IR News

1. Lately, many analysts have recommended buying LGE shares. Their claim is that management efficiency has been significantly improved since the demerger, so the performance of LGE will continue to improve next year? At this point, could you summarize results on 3rd Q?

-This year revenue (1st Q - 3rd Q) is 14 trillion Korean Won (YoY 18% increase). Operating profit for the same period is 986.4 billion (YoY 46% increase).
-The major causes for the increase in revenue and operating profit are a sharp increase in export of the handset, a domestic sales increase in Appliance and DDM, and a lower cost structure of the products.


2. As this point in November, can you forecast this year results, including 4th Q estimation?

- Overall this year revenue and operating profit are expected to be 18.4~18.5 trillion(YoY 15~16% increase) and 1.2 trillion(YoY approximately 50% increase) respectively.


3. As you said in the beginning of this year, the operating profit results during 2002 seem as they will exceed the 1 trillion, could you elaborate on causes of the high operating profit?

-Improvement in performance of handset business: this year operating profit 1~3Q increased 125% compared to 1~3Q in 2001. Impact from the improvement of GSM handsets has been especially great.
-Launch high-end products (DTV's, side-by-side refrigerators, drum wish machines, handsets, LCD monitors etc.)
-Some businesses that made a loss in 2001 are going to reduce their losses or turn a profit. For example, in 2003, System and PDP businesses are expected to show profits.
-The demerger improved transparency and the level of the concentration in our own operations. In addition, the amount of the debt has significantly reduced(over 1 trillion).


4. You mentioned that effective resource allocation among divisions could be one of the key factors leading LGE to be to a top ranking company. Could you specify the businesses which give LGE great victories?

-Victory Business: handsets, DTV's, PDP's and intensive support to be provided to develop these into future cash cow businesses
-Main Business: Home appliances, optical storages, Digital AV's and maintain current cash cow positions
-Based on Victory and Main businesses, LGE is going to enter in the Top-Tier in electronics and IT industry, maintaining 10% operating margin.


5. What are the CAPEX and business strategy in 2003?

[CAPEX]
- CAPEX for the next year should be about 770 billon Won which is a 35% increase over this year (570 billion in 2002). Major areas of spending are investment in the PDP 2 phase and increase in capacity of handset business.
[Business Strategy]
- Creating growth foundation for handsets, DTV, PDP
- Based on our scenario management, LGE will maximize outcomes of the next year in spite of uncertainties domestically and internationally (slow IT, the US economy, and Korean market, possible war with Iraq) and falling average selling prices in major products.


6. Could you describe the competition with Chinese companies?

- LGE sees the Chinese market as another domestic market; therefore, LGE continues to actively participate in the Chinese market in order to build up the same level of the cost efficiency as Chinese players. In addition, the product leadership and quality of LGE enhance its victory in the market.
- LGE is broadening its scope of business in China from production-oriented to the full scope including R&D and Marketing.
- Overall, China seems to be more of an opportunity than a threat for LGE.


7. Can you comment on the merger of the two LG holding companies?

- Two companies are going to be one before April 1,2003. We are trying to complete all the necessary procedures as soon as possible.


8. Could you give a final comment for the investors?

- LGE is perceived as a stable and somewhat conservative company; however, now LGE determined in its pursuit of Victory businesses.
- Corporate governance has been significantly improved since the demerger. On this basis, LGE will continue to improve its trust from investors.