LG Display Co., Ltd. (LPL) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals mixed results: a decline in operating profit and a net loss, but improved EBITDA and financial health. The Q&A highlights management's focus on OLED growth and strategic partnerships, though concerns about demand visibility and external uncertainties persist. The market cap suggests moderate stock price sensitivity. Overall, the positive aspects are balanced by challenges, leading to a neutral sentiment.
Key Financial Performance
Revenue KRW 7.2008 trillion, rose slightly quarter-over-quarter (Q-o-Q). The increase was due to solid shipment of panels for TVs and notebook PCs, despite changes in the mix of small and medium OLED products.
Operating Profit KRW 168.5 billion, declined Q-o-Q. The decline was attributed to lower shipments of certain small and medium OLED models and one-off costs related to strengthening the company's profit structure and future competitiveness.
Net Loss KRW 351.2 billion, down Q-o-Q. This was primarily due to foreign currency translation loss stemming from the higher year-end exchange rate.
EBITDA KRW 1.162 trillion, with an EBITDA margin of 16%. This reflects continued improvement in business fundamentals and profitability.
ASP per square meter $1,297, down 5% Q-o-Q but up 49% year-over-year (Y-o-Y). The Q-o-Q decline was due to shipment concentration of certain small and midsized OLED models in Q3, while the Y-o-Y increase reflects progress in upgrading the business structure toward OLED.
Inventory KRW 2.546 trillion, declined year-over-year. This reflects progress from efficiency improvement efforts.
Total Debt KRW 12.664 trillion, decreased by KRW 1.886 trillion from the end of 2024. This reduction is part of efforts to wind down nonstrategic businesses and improve operating efficiency.
Net Debt KRW 11.0910 trillion, fell by KRW 1.437 trillion Y-o-Y. This reduction further strengthens financial soundness.
Debt-to-Equity Ratio 243%, improved by 20 percentage points Q-o-Q and 64 percentage points Y-o-Y. This improvement reflects strengthened financial soundness.
Net Debt-to-Equity Ratio 141%, improved by 10 percentage points Q-o-Q and 14 percentage points Y-o-Y. This also reflects strengthened financial soundness.
OLED Revenue Share 65% in Q4, unchanged Q-o-Q but up 5 percentage points Y-o-Y. Year-to-date, OLED share rose to 61% from 55% last year, reflecting the continued upgrade toward an OLED-centric business structure.
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Operating Highlights
OLED-centric business structure: OLED products accounted for 65% of total revenue in Q4, up 5 percentage points Y-o-Y. Year-to-date, OLED share rose to 61% from 55% last year, reflecting a steady upgrade toward OLED-focused operations.
Large LCD business termination: The company terminated its large LCD business with the sell-off of Guangzhou LCD plants in 2025.
Automotive OLED: The company sustained its competitive advantage in automotive OLEDs, leveraging its differentiated product and technology portfolio.
High-end market demand: The company is responding to high-end market demand for medium-sized OLEDs across product segments by leveraging technological leadership and mass production experience.
IT LCD focus: The company is focusing on B2B and differentiated high-end IT LCDs, reducing low-margin products, and achieving meaningful profitability improvement.
Voluntary retirement program: Costs associated with voluntary retirement programs for domestic and overseas employees exceeded KRW 90 billion, aimed at improving workforce efficiency.
Inventory rationalization: Inventory at quarter end declined Y-o-Y to KRW 2.546 trillion, reflecting progress in efficiency improvement efforts.
Debt reduction: Total debt decreased by KRW 1.886 trillion from the end of 2024 to KRW 12.664 trillion, and net debt fell by KRW 1.437 trillion Y-o-Y to KRW 11.091 trillion.
Profitability-focused product portfolio: The company is maintaining a profitability-focused product portfolio, reducing low-margin midsized LCD models.
Cost innovation and operational efficiency: The company is driving cost innovation and operational efficiency activities to stabilize business performance amidst external uncertainties.
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Risk or Challenges
Lower shipments of small and medium OLED models: Operating profit declined due to lower shipments of certain small and medium OLED models quarter-on-quarter, impacting revenue and profitability.
One-off costs for profit structure and competitiveness: Costs related to voluntary retirement programs, incentive payments, and inventory rationalization exceeded KRW 90 billion, affecting Q4 financial results.
Foreign currency translation loss: Net loss of KRW 351.2 billion was primarily due to foreign currency translation loss stemming from higher year-end exchange rates.
Decline in ASP per square meter: ASP per square meter fell 5% quarter-on-quarter due to shipment concentration in Q3, impacting revenue.
External uncertainty and market volatility: Persistent external uncertainties, including macroeconomic-driven demand, trade environment changes, and supply chain stability, pose risks to business performance.
Seasonal decline in shipment area and ASP: Shipment area is expected to fall across all categories in Q1 due to seasonality, with ASP per square meter also projected to decline.
High debt levels: Despite improvements, the company still has a high debt-to-equity ratio of 243%, which could impact financial flexibility.
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Guidance & Outlook
Q1 2026 Shipment Area and ASP: Shipment area is expected to fall across all categories in Q1 due to seasonality. ASP per square meter is also expected to fall slightly Q-o-Q but will remain above the $1,200 line, up by more than 50% Y-o-Y. Total shipment area is projected to decrease by low 20% level from the previous quarter, and ASP per square meter to decline by mid-single-digit percent.
OLED Business Growth: The company will focus on growing its OLED business to stabilize performance amidst external uncertainties. OLED revenue share reached a record high of 61% in 2025, and the company plans to continue expanding this share.
Small Mobile OLED Panels: The company plans to expand panel shipment by leveraging technological leadership and strengthened customer partnerships. It will also execute R&D and new technology investments to grow future opportunities.
Medium-Sized OLED Panels: The company will respond to high-end market demand across product segments by leveraging technological leadership and mass production experience. It will also assess market size and conversion pace to enhance competitiveness.
IT LCD Panels: Focus will remain on B2B and differentiated high-end LCD products while reducing low-margin products. This is expected to lead to meaningful profitability improvement and a potential turnaround in 2026.
Large OLED Panels: The company aims to solidify its leadership in the premium market through a diversified TV and gaming OLED panel lineup. It will expand business results and pursue cost improvements to maintain stable operations.
Automotive Displays: The company will sustain its competitive advantage and create customer value through its market leadership and differentiated product and technology portfolio.
Capital Expenditures (CapEx): CapEx in 2026 is expected to be at the KRW 2 trillion level, up Y-o-Y. This includes investments to enhance OLED technological competitiveness and strengthen the OLED business for future readiness.
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Shareholder Return Plan
The selected topic was not discussed during the call.
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Key Q&A
Q:What is the company's outlook for each business and expected business performance for the year?
A:The company aims to continue growing the share of OLED in revenue, driving up profitability. They are focused on becoming a technology-centric company and achieving profitability in all business segments. Efforts to improve operational efficiency and competitiveness will continue.
Q:What are the company's new strategic priorities or tasks for the mid- to long-term?
A:The company aims to become a normalized and competitive company by improving technology, cost, product, and operational competitiveness. They plan to complete a business structure that ensures profitability in all segments and regain market trust.
Q:What is the target for smartphone panel shipments this year, and what opportunities exist given changes in product launch cycles and competitor readiness?
A:The company aims to outpace last year's shipment of mid-70 million units. They are leveraging proven smartphone panel development and production capabilities to address demand and new technology readiness efficiently.
Q:What is the company's perspective and intended response to the memory semiconductor trends?
A:The company acknowledges potential impacts such as increased display pricing and dampened demand due to rising memory prices. They are monitoring demand trends and volatility carefully to address any arising impacts.
Q:What is the company's outlook for the IT business and the possibility of a turnaround?
A:The company is focusing on high-end clients and reducing low-margin products, leading to improved profitability year-over-year. However, full market recovery remains uncertain due to external factors like rising component prices and supply chain disruptions.
Q:Why is the company not investing in an 8.6 gen plant, and what is the outlook for IT PC OLED?
A:The company sees insufficient demand visibility and high external uncertainties to justify an 8.6 gen investment. They are monitoring market conditions and focusing on maximizing existing infrastructure while developing future-ready technologies.
Q:What is the outlook for TV and monitor OLED profitability this year?
A:The company expects profitability to improve due to cost improvements and lower depreciation. They aim to grow panel shipments by 10% year-over-year and strengthen their white OLED lineup for TVs and monitors.
Q:How will the company respond to potential price pressures from TV set companies?
A:The company plans to strengthen technology and product differentiation, expand partnerships with global strategic partners, and optimize production between TVs and monitors to improve profitability.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details about customer-related information, such as smartphone panel shipment numbers and customer strategies. They also did not commit to an 8.6 gen investment, citing insufficient demand visibility and external uncertainties.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Director afternoon
Display result
Kim Sung
President charge
Shipment
Vice President
addition
change trade
conference
conversion
cost KRW
debt KRW
employee
end KRW
evening
fundamental structure
incentive payment
investment readiness
item
loss
margin product
member
point percentage
point shipment
portfolio
presentation
product inventory
product seasonality
production strategy
progress
rationalization
retirement program
share percentage
shipment area
structure competitiveness
turnaround year
upgrade
volatility market
work
LPL Transcript
LG Display Co., Ltd. (LPL) Q4 2025 Earnings Call Transcript
Unknown1-28
The earnings call reveals mixed results: a decline in operating profit and a net loss, but improved EBITDA and financial health. The Q&A highlights management's focus on OLED growth and strategic partnerships, though concerns about demand visibility and external uncertainties persist. The market cap suggests moderate stock price sensitivity. Overall, the positive aspects are balanced by challenges, leading to a neutral sentiment.
LG Display Co., Ltd. (LPL) Q3 2025 Earnings Call Transcript
Positive10-30
The earnings call indicates strong financial performance with significant improvements in operating profit and EBITDA. OLED products are driving revenue growth, and the company is focused on cost innovation and strategic partnerships. Despite some Q&A concerns, management's strategies appear robust. The market cap suggests moderate stock price movement, leading to a positive outlook.
LG Display Co., Ltd. (LPL) Q2 2025 Earnings Call Transcript
Positive7-24
The earnings call reflects positive sentiment with strong financial performance, including a significant net income and EBITDA margin. The strategic shift to OLED and cost efficiency improvements are promising. Despite shipment declines in some areas, ASP increases and debt reduction are positive indicators. The Q&A section highlights growth expectations in the smartphone business and OLED monitors, though some details remain confidential. Considering the market cap, the stock is likely to experience a positive movement in the range of 2% to 8% over the next two weeks.
LG Display Co., Ltd (LPL) Q1 2025 Earnings Call Transcript
Unknown4-24
The earnings call reveals several concerns: a mid-20% decline in area shipment due to the LCD TV business exit, investment risks, and competition in the IT segment. Despite a 15% revenue increase, the absence of a share repurchase plan and lack of clear guidance on adjustments to business plans amid uncertainties add to negative sentiment. The Q&A section highlights management's evasive responses and external challenges, further impacting the outlook. Given the $4.02 billion market cap, these factors suggest a negative stock price movement of -2% to -8%.
LPL Report
Frequently Asked Questions
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