LG Electronics 2012 _wish
USERS GUIDE
What is your wish?
Warning: Wishing is a powerful force. It can lead to amazing leaps of imagination. We are not responsible for the effects of this book on the reader.
01 LG Electronics 2012 _wish
Our lawyers wish to include the following: All LG Electronics products and services mentioned in this publication are the property of LG Electronics.
02 My wish This is a book 12 LG’s wish 14 Message from the CEO 18 Four Pilars of Core Strategy about wishing. 22 My wish + LG’s wish 24 Home Entertainment Company And how one 30 Mobile Communications Company 36 Home Appliance Company 42 Air Conditioning & Energy Solution Company company has been 48 Wish + New Business 48 Solar Energy 50 Water Treatment listening to the 52 We wish 54 Environment wishes of people 56 Global Social Contributions 58 Sports Sponsorships 60 Marketing Campaign & Activity like you. 62 Leading the world in Innovation 64 Awards 66 Fact & Figures 76 Financial Statements
Warning: Wishing is a powerful force. It can lead to amazing leaps of imagination. We are not responsible for the effects of this book on the reader.
01 LG Electronics 2012 _wish
It is a story And how that about how inspiration is the your wishes very first step become the in the process inspiration for of innovation our engineers across all of our and designers. divisions.
Warning: Wishing is a powerful force. It can lead to amazing leaps of imagination. We are not responsible for the effects of this book on the reader.
01 LG Electronics 2012 _wish
As you look So, from through the pages everyone at LG, of this book, thank you for remember that your inspiration. every product you And please, see began with a never ever stop wish. wishing.
Warning: Wishing is a powerful force. It can lead to amazing leaps of imagination. We are not responsible for the effects of this book on the reader.
01 LG is in the wish business. First, we listen to what people dream about the most. Then, we deliver. What do you wish for? Read on. And discover that wishes really do come true. My wish
02 03 More natural color and sound that let me feel the power all around me…an endless stream of entertainment…detail, detail, detail… Smarter life with technology that makes my life more passionate, creative and inspiring…the latest and extreme mobile experience with the fastest speed of connectivity. Convenience and intelligence to fit busy moms like me…style to make me proud in front of my neighbors… Cool but soft air that keeps me always feeling fresh and won’t wake me up at night… and worry-free maintenance with ultimate efficiency… LG wishes sustainable growth for our company, our employees and our partners, and a sustainable future for our planet. We wish that our Innovation continues to deliver on people’s needs. And brings new levels of ease, convenience and enjoyment to families around the world. LG’s wish
12 13 MESSAGE FROM THE CEO
Throughout the past year, I have been privileged to meet many of you around the globe, and I would first like to express my most sincere thanks to each one of you. Hearing your thoughts and ideas first- hand has been a key goal of mine since I’ve come on board, and I am confident that we will continue to have many chances to greet and speak with one another in person in the near future. And it is with great pleasure that I can say, the more conversations I was able to engage in with friends and colleagues around the world, the more I felt the surge of optimism for greater things yet to come.
As we face the future unfolding before us, it is imperative that we continue to communicate through such tight connections. It is the surest possible way for us to sense the changes that may surface, as well as the interesting opportunities that will surely arise for us to evaluate and attain. In today’s industry, where even the strongest of all can rise and fall overnight, I once again would like to declare “I am excited to share with you that our dedicated and forward-thinking commitment to improving the lives of our consumers, business Innovation partners, and all of the readers I am communicating with today. By dedicating ourselves to values such many of our products have truly as innovation and product leadership, we will prevail through the challenges of our economic climate and captured the hearts and minds of the aggressiveness of our competitors. continues people around the world” With that said, I continue to urge all of our employees: “Put progressive thinking first, prepare for the future in advance, and create a culture where we do things the right way.”
14 15 There are five essential pillars upon which we will build that future:
Product Leadership Preparation for the Future
The foundation of a manufacturing company lies in its products. In our industry, that means To back up our word in product leadership and constantly developing consumer offering truly differentiated products that make consumers take notice and say, “This is It!” But values, our R&D ensures that we target to be the first mover in the market with new this is only accomplished when everyone onboard—from R&D and design through quality and ideas and products. To make certain that there would not be an under-supported marketing—execute with that consumers’ needs in mind. I am excited to share with you that many area, we will be expanding our investment in R&D with continuous efforts in securing of our products, from 3D Cinema TV and LTE phones to the world’s largest capacity refrigerators the brightest and the most innovative minds in the industry. Innovative ideas are our and washing machines, have truly captured the hearts and minds of people around the world. most valuable currency for the future. And 2012 promises to deliver even more on the wishes of consumers. 2012 Motto Strong Fundamentals “Put progressive thinking first, prepare for the future in advance, and create a The more the world changes, the more imperative it becomes that we stay true to the culture where we do things the right way.” fundamentals. We will strictly observe the processes that enable us to enhance both productivity and profitability. We will adhere to ‘Jeong-do Management’ by keeping our promises to all Once again, thank you for all of your thoughts and valuable input through the past stakeholders, and pursuing victory in a fairly contested business practices. It is only through year. I hope that this can help add to your generous efforts in caring and moving these strong fundamentals that we will continue to grow steadily in all economic and business forward with us as friends, colleagues, business partners, and shareholders of LG environments, whether that may be positive opportunities or unexpected challenges. Electronics.
Superior Value Thank you,
What will keep customers turning to us first? The more we can conceive and execute customized Bon-Joon Koo market strategies, the more we will maintain a truly differentiated value proposition that sets Vice Chairman & CEO of LG Electronics us apart from our competitors. By focusing on the value we offer more than the volume we derive, we will maintain the long-term trust of customers in every kind of market, and our goal of January 2012 sustainable growth will be much easier to attain.
No. 1 Passion, No. 1 Culture
“Passion” I believe, is expressed through one’s actions to achieve what he or she believes in, and aims to attain. This is not limited to our leaders or the managers that are “out-in-the-field,” but it pertains to all. I pride myself in being a member of such a company that promotes Passion as its No 1 virtue, and where this value cultivates creative culture, ultimately leading its people to business success and more.
16 17 Product Strong Leadership Fundamentals
LG There is committed is nothing to being first in the more fundamental market with solutions that to consumer trust than meet real consumer needs quality. LG’s Founding today, and tomorrow. We will Chairman once said: “Even accomplish this in two ways: if there is just one defective through innovation that assures product out of 100, the other 99 our products have an unequivocal are likewise defective.” Through a competitive advantage in every strict observation of our principles, category where we compete, predictable management, and and by introducing products adherence to the true nature of so unique in their application our industry, we will continue they create an entirely new to prize—and deliver—quality market. There simply above all. is no substitute for innovation.
18 19 Preparation No.1 Passion, for the Future No.1 Culture
Lead, LG not follow. Not guarantees an only in the products ethical workplace that we create, but in the way is second to none. Our we nurture and challenge people are our company. our future engineers, designers They don’t just make world- and corporate leaders. We leading products—they make must have the vision today to LG the best corporation in the trust in their vision for tomorrow. world. And we owe every one of And to give them the freedom them a culture of openness and now to explore new avenues of fairness; where competition lives innovation that will keep LG on alongside collaboration; and the forefront for generations, where accomplishment is and will keep our planet a recognized, applauded and greener place for us all. rewarded.
20 21 Innovation that astounds us. Style that inspires us. And technology that is beneficial to our homes, our families—and our environment. It turns out that we’re both wishing for the My LG’svery same things! Read on. wish wish
22 23 HOME ENTERTAINMENT COMPANY Mesmerizing. It’s LG.
Our engineers set out not just to grant your entertainment wishes—but to surpass them! With a line- up of fully-immersive products that guarantee an eye- popping reaction the first time you turn them on. And that will keep you amazed for years to come.
OLED TV (EM9600)
24 25 CINEMA 3D Smart TV (LM9600) Step into the future of fully-immersive entertainment. By slimming down the bezels to negligible levels, CINEMA SCREEN Design makes you completely immersed in image and makes the TV perfectly blend into the wall. The advanced Smart TV ecosystem with the Magic Remote* offers unlimited content and intuitive control over your Smart TV. See how the smartest one can be the most beautiful one as well.
Magic Remote: The new remote control that works through * Point and Click. It has additional functions including voice recognition and wheel. CES 2012 Innovations Awards and red dot Design Award Wish for Wow. Pentouch TV (PM6900) OLED* TV (EM9600) Smart TV just got smarter. Business, entertainment, education— Get ready for THE ULTIMATE LG’s Pentouch Plus function gives you all the interactive DISPLAY with the world’s most possibilities of ordinary Smart TV, but without the need for a PC natural picture quality and advanced connection. Write, draw and color right on the screen with the design. 4 Color Pixel combined with Magic Pen. Access almost unlimited content including Netflix, Color Refiner generates more photo- Hulu Plus and the brand new 3D World. LG Pentouch TV, a very realistic colors than ever before. It smart way to watch! also boasts infinite contrast with perfect black and absolute motion red dot Design Award clarity with a blur-free picture. The Paper Slim design is only 4 mm thick to blend in with any wall. Naturally. IPS Monitors (IPS7W, TM92, D43) * OLED: Organic Light Emitting Diodes See 3D from a whole new angle. The high resolution and wider viewing angles of LG IPS* Monitors let everyone enjoy the 3D experience from almost anywhere in the room. The IPS7W series offers amazingly life-like 3D images. The TM92 series features LG’s unique slim bezel CINEMA SCREEN design. And by bringing 3D to an IPS Panel, the D43 offers the most comfortable 3D viewing with greater 3D effects. With SUPER+ Resolution*. More features. Wider angles. Wow!
* IPS: In-Plane Switching. An LCD technology that offers wide viewing angle SUPER+ Resolution: A technology that sharpens up blurry edges and enhances * dim colors to make image more vivid and realistic
26 27 Home Theater System (BH9520TW) Go beyond sight and sound with 3D you Bigger. Louder. Faster. The world of can actually feel. 3D Sound Zooming instantly syncs sound with the location and entertainment is more spectacular than motion of images on a CINEMA 3D Smart TV, so you can sense the action literally all around you. A 9.1 speaker system includes ever. And LG Home Entertainment four Upright 3D speakers that shoot sound upward, filling every inch of space with hair- Company brings that experience into raising, heart-pounding sound. consumers’ homes the way it was meant to be. With more natural color. More immersive 3D. More all-around
Ultrabook (Z330) sound. And more on-the-go portability. It’s easy to get carried away with technology this convenient. The LG SUPER Ultrabook features award-winning Super LG offers a wide array of innovative Compact Clutch design in a laptop barely 14.7mm all around, and weighing a mere 1.2 kg. Plus Super Speed Boot technology has you up and running in a blazingly fast 9.9 seconds, four and stylish products—from OLED and times fast than other laptops. Ultra-slim. Ultra-fast. Ultra-cool. LCD TVs to home theater systems, projectors and so much more. No wonder LG is the industry trendsetter for innovative home
Smart Upgrader (SP820) Turn your ordinary TV into something extraordinary! Simply attach entertainment. Bravo! the LG Smart Upgrader and begin to experience the future of home entertainment right now on your current TV. Choose from over 1,200 fun, informative and entertaining apps, an amazing selection of premium content, plus full web browsing and file sharing capabilities. Now that’s one smart upgrade!
Projector (CF3D) Another LG innovation—and another advancement in picture perfect reproduction. The versatile CF3D is the world’s first Full HD Single Lens Type 3D projector. That translates into breathtaking brightness levels of 2,500 ANSI-lumens* and a super sharp contrast of 7,000:1. Plus TruMotion that combines Dual Engine and 3D Auto Calibration technology for incredibly smooth and natural motion.
ANSI-lumens: A measurement of light that has been standardized by ANSI (American * National Standards Institute). It is commonly used to rate the brightness of a data projector.
28 29 MOBILE COMMUNICATIONS COMPANY Blazing. It’s LG.
LG’s latest range of smartphones puts full control of today’s lifestyle at your fingertips. Groundbreaking technology, stylish design, and a full slate of features keeps you connected on the go like never before.
LG Optimus True HD LTE
30 31
LG Optimus 4X HD The LG Optimus 4X HD proudly reinforces LG’s multi-core leadership with a powerful Quad-core processor. The Quad-core processor guarantees blazing lag-free speed even when handling processor-heavy tasks such as multiplayer gaming. The distortion-free 4.7 True HD display is powered by NVIDIA’s latest Tegra3 1.5 GHz processor and 5th Battery Core, all packed inside a super sleek shape that lets you enjoy HD multimedia anywhere, anytime.
Wish for Whoa.
LG Optimus Vu The LG Optimus Vu brings productivity to whole new levels. Equipped with LG’s LTE and 5-inch 4:3 aspect ratio IPS display technology, it offers faster and more efficient tools to manage daily life. Running on a powerful 1.5 GHz dual-core processor, the LG Optimus Vu makes viewing documents, books, Internet sites and multimedia content much more comfortable while every color is rendered in sharp, vivid, life-like quality.
LG Optimus True HD LTE* LG Optimus 3D Max The LG Optimus True HD LTE, the world’s first HD LTE The LG Optimus 3D Max is the latest incarnation of LG’s ongoing smartphone, delivers a stunning viewing experience. With a effort to provide superior portable 3D entertainment. It belts out magnificent 4.5 Full HD Touch Screen, the phone boasts a amazingly vivid 3D images without the need for 3D glasses on a super-high resolution display and colors that are astonishingly 4.3-inch NOVA display with improved 520 nit brightness. Thanks bright and vivid. The powerful 1.5 GHz dual-core processor to LG’s prowess in 3D technology, the LG Optimus 3D Max not and seamless LTE connectivity also make this phone only handles standard 3D content beautifully, it also offers 2D-to- impressively quick. 3D conversion with LG’s unique HRZ Engine.
LTE: Long Term Evolution. It is a standard for wireless communication of high-speed data for * mobile phones and succeed 3G WCDMA/HSDPA/HSUPA (and also CDMA) technology.
32 33 LG Optimus L7 One of the L-Style product line-up, the LG The world moves faster than ever. And Optimus L7 features an 8.7 mm-thickness and a premium modern square look via LG’s LG Mobile Communications Company floating mass technology. It also boasts the latest Android 4.0 Ice Cream Sandwich OS and a largest-in-class 4.3 wide display. is working smarter than ever to keep Combining the latest technology and a sophisticated design, the LG Optimus L7 you up to speed. With revolutionary brings versatility to the mobile experience. smartphones that offer 4G LTE technologies and quad-core processors LG Optimus L5 With a large 4-inch screen, the LG Optimus that take speed to a whole new level. L5, also from the L-Style series, introduces an optimized display and error-free input. L-Style’s True HD IPS and 3D displays for unique modern square shape offers exquisite style, allowing comfortable, one-handed multi-tasking. The LG Optimus L5 features breathtaking images. And LG’s elegant the latest Android 4.0 operating system, Ice Cream Sandwich, as well as NFC Tag & Play L-Style design that puts more elegance functionality (EU). in the palm of your hand.
LG Optimus L3 The LG Optimus L3 delivers a big punch in a small compact form. This L-Style product packs the full smartphone experience into a 3.2” wide screen designed for easier reading and viewing. Its 1,500 mAh battery ensures longer talk and standby times. And of course, as an L-Style smartphone, the Optimus L3 has the beauty to match the brawn.
LG T375 Engineered with elegant, slim lines, the LG T375 presents an upscale design and essential smart features. Connectivity is optimized with pre-installed SNS via Wi-Fi, and data sharing is made ultra-easy with PC drag and drop. On its 3.2 inch QVGA screen, images appear with sharp clarity, and the screen’s multi-touch brings a glimpse of the smartphone experience.
34 35 HOME APPLIANCE COMPANY Intuitive. It’s LG.
We heard your wish for convenience. And we’ve come up with some very surprising ways to answer that call. In fact, LG Home Appliance Company has a smarter, fresher and, we’re proud to say, more stylish line-up of appliances than any other company in the world. Wish, granted!
French Door Refrigerator
36 37 Front Load Washing Machine Wash more per load, and do fewer loads per day! With LG you get the industry’s largest washing machine, big enough for the bulkiest comforters. Plus Inverter Direct Drive* to save energy, TurboWash™ for faster wash and rinse cycle times, and 6 Motion* Direct Drive technology that combines the right combination of actions for a wide range of fabrics—from heavy-duty towels to delicate hand- washables. Wash. Rinse. Relax!
Inverter Direct Drive: Doing away with its belt and pulley, LG’s Inverter Direct Drive * makes the motor hardier and much more efficient. Fewer parts mean quieter operation as well. * 6 Motion: Different combinations for customized washing of various fabric types. (Swing, Rolling, Tumbling, Filtration, Stepping, Scrubbing) Wish for Wonderful.
TrueSteam™ Dishwasher Skip the soaking and scraping that ordinary dishwashers require. LG’s TrueSteamTM technology uses three dedicated steam cycles to deliver sparkling clean results. Thanks to its unique built-in steam generator, the steam is hot enough to dissolve tough food residue, and gentle enough to remove lipstick stains on delicate items such as wine glasses. And with Dual Spray, LG’s new dishwasher takes care of fragile glassware as well as big pots and pans in a single cycle.
Lightwave Convection and Grill Crispy, tasty, tender dishes at the speed of light! LG’s Lightwave Technology uses a multi-heating system that keeps dishes crispy on the outside, juicy on the inside. And helps make your meals healthier, too, as Lightwave cooking helps food retain more Vitamin French Door Refrigerator C while shedding unwanted salt and fat. So you can serve food like Open the door to convenience! Our door-in-door feature puts an extra compartment inside the a gourmet chef, while saving time like a smart mom. main door—open it up for quick and easy access to the drinks and snacks your family enjoys most often. This smart feature will help you keep everything inside the refrigerator better organized, easier-to-reach, and help save energy by reducing the times you open the main refrigerator door. Now that’s out-of-the-box thinking!
38 39 KOMPRESSOR FOLLOW ME™ Cleaner. Faster. More hygienic. LG Long a global leader, LG Home KOMPRESSOR™, the world’s first dust compression system, keeps dust from escaping Appliance Company created the back into the room. And the KOMPRESSOR FOLLOW ME™, with its revolutionary Location Recognition Technology and Active Following world’s first smart home appliances. Wheel Technology literally follows you around the room without pulling on the hose. Less effort, Now, LG continues to set the pace and cleaner home…now that’s LG smart! bring even more insightful, energy- saving technology into homes around the world. Beginning with four core
HOM-BOT 2.0 technologies—Linear Compressor*, LG’s revolutionary robotic vacuum cleaner just took another leap forward. The Dual Eye Camera Sensors help the HOM-BOT navigate floors Inverter Direct Drive, KOMPRESSOR™, more effectively, even around tough obstacles and odd-shaped furniture. So your home is and Lightwave—we have refined our cleaned better, faster…and with you barely having to lift a finger! line-up even further with Smart Saving and Smart Convenience. Built-in Appliances LG has put all of its industry-leading innovation and design into the My Linear Compressor: A unique direct transmission system that minimizes mechanical loss, saves energy, * reduce noise and increase durability. Signature Kitchen suite of built- in appliances that are in perfect harmony with the way you live, cook and entertain. No matter what your lifestyle, your kitchen can truly become the center of your home. Efficient, fashionable, and on the forefront of sustainability. Design LG My Kitchen into the wish list of your next renovation. Water Purifier
H2O. Simple. Pure. Nothing is better than clean and clear water. And nothing gets household water closer to perfect than LG’s CoreCare3™* system. Along with a unique stainless steel water tank and regular maintenance with eco- friendly sterilization kit, your family will enjoy water that is cleaner and safer—a very refreshing thought, indeed.
CoreCare3™: Three different core systems, one for * water care products, one for air care products and one for massage chairs. Taken together, the system offers customers impressive health care benefits and ease of use.
40 41 AIR CONDITIONING & ENERGY SOLUTION COMPANY Vitalizing. It’s LG.
We heard your wish for HVAC* & Energy solutions that use less energy, and save you more on utility costs month after month after month. LG Air Conditioning and Energy Solution Company’s HVAC offerings redefine efficiency for the entire industry, while bringing more peace, quiet, vitality and comfort to homes, offices and buildings of every size.
* HVAC: Heating, Ventilating & Air Conditioning
Prestige Inverter V
42 43 Deluxe Inverter V Pure health. Perfect comfort. Supreme quiet. The Deluxe Inverter V boasts 15% moisturizing improvement, emitting over 2 million ions water droplets, eliminating the negative effects of dried out air while delivering deep, revitalizing moisture to your skin. Plus a Plasmaster Ionizer that kills 99.9% of bacteria in the air, all delivered in a unit with a low 19dB noise level. Keep cool. Sleep quiet. Feel refreshed.
Wish for Mmmmm.
Prestige Inverter V Multi V III 74% energy saving. Industry-leading cooling and hearing efficiency. And the absolute lowest High efficiency. Easy installation. Eco-friendly design. LG VRF* technology sound levels possible in sleep mode. Not to mention LG’s unrivaled Plasmaster ionizing is now available for even high-rise buildings! The LG Multi V III increases technology that not only sterilizes air going through the air conditioner, but also cleans harmful efficiency by minimizing energy consumption and offering comfort-on- substances, allergens and odors surrounding the unit. Cool. Clean. Quiet. No wonder the Prestige demand even in high-rise buildings while affording surprisingly easy Inverter V is a leading choice for year-round comfort. installation. In fact, it’s the most advanced commercial air conditioner to ever earn the industry’s official CarbonFree™ certification—another important first from LG!
VRF: Variable Refrigerant Flow. A technology introduced as a system to minimize efficiency * losses found in conventional HVAC systems and provide sustainable energy benefits.
Hydro Kit Floor heating, cooling and hot water supply reach new levels of efficiency with LG’s Hydro Kit. The advanced heat pump technology takes advantage of ambient air from other parts of the building to deliver 360% greater energy efficiency versus a boiler for overall lower utility costs. Plus extreme eco-friendly
reduction of CO2 emissions, and easy installation with a compact modular structure.
44 45 LG Centrifugal Chiller Now, even large size buildings From the very first air conditioner and industrial facilities can take advantage of LG’s high- sold in Korea, to over 100 million performance chiller technology. The high-efficiency compressor will help large-scale operations realize units sold around the world, LG Air significant energy savings while reducing maintenance worries with Conditioning and Energy Solution proven LG reliability. And advanced Eco-friendly refrigerants mean that Company is a long-standing global buildings are doing their part for a sustainable future. leader in making homes comfortable. LG LED PAR 16 7W LG LED PAR 16 7W Lamp puts your home’s Our innovative HVAC solutions and art work in a better light! Not only will it bring out all the wonderful color of pictures and objects without flickering, it can save energy management can transform any more than 80% on energy versus halogen lamps. And save you trips up the ladder, as type, style and size of interior space, well—the PAR 16 lasts up to 40 years even when operated 2.7 hours a day! Longer life. Less energy. Simply brilliant! residential or industrial. The result: safer and greener solutions for the way we live today. And tomorrow. LG LED Bulb 14W The Omni-directional LG LED Bulb 14W will change the light quality of your home at the flip of a switch. Make full use of the bulb’s natural light and long life anywhere, including front door, bedroom, kitchen and bathroom. Enjoy up to 80% energy savings compared to 60W incandescent bulb, and a lifetime of 25,000 hours.
Control System Finally, you’re in total control of HVAC usage. From easy-to-use home networks that save on electricity bills, to the incredible AC Manager that can control up to 8,192 indoor facilities, LG offers total flexibility in centralized control system management. Set it for optimal indoor temperatures in all weather, maintain steady levels of energy use, and prevent sudden outages in periods of over power use. Cool!
46 47 Wish + New Business Solar Clean. Renewable. Affordable. Solar energy is the power of Energy choice for the world’s future. And it will be a powerful engine of growth to sustain our company well into the 21st Century.
Wish for sustainable solar energy
A future built on years of experience No other company is better positioned to lead the world in renewable energy. The engineers of both LG Electronics and LG Chem have been New conducting groundbreaking research for the past 20 years, well before most companies even conceived of solar as a viable commercial prospect. Add those decades of insight to a half-century designing and building world-renowned electronics for homes and businesses of all sizes, and it is easy to see why LG is a company the rest of the industry will be following Growth for years to come. Products built for today…and tomorrow LG has committed all of it resources to building solar products that meet today’s real-world needs. Our residential, commercial and utility-grade modules are built with the industry’s most reliable materials to our unique design specifications. They are then tested through an unprecedented process of quality assurance—an evaluation so rigorous, we offer a 10-year product warranty, plus a linear performance warranty that guarantees a minimum power output of 80.2% up to 25 years.
The world’s first Carbonfree module But don’t just take our word for it—LG’s MonoX™* solar modules are the first in the world authorized to display the Carbonfree Certified® Label. This certification comes after an independent Life Cycle Assessment, taking into account everything from the raw materials used to the end user experience. And all MonoX™ modules are designed to satisfy customer need for easy installation and maintenance.
Reliable, renewable, affordable energy that won’t harm our atmosphere— it’s another way that LG is fulfilling the world’s wish for a cleaner, more sustainable future. LG has committed itself to leading the world in new ways to generate clean, sustainable energy to all communities… * MonoX™: The brand name of LG’s high efficiency mono crystalline solar module
48 49 Water Clean water is a human essential. And LG, through three pioneering divisions, Treatment is developing the technologies and infrastructures needed to see that pure water continues to be available to communities around the world.
Wish for clean water
Developing the most advanced nano technology LG Electronics, by utilizing LG Group’s expertise in chemical, mechanical and electronic technologies, has been at the forefront of efficient and eco-friendly membrane development. By converging three core nano technologies—fine patterning, resin formulation and resin mixing—we have been able to develop unique membrane processes applicable to many different types of raw water New found around the world. And, since 1994, we have been fully compliant with global environmental regulations such as RoHS* and Halogen Free. So that we are not just providing cleaner water, we are also assuring a cleaner planet in the process.
* RoHS: The restriction of the use of certain hazardous substances in electrical and electronic Growth equipment adopted in February 2003 by the European Union Engineering better solutions for clients LG has partnered with the Hitachi Group to create LG-Hitachi Water Solutions, a company aimed at providing world-class solutions to businesses in need of effective water treatment. By combining the global business, research and technological expertise or these two great corporations, LG-Hitachi Water Solutions is quickly becoming a leader in engineering, procurement and construction of water treatment facilities. From the delivery of ultrapure drinking water to the purification of industrial & municipal waste water, the company is ready to design and build advanced water treatment plants in Korea, and around the world.
Simplifying the complex issue of water infrastructure The operation and maintenance of water treatment facilities is a complex undertaking. It requires up-to-the minute knowledge of both technological and environmental issues. LG operates its HiEntech division to offer a full range of services to the industry, from sophisticated infrastructure development through highly-trained manpower. It is our goal that facilities are run with the same concern for our clients’ needs, and for the safety and welfare of their customers and communities, that is consistent with LG’s long-standing global reputation.
By working together, sharing knowledge, and staying true to our values, LG’s water treatment divisions are committed to making one very basic and global wish come … And to providing pure, potable water that will supply the world’s needs well true: that people everywhere have access to clean water every single day. into the future.
50 51 We wish to maintain our hard- earned reputation for bringing added value to the lives of consumers. We wish that our investments in sustainability, sports, and community causes bring health, prosperity and joy to our friends and neighbors around the world. We wish
52 53 A commitment to reduce Green House Gas Emissions A record to be proud of! For three consecutive years, LG has been the No.1 company for Green Management as designated by the Carbon Disclosure Project of Korea. But we’re not stopping
there. We aim to reduce 30 Energy Star* partner of the year million tons of GHG emissions at ceremony the manufacturing and product usage stage in 2020, comparing Life’s good, to 2007 emissions. And we have been expanding our low carbon management to the whole value chain, including logistics when you live and procurement as well as employees’ business travels. Products people are proud to own Growing greener businesses Greenovation comes home! Our Smart 6 Motion washing machine, Appliances have already been helping green Yes, green can be good for introduced as an eco-friendly business as well as for the planet. product at CES 2012 for its energy consumers save on energy costs, saving feature We have spent several decades and we are continuing to invest in the d exploiting oppo k an rtuni technologies that will keep our products ris nge ties investing in the R&D necessary ing ate cha mitigat th “Greenovation.” The fundamental ag clim ion rou on the forefront of sustainability. So an gh to lead the next generation of M wish for all innovation that LG on M consumers can point out with pride how Carb anag green enterprise: LED lighting, ow em they are doing their part for the planet includes sustainability as a core L en solar power, electric vehicles, water g t in right inside their homes. s treatment and smart grid not value. It’s a wish we’re fulfilling in a e S r s c e only because they’re good for the n e c i u five key areas: reducing carbon y c r h c r G i Encouraging our partners to be green ENVIRONMENTS ENVIRONMENTS n planet—but they will also be good g n u e r g u i emissions, developing greener o e o c f Green work is teamwork! Our Green r i u fi s e for our bottom line. h f t t e n u e
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G through energy efficient products
r ts e c and practices S e u h n t Recyclable packaging and products a d c r P o u in a r d Smart Grid: A digitally enabled g r P ro * We’re not wasting any opportunity to b g tn r p s electrical grid that gathers, u r e e s s ee r n ng e in n sh ee ni n distributes, and acts on information help keep communities green. E-waste, e g ip Gr e ve ss ro th ti p w ng ti about the behavior of all suppliers a th tre pe that is! So we are working with local rtn with S m and consumers in order to improve ers co the efficiency, importance, reliability, service providers, recyclers, and NGOs economics, and sustainability of around the world to implement take- electricity services back programs that comply fully with e-waste regulations in each country. And we have been increasing the use of recycled materials in all of our products and packaging.
54 55 An environment of learning Welcome to the classroom of the future! Life’s Green Class is an innovative and highly mobile classroom designed by LG, and dedicated to lessons about the environment through hands- on experiments and imaging technology. After great success LG Hope Screen in Time Square, with children throughout Korea, NYC, US the program has been expanded to India visiting more than 70 schools each year. And, since 2010, LG has sponsored “Champions of the Earth,” the United Nations’ flagship Tapping into LG technology for global Fulfilling environmental award. solutions Technology has the power to make a Where hope is more than a wish real difference in the world. In 2006 we For many people, there is no developed mobile phones that can read LG Hope Family in Cambodia the dream greater wish than a simple plate books for the visually impaired, and of food. In partnership with the have donated phones every year since UN World Food Programme, LG then. In 2011 we launched WeFeedBack, operates the LG Hope Schools, a Smart TV application that enables Here is our fondest wish: that people everywhere can live in a world free of hunger, providing free school meals people to make voluntary contributions disease, and poverty. Everyone at LG is proud to support the United Nations to children in Kenya; LG Hope to fight world famine. And we build Millennium Development Goals, and to partner with other high-profile partners on Village in Ethiopia, a farmland awareness of poverty everyday through important projects that raise awareness, provide donations, deliver technology, and reclamation project helping to our on-going SNS campaign. encourage volunteer work in communities everywhere. After all, we’re not just a global improve productivity in local corporation—we are also concerned citizens of the world. villages; and LG Hope Family, a LG employees making wishes come new community improvement true program in Bangladesh and We couldn’t be prouder! LG employees
GLOBAL SOCIAL CONTRIBUTION GLOBAL Cambodia. We also work to around the world continue to devote eradicate environmental diseases countless hours and money to causes such as cholera and typhoid right in their own communities. Global through the International Vaccine Volunteer Day, when employees Institute, and provide aid to volunteer to help our environment each
victims of natural disasters. LG Smart TV Charitable App., year on World Environment Day; blood WeFeedBack donation drives; LG Hope Schools; and tree planting activities are just a few of the ways they support. In Korea alone, employees have organized Life’s Good Volunteers, using their talents to benefit isolated members of their local areas; LG IT Angels, one-on-one computer sessions to bridge the information gap for those with severe disabilities; and Junior Science Class programs. Thank you to every LG employee for helping LG Hope Village in Ethiopia to make so many wishes come true!
56 57 Formula 1™ _Sponsor since 2009 The most exciting sport on four wheels is the perfect platform to showcase LG innovation. After all, Formula 1 racing and LG products share the same key elements that drive the passion of their fans: sleek style, engineering Life’s excellence, and the will to be first 2011 Formula 1 Petronas in the world. exciting, Malaysia Grand Prix when you
ICC Cricket _Sponsor since 2002 win Passion. Few sports create the same frenzy of excitement like cricket. And when teams compete for the Cricket World Cup every four years, entire Victory! It’s the one wish that every sports fan has in common. countries pause to cheer their national And it’s a feeling that we all share at LG not only as sponsors, teams on to victory. It’s the same kind of but as a global community of fans of many different sports, passion shared by LG employees for the challenges they share at work every day, from car racing to cricket. Which is why we’re doubly honored ICC Cricket World Cup 2011 in to sponsor some of the world’s leading organizations. India which is why ICC* Cricket is the perfect platform to share our products with the
SPORTS SPONSORSHIPS SPORTS world. Match after match after match.
* ICC: International Cricket Council
NCAA _Sponsor since 2009 This sponsorship was a slam dunk! 88 National Championships in 23 different sports, and a fan base that will stop at Pit exit at the 2011 Formula 1 Petronas Malaysia Grand Prix nothing to root their favorite team on. That’s a lot of cheering over the course of one year! LG is proud to partner with the NCAA* and CBS Sports for an exclusive, fully-integrated campaign that will put our name on air, in print, in arenas, online, in stores, and as part of promotional tie-ins throughout the year.
* NCAA: The National Collegiate Athletic Association
58 59 LG World Record Campaign The World Record campaign recognizes those LG products that feature World First and World Best technology, further building the story of LG as a world leading Cinema Screen TV Marketing technology pioneer. Products are LG World Record Campaign We began our effort to reach premium Emblem showcases the company’s chosen based on one of three product leadership customers with ties to celebrities Adding criteria: first to introduce a new and governments in key markets. technology, at least one superior In Hollywood, LG hold ‘techorator* product spec versus competitors, marketing’ that offered decorating or unique position or accreditation service for a power blogger’s house value to by an external organization. collaborating celebrity interior Beginning from LG Cinema consultant. The Experience Zone also Screen 3D TV with the narrowest made an appearance at the Dubai bezel and LTE Smartphones World Cup horse racing event, and we consumers’ with the most numbers of LTE helped the government in Kazakhstan essential patents, look for the with a campaign meant to convert most innovative products to consumers in that market to digital TV receive this special designation in standards. lives the coming years. Techorator: It’s a mix of Technology & Decorator. * Design consultant who offers counseling of K-Pop Sponsorship harmony between new electronic products and Music fans were not “Sorry, consumer’s house interior. Sorry” last November when LG The LG Brand is more than the products we sell. It is brand Performance of Korea’s popular based on adding value to consumers’ lives every single began working with the groups idol group, Super Junior and f(x) The Dubai World Cup was not the Super Junior and f(x) who are who are leading the Korea Wave only sports event to be enhanced with day. It is that same spirit that forms the core of our many playing big roles of spread on Cinema Screen 3D TV excitement. marketing efforts. Campaigns meant not merely to inform Korea Wave with their songs. Basketball fans in the US felt it first- consumers—but to inspire them to enjoy life more. LG’s sponsorship and promotion hand with Experience Zones during the of K-Pop and Korea Wave is NCAA March Madness tournament, already inspiring legions of fans along with co-promotions with the in Asia and around the world. leading retailer Best Buy. We invited the
MARKETING CAMPAIGN & ACTIVITY & MARKETING CAMPAIGN This past year we sponsored the press, retailers and influencers of soccer ‘SM Town concert’ that all K-Pop in Germany to our product launching stars performed in New York City, soccer parties in stadiums across the brought LGE’s innovative products country. experience to ‘MoA (M live Most Amazing)’ concerts in various Sports fans aren’t the only ones who East Asian Countries, in addition got to experience the thrill. Cinema ran numerous ticket promotions, Screen 3D TV is a video gamer’s and brought added value to dream come true. LG is willing to take fans through Facebook with an center stage at major game festivals in interactive film featuring Super nine countries, and to be an exhibition Cinema Screen TV marketing Junior as brand endorsers. through a range of consumer sponsor at Germany’s Gamescon in experiences August and Russia’s Igromir in October. And we installed Cinema Screen 3D TV in sports pubs for Euro Cup broadcasts throughout Russia—and inspired fans to cheer on their team like never before!
60 61 LG continues to be honored with Industry Awards around the world. These honors are a reflection of the passion our employees put into every product we create. And they are a reaffirmation of what consumers already know: how LG’s steady stream of world- leading innovation fulfills their fondest wishes for greater comfort, convenience, health and entertainment. Leading the world in Innov ation
62 63 AWARDS 2012 CES Innovations Awards 2012 CES Innovations Awards 2012 CES Innovations Awards 2012 CES Innovations Awards - 55LM9600 - 55LM8600 - PM9700 - Smart Upgrader (SP820)
red dot Design Award 2012 red dot Design Award 2012 red dot Design Award 2012 red dot Design Award 2012 red dot Design Award 2012 red dot Design Award 2012 - LM9600 - LM8600 - PM6900 - M4 - BH5320F - PA70G
red dot Design Award 2012 iF Design Awards 2012 2011 CTIA’s E-Tech Awards 2011 CTIA’s E-Tech Awards Guinness Record: World’s 2012 CES Innovations Awards 2011 CES Innovations Awards - Ultrabook (Z330) - BH5320F - LG Revolution™ - LG Thrill 4G First Dual-core Smartphone - LG DoublePlay™ (LG C729) - Steam Dishwasher - Optimus 2S
2012 CES Innovations Awards - LG Revolution™
Mobile Choice (UK Magazine): NTT DoCoMo: LTE Partnership MWC 2012: Best Product red dot and 2011 CES Innovations Awards 2011 CES Innovations Awards iF Design Awards 2012 Most Innovative Device Special Award - Optimus 4X HD iF Design Awards 2012 - LG Wave™ Top-loading Laundry - LG ULTRA Capacity - Side-by-Side Refrigerator - Optimus 3D - Optimus True HD LTE - Optimus UI 2.0 Pair with a Full Color LCD Panel SteamWasher™ (Material Award)
2012 CES Innovations Awards - French Door Refrigerator with Blast Chille (Best of Innovations)
2012 CES Innovations Awards 2012 CES Innovations Awards iF Design Awards 2011 iF Design Awards 2011 iF Design Awards 2011 iF Design Awards 2011 2012 Edison Awards - Titan™ Front Loading - HOM-BOT 1.O - Convection Oven - European Bottom Freezer - Sidy-by-Side Refrigerator - 24-inch Front Loading - LG CINEMA 3D Laundry Pair Refrigerator Washing Machine (Silver at Content Display Category)
red dot Design Award 2011 red dot Design Award 2011 red dot Design Award 2011 red dot Design Award 2011 red dot Design Award 2011 red dot Design Award 2012 - European Bottom Freezer - 24-inch Front Loading - Lightwave Oven - Canister Type Vacuum - Robotic Vacuum Cleaner - European Bottom Freezer Refrigerator Washing Machine Cleaner
red dot Design Award 2012 red dot Design Award 2012 red dot Design Award 2012 2009 & 2010 New Excellent - Clothing Management - Dishwasher (Honorable - French Door Refrigerator Technology Award Cabinet Mention) (Honorable Mention) - Multi V III
64 65 FACT & FIGURES As of 2011_ In Billions of Korean Won Global revenue, referring to the total revenue of the global subsidiaries’ accounts excluding internal transactions.
2010 2011 • Mobile Co t mm COO en un m ica in tio CTO ta n r s 55,754 54,257 te n CFO E •
e H m CHO o o m H e Business Support Officer
A
• p
p GMO
l i
a As of 2011_ In Billions of Korean Won Vice Chairman & CEO n
c Smart Business Center Global revenue, referring to the total revenue of the global subsidiaries’ accounts excluding internal transactions. e
• Corporate Design Center
China 5%
A Others 6% CIS 6% Japan 2%
i Quality Center r
AE 8% India 5%
C HE 44%
o Korea 14%
n Corporate Strategic Planning Division South East d
i
t Asia 6%
i o
n
i
n
g Corporate Business Planning Division
Middle East
&
•
E
n
Sales by
e & Africa r n Sales by g
o i y
t HA 20% S u l o Corporate Audit Division Company 10% Region
Central & North South America America 15% 23%
MC 22% Europe 15% ORGANIZATION SALES
EMPLOYEES INVESTMENT
Korea Overseas Equipment Investment R&D Investment 35,284 56,173 1,812 2,483
Total Total 91,457 4,295 As of 2011_ In Billions of Korean Won
66 67 GLOBAL OPERATIONS
•LGENO Oslo •LGESW Stockholm LGELV Riga LGEBN Amsterdam • •LGERA Moscow LGEMA Mlawa • • LGERI Moscow LGEUK London •LGEPL Warsaw •LGESC Amstelveen LGEDG Duesseldorf• • •LGEUR Kiev • •LGECZ Praha • LGEAG Vienna LGEMF Villepinte LGEFS Paris • • LGEMK Budapest LGEIS Milano • •LGERO Bucharest LGEAT Istanbul •LGEAK Almaty •LGECI Mississauga LGECH Beijing LGESY LGEES •LGETK Istanbul • Shenyang ZenithChicago • LGEUS Englewood Cliffs • Madrid • LGERD Beijing• • •LGEPT Lisbon •• • LGEQH Qinhuangdao •Triveni New Jersey •LGEHS Athens LGETL Tianjin / LGETA Tianjin LGEAS Algiers • •LGETU Tunis ••LGEYT Yantai LGEQD Qingdao • •LGEJP Tokyo •LGEAIHunstville •LGEMC Casablanca LGEQA Qingdao • LGEMX Mexicali LGELF Amman LGEPN Nanjing / LGEND Nanjing LGEJLTokyo • • • LGEKS •LGEMU San Diego • Kunshan • •LGEEG Katameya LGEHN Hangzhou •• LGESH Shanghai LGEMR San Diego • LGEIL New Delhi LGETR Taizhou • LGCRC Shanghai LGEMI Miami •LGEAF Dubai LGEMM Monterrey •LGERS Reynosa • LGESR Riaydh• • LGETT Taipei• • LGEGF Dubai LGEHZ Huizhou •LGESB Jeddah •• LGEDF Dubai • LGEHK Hong Kong • LGEIL Pune LGEVN Hung Yen •LGEMS Mexico City LGEME Dubai • LGETH Bangkok •LGEPH Manila •Guatemala Guatemala City •LGSI Bangalore • LGEVZ Caracas LGETH Rayong •LGEPS Panama• City •LGENI Lagos • LGECB Bogota Easytec Lagos •LGEML Kuala Lumpur • •LGESL Singapore Marketing •LGESK Nairobi R & D •LGEIN Jakarta Marketing & Production •LGEAO Luanda Service OTHERS •LGEPR Lima Production
•LGEBR Taubate •LGESA Johannesburg
LGEAP Sydney • LGECL Santiago • •LGEAR Buenos Aires
AMERICA EUROPE MIDDLE EAST & AFRICA ASIA CIS
LGEAI LG Electronics Alabama, Inc. LGEAG LG Electronics Austria GmbH LGEAF LG Electronics Africa Logistic FZE LGEAP LG Electronics Australia Pty, Ltd. LGEND LG Electronics Nanjing Display Co., Ltd. LGEAK LG Electronics Almaty Kazakstan LGECI LG Electronics Canada, Inc. LGEBN LG Electronics Benelux Sales BV LGENI LG Electronics Nigeria Limited. LGEIL LG Electronics India Pvt. Ltd. LGEPN nanjing LG-Panda Appliances Co., Ltd. LGERA LG Electronics RUS., L.L.C LGEMR LG Electronics Mobile Research. LGECZ LG Electronics CZ, s.r.o. LGEAT arcelik-LG Klima Sanayi ve Ticaret A.S. LGEIN P.T.LG Electronics Indonesia LGEQD Qingdao LG Inspur Digital LGEUR LG Electronics Ukraine, Inc. U.S.A., L.L.C LGEDG LG Electronics Deutschland GmbH LGEEG LG Electronics Egypt S.A.E. LGEML LG Electronics (M) Sdn. Bhd Communication Co., Ltd. LGERI LG Alina Electronics LGEMS LG Electronics Mexico S.A.DE C.V. LGEES LG Electronics Espana S.A. LGEGF LG Electronics Gulf FZE LGEPH LG Electronics Philippine, Inc. LGEQH LG Electronics Qinhuangdao, Inc. LGEMU LG Electronics Mobilecomm LGEFS LG Electronics France S.A.S LGETU LG Electronics North Africa LGESL LG Electronics Singapore Pte, Ltd. LGESH Shanghai LG Electronics Co., Ltd. U.S.A., Inc. LGEHS LG Electronics Hellas S.A. LGEAS LG Electronics Algeria SARL LGETH LG Electronics Thailand Co., Ltd. LGESY LG Electronics (Shenyang), Inc. LGEUS LG Electronics U.S.A., Inc. LGEIS LG Electronics Italia S.p.A. LGEDF LG Electronics Dubai FZE LGEVN LG Electronics Vietnam Co., Ltd. LGETA LG Electronics Tianjin Appliances Co., Ltd. Zenith Zenith Electronics, L.L.C LGEMA LG Electronics Mlawa Sp.z o.o. LGELF LG Electronics (Levant) Jordan LGSI LG Soft India Private Ltd. LGETR taizhou LG Electronics Triveni Triveni Digital, Inc. LGEMF LG Electronics Mobilecomm France LGEMC LG Electronics Morocco S.A.R.L. LGEJP LG Electronics Japan, Inc. Refrigeration Co., Ltd. LGEMM LG Electronics Monterrey Mexico LGEMK LG Electronics Magyar KFT LGEME LG Electronics Middle East Co., Ltd. LGEJL LG Electronics Japan Lab, Inc. LGETT LG Electronics Taiwan Taipei Co., Ltd. S.A.DE C.V. LGEPL LG Electronics Polska Sp.z o.o. LGESA LG Electronics S.A. (Pty) Ltd. LGEYT Yantai LG Inspur LG Digital Mobile LGEMX LG Electronics Mexicalli S.A.DE C.V. LGEPT LG Electronics Portugal S.A. LGESR LG-Shaker Company Ltd. Communications Co., Ltd. LGERS LG Electronics Reynosa S.A.DE C.V. LGERO LG Electronics Romania S.R.L. LGETK LG Electronics Ticaret A.S CHINA LGCRC LG Electronics (Shanghai) Research and LGEAR LG Electronics Argentina S.A. LGESC LG Electronics European Shared Easytec Easytec Global Services Development Center Co., Ltd. LGECB LG Electronics Colombia Ltda. Service Center B.V. Innovation Limited. LGERD LG Electronics (China) Research and LGETL Tianjin Lijie Cartridge Heater Co., Ltd. LGECL LG Electronics, Inc. Chile Ltda. LGESW LG Electronics Nordic AB LGEAO LG Electonics Angola Limitada (Limited.) Development Center Co., Ltd. LGEQA LG Electronics Air-Conditioning LGEPR LG Electronics Peru S.A. LGENO LG Electronics Norway AS LGESK LG Electronics Service Kenya Limited, Inc. LGECH china Holding Company (Shandong) Co., Ltd. LGEPS LG Electronics Panama S.A. LGEUK LG Electronics United Kingdom Ltd. LGESB LG Electronics Saudi Arabis Limited. LGEHK LG Electronics HK Ltd. LGEBR LG Electronics de Sao Paulo Ltda. LGELV LG Electronics Latvia, L.L.C LGEHN LG Electronics (Hangzhou) Co., Ltd. LGEVZ LG Electronics Venezuela S.A. LGEHZ LG Electronics Huizhou Ltd. Guatemala LG Electronics Guatemala S.A. LGEKS LG Electronics (Kunshan) LGEMI LG Electronics Miami, Inc. Computer Co., Ltd.
68 69 TOP MANAGEMENT
Jong-Sik Kim Skott Ahn David Jung Young-Ha Lee Bon-Joon Koo President / Chief President / Chief Executive Vice President President / Business Vice Chairman & CEO / Operating Officer Technology Officer / Chief Financial Officer Support Officer LG Electronics
Havis Kwon Jong-Seok Park Moon-Bum Shin Hwan-Yong Nho Ki-Wan Kim Kun-Pyo Lee Ju-U Han Ho-Geon Hwang President & CEO / Home Executive Vice President Executive Vice President President & CEO / Air Executive Vice President Executive Vice President Senior Vice President Senior Vice President Entertainment Company & CEO / & CEO / Home Conditioning & Energy / Global Marketing / Corporate Design / Quality Center / Chief Human Mobile Communications Appliance Company Solution Company Officer Center Resources Officer Company
Board of Directors
Inside Outside Audit Committee
Bon-Joon Koo Sang-Hee Kim In-Ki Joo Woody Nam Sang-Gyu Choi Stanley Cho James Park Wayne Park Vice Chairman & CEO of Lawyer / Outside Director Professor of Yonsei University / President & CEO / China Executive Vice President Executive Vice President Senior Vice President Executive Vice President LG Electronics / Director Outside Director & CEO / Korea Marketing & CEO / Europe & CEO / Middle East & / US Kyu-Min Lee Company Africa David Jung Advisor of SK Research Institute / Sang-Hee Kim Executive Vice President & CFO of Outside Director Lawyer / Outside Director LG Electronics / Director In-Ki Joo Kyu-Min Lee Yu-Sig Kang Professor of Yonsei University / Outside Advisor of SK Research Institute / Vice Chairman & CEO of LG Corp. / Director Outside Director Director Chong-Nam Chu Professor of Seoul National University / Outside Director
Chris Yi Soon Kwon Weon-Dae Kim Dae-Hyun Song Senior Vice President / Senior Vice President / Senior Vice President / Executive Vice President Brazil India Indonesia / Russia
70 71 GLOBAL PRODUCTION NETWORK CORPORATE MILESTONES
* As of December 31, 2011 1958 2001 2008 Region Country City Subsidiary Product • Established as GoldStar • Commercialized asynchronous IMT-2000 • The 50th Anniversary of LG Electronics communications equipment • Established new LG Electronics brand identity 1959 • Launched world’s first Internet-enabled • Launched LG Secret, the third handset in the North, Mexico Mexicali LGEMX LCD TV, Monitor • Produced Korea’s first radio South washing machine, air conditioner, and Black Label Series Mexico Reynosa LGERS LCD TV, PDP TV, CRT TV, PDP Module & central 1962 microwave oven • Released LCD TV Scarlet in 80 nations • Exported Korea’s first radios to the US and simultaneously America Brazil Manaus LGEAZ TV, DVD, Audio, Car Audio, Microwave Oven, Air Conditioner 2002 Hong Kong • Unveiled the world’s first Bluetooth headset • Demerged into two companies to unlock Mexico Monterey LGEMM Refrigerator, Oven combined mobile phone 1965 shareholder value: holding company LG • Unveiled the world’s first Blu-ray network Brazil Taubate LGESP Monitor, Mobile Phone, Laptop, Washing Machine • Produced Korea’s first refrigerator Electronics Investment (LGEI) and operating storage company LG Electronics (LGE) 1966 • Held international environment conference Europe Poland Mlawa LGEMA TV, Monitor • Commercialized world’s first home network • Produced Korea’s first black and white TV with UN system Poland Wroclaw LGEWR Refrigerator, TV 1968 • Developed the world’s first LTE mobile modem 2003 • Produced Korea’s first air conditioner chip middle east Egypt Ismailia LGEEG CRT TV, FPD • Developed world’s first synchronous- • Recorded over 100 million units of LG air & africa 1969 asynchronous IMT-2000 Mobile phone conditioners in accumulated sales Turkey Istanbul LGEAT Air Conditioner • Produced Korea’s first washing machine • Developed world’s first 76-inch Plasma TV 2009 • Launched world’s first DVD rewriter compatible Saudi Arabia Riaydh LGESR Air Conditioner 1974 • Became second-largest LCD TV provider with all CD and DVD standards • Listed on the Korea Stock Exchange worldwide South Africa Johannesburg LGESA LCD TV, PDP TV, Monitor • Led US CDMA mobile phone market for the • Became third-largest supplier of mobile 1977 first time Asia handsets market worldwide India Noida LGEIL CRT TV, LCD TV, PDP TV, Monitor, Refrigerator, Air Conditioner, • Produced Korea’s first color TV 2004 • Became Global Partner and Technology Washing Machine, Compressor, Optical Storage, Mobile Phone Pune 1978 • Received approval for E-VSB as the next Partner of Formula One™ • Surpassed USD 100 million in exports, a generation ATSC DTV transmission standard 2010 Thailand Rayong LGETH Washing Machine, Air Conditioner, Compressor Korean industry first • Launched world’s first 55-inch LCD TV • Unveiled world’s first and fastest dual-core • Commercialized world’s first 71-inch Plasma Vietnam Hung Yen LGEVN TV, Monitor, Mobile Phone, Air Conditioner, Washing Machine 1980 smartphone, LG Optimus 2X TV • Established first EU sales subsidiary in • Unveiled world’s first full LED 3D TV Hai Phong Refrigerator, Microwave Oven, Vacuum Cleaner • Developed world’s first mobile phone with Germany (LGEWG) • Unveiled the new E90 monitor, the company’s T-DMB mobile TV reception Indonesia Bekasi LGEIN LCD Monitor, LCD TV, PDP TV, CRT TV, VCR, DVD-P, VCR, COMBI, slimmest LED monitor to date at just 7.2 mm 1982 • Developed home cinema system with wireless REC COMBI, DVD-P, DVD-R, BD-P, BD-Home Theater, in depth • Established US color TV plant in Huntsville, speakers Tanggerang DVD-Home Theater, Audio, Refrigerator • Unveiled the company’s first ever Real 3D Alabama • Led global CDMA mobile phone market for Sound Home Theater System the first time China China Taizhou LGETR Refrigerator, Compressor 1984 • Unveiled its latest, groundbreaking creations: • Surpassed KRW 1 trillion in sales for the first 2005 the BIGIN, a largest-in-class washing machine China Huizhou LGEHZ Media, Optical Storage time • Launched world’s first notebook with T-DMB with LG’s proprietary 6 Motion Direct Drive; China Nanjing LGEND Monitor, LCD TV, PDP TV 1986 reception the iPRO, the largest, most energy efficient • Established European VCR plant in Germany • Launched LG Chocolate, the first phone in the refrigerator in its class; the world’s first China Nanjing LGEPN Washing Machine, Motor Black Label Series solar Lightwave oven and the world’s first 1988 China Qinhuangdao LGEQH Casting • Developed world’s first 102-inch Plasma TV KOMPRESSOR™ vacuum cleaner • Established sales and joint venture production • Co-established LG-Nortel, a 2011 China Shanghai LGESH Security Camera subsidiaries in Thailand telecommunications network equipment • Launched water treatment business providing 1991 venture with Nortel Networks China Shenyang LGESY CRT TV full-scale planning through total maintenance • Established design technology center in • Launched mobile phone with S-DMB solutions China Tianjin LGETA Microwave Oven, Air Conditioner, Vacuum Cleaner, Compressor, Ireland reception and recording • Introduced CINEMA 3D Smart TV combining MGT 1993 2006 industry-leading 3D technology and smart TV China Yantai LGEYT Mobile Phone • Established a production and sales subsidiary • Launched LG Shine, the second handset in capabilities in Huizhou, China (LGEHZ), beginning a full- the Black Label Series • Unveiled the world’s first smart appliances China Kunshan LGEKS Telematics, Audio scale advance into the Chinese market • Launched steam washing machine and delivering the consumer benefits of smart interactive TV refrigerator savings and smart convenience China Hangzhou LGEHN Video Cassette Tape, USB, HDD, Prism Sheet 1995 • Developed world’s first 100-inch LCD TV • Launched the largest French-door refrigerator • Renamed as LG Electronics China Qingdao LGEQD Mobile Phone • Launched world’s first full HD (1080p) 102- in its class offering unparalleled capacity and • Acquired US-based Zenith Electronics China Qingdao LGEQA Chiller inch Plasma TV convenience 1997 • Developed world’s first dual-format high- • Increased investment in air conditioning CiS Kazakhstan Almaty LGEAK TV, Washing Machine • Developed 40-inch Plasma TV and world’s definition disc player and drive solutions delivering a full line-up for residential first DTV IC chipset through large industries 2007 Russia Ruja LGERA TV, Monitor, Refrigerator, Washing Machine • Established India production subsidiary • Introduced LG Revolution™, LG’s first 4G • Launched BH100 Super Blu, the world’s first (LGEIL) smartphone followed by Optimus LTE, the dual-format HD disc player company’s best-selling 4G smartphone to 1998 • Launched PRADA Phone by LG with advanced date. • Developed world’s first 60-inch Plasma TV touch interface • Won record number of international design 1999 awards, including 21 iF and 29 red dot Design • Co-established LG.Philips LCD (currently LG Award Display) • Launched 120 Hz full HD LCD TV line 2000 • Shipped 15 millionth LG Chocolate Phone • Acquired operations of LG Information & • Led US drum washing machine market for the Communications first time • Launched world’s first Internet-enabled refrigerator
72 73 FINANCIAL STATEMENTS Report of Independent Auditors
75 Report of Independent Auditors To the Board of Directors and Shareholders of LG Electronics Inc. 76 LG Electronics Consolidated Statements of Financial Position We have audited the accompanying consolidated statements of financial position of LG Electronics Inc. and its subsidiaries 78 LG Electronics Consolidated Statements of Operations (collectively the “Group”) as of December 31, 2011 and 2010, and the related consolidated statements of operations, 79 LG Electronics Consolidated Statements of Comprehensive Income comprehensive income, changes in equity and cash flows for the years then ended, expressed in Korean won. These financial 80 LG Electronics Consolidated Statements of Changes in Equity statements are the responsibility of the Group’s management. Our responsibility is the express an opinion on these financial 81 LG Electronics Consolidated Statements of Cash Flows statements based on our audits. We did not audit the financial statements of certain consolidated subsidiaries, whose financial statements represent 33% and 35% of the Group’s consolidated total assets as of December 31, 2011 and 2010, respectively, and 57% and 56% of the Group’s consolidated total sales for the years then ended, respectively. These statements were audited by other auditors whose reports have been furnished us and our opinion, insofar as it relates to the amounts included for those subsidiaries, is based solely on the reports of other auditors.
We conducted our audits in accordance with auditing standards generally accepted in the Republic of Korea. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, based on our audits and the reports of the other auditors, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Group as of December 31, 2011 and 2010, and their financial performance and cash flows for the years ended December 31, 2011 and 2010, in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (“Korean IFRS”).
Auditing standards and their application in practice vary among countries. The procedures and practices used in the Republic of Korea to audit such financial statements may differ from those generally accepted and applied in other countries. Accordingly, this report is for use by those who are informed about Korean auditing standards and their application in practice.
Seoul, Korea March 7, 2012
This report is effective as of March 7, 2012, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the accompanying consolidated financial statements and notes thereto. Accordingly, the readers of the audit report should understand that there is a possibility that the above audit report may have to be revised to reflect the impact of such subsequent events or circumstances, if any.
74 75 LG Electronics Consolidated Statements of Financial Position LG Electronics Consolidated Statements of Financial Position
December 31, 2011 and 2010 December 31, 2011 and 2010
(in millions of Korean Won) December 31, 2011 December 31, 2010 (in millions of Korean Won) December 31, 2011 December 31, 2010
Assets Liabilities Current assets Current liabilities Cash and cash equivalents 2,345,465 1,944,162 Trade payables 5,486,871 5,824,392 Financial deposits 150,000 85,000 Borrowings 3,178,212 4,009,229 Trade receivables 6,752,559 7,001,962 Other payables 3,780,158 3,730,292 Loans and other receivables 494,239 525,046 Other financial liabilities 13,860 5,314 Other financial assets 1,677 1,814 Current income tax liabilities 81,643 98,659 Inventories 4,947,160 5,872,420 Provisions 724,516 748,146 Current income tax assets 197,968 154,286 Other current liabilities 949,262 901,201 Other current assets 890,388 924,813 14,214,522 15,317,233 Assets classified as held for sale 3,670 5,030 Non-current liabilities 15,783,126 16,514,533 Borrowings 4,257,406 3,183,706 Non-Current Assets Other payables 20,490 11,597 Financial deposits 129,439 105,479 Other financial liabilities 378 37,492 Loans and other receivables 610,709 543,562 Deferred income tax liabilities 15,237 10,253 Other financial assets 139,282 105,601 Defined benefit liability 423,306 318,112 Property, plant and equipment 7,290,413 6,500,484 Provisions 575,632 577,697 Intangible assets 1,035,797 763,382 Other non-current liabilities 3,238 2,772 Deferred income tax assets 1,246,071 968,751 5,295,687 4,141,629 Investments in jointly controlled entities and associates 5,603,199 6,008,145 Total liabilities 19,510,209 19,458,862 Investment property 7,239 7,295 Equity attributable to owners of the Parent Company Other non-current assets 813,182 801,267 Paid-in capital: 16,875,331 15,803,966 Capital stock 904,169 809,169 Total assets 32,658,457 32,318,499 Share premium 3,088,179 2,207,919 Retained earnings 9,499,534 10,108,173 Accumulated other comprehensive loss (326,584) (209,844) Other components of equity (271,339) (271,277) 12,893,959 12,644,140 Non-controlling interest 254,289 215,497 Total equity 13,148,248 12,859,637 Total liabilities and equity 32,658,457 32,318,499
76 77 LG Electronics Consolidated Statements of Operations LG Electronics Consolidated Statements of Comprehensive Income
Years ended December 31, 2011 and 2010 Years ended December 31, 2011 and 2010
(in millions of Korean Won, except per share amounts) 2011 2010 (in millions of Korean Won) 2011 2010
Continuing operations Profit (loss) for the year (432,805) 1,282,119 Net sales 54,256,585 55,753,804 Other comprehensive income (loss): Cost of sales 42,057,595 43,453,096 Available-for-sale financial assets (3,474) (1,262) Gross profit 12,198,990 12,300,708 Cash flow hedges (4,717) (38) Selling and marketing expenses 7,201,413 7,534,431 Actuarial loss on defined benefit liability (94,056) (46,732) Administrative expenses 1,359,986 1,402,203 Currency translation differences (117,633) (32,311) Research and development expenses 1,698,917 1,500,792 Share of actuarial loss of associates (11,887) (3,692) Service costs 1,595,453 1,775,128 Other comprehensive income (loss) from jointly controlled 22,259 (20,200) entities and associates Other operating income 1,622,901 2,009,968 Other comprehensive lossfor the year, net of tax (209,508) (104,235) Other operating expenses 1,685,859 1,921,653 Total comprehensive income (loss) for the year (642,313) 1,177,884 Operating income 280,263 176,469 Comprehensive income (loss) for the year attributable to: Financial income 574,148 819,747 Equity holders of the Parent Company (692,307) 1,123,631 Financial expenses 922,666 1,039,012 Non-controlling interest 49,994 54,253 Income (expense) from jointly controlled entities and associates (331,058) 477,322 Total comprehensive income (loss) for the year (642,313) 1,177,884 Profit (loss) before income tax (399,313) 434,526 Income tax expense 33,492 141 Profit (loss) from continuing operations (432,805) 434,385 Discontinued operations Profit from discontinued operations - 847,734 Profit (loss) for the year (432,805) 1,282,119 Profit (loss) for the year attributable to: Equity holders of the Parent Company (469,624) 1,226,962 Profit (loss) for the year from continuing operations (469,624) 393,713 Profit for the year from discontinued operations - 833,249 Non-controlling interest 36,819 55,157 Profit for the year from continuing operations 36,819 40,672 Profit for the year from discontinued operations - 14,485 Earnings per share attributable to the equity holders of the Parent Company during the year (in Won) Earnings per share for profit attributable to (2,880) 7,419 the ordinary equity holders of the company Earnings (loss) per share for profit from continuing operations (2,880) 2,381 Earnings per share for profit from discontinued operations - 5,038 Earnings (loss) per share for profit attributable to (2,563) 7,662 the preferred equity holders of the company Earnings (loss) per share for profit from continuing operations (2,563) 2,459 Earnings per share for profit from discontinued operations - 5,203
78 79 LG Electronics Consolidated Statements of Changes in Equity LG Electronics Consolidated Statements of Cash Flows
Years ended December 31, 2011 and 2010 Years ended December 31, 2011 and 2010
(in millions of Korean Won) Attributable to equity holders of the Parent Company (in millions of Korean Won) 2011 2010 Accumulated Other Non- Paid-in Retained Other Total Cash flows from operating activities Components Comprehensive Total controlling Capital Earnings of Equity Equity Income (loss) Interest Cash generated from operations 2,240,468 490,119 Balance at January 1, 2010 3,017,088 9,214,309 (156,886) (270,333) 11,804,178 621,068 12,425,246 Interest received 74,412 67,972 Comprehensive Income Interest paid (310,460) (232,253) Profit for the year - 1,226,962 - - 1,226,962 55,157 1,282,119 Dividends received 84,859 76,301 Available-for-sale financial assets - - (1,262) - (1,262) 0 (1,262) Income tax paid (359,212) (393,622) Cash flow hedges - - (38) - (38) - (38) Net cash generated from operating activities 1,730,067 8,517 Actuarial gain on defined benefit liability - (46,681) - - (46,681) (51) (46,732) Cash flows from investing activities Currency translation differences - - (31,458) - (31,458) (853) (32,311) Decrease in financial deposits - 195,835 Share of actuarial loss of associates - (3,692) - - (3,692) - (3,692) Decrease in loans and other receivables 148,705 221,406 Other comprehensive expense of Proceeds from disposal of other financial assets 38,303 98,081 - - (20,200) - (20,200) - (20,200) jointly controlled entities and associates Proceeds from disposal of property, plant and equipment 77,780 321,739 Total comprehensive income - 1,176,589 (52,958) - 1,123,631 54,253 1,177,884 Proceeds from disposal of intangible assets 15,954 2,618 Transactions with equity holders of the Parent Company Proceeds from disposal of and recovery of investments in jointly controlled entities and associates 866 210,336 Dividends - (282,725) - - (282,725) (24,900) (307,625) Increase in cash and cash equivalents due to changes in scope of subsidiaries - 798 Change in ownership interest over subsidiaries - - - (957) (957) 4,833 3,876 Decrease in other assets 4,155 9,375 Changes in scope of subsidiaries - - - - - (439,757) (439,757) Increase in financial deposits (77,352) - Others - - - 13 13 - 13 Increase in loans and other receivables (212,227) (183,362) Total transactions with equity holders of - (282,725) - (944) (283,669) (459,824) (743,493) the Parent Company Acquisition of other financial assets (91,989) (144,137) Balance at December 31, 2010 3,017,088 10,108,173 (209,844) (271,277) 12,644,140 215,497 12,859,637 Acquisition of property, plant and equipment (1,830,008) (1,745,219) Balance at January 1, 2011 3,017,088 10,108,173 (209,844) (271,277) 12,644,140 215,497 12,859,637 Acquisition of intangible assets (319,850) (287,549) Comprehensive income Acquisition of jointly controlled entities and associates (998) (129,693) Profit (loss) for the year - (469,624) - - (469,624) 36,819 (432,805) Decrease in cash and cash equivalents due to changes in scope of subsidiaries (205,254) (239,632) Available-for-sale financial assets - - (3,474) - (3,474) - (3,474) Increase in other assets - (399) Cash flow hedges - - (4,717) - (4,717) - (4,717) Net cash used in investing activities (2,451,915) (1,669,803) Actuarial loss on defined benefit liability - (94,056) - - (94,056) - (94,056) Cash flows from financing activities Currency translation differences - - (130,808) - (130,808) 13,175 (117,633) Proceeds from borrowings 3,020,490 3,276,962 Share of actuarial loss of associates - (11,887) - - (11,887) - (11,887) Issuance of ordinary shares 975,461 1,301 Other comprehensive income of Repayments of borrowings (2,792,295) (1,749,208) - - 22,259 - 22,259 - 22,259 jointly controlled entities and associates Dividends paid (43,143) (308,292) Total comprehensive income (loss) - (575,567) (116,740) - (692,307) 49,994 (642,313) Net cash provided by financing activities 1,160,513 1,220,763 Transactions with equity holders of Exchange losses on cash, cash equivalents (37,362) (39,102) the Parent Company : Net increase (decrease) in cash, cash equivalents 401,303 (479,625) Paid-in-Capital 975,260 - - - 975,260 - 975,260 Cash and cash equivalents at the beginning of year 1,944,162 2,423,787 Dividends - (33,072) - - (33,072) (11,381) (44,453) Cash and cash equivalents at the end of year 2,345,465 1,944,162 Change in ownership interest over subsidiaries - - - (62) (62) 179 117 Total transactions with equity holders of 975,260 (33,072) - (62) 942,126 (11,202) 930,924 the Parent Company Balance at December 31, 2011 3,992,348 9,499,534 (326,584) (271,339) 12,893,959 254,289 13,148,248
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