LG Electronics Inc
KRX:066570
Earnings Call Analysis
Q4-2023 Analysis
LG Electronics Inc
As a prestigious investor akin to Warren Buffett, interpreting the quarterly results of a company requires a focus not only on the numbers but also on the underlying story of the business. The subject company reported a mixed quarter with consolidated sales reaching KRW 23.1 trillion, despite operating losses indicating that the path to stability is marred with obstacles. The Home Appliance & Air Solution (H&A) segment grappled with losses despite decent sales, paralleled by deficits within their Business Solutions (BS) domain. In contrast, Vehicle Solutions showcased operating profitability, albeit slender, within a challenging market.
Looking ahead, the company is poised to generate higher revenues compared to the prior year, fueled by a resurgence in B2C sales and a substantial escalation in the vehicle components sector. An emphasis on operational efficiency is expected to sustain profitability levels.
Incremental growth in electric vehicle component sales underpins the company's year-on-year resilience. Despite transient cost escalations, including incentive payouts, the firm managed to preserve its profitability. Delving deeper into segments such as information display highlights a modest annual uptick in sales, counterbalanced by a dip in operating profits due to assertive investments to catalyze growth in burgeoning fields like EV charging.
In an anticipated rebound of global IT demand, the company plans to navigate through the persistently fierce competition landscape, committing to efficient resource administration to fortify profitability.
Enhancing product competitiveness has been a strategic pillar, particularly in the eco-friendly product line where accolades such as the U.S. consumer reports nod for large capacity washing machines reaffirm the brand's ecological commitments and quality. Additionally, receiving the ENERGY STAR award reflects the company's dedication to environmental sustainability and bolsters its ESG endeavors.
The company is braced for a more favorable business horizon compared to the preceding year, anticipating stable key cost components like raw materials and logistics. A strategy aiming at balancing steady profit margins with revenue augmentation indicates a hopeful yet grounded approach to 2024's fiscal challenges.
An adaptive corporate strategy that addresses market and competitive shifts, particularly in the premium product space, is in place to widen the market share gap with competitors. Efforts will also concentrate on expanding coverage in the lower to mid-priced segments to improve market penetration.
Foreseeing a sustained surge in the demand for electrification and energy-efficient products, the company plans to upscale its regional product offerings, particularly in North America's heating and cooling systems market. A similar growth orientation is eyed for the European HVAC market with a unique proposition tailored to regional demands.
Strategies in the North American B2B built-in sector aim to consolidate the super premium segment with distinctive design elements, while the overall product portfolio aims at driving top-line growth. For the European market, the company hopes to rank among the top five in built-in businesses by diversifying and optimizing regional packages.
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Good morning and good afternoon. Thank you for joining LG Electronics Earnings Release Conference Call for the Fourth Quarter of 2023. This conference call will start with a presentation on the earnings results, followed by a Q&A session. [Operator Instructions] I would now like to hand the conference over to the first speaker.
Good afternoon. My name is Seung-Hyun Kim from IR Communications. Thank you for joining LG Electronics earnings release conference call for the fourth quarter of 2023. With me are representatives of each business management division, Mr. I-Kueon Kim from Home Appliance and Air Solution; Mr. Jeong-hee Lee from Home Entertainment; Mr. Ju Yong Kim from Vehicle Component Solutions; Mr. Dong Cheol Lee from Business Solutions. We are also joined by Mr. Sang Ho Park from Global Business Management Group; Mr. Choong-hyun Park from Corporate Business Management Division; Mr. Hong Su Lee from Accounting Division; and Mr. Young Kyoon Kim from Finance Division.
Please note that all statements we will be making today regarding the financial results of the fourth quarter are subject to change in accordance with the result of the external audit. I would also like to remind you that uncertainties in the market and changes in strategies may cause our results to be different from the outlooks and forward-looking statements made today. Today, I will outline the overall performance results of the fourth quarter of 2023 and the outlook for the full year of 2024 and the first quarter. Then each division will take turns to deliver its business results and outlook. After that, I will share our ESG activities and achievements.
Now let me start with the consolidated financial results of the fourth quarter of 2023 and the outlook for 2024 and the first quarter. Consolidated sales of the fourth quarter was KRW 23.1 trillion, and operating profit was KRW 313.1 billion. Q4 revenue grew year-on-year on the back of stable growth in appliance and increased sales of electric vehicle components, though sluggish revenue continued in TV due to slowing demand from premium TVs. Operating profit recorded a loss due to increased marketing spending to address year-end peak season demand, including Black Friday promotions and one-off costs such as year-end performance incentives.
I will now briefly review the fourth quarter performance of each business. H&A recorded KRW 6.7 trillion in sales and KRW 115.6 billion in operating loss. LG recorded KRW 4.2 trillion in sales and KRW 72.2 billion in operating loss. VS recorded KRW 2.6 trillion in sales, KRW 5.7 billion in operating profit and 0.2% in profitability. BS recorded KRW 1.3 trillion in sales and KRW 89.5 billion in operating loss. Each business will later share its respective business results and outlook in detail.
Let's move on to the profit and loss and cash flow of the fourth quarter. In terms of profit and loss, reflecting financial income and expense, equity method gain and loss, other nonoperating income and expense, corporate income tax and income and loss from discontinued operations, we posted negative KRW 76.4 billion in net income. Next on cash flow. Q4 cash flow from operating activities was KRW 1.5 trillion, and cash flow from investment activities was negative KRW 1.1 trillion. Accordingly, net cash flow was KRW 385.2 billion. When reflecting cash flow from financial activities of negative KRW 9.8 billion, cash balance at the end of Q4 increased KRW 375.4 billion from the previous quarter to stand at KRW 8.5 trillion.
Next is the key financial position and indicators for the fourth quarter of 2023. As of the end of the fourth quarter, assets stood at KRW 60.2 trillion, liability at KRW 36.7 trillion and equity at KRW 23.5 trillion. In terms of leverage ratios, regarding liability to equity, debt to equity and net debt to equity, we are maintaining a healthy financial condition.
Now the outlook for the year 2024 and the first quarter. In terms of the business environment, there are expectations of a recovery in consumer sentiment attributable to slowing inflation and possible interest cuts in major regions like the U.S. and Europe. The concerns regarding protracted geopolitical risks and bottlenecks in global maritime logistics also exist. We will continue to grow our top line in main businesses as well as enhance the business portfolio by expanding B2B and software platform businesses and maintain stable cost structures through fundamental cost improvements and efficient spending. We plan to strengthen business competitiveness by expanding investments in line with our strategic priorities.
Accordingly, we seek to grow revenue in 2024 by responding nimbly to shifts in demand and driving stronger performance in B2B businesses such as vehicle components and HVAC. We will secure sound levels of profitability on an annual basis by maintaining stable cost structures through preemptive efforts. In the first quarter, we plan to reach revenue levels higher than that of the previous year on the back of a pickup in B2C sales and steep growth in vehicle components business. We aim to maintain stable levels of profitability through enhanced operation efficiency.
Now let's move on to the fourth quarter results and outlook for 2024 and the first quarter by business. We will start with H&A. Let me share the fourth quarter results of H&A. Though recovery of demand in the global appliance market is delayed, revenue increased year-on-year on the back of our strengthening of the two-track strategy to address the premium and volume zone segments and expansion in new business areas such as appliance subscription. Operating profit decreased year-on-year despite stable operations regarding material and logistics costs because of increased marketing spending to address intensified competition in the market and the impact from year-end performance incentives.
Next is the outlook for 2024 and Q1. Marketing uncertainties and intense competition are expected to persist due to the sluggish global economy and unstable international situations. Amid this environment, we seek to secure top line growth momentum through stronger drive of the volume zone in main B2C businesses, expanded proportion of B2B centered around HVAC and accelerated efforts in online and subscription businesses. We will focus capabilities on creating stable profitability through efficient resource management and cost improvement efforts. In Q1, we will maintain revenue growth momentum compared to the previous year by expanding sales of volume zone products, which have relatively sound demand. We plan to secure profitability level similar to that of the previous year, by improving manufacturing costs and optimizing marketing spending.
I will share the fourth quarter results of HE. Though Q4 sales increased quarter-on-quarter as we entered the peak season, it declined year-on-year due to sluggish demand for premium TVs, including our flagship product, OLED TV. Despite the sales decrease and rising LCD panel prices, the level of operating loss was reduced year-on-year by enhancing efficiencies in resource management, including marketing spend.
Now let me share the outlook for 2024 and the first quarter. In the market, there are uncertainties regarding recovery of consumer sentiment, but a gradual recovery in TV demand is expected. Accordingly, we aim to turn around to a growth trend in revenue and secure solid profitability by both focusing on operations centered on premium products and expanding the software platform business. In the first quarter, we expect revenue to grow year-on-year on the back of increased sales of OLED TVs, but profitability may decrease somewhat year-on-year due to the impact from rising cost of major materials, including LCD panels.
Let me share the fourth quarter results of VS. Revenue grew year-on-year, thanks to increased sales of electric vehicle components. Though there were factors temporarily pushing up costs, including incentive payments, operating profit remained in the black, thanks to revenue growth. Next, the outlook for 2024 and the first quarter. Despite concerns of stagnant demand for vehicles following the slowing growth in the global economy and impact from EV subsidy reduction in many countries, demand for electric vehicles is projected to grow, especially in North America on the back of recovery in spending power in the second half. Accordingly, for the year 2024 and Q1, we anticipate that top line growth momentum will continue driven by revenue realized from project launches of awarded business.
We plan to manage operations flexibly in accordance with possible short-term dips in demand and continuously make efforts to improve profitability. I will share the fourth quarter results of BS. Sales grew by a small margin year-on-year, thanks to demand recovery in information display, though demand was slow to recover in the global IT market. Operating profit decreased year-on-year with increased investments to accelerate future growth, including new business areas such as EV charging.
Now let me share the outlook for the year 2024 and the first quarter. Global IT demand is expected to recover but fierce competition is expected to remain overall. We will pursue top line growth based on our new lineup in gaming monitors and gram Pro and strengthen efforts to secure more projects, especially in the government and education verticals. We aim to secure profitability through efficient resource management. In Q1, we seek to expand revenue year-on-year by actively addressing the peak season for IT products in Korea. We plan to focus on enhancing operations through thorough inventory management and stringent spending.
Last but not least, let me share our ESG activities and achievements. We are striving to give confidence to customers that they are using the most eco-friendly and convenient products and service just by choosing us. We are also seeking to enhance corporate value by minimizing ESG-related risks as well as becoming a company that customers and the market can trust the most. To provide more sustainable customer experiences, we have continuously strengthened the competitiveness of our eco-friendly products. Our products took up the top positions in all categories of the best large capacity washing machines in 2023, named by the U.S. consumer reports last year and our products acquired the Green Choice mark for outstanding performance in energy efficiency.
Moreover, we received recognition for our efforts to protect the environment and save energy by receiving the ENERGY STAR from the U.S. Environment Protection Agency for the first time in the industry, regarding 7 induction cooktop and range models. Meanwhile, LG Electronics is placing emphasis on implementing ESG management through active collaboration with external partners. We have become a member of Glass Futures, a U.K. not-for-profit research and technology organization and are exploring ways to produce glass in a sustainable manner together. These activities to continuously enhance our corporate value have also received much acknowledgment from the outside. LG Electronics was listed in the Dow Jones Sustainability World Index for 12 consecutive years last year. The DJSI World ranks the top 10% of global companies in terms of ESG management practices.
LG Electronics was the sole South Korean company in the leisure equipment and consumer electronics industry to be included in the DJSI World Index for 12 years in a row. We also received an A rating for 4 and 3 consecutive years, respectively, from Morgan Stanley Capital International and Korea Institute of Corporate Governance and Sustainability. Going forward, we will preemptively identify ESG-related risks and opportunities to further achieve an advanced ESG targets and vision. By doing so, we will ensure the long-term growth and stability of LG Electronics and maintain high levels of trust and a positive reputation among stakeholders.
That brings us to the end of the fourth quarter earnings release and outlook for the year 2024 and the first quarter.
We will now take questions. Operator, please commence with the Q&A session.
[Foreign Language] [Operator Instructions] The first question will be provided by Kangho Park from Daishin Securities.
[Interpreted] I have 2 questions. And my first question is about corporate-wide operations. This year, we are expecting greater macroeconomic and geopolitical uncertainties at the moment. Under such circumstances, can you share the corporate-wide revenue and profitability guidance of 2024? And also, it will be appreciated if you can share in which business you expect specific growth or weak performance.
My second question is on H&A. I think in 2023, you achieved results and performance by maintaining the two-track strategy covering the volume zone. Is there any change in terms of strategy? Also with Chinese competitors winning the low to mid-priced home appliance market at an accelerated pace. What is your strategy for boosting LG Electronics home appliance market shares?
[Interpreted] Let me answer your question about corporate-wide operations. In 2024, we expect a better business environment compared to the previous year due to expectations on eased austerity measures and gradual demand recovery. However, uncertainties in the macroeconomic environment is projected at the same time as there are concerns on economic recession in major countries, including the United States. We believe 2024 is going to be very important in securing new growth momentum and taking proactive measures against a changing market environment more than any other time. In our major business, home appliance and TVs, we expect major cost factors, including raw material cost and logistic costs to remain stable. Therefore, we would like to continuously seek for stable profitability together with revenue growth through full potential strategy that actively responses to changes in the market demand, your two-track strategy and so on.
In terms of B2B business concentrating in electric devices and HVAC, a new business area, including EV charging solutions, we would like to make meaningful investments and accelerate revenue growth and expand new orders through diversifying regional and customer portfolio so that they can further make contribution as a future growth engine. Comprehensively, the corporate-wide 2024 revenue excluding that of LG Innotek, will turn to the growing curve, and we plan to improve profitability year-on-year.
[Interpreted] Let me answer your question on H&A. As you said, we have employed a two-track strategy covering both the premium and volume zone in alignment with market demand changes thus far. We will continue this approach moving forward to preemptively respond to the changes in both the market and competition landscape. We will further ratchet off our competitive and market-leading products in the premium space in order to further widen the gap with Chinese makers so that they can't even catch up later. In parallel, we plan to expand ODM business in the low to mid-priced market while also bolstering investment to respond to Chinese companies in strategic markets.
Although we might find gap -- differences from market to market, the brand power of Chinese companies has grown a bit amidst fierce competition. In response, we have continued ramping up the premium zone by tapping into large capacity and high-efficiency products based on our competitive key components, unviable to design and exceptional performance. In the volume zone, we have improved our market share by further enhancing our product and price coverage.
Next question, please.
[Foreign Language] The following question will be presented by Simon Woo from Bank of America.
[Interpreted] This is Woo Dong-je. I have 2 questions. First, on HE. With the LCD panel market skewing towards the Chinese producers, I think LG Electronics is relying more on Chinese panel makers. What is your response to increased risk from this trend?
And my second question is on Vehicle Solution. In the United States, the number of EV subjected to receive subsidies is on a decline. Accordingly, we are expecting a drop in demand in EV and EV components. I would like to ask your thoughts and impact on such circumstances.
[Interpreted] Let me answer your question on HE's LCD panel sourcing. It is true that the Chinese panel makers market share rose in the LCD panel market, and we have also purchased more panels from Chinese makers. But we have operated volumes as the global #2 TV business in terms of revenues and establish stable partnerships with a number of Chinese panel makers. So we won't see issue with panel supply.
In addition, we have minimized risk by acquiring supply from diverse panel makers outside of China as well, like Taiwan and Japan. Unlike other TV companies skewing towards LCD TV, we have high proportions of OLED TV within our portfolio, and that also helps in reducing our risk.
[Interpreted] Let me answer your question about Vehicle Solutions. To elaborate furthermore on the IRA revision in 2024, the number of EV models subjected to receive tax benefit drops and this may have impact on several EV demand that has LG components installed in the short term. However, there are positive signs in the mid- to long-term perspective as more EVs will be rolling in the market due to the withdrawal of the limits that currently cap subsidies at 200,000 units per carmakers. Therefore, we would like to keep a close eye on the market and customer changes so that we can proactively establish business operational strategies that allow us to win in the market and eventually respond to the changing market environment.
[Interpreted] Next question, please.
[Foreign Language] The following question will be presented by Dongwon Kim from KB Securities.
[Interpreted] I have 2 questions. And my first question is on VS. I understand that you're making greater investment to accelerate into future growth. Can you give us some like updates on your new business such as robots and EV charging solutions?
Second, on H&A, what is the forecast for your B2B home appliance business, including HVAC and please size that for us in the mid-to-long term. I'm also curious about your strategy for boosting market shares in North America and Europe and B2B sales proportions within the H&A company.
[Interpreted] Let me answer your question on BS new business. Robot business is driving growth in delivery and logistics. For delivery robots, we would like to leverage the already established food and beverage market as the volume zone. And for logistics, our focus would be on paving the ground in overseas markets to expand business performance. And we have further plans in 2024 to advance into various verticals such as retail and hospitality.
[Interpreted] If I may elaborate more on EV charging business, we do expect temporary slowdown in market growth as subsidy benefits are only decline. However, we expect demand in establishing charging infrastructure to remain strong, and the market growth to be eventually accelerated in the mid- to long-term perspective due to stronger ecofriendly regulations around the world and greater EV supply.
To respond to such environment, LG Electronics have entered into the market in 2023 based on stable quality, sales capacity in verticals and maintenance system. We would like to develop fast chargers and ultrafast chargers in 2024 to strengthen our product portfolio. Furthermore, we would like to expand regional coverage through establishing sales and engineering infrastructure and secure differentiated charging solutions so that we can establish our fundamentals for growth. Thank you.
[Interpreted] Let me answer your question on H&A's B2B. Let me split it into HVAC and built-in in my answer. Let me talk about the HVAC business, first of all. We expect the trend towards electrification and the demand for eco-friendly and highly energy-efficient products are likely to continue to rise down the road. In North America, we will first upscale model lineups optimized for each region through a launch of new heating and cooling systems containing new refrigerant using inverter heat pumps. Second, all established production basis in the U.S. Last but not least, we will increase market share by expanding installation channels, customer touch points and entering large management channels step by step. For HVAC in Europe, we plan to enhance market share by timely addressing market demand within channels specialized in heating products like launching heaters with eco-friendly refrigerant using heat pumps. Based on all this, we intend to grow the European heat pump business to a multitrillion business in terms of revenues in the mid- to long term. On the B2B built-in business side for North American market, we will address the super premium zone with our SKS or Signature Kitchen Suite brand to have a strong presence as a leading super premium brand by way of our unique design and product coverage expansion. [ Over served ] our volume zone with the LG brands by revamping our China portfolio to drive top line growth with built-in product lineups. In the European market for built-in, we will drive an accelerating flywheel towards diversifying our packages optimized for each region and channel by incorporating 24-inch models and rank in the global top 5 in terms of built-in business by creating more success cases of global built-in business. The annual B2B sales proportions in 2023 within the H&A company you asked about were in the low 20s, and we are now focusing on working on improving the overall value chain to raise this result.
[Interpreted] Next question, please.
[Foreign Language] The following question will be presented by S. K. Kim from Daiwa Securities.
[Interpreted] I have 2 questions. My first question is on corporate-wide operations. I believe that this year, we are expecting more AI consumer products in the market. And can you share your status and plans on AI product development? And my second question is on Vehicle Solutions. Can you share the overall order backlog as of end of 2023. And since the EV market growth rate is expected to slow down this year, as mentioned previously, I would like to know whether there are any canceled projects out of the already in backlog. And what is your order target for this year and expected order backlog level as of end of this year?
[Interpreted] Let me answer your question about corporate-wide operations. LG Electronics select direction on AI is to go beyond simply providing function-based artificial intelligence and realize affectionate intelligence that understands and be empathetic towards our customers. Additionally, our AI have connections with over 700 million LG Smart devices around the world with real-time life intelligence, utilizing real-time live data through various IoT devices. And based on this, we are equipped with a so-called orchestrated intelligence that leads to like optimized operation by orchestrating connected devices with LG AI Brain. Data that we collect is safely managed and learn through our security system or security solution called LG Shield so that we can provide a better life experience to our customers throughout our differentiated AI based on responsible intelligence.
Later, we would like to expand our affectionate intelligence based on such intelligent technology from home to mobility and commercial areas so that our customers can focus on a more meaningful and valuable life. For this, we would like to establish AI agents based on the integrated AI platform Atom, so that we can provide interactive and proactive services or space as a service to our customers and eventually innovate customer experiences through optimized services.
Touching upon more. Last year, we have allowed voice command to control home appliances, TVs, differentiate TV screen quality and sound quality, and furthermore, we have introduced air conditioners, air purifier, washers and dryers so that it can understand the space and situation in the smart appliances. In terms of smart mobility area where we can provide tailored services, we have commercialized in-cabin monitoring system for driver safety.
This year, we would like to advance the completeness of AI agent technology, which allows personalization through user recognition and natural interaction that not only recognizes the situation and context to multimodal sensing, but also commands to the device and have emotional connection with users. Our plan is to apply this technology to voice serve in the smart home sector so that it can be available in launching better version of the smart home AI agent.
In smart appliances and TVs, we would like to commercialize functions that automatically transfer accounts and recommend tailored contents together with like air conditioners and air purifiers equipped it with enhanced intelligent sensing technology. In addition, we would like to commercialize chatbots using LLM that can interact and answer users' questions based on our professional intelligence in the online channel field.
[Interpreted] Let me answer your question about Vehicle Solutions order backlog. Previously, we have disclosed that our order backlog will reach KRW 100 trillion as of end of 2023. We have successfully signed new orders based on product competitiveness and geographical conditions and LG-Magna e-Powertrain's expanded customer pipeline brought some results as well. However, due to delays in some customer companies sourcing decisions and foreign exchange impact, our order backlog remains at mid KRW 90 trillion.
Touching upon major business proportions, infotainment accounts for late 50% of order backlog, while EV parts account for late 20% level and lamps mid-teen level. Thanks to the high growth rate in EV market and synergy effects from LG-Magna e-Powertrains JV, proportion of EV parts order backlog have shown a dramatic increase year-on-year. Please understand that I cannot disclose detailed target or expected figures for this year. However, we would like to continue the growing trend of our order backlog by expanding the overall new orders. Thank you.
[Interpreted] Next question, please.
[Foreign Language] The following question will be presented by Hyung Wou Park from SK Securities.
[Interpreted] This is Park Hyung Wou from SK Securities. I have 2 questions on HE and corporate-wide operations. First, how do you envision the OLED TV market and overall TV market, respectively, for 2024? Do you have any insight on possible improvement in the weakened premium TV demand seen in 2023?
And my second question is on corporate-wide operations. In 2023, I understand that you have seen some enhancement in operating profit due to logistic cost ratio drop, and can you share how much impact you've seen? And importantly, I understand that there are concerns on logistic cost increase due to global logistics bottlenecks phenomenon. Do you think you can keep the stable logistics cost ratio or further make improvements?
[Interpreted] Let me answer your question on HE's outlook on TV demand. According to market research firms, the overall 2024 TV market demand is likely to grow Y-o-Y. But because it will take some time for consumer sentiment to fully resolve, it's unlikely to realize significant increases. The demand of the OLED TV market, our main product line, is expected to see a bounce to 2022 levels as the market shifts away from LCD toward OLED and OLED panel prices stabilize.
Our competitors are expected to boost OLED TV sales by ramping up their product lineups with wide OLED applied. In response, we will continue unveiling some world's first, like the first transparent TV we launched this year and the wireless OLED TV based on our 11-year heritage in OLED TV, focusing on our individualized customer values. We've been recognized through 109 awards in OLED TVs only at CES 2024, like with our OLED TV and other strong industry-leading technologies and products. Therefore, based on this premium TVs leadership, we expect the premium TV demand to grow down the road.
[Interpreted] Let me answer your question on logistic costs of corporate-wide operations. As mentioned, despite difficult business environment, including global demand drop and fiercer competition in 2023, LG Electronics was able to continue witnessing operating profit and securing business competitiveness by stabilizing cost structure, including logistic costs.
Switching upon the logistics status in 2024, basically, more freight space is added to the logistic view, but the global shipment recovery is showing flat growth leading to a supply-centric structure and contract renewals are taking place smoothly. However, the uncertainties in logistics environment is going up due to Red Sea issues stemming from recent geopolitical risk and drought in Panama Canal. We would like to maintain the logistics freight rate level in a stable manner by taking differentiated approaches to negotiation for shipping companies, especially in case of long-term contracts, reclassifying strategic stripping companies per region and enhancing long-term contract conditions through negotiations. In addition, as part of taking proactive measures on the recent uncertainties, we would like to operate emergency response centers, secure alternative logistics route and adjust production plans in neighboring production sites so that we can minimize the business impact.
[Interpreted] Next question, please.
[Foreign Language]Currently, there are no participants with questions. [Operator Instructions]. Once again, currently, there are no participants with questions. We'll wait for a second until there is another question.
[Interpreted] That brings us to the end of LG Electronics earnings release conference call for the fourth quarter of 2023. For further questions, please contact the IR team. Thank you. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]