LG 2006 Annual Report Download

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Table of contents

  • Page 1

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    01 10 14 16 25 37 I'M FEELIN' #1 MESSAGE FROM THE CEO NEW VISION R&D AND DESIGN I'M FEELIN' #2 BUSINESS OVERVIEW 46 52 56 58 59 60 CORPORATE SOCIAL RESPONSIBILITY FACTS & FIGURES GLOBAL NETWORK MANAGEMENT & BOARD OF DIRECTORS CORPORATE MILESTONES FINANCIAL STATEMENTS

  • Page 3
    I'M FEELIN' CUSTOMERS' FEELINGS LG Electronics is dedicated to developing and producing the most advanced high technology products in the world. An important measure of our success is the enjoyment our customers get from how our products enrich their lives. The following pages show some of the ways...

  • Page 4
    I'm breathin'

  • Page 5
    To keep your allergies under control, you need a washing machine that gets rid of allergens while making your clothes-and your teddy bear-fresh and clean. WASHING MACHINE LG Electronics' new Steam Washing Machine virtually eliminates allergens with its unique Allergy Care function. 02 03

  • Page 6
    LG SHINE LG Electronics' stunning Shine, a full-metal bodied phone with a sleek and sophisticated design, offers a multi-function scroll key and the 'magic mirror' screen. I'm stylin'

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    To play music, send pictures, and look fashionable, you need a phone with amazing looks as well as cutting-edge technology. 04 05

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    I'm touchin'

  • Page 9
    To experience incredibly lifelike images, you need a LCD & Plasma TV with Full HD 1080p picture resolution. FULL HD LCD & PLASMA TV LG Electronics' LCD & Plasma TVs offer Full HD 1080p resolution- the highest in the industry-in a range of models up to 71-inch. 06 07

  • Page 10
    I'm cheerin'

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    To enjoy all the movies and videos in full HD picture resolution, you need a highdefinition disc player that handles both formats. THE WORLD'S FIRST DUAL-FORMAT HIGH-DEFINITION DISC PLAYER You no longer need to choose between the two high-definition disc formats. 08 09

  • Page 12
    MESSAGE FROM THE CEO Value Creation: Key to the Future YONG NAM VICE CHAIRMAN & CEO LG ELECTRONICS CEO MESSAGE

  • Page 13
    ... such as the Steam Washer. Our Mobile Communications division also ended the year with strong momentum, driven by steady penetration into open markets and strong sales of 3G phones and hit products such as the Chocolate phone. However, the unexpected, sharp declines in Plasma TV prices in the second...

  • Page 14
    ... is now one of the most recognized consumer of consumer electronics, oblige us to lock in on electronics brands across the world. However, we must strategies that will improve margins, drive supply chain continue to invest to build a brand with a clear identity, efficiencies, and efficiently utilize...

  • Page 15
    ...R&D investment in core helping make LG Electronics the success it is today. businesses such as mobile phones and flat panel TVs, as well as new, exciting businesses such as car Sincerely, infotainment and home networking. Together with this investment in technology, we are also improving our product...

  • Page 16
    NEW VISION LG Electronics is pursuing the vision of becoming a true global digital leader, attracting customers worldwide through its innovative products and design. The company's goal is to rank among the top 3 consumer electronics and telecommunications companies in the world by 2010. To achieve ...

  • Page 17
    ... superior returns to shareholders Develop strategies for the "polarizing consumer" 04 Innovate through design, as well as technology 05 Invest in clear, global brand identity Developing the "best-in-class" organization 06 Align and upgrade organization for the future LG ELECTRONICS NEW...

  • Page 18
    ... the Corporate Institute of Technology, Production Engineering Research center, and 36 research labs throughout the world. Our investment plan focuses on high-growth areas-mobile handsets, flat panel displays, car infotainment, system air conditioners, and home networks. LG Electronics designers...

  • Page 19
    16 17

  • Page 20
    ...), and a high contrast ratio for purer blacks, for an optimized movie viewing experience. PY3 series Plasma TVs not only offer Full HD processing without downscaling, but also incorporate LG's 100Hz drivings technology, designed to reduce flickering by doubling the screen refresh rate. Plus, eXtreme...

  • Page 21
    18 19

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    ... Steam Washing Machine offers cutting-edge steam cleaning technology housed in a modern design. Replaceable color panels can work with any decorating scheme and there's even a beautiful range of Designers Guild limited edition panels. LG Electronics' latest Roboking is a robotic vacuum cleaner...

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    20 21

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    DIGITAL MEDIA Here LG Electronics is developing products that push out the boundaries of the home entertainment experience and expand networking and connectivity in the information technology arena. Our world's first dualformat high-definition disc player handles both Blu-ray Disc and HD DVD content...

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    22 23

  • Page 26
    ... approach to mobile communications combines leading edge technology with cutting-edge style. The LG Chocolate phone, the first handset in the Black Label series, is a hit fashion icon. Its minimalist black design is set off by the sleek yet subtle red glow of its hidden touch pad. The award-winning...

  • Page 27
    ...' CELEBRITIES' FEELINGS LG Electronics has attracted the attention of people who are prominent leaders in their industries and professions around the world. The following pages show how some of the business partners, opinionleaders, and educators who know us feel about our products and our company.

  • Page 28
    " The way LG Electronics has risen on the FORTUNE Global 500 list over the last five years is very impressive. The high quality and advanced technology of its products has made LG a premium brand in home appliances, mobile, and displays."

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    MIKE FEDERLE GROUP PUBLISHER, FORTUNE GROUP TIME WARNER CORP. 26 27

  • Page 30
    LUIZ FERNANDO PASSOS CORREIA DE SÁ EDITOR-IN-CHIEF ISTOÉ DINHEIRO MAGAZINE

  • Page 31
    " LG Electronics took our market by surprise, launching high quality and trend-setting products. They're strong in LCD TVs and Plasma TVs, winning our Annual Best Corporate Award the last three years in a row." 28 29

  • Page 32
    PROFESSOR DR. PETER ZEC FOUNDER, REDDOT DESIGN AWARDS PRESIDENT, DESIGN ZENTRUM NORDRHEIN WESTFALEN PRESIDENT, INTERNATIONAL COUNCIL OF SOCIETIES OF INDUSTRIAL DESIGN (ICSID)

  • Page 33
    " LG Electronics develops products that exactly fit the Zeitgeist, like the Chocolate and Shine phones. They won 29 reddot 2007 Design Awards, including 'Best of the Best' for their 'PRADA Phone by LG' that's creating worldwide buzz." 30 31

  • Page 34
    MARK LEVINSON PRESIDENT AND CEO DANIEL HERTZ ADVANCED AUDIO DESIGNS

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    " I'm partnering with LG Electronics to make a contribution to the music world, as well as the audio/ video world-creating systems that dramatically improve the listening quality of digital audio." 32 33

  • Page 36
    LIN CHUANJIN SCHOOLMASTER, TIANJIE PRIMARY SCHOOL QIXIA DISTRICT, SHANDONG PROVINCE, CHINA

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    " The LG Electronics Scholarship inspires positive attitudes among students and is a great help for poor families. LG Electronics also gave us new PCs and does many things to improve our school. We wish them much future success in China." 34 35

  • Page 38
    ... of them we work with as business partners. Others inform the world about our products and our company. Others are people whose work in the community can benefit from our products and support. What these exceptional people are thinking and feeling is of paramount importance to us at LG Electronics.

  • Page 39
    ... Digital Media Company maintained its number one position in optical storage, and performed well in home audio, car infotainment, mobile AV, and notebook PCs. It will now offer the world's first dual-format high-definition disc player and digital convergence products leading to ubiquitous systems.

  • Page 40
    .... LG plans to expand this artistic product line to other household appliances. LG's Swarovski Refrigerator adds a touch of elegance with glimmering crystal accents. LG provides a wide range of tailored Commercial Air Conditioners suited to buildings in a variety of types and sizes. Its Multi V Plus...

  • Page 41
    LG ELECTRONICS BUSINESS OVERVIEW 1, 4, 6 ARTCOOL AIR CONDITIONER The picture-replaceable front panel allows ARTCOOL Inverter to fit into any interior design, while offering improved cooling and heating through inverter technology. 6 2 STEAM WASHING MACHINE The world's first steam washing machine ...

  • Page 42
    ..., LG Electronics sees rapid products to meet all customer needs-from Full expansion of the Flat Panel TV market at 40-inch HD LCD TVs and Plasma TVs to monitors and other and above, led by the fast growth of LCD TVs. The types of display. company's goal is to increase its market share by supporting...

  • Page 43
    ... team creates beautiful products that are truly elegant with minimalist features like these rich, glossy frames. 3 DVR (PB4) LG is the only company to offer TVs with integrated HD digital video recorder (DVR) capability. The built-in DVR enables you to pause live broadcasts and record programs...

  • Page 44
    ... with products that offer specialized multimedia functions, such as the LG-KS10 smart phone with PC-level functionality; the LG-CU500v with improved Video Share Call function; and the LG-LX550 with an FM transmission function and touch wheel pad. MC LG Electronics Mobile Communications Company is...

  • Page 45
    ...5 CHOCOLATE This high-fashion slider features touch-sensitive navigation keys, video/music-on-demand, music player, 1.3 megapixel camera with camcorder, and Bluetooth. 10 6 LG VX9400 This is capable of delivering television programming from some of the most popular TV channels right to your phone...

  • Page 46
    ...-format high-definition disc Super Multi is "Stylish & Slim." We have also player that handles both Blu-ray and HD DVD, we debuted the new Super Multi Security system, reaffirmed our position as the world's leading high- featuring SecurDiscâ„¢ technology. Co-developed definition technology company...

  • Page 47
    LG ELECTRONICS BUSINESS OVERVIEW 1 BLU-RAY DISC REWRITER AND HD DVD-ROM DRIVE GGW-H10N The world's first device that allows PC users to both read and write Blu-ray discs and read HD DVD discs, plus record up to 9 hours of high-definition or 23 hours of standard definition video. 2 4.3" PORTABLE ...

  • Page 48
    ... brand image of our products. We continue to diversify the range of our eco-products, taking into consideration all the Eco-design aspects mentioned above. WASHING MACHINE LG's direct drive motor reduces noise, and vibration, through eliminating the belt of conventional washing machines. Its steam...

  • Page 49
    ...-Power System) • Uses eco-friendly R-410A coolant • Korean Eco-mark Certificate AIR CONDITIONER LG's inverter multi compressor technology, MPS (Multi-Power System) uses eco-friendly R-410A coolant, earning the Korean Eco-mark Certificate. PLASMA TV Employs single scan module to reduce number...

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    .... In addition, LG Electronics employees and executives contributed countless hours of volunteer service. Our programs range from helping over 5,000 children who head their households to assisting underprivileged people with medical care and home repairs and even building brand-new homes for them...

  • Page 51
    ...'s group. For 2006, top management's social contribution added up to KRW 384 million, including a matching grant from the company. Participating in the fund, which was principally used to support the activities of our mobile electronics classes, were 209 executives. Employees also planned and...

  • Page 52
    ..., this tournament has helped Africa to emerge as a new football power, shaking the two soccer establishments, Europe and South America. We also continue to support the national soccer teams of the Republic of South Africa and Iraq. LG Electronics likes to support sports that people love and enjoy...

  • Page 53
    ... Republic, countries where ice hockey is the national sport, more popular than football. The event is telecast to millions of fans in the participating countries, reaching 25% of the Swedish population alone. In the US, LG Electronics sponsors the LG Skins Game, a top PGA golf event, now in its...

  • Page 54
    ...Headquarters CTO Customer Service CFO CHO MID - TERM STRATEGIES STRATEGIES BUSINESS GOAL Global Number 1 player in the digital appliance industry Premium marketing based on customer insights DA Align whole activities to enhance brand power and strengthen customer insight Upgrading position...

  • Page 55
    ... ELECTRONICS FACTS & FIGURES in billions of Korean won Global revenue, referring to the total revenue of the global subsidiaries' account excluding internal transactions SALES 35,563 36,730 2005 2006 SALES BY COMPANY CENTRAL & SOUTH AMERICA 8% CIS 5% KOREA 16% - DD 31% Sales by Company CHINA...

  • Page 56
    LEADING GLOBAL PRODUCTS as of 2006 MARKET SHARE 30% Optical Storage CDMA Handsets 22.3% 10% LCD & Plasma TVs Residential Air Conditioners 16.9% 9% DVD Players 29% Plasma Panels EMPLOYEES KOREA (36%) OVERSEAS (64%) as of 2006 29,986 52,963 LG ELECTRONICS FACTS & FIGURES

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    ... Country Worldwide Operations Products EUROPE POLAND POLAND ENGLAND CIS KAZAKSTAN RUSSIA MIDDLE EAST & AFRICA TURKEY EGYPT CHINA CHINA CHINA CHINA CHINA CHINA CHINA CHINA CHINA CHINA CHINA CHINA CHINA CHINA ASIA INDIA INDONESIA THAILAND VIETNAM NORTH AMERICA MEXICO...

  • Page 58
    ... S.A. LG Electronics Romania S.R.L. LG Electronics European Shared Service Center B.V. LG Electronics Nordic AB LG Electronics United Kingdom Ltd. LG Electronics Wales Ltd. LG Electronics Wroclaw Sp. Z.o.o. Tashkent LGEAK Almaty CIS LGEAK LGERA LGERI LGERM LGERU LGEUA LGEUR LGEIL New Delhi...

  • Page 59
    ...Ltd. LG Electronics Singapore Pte. Ltd. LG Electronics (Thailand) Co., Ltd. LG Electronics Taiwan Taipei Co., Ltd. LG Electronics Vietnam Co., Ltd. LGEUS New Jersey LGECB Bogotá NORTH AMERICA LGEAI LG Electronics Alabama Inc. LGECI LG Electronics Canada, Inc. LGEMR LG Electronics Mobile Research...

  • Page 60
    ... CEO chairman of the board of directors YU SIG KANG VICE CHAIRMAN / LG CORP. BOARD OF DIRECTORS directors YONG NAM MANAGEMENT VICE CHAIRMAN / CEO HO YOUNG JEONG YOUNG-HA LEE PRESIDENT / HEAD OF DIGITAL APPLIANCE COMPANY CTO PRESIDENT / PRESIDENT / HEAD OF CHINA HEADQUARTERS EXECUTIVE...

  • Page 61
    ... Black Label Series Globally launched the steam washing machine and interactive TV refrigerator Developed the world's first 100-inch LCD TV Launched the world's largest Full HD 102-inch Plasma TV (1080p) Developed the world's first dual-format high-definition Disc Player& Drive 1969 Korea's first...

  • Page 62
    ... financial instruments Long-term investment securities Equity method investments Refundable deposits Long-term advance payments Long-term prepaid expenses Long-term loans receivable, net Intangible assets, net Derivatives transaction debit TOTAL ASSETS LG ELECTRONICS FINANCIAL STATEMENTS

  • Page 63
    LG ELECTRONICS FINANCIAL STATEMENTS (in millions of Korean won) 2006 2005 LIABILITIES AND SHAREHOLDERS' EQUITY ￦37,674 792,569 1,764,116 1,083,... accounts and notes payable Other accounts payable Income taxes payable Accrued expenses Withholdings Unearned income Advances from customers ...

  • Page 64
    ... Gain on settlement of derivatives Gain on disposal of investment securities Reversal of allowance for doubtful accounts Rent income Dividend income Gain on disposal of property, plant and equipment Refund of income taxes Gain on business transfer Others LG ELECTRONICS FINANCIAL STATEMENTS

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    LG ELECTRONICS FINANCIAL STATEMENTS (in millions of Korean won, except per share ...exchange losses Loss from transfer of trade accounts and notes receivable Loss from disposal of property, plant and equipment Loss from disposal of investment securities Loss on impairment of investment securities...

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    ... FROM VOLUNTARY RESERVE Reserve for research and manpower development APPROPRIATIONS OF RETAINED EARNINGS Legal reserve Reserve for research and manpower development Cash dividends UNAPPROPRIATED RETAINED EARNINGS TO BE CARRIED FORWARD TO SUBSEQUENT YEAR LG ELECTRONICS FINANCIAL STATEMENTS

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    ...severance benefits Loss from transfer of trade accounts and notes receivable Bad debt expense Gain on foreign currency translation, net Gain from disposal of investment securities, net Loss on impairment of investment securities Loss from disposal of property, plant and equipment, net Loss on...

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    ... accounts payable Decrease in accrued expenses Increase (decrease) in withholdings Increase in advances from customers Increase (decrease) in income taxes payable Payment of severance benefits Decrease (increase) in severance insurance deposits Decrease in contribution to the National Pension...

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    LG ELECTRONICS FINANCIAL STATEMENTS (in millions of Korean...financial instruments Acquisition of long-term financial instruments, net Proceeds from disposal of investment securities Acquisition of investment securities Payment of refundable deposits, net Proceeds from disposal of property, plant...

  • Page 70
    ... programs, the music, the text messages, the sound of a loved one's voice. We also enrich people's lives in the enjoyment they feel when using our products. Finally, we work to help people feel hopeful about our environment, feel charitable toward others, and feel the unity promoted through...

  • Page 71
    LG Twin Towers 20, Yeouido-dong, Yeongdeungpo-gu, Seoul 150-721, Korea T. 82-2-3777-1114 www.lge.com

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