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2003 1H Results

2003 1H Results. Sales and Operating Income. Due to the slowdown in domestic consumption and intense competition, sales decreased by 2% and operating income by 34% year-on-year. Operating Income. Sales. (KRW bn). (KRW bn). 555.6. 58.3. 546.7. ▽2%. Cosmetics. Cosmetics. ▽34%. 34%.

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2003 1H Results

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  1. 2003 1H Results

  2. Sales and Operating Income Due to the slowdown in domestic consumption and intense competition, sales decreased by 2% and operating income by 34% year-on-year. Operating Income Sales (KRW bn) (KRW bn) 555.6 58.3 546.7 ▽2% Cosmetics Cosmetics ▽34% 34% 36% 40% 38.6 30% Household Products Household Products 66% 64% 60% 70% ’02 1H ’03 1H ’02 1H ’03 1H 1

  3. Segment Results Sales of Household Products was similar to last year with a decrease in margin. Cosmetics showed negative growth both in sales and profits year-on-year. Household Products Cosmetics (KRW bn) (KRW bn) ’02 1H ’03 1H ’02 1H ’03 1H changes changes ▽9.1% ▽8.6% ▽51.1% 1.0% ▽2.1% ▽22.4% Sales Gross Profit Operating Income 205.3 146.4 23.7 186.6 133.8 11.6 Sales Gross Profit Operating Income 360.3 147.4 34.8 364.0 144.3 27.0 71.7% 71.3% 40.9% Gross Margin Gross Margin 39.6% ▲0.4%p ▽1.3%p Operating Margin Operating Margin 11.5% 9.7% 6.2% 7.4% ▽5.3%p ▽2.3%p 2

  4. Financial Highlights In spite of the lower-than-expected business results and the substantial amount of dividend payout for FY ‘02, the debt-to-equity ratio has remained flat since end-FY ’02. However, profitability was negatively affected by a decrease in sales and increase in costs. P/L Summary B/S Summary (KRW bn) (KRW bn) ’03 1H ’03 1H FY ’02 ’02 1H Sales (Cost of Sales) Gross Profit (SG & A) Operating Income Recurring Profit (Extraordinary Loss) Net Profit 555.6 265.6 290.0 231.7 58.3 55.9 - 39.7 546.7 270.4 276.3 237.7 38.6 38.5 0.8 27.4 Assets (Fixed) Liabilities (Long-term) Shareholders’ Equity Debt-to-Equity Net Debt-to-Equity 678.1 435.4 406.9 79.1 271.2 150% 53% 669.3 418.0 399.5 81.5 269.8 148% 50% Borrowings (Net Borrowings) Gross Margin 52.2% 173.0 50.5% 167.6 (144.8) 10.5% Operating Margin (135.9) 7.1% 3

  5. Quarterly Results (KRW bn) y-o-y 1H 1H ’02 1Q 2Q ’03 1Q 2Q 1H 1Q 2Q Total 0.8% △ 1.5% △25.6% △ 4.2% △ 8.0% △44.6% △ 1.6% △ 4.7% △33.8% Sales Gross Profit Operating Income Household Products 4.2% 3.0% △ 7.9% △ 2.3% △ 7.5% △42.8% 1.0% △ 2.1% △22.4% Sales Gross Profit Operating Income Cosmetics △10.8% △ 8.5% △54.6% △ 7.4% △ 8.7% △46.7% △ 9.1% △ 8.6% △51.1% Sales Gross Profit Operating Income 4

  6. Earning Target for 2003 Due to 1st half results falling below target and slowing growth of the domestic economy, LG H&H revised sales and recurring profit targets for 2003. Recurring Profit Sales (KRW bn) (KRW bn) 1,170 110 1,100 ▽6% ▽27% 80 Previous Target Revised Target Previous Target Revised Target * Any information regarding the earning forecast for 2003 provided before Aug 1, 2003 should be revised to reflect the above change. 5

  7. Thank you! This presentation contains forward looking statements which are based on management’s assumptions and estimates. The forward looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in this presentation. Potential risks and uncertainties include, but are limited to, such factors as general economic conditions, foreign exchange fluctuations, and any change in the relevant laws and regulations. www.lgcare.co.kr www.careshop.co.kr

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