• Revenue: KRW7,832.9 billion, up 15% QoQ and 6% YoY.
• Operating Profit: KRW83.1 billion, marking a turnaround.
• EBITDA: KRW1,306.5 billion in Q4; KRW4,565 billion for the year.
• EBITDA Margin: 17% for 2024.
• Area Shipment: Up 5% QoQ and 19% YoY, driven by TV panels.
• ASP per Square Meter: Increased 6% QoQ to USD873.
• Product Revenue Mix: Mobile and others at 42%; TV segment at 22%; Auto segment at 8%.
• OLED Revenue Share: 60%, up 2 percentage points QoQ and YoY.
• Cash and Cash Equivalents: KRW2,021.6 billion.
• Inventory Assets: Declined to KRW2,671.2 billion.
• Debt-to-Equity Ratio: 307%.
• Net Debt Ratio: 155%.
• CapEx: KRW2.2 trillion in 2024; projected low to mid-KRW2 trillion for 2025.

• Warning! GuruFocus has detected 6 Warning Signs with LPL.

Release Date: January 22, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• LG Display Co Ltd (NYSE:LPL) reported a 15% quarter-over-quarter and 6% year-over-year revenue increase in Q4 2024, driven by smartphone panel shipment expansion.
• The company achieved a turnaround in operating profit, reporting KRW83.1 billion, supported by rigorous cost savings and operational efficiency.
• OLED panel shipments reached a record high, accounting for 60% of total revenue, reflecting the success of the company's OLED-centric business transformation.
• The auto segment revenue increased by mid-10% quarter-over-quarter and year-over-year, maintaining its share of the revenue mix at 8%.
• LG Display Co Ltd (NYSE:LPL) plans to drive shipment expansion and profitability through diversification of its product lineup, including ultra-large TV panels and gaming OLED monitors.

Negative Points

• The IT segment revenue declined by 28% quarter-over-quarter due to prolonged sluggishness in downstream demand.
• The company faced a mid-KRW100 billion one-off expense in Q4, including ERP-related severance pay, impacting overall financial performance.
• Debt-to-equity and net debt ratios remain high at 307% and 155%, respectively, indicating financial leverage concerns.
• Q1 guidance projects a decline in TV panel shipments due to seasonality, with ASP per square meter expected to fall by mid-10% range quarter-over-quarter.
• The global IT market's sluggishness has negatively impacted the demand for high-end products, including tablet OLED panels, underperforming expectations.

Q & A Highlights

Q: What are LG Display's strategies to maintain market share and profitability in the smartphone panel business amidst heightened competition? A: Seong Hyeon Kim, CFO, stated that LG Display is focused on future-proof technologies and mass production competitiveness to reinforce its competitive edge. The company plans to improve productivity, quality, and cost innovation to strengthen business competitiveness. They aim for a 20% year-over-year growth in smartphone panel shipments by diversifying models and optimizing production infrastructure.

Q: How does LG Display plan to address the underperformance in the tablet OLED market, and what is the outlook for 2025? A: Seong Hyeon Kim, CFO, acknowledged the sluggish global IT market impacting tablet OLED sales. Despite this, LG Display expects year-over-year growth in 2025 due to the distinct advantages of their low power and tandem technology. The company is exploring ways to maximize operational efficiency in their fabs.

Q: What are LG Display's strategies for the large-panel OLED business, especially with the end of depreciation in the Guangzhou fab? A: Jongdeok Kim, VP of Large Display Planning and Management, mentioned that LG Display will continue cost competitiveness and optimal fab operations. They plan to strengthen cooperation with strategic customers and focus on differentiated products like gaming monitors to enhance profitability.

Q: What is LG Display's approach to investment, particularly in the eighth generation IT OLED business, given the current market uncertainties? A: Seong Hyeon Kim, CFO, emphasized a conservative investment approach due to ongoing uncertainties. The company prioritizes improving business fundamentals and financial stability. They are prepared to respond to market changes once clear signals of improvement are identified.

Q: What is LG Display's assessment of the auto market and its strategy for the auto display business? A: Kihwan Son, VP of Auto Marketing, noted mixed factors in the auto market, with flat growth expected in 2025. The auto display market is growing, with OLED and LTPS LCD expected to see significant year-over-year growth. LG Display aims to maintain market leadership through a strong customer base and differentiated technology offerings.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.