[Foreign Language] [Interpreted] Good morning. This is Daniel Lee, in charge of LG Display's IR. On behalf of the company, let me thank all the participants at this conference call. Today, I'm joined by the CFO, DH Suh; Heeyeon Kim, Senior Vice President of Corporate Strategy Group; Seung Min Lim, Vice President of Corporate Planning; Stephen Ko, Vice President of TV Marketing; Jae Yong Kwon, Vice President of IT, Strategy and Marketing; and Ki-Joon Jin, in charge of Auto Marketing. The conference call today will be conducted for one hour in both Korean and English, starting with the presentation on the financial results of Q2 2021 and the company's outlook for Q3, followed by Q&A. Please refer to the IR presentation document in the company's website for more details on the financial results of Q2 2021. 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 IFRS standards prepared for your benefit and have not yet been audited by an outside auditor. With that said, we will now start with the presentation on Q2 2021 earnings results. Let me start off with our business performance in Q2. Revenue in Q2 was KRW 6.966 trillion, up 1% QoQ despite the seasonality. There was increase in TV shipments, including OLED TV and continued solid demand for IT. Operating profit was KRW 701 billion, an increase QoQ, thanks to rise in LCD panel price and improvement in OLED TV profitability. Operating margin was 10% with EBITDA margin at 25%. Net profit was KRW 424 billion. Next is area shipment and ASP. Area shipment in Q2 was 8.91 million square meters, up 4% from the…

[Foreign Language] [Interpreted] Good morning. This is DH Suh, CFO of LG Display. Let me first thank all of you, all stakeholders, including our shareholders, investors and analysts for your support and interest in LG Display, even as uncertainties continue and the extended impact of COVID-19. First and foremost, I wish for your health and safety. I will now brief you on the company's Q2 performance. Revenue was KRW 6.966 billion, the highest ever in Q2. Operating margin recovered to double digit and EBITDA margin at 25.4% was the highest since Q3 2009. Breaking down the performance by business, large OLED TV shipments in the first half was 3.5 million units, which is around 80% of last year's shipment. It has significantly bolstered its position in the premium TV market. Global OLED TV sales - the actual global sales of OLED TV sets in the first half of 2021 was over 60% YoY in growth. Thanks to this development, we have been expanding our market share in the over $1,000 premium TV market. IT also kept up its improvement despite some parts supply disruptions, thanks to a solid demand for enterprise and education. The company also has strong competitiveness in both the products and customer base in IT and has been achieving solid performance. For the mobile business in Q2, there was some typical seasonality but we focused on stabilizing our development, production and quality to respond to the large volume for our strategy clients in the second half. Next is the company's outlook on Q3. As we move into positive seasonality, demand growth is expected across all segments, TV, IT to mobile. Annual shipment for OLED TV is planned at below 2 million units. While improved performance is expected quarter-on-quarter in all products of IT on the back of…

[Foreign Language] [Interpreted] Now Q&A session will begin. [Operator Instructions] The first question was presented by Kim Dong-won from KB Securities. Please go ahead with your question.

[Foreign Language] [Interpreted] Now first of all, congratulations on the good performance. I have one question each word LCD and OLED. And first, when we look at the revenue share, then it seems as if it is the LCD TV where the profitability is the most susceptible to change depending on the changes in the pricing. But I wonder what was the share out of revenue in the second quarter of the LCD panels and also looking ahead to the second half of the year, what do you see in terms of the price trend for the LCD panel? And then for next year, the company plans to have the LCD exit and are there any changes to your exit strategy for LCD? And the second question is regarding OLED. I do agree, according to the [indiscernible] presentation that the company was able to lay the basis for profitability, thanks to improved cost structure in the small-to-mid size panels as well as the increased sales of large size panels. Now then, but then there are also some press reports saying that there could be need for additional ramp up of the Guangzhou plant or the E6 lines. If that does happen, then it will increase additional costs including depreciation and amortization. So then do you believe that if this does happen, then it could potentially delay the timing of the OLED business turning around to profit?

[Foreign Language] [Interpreted] I take it that you asked questions about the LCD followed by OLED so let me respond to the second question first. [Foreign Language] [Interpreted] Now for both the large size OLED and small-to-mid size plastic OLED, on doesn't the company need additional investment, meaning that it could potentially delay our turn around to profitability, is the gist of your question as I understand it. Now first of all, let me say that for the past few years, of course, on one hand, there was the sluggishness of the LCD market. Also on the other hand, the company had to invest a large sum into OLED but at the same time was not able to have a timely mass production or secure revenue in a timely manner. That - so these are also some of the issues that pose challenges for the company. [Foreign Language] [Interpreted] So then obviously, this was also an opportunity for us to remind ourselves of the very fundamental principles of making investment especially large scale one. In other words, or in the future whenever we make large scale investment, then this would - the decision will be based on a very thorough and objective analysis of the status quo as well as the outlook. In other words, whether we have the capability and whether it will be possible for the volume as well as profitability as a result of making investment. So again, this was a chance for us to further consolidate our principle in investment, meaning that we should move ahead with any type of large scale investment only when such conditions are fulfilled. So no matter the type of investment, we will make sure that those principles will be fulfilled. And also, we will make sure that mass production will…

[Foreign Language] [Interpreted] The following question will be presented by Kim Hyun-soo from Hana Financial Investment. Please go ahead with your question.

[Foreign Language] [Interpreted] I have two questions, and one is regarding the EBITDA guidance, because it was mentioned earlier in the presentation that the company will maintain the principle that the CapEx execution will remain within EBITDA. Now, then, of course, because of the higher earnings expected for this year and next, perhaps it would be difficult for you to give us a definitive response to this, but then, what would be the EBITDA guidance for this year and next? And the second question is for the CapEx. Now, there are talks of P-OLED ramped up in response to IT demand and also further investment in mobile area as well. And regarding the investment, you have been conservative and even now, your response has been a conservative. And of course, we do understand that this requires cautious review and decision making. So I also do understand that it would be difficult to give a conclusive response at this point but do you believe that investing into the P-OLED ramp up would be necessary?

[Foreign Language] [Interpreted] First regarding the EBITDA guidance, now, as it stands today, the company's depreciation and amortization for this year and also will be similar for next year but it would be around KRW 4.5 trillion. So then, assuming that there is going to be BEP in the second half of the year, then KRW 4.5 trillion plus operating profit of KRW 1.1 trillion would be about KRW 5.7 trillion. Of course, at this point, we cannot pinpoint what the operating profit is actually going to be in the second half. But then, looking at the market expectations, then perhaps that is where it is going to be. But then with the KRW 4.5 trillion in depreciation amortization, then also with the operating profit, then I would say that the EBITDA would be around KRW 5.5 billion to KRW 6 billion. And that is what we need to achieve and I believe that that would be achievable. [Foreign Language] [Interpreted] And for the plastic OLED, especially investment in IT and mobile, what I can tell you at this point is that these issues are under review at this time. There has been some progress in the review. So once we have something final and concrete to share with the market, we will do so without delay. But I would like to ask for your patience a bit longer. We will take the next question.

The following question will be presented by Woo Dong-je from Bank of America. Please go ahead with your question.

[Foreign Language] [Interpreted] Also congratulations on the excellent performance that makes me also feel a lot better. Regarding the quarterly performance, then I see that the number one contributor to the quarterly earnings this time was once again the LCD, despite the seasonality. And it appears as if the company feels that it is also in a good position with the LCD perhaps because of its differentiation. But then now looking at the IT use LCD, for example, with the oxide, now what are the reasons, if any, that the companies in Taiwan, Japan or China not do as well as the company today? And also looking at China, then it seems as if they are making large scale investment not only Gen 8 LCD, but now and in Gen 10 LCD. This means that the LCD TV price, which had gone up by over 100% recently, is now at the risk of falling dramatically. Of course, the company mentioned its response strategy, for example, strengthening its partnership with the strategic clients, and also strengthening your differentiation. But still, when we look at the history of LCD so far, especially for the past 10 years, then whenever there has been an oversupply then without exception it led to plummeting crisis. So perhaps that is a risk that could materialize as early as the end of this year or next year. So I would say that that could be one of the biggest risks for the company and what can the company do regarding this potential risk? Then also it appear, this is the last question and it seems as if the facility investment has been consistently moving going over KRW 1 trillion for every quarter. But from my perspective, about KRW 500 billion to KRW 600 billion of facility investment per quarter would be sufficient. So because the EBITDA is growing, does this mean that we also have to increase the facility investment in correspondence to the growth in EBITDA or perhaps it could just stabilize the CapEx at around KRW 3 trillion per year and then for the surplus EBITDA, maybe we can utilize that as free cash flow and perhaps use that for the conversion or use that for share buyback to assure the shareholders perhaps that would be a better strategy, than providing cash dividends?

[Foreign Language] [Interpreted] Regarding your first question about the differentiation of IT products, and I understand that your question was about the competitors in China, Taiwan or Japan, and of course that some are utilizing IPS and some are also utilizing oxide for some - for some products. But I understand that there is still some entry barrier especially in infrastructure or the development process. And of course, it's I'm not in the position to tell you what the other players are thinking or what their judgment is but then as far as understand at this point there is still quite a high entry barrier. [Foreign Language] [Interpreted] And for the LCD TV, the price potentially falling and how the company intends to respond to this potential risk, now, as we had reiterated earlier, the challenges for the company last year and the year before, not about the LCD itself, because for the LCD business, although the - let's say, for the LCDs, the sales were falling, but still, we were never in the red with the LCD. So it was not actually the LCD business itself that was the cause of the company's challenges, but rather for the large size OLED or the plastic OLED, after making the investment, we were not able to go on our scheduled track for batch production and sales. As a result, we were amassing large size deficits. So those were the biggest cause of our difficulties for the past few years. And now these issues are largely going away. Then now what are we going to do about the LCD's potential risks? Now regarding the fall - potential fall in the prices, we have our scenario planning and we will be making preparations in accordance with the scenarios. And for the LCD panel…

The last question will be presented by Kim Sung Kyu from Daiwa Securities. Please go ahead with your question.

[Foreign Language] [Interpreted] I have two questions. One is about the OLED TV. I see that the sales in the first half for the OLED TV were quite high. And in the second half, considering the positive seasonality, I believe that it is more than likely that the company will be able to achieve the target of 1 million - the 8 million units. And then for - but then for the LCD TV, as was mentioned earlier, it is likely that demand is going to fall earlier than expected, which could then have an impact on the demand and pricing as well. But then in addition to this, regarding the OLED TV, does the company believe that there are also some, let's say, pressure, so downward pressure on the pricing so that you will be able to achieve the target for the second half of the year? So do you believe that there is such a risk of the downward pressure on the OLED TV pricing? And the second question is, it seems as if this year the shipment is to double, then first in the Guangzhou fab there is an additional capacity of 30,000 that is available, but then for next year then what is the company's target capacity? And there are already so the target shipment, and there are talks of 10 million or even 11 million, so could you give us a guidance about the new target shipment next year? And then the second question is about the automotive display business. Because, in the first half, there have been a lot of issues regarding the automotive semiconductor supply. And in the second half, we see that the issue has been somewhat eased for EVs, but overall the semiconductor supply issues continue and perhaps all the way into late this year as well. So, I'll just like to ask for the company's update on the automotive display business as well as OLED?

[Foreign Language] [Interpreted] First question was I believe on the pricing of OLED in relation especially to the LCD price. So whether the fall in the LCD price will come around to affect the OLED price, especially what is also going to be in the shipment for next year? Now for the first question about the pricing, yes, it is true that because the LCD and OLED are the two leading panels for TV, they tend to exchange impact with each other. But as you would also know, for the LCD TV, while the price for the LCD TV has close to doubled compared to last year, it has actually not affected the OLED TV pricing much. And that is because we set the OLED pricing not in relation to the LCD, but based on a very thorough market research. So based on the market research, and we try to determine the sweet spot in terms of the OLED TV pricing that would be acceptable to as many consumers in the market as possible. Then based on this we also discuss the panel pricing with the customers, with the set makers and because of this, of course the changes in the LCD price could have some impact on the OLED price as well but then this will not directly affect the price because we look to the market to come up with the acceptable - the appropriate pricing. So given this situation, we believe that any changes in the LCD pricing in the future but despite that, we would be able to manage the OLED price. [Foreign Language] [Interpreted] There regarding the OLED shipment for next year, of course we are in the preparation for this but yes, we do have the capacity of additional 30K in Guangzhou and then…

We will now close Q2 2021 earnings conference call for LG Display. Thank you once again for joining us today. Please do contact us at the IR team for any additional questions. Thank you