LG Chem Ltd. · KRX:051910
LG Chem — Non-Deal Roadshow (June 2006)
20 slides from LG Chem's roadshow presentation, June 2006
Slide 1: LG Chem, Ltd. – Future for you
_ Future for you LG Chem, Ltd. June 2006
Slide 2: Table of contents
Table of contents . General overview 1 . Financial highlights 5 . Business performance 7 Appendix 10
Slide 3: LG Corp. group structure and sales (2005)
LG corp. Sales OP As of 2005 Fiscal year (Consolidated base) (137) 62 3.3 ( ) : The numbers of companies (KRW tn, %) LG Chem Sales OP Shares LGE Sales OP Shares LG Sales OP Shares LG CNS <66> (20) 11 0.8 <34> (96) 44 1.7 <35> Telecom 3.5 0.4 <37> LG Petrochem <40> LG Philips-LCD <38> LG Nsys <100> L
Slide 4: Business portfolio and main growth engines
Petrochem I&E Industrial materials 48 Business CAGR Business CAGR Main ABS/PS 10% 3E materials * 190% Main growth Batteries 20% growth PO * 40% engine Polarizer film 24% engine Batteries 46% PDP filter 27% Polarizer film 61% Color filter PR 40% * LG Daesan included in 2006 * 3E (Energy, Environment,
Slide 5: Market positions of Petrochemicals, Industrial materials, I&E materials
Petrochemicals Industrial materials • Dominant No.1 market share in the domestic market - Building & decorative Materials (60%) - Automotive components (30%) • Globally competitive products (Global market share) - High-gloss sheet (12%) LG - HI-MACS (Artificial marble) (15%) I & E materials 22% 20%
Slide 6: Sales contribution by market and target markets
Sales contribution by market Target markets • Petrochemicals KRW 7.5 tn - PVC : North/South America, Africa, EX-CIS - ABS : China - PO : China, Africa, South America Direct 41% export China 56% • Industrial materials - Housing solutions : Domestic No1 player - Living solutions / HI-MACS / Automotive
Slide 7: Income statement and balance sheet (consolidated)
Income statement Balance sheet (Unit : KRW bn) ’03 ’04 ’05 ’06 1Q (Unit : KRW bn) ’03 ’04 ’05 ’06 1Q Sales 5,672 7,127 7,425 2,129 Assets 4,762 5,679 5,593 5,667 (Cash and equivalents) 257 414 189 134 Operating Profit 474 523 422 66 Liabilities 2,947 3,484 3,155 3,271 (Borrowings) 1,706 1,980 1,865
Slide 8: Income statement and balance sheet (non-consolidated)
Income statement Balance sheet ’03 ’04 ’05 ’06 1Q ’03 ’04 ’05 ’06 1Q (Unit : KRW bn) (Unit : KRW bn) Sales 6,897 8,817 10,785 2,635 Assets 5,835 6,897 7,291 7,325 (Cash and equivalents) 334 528 608 325 Operating 673 890 841 141 Profit Liabilities 3,618 4,196 4,221 4,369 (%) (9.8) (10.1) (7.8) (5.3)
Slide 9: Petrochemicals business results, analysis and outlook
Business results Analysis & Outlook (Unit : KRW bn) • 4,327 4,152 - Passed the peak of petrochemical cycle 36% · 3Q 2004 ~ 1Q 2005 3,262 33% - Strong crude oil Others 33% · High cost structure in down stream chemicals from late 2005 NCC/PO 33% 32% - Capacity expansion in China 31% 1,365 · Severe com
Slide 10: Industrial materials business results, analysis and outlook
Business results Analysis & Outlook (Unit : KRW bn) • 2,055 2,087 1,960 - Hitting the bottom in the 4Q 2004 Automotives/ 43% 42% - Improved product-mix Living 41% Materials · Value-added window frame (balcony window frame) · Automotive skin Building/ - Business paradigm transformation Decorative · I
Slide 11: I&E materials business results, analysis and outlook
Business results Analysis & Outlook (Unit : KRW bn) • 1,271 1,207 - Volume growth for LPL and the large-sized TV polarizer 30% - Focusing on quality stabilization and increasing long-term Battery/ Printed 48% contract volume in battery business Circuit Materials 699 - Special expense (KRW 80 billion
Slide 12: Quarterly sales and operating profit by segment
! " (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 2,129.1 Operating Profit 141.4 85.6 92.1 102.6 421.7 65.8 65.8 Petrochemicals 1,160.7 1,050.5 1,069.5 1,046.5 4,327.2 1,364.8 1,364.8 PVC/Plasticizer 382.2 335.7 348.5 354.7 1,421.1 31
Slide 13: LGPC and overseas subsidiaries
! " ’05 ’06 1Q ’05 ’06 1Q (Unit : KRW bn) (Unit : KRW bn) Sales 1,989 513 Assets 1,040 1,045 LGPC Operating Profit 242 42 Liabilities 226 280 (%) (12.1) (8.2) Net Income 193 34 Equity 814 765 Sales 1,305 323 Asset 908 1,070 Operating profit 37 16 Overseas* Liabilities 525 669 (%) (2.8) (5.0) Net Inc
Slide 14: Capital expenditure by segment
! " # $ % # ! " (Unit : KRW bn) ’04 Results ’05 Results ’06 Plan ’06 1Q New/Expansion 11.8 23.7 127.4 5.9 Maintenance 52.7 69.1 81.3 15.8 Petrochemicals Equity Investment 6.6 41.2 28.5 - Total 71.1 134.0 237.2 21.7 New/Expansion 4.9 17.1 42.8 0.7 Industrial Maintenance 42.7 49.1 44.8 14.6 Materials
Slide 15: Borrowings and cash flow
& ! ! " Borrowings Cash Flow (Unit : KRW bn) (Unit : KRW bn) Balance ’06 (P) ’05 ’06 1Q ’05 ’06 1Q Changes 1,865.4 1,731.0 134.4 1,766.0 Total Net Income 400.3 65.6 (100%) (100%) (100%) KRW 1,529.8 1,345.5 184.3 1,359.8 Depreciation 344.5 125.9 Currency (82%) (78%) (77%) C P 100.0 100.0 - 120.1 Inve
Slide 16: Shareholders and market cap
! " Shareholders Market Cap. (Unit : KRW) Dec 31, ’05 May 15, ’06 Foreign Investors No. of Shares LG Corp. 34.0% Price Price Market Cap 32.6% Common 64,425,064 57,000 40,500 2,609 bn Institutional & Individual Investors 33.4 Preferred 8,661,251 40,000 27,800 241 bn Total 73,086,315 2,850 bn Common S
Slide 17: Dividend history and policy
' ! " 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% 1,750 1,500 1,500 * Adjusted Net-income = 1,250 750 750 750 Net-income Dividend revenues Equity-method gains Dividend per share Yield * Legal rese
Slide 18: Production capacity by product and region
# ' ' ! " (Unit : kMT/Yr) Item Region ’04 ’05 ’08 ’10 Item Region ’04 ’05 ’08 ’10 PVC Yeosu 560 560 560 560 ABS Yeosu 560 560 560 560 Daesan 200 200 200 200 Ningbo 330 330 500 500 China 350 350 400 400 India 0 0 0 100 Total 1,110 1,110 1,160 1,160 Total 890 890 1,060 1,160 VCM Yeosu 720 720 720 720
Slide 19: Vinyls and Styrenics price trends
# & ( ! " Vinyls Styrenics (Unit : U$ / MT) (Unit : U$ / MT) 1,497 1,469 1,099 1,067 1,412 1,437 1,060 1,043 1,364 1,364 1,384 1,330 945 970 1,237 898 1,185 841 887 841 818 1,123 1,115 1,084 1,075 760 786 1,023 1,041 834 984 987 740 732 775 933 775 786 723 902 790 740 850 755 818 809 600 607 607 739
Slide 20: Chairman, CEO and directors
) * ! " Name Career Remark BA (Business Administration), Seoul National Univ. Chairman Kang, Yu-Sig Vice Chairman of LG Executive Office for Corporate Restructuring During his tenure *Vice Chairman & President of LG Corp. BA (Chemical Engineering), Seoul National Univ. CEO Kim, Bahn-Suk CEO of LG Pe