IR News

- Hitting a record high of 18.602.9 trillion won in sales and 1.286 trillion won in operating profits in 2002
- Recording 4.609 trillion won in sales (up 4.7% from the same period of last year) and 42.2 billion won in operating profits for the 4th quarter in 2002
- Announcing the goal in 2003 to achieve 18~18.3 trillion won in sales, a 3~5% increase from last year and to make a 1.75 trillion won investment

LG Electronics (CEO &Chairman: John Koo, www.lge.com) on 5 Feb announced its 2002 performance recording the sales of 1.286 trillion won, up 29.2% from the previous year.

Announcing the 2002 performance at the conference room of the Korea Stock Exchange, Mr. Young-soo Kwon, LG Electronics Vice President said LG Electronics posted 18.602.9 trillion won in sales (11.948 trillion won in exports and 6.654.9 trillion won in domestic sales), 1.286 trillion won in operating profits, 675.2 billion won in ordinary profits and 497.6 billion won in net profits thanks to the sales increase in mobile phones and premium home appliances.

< Sales and Main Features by Product Divisions >
Mobile phones recorded 3.524 trillion won, a 46% annual increase. Digital appliance also increased by 21.7% annually to 6.426 trillion won due to a good performance of “Intellowasher”, the washing machine and “Side by Side Refrigerator”. Display & Media including DTV and Home Theater showed an annual increase of 7.2% to 7.942.9 trillion won.

LG Electronics’ 2002 performance can be characterized that it was boosted by a strong sales in mobile phones, a stable growth in Digital Appliance and a recovery of Display & Media.

In particular, 16 million handsets were sold, up 58% from last year with an increase of operating profits from 7% in 2001 to 10% in 2002.

Behind this good performance was LG Electronics’ successful efforts of creating domestic demand for high-end products like color phones and camera phones, raising the overseas market share of CDMA (Code Division Multiple Access) business especially in strategic markets like North America and increasing sales in GSM (Global System for Mobile Communication) business substantially. As a result, LG Electronics jumped to the 6th place (as of the 3rd quarter in 2002) from 10th in the world’s handset market.

LG Electronics plans to focus more on handsets this year, increasing its domestic market share of high-end CDMA products and selling 23 million GSM phones, up 46% from 2002 by raising sales in earnest. It also expects a 60% increase in handset sales for the 1st quarter in 2003, compared with the previous year.

< The 4th Quarter Results >
For the 4th quarter, LG Electronics recorded 4.609 trillion won in sales, up 13.9% from the same period of last year. It also posted 42.2 billion won in operating profits and 259.6 billion won in ordinary losses.

Profits for the 4th quarter was less than the 3rd quarter. According to LG Electronics, however, it is not due to a slower performance. Rather, it is because incentive payments, which are normally calculated as expense for the 1st quarter, were reflected in advance during the 4th quarter in 2002, and a profit and loss valuation of equity method of its subsidiaries including Philips Display was also reflected.

< 2003 Business Plan >
LG Electronics announced its 2003 business plan: 1) achieve 18 ？ 18.3 trillion won in sales, a slight increase from the previous year. 2) maximize profits of key businesses such as home appliance, optical storage, digital AV through core technology development and active marketing. 3) strengthen the market position in strategic areas including mobile phones, DTV, PDP and organic EL.

To this end, LG Electronics will invest a total of 1.75 trillion won in several areas including facilities for such products as PDP and mobile phones with about 770 billion won, up 35% from 2002 and R & D with 980 billion won.

* 18~18.3 Trillion Won in 2003 Expected Sales
With a change in Korea’s accounting rules from 2003, paid supply be excluded from sales, making a 2003 sales figure look decreased from 2002. However, 2003 expected sales are actually up 3 ~ 5% from 2002, if paid supply is excluded from 2002 sales.

※ Paid supply: It refers to purchasing prices which is calculated as sales when manufacturers buy raw materials and sell them to subcontractors. This will be excluded from sales starting from 2003.