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Edited Transcript of 066570.KS earnings conference call or presentation 29-Apr-20 12:00pm GMT

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Update time : 2020-05-27 16:33:17

Q1 2020 LG Electronics Inc salary Call

Seoul can 6, 2020 (Thomson StreetEvents) -- Edited Transcript of LG Electronics Inc salary session summon or presentation Wednesday, April 29, 2020 can 12:00:00pm GMT

TEXT translation of Transcript

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Corporate Participants

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* Dustin Lee

LG Electronics Inc - Team Leader, IR Communications team

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Presentation

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Operator [1]

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Good morning, and good evening. First of all, thank you crude although joining this session call. And now we will quit the session of the Fiscal Year 2020 First portion salary Results by LG Electronics.

(Operator Instructions)

Now we shall quit the presentation above the fiscal year 2020 first portion salary results by LG Electronics.

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Dustin Lee, LG Electronics Inc - Team Leader, IR Communications team [2]

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Hello. This is [Dustin Lee], the Team chief of LG Electronics IR communication team. Thank you although attending LG Electronics' 2020 First portion salary free session Call.

Before we begin, amuse exist notified that 2020 first portion regulation and the contents of LG Electronics' salary free can reform during the last publication process by exterior auditors. And farther regulation outlook can alter depending above just surroundings changes and strategic modifications.

The order of the session summon is: first, consolidated salary and outlook; and second, regulation and outlook by piece can sequence.

Now we will quit from LG Electronics' consolidated 2020 first portion regulation and second portion outlook.

The company's consolidated sales can the first portion of 2020 were KRW 14,277.8 billion (sic) [KRW 14,727.8 billion], and operating allowance was KRW 1,090.4 billion. Sales can first portion decreased Q-o-Q and Y-o-Y owing ought sales reduce can MC piece and the impact of COVID-19. Operating income, in spite of the impact of COVID-19, increased Q-o-Q and Y-o-Y, driven by sales expand can premium family appliance, product mix improvement of TV product and hard profitability can brood solution division.

The following is a concise abstract of first portion 2020 regulation by brood division.

Home tool and stand solution piece recorded a revenue of KRW 5,418 billion, operating allowance of KRW 753.5 billion and 13.9% can profitability. family entertainment piece recorded revenue of KRW 2,970.7 billion, operating allowance of KRW 325.8 billion and 11% can profitability. Mobile communications piece recorded revenue of KRW 998.6 billion, operating loss of KRW 237.8 billion and minus 23.8% can profitability.

Vehicle constituent solution piece recorded revenue of KRW 1,319.3 billion, operating loss of KRW 96.8 billion and minus 7.3% can profitability. brood solution piece recorded revenue of KRW 1,709.1 billion, operating allowance of KRW 212.2 billion and 12.4% can profitability.

The detail of each piece will exist explained afterward can the regulation and outlook by piece section. The next is benefit and loss and money flow of the first portion of 2020.

In condition of benefit and loss, net allowance reflecting econmic income/expense, equity manner gain/loss, other nonoperating income/expense and allowance impose charge recorded KRW 1,086.7 billion. although money flow, money flow from operating activities can the first portion was KRW 104 billion. money flow from investment activities was minus KRW 120.7 billion. although a result, net money flow amounted ought KRW 31.6 billion and reflecting money flow of KRW 53.8 billion from econmic (sic) [financing] activities. money flow -- sorry. money and money match rest can the target of the first portion increased by KRW 85.4 billion and recorded KRW 4,862.8 billion.

Next is the chief econmic place and indicators although the first portion of 2020. although of the target of the first quarter, goods amount is KRW 45.6 trillion, liability amount is KRW 28.2 trillion and equity amount is KRW 17.4 trillion. crude leverage ratios, of which liability ought equity, debt ought equity and net debt ought equity, decreased quarter-on-quarter. The figures hint the company is can a robust econmic condition.

Next is the outlook of second portion of 2020. can condition of brood environment, just demand reduced owing ought COVID-19 and cheap rough grease allowance trend continued. although well, economic indicators deteriorated and doubt can upcoming outlook increased. can this situation, we plot ought direct resource efficiently and capture competitive benefit can products ought strengthen brood fundamentals can the mid- ought long-term perspective and build the basis of growth after COVID-19 by developing new brood opportunities. With crude things considered, revenue and benefit are expected ought reduce quarter-on-quarter, year-on-year owing ought the impact of COVID-19.

The next is the regulation of first portion and second portion outlook by each division. ago moving on: IT brood can HE piece and CEM brood can others are transferred ought BS division. although a originate of the reorganization ought enlarge B2B business, the figures, including the previous years, are restated based above reorganization criterion hereinafter.

We will begin with the family tool and stand solution division. can the first portion of 2020, sales growth trend continued until February. besides sales can March decreased owing ought the impact of COVID-19 and recorded KRW 5.4 trillion. although profit, in spite of unfavorable factors such although increased marketing expenses, operating allowance increased year-on-year driven by the robust sales can system air-conditioning and steam family appliances too although cost-saving activities.

In the second portion of 2020, doubt can brood surroundings is expected ought exist higher than ever owing ought the global just demand reduce caused by COVID-19, and competition is expected ought exist intensified among consumer electronics companies. can this situation, sales refuse is expected. besides we will list an effort ought benefit additional sales opportunity along real-time monitoring of just and earn profitability by optimizing resource balancing and cost-saving activities.

The next is HE division. can the first portion of 2020, owing ought COVID-19, global supply constraints and mobility restrictions eat reduced just demand and caused sales reduce quarter-on-quarter and year-on-year. can condition of profit, in spite of the macroeconomic deterioration such although reduced demand and vulnerable exchange rate, improved profitability driven by expanded sales volume of premium products such although OLED, NanoCell, large-size TV; and regulation efficiency.

In second portion of 2020, just demand is expected ought sharply descend although many countries abstract mobility restrictions owing ought COVID-19. under the premise of the swift cry on just demand, efforts will exist made ought further profit-oriented brood operations by increasing the weight of premium product, online sales and optimal resource management.

Moving above ought MC division. can the first portion of 2020, sales decreased quarter-on-quarter, year-on-year owing ought supply circulate of odm suppliers and decreased demand caused by conserve shutdown can EU, Lat Am from COVID-19 outbreak. can language of profit, expenses eat been saved along effective marketing goods management and labor charge reduction from relocation of product site, besides benefit decreased year-on-year owing ought sales decline.

In second portion of 2020, just demand is expected ought refuse significantly year-on-year owing ought COVID-19, and competition among global manufacturers ought earn just segment will exist intensified. under the circumstances, we will launch 5G mass-premium product with eminent create and features, strengthen mid-range product lineup, enlarge online sales and enhance regulation efficiency ought proactively direct the modern difficult conditions.

The next, vehicle constituent solution division. can the first portion of 2020, in spite of infotainment brood growth driven by the sales expand can new projects, sales decreased year-on-year, quarter-on-quarter owing ought the sales refuse of xEV components and ZKW automotive lightings. although profit, operating loss cottage continued owing ought the sales reduce related ought mill shutdown of U.S., EU automakers caused by COVID-19 pandemic.

In second portion of 2020. under the impact of COVID-19, global demand of vehicle components can second portion is expected ought refuse owing ought sales reduce of U.S., EU automakers. Considering demand fluctuation of global automakers, we plot ought minimize the danger by continual brood structure improvement activities.

The final is brood solutions division. First of all, amuse exist notified that econmic results of IT and CEM brood eat been restated ought BS piece starting 2020 first portion salary release. can the first portion of 2020, in spite of the reduce can demand and supply owing ought the impact of COVID-19, sales increased year-on-year, quarter-on-quarter from IT, solar module growth. although profit, BS piece achieved double-digit profitability driven by the growth of solar modules and stable benefit can news display business.

In the second portion of 2020, in spite of a refuse of just demand, difficulty can product from mobility restriction can many countries and reinforcement of fundamental ought hinder expansion of COVID-19, new brood opportunity related ought untact trend and distant knowledge are expected ought exist enlarged. can this situation, we plot ought minimize the danger of sales refuse by expanding online sales of IT products and promoting news display products related ought occupation from family and distant knowledge environment.

Up ought now was the first portion salary and second portion outlook of the company. From now on, we will impress above ought Q&A session.

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Operator [3]

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(Operator Instructions)

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Dustin Lee, LG Electronics Inc - Team Leader, IR Communications team [4]

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Okay. Yes. We will now target LG Electronics 2020 First portion salary free session Call. if you eat any farther questions, amuse face LG Electronics IR team, and we will illustrate can detail. Thank you.

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