2009 3Q Earnings Release

Transcription

1 2009 3Q Earnings Release October 21 st 2009

2 All information regarding management performance and financial results of LG Electronics (the Company ) during the 3 rd quarter of 2009 as contained herein has been prepared on a parent and consolidated basis in accordance with Korean Generally Accepted Accounting Principles (Korean GAAP). In addition, the information contained herein has been prepared in advance, prior to being reviewed by outside auditors, solely for the convenience of investors of the Company, and is subject to change in the process of final reviewing by outside auditors. The information contained herein includes forward-looking statements in respect to future plans, prospects, and performances of the Company as well as the Company s projected sales plan for the 4 th quarter of These forward-looking statements also refer to the Company s performance on both parent and consolidated base, as indicated. The aforementioned forward-looking statements are influenced by changes in the management environment and relative events, and by their nature, these statements refer to uncertain circumstances. Consequently, due to these uncertainties, the Company s actual future results may differ materially from those expressed or implied by such statements. Please note that as the forward-looking statements contained herein are based on the current market situation and the Company s management direction, they are subject to change according to the changes in future market environment and business strategy. The information contained herein should not be utilized for any legal purposes in regards to investors investment results. The Company hereby expressly disclaims any and all liability for any loss or damage resulting from the investors reliance on the information contained herein.

3 Table of Contents Ⅰ. 09 3Q Results (Consolidated) Ⅱ. Performance and Outlook by Sector Ⅲ. 09 3Q Results (Parent) Ⅳ. 09 4Q Business Direction and Prospects

4 Ⅰ Q Results (Consolidated) and Profit Consolidated & Profits (Unit : KRW tn) QoQ YoY OP(%) QoQ YoY Total (Consolidated) % +23.5% 1.81 (9.6%) %p %p LGE Global * % +15.7% 0.85 (6.1%) %p %p LG Display % +54.7% 0.91 (15.3%) %p %p Other Affiliates % +18.2% 0.06 (4.8%) %p %p Intercompany Transactions * Consolidation based on LG Electronics Korea and overseas subsidiaries (excluding internal transactions) 1

5 Ⅰ Q Results (Consolidated) and Profit by Division and Profit* (Unit : KRW bn) 2Q 09 QoQ 3Q 09 YoY 3Q 08 Home 4, % 4, % 3,979 Entertainment Op. Profit Mobile 5, % 4, % 3,815 Communications Op. Profit Handset Op. Profit 4, % 4, % 3, Home 2, % 2, % 2,255 Appliance Op. Profit Air Conditioning Op. Profit 1, % % Business 1,016 1, % 2.6% 1,177 Solution Op. Profit * Consolidation based on LG Electronics Korea and overseas subsidiaries (excluding internal transactions) * Divisional sales includes internal transactions between divisions 2

6 Ⅱ. Performance and Outlook by Sector Home Entertainment Op. Margin (%) Global * Performance (KRW tn) 0.8% Q 08 3,102 8% 11% 25% 21% 34% -0.6% % 4.30 (FPTV, Unit: K) 4,805 6% 55% 10% 20% 23% 41% 5.0% 4.51 Shipment by Region * Korea CS America N. America Asia 1) Europe 5.2% Q 08 1Q 09 2Q 09 3Q 09 2) Q Performance : Revenue grew 24% YoY with strong product leadership and rising demand for FPTV amid peak season. LCD TV : Continuous sales growth from marketing activities in the Americas, PDP TV Media Profitability : Increase in sales, structural improvement in PDP business, and an effort to gain cost competitiveness led to stable profitability in all six businesses in HE division Q Outlook Market : As economic slowdown is getting improved and holiday season is LGE DS Europe, and CIS region contributed to 60% shipment increase YoY. : Increased portion of large-size TV sales resulted in 30% YoY growth in shipment. : Revenue from Blu-ray disc players is picking up in developed markets. : Strengthened #1 position with higher M/S. approaching, TV makers are expected to face stronger competition. : Make full preparation for high season with improved product line-up including borderless TV and through aggressive marketing. 3Q 08 3Q 09 1) includes MEA 2) includes CIS * includes consumer and commercial TVs * Pertains solely LG Electronics and its overseas subsidiaries (excluding internal transactions) 3

7 Ⅱ. Performance and Outlook by Sector Mobile Communications Op. Margin (%) Global * Performance (KRW tn) 10.1% Q % Q % Q % Q % Q Q Performance : Shipment hit 31.6M units, up 6% QoQ. ( 37% growth YoY) Unit sales declined in North America and Korea - Shipment to North America slowed down due to rising demand for smartphones and prepaid phones - Severe decline of demand in Korea (down 23% QoQ) Emerging and European markets saw robust growth QoQ. - Europe: Cookie and messaging phones drove sequential sales growth. - Emerging markets: CS America, Asia grew over 30% QoQ. Profitability : Price erosion and increased sales portion of low-end handsets resulted in lower profitability QoQ. Shipment by Region % 23% 16% 17% 36% (Unit: mn) 6% % 25% 20% 18% 31% 2Q 09 3Q 09 Korea Asia/MEA/ CIS CS America Europe N. America Q Outlook Market : Steady growth is expected due to seasonality. LGE * Pertains solely LG Electronics and its overseas subsidiaries (excluding internal transactions) : Growth in shipment is expected QoQ. Expand investment in smartphone development and emerging markets. Smartphone Line-up: launch first Android and three W/M smartphones Differentiation by Design: launch new LG Chocolate (LG BL40) and the most compact 3-inch full touchscreen phone LG Pop (LG GD510) Emerging Markets: increase marketing investment, secure distribution channels and focus on risk management 4

8 Ⅱ. Performance and Outlook by Sector Home Appliance Op. Margin (%) Global * Performance (KRW tn) 5.0% Q % Q % Q % Q % Q Q Performance : Demand recovery in emerging markets contributed to 12% growth YoY on a KRW base. (4% decline YoY on a USD base) Korea Overseas : revenue remained at last year s level. : Decline slowed down QoQ supported by demand increase in emerging markets such as Asia and Middle East. (2Q 15% 3Q 5%) Profitability : Despite increased marketing expense, higher sales in emerging markets and ongoing cost innovation generated higher margin YoY Revenue by Region ($2.1B) 12% 2% 25% 21% (KRW tn) 2.52 ($2.0B) 5% 31% 17% Others Asia 1) Europe 2) Q Outlook Market : Demand for durable goods is anticipated to pick up in emerging countries such as China and India. LGE : Focus on recovering back to pre-recession sales level and strengthen brand awareness through aggressive marketing. 35% 32% N. America : Maintain competitiveness through products that capture consumer insights. 18% 16% Korea Profitability : Enhance profitability from continuous cost innovation activities. 3Q 08 3Q 09 1) includes MEA 2) includes CIS * Pertains solely LG Electronics and its overseas subsidiaries (excluding internal transactions) 5

9 Ⅱ. Performance and Outlook by Sector Air Conditioning Global * Performance (KRW tn) Q Performance Op. Margin (%) 10.2% : Due to low seasonality coupled with recession, revenue declined by 13% YoY. 2.2% % % % 0.85 Korea Overseas : affected by low demand from long rainy season in the summer : sluggish sales due to low demand from major markets entering low season Profitability : Achieved target profitability from continuous cost innovation despite sales decline. 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 Revenue by Region (KRW tn) % 12% 27% 15% 32% 13% % 20% 22% 15% 29% Europe Asia MEA N. America Korea 1) 2) Q Outlook Market : Demand and sales are expected to pick up in Asia, Africa, and CS America, and highly efficient CAC products will lead growth. LGE : Expand M/S in Korea, and southern hemisphere through the world s most energy-efficient commercial A/C (Multi-V Super III), inverterembedded RAC and commercial radiator. 3Q 08 3Q 09 1) includes CIS 2) includes CS America * Pertains solely LG Electronics and its overseas subsidiaries (excluding internal transactions) 6

10 Ⅱ. Performance and Outlook by Sector Business Solution Global * Performance (KRW tn) Q Performance Op. Margin (%) 1.8% 1.7% 2.5% 1.3% 2.1% : revenue increased entering high season with increased demand. Monitor : grew due to seasonality. Commercial : were strong in developing markets. (China, CS America) Car : Revenue increased with GM s operation stabilizing Profitability: Increased sales and stable prices contributed to higher profit. 3Q 08 4Q 08 1Q 09 2Q 09 3Q 09 M/S Ranking 4th Monitor M/S (Global, Revenue-based) 5th 3rd 3rd 3rd Q Outlook Market : Developed markets are expected to see steady demand rise and emerging markets are expected to post continuous growth. LGE : Maximize sales through launching new products and strengthen partnerships to enhance sales. 9.9% 9.5% 11.1% 11.4% 11.7 % Monitor Commercial : Focus on monitor-tv in Europe and Brazil. : Increase sales from launching new models. 3Q 08 4Q 09 1Q 2Q 3Q Car : Highest sales revenue in 09 is expected. Focus on increasing M/S within GM. * Pertains solely LG Electronics and its overseas subsidiaries (excluding internal transactions) 7

11 Ⅲ Q Results (Parent) & Profit (Unit: KRW tn) Profit (Unit: KRW bn) Domestic % -17.0% % -2.4% Operating Profit 2Q QoQ 16% 3Q 09 3Q YoY 79% 338 EBITDA % % 511 Export % % 5.15 Recurring Profit 1,408 27% 1,027 2,922% 34 Net Profit 1,146 30% 807 3,144% 25 2Q 09 3Q 09 3Q 08 8

12 Ⅲ Q Results (Parent) Non-operating Items Non-operating Items Equity Method (Unit : KRW bn) (Unit : KRW bn) 8 71 Others F/X Gain Recurring Profit 2Q,09 3Q,09 Op. Profit Financial * Expenses Equity Method Gain 1,027 LG Display LGE Overseas Subsidiaries Others Equity Method Total * AR discount fee is included in financial expenses 9

13 Ⅲ Q Results (Parent) Cash Flow 3Q Net Cash Flow* (Unit : KRW bn) Cash Flow (Unit : KRW bn) Cash at the beginning of Quarter 1,200 Depreciation Increase in Notes Receivables Etc Increase in Working Capital Equity Method Gain Cash Flow from Operating Activities Net Income Depreciation Equity Method Gain Increase in Working Capital Increase in Notes Receivables, Etc. Others Net Income CAPEX & Capital Investment Others Cash Flow from Investing Activities CAPEX & Capital Investment Cash Flow from Financing Activities Debt Increase Dividend Payment 91 - Cash In Cash Out Net * Cash Increase Cash at the end of Quarter 231 1,431 * Excludes cash flow from financing activities 10

14 Ⅲ Q Results (Parent) Financial Structure Balance Sheet (Unit : KRW tn) Financial Ratio (Unit : %) End of Q 09.3Q End of Q 09.3Q Assets Current Assets Cash Inventories Total Liab. to Equity Fixed Assets Liabilities Debt to Equity Current Liabilities Long-Term Liabilities Equity Net Debt to Equity Debt Net Debt

15 Ⅳ Q Business Direction & Prospects Going into peak season for TV, slight sales growth is expected both in QoQ and YoY. Profitability Price erosion in TV and handset business and marketing/r&d investment expansion will lead to lower profitability QoQ. 12

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17 Appendix Appendix Business Structure Change Digital Appliance Digital Display Digital Media Mobile Communications Home Appliance Air Conditioning Home Entertainment Business Solution Mobile Communications - Refrigerator - Washing Machine - C&C - Healthcare - Others - Residential Air Con. - Commercial Air Con. - BMS (Home Net) - Others - LCD/CRT TV - Monitor - PDP Module/ TV - Hotel TV - Home A/V - Digital Signage - STB (Set Top Box) - Security - DS (Digital Storage) - Car Built-in - RMC (Recording Media Chemetronics) No Changes - Handset - PC - Others

18 Appendix Financial Statement (Parent) Income Statement (Unit : KRW bn) Q 2Q 3Q 4Q Total 1Q 2Q 3Q 6, % 7, % 6, % 6, % 27, % 7, % 8, % 7, % Domestic 1, % 1, % 1, % 1, % 6, % 1, % 2, % 1, % Exports 5, % 5, % 5, % 5, % 21, % 5, % 6, % 6, % COGS 5, % 5, % 5, % 5, % 20, % 5, % 6, % 5, % Gross Profit 1, % 1, % 1, % 1, % 6, % 1, % 2, % 1, % SG&A 1, % 1, % 1, % 1, % 5, % 1, % 1, % 1, % Op Profit % % % % 1, % % % % Non Op. Income % % % % 2, % 1, % % % Non Op. Expense % % % 1, % 3, % 1, % % % Rec. Profit % % % % % % 1, % 1, % Tax % % 9 0.1% % % % % % Net Profit % % % % % % 1, % % * Recurring profit is equal to pre-tax profit from continuous operation. Balance Sheet (Unit : KRW bn) Q 2Q 3Q 4Q 1Q 2Q 3Q Assets 16,306 17,314 18,444 17,338 18,670 20,375 21,991 Current Aseets 4,394 4,533 5,415 4,518 6,088 7,497 9,002 Quick Assets 3,138 3,354 4,257 3,617 5,129 6,606 7,965 Inventories 1,256 1,179 1, ,037 Fix Assets 11,912 12,781 13,030 12,820 12,582 12,878 12,989 Investments 7,553 8,464 8,820 8,639 8,487 8,826 8,969 Tangible 3,962 3,852 3,737 3,711 3,633 3,594 3,568 Intangible Liabilities 8,514 8,553 9,497 8,931 10,402 11,024 12,009 Current Liabilities 5,733 5,544 6,446 5,942 6,875 8,119 8,862 LT Liabilities 2,781 3,009 3,051 2,989 3,527 2,905 3,147 Capital 7,791 8,761 8,948 8,407 8,268 9,352 9,982

19 Appendix Divisional (Parent) (Unit :KRW bn) H E M C Handset H A A C B S Others Total 1Q'08 2Q'08 3Q'08 4Q'08 FY08 1Q'09 2Q'09 3Q'09 QoQ YoY 1,538 1,485 1,688 1,324 6,035 1,512 1,723 1, % 17.8% Op. Profit (%) -5.8% -6.2% -4.3% -14.9% -7.5% -4.9% -1.1% 9.5% 3,423 3,710 3,393 3,668 14,193 3,682 4,579 4, % 20.7% Op. Profit , (%) 14.0% 14.3% 10.8% 1.3% 10.0% 8.4% 12.0% 8.8% 2,955 3,360 3,089 3,209 12,612 3,350 4,291 3, % 23.0% Op. Profit , (%) 15.9% 16.3% 12.4% 2.3% 11.7% 9.3% 12.7% 9.4% , , ,141 1, % 6.5% Op. Profit (%) 8.5% 9.1% 6.7% -6.9% 4.4% 14.3% 13.5% 7.5% , % -10.1% Op. Profit (%) 14.9% 15.5% 0.4% -15.8% 7.4% 15.2% 10.3% -1.3% % 5.7% Op. Profit (%) -2.1% -6.0% -8.6% -17.4% -8.2% -16.0% -20.8% -8.7% n/a n/a Op. Profit ,927 7,234 6,887 6,591 27,639 7,074 8,477 7, % 14.2% Op. Profit , (%) 8.1% 8.8% 4.9% -4.7% 4.4% 6.2% 8.4% 7.7% * Divisional sales includes internal transaction between divisions * Adjustments were made for apple to apple comparison based on 2009 business structure change.

20 Appendix Divisional (Global*) (Unit :KRW bn) H E M C Handset H A A C B S Others Total 1Q'08 2Q'08 3Q'08 4Q'08 FY08 1Q'09 2Q'09 3Q'09 QoQ YoY 3,622 3,780 3,979 4,986 16,368 4,298 4,509 4, % 23.9% Op. Profit (%) -0.4% 0.7% 0.8% -0.6% 0.1% 0.3% 5.0% 5.2% 3,643 4,086 3,815 4,487 16,030 4,253 5,140 4, % 21.9% Op. Profit , (%) 12.6% 12.8% 10.1% 3.9% 9.6% 6.0% 10.6% 8.4% 3,195 3,754 3,514 4,093 14,556 3,916 4,877 4, % 24.8% Op. Profit , (%) 13.9% 14.4% 11.5% 5.2% 11.0% 6.7% 11.0% 8.8% 1,904 2,131 2,255 2,310 8,600 2,211 2,339 2, % 11.9% Op. Profit (%) 4.4% 4.8% 5.0% -2.2% 2.9% 4.6% 7.7% 6.7% 1,170 1, ,527 1,274 1, % -13.4% Op. Profit (%) 5.2% 10.1% 2.2% -1.6% 5.3% 4.8% 10.2% 1.6% 1,173 1,113 1,177 1,181 4,645 1,096 1,016 1, % 2.6% Op. Profit (%) 2.3% 3.1% 1.8% 1.7% 2.2% 2.5% 1.3% 2.1% n/a n/a Op. Profit ,218 12,735 12,009 13,371 49,333 12,853 14,497 13, % 15.7% Op. Profit , , (%) 5.4% 6.7% 4.8% 0.8% 4.3% 3.5% 7.8% 6.1% * Divisional sales pertains solely LG Electronics Korea and its overseas subsidiaries and includes internal transactions * Adjustments were made for apple to apple comparison based on 2009 business structure change.