LG Display Co., Ltd. — 2021 Form 20-F summary
Reporting period: Fiscal year ended December 31, 2021; filed April 28, 2022. Although the request specifies 2021 Q4, this is an annual report and the supplied filing text does not provide a clear standalone fourth-quarter income statement or cash-flow figures. Financial statements are consolidated and prepared under IFRS as issued by the IASB; amounts below are Korean won unless stated otherwise.
Business context and key financial metrics
LG Display manufactures TFT-LCD and OLED panels, primarily for IT products, televisions, and mobile and other applications. It shipped 250.9 million panels across its product categories in 2021 and reported an approximately 20% revenue share of the global market for panels nine inches or larger.
| Metric | 2021 | 2020 |
|---|---|---|
| Revenue | W29.878tn | W24.262tn |
| Gross profit / margin | W5.305tn / 17.8% | W2.635tn / 10.9% |
| Profit (loss) for the year / net margin | W1.334tn / 4.5% | Loss of W76bn / (0.3%) |
| Cash from operating activities | W5.753tn | W2.279tn |
| Cash used in investing activities | W4.263tn | W2.311tn |
| Cash used in financing activities | W2.466tn | Cash provided: W932bn |
| Cash and cash equivalents | W3.542tn | W4.218tn |
| Cash and current bank deposits | W4.285tn | W4.297tn |
| Current assets / current liabilities | W13.187tn / W13.995tn | W11.099tn / W11.007tn |
| Capital expenditure cash outflows | W3.141tn | W2.595tn |
Outstanding short- and long-term debt, including current portions and before bond discounts, was approximately W12.667tn at year-end 2021. Management reported net borrowings to equity of 57% and total liabilities to equity of 158%, improved from 77% and 175%, respectively, in 2020. Working capital was a deficit of W808bn, versus a W92bn surplus in 2020. The filing states management believed working-capital sources, including debt financing, were sufficient for at least 12 months from the report date.
IFRS financial statements do not present operating profit as a separate line item. The filing cites K-IFRS operating profit of W2.231tn for 2021 in a separate Form 6-K disclosure; that figure is not a line item in the IFRS statements summarized here. Reported non-GAAP EBITDA was W6.565tn, up from W3.832tn in 2020.
Material changes versus 2020
- Revenue increased 23.1%; gross profit approximately doubled, and the company moved from a W76bn net loss to W1.334tn net profit.
- All major product categories grew in revenue: television panels rose 40.5% to W9.466tn; IT panels rose 23.1% to W12.459tn; mobile and other applications rose 7.4% to W7.900tn. IT represented 41.7% of revenue and television 31.7%.
- Management attributed stronger results to increased panel volumes, higher television and IT average selling prices, a richer mix of higher-value OLED and differentiated products, and pandemic-related demand for IT products. Mobile-panel average selling price fell 2.0% amid smartphone-market pricing pressure.
- Cost of sales rose 13.6%, slower than revenue, reducing cost of sales as a share of revenue from 89.1% to 82.2%. Gross margin improved to 17.8% from 10.9%.
- Operating cash flow increased to W5.753tn, while inventory rose 54.3% to W3.350tn, reflecting stocking amid supply-chain uncertainty. Cash and cash equivalents fell W676bn from year-end 2020.
- Total debt decreased from W14.069tn to W12.664tn on the capital-management measure disclosed, while financing cash flow turned negative mainly due to repayment of current maturities.
Outlook, risks, contingencies, and unusual items
- Management expected 2022 capital expenditure to exceed 2021 levels, primarily to fund OLED facilities. The company had announced up to W3.3tn of investment in a new small- to mid-sized OLED facility in Paju, with construction expected through the first quarter of 2024. The spending outlook is subject to reassessment and market conditions.
- Key risks include display-industry cyclicality and capacity-driven price declines, strong competition—particularly from Chinese producers—technology and product-transition execution, customer concentration, supply-chain constraints, utilization rates, foreign-exchange movements, and continued uncertainty around COVID-19 and global demand.
- The top ten end-brand customers accounted for 86% of 2021 sales; LG Electronics and its subsidiaries accounted for 19.8%. LG Electronics held 37.9% of voting stock at year-end.
- At year-end, W614bn of short-term borrowings, W3.069tn of long-term borrowings including current portions, and W119bn of bonds were LIBOR-linked. The company planned to transition affected instruments to SOFR where applicable. A 10% short-term U.S. dollar appreciation or depreciation against the won could materially affect financial condition, results, or cash flows, according to the filing.
- Antitrust follow-on matters remained, including a UK claim by Granville and a Puerto Rico attorney general matter; the company said it had recognized no provision for legal claims at December 31, 2021. Outcomes and potential cash outflows remain uncertain. Four Solas OLED patent suits were settled and withdrawn in 2021.
- A January 2021 chemical leak at a Paju facility caused worker casualties; the company and employees involved were prosecuted, and a criminal case was pending. A separate March 2022 construction-site accident caused injuries to contracted workers. The filing also reports approximately W138m in aggregate safety and environmental fines and penalties since 2019.
- Accounting change: LG Display early adopted amendments to IAS 16 on proceeds from items produced before an asset is ready for intended use, retrospectively restating 2020. The restatement increased 2020 revenue by W31.4bn and cost of sales by W38.8bn, increased the loss by W5.5bn, and reclassified W8.1bn of cash flow from investing to operating activities.
- A cash dividend of W650 per share, totaling W232.6bn, was declared in March 2022 for shareholders of record at December 31, 2021. No cash dividend was declared for 2019, 2020, or 2021 at the respective prior annual meetings.
Most important facts for investors to verify
- Obtain the company’s quarterly disclosures to assess Q4 2021 separately; this Form 20-F does not provide clear standalone Q4 results.
- Reconcile the IFRS results with the separately disclosed K-IFRS operating profit and confirm the basis and adjustments for non-GAAP EBITDA.
- Track OLED facility spending, commissioning, utilization, yields, and returns against the higher 2022 capex outlook.
- Monitor panel prices, product mix, inventory levels, and demand after pandemic-related IT and television demand effects.
- Review debt maturities, LIBOR-to-SOFR transition, foreign-exchange sensitivity, and the working-capital deficit alongside available liquidity.
- Follow the concentrated customer exposure and the status of the unresolved antitrust proceedings and safety investigations.