Updated on Sept. 22, 2003 2002 to 2003. Corporate Overview Founded in 1947, LG Household & Health Care(“LG H&H”) has been the basis of growth for LG Chemical.

Updated on Sept. 22, 2003

2002 to 2003

Corporate Overview

Founded in 1947, LG Household & Health Care(“LG H&H”) has been the basis of growth for

LG Chemical and LG Group. Since its demerger from LG Chemical in 2001, LG H&H has become

the leading household and health care company in Korea.

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Major Products & BrandsHistory & Sales Breakdown

Cosmetics: 34% HouseholdProducts: 66%

Toothpaste

Shampoo

Soap

Laundry Detergent

Kitchen Detergent

Fabric Softener

2002 Sales: KRW 1,102 bn*

Skin Care

Color Cosmetics

Functional Cosmetics

Men’s Care

Household Products

1947 Established as Lucky Chemical Industrial Co.

1954 Produced Korea’s first toothpaste “Lucky”

1969 IPO

1974 Changed corporate name to “Lucky”

1979 Established Lucky R&D Center

1980 Established Cheongju Plant

1984 Launched cosmetics business

1995 Changed corporate name to “LG Chemical”

2001 Demerged from LG Chemical and

established LG Household & Health Care

* The sales amounts are net of sales incentive expenses

Cosmetics

Demerger

With the demerger, management transparency and shareholder value will continue to increase.

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Structure

• Household• Cosmetics

• Petrochem• Industrial Materials, etc.

• Biotechnology

LG Life ScienceLG H&H

Concentrate on core businesses

Enhance management transparency

Respond quickly to customer’s needs

Rise in Corporate & Shareholder value

Positive Effects

2001 2002

KOSPILG Chem 100

250

100 = Market Cap. on 25 Apr. 2001 KRW 186 bn / KOSPI 556

KRW 454 bn

759p

EquityInvestment

Old LG Chemical

Petrochem

IndustrialMaterials

HouseholdProducts &Cosmetics

Biotech

ElectronicMaterials

Demerger

2003

(As of Aug. 2003)LGCI

+LGEI

• Chemical Biz• Investments

• Electronic BizInvestments

LG

• Investments

LG H&H

【 Market Capitalization 】500

Corporate Structure

(End of June 2003)

R & D

Product/Design/Packaging Research CTRs

Production

4 plants & 4 overseas J/Vs

ConsumersConsumers

AgentsAgents

Direct SalesDoor to Door

Sales

Direct SalesDoor to Door

Sales

SupermarketsSpecialty ShopsSupermarkets

Specialty Shops

Discount StoresDepartment StoresConvenient Stores

Discount StoresDepartment StoresConvenient Stores

Sales Production R&D Admin

Number 1,586 808 297 209

Utilizing EVA & TSR as management standards, 2,900 employees are working together to enhance

corporate value. In addition, advanced R&D, production, logistics & sales network are contributing

to our competitiveness.

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OrganizationManagement/Shareholders

BOD

- 8 directors including 4 outside directors

Management Standard

- EVA : ROIC - WACC (2002 : 11%)

- TSR : Weighted Average Share Price Increase (2002 : 25%) Employees

- 2,900 People

Shareholder Structure

- LG, the holding company, is a major shareholder

Logistics

10 logistics centers

(End of Aug. 2003)

LG Foreigner Others

Stake 34% 38% 28%

Corporate Strategy, Business Results & Targets

As a leading home care and personal care company, LG H&H will enhance market leadership by restructuring, strengthening brand competitiveness and improving organizational competency.

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(65%)

(35%)

(66%)

(34%)

2001 2002 2003(e)

108(10.4%)

1,032

1,102

(KRW bn)

• Restructuring

• Strengthening brand competitiveness

• Improving organizational competency

▽0.2%

1)

7%

99(8.9%)

Corporate Strategy Business Results & Targets

Enhance Market Leadership by

HouseholdProducts

Cosmetics

OperatingIncome(Margin)

Note1) Sales amounts are net of sales incentive expenses(’01: KRW 79bn, ’02: KRW 86bn). The 2002 financial report includes 2001 & 2002 special bonuses( KRW 8bn & 9bn respectively).

Leading Home Care and Personal Care Company

Devoted to the pursuit of beauty, dreams and the betterment of life

(68%)

(32%)

80(7.3%

)

1,100

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Strengthening market leadership

Customer

Focus on brand, image and perceived quality

Greater consumer needs for high-functional products

Promotion becoming more important

Channel

Continuous growth of discount stores

Expansion and diversification of online sales

Competitor

Foreign: Expansion of M/S and product categories

Local: Focus on certain categories and

penetration into niche markets

Business StrategyHousehold Products

Business Environment

Enhancing competitiveness in growing channels

Developing sustainable growth engines

Strategy

Changes in consumer preferences, more intense competition and channel reshuffling are expected. However, LG H&H will enhance market leadership in major product categories and develop new growth engines for the future.

【 19 Categories 】

【 6 Major Categories 】 : 59% of Sales

37

24

39

37

27

36

Discount Stores

Agents

Direct Sales

2001 2002

Sales BreakdownCategory

Sales

OperatingIncome(Margin)

L G 36

Toothpaste L G 47

Aekyung

19Others

Pacific19

Shampoo L G 28

P&G19

Soap L G 37

Unilever

14 OthersPacific

16

LaundryDetergent

Aekyung27

CJ22

Others

KitchenDetergent

L G 44 Others

CJ15

Aekyung33

FabricSoftener

L G 31

Pigeon49

Oxy15

Others

L G 37

686

2001 2002 2003(e)

68(10.0%)

735

Sales of KRW 735bn and operating profit of KRW 72bn was reached in 2002, an increase of 7% and 5% year-on-year respectively. Despite intense competition, LG H&H has maintained market leadership.

49 20 17 Others

27 18 20 Others

40 15 12 Others11

36 27 Others21

43 34 Others15

(2001)

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31 47 Others16

Sales & M/S

(%)Market ShareSales (KRW bn)

Pacific18

7%

Note1)

* Including inter-company transaction

72(9.7%)

Note1) The sales amounts are net of sales incentive expenses(’01: KRW 28bn, ’02: KRW 34bn). 2002 financial report includes 2001 & 2002 special bonuses( KRW 4bn & 5bn respectively).

Aekyung

10

OthersUnilever

15

Aekyung

12

3%

753

66(8.8%)

(2002)

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Building “Power Brands”

Different Strategy for Each Channel

R&D and Design Capability Enhancement

Greater consumer preference for premium & foreign brands

Diversification of products and brands according to

consumer needs

Larger and more modernized specialty shops

Growth of discount stores and department stores

More intense competition in door-to-door sales

Foreign: New entry and penetration into diverse channels

Local: Major players are positioned in multiple channels

Minor players are mainly niche players

Cosmetics Business Strategy

Changes in distribution channels and aggressive marketing from foreign and local competitors are expected. LG H&H will secure growth momentum by building “Power Brands” and establishing a different strategy for each distribution channel.

Business Environment Strategy

Customer

Channel

Competitor

Specialty Shops & Discount Stores

- Volume and profit driver - Aggressive marketing and channel development

Department Stores

- Strategic development as a premium channel

New door-to-door channel

- Change of business model and restructuring

Old door-to-door channel

- Business model improvements and gradual expansion

40(10.9%)

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Sales

2001 2002 2003(e)

366

383

Sales by Channel (%)

5%

New type

Departmentstores

Discountstores

Specialtyshops

Old type

Others

PremiumMarket

MassMarket

2001 20022000

【 LG H&H M/S 】 【 15% 】 【 16% 】 【 15% 】

Sales (KRW bn)Note1)

* Including inter-company transactions

27(7.1%)

Sales of KRW 383bn and operating profit of KRW 27bn was reached in 2002, a growth of 5% and ▽32% year-on-year respectively. Market share declined slightly.

Sales

OperatingIncome(Margin)

Note1) The sales amounts are net of sales incentive expenses(’01: KRW 51bn, ’02: KRW 52bn). 2002 financial report includes 2001 & 2002 special bonuses( KRW 3bn & 3bn respectively).

ExportHome shoppingE-channel, etc.

6662

14

67

13

20 21

13

24

▽ 6%358

14(3.9%)

Overseas Business

Based on localization strategy, LG H&H actively pursues overseas business with particular emphasis on JVs in China and Southeast Asia.

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■■

■■■■

■■

■■■■

Country/Est. : China / 1996 Business : Toothpaste Production ’03 Sales Target: U$ 12 mn

LG H&H R&D Shanghai

Country/Est. : China / 1998 Business : Natural Materials R&D

Hangzhou LG Cosmetics

Country/Est. : China / 1994 Business : Cosmetics Production ’03 Sales Target: U$ 20 mn

Beijing LG Household Chemical

LG Vina Cosmetics

LG HAI

Country/Est. : Vietnam / 1997 Business : Cosmetics Production ’03 Sales Target : U$ 19 mn

Country/Est. : U.S.A. / 1990 Business : Toothpaste/Detergent/ Cosmetics Sales

LG H&H International Trading

Country/Est. : China / 2000 Business : Shampoo/Soap/ Cosmetics etc.

■■

■■

■

■■

Cognis Rika

Country/Est. : Malaysia / 1989 Business : Fatty Alcohol Production

Production JV (4) Sales Subsidiary (2)

R&D Subsidiary (1)

Key Financials

Assets(Fixed Assets)

Liabilities(Borrowings)

Shareholders’ Equity(Capital Stocks)

Debt/EquityBorrowings/Equity

Sales

Gross Profit

Operating Income

Recurring Profit

Net Profit

E P S (KRW)

R O AR O E

678435

407173

27189

150% 64%

703428

404164

30089

135% 55%

1,102563

9996

44

2,489

6.5% 16.3%

2001 2002 2003(e)

2002 2003

647414

414205

23389

178% 88%

1,032528

108107

75

4,205

11.5%32.0%

2001*

E B I T D A

Interest Expenses

EBITDA/Interest Expenses

12712

10.7

2001 2002 2003(e)

13521

6.4

205

2001 2002 2003 (e)

178%Debt/Equity(%)

Borrowings

1,100550

8080

56

3,172

8.0% 18.8%

(KRW bn)

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1129

12.3

Borrowings & InterestKey Financials (KRW bn)

* Including pre-demerger 1Q results

173164

150%

135%

At the end of 2002, debt-to-equity ratio declined to 150%, a 28%p decrease from 2001.

LG H&H plans to reduce the ratio to the 130% range by 2003.

Cash Flow

2001 2002 2003(e)

84 20 12Net Cash Flow

Cash Flow from Operations

Net Income

Depreciation

Working Capital

DividendOthers

Capital Expenditure

87

56

21

10

-

25

28

37

44

29

-18

-18

21

38

52

56

31

-8

-27

4

45

*

**

* Excluding 1Q 2001 results** Including disposal of assets (’01: KRW 13 bn, ’03: KRW 16 bn)

Net Cash from business operating activities is expected to be KRW 12bn in 2003.It will primarily be allocated to maintaining a stable dividend pay-out ratio, enhancing marketleadership and improving financial conditions.

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Cash Flow (KRW bn)

Sustain Stable Dividend Pay-out Ratio

Enhance Market Leadership

Improve Financial Conditions

(Dividend)

2000 2001 2002

40

30

20

10

(%)

Pay-out ratio

Dividend Per Share(KRW)

Dividend Yield

* Pre demerger dividend of LG Chem* * Pay-out ratio excludes extraordinary loss

7501,000

1,500

* **

www.lgcare.co.kr

www.careshop.co.kr

Thank you! This presentation contains forward looking statements which are based on

management’s assumptions and estimates. The forward looking statements involve certain risks and uncertainties that could cause actual results to differ materially from those contained in this presentation. Potential risks and uncertainties include, but are limited to, such factors as general economic conditions, foreign exchange fluctuations, and any change in the relevant laws and regulations.