(June2012)Cheil Industries IR(v2)

7/29/2019 (June2012)Cheil Industries IR(v2)

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Cheil Industries

June, 2012


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CONTENTS

1.Company Overview

2.Earnings Release 1Q12

3.Appendix

This document is provided for the convenience of investors only, before the completion of an external audit.Some figures may be subject to change according to the audit outcomes.

As the forward-looking statements this release may contain are based on the companysown business outlook, they may differ from the real result. Therefore, the responsibility for investmenton this material is imputed only to investors.

The financial information in this document are consolidated earnings results based on K-IFRS.


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1 Company Overview


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4

1990 2000 2010 2012(E)

Chemicals E M Fashion Others

History (Wbn)

1,661

5,113

1954~ 1979

Cheil Woolen Fabrics Industries was founded

as a parent company of Samsung

1980sMoved into the fashion industry,

and became the first Korean company

to produce ready-made clothes

1990sDiversified the business portfolio to include

chemicals by developing synthetic resins

as ABS and PS

2000~ 2009

Entered the electronic materials business

involving the production of semiconductor and

display materials

2010 ~

Continually growing through a diversified

business portfolio encompassing

chemicals, EM, and fashion;

also building new businesses that will bolster

our future competitiveness

Cheil Ind at a glance-I

433 33

716

2,267 2,600

1,413

1,700

691

1,353

1,700

6,100


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Manufacturing innovative casing materialsfor IT devices, home appliances, cars, etc.

- #1 global market share in resins formonitors, refrigerators

- #1 domestic & #2 global market sharein resins for mobile phones

Providing display, semiconductor, PV-relatedmaterials for global IT players

- CAGR 39% in 2006 ~ 2011

- #2 biggest material player in Korean market

- Aggressively exploring new business opportunitysuch as OLED and rechargeable battery

Operating more than 20 brands coveringcasual, mens, and womens wear

- #1 player in domestic fashion market

- Galaxyand Bean Polehave consistently rankedat the top of domestic brand preference

Cheil Ind at a glance -Business Status Sales (wtn) 3.7 4.3 5.1 5.6 6.1

O P (wbn) 240 264 330 287340

2.3 2.42.6

1.4 1.5

1.7

1.51.4

1.7

1.81.8

1.2

0.8

1.1

1.0

92 123159

71 100

95 95 98 105140

44

50 52 74 68100

Sales

O P

one-off

income


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2008 2009 2010 2011 2012(E)


Capex (Wbn)

125

317

Cheil Ind at a glance -

171

43 52 51

108 11037 2193

110140

88

41

83

81

120

49

420

242

2009 2010 2011 2012(E)

R&D (Chemicals) R&D (E M)

Workforce (individuals)

3,257

4,770

171

2,7763,307

4,190 4,257

158

196

203 196

307

349

332 353

3,896

4,869


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69

22

8

99

/

2011

/

`11

`20

69

22

8

99

109(5%)

34(4%)

47(22%)

190(CAGR 7%)

Chemicals

Electronic

Materials

Green/Energy

2011 2020(E)

End market

Reducing Weight of Cars

Growing demand for IT devices Rapid growth of OLED display

and rechargeable batteries

IT devices

Automobiles

2011

1,900

80 mil

2020(E)

2,500

110 mil

Business Opportunities

Materials (Chemicals & EM)

(Wtn)

(numbers)

Fashion

The growth momentum will be

placed on global expansion

- As China is growing rapidly ranked #2

in global market,

we will further strengthen our market

position in China,

where brands such as Bean Pole, Galaxy

and Rapido are already established.

(wtn) 2011 2020 CAGR

Global 1,750 2,350 3.5%

US 380 420 1.1%

China 170 385 9.9%

Korea 30 45 4.6%

Materials market will continue expanding driven by newly emerging demand

(Wtn)

Materials market


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Major Products -Chemicals

Styrene Products Engineering Plastics

PC

PC, Flame Retardant PC, PC/ABS, etc.

ABS

General ABS, Extrusion ABS,Metal Plating ABS, etc.

PS

Flame Retardant HIPS

Specialties

Transparent ABS

- Advanced high transparent ABSwith excellent colors

Non-painting resin- Gives off the appearance of painted surfacewhile solving flow marks and weld line issues

Eco-friendly materials

- Resins made with recycled and used PET

bottles

EP

PBT/ABS, PA/GF, MPPE, etc.

Automobile Applications

Providing high-tech materials and solutionin partnership with global automobile makerssuch as Audi, BMW, Ford, etc.

Interior, Exterior, Lighting, Structure


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Major Products -Electronic Materials

Display Semiconductor

Process materials

SOH (Spin-on Hardmask)- Supports process migration

by reducing the amount of Photo Resistused in lithography process

EMC(Epoxy Molding Compound)- A protector that effectively

protects semiconductor circuits fromexternal damage and contamination

EMC

Packaging materials

DAF(Die Attach Film)- An adhesive for mounting

and stacking chips on wafersDAF

SOD (Spin-on Dielectric)- Insulator for interconnect capacitance

reduction between transistors ofsemiconductor device

Film materials

Polarizer- Polarizes the emissionsgenerated by LCD light sources

Process materials

PDP Paste- A high-viscosity liquid-conductive orinsulating substance, used to forminsulating bodies and components of

electrodesColor Resist- A photosensitive color dispersingagent used in the manufacture ofcolor filters, a core componentin LCDs

MAS (Prism sheet)- Makes LCD brighter and richer


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Major Products -Fashion

Casual

Bean pole

Fubu

Mens Wear

Rapido (only in China)

A family brand that includesBean Pole Mens, Ladies, Golf,and etc. It has the strongestbrand power in Koreaas a single casual brand.

Galaxy

Galaxy has been ranked the first in surveys

of brand preference in the past severalyears, and is becoming a world class brandby breaking into the Chinese market.

Rogatis MVIO Pal Zileri

Womens Wear

KUHO

Theory Issey Miyake

Launched in 2003, a high-end brandadored by female customers.

Tory Burch Le Beige

Fast Fashion (SPA)

8 seconds

A Korean fast fashion brand launched in February 2012,

offering a wide range oftrendy itemsat affordable prices.

Specialty store retailer of Private label Apparel


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2 Earnings Release 1Q12


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4Q11 1Q12 1Q11

Profitability

551 613 621

362376 384

454429 377

12

1Q12 Business Results


1,400

Sales (Wbn)

1,384 1,429

(Wbn)

4Q11 QoQ

1Q12 YoY

1Q11

O P 49 94% 95 7% 103

R P 31 171% 84 24% 110

N P 40 59% 64 30% 92


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Financial Ratios

Financial Status

Financial Position (Wbn)

2012.3 2011.12 Change

Assets 5,367 4,931 436

Quick 1,619 1,435 184

Cash 60 96 36

Receivables 695 485 210

Inventories 760 743 17

Non-current 3,748 3,496 252

Liabilities 1,957 1,714 243

Total Borrowings 1,017 853 164(Net Borrowings) (931) (763) (168)

ShareholdersEquity

3,410 3,217 193

Total Liabilities

/ Equity

2010.12 2011.12 2012.3

Total Borrowings

/ Total Assets

Shareholder

Equity Ratio

Net Debt to

Equity

8

17

46

53

69

11

24

65

(%)

57

64

27

19


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4Q11 1Q12 1Q11

OP 10 26 36

% 1.8 4.2 5.7

Business Review & Outlook

Chemicals

621

Business Results (Wbn)

551

Raw materials Price Trend

Despite high raw materials price and

low seasonality,

QoQ sales and margin improved as

IT demand gradually recovered

Overall demand to grow as

set product will increase for the demand

related with Chinese Labor day

and Olympics

613 ($/bbl, ton) 1Q11 4Q11 1Q12

Oil Price 94 94 103

S M 1,400 1,316 1,436

A N 2,503 1,779 2,125

B D 2,404 2,169 3,426

ABS(spot) 2,268 1,863 2,096


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4Q11 1Q12 1Q11

OP 18 44 36

% 4.9 11.6 9.5

128 125152

147 155157

87 9675


E M

384

Business Results (Wbn)

362 376

Polarizers Display Semiconductors Semiconductors

- Sales and margin increased as

geometry migration is expanding and

new products sales are growing

Display

- QoQ and YoY margin improved by

restructuring low margin products

Polarizer

- Weak Japanese yen had cost reduction effect,

However, margin loss continued due to

low market demand

Margin improvement to continue amid

internal cost reduction and sales increase

along with the IT demand upswing


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4Q11 1Q12 1Q11

OP 23 26 29

% 5.1 6.1 7.6

159187 173

155129

116

105 99

77

35 15

12


Fashion

377

(Wbn)

454429

Casual Men Women etc. Others

Business Results

YoY sales increased 14% as both

main and new brands sales expanded

- Main brand sales remained firm,

Bean pole(12%), Rogatis(14% ) etc.

- Women sales continuously increased,

Tory Burch(117%), Theory(9%) etc.

YoY margin slightly decreased due to

launching cost of new brands as

SPA, 8 seconds(Feb) and

Outdoor, Bean pole outdoor(Mar) etc.

The outset sales of S/S expected to be

depressed due to unfavorable weather,

However, sales will improve from

strong seasonality and expansion of

new launched brands


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O P R P

Equity Method Gains(Losses)

Non-operating Gains/Losses

Analysis(Wbn)

95

(Wbn)

148

9

FinanceLosses Equity

MethodLosses

3

4Q11 QoQ

1Q12 YoY

1Q11

AceDigitech

- - - + 5.1 -5.1

SamsungPetro-chem

-1.1 - 2.3 -3.4 - 22.4 19.0

Others 0.2 + 0.1 0.3 + 0.2 0.1

Total -0.9 - 2.2 -3.1 - 17.1 14.0

84


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3 Appendix


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Quarterly Business Results(Consolidated/K-IFRS)


(Wbn)10.1Q 10.2Q 10.3Q 10.4Q FY2010 11.1Q 11.2Q 11.3Q 11.4Q FY2011 12.1Q

S a l e s 1,170 1,327 1,258 1,358 5,113 1,399 1,481 1,317 1,384 5,581 1,429

C h e m i c a l s 516 591 570 591 2,267 621 650 593 551 2,415 613

E M 321 368 371 352 1,413 384 406 396 361 1,547 376

F a s h i o n 317 343 289 404 1,353 376 397 294 454 1,521 429

O t h e r s 16 25 28 11 80 18 28 34 18 98 11

Operating Profit 91 103 87 49 330 103 63 72 49 287 95

C h e m i c a l s 25 69 39 25 159 36 23 2 10 71 26

E M 39 23 40 -3 98 36 27 68 18 149 43

F a s h i o n 28 11 8 9 55 29 11 5 23 68 26

O t h e r s -1 1 1 17 18 2 2 -3 -2 -1 -

F i n a n c e

incomes/expenses -7 -4 -15 - -25 -7 -7 7 -17 -24 -8

E q u t i y M e t h o dG a i n s / l o s s e s 8 8 10 15 40 14 - - -1 13 -3

Recurring Profit 91 108 82 64 345 110 56 79 31 276 84

N e t P r o f i t 79 88 66 44 276 92 55 72 40 259 64


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(Wbn)10.1Q 10.2Q 10.3Q 10.4Q FY2010 11.1Q 11.2Q 11.3Q 11.4Q FY2011 12.1Q

S a l e s 1,161 1,305 1,232 1,306 5,004 1,352 1,451 1,311 1,303 5,417 1,372C h e m i c a l s 519 592 568 551 2,231 598 652 607 524 2,381 595

E M 321 367 371 351 1,410 383 405 393 362 1,543 375

F a s h i o n 308 322 270 385 1,284 353 367 292 406 1,418 391

O t h e r s 14 24 23 19 80 18 27 19 11 75 11

Operating Profit 98 102 90 23 313 104 65 64 49 282 101C h e m i c a l s 30 69 39 28 167 36 23 4 9 72 26

E M 37 23 39 2 101 33 28 51 12 124 44

F a s h i o n 30 11 10 12 63 33 13 8 28 82 31

O t h e r s - -1 2 -18 -18 2 1 1 - 4 -

F i n a n c e

incomes/expenses -7 -3 -14 -1 -25 -6 -6 7 -18 -23 -8Recurring Profit 91 99 76 22 288 98 59 71 31 259 94

N e t P r o f i t 78 79 67 16 240 81 55 63 42 241 74

Quarterly Business Results(Non-consolidated/K-IFRS)


(June2012)Cheil Industries IR(v2)

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