LG Chem Ltd. · KRX:051910
LG Chem — Q3 2006 Earnings Presentation
16 slides from LG Chem's earnings presentation, Oct 17, 2006
Slide 1: 3Q 2006 Business Results & Outlook
3Q 2006 Business Results & Outlook Oct 17, 2006
Slide 2: Audit review and forward-looking statements notice
The business results for the 3rd quarter of 2006 currently under audit review are presented here for investors’ convenience. Hence, please be advised that some of their contents may be altered in the course of audit. Forecasts and projections contained in this material are based on current business
Slide 3: Table of Contents
Table of Contents 3Q 2006 Business Results 1 Divisional Results & Outlook 3 Subsidiaries’ Results & Outlook 9 Appendix 10
Slide 4: 3Q 2006 Business Results: Income Statements
3Q 2006 Business Results Income Statements Non-Consolidated Consolidated (Unit:KRW bn) ’05 3Q ’06 3Q ’06 2Q QoQ ’05 3Q ’06 3Q ’06 2Q QoQ Sales 1,849.8 2,482.5 2,272.5 9.2 2,910.9 3,094.0 2,850.7 8.5 Operating Profit 92.1 108.1 48.0 238.7 217.3 88.5 125.2 145.5 (%) (5.0) (4.4) (2.1) (8.2) (7.0) (3.1)
Slide 5: 3Q 2006 Business Results: Balance Sheets
3Q 2006 Business Results Balance Sheets Non-Consolidated Consolidated (Unit:KRW bn) ’05 ’06 3Q ’05 ’06 3Q Assets 5,593.4 5,847.9 7,291.3 7,676.5 (Cash and equivalents) 189.4 170.8 608.0 420.2 Liabilities 3,154.9 3,296.8 4,221.8 4,487.3 (Borrowings) 1,865.4 1,717.1 2,614.8 2,529.8 Shareholder’s Equit
Slide 6: Petrochemicals: Business results and analysis
Divisional Results & Outlook Petrochemicals Business results Analysis (Unit:KRW bn) ▣ NCC margin improved by tight supply 1,582.2 Naphtha : U$617 (’06 2Q) → 616 ( 3Q) 16% 1,429.6 Ethylene : U$ 1,090 → 1,331 18% 1,069.5 Propylene : U$ 1,069 → 1,280 Others 37% 36% 35% ▣ Sales and margin expanded
Slide 7: Petrochemicals: Spread trend and outlook
Divisional Results & Outlook Petrochemicals Spread trend Outlook (Unit:U$) ▣ Olefins prices will come off backed by stabilizing 307 319 oil/naphtha, end of NCC TA season, and capacity 295 280 267 263 expansions 255 PVC 270 238 Stable NCC margin in 4Q due to naphtha price drop 211 245 221 211 ABS 2
Slide 8: Industrial Materials: Business results and analysis
Divisional Results & Outlook Industrial Materials Business results Analysis (Unit:KRW bn) 543.3 ▣ Sales and margin declined in Automotive 518.3 521.6 materials by the strikes in auto industry 38% 42% • AMS Sales 20%↓(QoQ) Living / 40% Automotive • Hyundai Motors sales volume in July solutions : Appr
Slide 9: Industrial Materials: Business environment and outlook
Divisional Results & Outlook Industrial Materials Business environment Outlook (Thousand units) ▣ Domestic business environments 4.7 4.7% ▣ Sluggish constructing market by 4.0 3.1 Building/ the government’s real-estate policy GDP GDP Decorative 590 materials ▣ Enhancing the brand marketing Housing 4
Slide 10: I & E Materials: Business results and analysis
Divisional Results & Outlook I & E Materials Business results Analysis (Unit:KRW bn) 448.5 ▣ Strong seasonal demand boosted sales volume to Dell & HP 32% 370.4 Battery ▣ Increase of utilization for polymer Battery/ 319.9 Printed 32% batteries Curcuit 27% ▣ Prismatic batteries still struggling Materi
Slide 11: I & E Materials: Business environment and outlook
Divisional Results & Outlook I & E Materials Business environment Outlook ▣ Notebook & Handset Demand Outlook ▣ High demand season (Oct, Nov) (million unit/yr) ’04 ’05 ’06(E) CAGR ▣ Polymer-Strong market demand Notebook 47 60 75 26% Battery ▣ Prismatic-Delay in securing major customers Handset 692 8
Slide 12: Subsidiaries' Results & Outlook
Subsidiaries’ Results & Outlook Business results Analysis & Outlook ’05 3Q ’06 3Q ’06 2Q (Unit: KRW bn) Sales 532.6 641.8 450.3 LG Petrochemical LG Operating ▣ Expansion of sales thanks to Asian NCCs’ T/A and 83.2 92.5 11.2 Petro- Profit strong oil price (15.6) (14.4) (2.5) chemical (%) ▣ Improved p
Slide 13: Appendix: Sales & Operating Profit
Appendix Sales & Operating Profit (Unit : KRW bn) 2005 2006 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 6,884.1 Operating Profit 141.4 85.6 92.1 102.6 421.7 65.6 48.0 108.1 221.7 Petrochemicals 1,160.7 1,050.5 1,069.5 1,046.5 4,327.2 1,364.8
Slide 14: Appendix: Borrowings & Cash Flow
Appendix Borrowings & Cash Flow Borrowings Cash Flow (Unit : KRW bn) (Unit : KRW bn) Balance ’06 (P) ’05 ’06 3Q ’05 ’06 3Q Changes 1,865.4 1,717.1 △148.3 1,766.0 Total Net Income 400.3 234.9 (100%) (100%) (100%) KRW 1,529.8 1,343.7 △186.1 1,359.8 Depreciation 344.5 378.8 Currency (82%) (78%) (77%) C
Slide 15: Appendix: Capex Plan & Results
Appendix Capex Plan & Results (Unit : KRW bn) ’04 Results ’05 Results ’06 Plan ’06 3Q New/Expansion 11.8 23.7 127.4 50.2 Maintenance 52.7 69.1 81.3 65.2 Petrochemicals Equity Investment 6.6 41.2 28.5 25.9 Total 71.1 134.0 237.2 141.3 New/Expansion 4.9 17.1 42.8 8.8 Industrial Maintenance 42.7 49.1 4
Slide 16: Appendix: Price Trend
Appendix Price Trend Vinyls Styrenics (Unit:U$/MT) (Unit:U$/MT) 1,331 1,586 1,480 1,412 1,437 1,060 1,364 1,364 1,384 1,090 1,271 1,067 887 970 910 1,185 1,160 818 798 1,075 786 834 1,023 1,041 760 775 984 987 723 906 692 863 818 809 740 635 600 589 739 666 505 607 607 358 379 281 298 304 304 '05 1Q