LG Electronics

March 2006

As a note, this presentation was released as the dates shown and reflected management views as of

these dates. All information in this presentation regarding the Company’s financial results has been

prepared on a non-consolidated basis in accordance with Korean GAAP. In particular, sales

information includes sales by the Company to, and purchases by the Company from, its subsidiaries

and affiliates, but excludes sales by the Company’s subsidiaries and affiliates to third parties. The

presentation includes forward-looking statements regarding the Company’s outlook for the future

including projected sales. These forward-looking statements also refer to the Company’s results on a

non-consolidated basis. These forward-looking statements are subject to known and unknown risks

and uncertainties that may cause actual results to differ materially from those stated or implied by such

statements. These risks and uncertainties, but are not limited to the risk factors noted in the Company’s

Earnings Releases and 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.

3

Highlights

The Road Ahead

Raising brand image developed overseas markets“LG Electronics” means high-end quality products

Successful launch of high-end LG brand appliance in US market

Digital TV - next stage of brand building

Improve handset profitability

Improve costs structure and R&D efficiencies

Successful entry into open market

Introduce “mega hit” product for global market

Improve financial structureMaintain CAPEX within cash flow means

Tighter control on working capital

ROE and EVA remains the focusEVA is a key performance measurement

Reduce overhead costs

http://www.lge.com

Ⅰ. Business Overview

Ⅱ. Home Appliances

Ⅲ. Mobile Handset

Ⅳ. Digital TV

Ⅰ. Business Overview

6

Business Domain

*Based on sales in 2005*Digital Display breakdown by product is adjusted for PDP internal sales

GSMHandset

40%

Others2%

Network8%

CDMAHandset

50%

Refrigerator26%

WashingMachine

23%

CookingAppliance

7%

Others6%

VacuumCleaner

3% Airconditioner

34%

PC23%

A/V33%

OS44%

MobileCommunications40%

PDP25%

Others6%

Monitor29%

TV40%

LG Electronics

LG.Philips LCD

Digital MediaAppliance 13%25%

LG.Philips Displays

Overseas Subsidiaries

22% Digital Display

7

Improving ReturnsHigher asset turnover leading to improved returns on investmentImproving returns via business rationalization and better efficienciesMain goal is to improve profitability in the future

Operating Profit / Invested Capital*

0%

5%

10%

15%

20%

25%

30%

35%

'99 '00 '01 '02 '03 '04 '05

Op Margin vs. Asset Turnover*

0.0%

5.0%

10.0%

'01 '02 '03 '04 '051.0

1.3

1.5

1.8

2.0

OP Margin Asset Turnover

* Based on LGE parent and LGE overseassubsidiaries only

8

Capital structure ratios improvingInternally generated cash flow allows for debt reductionGoal is to reduce global debt-equity ratio below 70%

Balance Sheet

Net Debt Trend EBITDA /CAPEX

6.46.2 7.3

179%

106%

146%

0

2

4

6

8

10

2003 2004 2005

(U$ bn)

Global Net Debt Global Net-debt to Equity

0

0.5

1

1.5

2

2.5

2003 2004 2005

EBITDA CAPEX

(U$ bn)

9

Building Brand AwarenessRedefining “LG Electronics” brand to high-end marketProduct led marketing strategyHandsets, appliance and Digital TVs leading the charge

Brand Awareness (USA)Branding Synergy

Aided

Unaided

‘03 ‘04 ’05 ’10E

90

50

33

10

65

2015

42

* AC Nielsen, Brand Survey

10

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

After

LG Corp.LG Corp.

LG Electronics

LG CNS (66%)

DACOM (40%)LG Siltron (51%)

LG.Philips LCD (45%)

LG.Philips Displays (50%)

LG Micron (36%)

LG Innotek (70%)

Hiplaza (100%)

LG Telecom (37%)

LG Life Sciences (30%)LG Household & Health Care (34%)

LG Chem (34%)

LG MRO (100%)(36%)

Ⅱ. Home Appliances

12

Becoming a Global Player Sales growth more than 19% CAGRNew product innovation has led to rising export growth Becoming a major player in the the global market

Market Distribution

Korea 24%

US 22%

Europe 20%

M.East 10%

Asia 20%

CS America5%

Sales Growth

(U$ bn)CAGR 19%

5.37.1 7.7

2.31.7

1.6

0

2

4

6

8

10

12

'03 '04 '05

6,9

8.8

10.0

13

Differentiating FactorsLGE has competitive edge in fast innovation and cost reduction

- Emphasis on R&D for new innovative products- Highly efficient production base in low cost centers

Focusing on key competitive products

R&D Investment

3.9%3.3%

2.8%(E)

2.7%(E)

Emphasis on R&D led to product leadershipEmphasis on R&D led to product leadership

Technological leadership in key componentsTechnological leadership in key components

2003 2004

LG

Major Competitors

Producing only high-end products in KoreaProducing only high-end products in Korea

Utilizing China as low-costproduction baseUtilizing China as low-costproduction base

Global Production

Korea35%

China50%

Asia10%

Others5%

Focusing only 5

A/C Washingmachine Refrigerator

CookingAppliance

VacuumCleaner

14

Target Market SegmentTargeting high end market with LG brand“Best Buy” and “Home Depot” are major US distributorsAggressively introducing new models

U.S. Appliance Market (’05)

400 800 1200 1600+Source: Stevenson ’05

(US$)

ASP:

LGE US Appliance Sales

'03 '04 '05 '06(E)

1,060

1,616

LG

Brand

38%

OEM

7%

55%62%

60%

31%19%19%9%

1,217

CAGR

27%

182%

-9.9%

15.1%

1,960

48%

8%

44%

15

New Growth AreaCommercial A/C is new market for LGECommercial A/C is as large as residential marketEmploy competitive advantage from residential A/C

LGE A/C SalesGlobal A/C Market

CAGR

2.6 2.8 2.9

0.7

1.72.7

2005 2007E 2010E

3.2

4.5

5.6

CAC

RAC

Total

11.8%

31.0%

2.2%

20% 38% 48%CACPortion

CAGR(In U$ Bil.)

5.7%

18.4 19.1 20.5

20.927.5

16.5

2005 2007E 2010E

Source: Company data

36.340.0

48.0

CAC

RAC

Total

9.0%

2.2%

Source: Company data

Ⅲ. Mobile Handset

17

Rising Global PresenceGlobal PresenceBecoming a major player in the global handset marketBrand awareness growing in major marketsFurther growth opportunities in WCDMA and GSM

Global Market LGE

(in million units) (in million units)

CAGR 53%

2001 2002 2003 2004

W-CDMAGSMCDMA

2005

10

18.5

27.4

44.4

54.9

2001 2002 2003 2004 2005

393429

517

680

817W-CDMAGSMCDMAOthers

* Source : Strategy Analytics

18

Rising Global PresenceCost Cutting MeasuresImprove R&D, time-to-market, and handset design efficiencyRationalizing production and R&D facilities Increasing component commonality and improve supply chain management

• Better production flexibility • Better inventory control• Lower overhead costs

CDMA GSM Integration

• Higher ASPs• Timely new innovative products• Better return on R&D investment

• Increase component commonality• Reduce platform diversity • Rationalize component suppliers

19

Penetrating New MarketsRestructuring BenefitsRising shipment to platform ratio improving component commonality Raw material cost falling rapidly with restructuring measuresCost competitive framework in place for future growth

Shipment to Platform Ratio

0

200

400

600

800

1,000

2003 2004 2005 2006(E)

(Unit :K)

Cost and ASP Trend

60

80

100

120

140

100

120

140

160

180

200(Unit :U$)

Blended ASPRaw Material Cost

1Q’04 4Q’05

20

Open Market StrategyGain experience in the GSM “B to C” business modelEntering major open market in 2006 and full scale in 2007Create product portfolio synergy between Open and Operator market

2005

Taste of open marketin CIS and Asia Taste of open marketin CIS and Asia

Technological leadership in key componentsTechnological leadership in key components

Operator90%

Open10%

GSM Shipment

Entering major GSM openmarket with “Black Label”Entering major GSM openmarket with “Black Label”

Building Premium brand image in EuropeBuilding Premium brand image in Europe

2006

Operator65%Open

35%

GSM Shipment

2007 ~

Create Synergy betweenopen and operator marketCreate Synergy betweenopen and operator market

Success in open marketcan improve product mix and ASP.

Success in open marketcan improve product mix and ASP.

GSM High-end Strategy

Success inOpen market

Operatorfollows

21

Penetrating New MarketsFuture DirectionASP improvement just as important as growthIncreased concentration on high-end handsetsCreate global “LG” identifiable designed phone

VolumeL H

H

L

NokiaMotorola

Long-term Goal

ASP

Global “Hit Product”• Outsource design capability • “User centric” product development• Improve market research capability

Two tier marketing strategy • Operator centric strategy for CDMA • Open market strategy for GSM• Improve market research

Raise blended ASP• Take advantage of “Korea test market”• Expand 3G models and carriers• Move up market in GSM

Ⅳ. Digital TV

23

The DTV BattlefieldLCD and PDP can co-exist in the years to comeLCD is expected to be the main technology for TV below 40 inchesPDP is expected to be the main technology for large size TV

Market for bothNew Displays by Technology

LCD

0.1

Pixels (mil.)

30” 40” 50” 60”

2.0

1.0

0.30.4

Size

PDP

'03 '04 '05 '06(E)

5.9

13.2

29.6101% CAGR

24

Potential PDP demand

42” digital TV is equal to 34” conventional TVGrowing high definition broadcasting to drive large screen demand End market PDP demand could be larger than expected

25

PDP Market TrendLarge sized TVs taking larger portion of market Falling retail prices spurt demand for PDPs Industry in consolidated with three major players

Global PDPdemand

42" VGA

42" XGA

0

1,500

3,000

4,500

6,000

7,500

'03 '04 '05 '06

US$

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0mn units

LGE26%

SDI30%

MEI25%

Pioneer10%

Hitachi9%

2005 PDP Module market share

Source: Company data

PDP demand growing

Source: TSR, Displaysearch, LGE

26

Technological LeadershipRetain proprietary transmission technology –VSB/EVSB patent by ATSC EVSB patent approves by ATSC for terrestrial digital broadcasting in USConsiderable royalty revenue stream expected in the years to come

Transmission/Reception Technology - EVSB

Transmission

Encoder Integration

Data Encoder

Encoder

Broadcaster(service) Digital TV

27

Summary

The Road Ahead

Raising brand image developed overseas markets“LG Electronics” means high-end quality products

Successful launch of high-end LG brand appliance in US market

Digital TV - next stage of brand building

Improve handset profitability

Improve costs structure and R&D efficiencies

Successful entry into open market

Introduce “mega hit” product for global market

Improve financial structureMaintain CAPEX within cash flow means

Tighter control on working capital

ROE and EVA remains the focusEVA is a key performance measurement

Reduce overhead costs

http://www.lge.com