The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Jong Wook Lee - Samsung Securities Co. Ltd., Research Division - Analyst
: (foreign language) I had 2 questions. First -- my first question is related to H&A. Due to impact of COVID-19, we saw a dramatic increase of demand
for home appliances in year 2020. And can you share the current status of the global demand compared to the end of October? And can you also
forecast the year 2021? I believe that a strong demand of traditional home appliances was attributable to strong housing market in the United
States. And considering the existing replacement cycle for the traditional appliances, can you share your sales upside for 2021?
And my question -- second question is related to VS. With the establishment of the joint venture with Magna, there were, and there will be many
changes within VS company. So can you share your overall corporate strategy in regard to this point?
Unidentified Company Representative
(foreign language) So I'll take the question regarding H&A. The global demand for home appliances in 2021 will show a meaningful expansion
centering around large capacity and product featuring hygiene and health care functions.
(foreign language) According to the recent market research, we found out that in the advanced markets, such as the European regions and the
[green] markets, we saw an increase of market demand for large capacity and the product with certain functions. And during a certain period of
time, the demand for the product featuring hygiene and health care function showed a slower decrease compared to the major home appliances.
So given that, we forecast the demand for those product to continue to grow.
(foreign language) In the past, people used to give a lot of thought for buying the necessity products. However, recently, like they're buying the
IT devices, they are keenly interested in the new product and new category home appliances featuring new technologies.
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(foreign language) And we forecast the demand for the product with high specifications such as the large capacity and product with hygiene and
health care functions and high technology to continue to grow. And if we capture these opportunities and link it into the actual sales opportunity,
then we believe that we can replace -- we can shorten the replacement cycle for the traditional appliances as well.
(foreign language) As you already know, we are running 3 different businesses: infotainment, electric vehicle component and vehicle lens.
(foreign language) Based on our growth, our target is to become the top-tier supplier for vehicle components.
(foreign language) This explain the business strategy by business segment. For the infotainment area, we are focusing on the development of
software capability.
(foreign language) For the electric vehicle component area, there the joint venture that we are going to establish, we will focus on integrated
power-generating module, which is the key component for the JV.
(foreign language) And for the vehicle lamp area, we are going to solidify our company standing by expanding the OEM customer base of DKW.
Also, we are going to enter into the mass-tier brands so that we can expand our portfolio for our products and programs.
Question: Jeongu Ko - NH Investment & Securities Co., Ltd., Research Division - Analyst
: (foreign language) I have 2 questions regarding TV business. First, regard the mini LED TV that you introduced this year, some are concerned that
there can be sales cannibalization of OLED TV due to the introduction of mini LED TV. Can you share with us your strategic directions for each
product group, mini LED TV and OLED TV?
My second question regards the profitability of TV business in 2021. You have already shared with us the overall market projection. But considering
the increasing panel price and supply issues of the chipsets, what is your expectations of sales revenue for 2021?
Unidentified Company Representative
(foreign language) Let me answer your questions. First about the mini LED TV, mini LED TV that we introduced last December during the technology
seminar is an LCD TV adopted with a new technology. For OLED TV, however, our strategy of putting OLED TV at the top of our premium segment
remains unchanged.
(foreign language) Regarding the concerns of possible sales cannibalization of OLED TVs, actually, we don't have any concerns regarding it because
OLED TV has its unique and distinctive strength, such as contrast ratio, accurate color and fast response speed. Therefore, people who are in search
of better contrast ratio and color for enjoying movies or customers who are looking for faster speed for playing games will be maintained as the
customers of OLED TVs.
(foreign language) On the other hand, for mini LED, we believe that out of the existing LCD customers, those who want slimmer LCD TV with slightly
more OLED-like picture quality will get very interested in this product.
(foreign language) Therefore, we will operate on the strategies -- different strategies for OLED and mini LED TV tailored to this different needs of
the customers.
(foreign language) Let me answer your second question. The cost pressure from increased panel price and supply crunch of chipsets will persist.
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(foreign language) However, in spite of these difficulties, we plan to increase our sales of premium products such as OLED TV, NanoCell TV and
mini LED TVs. Through this, we plan to strengthen our market position and strengthen the profitability.
Question: Roko Kim - Hana Financial Investment - Analyst
: (foreign language) I have 2 questions, 1 for H&A business and the other for vehicle solution business. First, H&A business, the profitability of the
incubating businesses and product has been really good. It was actually better than what many have expected. So can you share with us the
percentage of this incubating business in your overall business? Additionally, regarding this incubating business of H&A division, can you share
with us the percentage of its sales in the overseas market? And also the trend and any plans and prospect for the sales in the overseas market?
My second question regards vehicle solution business. Your plan is to reach BEP and swing to profit in the second half of this year. But when I look
into the figures and performance of the fourth quarter, your deficit amount was a mere 2 billion. So I was wondering, perhaps you can turn around
earlier than your original plan. So could you share with us your take on this? And also share with us the ground and reasons why you believe that
you'll be able to reach BEP this year.
Unidentified Company Representative
(foreign language) Let me answer your question from H&A side. H&A division is continuously expanding new businesses and new product groups
by sensing the market trend and identifying customer insight.
(foreign language) All of these activities are based on our efforts to address customer pain points based on smart home appliances and digital
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