LG 2000 Annual Report Download - page 6

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Message to Our Shareholders
Let me take this opportunity to convey my sincere appreciation for your patronage and support for LGE
over the last fiscal year. As the first year of the new millennium, the year 2000 was greeted all over the
world with great hope and anticipation. LGE also started the year with aspirations, motivated more than
ever to becoming of the leader of the global digital market.
Focused on these goals, LGE’s performance in 2000 far surpassed those of previous years. Despite
adversity and uncertainty in the business environment, the Company attained sales of W14.8 trillion, a
40.7% increase over the previous year. Not taking into account LGE's merger with LG Information &
Communications (LGIC), total sales in 2000 were W13.8 trillion, 30.5% higher than sales in 1999 and
almost W2 trillion more than our original target of W12 trillion. Ordinary income amounted to W728.5
billion, a new record, and operating income totaled W921.1 billion.
Another substantial gain this year was consolidation of the Company's business performance base. In 2000,
LGE merged with LG Information & Communication to become a world-leading company in electronics
and telecommunications. The establishment of strategic alliances with world-class companies and
promising venture companies has also facilitated the Company's progress. One of our numerous successful
collaborations is the joint venture with Philips to produce cathode ray tubes. LGE also entered into a
business alliance with Hitachi in the area of optical storages. These strategic alliances and restructuring
efforts are part of our plan to focus on profitability through unbeatable quality and competitiveness.
Despite our record-breaking business performance and restructuring, there were many challenges in 2000.
Among these, the biggest was the merger with LGIC. While the immediate market response to the merger
was less than encouraging, we are certain that our vision will be realized in the long run. In connection with
the merger, LGE bought back 42 million shares which, in turn, shot the Company's liability to equity ratio
up to 284%. The temporary deterioration of our financial position raised concerns over our ability to
finance our participation in the third generation telecommunications market. LGE swiftly undertook diverse
measures to remedy the situation and succeeded in bringing the liability to equity ratio down to 196.4% by
the end of 2000. In 2001, LGE will continue to make financial soundness a top priority.
Since 1999, LGE has pursued the "Digital LG" idea. In line with this goal, we are aiming to be the top
producer of digital TV and telecommunication equipment in the world. To secure our dominance in the
emerging digital TV and third generation telecommunication markets, we have set the following strategies:
First, we will cultivate our core businesses to lead the global electronics market, team up with top-tier
electronics manufacturers, and make a determined drive into the digital TV business.
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