LG Chem, Ltd. (A051910) Earnings Call Transcript & Summary

Good afternoon. This is Hyun-suk Yoon, Head of IR at LG Chem. Thank you for taking an interest in LG Chem and joining this call despite your busy schedules. We will now start LG Chem's 2020 Third Quarter Earnings Call. We will begin with Q3 earnings performance and outlook, followed by the CFO highlight presentation and then we will have the presentation on the medium- to long-term strategic direction of LG Chem. The presentations will be interpreted simultaneously while the Q&As will be interpreted consecutively. Also, I'd like to mention that the presentation materials are being shared real-time via earnings conference webcasts. You can access the webcasts on our company website to get access to the presentation materials. First, let's begin today's call with the introduction of the management team. We have CFO, Dong Seok Cha; Chul Nam from Business Strategy; Young Suk Lee from Business Planning; Ho Lee from Petrochemicals; Hong, Su Jeung from Energy Solutions; and Chong, Woo Park from Advanced Materials. We would like to first present on the earnings result for Q3. As was announced in the tentative earnings disclosure, we have the same numbers. So we have the operating profit and the sales that were announced, and you can see that these numbers are record high in the history of the company. The EBITDA for Q3 was KRW 1.4902 trillion, 19.9% to sales. Pretax sale -- pretax profit was KRW 707.6 billion and net income was KRW 570.4 billion. Next, our financials. As at the end of Q3, assets was KRW 40.189 trillion, cash was KRW 3.554 trillion and liabilities was KRW 21.1983 trillion. Borrowings was KRW 11.3653 trillion. Net ratio and total liabilities to equity improved on quarter as KRW 500 billion of borrowings were repaid, including the ECV. Next, earnings and outlook by business division. First, Petrochemicals. 2020 Q3 sales was KRW 3.5836 trillion, operating profit was KRW 721.6 billion and the operating margin was 20.1%. Sales grew on the back of demand recovery for key products such as ABS and PE and the increased shipments of hygiene products. Profitability increased significantly from the wider spread, thanks to the weak feedstock prices such as naphtha and recovering demand of some products, including ABS. In Q4, while there are concerns over seasonal factors and global supply and demand outlook, robust earnings are expected to continue with sustained demand for key products such as ABS and PVC. Next, Energy Solutions. In Q3, sales was KRW 3.1439 trillion and the operating profit was KRW 168.8 billion, a record high for quarterly sales and operating profit. Sales increased, thanks to the launch of new models for European EVs, growing sales of EVs that use cylindrical batteries and greater supply of small batteries, driven by a higher demand for IT products. Along with the sales growth, operating profit improved slightly on the back of increase in sales and productivity. In Q4, we expect sales growth and robust profitability to continue with greater shipments of automotive batteries for Europe and the U.S. as well as increased sales of cylindrical batteries for EV. Next, Advanced Materials. In Q3, sales was KRW 962.9 billion, operating profit was KRW 59 billion and the operating margin was 6.1%. Profitability and sales improved on quarter, thanks to the increase in demand from downstream industries such as Automotive and Display. In Q4, we expect some seasonal factors on Display, but the overall sales are expected to grow with greater volume of cathodes. Next, Life Sciences and Farm Hannong. In Q3, Life Sciences sales was KRW 172.1 billion and the operating profit was KRW 8.5 billion. Sales grew with flu vaccines and diagnostic agents, but profitability was down with higher cost for marketing and R&D. Farm Hannong sales was KRW 102.1 billion and the operating loss was KRW 9.6 billion. The business recorded losses due to seasonal factors in the second half of the year but sales and profitability improved on year from more shipments of crop protection products. For Life Sciences, we expect demand for core products, including aesthetics to recover but marketing costs are going to increase. Farm Hannong's annual earnings are expected to improve with greater sales of key products such as Terrad'or. This concludes our earnings presentation. Next, CFO, Dong Seok Cha, will present the highlights of Q3 earnings performance.

Good afternoon. I am LG Chem's CFO, Dong Seok Cha. Thank you for your keen interest and taking part in LG Chem's conference call despite your busy schedules. As you may know from the previous tentative earnings disclosure that we made, in Q3, LG Chem was able to achieve record high quarterly sales and operating profit despite the unprecedented challenges of COVID-19, and most business lines at LG Chem were able to achieve the best results. This means that despite the pandemic, the company has been focusing on key initiatives since the beginning of the year to improve internal efficiency, stabilize cash flows and continued investment for the future. We believe that this experience of navigating through the crisis successfully will serve as another source of competitiveness in the post COVID-19 new normal era for LG Chem and serves as a strong driver for sustained business growth and corporate value enhancement. Dear shareholders, on September 17, LG Chem announced the plan to split off Energy Solutions in order to create optimal structures and organizations to realize high potentials of all the business divisions of LG Chem. And at this point, we are awaiting final approval at the General Meeting of Shareholders, which will be held on October 30. We are very well aware that there has been some concerns and views on the split off plan in the market. While there are some misunderstandings, we also acknowledge that there are some areas where we could have communicated more clearly. Let me reiterate the reasons and the background behind the split off. First of all, we aim to create a separate organization optimally structured for Battery & Energy Solutions business for faster decision-making and operational efficiency with the split-off. Overall, it will result in a more competitive structure. Second, when Energy Solutions is split off as a wholly owned subsidiary of LG Chem, the new company will be able to access various funding options to fund large CapEx projects for the business. More investments will strengthen its competitiveness to solidify its global leadership position. Third, LG Chem's other business divisions will be able to increase investment by utilizing their own cash flows to further strengthen their competitive edge. Overall, this will lead to maximizing growth potentials and improving profitability of these businesses. And when these efforts translate into higher corporate value of LG Chem, we believe that LG Chem's shareholder value will increase as well, and we believe that the split-off will help us achieve this. You may have questions about the growth strategies of each business divisions after the split-off. So we will now spend time to give you presentations on the elaborate medium- to long-term strategies of LG Chem and the individual business divisions. You may still have some concerns about the split-off and you may still have some questions, but we would like to ask our shareholders for your continued support on our efforts to maximize the corporate value of LG Chem in the medium- to long term. Thank you.

Next, as the CFO mentioned, we will have a presentation on the medium- to long-term strategy of LG Chem. Once again, I'd like to mention that the presentation materials are available using the webcasts. You can access the webcasts on our company website. You can access the materials on your computer or on your mobile device. Now I'd like to invite [ Seung Hye Chung ] from LG Chem Energy Solutions Business Strategy division, who will discuss the medium- to long-term strategic direction of the Energy business.

Good afternoon. I am [ Seung Hye Chung ] from LG Chem Energy Solutions Business Strategy division. Let me share with you the medium- to long-term business goals and strategic direction of the new company that will be established after the split-off. First of all, it's about the lithium-ion battery market growth. The EV market has been driven by regulation on environment and government subsidies. But now the EV market is being driven more by customers as EVs are improving in terms of price, driving distance and charging. As a result, the lithium battery market, including EV battery, is expected to grow from the current KRW 57 trillion in 2020 to KRW 142 trillion in 2024. It is often called the next semiconductor industry with huge growth potentials. The new company, which will specialize in Energy Solutions, as already, the remaining order of KRW 150 trillion with the global OEMs and already has global #1 market share. After the split-off in the medium- to long term, the new company aims to achieve huge value by solidifying its global #1 position in the value chain and more than KRW 30 trillion of sales by 2024. And the split-off was a strategic decision to have fast decision-making and strategic freedom that is required to achieve flexibility in investments and profitable growth of the business. And we will further solidify our market leadership. The company has core battery technology and patents based on chemicals, materials and plaster technology that have been accumulated over the past 20 years. By utilizing our expertise on battery development and production, we will continue to lead the global battery market. And to this end, we plan to pursue specific strategies for each business line and strategies for the future to widen the gap with the competitors. Also, we plan to implement sustainability strategy to be socially responsible leading company. Let me elaborate more on each of these strategies. First of all, automotive battery. The automotive battery market is growing rapidly with rising competition among the players. We will expand the product portfolio to deliver unique value for each EV type and secure strong technology and product competitiveness by improving battery performance based on the product road map for each segment. In particular, we will lead the development of products that have energy density, and we're going to develop materials technology such as high capacity and CMA and high-efficiency SiO anode and higher safety SRS separator with the charging time of less than 15 minutes. We have established a network of manufacturing hubs in the U.S., Europe, China and Korea for stable supply to growing global demand. We are considering to add additional factories in key markets in Europe and North America. Thus, we have the plan to increase our annual EV battery production capacity from 120 gigawatt hours in 2020 to 260 gigawatt hours in 2023. We are strengthening strategic partnership with top-tier global OEMs and are working with competitive battery material suppliers to pursue joint entry into overseas markets and develop new materials together. The new facilities will be designed as smart factories based on automation and information technology that require minimum human intervention, which will lead to the improvement in productivity, quality, safety and eco friendliness. Next, small battery business. For small battery, we will expand profit sources by activate -- actively developing new e-mobility areas such as automotive driving robots and shuttles as well as EVs and LEVs that adopt cylindrical batteries and increasing the supply of pouch cell products for premium IT devices. We have already secured EV and LVE (sic) [ LEV ] -- about 20 EV and LEV customers that use cylindrical batteries. And we have developed new form factor products that have energy density of 5x higher and the output of 6x higher, and we also plan to increase the production capacity by threefold. As I mentioned, as for the small pouch cell products, they are applied for wearable devices and premium IT devices, and this will lead to better profitability. Next is the ESS battery business. ESS market is likely to experience rapid growth, mainly in connection with PV, thanks to PV technology and cost improvement. In particular, gigawatt hour scale large power grid projects and greater use of ESS for households in the U.S. market are expected. We will actively expand the ESS businesses by focusing on power grid and household use by developing products that generate safe and cost-effective and long lifespan battery while executing new business initiatives, including battery reuse business. In addition to that, we will further widen the gap with the competitors and strengthen our leadership position through ceaseless innovation. At the same time, we will bear our social responsibility as an eco-friendly leading company. We are also leading the industry with next-generation battery development. As for all solid-state battery for safety enhancement, we are focusing on high polymer type that can utilize the existing production process while working to secure core technology for sulfide type. And as for lithium sulfur battery that has high energy density, we are developing it for aerial vehicle applications, given that it is lightweight. In order to support stable sourcing of upstream metals and improve cost competitiveness, we will actively pursue the value chain expansion in cooperation with mining companies and material suppliers. We're also preparing for E-platform business that covers the entire battery life cycle. The E-platform will provide information on the status of batteries, which can also be used for various services, including leasing, warranty and certification services for used batteries and EVs. This initiative aims to dramatically lower the initial costs of owning EVs in order to grow the EV market overall and contribute to enhancing the social value of batteries on utilizing the used batteries. We're also building a sustainability framework as an industry leader. Specifically, by 2025, we are going to shift to 100% renewable energy for power electricity for battery production and we're going to build a transparent and monitored supply chain in consideration of environment, human rights and anticorruption issues. In addition, we are creating a virtual cycle where secondary berries are reused and the used batteries are reprocessed into materials for battery production. Going forward, LG Energy Solutions will continue to grow as a socially responsible global leader that enhances customer value and shareholder value. This is the end of the presentation on the medium- to long-term business goals and strategic direction of the new company. Thank you.

Next, Chul Nam from LG Chem Business Strategy will give a presentation on the portfolio strategy of LG Chem.

Good afternoon. I am Nam -- Chul Nam from LG Chem Business Strategy. I am going to give a presentation on the vision and the portfolio strategy of LG Chem. LG Chem will strengthen competitiveness in the battery business and maximize growth potential of the existing businesses. In particular, it will foster new growth drivers in the emerging industries, led by megatrends, including e-mobility and battery materials, sustainability materials and life science materials. To this end, we will diversify our business models and promote organic approaches by converging our internal technologies and competencies. At the same time, we will actively explore inorganic approaches via M&As and JVs to further strengthen our leadership position. Let me first discuss more about Petrochemicals business. Currently, Petrochemicals is generating stable profit with a diversified product lineup based on complex. And as you may know very well, despite the global pandemic, Petrochemicals has been enjoying high profitability with market-leading products and differentiated products. In the short term, we will stabilize the profit trend with Yeosu's second complex and actively expand highly differentiated leading products such as NBL and ABS. In addition, in new growth markets such as Hygiene, Packaging and E-mobility, we will promote the growth of the existing businesses, including metallocene PE, NBL and SAP. For sustainability market, we will develop post-consumer recycled ABS that uses waste plastic and biodegradable materials in collaboration with our customers. Also, we plan to step up as a global petrochemical company by applying our success models in Northeast Asia to other emerging markets such as ASEAN and India. To this end, for several years now, we have been developing various cooperation in models and options, including complex expansion in emerging markets and plug and play. Next, Advanced Materials. Advanced Materials has completed restructuring of low-growth and low-profit business, such as LCD display, and is currently building a foundation for growth by reallocating resources to high-growth areas such as battery materials. Specifically, we aim to develop battery materials business as a core growth driver. For this, we are collaborating with external partners to strengthen the value chain, including metal sourcing for cathodes. And for materials market that has high-technology entry barriers, we will quickly materialize our business in the near future through cooperation with global leaders. In addition, we will grow the volume and customer base of the other existing materials businesses, including conductive materials, dispersions and binders. In addition, we will actively cooperate with customers and accelerate growth in the areas of materials for E-mobility, OLED and semiconductors, which are well aligned with the mega trends. Finally, Life Sciences is generating stable profit from the existing business in diabetes, vaccines and aesthetics. We will take advantage of the new opportunities that are arising during COVID-19 by expanding our vaccine and diagnosis business while actively enlarging the scope of biosimilar products, such as aesthetic and growth hormones. Furthermore, we are pursuing additional overseas expansion of diabetes and aesthetic business to China and Southeast Asia. For global, new drug development, which is our future growth driver, we are on track with transition from research to development. In particular, we will expand the new drug pipeline and increase the success rate through external cooperation. This is the end of the presentation on the portfolio strategy of LG Chem. Thank you.

[Interpreted] Now we'll move on to Q&A. Today, we presented more details beforehand. Therefore, time might not be enough for Q&A. So we are going to have some more time for Q&A today. [Operator Instructions] The first question will be presented by Jae Sung Yoon from Hana Financial Investment.

[Interpreted] This is Yoon Jae Sung. I have 2 questions. The first question is related to Petrochemicals. Recently, what we're seeing in the market is, for example, Saudi Aramco and Chevron, they have actually canceled their projects for additional capacity expansion. And we are also seeing that there are attractive M&A opportunities that are coming into the market. Under this backlight, is there any change that's going to take place in LG Chem's capacity expansion plan? And more specifically, I would also like to hear from the company related to your overall strategy in this area because you have already mentioned related to the emerging market as well as M&A. And so can you be very specific in respect to which opportunities that the company will be interested in pursuing? The second question is related to the electric vehicle fires recently. And there -- in the marketplace, there is talk that LG Chem, the company, may have to actually provision for this. So can you actually explain to us what the position of the company is on this?

[Interpreted] I will answer the first question. This is Ho Lee from Petrochemicals. The first question was related to whether or not the company has made any changes to its global capacity expansion. To answer this question, I'd like to first state that our plan for up to 2023 has already been confirmed, meaning that our investment is currently underway and we have already started construction for these projects. And so in respect to all the projects that are ahead of us until 2023, it is probable that there might be some delay in schedule. But in respect to the absolute capacity, that is going to go as according to the plan. And in the marketplace, we see that the supply-demand balance will improve starting from 2023. And you also asked specifically about opportunities that the company is interested in, or specifically, whether or not we're looking at also the M&A option. But when we actually look at the complex space of initiative that the company is pursuing, we don't really believe that there are that many opportunities in the emerging markets because we already see that there are many players already in the marketplace. And at the same time, while the markets are actually giving us a very high growth potential, we also have to take into consideration that there are also many state-owned players in this area as well. So if we are taking any opportunity, there would be more in the approach of grassroot investment. And so the company will be mindful about of watching the market and trying to identify continuously good opportunity. And we do have some options that we are looking at and that we will be performing business feasibility starting from next year on this. And for us, if you look at our approach to the emerging markets for year 2021 and year 2022, it would really be the plug-and-play approach, just focusing on our high value-added products, including ABS and NBL.

[Interpreted] This is [ Chung Seung Hye ] from Energy Solutions, and I will be answering your second question. You asked about whether or not the company will be provisioning related to the recent fires at EV. And in respect to this, after the voluntary recall was initiated, we have been working with the customer, Hyundai Motors, and we have set up a joint task force to try to understand the root cause of the recent fire incident. For the LG Chem's Energy Solutions Division, we are going to continue to work to identify the cause of the fire, and we will be doing this in a very responsible manner. In respect to the current situation, you do have to understand that we're not at a stage where we know the exact root cause of the fire. And under this backdrop, it's too early for us to talk about specific level of provisioning requirements as well as the contribution or the share that each party will be making for this end. But I do want to finish by saying that LG Chem's Energy Solutions have been doing monthly warranty provisioning, and we do have a sufficient provisioning path already in place.

[Interpreted] We'll take the next question. The next question will be presented by Parsley Ong from JPMorgan.

My first question is with regards to Europe EV subsidy policy. So I think there have been some concerns from investors about some of these subsidies potentially expiring by end of this year or next year or not getting renewed. Do you see potential for more subsidies or an extension of these subsidies? And can you remind us what is your EV battery sales and margin outlook over the next few years? Second question is a follow-up regarding the Hyundai Kona fire issues as well as the other fires. So I understand that you cannot give guidance on provision right now, but could you tell us a bit more about your fire prevention technology? For example, I think one of the slides mentioned a safety reinforced separator. So just curious to know what are some of your fire safety technologies.

[Interpreted] I would say that you asked 3 questions, and I will answer your question one at a time. But just to summarize your 3 questions, the first question was related to the expiry of the subsidies that EU provides on the EV side. The second question, you also asked about our battery sales projections for next year and also mid- to long-term outlook. And the third question was related to our company -- my company's fire prevention technology. To answer your first question related to EU EV subsidy, I think that for us, it is more important for us to first talk about the subsidy that EU and respective member countries are providing to the battery companies. When we build our battery facility in EU and we make investment, there are 2 types of support that we are receiving. First is the host country subsidy that we get as we enter into the market and second is a subsidy at the EU level, which is reviewed by the European Commission. And so in terms of the first part of the subsidy, the battery investment related subsidy, each country has a different approach. So that means the extent or the level of subsidy will vary by member countries. But in respect to the recent trends of the EU Commission, the review that they have been doing for the applicable applicants, we do see that the review has become more stringent. Moving to the purchasing side related to the subsidy provided to the EV -- electric vehicle purchase, this is different to what I've mentioned related to the battery investment because we do see these member countries and EU as a whole looking at the -- providing subsidy as a way to boost economic recovery as the overall economy has been further aggravated with the COVID-19 outbreak. And so this is on a growing trend. And also, there was a concern that it's possible that the environmental regulations could be eased going forward. However, we do recognize that the stance is very clear that the EU will maintain the current course in respect to the environmental regulation, and we expect that this stance to continue in the future.

[Interpreted] And moving to your second question related to the earnings guidance related to next year and more mid- to long term. To answer what we anticipate for our next year is for Energy Solutions as a whole, the revenue would be at around KRW 18 trillion or mid to higher level. And in respect to operating margin, it will be in the mid-single-digit level. But if we look at the business plan for 2024, our outlook is that the revenue will grow to over KRW 30 trillion and the OPM will be at the high single-digit level.

[Interpreted] And your third question was related to our safety protection technology. And I have to paying this in 3 areas. The first area is related to the early detection technology that we have. If there is an issue with either a cell pack or battery, you have -- we have the understanding of, for example, wear of the cells as well as a very strong BMS algorithm to be able to grow it closer and more densely, to do an early detection of any issues related to the battery cells and et cetera. And secondly, the second area is related to before we actually issue all these products out into the field, we have -- we can have a very stringent quality assurance program to be able to use our detection technology to be able to better identify, for example, low voltage cell. And this technology is automated technology. The third area is to really have a very robust design when it comes to either designing cells or modules or a battery pack. And since LG Energy Solutions produce all 3 types of batteries either in a cell format, module format or a pack format, we have the necessary technology to be able to fit the business scope that we have. And going forward, we can actually even further improve and make this technology tighter so that we do have a very robust design to start from.

[Interpreted] The next question will be presented by Young-chan Baek from KB Securities.

[Interpreted] I have 2 questions. The first question is to better understand the profitability of specific products that you have under Petrochemical. You've already mentioned for overall the -- in Q3 for the Petrochemical business, the operating margin was 20%. But can you actually share some guidance or projections related to what it would be for specific products, like, for example, in NCC/PO, PVC and ABS. My second question is related to the next-generation battery technology. Specifically, we also hear from the market that lithium sulfur batteries. And so if the company has a road map related to the commercialization schedule per technology, it will be very helpful for me to understand.

[Interpreted] To answer your question related to Petrochemical's market outlook, in respect to the upstream side from the NCC side, for this year, we did see some companies undergoing some troubles. And that's the reason why we had a supply shortage in the marketplace. But if we look at -- look into the future in terms of what's going to happen for the remainder of the year as well as at the beginning of the year, we will see some additional capacity coming onboard and which will actually be a pressure or a stress on the supply side. But if we, on the other hand, look at the downstream side, due to COVID-19 outbreak and since then, we've seen that demand has been covering and that we are and the suppliers having trouble are actually meeting the growing demand. And so from our perspective, we have a product portfolio that is very much in line with the market trend, and that is why we believe that we'll be able to continue to perform a very stable profitability for next year and going forward as well. More specifically, on the ABS side, we also believe that the demand will continue to be strong out for electronic goods for next year as well. And so we will see some additional capacity coming onboard globally, but that's going to be not -- that's not going to actually be globally. But overall, we do see that our ABS products as well as the PVC and Acrylate/SAP, the new additions will be added on to the marketplace. But in terms of the overall supply and demand mix, we are in a very good position to offset this as well. And at the same time, LG Chem is much better positioned than the Chinese competitors. For example, our carbide method actually allows us to have -- enjoy a 3% to 4% premium. And with the persistent low oil prices, this also has a cost benefit of around 6%. And so if you look at on a global basis, we do see some capacity coming onboard. But overall, we believe that the upstream are facing some supply pressure and going forward will be offset by the strong performance that we will see on the downstream side as well. And at the same time, we will continue to make additional efforts to cut cost and to even further strengthen our product portfolio so that our performance next year will be as robust as we have shown for this year.

[Interpreted] And to answer your second question related to the future innovate battery development, in any technology development, I'm sure you will understand that there are uncertainties. And so for us, knowing that these uncertainties exist, we cannot be very definitive in terms of talking about commercialization schedule. But I do want to say a few words related to the lithium sulfur battery development as well as all solid-state battery development because we do face challenges in terms of how we develop that technology and get to the commercialization stage. I can say that the lithium sulfur battery is actually more -- if we do a one-to-one comparison with all solid state, that they're more closer to commercialization, meaning that it's possible that we can see commercialization taking place for lithium sulfur batteries by 2024 or 2025. As we look at our client development for lithium software batteries, we do have some benchmarks that we have to measure against. For example, the cycle life of the batteries. And for the time being, it's not really meeting the internal targets that we have set. And so this is not really for the mass market use just yet. It's really more geared towards a niche market use. And then moving to the all solid-state batteries, is I said before, we believe that this battery technology will take longer to commercialize. And we do have to understand the components related to the all solid-state. In terms of the solid electrolytes, we have to better the energy density. And at the same time, we do have a challenge of having to set up a new processing line related to the electrolytes that we'll be using. And so what would be the commercialization schedule? I would say it would be 2028 or possibly 2030 time frame. But I can say that when we get to year 2026 or perhaps year 2027, we will be able to have developed the technology to a certain level for us to better understand the commercialization scale that will be possible. And what I mean by this is that we'll be starting to test the commercial ability of the battery technology at this time.

[Interpreted] The time is going to up. However, because we spent more time for the presentation about the strategies, now we're going to take the one final question. The final question will be presented by Yeon-ju Park from Mirae Asset Daewoo.

[Interpreted] I have 2 questions. My first question is that for the company when do you believe that you'll be able to apply the NCMA technology? And second question is related to your Advanced Materials. Can you actually give us a little bit more information related to the capacity guidance for mid- to long term?

[Interpreted] This is Park Chong Woo from Advanced Materials. We have been working with automotive OEMs and on the cathode side, with GM, for example, in Volkswagen since 2013. And that is why we already have a very strong all market reference already in place. Specifically related to NCMA cathode, we are targeting 2020. And for this end, we're working very closely with the Energy Solutions division to make sure that we are able to deliver world-class performance and quality. So in the area of development, quality as well as our competitiveness, we are currently very strong in the marketplace. And so we will continue to grow this portion by improving the supply to 20 -- production capacity to 170,000 tonnes by 2025 from the current of 40,000 tonnes. And in 2025, our projection for sales would be KRW 4 trillion.

[Interpreted] Thank you for your time. This ends the third quarter's earnings call by LG Chemical. If you could not ask your question or if you have further questions, please contact IR team. Thank you once again for participation. Thank you. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]