LG Electronics

November 2002

As a note, this presentation was released as the dates shown and reflected management views as of these dates. While reviewing this information, the data and information contain certain forward-looking statements that are subject to known and unknown risks and uncertainties that may cause actual results to differ from those stated or implied by such statements. These risks and uncertainties include, but are not limited to the risk factors noted in the Companys Earnings Releases and the Companys filings with the Financial Supervisory Commission of Korea. The Company assumes no obligation or responsibility to update the information provided in the presentations in correspondence to their respective dates.

Accomplishments to Date

Business Structure
LGE is in four different business lines with two JVs with Philips LG. Philips LCD LG Electronics Investment (LGEI) LG. Philips Displays LG Innotek LG Micron

LG Electronics LG Electronics

LGIBM PC Overseas Subsidiaries

Digital Display Digital Display & Media & Media

Optical Storage PC Monitor TV Audio/Visual Recording Media PDP

Home Home Appliance Appliance

Mobile Mobile Handset Handset

Telecom Telecom System System

Air-Conditioner Refrigerator Washing Machine Vacuum Cleaner Cooking Appliance Others

CDMA handset GSM handset WLL handset

Wireless System Switching & Transmission Data Network

Accomplishments
Now LGE is reshaped and more focused and most of all, has much clearer direction

Demerger to focus on main business Strong growth, high margin Home Appliance division
- CAGR from 1999 to 2002 : LGE 22% vs. Industry 4%

High growth in Handset division with growing market share

- CAGR from 2000 to 2002 : LGE 50% vs. Industry 1%

World top-class PDP maker / Leader in Digital TV development LG.Philips LCD ahead of competition in 5G TFT-LCD production Globally securing a top-tier position in major products (Optical storage, Monitor etc.)

Product Leadership in Key Markets

LGE has built up its presence in the global market by taking number one position in many product areas

Global Market Share in 2002(E)

Korean Market Share

1
Air Conditioner *
15.4%

Optical Storage
21.4%

CRT
27.0%

2 3

TFT-LCD
17.0%

CDMA
18.0%

Monitor
10.4%

No.1 No.1

6.4%
* Based on Package Air conditioner Source: DisplaySearch, LSI, IDC, LGE

Performance History
Sales has grown steadily despite the economic turmoil

(Unit : W tril.)

Sales

2002 Target
16.6 14.8

6.1
9.9 10.5

Sales : W18.4 ~ 18.5 tril. (15% ~ 16% yoy growth)

4.9 Operating Profits : 6.4~6.5% (more than 50% growth yoy) 9.9 10.5

2.6

2.7

7.3

7.8

Recurring Profits : Dramatic improvement in equity method accounts (W902 bil. loss in 2001)

1998

1999 Export

2000 Domestic

2001

Handset Performance and Outlook

CDMA so far led the growth. GSM will be next growth driver
Advance into Europe and China Strong sales in US CDMA

(unit: million units)

9 6.8 5.7
0.7 5 CDMA export 0.2 4.2 4.5 2 GSM Export

4.2
0.1 2.4 1.8
'01 1H

1.5
'01 2H

1.6
'02 1H

2
'02 2H(E)

domestic 2

Achievement
CDMA in US : Secured #1 supplier position to major operator Groundbreaking effort to GSM market launched LG Brand

Outlook
Full launching of EVDO and WCDMA market in Korea CDMA : US market to move to color phones, Demand growth in China and India Color phones to lead robust GSM sales

Global Market Share

LGE is now 6th in the global market with 2nd place in the CDMA handset market. Europe, China, and India are next growth areas.

Global Handset Makers Status Worldwide Handset M/S*

2001 2002 1H

Worldwide CDMA Handset M/S

2001 2002 1H
30.9% 17.7% 12.3% 11.3% 10.6%
1 2 3 4 5 Samsung LG Motorola Kyocera Nokia 23.3% 18.9% 17.3% 13.2% 12.3%

1 2 3 4 5 6 7 8 9 10

Nokia Motorola Samsung Siemens SEMC NEC Mitsubishi Panasonic Alcatel LG

35.6% 14.9% 7.3% 7.3% 7.1% 2.9% 2.9% 2.7% 2.6% 2.5%

1 2 3 4 5 6 7 8 9 10

Nokia Motorola Samsung Siemens SEMC LG Alcatel Kyocera Mitsubishi NEC

36.3% 16.5% 10.1% 8.8% 5.8% 3.6% 3.2% 2.2% 2.1% 2.1%

1 2 3 4 5

Samsung LG Motorola Nokia Kyocera

*Source : Strategy Analytics, August 02

2H Expectation - CDMA
Sequential drop in 4Q especially from US expected 87% in domestic market and 24% in export expected to be color phones

CDMA Performance in 2002

Color-Screen Sales Trend

Domestic
69% 87%

3.2M 2.9M

3.8M 3.1M

45%

1,065 646

12.9M
0%

Domestic

958

0
2,685

1,100

3,8M

'01 2Q

'01 4Q

'02 2Q

'02 4QE

Export

2,588 1,901

Export
1,900

9.1M
13% 0%

24%

1Q

2Q

3Q

4Q(E) 2002(E)

'02 2Q

'02 3Q

'02 4QE

2H Expectation - GSM
GSM business offers great opportunities for LGE to be in a global top-tier handset maker by 2005.

Performance Overview
Total 2.6M units in 2002 (Unit: thousand) 1,100 750

LGEs Strength

Technology leadership
- Utilize multimedia technology from Display & Media division

Enhancing Brand Power

- Targeting mid to high market - Utilize high brand power in Europe and China

480

260

Product Leadership -Export launch from selected hit products in Korea -Maximize synergy between GSM and CDMA
business

1Q

2Q

3Q

4Q(E)

LGE as a top CDMA maker

LGE succeeded in Korea, a toughest test ground for new tech with fastidious customers. LGE has outstanding competitiveness in ever-changing world handset market with its Innovation, customization and product differentiation capability.

Market - Change in Game Rule

97~00 Scale Game - Moderate Quality - Low Price

LGEs Competitiveness Rapid product development time

- Short product lead time of 8.5 months - More diverse model portfolio vs. competitors

[ Service operators ] Profit aggravation of service operators [Handset customers] Increasing desire for better design and new tech

Vertical integration
- Ability to leverage product development of Display and Media Tech divisions

Innovative and smart designs Successful customization with major operators

- Excellent design 00 ~ Scale + Exciting Products - Multi media

Going Forward

Diversified Product Portfolio

LGE will continue to move up to the value chain by allocating resources into future business Profitability Product Life Cycle

Handsets Optical Storage

Home Appliances

Digital TV
Time

PDP OLED

Balanced Contribution
More balanced income from each sector projected
2001 Operating Profit Breakdown Operating Profit Up to 3Q 2002

Display& Media 19%

Display& Media 29%

Handset& System 19%

Appliance 62%
Handset& System 21%

Appliance 50%

Major contributor
Package Air conditioner Refrigerator Optical Storage TV CDMA handsets -

Major contributor
GSM / CDMA handset TV LCD and PDP TV Optical Storage Other Premium Products

Stronger Balance Sheet

Having strong balance sheet is the first priority of LGE.
LG Electronics Debt (KRW trn)

118% 95%

128% 97% 50%Level 4 3.6 3.1

4.9

2000

2001

After Demerger Debt

D/E Ratio

3Q 2002

2005E

A strong balance sheet is a prerequisite for a global player For stable growth and investment, LGE will reduce current 97% gearing level down to 50% level by 2005

Key Summary
With strong growth in GSM and color phones, handsets has contributed to the overall margin improvement
- GSM : Explosive growth (grew 877% YoY, 38% QoQ in 3Q02) with highly improved profitability - Domestic : Product leadership (OLED, EV-DO Phones) / Full product line-up, leading to market share expansion

Ongoing growth of Home Appliance in sales and profitability

- Sales has shown over 20% CAGR since 1998 with more than 10% op margin - Premium products have driven the growth, maintaining market leadership

Level-up in PDP business with a possible turnaround in System business in 2003

- PDP : Visible demand growth with reliable yield improvement - System : Better profitability from W-CMDA sales and business rationalization

Continuing cost innovation and restructuring to improve profitability

- Business rationalization in Monitor, PCB and Telecom System

Thank You

www.lge.com