[Foreign Language] Good afternoon. This is Kim Hee Yeon, in-charge of LG Display's IR. On behalf of the company, let me thank all the participants at this conference call. Today I am joined by the CFO, DH Suh; Seung Min Lim, in-charge of Corporate Business Management; Matthew Kim of TV Marketing; JY Kwon of IT Marketing; and Daniel Lee of Market Intelligence. The conference call will be conducted for one hour in both Korean and English, starting with a presentation on the financial results of Q3 2019 and the company's outlook, followed by Q&A. Please refer to the IR presentation document in the company's website for more details on the financial results of Q3 2019. For those joining through the webcast, please refer to the details on the widget on your screen. Before we begin the presentation, please take a moment to read the disclaimer. Please note that today's results are based on consolidated K-IFRS standards, prepared for your benefit and has not yet been audited by an outside auditor. With that said, we will now start with the presentation on Q3 2019 earnings results. Revenue in Q3 was KRW 5.8217 trillion, up 9% Q-o-Q. There was operating loss of KRW 436.7 billion, mostly due to continued decline in LCD panel price and adjustment in the large-size LCD fab utilization rate. Operating profit margin was minus 8% and EBITDA margin was 11%. There was net loss of KRW 442.2 billion. Next is area shipment and ASP. Area shipment in Q3 was 952 million square meters falling 4% Q-o-Q underperforming the guidance. Main causes were short price decline and utilization adjustment in large-size LCD panels despite Q3 being a favorable season. ASP was $513, up 13% Q-o-Q following the increase in mobile shipment. Production capacity remains unchanged to Q-o-Q. Next is…

[Foreign Language] Good afternoon to shareholders investors and analysts. This is the CFO of LG Display DH Suh. Allow me to add more details regarding Q3 earnings and guidance and explain the company's future direction. Although, volume increase is expected in Q3 with seasonality the LCD panel price went down steeper than the market expectation this time as new 10.5G fabs from Chinese panel makers initiated mass production along with the other existing 10.5G fabs in China. The company did not engage in such volume competition rather focusing on adjusting the utilization rate to flexibly address market changes. Area shipment in Q3 was down 4% Q-o-Q and 12% Y-o-Y. On the other hand, the company's ASP went up 13% Q-o-Q and 3% Y-o-Y. This is due to the increase in the shipment of plastic OLED and mobile products that have higher ASP. Despite the growth in revenue operating loss increased Q-o-Q in Q3. As we discussed before LCD panel price fell shortly and LCD TV revenue decreased reflecting utilization adjustment. In addition, there was recognition of over KRW 200 billion in depreciation and amortization for the new plastic OLED fab. To address the volatile reality in LCD business, the company is focusing on strategic preparation to analyze core business competencies and execute action plans based on the evaluation. It will include structural business realignment process such as fab downsizing, not only utilization control. As a result, LCD TV shipment in Q4 will be reduced continuously Q-o-Q. Nevertheless, we expect the revenue in Q4 to be increased. It is because we expect the revenue decrease from LCD TV to be offset by volume expansion for plastic OLED for strategic customers. In terms of profitability, it should be noted that profitability could be further affected by the over competition in LCD TV…

[Foreign Language] That brings us to the end of earnings presentation for Q3 2019. We will now take questions. Operator, please commence with the Q&A session.

[Foreign Language] The first question will be provided by Dongwon Kim from KB Securities. Please go ahead with your question.

[Foreign Language] I have two questions. First is about the ramp-up plan for the Guangzhou OLED plant. So I understand that the plan is to increase the capacity to 60,000 this year and to 90,000 next year. So I wonder whether this is the correct understanding of your plan. And also what is the company's target of OLED TV shipment for this year and next? And then the second question is now another player has announced recently about its plan to invest into the QD display. So what is the company's view or opinion regarding such investment plan?

[Foreign Language] Now this is the CFO speaking. And first about your question on the Guangzhou OLED fab, as for the capacity ramp-up to 60,000 for this year it is nearly completed. And then for the additional 30,000 ramp-up for next year, the ramp-up will move ahead on schedule, but then the actual operation is more likely to begin in the early part of the year after that rather than the end of next year. So rather than the operation starting at the end of next year, it is more likely to be the early part of the year after that. And of course, we will share more details with the market as soon as they are ready. And then regarding the panel shipment plans for this year, we had initially announced about 3.6 million, but then it's more likely that it will be slightly less done 3.5 million. And then regarding your question about the other player investing into the QD display. Now as far as we understand, the announcement was for QD display. But then if the QD display as announced is QD OLED then we believe that it would be made using the same technique that we have. In other words, it would be using the blue OLED materials and using the same type of evaporation technology that we do. And if that is the case then based on that understanding then we would welcome another player joining the OLED camp, because then together we will be able to further strengthen the display technology of Korea and we'll be also able to broaden the ecosystem and the camp for OLED. So, I express welcome for another player entering the OLED camp. And let me reiterate the reasons and that is if there are other players in the OLED ecosystem, then this will help broaden the ecosystem itself. And also this will be quite helpful in turning the premium display market more toward the OLED side. So this will further help mainstreaming OLED as the premium display. So that is why we welcome another player entering this the OLED ecosystem. Now, having said that since we have been a few years ahead with the OLED technology, we believe that we have built up sufficient OLED value so far and we will, of course, continue to make preparation to offer our own differentiated value. So, even as other players enter the camp or the ecosystem, we will be able to maintain our differentiated technology as well as unique competitiveness.

[Foreign Language] The next question will be provided by Jung Woo Ko from NH Investment & Securities. Please go ahead with your question.

[Foreign Language] Now, I have some questions about the -- about large-size OLED. Now, first is about your status of the customer base for the OLED TV. And following question is how do you intend to broaden your customer base? And another is about your pricing strategy for OLED.

[Foreign Language] Now, this is Matthew Kim of TV, Marketing. Now, first about your question on the current customer profile. Now, as is already known we have 15 customers and this is likely to keep increasing down the road. So, we will keep broadening our customer base. And this would also be much healthier for the company because this means that we will be able to lessen any reliance or share of any particular customers or -- particular customers meaning that there will be a better balance among the different customers. And another point is now we understand that there have been some concerns expressed in relation to the sharp price decline for the LCD. But then now let me assure you that for the OLED, we have established differentiated value for the OLED and we will continue to make such efforts to have inherent values for the OLED. So, I would say that the situation so far has largely been within our expectation. And as for the pricing strategy, we will be running this strategy in accordance with the increased capacity next year.

[Foreign Language] The next question will be provided by Jong Woo Yoo from Korea Investment & Securities. Please go ahead with your question.

[Foreign Language] Now I also have two questions. Now you mentioned that the OLED TV panel shipment for this year will be falling a little bit shorter -- short of the expectation. So what is the particular reason for that? Is it because of the slower demand for OLED TV? Or is it because of the delay in the ramp-up of the Guangzhou line? And if there has been delay then -- if that is the cause then have all the problems been resolved? And the second question is about the medium- to small-size OLED. So in the third quarter we see that for the mobile side there have been increase in revenue as well as the share out of the total revenue. So we see that the strategic customers' contribution to the revenue is now becoming more visible. And also it was mentioned that in the Q4 the blended ASP is likely to rise. Then what is the expected yield or the plan for ramp-up for the medium- to small-size OLED, the flexible OLED?

Now for the OLED TV, shipment going down slightly, yes, that is because of the Guangzhou line work that had yet to be completed completely. So we had to do some more work in terms of stabilizing the quality and also the production. So yes, there have been -- and yes, it did have an impact on the production volume as well. But then since then -- so right now we are still doing some large batch of fine-tuning and we also need to get the final approval from the customers. But then after that we plan to start the normal operation within the year, but of course that is assuming that all of the issues are cleared by then. And then your question about the plastic OLED. And since -- please understand that I am not at liberty to divulge too much details about this, because this is -- this involves the strategic customers. But then what I can tell you is that now we are in a stable phase where we are able to sufficiently provide the volume that is required by the customer. So from that point of view well there have been some issues before which did not allow us to meet the volume requirement, but then now I would like to point out that those issues have been cleared.

The next question will be provided by Hong-sik Kim [ph] from Hana Financial Investment. Please go ahead with your question.

Now I have some questions about the LCD line reshaping or the adjustment. So what would be the intensity or the pace of the realignment of the LCD lines? And you also mentioned the -- specifically the P7 and the P8 lines. So then regarding them then what would be the extent of the let's say realignment? Let's say what percentage? And also by when do you believe that the realignment or the adjustment will be completed?

[Foreign Language] Now as the market already knows, we have started receiving applications for voluntary retirement last month. So this means that not just the adjustment in the utilization, but we are now looking into -- we are taking a fundamental look into the operation of the lines themselves. And with regards to the scope or the pace of the adjustment well as I have explained earlier with the new CEO we are reviewing the plan from a 0 base. So please understand that we do not have the details ready today to communicate. But then once they are ready then we will be sharing the finalized plan with the market.

[Foreign Language] The next question will be provided by SK Kim from Daiwa Capital Market. Please go ahead with your question.

[Foreign Language] Now I have questions about the display market outlook for next year. Now for the LCD price because of the adjustment in supply, I understand that the LCD price has been on the rise. But then -- so the company has planned to reduce the portion of its LCD business, but still the LCD business will take up a sizable percentage out of the company's overall business. So what is your outlook for the demand and supply dynamics in the LCD TV market next year? And then related question to that is -- or similar question about OLED. So I understand that there have been some changes to your plan on investing into the 10.5G, but I think that is for the longer term. So what is your outlook for the OLED TV market next year? What do you foresee its size to be? And if you can also answer the same question about the plastic OLED that would be appreciated?

[Foreign Language] Now this is Matthew Kim of TV Marketing. And regarding your question about the outlook for 2020 LCD market, because of the business realignment it is quite likely that the demand and supply will reach balance in the fourth quarter of this year. But having said that, there are also the possibilities of new fabs being traded or going into operation in China. So we are rather conservative about next years. And also regarding the pricing -- the price going up or down, well of course, there are still a lot of uncertainties. But overall, because of the uncertainties we remain -- our stance for next year remains quite conservative. [Foreign Language] And about the OLED TV market size outlook for next year. Now as you know we remain the sole supplier of OLED. And rather than focusing on increasing the demand all the time what we are seeking is to have win-win and growth to have a shared growth with customers. So that has been our approach so far. And under that goal we have been preparing the capacity for the past few years. So with this capacity and as we continue to increase customers, we will be trying to create the market together. And the outlook for next year is around mid-6 million units.

[Foreign Language] The next question will be provided by Dong-je Woo from Bank of America Merrill Lynch. Please go ahead with your question.

[Foreign Language] Now I have a question about TV Marketing. Now what I see these days is that customers are going for 80-inch LCD TV at a price around $2000. So when the customers were looking for a 50-inch TV then perhaps OLED offered a very good premium alternative. But then today we see that the customers are more going for ultra-size not even 60-inch but even larger like 70- or 80-inch TV. And the price they are willing to pay might be going lower to somewhere around $1000 level. Then with your Gen 8 OLED fab in China, how do you plan to compete against the ultra-size LCD panel makers in China?

[Foreign Language] Now when we see the application called TV then we see by its nature, the customer base or the customer groups are quite diverse and varied. Now perhaps up to the 50-inch size then regardless of the home or the personal preferences perhaps there was the thinking that, if the price is the same then the larger the better, so up until 50-inch. But then let's say for TV size like 70-inch or 80-inch then in this case you need to have the home or the space that is suitable to this. And also it would be probably preferred by the high-income groups. And in such a case, because of the difference in the nature of the customer group, perhaps the need or their requirements might also be different. So, the market that we target – the market segment that we target is not the customers – not only the customers who are just going for a big size at a cheaper price, but then in our case it would be those who are going for premium, and also new technologies,. and new features. So we intend to remain focused on that target group as we try to increase our consumer base.

[Foreign Language] Now then my second question is about your interest burden. So with your outside financing going over KRW 10 trillion then of course the interest rate that you have to serve is also would go up. So, just based on the effective interest rate of 2% that means that the interest that you have to bear would be about KRW 200 billion. So then can you just give us the average interest payment burden for the – for 2020?

[Foreign Language] Now, this is the CFO speaking. And yes as you have mentioned in terms of net debt, there has been an increase from the early part of this year. So, it is now around KRW 10 trillion, as you have rightly pointed out. And now of course in the first half next year, if there is improvement in the EBITDA then it is also possible that the net debt could go down. But now given the debt level as it is today then with the effective interest rate then it would be about KRW 350 billion per year in terms of the interest burden, so in terms of the financial cost. But then when you look at the financial statements or the profit-and-loss statement then the financial cost would be much lower than that. And that is because now out of the investment, the funding – the funds for construction as well as the interest for the construction fund. Now initially, it would be captured as capital and then it would later on be turned into– recognized as assets. And that is why in the P&L statement the financial cost that you would be actually seeing would be much lower than what I have just explained.

[Operator Instructions] We will take one last question. The last question will be provided by JungHoon Chang from Samsung Securities. Please go ahead with your question.

[Foreign Language] Now I – well this was explained earlier, but then I am asking about this again to get more clarification. So, regarding the LCD fabs you mentioned about the realignment plan and then you mentioned that the realignment at the P7 and P8 are under review. And also you did mention that us with the new CFO in place, now you are reviewing the plan from a zero base again. But then you also mentioned that the -- you have started receiving applications for the voluntary retirement. So it seems as if you at least have the big picture ready or the high-level plan ready. So can you just give us an explanation about the strategic orientation perhaps? So, for example, in terms of the priority, where does your priority lie when it comes to the LCD realignment? So, is it going to be in the TV first, or in the Gen 8 or Gen 7? And then also can we take it that some kind of time line will be ready by the end of this year? And then the second question is, in your presentation the CFO has mentioned that the CapEx would be reduced by about KRW 500 billion this year from the planned KRW 8 trillion. So from where do you intend to cut the CapEx?

[Foreign Language] Now regarding the structural business realignment, please bear with us that this is not the right time to discuss this more in detail. And I ensure that this is also frustrating for you, but then you will just have to give us more time. And you asked whether the time line will be visible by the end of this year. Well, we do hope so, but then we also have to keep in mind that there could be some factors, some unexpected factors that arise in the course of the review. But then, we do hope to have some kind of plan or time line ready by the end of this year or early next year. Now in terms of the orientation, we did explain about the downsizing of some fabs earlier. But then rather than that, the focus of the realignment this time is; now we do have a number of sites, for example, in Paju or in China. And right now what we are looking into is about what type of products to be produced in which fab for us to gain the utmost competitiveness. So right now, what we are thinking about is not about doing this or that for particular fabs, but it's more about looking into the LCD business more at a fundamental perspective. In other words, how we are going to secure fundamental competitiveness in our LCD business to begin with. And then, your question about the CapEx about the KRW 500 billion less than the planned KRW 8 trillion and your question was, from where it was reduced. And let's say that for our strategic projects, they remain unchanged. But then, now in the course of implementing projects or implementing our work, sometimes there are, let's say, ways of doing it that could be different from investing CapEx into it. So if there are other ideas or other viable solutions then and if they are in line with the company's strategic orientation then we could go for such other solutions instead of using the CapEx. And that is why -- that is how we plan to reduce KRW 500 billion.

[Foreign Language] So we will now close Q3 2019 earnings conference call. Thank you once again for joining us today. Please do contact us at the IR team for any additional questions. Thank you.