LG International. Investor Presentation

Transcription

1 LG International Investor Presentation

2 Table of Contents Business Overview Business Portfolio & Strategy - Resources Business - Infra & Industrial Business - Logistics Business Financial Highlights Ownership Structure / Dividend [Appendix] Balance Sheet (K-IFRS Consolidated) Income Statement (K-IFRS Consolidated)

3 Business Overview

4 Overview Comprised of Resources, Infra & Industrial and Logistics. Resources Infra & Industrial Coal 석탄 Invest/Develop/Operate coal mines Off-take and trading IT IT/Display components/equipment trading Vendor Management Inventory services: Logistics, inventory management, and customs Palm Invest/Develop/Operate palm oil plantation Production and supply of palm oil Power Generation Invest/Develop Power Generation business Metals Invest/Operate coil centers Invest/Develop non-ferrous metal mines Industrial Infrastructure Petrochemical Invest/Develop industrial infrastructure project Invest/Develop chemical plants Petrochemicals product trading Oil & Gas Invest/Develop oil/gas fields Automotive Develop & Organize automotive related projects Provide an integrated solution for automotive manufacturing facility, equipment, design, parts, etc. Logistics Pantos (51%) Integrated Logistics Service Provider: Sea Freight, Air Freight, Warehousing, Trucking, Express, Project cargo, etc. Pantos acquired100% stake of Hi Logistics in Nov 2015 and merged in June

5 Track Record On-going revenue stream diversification Resources Infra & Industrial Logistics Production in Ensham coal mine in Australia(1993) Investment in Block 8(West Bukha) oil field in Oman(2004) Production in Ras Laffan LNG gas field in Qatar(1999) Initial E&P Investment (~ 2007) Investment in MPP coal mine in Indonesia(2007) Investment in coil center(2007) Production in Block 11-2 gas field in Vietnam(2006) Started import/distribution business(2003) - Digital Camera/Wine/Commercial Vehicles, etc. Production in RapuRapu copper mine in Philippines(2008) Investment in Wantugou coal mine in China(2008) Production in MPP coal mine in Indonesia(2009) Production in Block 8(West Bukha) oil field in Oman(2009) Investment in PT.PAM palm plantation(2009) E&P Portfolio Construction (2008 ~ 2011) Order received for gas desulfurization plant in Turkmenistan(2009) Production in Wantugou coal mine in China(2011) Investment in GeoPark Chile(2011) Order received for Aromatics plant in Oman(2006) Exit from Commercial Vehicles distribution business (2011) Investment in GAM coal mine in Indonesia(2012) Investment in GeoPark Colombia(2012) Production in ADA oil field in Kazakhstan(2013) Investment in GS E&R(2014) Production in GAM coal mine in Indonesia(2017) Exit from Digital Camera/Wine distribution business(2012) Order received for oil refinery plant in Turkmenistan(2012) Order received for Ethane Cracker plant in Turkmenistan(2014) Investment in Hasang hydropower plant in Indonesia(2014) Investment in Coal power plant in China(2015) Investment in Cement plant in Myanmar(2015) Acquisition of Pantos Logistics(2015) Pantos acquired 100% stake of Hi Logistics(2015) Investment in PT.TBSM / PT.GUM palm plantation(2018) Revenue Stream Diversification: Project and Logistics Business(2012 ~) Investment in coal to chemical plant in China(2013) Pantos merged with Hi Logistics(2016) -2-

6 Business Portfolio & Strategy

7 Resources Business Coal / Palm /Metals Conduct selective investments in resources based on our experience in the operation of coal/metals mines and palm plantations, and creates profits by trading produced resources Coal Palm Metals PT.GAM coal mine in Indonesia PT.PAM plantation in Indonesia Rosemont copper mine in USA [Overview] Invest in/develop/operate coal mines in Indonesia, China, Australia Import and tripartite sales of coal to power plants, cement plants, etc. [Strategy] Enhance productivity and operational efficiency at existing invested mines Secure low-cost production mines in strategic area based on accumulated knowhow in mine development and operation [Overview] Invest in/develop/operate palm plantation Supply palm oil to local oil processing corporations [Strategy] Expand palm oil business based on accumulated know-how - Improve productivity of existing plantations [Overview] Invest in/develop a copper mine in USA Provide a One-Stop service encompassing processing, distribution, and sale of steel [Strategy] Seek new business opportunities in green minerals which are resources of secondary cells -3-

8 Resources Business Key Assets : Coal GAM (Indonesia) MPP (Indonesia) Wantugou (China) Ensham (Australia) Location East Kalimantan East Kalimantan Inner Mongolia Queensland Ownership/ Profit Recognition 60% / Consolidated Income 75% / Consolidated Income 30% / Equity Method 15% / Consolidated Income Investment/ Production 2012 / / / / 1993 Features Operator Off-take 100% 6 th largest in Indonesia Operator Off-take 100% First Chinese mine to be owned by a Korean corporation Open-pit mining Open+Underground mining Remaining Minable Reserves 209 million ton (Thermal Coal) 6.6 million ton (Thermal Coal) 128 million ton (Thermal Coal) 160 million ton (Thermal Coal) -4-

9 Resources Business Key Assets: Palm PT.PAM (Indonesia) TBSM/GUM (Indonesia) Location West Kalimantan West Kalimantan Ownership/ Profit Recognition 95% / Consolidated Income 95% / Consolidated Income Investment/ Production 2009 / / 2018 Features Enhancing productivity of the plantations and minimizing production cost Constructing infrastructure to increase production volume Plantable Area 10,000 ha 10,200 ha -5-

10 Infra & Industrial Business Power Generation / Industrial Infrastructure Secure sustainable profit and off-take rights by working as Infrastructure/Power generation developer and selective equity investor Power Generation Industrial Infrastructure Musandam IPP in Oman [Overview] Invest in/develop IPP projects - Coal/Gas/Hydroelectric power, etc. [Strategy] Secure sustainable profit through equity participation Develop Power Producer projects with a focus on strategic regions such as Southeast Asia, the Middle East, and China Cement Plant in Myanmar [Overview] Infrastructure project development and equity investment in developing countries Play a role as a project developer - Business development, investment, financing, supply of raw materials, construction, maintenance, etc. [Strategy] Operate synergy-creating projects that link environmental elements and resources with a focus on Southeast Asian markets -6-

11 Infra & Industrial Business Expand profit base by expanding value chain, promoting functional business, and improving business structure IT Automotive IT / Automotive HUB Warehouse in Nanjing Automotive business [Overview] Import, export, and conduct tripartite trade of LCD Panel, equipment, etc. Provide functional VMI(Vendor Management Inventory) service based on global production bases - Logistics, inventory management, and customs [Strategy] Expand VMI business to provide differentiated values [Overview] Auto Project Developer focusing on emerging countries such as India, Russia, China etc. Parts, manufacturing facility, and engine design [Strategy] Expand the scope of business to EV, engine, driving, and automotive components, and enhance future growth potential Improve synergy related to customs, inventory management, and delivery -7-

12 Logistics Business Pantos Secure business synergy and profit stability through enhancing ability in logistics business Introduction Main Business : Integrated Logistics Service Provider - Sea Freight, Air Freight, Warehousing, Trucking, Express, Project cargo, etc. Number of employees : 7,176 (as of 2018) Global Networks : 349 networks in 40 countries worldwide Composition of Sales (as of 2018) : - Sea freight 44%, W&D 42%, Air freight 14% Summary Financial Position (KRW Bn) Items Assets ,056.7 Current Assets Cash Trade Receivables Inventories Non-Current Assets Investments Assets Tangible/Intangible Assets Liabilities Total Liabilities /Shareholder s Equity (%) (130%) (123%) (136%) Trade Payables Borrowings Interest Bearing Liabilities /Shareholder s Equity (%) (24%) (10%) (14%) Capital Capital stock Overview One of the global leaders in Sea/Air freight forwarding 1) - Global top 6/Domestic top 1 by sea freight volume: 1.3 mil TEUs - Global top 23/Domestic top 1 by air freight volume: 140,000 ton Global reach and coverage with extensive logistics network : Electronics, chemical, construction, oil refining, distribution, etc. Provides best possible solutions that perfectly serve customer needs - Operating bonded warehouses, logistics centers, hub warehouses - Managing 240(4milion m 2 )of warehouses globally and consultants of logistics Offers advanced visibility and administration service through high-end IT solutions - Allowing customers to track their packages at any given point in the transportation process and manage inventories Summary Income Statement (KRW Bn) Items Sales 2, , ,616.0 Gross Profit Gross profit rate (%) 13.2% 12.2% 10.3% Operating Profit Operating profit rate (%) 3.5% 2.5% 2.1% Non-Operating Income Finance income/costs Gain(loss) on investments in associates and subsidiaries Other income and expenses Profit before tax Net Income ) Armstrong & Associates, Top 25 Global Freight Forwarder (Ranking by volume) 2) Armstrong & Associates, Top 25 Global Freight Forwarder (Ranking by sales) -8-

13 Financial Highlights Net Interest Bearing Liabilities Financial Ratio Interest Bearing Liabilities 1,430.6 (KRW Bn) 17 (End) 18 (End) Cash & Cash equivalents Net Interest Bearing Liabilities 1,083.8 Total Liabilities/ 부채비율 Shareholder s Equity 213% +12%p 225% * As of 31 Dec 2018 Breakdown of Interest Bearing Liabilities (KRW Bn) Others Interest Bearing 차입금비율 Liabilities/ Shareholder s Equity 89% +3%p 92% Corporate Bonds 1, Long-term Borrowings (Government policy funds: 57%) Net Interest Bearing 순차입금비율 Liabilities/ Shareholder s Equity 63% +7%p 70% 63.3 Trade Finance * As of 31 Dec

14 Ownership Structure/Dividend Major Shareholders and Related Parties Ownership Structure Domestic Institutional Investors Foreign Investors 28% 27% 27% 35% 12% 30% 28% 15% 12% 25% 28% 33% Individuals and Others Number of Shares (Thousand shares) Division # of Shares Issued Shares 38,760 Treasury Shares 101 Outstanding Shares 38,659 * As of 31 Dec 2018 Dividend Division Dividend per share (KRW) Net Income (KRW Bn) Total dividend amount (KRW Bn) Dividend payout ratio (%) N/A Dividend yield (%) * Net Income : Based on K-IFRS consolidated statements -10-

15 Balance Sheet (K-IFRS Consolidated) (KRW Bn) Items Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q Assets 5, ,18.1 5, , , , , ,038.0 Current Assets 2, , , , , , , ,558.3 Cash & Cash Equivalents Trade Receivables 1, , , , , , , ,067.9 Inventories Other Current Assets Non-Current Assets 2, , , , , , , ,479.7 Tangible Assets Investments Intangible Assets Other Non-Current Assets Liabilities 3, , , , , , , ,488.5 Current Liabilities 2, , , , , , , ,167.4 Trade Payables 1, , , , , , , ,184.0 Short-term Borrowings Current Portion of Bonds and Long-Term Borrowings Other Current Liabilities Non-Current Liabilities 1, , , , , , , ,321.1 Bonds Payables Long-term Borrowings Other Non-Current Liabilities Equity 1, , , , , , , ,549.5 [Appendix]

16 Income Statement (K-IFRS Consolidated) (KRW Bn) Items Q 2Q 3Q 4Q Total 1Q 2Q 3Q 4Q Total Sales 3, , , , , , , , , ,988.2 Cost of Sales 2, , , , , , , , , ,277.1 Gross Profit SG&A Expenses Operating Profit Non-Operating Profit Finance Income/Costs Gain(loss) of Equity Method Other Income and Expenses (6.3) (5.0) (9.8) (13.2) (34.4) 8.9 (5.2) (3.0) (9.8) (9.1) (12.1) (6.1) (8.5) (11.8) (38.6) (7.4) (16.4) (13.0) (12.0) (48.7) (0.4) (0.1) (0.9) (11.0) (10.9) 1.0 (2.4) 1.1 (69.1) (69.5) Profit Before Tax (6.2) Income Tax Net Income (10.8) 88.2 (78.1) (15.1) (36.0) Owners of the Parent Non-Controlling Interests (14.0) 60.2 (87.5) (24.4) (70.4) [Appendix]