LG Chem Ltd. · KRX:051910
LG Chem — Q2 2004 Earnings Presentation
14 slides from LG Chem's earnings presentation, Jul 30, 2004
Slide 1: 2Q 2004 Results & Business Outlook
2Q 2004 Results & Business Outlook July 30, 2004
Slide 2: Table of Contents
Table of Contents 2Q Results 1 Business Results & Outlook 2 Business Environment for ’04 2H 6 Earnings Forecast for ’04 (Revised) 7 Appendix 8 For the sake of our investors, this material was prepared when our external auditor did not complete its audit of the financial statements for the second qua
Slide 3: '04 2Q Results: Sales
’04 2Q Results Sales Quarterly Sales Key Issue (KRW billion) 1,754 Chemicals & Polymers (9%↑) (22%↑) - Despite concern over contraction in China and 1,609 sluggish domestic consumption, booming exports 1,434 and an increase in sale prices associated with a 54% hike in raw materials and oil prices
Slide 4: '04 2Q Results: Operating Profit
’04 2Q Results Operating Profit Quarterly Operating Profit Key Issue (KRW billion) Operating Profit Chemicals & Polymers O/P Margin - Strong overseas demand and a boom in the PVC & 169 Acrylate business greatly boosted operating profit. (YoY 238%↑) 134 - But the higher costs of major raw materials
Slide 5: Results & Outlook (Petrochemicals)
Business Results & Outlook Chemicals & Polymers (Petrochemicals) With shortage in supplies across the petrochemical industry and higher sales prices driven by increased raw materials costs, the profitability improved considerably YoY. Business Results (Unit: KRW billion) Results Analysis & Outlook 5
Slide 6: Results & Outlook (Performance Polymer)
Business Results & Outlook Chemicals & Polymers (Performance Polymer) It showed a remarkable improvement in performance over the previous year’s struggle with SARS and war in Iraq, but profitability worsened QoQ. Business Results Results Analysis & Outlook (Unit: KRW billion) 432 • Results Analysis
Slide 7: Results & Outlook Industrial Materials
Business Results & Outlook Industrial Materials Despite sluggish domestic consumption, sales rose slightly although operating profit declined greatly. Business Results Results Analysis & Outlook (Unit: KRW billion) 534 • Results Analysis (2Q) 527 - Sales improved moderately thanks to the increased 4
Slide 8: Results & Outlook Information & Electronic Materials
Business Results & Outlook Information & Electronic Materials Expanded production lines of batteries and polarizers drove sales greatly, but depreciation expenses and raw material costs squeezed operating profit downwards. Business Results (Unit: KRW billion) Results Analysis & Outlook 305 • Results
Slide 9: Business Environment for '04 2H
Business Environment for ’04 2H Business Environment for 2H04 Key Countermeasures Chemicals & Polymers Execute innovative cost reduction activities • Continued strength in major raw material prices due to • Company-wide 6σ activities - energy cost etc. higher crude oil prices. • Demand growing by 10
Slide 10: Earning Forecast for '04 (Revised)
Earning Forecast for ’04 (Revised) With rapid changes in the business environment, such as strong oil prices and stagnant domestic economy, we decided to adjust the annual earning forecast of each business. Sales (Unit: KRW billion) Operating Profit (Unit: KRW billion) (7%↑) 6,706 6,269 592 592 53%
Slide 11: Appendix: B/S & Cash Flow
Appendix B/S & Cash Flow (Unit : KRW billion, %) (Unit : KRW billion) 2004 B/S ’03.12 ’04.06 ’04.12(E) 2003 1H 2004(E) Assets 4,761.7 5,273.7 5,472.0 CASH OUT 993.3 901.8 1,287.0 Accounts and notes receivable (net)1) 392.9 510.2 459.0 Inventories 379.0 502.7 472.2 Investment 841.4 260.5 720.6 Invest
Slide 12: Appendix: '04 2Q Sales & Operating Profit
Appendix ’04 2Q Sales & Operating Profit (Unit : KRW billion) Sales Operating Profit ’03 ’04 1Q ’04 2Q ’04 (E) ’03 ’04 1Q ’04 2Q ’04 (E) Petrochemicals 3,261.3 936,6 988.7 3,677.8 228.1 110.1 85.6 351.0 PVC/Plasticizer 1,220.1 347.3 364.3 105.4 53.3 43.0 Acrylate 321.0 99.1 107.2 43.9 22.8 22.4 333.
Slide 13: Appendix: Balance and estimation of borrowings
Appendix Balance and estimation of borrowings (Unit : KRW billion, %) Balance Dec 31, 2004 Dec 31, 2003 June 30, 2004 Change Total 1,706.0 2,153.2 2,076.2 447.2 (%) (100) (100) (100) KRW Currency 1,421.0 1,761.4 1,684.4 340.4 (%) (83) (82) (81) C P 65.0 321.0 256.0 244.0 C B 1,100.0 1,200.0 100.0 1,
Slide 14: Appendix: CAPEX Plan & Results
Appendix CAPEX Plan & Results (Unit : KRW Bil.) ’03 Result ’04 Plan ’04 2Q Result New/Expansion 43.7 33.6 10.0 Chemicals & Maintenance 51.4 65.6 22.1 Polymers Equity Investment 11.5 26.4 3.4 106.6 125.6 35.5 Total New/Expansion 9.4 10.0 2.2 Industrial Maintenance 39.0 50.7 18.9 Materials Equity Inve