Lg Corporation (“Lg” Or the “Company”)

A BETTER LG Whitebox Advisors Presentation

MARCH 2021 www.ABetterLG.com DISCLAIMER

THIS PRESENTATION IS FOR DISCUSSION AND GENERAL INFORMATIONAL PURPOSES ONLY. IT DOES NOT HAVE REGARD TO THE SPECIFIC INVESTMENT OBJECTIVE, FINANCIAL SITUATION, SUITABILITY OR THE PARTICULAR NEED OF ANY SPECIFIC PERSON WHO MAY RECEIVE THIS PRESENTATION, AND SHOULD NOT BE TAKEN AS ADVICE ON THE MERITS OF ANY INVESTMENT DECISION. THIS PRESENTATION IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY INTERESTS IN ANY FUND, ACCOUNT OR INVESTMENT VEHICLE MANAGED BY WHITEBOX ADVISORS LLC (“WHITEBOX”) AND IS BEING PROVIDED FOR INFORMATIONAL PURPOSES ONLY. THE VIEWS EXPRESSED HEREIN REPRESENT THE OPINIONS OF WHITEBOX, AND ARE BASED ON PUBLICLY AVAILABLE INFORMATION WITH RESPECT TO LG CORPORATION (“LG” OR THE “COMPANY”). CERTAIN FINANCIAL INFORMATION AND DATA USED HEREIN HAVE BEEN DERIVED OR OBTAINED FROM PUBLIC FILINGS, INCLUDING FILINGS MADE BY THE COMPANY WITH REGULATORS, AND OTHER SOURCES.

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UNDER NO CIRCUMSTANCES IS THIS PRESENTATION TO BE USED OR CONSIDERED AS AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY. 2 TABLE OF CONTENTS

Executive Summary

Why the Spin-Off Should Be Opposed

Misalignment Between the Controlling Family and Minority Shareholders

Deficient Corporate Governance Practices

Conclusion: How to Build a Better LG

3 EXECUTIVE SUMMARY www.ABetterLG.com ABOUT LG

LG is a Korean conglomerate primarily comprised of holdings in listed companies and cash

Company Snapshot (KRX: 003550) LG shares trade at a 66% discount to its asset value Founded in 1947, LG is the fourth largest Korean Conglomerate by market capitalisation LG Corp Sum of the Parts Market Cap LG Value to LG Value per LG % of Share Businesses (KRWbn) Ownership (KRWbn) share (KRW) Price • 87% of its value consists of cash and holdings in listed LG CHEM LTD 62,898 30% 20,969 121,519 130% companies that have their own management and LG ELECTRONICS INC 24,384 30% 8,209 47,573 51% Board of Directors LG HOUSEHOLD & HEALTH CARE 23,505 30% 8,000 46,360 50% LG UPLUS CORP 5,239 38% 1,991 11,538 12% • LG’s operating revenue consists of dividend income LG HAUSYS LTD 642 34% 240 1,391 1% from its subsidiaries, brand royalties and rental income LG INTERNATIONAL CORP 1,048 25% 259 1,500 2% from subsidiaries SILICON WORKS CO LTD 1,090 33% 360 2,089 2% LG MMA (book value) 50% 115 668 1% • Key subsidiaries consist of: Cash to NewCo 146 845 1% • LG Chem: worth 130% of LG’s share price Other Businesses 2,501 14,492 16% Brand 2,207 12,787 14% • LG Electronics: worth 51% of LG’s share price Property 1,506 8,727 9% • LG H&H : worth 50% of LG’s share price Total Business value 46,503 269,491 289% Net Cash 1,504 8,716 9% Total Asset Value 48,007 278,207 298% LG Corp Market Cap 16,100 93,300 100% Ownership Structure Discount to market value -66% -66% The Koo Family holds 46% of LG Corp shares, valued at KRW 7.4 trillion • The holding company structure allows the Koo Family to control KRW 118.8 trillion in publicly listed assets with its KRW 7.4 trillion investment

Source: Bloomberg, Morgan Stanley, company data. *LG ownership %. Listed holding values calculated using current market prices. Figures as of 2 March 2021. 5 ABOUT WHITEBOX

Whitebox is a meaningful, long-term shareholder of LG

• Whitebox is a multi-strategy alternative asset manager with more than $5.5 billion in assets under management • Founded in 1999, Whitebox invests across asset classes, geographies and markets through the hedge fund vehicles and institutional accounts it advises • Whitebox’s Equity team invests in three core strategies, with the largest by assets being holding companies • Whitebox’s portfolio managers have invested in holding companies in a variety of geographic locations for over three decades (public examples below), making HoldCos a core investment strategy for Whitebox

6 LG’S SPIN-OFF CREATES A MINI CONGLOMERATE TO BE CHAIRED BY KOO BON-JOON

Non-core assets will be transferred into a new holding company (“NewCo”) and spun off to LG shareholders

Koo Kwang-mo Koo Bon-joon Chairman Chairman

66% LG Corp discounted NewCo Mkt. Cap: KRW 16,100 billion Mkt. Cap: KRW 376 billion LG’s Stated Rationale: ELECTRONICS CHEMICALS TELECOM & SERVICES ELECTRONICS CHEMICALS TELECOM & SERVICES LG Electronics LG Chem Uplus 1. Portfolio Optimization Silicon Works Hausys International LG Display LG H&H CNS 2. Value Uplift MMA LG Innotek Hausys GIIR Silicon Works MMA S&I 3. Partnership Others Others International Others

Net Asset Value: KRW 48,007 billion Net Asset Value: KRW 1,121 billion

Source: LG, Bloomberg, Whitebox estimates. Figures as of 2 March 2021. 7 WHITEBOX STRONGLY OPPOSES THE SPIN-OFF TRANSACTION BECAUSE IT FAILS TO ENHANCE CORPORATE VALUE AND PERPETUATES THE UNPRECEDENTED DISCOUNT TO NAV

In our view, the Spin-Off does not achieve its stated objective of enhancing corporate value – instead, value is sacrificed

The Spin-Off does little to streamline LG, disproportionately sacrificing dividends, royalties and cash, and creating a new family-controlled holding company

The Spin-Off perpetuates LG’s most pressing issue, which is the unprecedented discount at which the Company trades relative to its assets

LG’s discount to net asset value (“NAV”) widened to an all-time low of 70% after the announcement of the Spin-Off proposal, reflecting investor exasperation

The decision to proceed with the Spin-Off reflects poorly on LG’s corporate governance

Despite the universe of potential alternatives and possible unaffiliated transactions, the Board unanimously approved a plan that we believe sacrifices minority shareholder return in order to resolve a family succession issue

8 LOCAL MEDIA AND ANALYSTS AGREE THE PRIMARY OBJECTIVE OF LG’S SPIN-OFF IS TO RESOLVE A SUCCESSION ISSUE AND LACKS CONSIDERATION FOR MINORITY SHAREHOLDERS

November 2020 November 2020 Spinoff to give LG chairman's uncle his own conglomerate “Why are they setting up a new holdco? We think it could be “The spinoff is not unusual for LG considering the for the business separation within the major shareholder conglomerate’s history of the first son taking on the family family” business and handing over subsidiaries to other male family members, creating an increasingly diverse network of separate “In our view, the brand royalty may decline for LG Corp after companies run by a very extended family.” 2022 because the new holdco will have a new brand name”

“The potential for capital management talks remains, but we think its capital management plan announcement will be after finishing the spin-off process”

November 2020 “During the Q&A session, the CFO acknowledged that there is a high chance of a share swap among controlling family members after the spin-off, and this seems to be December 2020 part of LG Group affiliate separation (similar to the GS/LS “The move was considered an initial step for Bon-joon to group case in the mid-2000s)” establish his own business group”

9 WE WANT TO HELP BUILD A BETTER LG FOR ALL SHAREHOLDERS AND STAKEHOLDERS To help urgently restore investor trust and improve the Company’s standing in the investment community, we believe LG should take the following actions in the near-term:

Immediately Abandon the Proposed Spin-Off

LG should cease the current transaction as constructed and delay all succession planning until the share price of LG more accurately reflects the value of its assets

Establish a Corporate Governance Committee

The Board should create a Corporate Governance Committee – comprised of truly independent directors with minority shareholder representation – to assess material corporate actions and related party transactions to ensure all shareholders are treated equally and fairly

Prioritize the Implementation of a Capital Management Plan

The Board should prioritize the implementation of a Capital Management Plan to address one of the largest discounts to asset value of any major publicly traded company globally – LG’s Capital Management Plan has been delayed time and again, despite its importance to unlocking corporate value

10 WHY THE SPIN-OFF SHOULD BE OPPOSED www.ABetterLG.com THE SPIN-OFF AS STRUCTURED IS NOT CREDIBLE

A Spin-Off where one discounted conglomerate is converted into two discounted conglomerates achieves nothing

Spin-offs create value for shareholders when: The economic benefits of a corporate action – like the Spin-Off – must be clear because there • The spun off assets are worth more as are significant costs associated: independent entities than as part of a conglomerate • Transaction costs: Advisory fees, legal fees, OR potential dis-synergies

• The surviving company is sufficiently • Opportunity costs: Loss compared to more streamlined through the transaction favorable transactions such as direct distributions, third party disposals, or other strategic initiatives This is not a credible Spin-Off: • Reputational costs: Any damage to the perceived • By creating a new mini-conglomerate, LG has quality of corporate governance tends to be foregone the opportunity to create value reflected in a wider discount to NAV

• 98% of LG’s assets remain in situ

12 THE SPIN-OFF DOES NOT CREATE VALUE FOR LG OR ITS MINORITY SHAREHOLDERS

LG’s purported rationale for the Spin-Off is not credible

• Spinning off 2% of assets does little to streamline LG

o It is unlikely these businesses are a material draw on management resources

o Three out of four affiliates are publicly listed companies with their own management and Board of Directors

• The creation of a new conglomerate negates any benefit from spinning out independent assets

o We anticipate that KRW 1,121 billion of asset value will trade at a market value of KRW 376 billion, in line with LG’s discount

o Like LG, NewCo will be a controlled entity with the appointment of a family member as Chairman

• The spun-off entities derive from different LG Core Business Areas and have no obvious synergies, raising suspicion that the transaction as structured reflects the interests of Koo Bon-joon and Koo Kwang-mo

o The Solidarity for Economic Reform issued a report on January 19, 2021, “Analysis of the Effects of Corporate Restructuring, including Spin-off: Focusing on LG Chem Ltd and LG Corp,” that supports the contention that this Spin-Off is completely unrelated to the interests of minority shareholders

13 THE SPIN-OFF MATERIALLY REDUCES THE COMPANY’S ABILITY TO INVEST GOING FORWARD

Though the Spin-Off impacts only 2.3% of LG’s assets, it disproportionately reduces LG’s revenue by 10.2% and cash by 8.8%, reducing its ability to invest in and develop new technologies

The Spin-Off sacrifices Movement of Assets (KRW billion) Current RemainCo % Total SpinCo % Total Net Asset Value 48,009.4 46,885.9 97.7% 1,120.7 2.3% ~17% of dividend revenue Revenue (FY2019) 874.7 785.3 89.8% 89.4 10.2% of which: Dividends 476.2 396.6 83.3% 79.6 16.7% ~4% of royalty of which: Royalty Revenue 270.6 260.7 96.3% 9.8 3.6% revenue of which: Rental Income 127.9 127.9 100.0% 0.0% ~9% of Cash 1,649.9 1,504.0 91.2% 145.9 8.8% cash balance

Source: LG, Bloomberg, Whitebox estimates. Figures as of 2 March 2021. 14 NEWCO WILL TRADE AT A SIGNIFICANT DISCOUNT TO THE VALUE OF ITS ASSETS

We believe creating a new controlled entity will cost shareholders KRW 745 billion

• NewCo will trade at a significant discount to its NAV due to the nature of the holding company structure o The average Korean holding company trades at a discount to NAV of 54% o LG currently trades at a 66% discount to NAV o Typically, smaller market cap holding companies trade at wider discounts than large, liquid holding companies

• In our view, prioritizing a structure that facilitates an easy transfer of control will result in foregone value of KRW 745 billion o The quantum of the likely discount means that these assets will be worth 60-70% less in a holding company than they would under diversified ownership

Pro-Forma NewCo NewCo Sum of the Parts NewCo Market Cap Ownership Value to NewCo Value per NewCo Businesses (KRWbn) (%) (KRWbn) share (KRW) % of NAV LG HAUSYS LTD 642 34% 240 3,147 21% LG INTERNATIONAL CORP 1,048 25% 259 3,394 23% KRW 745 billion lost SILICON WORKS CO LTD 1,090 33% 360 4,726 32% LG MMA (book value) 50% 115 1,512 10% Total Business Value 975 12,779 87% Net Cash 146 1912 13% Total NewCo Value (NAV) 1121 14,692 100% Target Discount to NAV -66% -66% Market Value of NewCo 376 4,927

Source: NH Investment report, 11 January 2021. Pro-Forma NewCo calculated as of 2 March 2021. 15 INVESTORS WERE CLEARLY DISAPPOINTED BY NEWS OF THE SPIN-OFF

LG underperformed the KOSPI by 6.5% on the day the transaction was announced, with the discount to NAV reaching an all-time wide of 70%, confirming the market’s negative view of the Spin-Off

LG’s Discount to NAV

(40)

(45) The discount only recovered after the announcement of (50) LG Electronics’ JV with Magna and the disposal of the (55) mobile business

(60)

(65)

(70) 1/2/2017 7/2/2017 1/2/2018 7/2/2018 1/2/2019 7/2/2019 1/2/2020 7/2/2020 1/2/2021

Spin-Off Announcement Source: Bloomberg. Calculated as of 2 March 2021. 16 MISALIGNMENT BETWEEN THE CONTROLLING FAMILY AND MINORITY SHAREHOLDERS www.ABetterLG.com THE MOST URGENT ISSUE LG FACES IS THE UNPRECEDENTED DISCOUNT AT WHICH ITS SHARES TRADE

Korean conglomerates trade at some of the widest discounts to NAV globally, which is widely attributed to a misalignment of interests between controlling and minority shareholders

70% Korean Conglomerate Discount to NAV

60% Average = 54%

50%

40%

30%

20%

10%

0% LG SCT Lotte SK KCC Hanwha CJ Doosan LS

LG currently trades at the widest discount to NAV among its peer group

Source: Bloomberg; CLSA. Calculated as 2 March 2021. 18 DUE TO THE DISCOUNT, SHAREHOLDERS HAVE NOT PARTICIPATED IN THE PERFORMANCE OF LG’S UNDERLYING ASSETS Despite the impressive performance of LG Chem and LG Electronics over the past three years, LG shares have lagged

Share Price and NAV Performance* 180 • LG’s minority shareholders have not 160 benefitted from the strong underlying +47% +47% performance of the Company’s assets 140 Value Gap KRW • If an investor bought $100 worth of shares in 120 32 LG in January 2018, those shares would be +5% +5% trillion worth $105 today 100

80 • If instead, that investor had bought $100 in the underlying assets of LG, it would be worth $147 today 60

40 • LG shareholders have seen a 5% increase in the value of their shareholding, despite a 47% increase in value of net assets NAV Share Price

Today, there is a KRW 32 trillion gap between the value of LG’s assets and its market capitalization

Source: Bloomberg, Morgan Stanley. Rebased to Jan 2018. Calculated as of 2 March 2021. 19 THE SPIN-OFF HIGHLIGHTS THE CONFLICT BETWEEN THE CONTROLLING FAMILY AND MINORITY SHAREHOLDERS We believe that the Spin-Off was conceived as a solution to a succession problem – reflecting an agency problem at LG – and that the proposed structure facilitates a change of control of NewCo rather than maximizing corporate value

• A share swap may occur post Spin-Off to allow Koo Koo Family and Affiliates Bon-joon, the Chairman of NewCo, to increase his 46% shareholding in NewCo

• Assuming NewCo trades at a similar discount to NAV as LG, Koo Bon-joon can acquire all of the affiliates’ shares in NewCo with only 12% of his holding in LG

Family Minority Koo Kwang-mo Koo Bon-joon • This would give Koo Bon-joon 46% control of NewCo Affiliates Shareholders 15.95% 7.72% and leave him with a 6.8% stake in LG 22.33% 54%

• The Spin-Off demonstrates a significant conflict of interest between the Board and LG’s minority shareholders

20 KOREAN MEDIA AGREES THE PRIMARY OBJECTIVE OF LG’S SPIN-OFF IS TO RESOLVE A FAMILY SUCCESSION ISSUE

21 LG PRIORITIZING THE PRIVATE INTERESTS OF THE FAMILY UNDERMINES TRUST AND EXACERBATES THE COMPANY’S DISCOUNT TO NAV

The discount to NAV at which a holding company trades is directly related to corporate governance and shareholder value creation

” ”

If weak corporate governance allows owner If investors anticipate the extraction of private families to favour their own interests over the benefits of control, this will have a negative effect profitability of some affiliated companies, it is on the price they are willing to pay for the shares rational for investors to pay less for their shares. of the holding company. ” ”

Explanation for the Holding Company Discount: Theory Explanation for the Holding Company Discount: Theory and Application, Organisation for Economic and Application, Organisation for Economic Cooperation and Development (2018) Cooperation and Development (2004)

We believe the Spin-Off demonstrates LG’s priorities are not aligned with minority shareholders

Source: OECD Economic Surveys: Explanation for the Holding Company Discount: Theory and Application (Korea 2018). Marc Deloof and Marc Jegers (January 2004). 22 DEFICIENT CORPORATE GOVERNANCE PRACTICES www.ABetterLG.com THE SPIN-OFF HIGHLIGHTS DEFICIENCIES IN LG’S CORPORATE GOVERNANCE STANDARDS

Rationale for the Spin-Off Though the transaction is small relative to the size of Transactions designed to pass corporate assets from one LG, it took considerable time away from the Board family member to another may be the norm in Korea, and delayed other corporate actions that are seen as but this is an unacceptable rationale in most jurisdictions crucial to the value of the Company

Board Approval of the Spin-Off It is clear to us that selling NewCo assets to a third Received unanimous approval from the Board as it was party would have resulted in superior returns for the believed to be the best option for the Company and its Company and minority shareholders shareholders

Change in Control without Corresponding Mandatory and Chain Bids In many jurisdictions, this would require a The likely share swap would result in a change in control mandatory bid for NewCo plus a bid for the at NewCo if Koo Bon-joon increases his holdings over underlying subsidiaries under the Chain principle 30%, which is likely since Family Affiliates will own 46% of NewCo

Source: CG Watch 2018, ACGA and CLSA. World Economic Forum, Morgan Stanley Research. 24 LG RANKS AS A CORPORATE GOVERNANCE LAGGARD WHEN COMPARED TO GLOBAL BEST PRACTICES AND EVEN DOMESTIC COMPETITORS At a time when environmental, social and governance (“ESG”) considerations are at the forefront of investors’ minds

We believe the decision to spin off these assets demonstrates that LG’s corporate governance practices:

1. Trail domestic competitors

2. Are not consistent with global best practices

3. Fail to represent the interests of shareholders

25 LG’S CORPORATE GOVERNANCE PRACTICES TRAIL FAR BEHIND ITS KOREAN PEERS, WHICH HAVE THE WORST ESG RATINGS IN ALL OF ASIA The Company’s governance profile compares unfavorably to Samsung C&T Corporation (“SCT”) – whose Vice-Chairman JY Lee was just sentenced to two and a half years in prison for bribery

LG Samsung C&T Separate CEO/Chairman No Yes Committees Audit Audit Independent Director Nomination Independent Director Nomination Management Related Party Transaction Compensation Governance Shareholder Advocate No 2 (one Korean, one non-Korean) Notice period for AGM 15 days 23 days, target for 4 weeks Foreign Shareholder English data sent if requested English reference material available on notification website and sent to key institutional investors, standing proxies and proxy advisory firms Voting results Published in Compliance Report Disclosed on day of meeting, published on website LG has a tremendous opportunity to improve its governance profile and lead the way in Korea for its peers 26 WHEN COMPARED TO GLOBAL BEST GOVERNANCE PRACTICES, LG ALSO DISAPPOINTS

If LG followed global best practices, we do not believe the Board would have approved the Spin-Off

Global Best Practice LG Implication

The Board should be chaired by an independent non-executive director (ICGN) Lack of independent oversight and strategy advisory role

There should be a sufficient mix of directors with relevant knowledge, Unanimous approval of Spin-Off despite independence, competence, industry experience and diversity of perspectives the universe of potential alternatives and to generate effective challenges, discussion and objective decision-making possible unaffiliated transactions (ICGN) The Board, particularly non-executive directors, should make available Shareholder views not considered communication channels for meaningful dialogue on governance matters with shareholders (ICGN) Remuneration should be designed to effectively align the interests of the CEO No link to Discount to NAV and executive officers with those of the company and its shareholders (ICGN)

Rights of all shareholders should be equal and must be protected (ICGN) Transactions made for the benefit of certain shareholders

Source: ICGN Global Governance Principles (see here). 27 CONCLUSION: HOW TO BUILD A BETTER LG www.ABetterLG.com WE WANT TO HELP BUILD A BETTER LG FOR ALL SHAREHOLDERS AND STAKEHOLDERS To help urgently restore investor trust and improve the Company’s standing in the investment community, we believe LG should take the following actions in the near-term:

Immediately Abandon the Proposed Spin-Off

LG should cease the current transaction as constructed and delay all succession planning until the share price of LG more accurately reflects the value of its assets

Establish a Corporate Governance Committee

Prioritize the Implementation of a Capital Management Plan

29 THANK YOU

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