1Q’15 Earnings release

Disclaimer

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This presentation contains historical information of the company which should

not be regarded as an indication of the future performance or results.

This presentation also contains forward-looking statements that are, by the

nature, subject to significant risks and uncertainties.

These forward-looking statements reflect our current views with respect to

future events and are not a guarantee of future performance or results.

Actual results may differ materially from information contained in the forward-

looking statements as a results of a number of factors beyond our control.

Contents

1. 1Q’15 Earnings release

5. Appendix

• Revenue / Profits

2. Business Review

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3. Consolidated Earnings • Consolidated revenue / profits

• Non-consolidated / Consolidated earnings

4. Business Review and Plan • 1Q’15 Business Review & 2Q’15 Plan

• Domestic health appliance business

• Overseas business

• Home-care and Cosmetics business

• Non-consolidated financial reports

• Consolidated financial reports

• Subsidiary results

1. Revenue and Profits

1Q’15 Revenue KRW 506.1 bn (+2.3% YoY) Operating Profit KRW 98.9 bn (+10.2% YoY), Net Profit KRW 75.1 bn (+13.6% YoY)

1) 4Q’14 Adj. Net Profit: KRW 75.9 bn, excluding one-off cost of KRW 30.6 bn (Impairment losses on investment of subsidiaries)

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4Q’14

494.8

89.8

98.9

19.5%

18.1%

75.1

13.4%

14.8%

1Q’14

499.5

93.2

45.31)

18.7%

9.1%

506.1

1Q’15 4Q’14 1Q’14 1Q’15 4Q’14 1Q’14

66.1

1Q’15

Revenue Operating Profit Net Profit

[Unit: KRW bn] [Unit: KRW bn/ : Margin] [Unit: KRW bn/ : Margin]

[Accounting standard: K-IFRS Non-consolidated financial reports]

Total accounts 5.66 mn, rental gross adds 341k in 1Q’15

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- Total accounts 5.66 mn in 1Q’15 (+3.5% YoY, +0.8% QoQ)

- Rental accounts 4.67 mn (+4.7% YoY, +1.4% QoQ), Membership accounts

9.9 mn (-2.0% YoY, -2.1% QoQ)

- Increase of rental net adds 66k in 1Q’15 (1Q’14: 20k, 4Q’14: 63k)

Accounts2)

- Rental gross adds 341k in 1Q’15 (+7.5% YoY, +2.7% QoQ)

- Historically high rental gross adds among 1Qs driven by strong sales of

water purifier, bidet, air purifier and mattress

Rental gross adds

5,469k 5,617k

- Health appliance revenue KRW 444.6 bn (+6.1% YoY, +1.4% QoQ)

- Improved growth on rental revenue KRW 363.3 bn (+6.1% YoY, +1.2% QoQ)

- Lump-sum and other health appliance revenue KRW 35.5 bn due to sales

increase on electric range, Massage chair and etc. (+7.4% YoY, +8.2% QoQ)

Health appliance1)

419.1 438.3

444.6

317k 332k

341k

1Q’15 4Q’14 1Q’14

1Q’15 4Q’14 1Q’14

1Q’15 4Q’14 1Q’14

5,661k

2-1. Health appliance business

[Unit]

[Unit: KRW bn]

[Unit: ccounts]

1) Including other health appliance revenue (A/S, Installation and etc.): Applies to all health appliance revenue in this material

2) Excluding non-performing, 5 year maturity pending and free membership accounts: Applies to all accounts in this material

Continued growth of rental gross adds and rental net adds

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Rental gross adds Rental net adds

3Q’14

311k

4Q’14 2Q’14 1Q’14

371k

317k 332k

1Q’15 2015(E)

341k

1,420k

Continued growth of rental gross adds

- Increase of rental gross adds due to increase of number of

sales forces and expansion of new sales channels

- Enhancement of premium positioning by releasing multi-

function products and increasing the sales portion of these

products

- Rental gross adds 341k (+7.5% YoY, +2.7% QoQ)

Increase of rental net adds for 4 consecutive

quarters

- Rental net adds 66k in 1Q’15 (+45k YoY)

- High rental gross adds and stable management of

cancellation rate

- Retention of 5 year matured subscribers

1,330k 1,166k

2014 2013 3Q’14 4Q’14 2Q’14 1Q’14 1Q’15 2015(E) 2014 2013

51k 32k

20k

63k 66k

248k

166k 141k

2-1. Health appliance business

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Steady revenue growth on health appliance business

- Health appliance revenue KRW 444.6 bn (+6.1% YoY, +1.4% QoQ)

- Continued growth on quarterly rental revenue by ARPU and rental net adds increase

- Lump-sum revenue expansion Release additional product line-up for lump-sum in 2H’15

3Q’14

419.1

444.6

1Q’14 2Q’14

436.5 438.0

4Q’14

438.3

1Q’15 2015(E) 2014 2013

1,856.0

1,732.0

1,675.8

Continued growth on health appliance business

by increase of rental and lump-sum sales

Health appliance revenue

2-1. Health appliance business

[Unit: KRW bn]

Maintain low cancellation rate and rental asset disposal expenses

Cancellation rate* Rental asset disposal expense

44.0

59.8

Rental asset disposal expense

Maintain stable rental asset disposal expense

- Rental asset disposal expense KRW 9.9 bn in 1Q’15

: 2.7% of rental revenue

- Continuous improvements in product and service quality

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38.8 3.6%

4.7%

2.9%

% of rental revenue

40.4

2.9%

Maintain stable cancellation rate in 1Q’15

- Continue to maintain stable cancellation rate below 1%

2011 2012 2013 2014

Monthly cancellation rate

1.06% 1.05%

0.95% 0.98%

* Cancellation rate (2012 and 2012 before): Excluding non-performing accounts

2011 2012 2013 2014 1Q’15

0.96% 9.9

2.7%

1Q’15

2-1. Health appliance business

[Unit: KRW bn]

‘Smart Air Care Service’ based on IoT technology

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Water purifier with sparkling water and ice function (May)

- Provide customized service by real-time monitoring and analysis of air quality based on IoT

technology (Fine dust, VOCs2), CO, CO2)

- Monitor indoor and outdoor air quality through smart phone application

- Provide customized care service based on analysis of air quality from big data

- Release IoT technology applied products in 2H’15

- Defend cancellation and improve retention, cross selling and up selling opportunities for

existing customers by offering customized air-care service

- Acquire new customers by offering differentiated value

- Strengthen sanitization through 3 steps of auto sterilization system (Euro, nozzle, body)

- Adopt multi types of water flow features (Wide oval water flow and etc.)

Sterilization bidet

- Dispense 3 concentration types of sparkling water

- Strengthen usability by one-touch extraction function for sparkling water and ice

Customer

Cody

Analyze

“Big data”

WiFi

Guide

customized

solution

Real-time monitoring

Offer

customized

service

Air purifier

Remote

control

Strengthen differentiation and specialization of products

by providing customer care value with IoT1) technology

2-1. Health appliance business

1) IoT: Internet of things 2) VOCs: Volatile Organic Compounds

2-2. Overseas business

[Unit: KRW bn]

Export revenue

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Subsidiaries

ODM/Dealers

Export revenue KRW 33.0 bn (-27% YoY)

- Export revenue to ODM/Dealers KRW 24.8 bn (-27.5% YoY)

: Sales decreased due to last year high sales base effect and

intensifying competition in China air purifier market

⇒ Enlarge sales by implementing joint promotions, releasing new

products and diversifying sales regions with China ODM partner

⇒ Increase sales through other ODM partners

- Export revenue to subsidiaries KRW 8.2 bn (-25.2% YoY)

: Sales decreased due to remaining inventory in 2014

⇒ Increase sales by expanding channels, regions and products

1Q’14 1Q’15

Weak export revenue due to intensifying competition,

Strong overseas subsidiaries revenue from major subsidiaries

4Q’14

45.2

34.2

11.0

33.0

24.8

8.2

33.5

24.5

9.0

Overseas subsidiary revenue

Continued growth of major subsidiaries

- Malaysia revenue +24% YoY, accounts 222k

- U.S. revenue +24.8% YoY, accounts 85k

[Unit: KRW bn, Accounts]

1Q’14 1Q’15 1Q’14 1Q’15 4Q’14

1Q’14 1Q’15 1Q’14 1Q’15 4Q’14

23.3

18.8

222k

173k 22.1

13.4 10.7

85k

76k 12.3

[Malaysia Subsidiary]

[U.S. Subsidiary]

Revenue Accounts

Revenue Accounts

2-3. Home-care & Cosmetics business

사업전략

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Continued growth of Home-care,

Improvement on performance of Cosmetics business

Cosmetics

21.0

[Unit: KRW bn]

23.1

Continued growth by door-to-door & lump-

sum sales expansion

- Increase of sales-forces and sales productivity

- Strong sales of home-shopping, department store and

duty-free shops(1Q’15: Retail sales portion 31%)

1Q revenue + 52.5% YoY

- Continued growth driven by strong sales of mattress

and bed frame products

- Total accounts: 232k (+63.6% YoY, +5.8% QoQ)

[Unit: KRW bn]

Home-care

Enhancement of Re:NK brand

- Expand Re:NK product line-up (skin care, make-up, etc.)

- Release new products (Cell to cell cream/ homme, etc.)

12.2

17.7

18.6

1Q’15 4Q’14 1Q’14 1Q’15 4Q’14 1Q’14

20.0

Revenue Operating Profit Net Profit

3. Consolidated earnings results

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1Q’15 Revenue KRW 548.2bn (+2.5% YoY),

Operating profit KRW 100.3bn (+11.1% YoY), Net profit KRW 77.6bn (+17.4% YoY)

1) 4Q’14 Adj. Operating Profit: KRW 97.4 bn, excluding one-off cost KRW 15.7 bn (Impairment losses on net assets) 2) 1Q’15 Adj. Net Profit: KRW 74.2 bn, excluding one-off gain KRW 3.3 bn (Disposal gain of affiliated company) 3) 4Q’14 Adj. Net Profit: KRW 73.1 bn, excluding one-off cost KRW 19.7 bn (Impairment losses on net assets)

[Unit: KRW bn] [Unit: KRW bn/ : Margin] [Unit: KRW bn / : Margin]

1Q’15 4Q’14

535.0

90.3

100.3

18.3%

16.9%

77.62)

12.4% 14.1%

1Q’14

542.9

81.71)

53.43)

15.1% 9.8%

548.2

1Q’15 4Q’14 1Q’14 1Q’15 4Q’14 1Q’14

66.1

3-1.

Revenue & Operating profit Consolidated details

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Revenue

Increase of revenue & profit for major subsidiaries

494.8 499.5

506.1

1Q’14 1Q’15 4Q’14

535.0 542.9

548.2

1Q’14 1Q’15 4Q’14

89.8 93.2

1Q’14 1Q’15 4Q’14

90.3 81.71)

1Q’14 1Q’15 4Q’14

Operating Profit

Non-Consolidated

Non-Consolidated

Consolidated

Consolidated

98.9 100.3

Revenue

- Consolidated Revenue KRW 548.2 bn

(+2.5% YoY, +1.0% QoQ)

- 1Q’15 Subsidiaries Revenue KRW 53.4 bn

(+2.5% YoY, -9.2% QoQ)

Operating profit

- Consolidated Operating profit KRW 100.3 bn

(+11.1% YoY, +22.8% QoQ)

- 1Q’15 Subsidiaries Operating profit KRW 1.8 bn

(into the black)

1) 4Q’14 Adj. Operating Profit: KRW 97.4 bn, excluding one-off cost of KRW 15.7 bn (Impairment losses on net assets)

[Subsidiaries Revenue & Operating profit]

Non-Consolidated, Consolidated earnings results comparison

[Unit: KRW bn]

[Unit: KRW bn]

[Unit: KRW bn] 1Q'15 1Q`14 YoY 4Q'14 QoQ

Revenue 53.4 52.1 2.5% 58.9 -9.2%

Operating Profit 1.8 (0.2) - 0.7 182.2%

4. ‘15.1Q Review & 2Q Plan

‘15.1Q Review

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Health appliance revenue +6.1% YoY

419.1 438.3

444.6

1Q’15 4Q’14 1Q’14

[Unit: KRW bn]

Operating profit +10.2% YoY, OPM 19.5%

89.8 93.2

98.9

1Q’15 4Q’14 1Q’14

1Q’15

341k

High rental gross adds and increase of rental

net adds

19.5%

18.1% 18.7%

317k

1Q’14

20k 63k

66k

1Q’15 1Q’14 4Q’14

‘15.2Q Plan

Health appliance business

Differentiation of product competiveness and

enhancement of sales

Strengthen Door-to-door + New channel

- Release premium products (Sparkling ice water purifier,

metal style cold & hot water purifier and etc.)

- Continue to increase Codys and door-to-door sales forces

- Increase Hi-mart stores and enlarge home shopping channel

sales

- Start lump-sum sales in Hi-mart channel for water purifier

- Enhance lump-sum sales by expanding product line-up

(Electric range and etc.)

Overseas business

Continued growth of China ODM business

and development of new ODM partners

Preparation for Brand business

- Enlarge sales of China ODM business by implementing

joint promotion, releasing new product and etc.

- Diversify sales region with current China ODM partners

- Increase sales with new ODM partners

- Establish strategy for water purifier business in China and

air purifier business in U.S.

[Unit: KRW bn]

Appendix

• Non-consolidated financial reports

• Consolidated financial reports

• Subsidiary results

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Non-consolidated financial reports [Appendix]

[Unit: KRW bn]

Balance sheet Mar. ‘15 Dec. ‘14

<Asset> 1,652.1 1,576.0

Current Assets 620.0 573.1

Cash and cash

equivalents 154.2 105.5

Accounts receivable 265.3 273.6

Inventories 43.7 41.8

Non-current Assets 1,032.1 1,002.9

PPE 616.1 617.6

Affiliates and

subsidiaries 70.3 70.3

Intangible assets 147.3 147.8

<Liabilities> 664.9 517.0

Current liabilities 606.3 468.0

Short-term borrowings 158.5 162.8

Debenture

(Less than 1 year) - -

Debenture

(More than 1 year) - -

Non-current liabilities 58.6 49.0

Long-term borrowings - -

Bonds - -

<Stockholder’s Equity> 987.2 1,059.0

Liability / Equity 67.4% 48.8%

Net debt / Equity 0.4% 5.4%

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Income statement 1Q’15 1Q’14 YoY

Revenue 506.1 494.8 2.3%

COGS 159.3 169.3 -5.9%

Gross profit 346.8 325.5 6.5%

SGnA 247.9 235.8 5.2%

Operating profit 98.9 89.9 10.2%

Margin(%) 19.5% 18.1% 1.4%p

Other income 2.7 4.1 -35.4%

Other expenses 2.8 3.9 -29.7%

Financial income 0.3 0.7 -55.1%

Financial expense 0.9 2.9 -68.3%

Investment income from

investments in affiliated

company

0.1 - -

Profit before income tax 98.3 87.8 12.0%

Corporate tax expenses 23.3 21.8 7.0%

Net profit 75.1 66.1 13.6%

Margin(%) 14.8% 13.4% 1.4%p

[Unit: KRW bn]

Consolidated financial reports

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[Appendix]

Income statement 1Q’15 1Q’14 YoY

Revenue 548.2 535.0 2.5%

COGS 175.2 182.3 -3.9%

Gross profit 373.0 352.7 5.8%

SGnA 272.7 262.4 3.9%

Operating profit 100.3 90.3 11.1%

Margin(%) 18.3% 16.9% 1.4%p

Other income 3.0 5.2 -41.7%

Other expenses 5.1 4.8 5.5%

Financial income 0.4 0.9 -49.6%

Financial expense 0.9 3.1 -69.6%

Investment income from

investments in affiliated

company

3.3 - -

Profit before income tax 101.1 88.4 14.3%

Corporate tax expenses 23.5 22.3 5.2%

Net profit 77.6 66.1 17.4%

Margin(%) 14.1 12.4% 1.8%p

[Unit: KRW bn] [Unit: KRW bn]

Balance sheet Mar. ‘15 Dec. ‘14

<Assets> 1,679.5 1,621.6

Current Assets 624.4 596.8

Cash and cash

equivalents 183.3 147.4

Accounts receivable 200.4 208.8

Inventories 59.4 61.9

Non-current Assets 1,055.1 1,024.8

PPE 675.0 675.2

Intangible assets 170.1 170.6

<Liabilities> 713.7 582.2

Current liabilities 645.1 526.0

Short-term borrowings 160.1 164.4

Debenture

(Less than 1 year) - -

Debenture

(More than 1 year) - -

Non-current liabilities 68.6 56.2

Long-term borrowings 3.2 0.9

Bonds - -

<Stockholder’s Equity> 965.8 1,039.4

Liability / Equity 73.9% 56.0%

Net debt / Equity Net Cash 1.7%

Subsidiary results – 5 entities (4 overseas subsidiaries and Green Entech)

Malaysia

. ’15.1Q Revenue KRW 23.3 bn (+24% YoY, 5.7% QoQ)

. ‘15.1Q Accounts 221,731 (’14.1Q: 172,530)

. Continuous revenue growth by stable enlargement of sales

forces

U.S.

. ‘15.1Q Revenue KRW 13.4 bn (+24.8% YoY, +8.6% QoQ)

. ‘15.1Q Accounts 84,737 (‘14.1Q: 75,601)

. Sales growth by increase of Codys’ productivity

. ‘15.1Q Revenue KRW 5.0 bn (-63.4% YoY, -50.8% QoQ)

. Revenue decrease by disposal of China cosmetic business and

decrease of air purifier sales due to intensifying competition

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[Unit: KRW bn]

China

Subsidiary 1Q’14 1Q’15 YoY 4Q’14 QoQ

Malaysia

Revenue 18.8 23.3 24% 22.1 5.7%

Operating profit 1.3 2.6 99.4% 2.0 30.5%

Margin 6.8% 11.0% 8.9%

U.S.

Revenue 10.7 13.4 24.8% 12.3 8.6%

Operating profit -0.3 0.02 - 0.3

Margin -2.8% 0.2% 2.5%

China

Revenue 13.7 5.0 -63.4% 10.2 -50.8%

Operating profit -0.5 0.2 - -0.8

Margin -3.8% 4.9% -7.6%

Thailand

Revenue 2.8 1.7 -37.6% 1.8 -1.5%

Operating profit -0.1 -0.2 - -0.7

Margin -3.7% -13.9% -39.5%

Green Entech

Revenue 6.1 10.0 63.0% 12.5 -20.4%

Operating profit -0.6 -0.7 - -0.1

Margin -9.2% -7.3% -0.8%

. ‘15.1Q Revenue KRW 1.7 bn (-37.6% YoY, -1.5% QoQ)

. Revenue decrease by change of sales strategy

Thailand

. ‘15.1Q Revenue KRW 10.0 bn (+63% YoY, -20.4% QoQ)

. Sales growth by new project orders

Green Entech