Slide 1: Q3 '07 Earnings Results
Q3 ’07 Earnings Results Q3 ’07 Earnings Results October 9, 2007 Attachment 2. Presentation Material
Slide 2: Disclaimer
Disclaimer Disclaimer This presentation contains forward-looking statements. We may also make written or oral forward-looking statements in our periodic reports to the United States Securities and Exchange Commission and the Korean Financial Supervisory Service, in our annual report to shareholders,
Slide 3: Q3 '07 Earnings Results
Q3 ’07 Earnings Results Q3 ’07 Earnings Results
Slide 4: Income Statement
Income Statement Margin (%) YoY Change QoQ Change Q3 ’06 Q2 ’07 Q3 ’07 KRW b Income Statement (12) Net margin EBITDA margin (14) Operating margin (9) Gross margin N/A 130% (321) Net income N/A 431% (422) Income before tax 366% 62% 1,376 EBITDA N/A 362% (382) Operating Income N/A 186% (246) Gross Pro
Slide 5: Balance Sheet
Balance Sheet YoY Change QoQ Change Q3 ’06 Q2 ’07 Q3 ’07 KRW b Balance Sheet 6% 8% 7,072 6,986 7,519 Shareholders’ equity (20) (12) Net debt to equity ratio (%) (8%) (13%) 3,807 4,027 3,509 Long-term debt 37% 47% Short-term debt (2%) (3%) 6,663 6,708 6,525 Liabilities (21%) (6%) 1,148 Inventory 251%
Slide 6: Cash Flow
YoY Change QoQ Change Q3 ’06 Q2 ’07 Q3 ’07 KRW b Cash Flow (6) Depreciation & Amortization (2) Others (260) (34) (563) (294) Net change in working capital (307) Net change in cash (478) (581) (199) Financing activities 1,203 (586) (124) Cash flow before financing (908) (512) (328) CAPEX Cash flow fr
Slide 7: Performance Highlights
Performance Highlights Performance Highlights
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Slide 11: Shipments and ASP
Shipments and ASP Shipments and ASP Total K m² * ASP/m² ** (USD) Source: Company financials * Net display area shipped ** Quarterly average selling price per square meter of net display area shipped Display area shipment in K m ² ASP per m ² (USD) 1,993 2,275 $1,430 $1,414 1,000 2,000 3,000 4,000 Q3
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Slide 15: Revenue: Product Mix
Revenue: Product Mix 27% 21% 5% 47% 28% 22% 5% 45% 25% 22% 5% 48% Revenue: Product Mix Source: Company financials (Based on USD) Notebooks Monitors TVs Applications Q1 ’07 Q2 ’07 Q3 ’07 %
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Slide 19: Q3 '07 Capacity Update
Q3 ’07 Capacity Update 409 413 362 386 420 389 418 416 437 487 507 534 520 549 605 1,092 1,211 1,162 1,228 1,367 682 1,032 1,021 1,298 1,675 Q3 ’07 Capacity Update P7 averaged 127K sheets per month for the third quarter Source: Company financials Quarterly input capacity by Area (K m² ) P1-P3 P4 P5
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Slide 29: Cash ROIC
Cash ROIC Cash ROIC Source: Unaudited, Company financials * IC (Invested Capital) equals average of net debt and equity for the designated period; Quarterly ratios are annualized K GAAP (Consolidated) EBITDA margin Sales / IC* Cash ROIC 18% 124% 23% 11% 112% 12% 19% Q3 ’06 Q4 ’06 Q1 ’07 Q2 ’07 Q3 ’0
Slide 30: Outlook
Outlook Outlook
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@ Le.Puiuips ico
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Slide 34: Q4 '07 Outlook
Q4 ’07 Outlook CAPEX Schedule (KRW b) Appr. KRW 1 Trillion Mid thirties (%) Low single digit (%) Mid single digit (%) Mid single digit (%) Low single digit (%) Flat (%) Mid single digit (%) Low single digit (%) Low single digit (%) High single digit (%) Mid single digit (%) IT TV IT TV IT TV (USD) C
Slide 35: Questions and Answers
Questions and Answers Questions and Answers
Slide 36: Appendix
Appendix Appendix
Slide 37: US GAAP Income Statement
Margin (%) YoY Change QoQ Change Q3 ’06 Q2 ’07 Q3 ’07 KRW b US GAAP Income Statement (11) Net margin EBITDA margin (14) Operating margin (9) Gross margin N/A 92% (307) Net income N/A 343% (408) Income before tax 355% 57% 1,352 EBITDA N/A 357% (378) Operating Income N/A 180% (236) Gross Profit 1% 1%
Slide 38: US GAAP Balance Sheet
YoY Change QoQ Change Q3 ’06 Q2 ’07 Q3 ’07 KRW b US GAAP Balance Sheet 6% 7% 7,028 6,965 7,480 Shareholders’ equity (19) (11) Net debt to equity ratio (%) (7%) (12%) 3,802 4,052 3,553 Long-term debt 37% 47% Short-term debt (1%) (3%) 6,668 6,775 6,590 Liabilities (21%) (6%) 1,148 Inventory 251% 34% 1
Slide 39: US GAAP Cash Flow
YoY Change QoQ Change Q3 ’06 Q2 ’07 Q3 ’07 KRW b US GAAP Cash Flow (6) Depreciation & Amortization Others (277) (36) (570) (313) Net change in working capital (307) Net change in cash (478) (581) (199) Financing activities 1,203 (586) (124) Cash flow before financing (908) (512) (328) CAPEX Cash flo
Slide 40: Net Income Reconciliation to US GAAP
Q2 ’07 Q3 ’07 KRW b Net Income Reconciliation to US GAAP (19) Convertible bonds (including FX valuation) (2) (1) Stock appreciation right (3) Cash flow hedge Net Income under US GAAP Others (1) (1) ESOP (14) Income tax effect of US GAAP Adjustments Pension expense (1) Capitalization of financial int
Slide 41: EBITDA Reconciliation
Q3 ’07 YoY Change QoQ Change Q3 ’06 Q2 ’07 US GAAP (KRW b) YoY Change QoQ Change Q3 ’06 Q2 ’07 Q3 ’07 K GAAP (KRW b) EBITDA Reconciliation 1,376 (16) 1,352 (16) 6. Amortization of Intangible Asset (307) 1. Net Income (5) 2. Interest Expense (11) (4) (5) (12) 3. Interest Income (100) (115) 4. Provisi
Slide 42: EBITDA Reconciliation (Continued)
EBITDA Reconciliation (Continued) EBITDA Reconciliation (Continued) EBITDA is defined as net income (loss) plus: interest income (expense); provision (benefit) for income taxes; depreciation of property, plant and equipment; amortization of intangible assets; and amortization of debt issuance cost.
Slide 43: Thank You!!!
LG. Philips LCD makes technology you can see… Thank You !!!
Slide 44: New Direction
New Direction October 9, 2007 New Direction 1. Progress of ’07 Major Action Items 2. Current Issues 3. Profitability in ’07
Slide 45: 1. Progress of '07 Major Action Items
1. Progress of ’07 1. Progress of ’07 Major Action Items 1) Increase capacity by shortening Tact Time (Maximize equipment efficiency) 2) Significantly enhance production capacity of the existing fabs by minimizing loss (Challenge limits) 3) Some effects to show from Q3 ’07 (Contribute to the revenue
Slide 46: 1. Progress of '07 Major Action Items
1. Progress of ’07 1. Progress of ’07 Major Action Items 1) Achieved superiority in pricing over competitors by strengthening price management, etc. 5. Price Management Through consideration management: Customer-oriented mindset Voluntary, positive mindset Building teamwork Establish strong organiza
Slide 47: 2. Current Issues
2. Current Issues 2. Current Issues 1) Possibility for Philips to sell some portion of its LPL shares during ’07. 2) Philips to discuss with LPL on how and to whom it sells LPL shares. Currently, one or two companies have interests. 1. Philips Overhang 1) Decision on Gen 8 investment Glass Size (mm)
Slide 48: 3. Profitability in '07
3. Profitability in ’07 3. Profitability in ’07 • Concerns on PDP price decline - But PDP price decline may not affect significantly on LCD • The shortage situation will be continued or eased depending on products • Sales may be decreased as a result of some equipment alteration for CAPA enhancement
Slide 49: Appendix 1) Theoretical CAPA and Production Utilization Rate
Appendix 1) Theoretical CAPA and Production Utilization Rate Dec '06 Jan '07 Feb Mar Apr May Jun Jul Aug Sep Dec '06 Jan '07 Feb Mar Apr May Jun Jul Aug Sep Appendix 1) Theoretical CAPA and Production Utilization Rate 38% improvement 15% Point increase Compared to Jan ’07, when Max Capa & Min Loss a
Slide 50: Appendix 2) Customers' Evaluation on LPL's IPS 120Hz FHD/HD
Appendix 2) Customers’ Evaluation on LPL’s Appendix 2) Customers’ Evaluation on LPL’s IPS 120Hz FHD/HD JVC: Letter of appreciation for receiving ‘Summer Best Buy’ award from ‘HiVi’ (June ’07) and ‘Visual Grand Prix’ award from ‘AV Review’ (July ’07) with LPL’s 42” 120Hz FHD product “ Thanks to your