LG Chem Ltd. · KRX:051910
LG Chem — Q2 2005 Earnings Presentation
18 slides from LG Chem's earnings presentation, 2005
Slide 1: Future for you - LG Chem
__ Future for you @ LG Chem
Slide 2: ’
’
Slide 3: ’
’
Slide 4: Net income including minority interests
’ ’ ’ ’ ’ ’ * * Total Net Income includes income of consolidated subsidiaries’ minority interests. 1 / 15
Slide 5: ’ ’ ’ ’ ’
’ ’ ’ ’ ’ 2 / 15
Slide 6: Petrochemical results and outlook: ABS, PVC, acrylate
• - Despite sluggish performance in the PVC, high prices of ABS/PO/Acrylate helped slight improvement in sales. - Fierce competition with Carbide PVC and bullish raw material price worsened PVC and ABS performance. Others - Sluggish domestic demand and competition due to new plants in China resulted
Slide 7: Industrial materials results and outlook
• - Increased sales of window frames and automotive materials resulted in better overall sales. - Sales prices hike and continued innovations resulted in slightly better profits. · Sales Price for PVC Window Frames (5% YoY) • - With stabilized raw material prices, slightly better operating margin ma
Slide 8: Information and electronic materials results and outlook
• - Batteries : Weak sales of cylindrical type worsened profitability · Cylindrical : Quality Issues. (Apple Recall etc.) Delay in launching lower priced products. · Polymer : Weak sales of new products for overseas customers. - Optical materials : Sales rose with increased volume but downward press
Slide 9: Product and raw material prices
’ ’ ’ ’ - Product prices hiked except ethylene. · Ethylene : U$ 788 (’04 2Q) 735 (’05 2Q) · Propylene : U$ 697 (’04 2Q) 870 (’05 2Q) - Profitability declined slightly due to higher naphtha price. · Naphtha : U$ 362 (’04 2Q) 448 (’05 2Q) - Higher raw materials prices reduced profits. * · MEG: U$
Slide 10: Petrochemical strategy: vertical integration
Vertical Integration Consider merger with LG Daesan Synergy -Efficiency in management Improved Cash flows Stability in raw material Expand NCC at LG Daesan Solution to the shortage of raw materials - EDC/VCM Focus on core businesses PVC - Strengthening vertical integration in China Securing energy t
Slide 11: Industrial materials strategy: brand power
Enhancing existing Expanding premium product group Building up brand power - “Ronchell “ - top quality window frame businesses - “El Greco ” - and wall paper brand Increasing environment-friendly, energy- saving products Accelerating globalization trough product Hi-Macs plants in the US (July 2005)
Slide 12: Battery and polarizer strategy: partnership with customers
Partnership with customers • Energy solution that has superior function based on a new chemistry -Providing superior value to customers with good partnership - Safety-improved batteries (LGE, LG Philips, HP etc.) - High-energy density& high temperature resistant batteries Development of new solution
Slide 13: Battery product launches and new applications
Long term supply contracts (HP–June ’05) Launching superior quality products Launching high energy density batteries ( 2.6 Ah- Aug ’05) Developing new applications Developing safety-reinforced batteries (Dec ’05) Exploring new markets: Cylindrical for Power tools New products for mobile devices Deve
Slide 14: Focus on TV displays market
Keeping first vender position (LPL, BOE etc.) Focus on TV displays market Existing Existing · Increasing sales with new models - Achieving leading position in LCD TV market customers customers · Leader in IPS displays & new entry into VA market -Joint marketing (China etc.) - Strengthening market po
Slide 15: Sales by business division (KRW bn)
(Unit : KRW bn) * Difference between total of all business divisions and total of each business unit indicates inter-company business sales. 12 / 15
Slide 16: Borrowings (KRW bn)
(Unit : KRW bn) The % is calculated to total borrowings. 13 / 15
Slide 17: Financial data (KRW bn)
(Unit : KRW bn) ’ ’ ’ ’ 14 / 15
Slide 18: Product price trends
1,497 1,469 1,099 1,043 1,067 1,412 1,364 1,330 1,237 945 1,185 898 887 1,123 841 841 1,084 1,115 790 760 976 1,023 775 984 786 755 723 949 902 933 650 850 620 740 818 740 732 727 600 696 698 552 542 527 489 505 423 548 484 483 371 471 333 358 432 284 • The prices are average price of CFR FE Asia fo