1. Korean and Korea, Inc: Past, Present and Future November 3, 2009 Mr. Yong Nam CEO LG Electronics, Inc.

2. 1 Korea and “Korea Inc.”, have come a long way in the past 30 years We still face many challenges in reaching our goal to be world leaders LGE is responding on several important fronts We are optimistic and will continue to do the things required to create success for our companies and our people 2 3 4 1 Several themes for today’s presentation

3. 2 From deeply impoverished in the 1960-70’s, Korea is now among the most successful developed markets in Asia * Base year = 2005 Source: Global Market Insight 20081970 6.7 times GDP per capita (real*), USD Korea: #2 fastest growing in Asia

4. 3 Source:BusinessWeek (2009) Korean brands are now among of the world’s most respected and pervasive Korean companies among the global top 100 Ranked #19 Ranked #69........ Rank 2009 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

5. 4 Top 10 Korean companies now generate $200+ billion in global revenues and employ around 270,000 people outside of Korea Source: Company website and annual reports, Bloomberg; Kisline IN KoreaOUTSIDE of Korea $230+ billion 500,000+ employees $200+ billion 270,000+ employees Outside of Korea, LGE now employs 56,000 people in 100+ countries around the world and over 85% of our sales occur outside of Korea

6. 5 And Korean companies are becoming increasingly innovative Hyundai Assurance Program US market share has nearly doubled since program launch Innovative Products of LGE Red dot & iF design awards are among the world most renowned top 3 design awards. EISA stands for European Imaging Sound Association Allergy care Wrinkle-free Fast dry 570,000 units sold (~Sep ’09)

7. 6 To enhance global competitiveness, Korean companies need to overcome several significant issues Competitive challenge: What do Korean companies need to do to stay ahead of Chinese and Indian companies? Management quality: overcoming the productivity challenge Services: Move from largely a manufacturing- oriented revenue base to a health mix of products and services revenues Engineering: quality and quantity in Korea is insufficient to fuel continuing growth

8. Of Korean companies with significant revenue outside of Korea, top management are dominated by Koreans *Estimated by # of foreign executives in each company’s annual business report, company website SOURCE: Company website; Kisline; BusinessWeek, Company annual reports Company % foreign executives* ~3% 0 0 ~10% Total Revenues US$ billions $90 $44 $50 $10 $22 $17 0 ~1% 81% 87% 42% 78% 24% 77% Overseas revenues (%)

9. 8 Korea is Heavily Dependent on Manufacturing “Products”, Which Creates Long-term Sustainability Challenges (SILICON GRAPHICS) Diversify, adding services...... or slowly die-off Personal computers Printers Photography

10. 9 LGE is responding through several transformation initiatives 1. Business portfolio: enhancing the mix of services and solutions in our portfolio 2. Innovation: deepening our ability to form proprietary insights about consumers and customers 3. Globalization: highest quality functional and “local” talents (which enables innovation) 4. LG Way: Creating an atmosphere to attract best in class talents – locally and globally

11. 10 We’re developing new solutions that will allow us to turn our products into solutions (Example: in-room solution for hotel) Devices Solutions Software Contents Services Hotel information Lights / Room temperature control Entertainment Program Guide Traffic / Weather Flight status Visitor identifying / Door opening Bill view ….

12. 11 Insight driven innovation is the foundation for LGE’s content and service solutions Develop and collide insights Set the FrameRapid LearningCreate Concepts ConsumerTech Business Model Consumer desires Enabling technology Business model Relevant brands, categories and opportunity spaces Core consumer value proposition Iterative prototyping Validate business proposition Business contextSolution GenerationDevelopment

13. 12 Globalization, including recruitment of global talents Globalization Global-level Capability Global Integration Localization Global Leadership  Standard organization / Process / system  Functional capability (led by CXO)  External recruiting*  Local COO (in 16 overseas subsidiaries as of Oct. ’09)  Future leader pool (~100)  Leadership training * Non-Korean executives (VP-level) : 4 in ’07 to 41 in ’09

14. 13 * "Jeong-Do" is " The right way” in English. - Work by principles - Provide equal opportunities and fair treatment. - Pursue to be the best in its class Vision Code of Conduct - Value individuality and diversity - Develop capabilities to the maximum Management philosophy : The LG Way Management Principles - Place greatest importance on serving customers - Create differentiated ideas

15. 14 Korea, Inc: Continuing to respond to our challenges and opportunities through creative investment The Incheon-Songdo development project

16. 15 LGE has achieved significant success in recent years; I am optimistic about our future! LGE Revenue Growth 1980 CAGR 19.3% CAGR 19.3% 0.3 50 4 13 199020002008 (US$billion)

17. http://www.lge.com