Lg Chem Ltd. · KRX:051910
Lg Chem — Non-Deal Roadshow (May 2007)
20 slides from Lg Chem's roadshow presentation, May 4, 2007
Slide 1: LG Chem, Ltd.
SolutionPartner LG Chem, Ltd. May 2007 @ LG Chem
Slide 2: Table of contents
Table of contents . General overview 1 . Financial highlights 4 . Business performance 6 . Business strategies 9 Appendix 10
Slide 3: General overview: LG group hierarchy
. General overview LG group hierarchy LG corp. Sales OP As of 12/31/2006 (Consolidated) (137) 64 1.5 ( ) : The numbers of subsidiaries (KRW tn, %) Holding Holding Holding LG Chem Sales OP Company% LGE Sales OP Company% LG Sales OP Company% LG CNS <66> (20) 12 0.7 <39> (96) 46 0 <35> Telecom 3.9 0.4
Slide 4: Business portfolio
Business portfolio As of 12/31/2006 LGPC LG Chem (Sales : 9.3 tn KRW) Petrochemicals Industrial I&E (61%) Materials (22%) Materials (17%) Building & Decorative Electronic Materials (13%) PVC (13%) Materials (58%) Batteries (28%) NCC/Poly Olefins (34%) Living Materials (14%) Optical Materials (59%) A
Slide 5: Vertical Integration (Ethylene)
Vertical Integration (Ethylene) LGPC LG Chem Yeosu Plant Daesan Plant Outsourcing 40 Ethylene Ethylene 500 760 KMT 860 KMT LDPE (140) 210 40 160 ** OCU (140) LDPE (160) LLDPE (80) 310 EDC (250) 170 HDPE (300) 245 HDPE (170) VCM (720) EG (150) 145 170 SM (500) SM (180) 180 * ( ) : production capacity
Slide 6: Financial highlights: Non-consolidated
. Financial highlights Non-consolidated Income statement Balance sheet (Unit : KRW bn) ’05 ’06 ’07 1Q (Unit : KRW bn) ’05 ’06 ’07 1Q Assets 5,593 5,807 5,932 Sales 7,425 9,302 2,381 (Cash and 189 116 195 equivalents) Operating Profit 422 334 127 Liabilities 3,155 3,189 3,262 (Borrowings) 1,865 1,586
Slide 7: Consolidated
Consolidated Income statement Balance sheet (Unit : KRW bn) ’05 ’06 ’07 1Q (Unit : KRW bn) ’05 ’06 ’07 1Q Assets 7,291 7,640 7,841 Sales 10,785 11,632 3,041 (Cash and 608 392 509 Operating equivalents) 841 676 258 Profit Liabilities 4,221 4,351 4,479 (%) (7.8) (5.8) (8.5) (Borrowings) 2,615 2,389 2,
Slide 8: Business performance: Petrochemicals
. Business performance Petrochemicals Business results Analysis (Unit : KRW bn) • Analysis (’07 1Q) NCC/ PO maintained solid performance despite the 5,885 shutdown of Deasan NCC for revamping Thanks to seasonal (March) demand and price increase, PVC showed notable improvement 4,327 · PVC : U$ 831(’0
Slide 9: Industrial materials
Industrial materials Business results Analysis (Unit : KRW bn) • Analysis (’07 1Q) 2,087 2,088 Sales of Housing Solutions declined due to seasonal weakness however, margin improved by the cost reduction activities (marketing costs etc) A; 9 BA < = ?DA @E A @ >? :; 899 54 1 67 1 D :C @ 9 Weak sales g
Slide 10: I & E materials
I & E materials Business results Analysis (Unit : KRW bn) • Analysis (’07 1Q) Cylindrical : Full utilization due to sales improvement 1,611 Prismatic : Continuing weak sales growth 1,271 Polarizer : Margin declined due to ASP pressure and M\ [T YX NT O NV Q R MOP N Z XP W PU ST M NL OP JI yen deprec
Slide 11: Business strategies
. Business strategies Strategies Basic strategies Long-term target (Unit: KRW tn) • Maximizing cash flow from the current CAGR Petrochem Petrochem business 9.3 10.8 13.0 9% I&E materials 17% 25% Industrial • Shifting high-functional product-mix Industrial 30% 25% Materials Materials • Clarifying lon
Slide 12: Business performance (Divisional)
Business performance (Divisional) Appendix (Unit : KRW bn) 2005 2006 2007 1Q 2Q 3Q 4Q SUM 1Q 2Q 3Q 4Q SUM 1Q 2Q 3Q 4Q SUM Sales 1,868.9 1,795.7 1,849.8 1,910.7 7,425.1 2,129.1 2,272.5 2,482.5 2,418.2 9,302.3 2,380.7 2,380.7 Operating Profit 141.4 85.6 92.1 102.6 421.7 65.6 48.1 107.1 112.3 333.9 126
Slide 13: Business performance (Subsidiaries)
Business performance (Subsidiaries) Appendix (Unit : KRW bn) ’05 ’06 ’07 1Q (Unit : KRW ’05 ’06 ’07 1Q bn) Sales 1,989 2,195 603 Assets 1,040 1,139 1,210 LGPC Operating 242 259 126 Profit Liabilities 226 283 310 (12.1) (11.8) (21.0) (%) Net Income 193 191 95 Equity 814 855 899 Sales 1,305 1,533 404
Slide 14: CAPEX Plan
CAPEX Plan Appendix (Unit : KRW bn) 구 분 ’05 Results ’06 Results ’07 1Q ’07 Plan New/Expansion 23.7 118.2 74.0 180.6 Maintenance 69.1 83.6 14.7 59.8 Petrochemicals Equity Investment 41.2 39.0 - 7.5 Total 134.0 240.8 88.8 247.9 New/Expansion 17.1 14.5 1.6 44.9 Industrial Maintenance 49.1 56.4 12.4 53.
Slide 15: Borrowings & Cash Flow
Borrowings & Cash Flow Appendix Borrowings Cash Flow (Unit : KRW bn) (Unit : KRW bn) Balance ’07 (E) ’06 ’07 1Q ’06 ’07 1Q Changes 1,585.3 1,557.6 -27.7 1,578.5 Beginning 317.0 115.8 Total (100%) (100%) (100%) Operating/Investing 115.8 106.4 KRW 1,269.2 1,143.9 -125.3 1,206.5 (80%) (73%) (78%) Net I
Slide 16: Stock information
Stock information Appendix Shareholders & Market Cap GDR Info. LG Corp. Foreign Investors Listed in LSE 39.2% 26.5% 144A GDR Reg.S GDR Institutional & Individual Investors 34.3% ORD:GDR Ratio: 1:2 Exchange: PORTAL Ticker: LGCLY US Common Stock as of April 30, 2006 ISIN: US5019551085 (Unit : KRW) Apr
Slide 17: Dividend policy
Dividend policy Appendix Dividend History Dividend Policy 6.61% Expected Dividend = (Unit : KRW) Approximately 30% Adjusted Net-income * 3.45% 3.69% 3.63% 3.18% 2.09% 2.19% 2.32% 1,750 1,500 1,500 * Adjusted Net-income = 1,250 1,000 750 750 750 Net-income Dividend revenues cdd d efff eff c eff e eff
Slide 18: Production capacity by product
Production capacity by product Appendix (Unit : KMT/Yr) Item Region ’04 ’05 ’08 ’10 Item Region ’04 ’05 ’08 ’10 PVC Yeosu 560 560 550 550 ABS Yeosu 550 550 550 550 Daesan 200 200 200 200 Ningbo 300 300 450 450 China 350 350 360 400 India 0 0 0 80 Total 1,110 1,110 1,110 1,150 Total 850 850 1,000 1,0
Slide 19: Product price & Raw materials
Product price & Raw materials Appendix Vinyls Styrenics (Unit:U$/MT) (Unit:U$/MT) 1,331 1,586 1,586 1,588 1,480 1,129 1,412 1,437 1,090 1,364 1,364 1,384 1,067 1,060 1,271 1,303 1,270 1,001 970 1,185 1,160 887 834 910 841 1,075 1,041 740 818 798 885 1,023 1,010 786 984 987 962 760 775 906 723 863 69
Slide 20: BOD Members
BOD Members Appendix Name Career Remark B.A. (Business Administration), Seoul National Univ. During his Chairman Kang, Yu-Sig Vice Chairman of LG Executive Office for Corporate Restructuring tenure *Vice Chairman & President of LG Corp. B.Eng. (Chemical Engineering), Seoul National Univ. During his