LG Display Achieves Record High Performance... "Will Further Widen OLED Gap with Samsung" (Comprehensive Report 2)

Driving Large OLED Performance, Achieved 2.2306 Trillion KRW Profit Turnaround Last Year
Last Year's Sales Hit Record High Since Establishment, Operating Profit Recorded Second Highest Ever

[Asia Economy Reporter Lee Hyeyoung] LG Display announced on the 26th that its annual sales last year reached KRW 29.878 trillion, with an operating profit of KRW 2.2306 trillion.

Annual sales increased by 23% compared to the previous year (KRW 24.2616 trillion), achieving an all-time high. Operating profit exceeded KRW 2 trillion, marking the second highest ever and successfully returning to profitability after three years.

This was driven by the popularization of large-sized organic light-emitting diode (OLED) in the premium market, strengthening the foundation of the small and medium-sized OLED business, and LCD structural innovation focused on high-end IT products.

Sales in the fourth quarter of last year were KRW 8.8065 trillion, and operating profit was KRW 476.4 billion. Sales increased by 22% and 18% compared to the previous quarter (KRW 7.2232 trillion) and the same quarter last year (KRW 7.4926 trillion), respectively, recording the highest quarterly sales.

Operating profit decreased compared to the previous quarter (KRW 529.3 billion) due to a decline in panel prices for LCD TVs and one-time year-end expenses. Net profit was KRW 179.5 billion, and EBITDA was KRW 1.645 trillion (profit margin 19%).

By product sales proportion based on sales, TV panels accounted for 27%, IT panels (monitors, notebook PCs, tablets, etc.) 42%, and mobile and other panels 31%.

LG Display plans to secure stability by continuously reducing volatility even as demand enters an adjustment phase after the COVID-19 special demand this year. To this end, it will increase the proportion of businesses that can stably generate results through strategic collaboration with customers beyond supply-demand type businesses that are greatly affected by the market, and expand its business areas to games and transparent displays based on OLED to deliver new customer experiences and value.

Despite the overall TV market shrinking by 13% last year, large OLED solidified its position by leading the premium market. OLED TV panel shipments grew sharply by more than 70% compared to the previous year, turning profitable in the second half and reaching the break-even point (BEP) for the year. This year, it plans to gradually expand profitability based on shipment growth of more than 20% compared to the previous year and strengthened business capabilities.

LG Display plans to apply ‘OLED.EX’ to all series of OLED TV panels starting from the second quarter, accelerating the popularization of OLED in the premium TV market. ‘OLED.EX’ is a next-generation TV panel that applies ‘deuterium technology’ and ‘personalization algorithms’ to the organic light-emitting elements, which are the core of OLED picture quality, increasing screen brightness (luminance) by 30%, enabling precise color reproduction, and reducing the bezel by 30%.

For small and medium-sized OLEDs, which have entered a stable growth trajectory, profitability in the mobile sector will be further improved through new models and expansion of high-end products in the second half. Additionally, based on differentiated competitiveness, it plans to dominate the medium-sized OLED premium market and expand into the entire mobility industry, including automobiles.

The LCD sector will continue to pursue a selection and concentration strategy focused on high-end IT products.

"Far superior comprehensive competitiveness compared to Samsung... We will further widen the gap"

During the conference call for the fourth quarter earnings announcement held on the same day, LG Display expressed confidence regarding Samsung Display, which has emerged as a new competitor in the OLED market.

Lee Taejong, head of large marketing, responded to a question about LG Display’s competitiveness compared to Samsung’s QD (Quantum Dot) OLED by saying, "Since the competitor’s product has not yet been released, an accurate comparison will only be possible after its launch," but added, "LG Display, which has been in business for more than 10 years, has far superior comprehensive competitiveness in terms of products, cost competitiveness, economies of scale, and customers. We will continue to widen this gap."

Regarding media reports that LG Display may supply OLED panels to Samsung Electronics in the future, Kim Seonghyun, Chief Financial Officer (CFO), said, "It is difficult to make specific comments on matters related to particular customers," and added, "This year, the company’s policy is basically to pursue growth centered on existing customers."

Meanwhile, LG Display announced that it has established a dividend policy for the fiscal years 2021 to 2023 to return 20% of consolidated net profit to shareholders to enhance shareholder value. Accordingly, it plans to pay a cash dividend of KRW 650 per share, totaling KRW 232.6 billion. The dividend policy will be finalized after approval at the regular shareholders’ meeting in March.