June 2003

LG Electronics

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 Company’s Earnings Releases and the Company’s

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.

Highlights

Accomplishments

Revenue grew over 13% CAGR over last three years

Led by strong sales of handsets

Appliance division still growing

Profitability improvement

Restructuring in system and IT related business (PCB, Monitor etc.)Concentrating on premium brand products Low-end production to China

Established framework for enhanced corporate governance

Demerger removed non core assets

Holding company structure limits investments in affiliates

Highlights

The Road Ahead

Raising brand awareness in developed overseas markets

Maintain high ROE and EVA

Expand LG brand appliance in North America

Aggressive marketing on handset in Europe

EVA is a key performance measurement

Invest in key growth products for the futureInvesting for the future despite current difficult market conditions

-> PDP 3rd line, LCD, OLED etc

Efficient cost and risk managementTighter control on receivables and inventory

Cash reserve for sufficient liquidity

Reduce overhead cost by 20%

www.lge.com

Ⅰ. Business Overview

Ⅱ. Home Appliances

Ⅲ. Mobile Handset

Ⅳ. Digital TV

Ⅰ.Business Overview

Business Structure

LG Electronics

LG Corp.

Digital Display& Media

TelecomEquip. & Handset

LG Micron

LG Innotek

LG. Philips LCD

LG. Philips Displays

LGIBM PC

Overseas Subsidiaries

Digital Appliance

CDMA HandsetsGSM Handsets--------------------

Telecom System--------------------

PC

Optical StorageMonitor

TVAudio/Visual

Recording MediaPDP

Air-ConditionerRefrigerator

Washing MachineVacuum Cleaner

Cooking ApplianceOthers

Sales Trend

All divisions registering growthFastest growth seen in handsets Contribution evenly distributed among three divisions

3.44.4

5.3

00 01 02

Appliance

CAGR 25%(US$ bn)

Telecom E & H00

4.04.9 5.4

01 02

(Handset: CAGR 51%)

CAGR 16%

5.1 4.65.6

00 01 02

CAGR 4%

Display & Media

Operating Profit

Appliance maintaining double digit operating margin

Appliance

350

400

450

500

0%

2%

4%

6%

8%

10%

12%

14%

00 01 02

Op margin

Display&Media

Display&Media improving after restructuring in IT divisions

Op margin

100

200

300

400

0%

1%

2%

3%

4%

5%

6%

7%

00 01 02

Telecom E&H

Telecom earning contribution becomes more significant thanks to handset

0

50

100

150

200

250

0%

2%

4%

6%

8%

10%

00 01 02

Op margin

(handset margin)

Reduced debt by 41% over three year periodInternally generated cash flow allows for further debt reductionGoal is to reduce debt-equity ratio to 50%

Balance Sheet

50% Level

Debt Trend

3.93.0 2.9 2.3

118%

95%

128%

96%

2000 2001 UponDemerger 2002

Debt D/E Ratio

(US$ bil.)EBITDA /CAPEX

1,278

1,101

1,283

686

446 426

2000 2001 2002

EBITDA CAPEX

(U$ Mil.)

Creating Shareholder Value

Improved returns via business rationalization EVA is key performance measurement for business divisionsLong-term goal is to maintain ROE above 20%

Return on Equity (ROE)*

9.4%10.4%

12.3%

13.7%

0%

5%

10%

15%

'99 '00 '01 '02

*Adjusted for extraordinary capital gains

Economic Value Added (EVA)

0

200

400

600

'99 '00 '01 '020%

10%

20%

30%

40%

50%

EVA ROIC WACC

(U$ Mil.)

Corporate Governance

Committed to increasing transparency and raising shareholder wealthDisposal of non-core assets via demergerHolding company structure restricts investments in affiliates

LG Department Store (57.7%)

LG CNS (10%)

LG Petrochemical

LG Chemical

LG Cable (6%)

LG Construction (8.6%)

LG International(2.9%)

LG Caltex (3.1%)

LG Mart (50%)

LGIS (41.5%)

Dacom (49.1)

LG Innotek (53.4%)

LG Micron (17.2%)

LG Philips Displays (37.5%)LG Capital (6.2%)LG Telecom (28.1%)LG Philips LCD (50%)LG Sports (39.3%)LG IBM PC (49%)

LG Caltex (3.1%)

LG Investment & Securities(7.2%)

7.5%

10%

5.4%

5.4%6.9%

4.4%

3.2%

30%

5.4%

3%

0.5%4%

10.7%4.8%

4.8%10.7%

4.2%

3.1%

50%

15.8%

6%15.8%

31%

17.4%

10.2%16.4%

6.1%

Before

LG Electronics

DemergerDemerger

As of June 2003

After

LG Corp.LG Corp.

LG Electronics

LG Caltex (50%)

LG H&H (30%)LGIS (48.9%)

LG.Philips LCD (50%)LG.Philips Displays (50%)LG Micron (37%)LG Innotek (70%)LG IBM PC (49%)Hiplaza (100%)LG Sports (25%)LG Inv.&Sec (7%)

LG Telecom (37%)LG Home Shopping (30%)

Dacom (30%)LG Chemical (30%)

LG CNS (64%)Silitron (51%)

(32%)

Product Roadmap

Implementing efficient resource allocation to maximize returnsPreparing for potential demand growth for digital TVsConcentrating on key growth products

Handsets

Digital TV / Home Theater

PDP

OLED

Prof

itabi

lity

Optical Storage

Time

Home Appliances

Ⅱ. Home Appliances

Global Comparison

Revenue grew over 25% CAGR (2000-2002) Profit margins remain above the competitionFurther room for growth with premium brand products

Sales Growth*

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

Electrolux

GEA

Maytag

LGE Appliance

*3 year CAGR

Whirlpool

Source: Company data

Operating Profit Growth*

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

Maytag

Electrolux

Whirlpool

GEA

*3 year CAGR

LGE Appliance

Source: Company data

Moving Up Market

Maintaining product leadership in key product linesNewly introduced premium products driving export growth

DIOSTROMM Cyking Microwave Oven Commercial A/C

(In U$ mill)

64%

63%

0

500

1,000

1,500

2001 2002

ExportDomestic

Sales of Premium Products Premium Portion

2001

2002

2003(E)

22%

30%

35%

Building Brand Power

Aggressively building band awareness in overseas markets

Concentrating marketing activities to North America and Europe Lowering OEM portion

Marketing Spend

0

100

200

300

'00 '01 '02

($ Mil. )

231

10652

10

20

30

40

'99 '00 '01 '02

25%28%30%35%

OEM Portion

TargetZone

Sales*

OP margin10%

10 bil$ Whirlpool

GEA

Electrolux

LGEMatsushita

Maytag

5%0%

5 bil$

*consolidated

Ⅲ. Mobile Handset

Penetrating New Markets

Becoming a major player in the global marketGrowth in CDMA has put LGE in global top tier positionGSM handsets will be the next growth driver

(in million units)

Domestic

CDMA Exports

GSM Exports

'01.1Q 2Q 3Q 4Q '02.1Q 2Q 3Q 4Q '03.1Q

2.0 2.2

3.12.8

3.1

3.7

4.5 4.7

5.6

Market Diversification

Reducing dependence on Korean marketGSM allowing expansion into European marketStill making strides in the global CDMA market

Latin America

1Q 200314%

37%15%

7%Europe

22%

Korea

North America

China

Other

6%

1Q 20031Q 2003

20012001

Korea

North America

Latin Americaother

34%

48%

16%2%

Global Position

LGE is now the fifth largest handset maker globallyBrand awareness growing globallyTargeting No. 3 global market share

1 Nokia 35.6%

2 Motorola 14.9%

3 Samsung 7.3%

4 Siemens 7.3%

5 SEMC 7.1%

6 NEC 2.9%

7 Mitsubishi 2.9%

8 Panasonic 2.7%

9 Alcatel 2.6%

2001

Source : Strategy Analytics

10 LGE 2.5%

1 Nokia 35.1%

2 Motorola 15.4%

3 Samsung 12.2%

4 Siemens 7.4%

2003 1Q

5 LGE 5.2%

6 SEMC 5.0%

7 Kyocera 2.6%

8 Panasonic 2.0%

9 Mitsubishi 1.8%

9 NEC 1.8%

Market and Strategy

Focusing on high-end segment Color handset diffusion is still low globallyCurrent global situation an opportunity for LGE

• Expanding sales to Verizon • Focus on high-end phones to Sprint

• Growing in Italy and Russia• Actively discussing with major operators

• Gradual recovery seen• Introduce new models → focusing on replacement demand

ASP 1Q 2003LGE $165Samsung $163Nokia $159SEMC $144Motorola $144

Source: Strategic Analytics

• High inventory and SARS effecting demand• Falling ASP a concern→ Focus on high-end market

Ⅳ. Digital TV/ PDP

Market Expansion

Entering the “sweet spot” for digital TV demand

Digital TV market is expanding in major developed countries

Preparing to meet the future head on

Product Life Cycle

ConceptionStage

‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05

DTV PortionOver 10%

Theoretical “Sweet spot”

DTV market Outlook

* Source : In-Stat, SRI, TSR, NRI, Displaysearch etc.

40%

21%

22%

17%

CRT

PTV

LCD

Total

PDP

'03 '04 '05 '06

28.0

10.1

16.5

21.7

CAGR(%)

61%

16%

38%

42%

55%Mil. units

LGE Competitiveness

Technological leadership in next generation displaysVertical integration in display devices and componentsPDP targeting > 40” digital TV market

• Best brightness and contrast (1000:1)• Best yield in Industry (over 90%)• Full product line-up from 40”~60”

PDP

TV Set

Top Tier Position in Capacity and Yield

PDP

Top M/S in CRT

Flat CRT

Global No.1 in LCD module

LCD

Display Devices

LCD

• Full product line-up (from 13”to 52”)• Offers various choice of design• Pre-emptive investment in next generation fab

CRT

PTV

• Secure technology on MD engine in LCD & DLP projection TV

• In house production of Lens, Optical components

• Largest distribution channel

• Largest global production base

PDP Strategy

Production yields are the highest in the industryCreate early awareness (PDP = Large screen DTV)Potential to become another cash cow business

Market Outlook LGE Strategy

Current demand exceeding production

Future demand growth to be led by residential demand

Early ramp-up in 2nd and 3rd line

Expand overseas brand awareness and distribution

Sales &

Marketing

Need to reduce unit price further

Enhance product performance

Continued production costs cuts planned

Continued R&D investment in core digital technology

ProductInnovation

Growth in China

Our 12 Joint ventures in China growing rapidly 30% of LGE’s total production is done in China

LGESY

LGETA

LGEBJ JV LGEQH

LGECT

LGENT

LGEPN

LGESG JVLGEHZ

LG Tianjing

LGTOPS

LG Langchao

2.0

4.7

2001 2002

Sales

3.1

2003E

(U$ bil)

1999 20021998

12th

5th

20th11%

30%

Brand Recognition

1st : Haier

2nd : Panasonic

3rd : Chang Hong

4th : Sony

5th : LG

6th : SamsungSource: Gallup poll

2001 2002

RevenueUnits 25% 30%

15% 15%

Production Portion

Optical Storage

Microwave oven

CD-Writer

PDP/Projection TV

CDMA handset

LCD monitor

1st

1st

2nd

2nd

3rd

3rd

Market Share

Summary

The Road Ahead

Invest in key growth products for the futureInvesting for the future despite current difficult market conditions

-> PDP 3rd line, LCD, OLED etc

Raising brand awareness in developed overseas markets

Maintain high ROE and EVA

Expand LG brand appliance in North America

Aggressive marketing on handset in Europe

EVA is a key performance measurement

Efficient cost and risk managementTighter control on receivables and inventory

Cash reserve for sufficient liquidity

Reduce overhead cost by 20%

Thank YouThank You

www.lge.com