitability?

A: Rationalizing the product lineup, reducing low-margin products, focusing on top-tier customers, and expecting the medium panel business profitability to improve gradually.

Q: Full year outlook for sales of large OLED panel in 2025?

A: Large-sized OLED panel shipments are proceeding as per plan, expected to reach the mid-6 million range, with OLED monitors, especially gaming monitors, seeing growth, and the proportion of monitor products in total large OLED panel shipments this year expected to exceed 10%.