Cheil Industries

June, 2012

CONTENTS

1. Company Overview
2. Earnings Release 1Q12

3. Appendix

This document is provided for the convenience of investors only, before the completion of an external audit. Some figures may be subject to change according to the audit outcomes.

As the forward-looking statements this release may contain are based on the companys

own business outlook, they may differ from the real result. Therefore, the responsibility for investment on this material is imputed only to investors.

The financial information in this document are consolidated earnings results based on K-IFRS.

Company Overview

Cheil Ind at a glance -I

History
Chemicals E M Fashion Others
(Wbn)

6,100
5,113
1,353 1,700

1954 ~ 1979 1980s

Cheil Woolen Fabrics Industries was founded as a parent company of Samsung Moved into the fashion industry, and became the first Korean company to produce ready-made clothes Diversified the business portfolio to include chemicals by developing synthetic resins as ABS and PS Entered the electronic materials business involving the production of semiconductor and display materials Continually growing through a diversified business portfolio encompassing chemicals, EM, and fashion; also building new businesses that will bolster our future competitiveness

1990s
1,700
1,413

1,661 433
33 691 716 1990 2000 2010 2012(E) 2,267 2,600

2000 ~ 2009

2010 ~

Cheil Ind at a glance -

Business Status
Manufacturing innovative casing materials for IT devices, home appliances, cars, etc.
- #1 global market share in resins for monitors, refrigerators - #1 domestic & #2 global market share in resins for mobile phones
Sales
OP 92 123 159 71 100

Sales (wtn) O P
(wbn)

3.7 240

4.3 264

5.1 330
2.3

5.6 287
2.4

6.1 340
2.6

1.8

1.8

Providing display, semiconductor, PV-related materials for global IT players

- CAGR 39% in 2006 ~ 2011 - #2 biggest material player in Korean market

1.2 0.8

1.4

1.5

1.7

44 95 95 98 105

one-off income

- Aggressively exploring new business opportunity such as OLED and rechargeable battery

140

1.4

1.5

Operating more than 20 brands covering casual, mens, and womens wear
- #1 player in domestic fashion market - Galaxy and Bean Pole have consistently ranked at the top of domestic brand preference

1.0
50

1.1
52 74 68

1.7
100

Cheil Ind at a glance -

Capex
Chemicals E M Fashion Others
(Wbn)

Workforce
R&D (Chemicals) R&D (E M)

(individuals)

420
49

4,770
3,896
332 203

4,869
353 196

317
120

242

3,257
307 158

81 140

349 196

171
125
88 37 43 2008 41 21 52 2009

83

171
2,776 3,307

110

4,190

4,257

93
108 51 2010 2011 2012(E) 110

2009

2010

2011

2012(E)
6

Business Opportunities
Materials (Chemicals & EM)
Materials market will continue expanding driven by newly emerging demand

Fashion
The growth momentum will be placed on global expansion
(Wtn)

End market

/ 2011 2020(E) `11 1,900 2,500 IT devices Automobiles

(numbers)

`20 (Wtn)

190 (CAGR 7%) 47 (22%) 34 (4%)

- As China is growing rapidly ranked #2 in global market,

80 mil

110 mil

we will further strengthen our market

position in China, where brands such as Bean Pole, Galaxy and Rapido are already established.
(wtn)

99
/ 99
8 Green/Energy Electronic 22 Materials Chemicals 69 2011

Materials market

8 22 Reducing Weight of Cars

Growing demand for IT devices Rapid growth of OLED display and rechargeable batteries

2011 1,750 380 170 30

2020 2,350 420 385 45

CAGR 3.5% 1.1% 9.9% 4.6%

Global

69

109 (5%)

US China Korea

2011

2020(E)
7

Major Products -
Chemicals
Styrene Products ABS General ABS, Extrusion ABS, Metal Plating ABS, etc. PS Flame Retardant HIPS Specialties Transparent ABS
- Advanced high transparent ABS with excellent colors

Engineering Plastics PC
PC, Flame Retardant PC, PC/ABS, etc.

EP
PBT/ABS, PA/GF, MPPE, etc.

Automobile Applications Providing high-tech materials and solution in partnership with global automobile makers such as Audi, BMW, Ford, etc.

Non-painting resin
- Gives off the appearance of painted surface while solving flow marks and weld line issues

Interior, Exterior, Lighting, Structure

Eco-friendly materials
- Resins made with recycled and used PET bottles
8

Major Products -
Electronic Materials
Display Film materials
Polarizer - Polarizes the emissions generated by LCD light sources MAS (Prism sheet) - Makes LCD brighter and richer

Semiconductor Process materials

SOH (Spin-on Hardmask) - Supports process migration by reducing the amount of Photo Resist used in lithography process SOD (Spin-on Dielectric) - Insulator for interconnect capacitance reduction between transistors of semiconductor device

Process materials
PDP Paste - A high-viscosity liquid-conductive or insulating substance, used to form insulating bodies and components of electrodes

Packaging materials
EMC (Epoxy Molding Compound) - A protector that effectively protects semiconductor circuits from external damage and contamination DAF (Die Attach Film) - An adhesive for mounting and stacking chips on wafers EMC

Color Resist - A photosensitive color dispersing agent used in the manufacture of color filters, a core component in LCDs

DAF

Major Products -
Fashion
Casual Bean pole
A family brand that includes Bean Pole Mens, Ladies, Golf, and etc. It has the strongest brand power in Korea as a single casual brand.

Womens Wear KUHO

Launched in 2003, a high-end brand adored by female customers.

Theory Tory Burch

Issey Miyake Le Beige

Fubu

Rapido

(only in China)

Mens Wear Galaxy

Galaxy has been ranked the first in surveys of brand preference in the past several years, and is becoming a world class brand by breaking into the Chinese market.

Fast Fashion (SPA)

Specialty store retailer of Private label Apparel

8 seconds
A Korean fast fashion brand launched in February 2012, offering a wide range of trendy items at affordable prices.

Rogatis

MVIO

Pal Zileri
10

Earnings Release 1Q12

1Q12 Business Results

Sales
Chemicals E M Fashion Others
(Wbn)

12

Profitability

(Wbn)

1,384

1,429
429

1,400

4Q 11 OP

QoQ

1Q 12

YoY

1Q 11

454

377

49

94%

95

7%

103

362

376

384

RP
613 621

31

171%

84

24%

110

551

NP

40

59%

64

30%

92

4Q11

1Q12

1Q11
12

Financial Status
Financial Position
2012.3 Assets Quick Cash Receivables Inventories Non-current Liabilities Total Borrowings (Net Borrowings) Shareholders Equity 2011.12
(Wbn)

Financial Ratios
2010.12 2011.12
53

(%)

Change

2012.3
57

5,367
1,619 60 695 760 3,748

4,931
1,435 96 485 743 3,496

436
184 36 210 17 252

Total Liabilities / Equity

46

Shareholder
Equity Ratio Net Debt to Equity Total Borrowings / Total Assets

69

65

64

24 11

27

1,957
1,017 (931)

1,714
853 (763)

243
164 (168)

17
8

19

3,410

3,217

193

13

Chemicals
Business Results
613
551 621
(Wbn)

Business Review & Outlook

Raw materials Price Trend
($/bbl, ton) 1Q11 4Q11 1Q12

Oil Price S A B M N D

94 1,400 2,503 2,404 2,268

94 1,316 1,779 2,169 1,863

103 1,436 2,125 3,426 2,096

ABS(spot)

Despite high raw materials price and low seasonality, QoQ sales and margin improved as

IT demand gradually recovered

4Q11 OP % 10 1.8 1Q12 26 4.2 1Q11 36 5.7

Overall demand to grow as set product will increase for the demand related with Chinese Labor day and Olympics
14

E M
Business Results
Polarizers Display Semiconductors
(Wbn)

Business Review & Outlook

Semiconductors - Sales and margin increased as geometry migration is expanding and new products sales are growing Display - QoQ and YoY margin improved by restructuring low margin products

362
87

376
96

384
75

157
147 155

128

125

152

Polarizer - Weak Japanese yen had cost reduction effect, However, margin loss continued due to low market demand Margin improvement to continue amid
internal cost reduction and sales increase along with the IT demand upswing
15

4Q11 OP % 18 4.9

1Q12 44 11.6

1Q11 36 9.5

Fashion
Business Results
Casual Men Women etc. Others
(Wbn)

Business Review & Outlook

YoY sales increased 14% as both
main and new brands sales expanded
- Main brand sales remained firm, Bean pole(12%), Rogatis(14% ) etc. - Women sales continuously increased, Tory Burch(117%), Theory(9%) etc.

454
35 105

429
15 99

377
12 77

155

129

116

YoY margin slightly decreased due to launching cost of new brands as

SPA, 8 seconds(Feb) and

159 187 173

Outdoor, Bean pole outdoor(Mar) etc. The outset sales of S/S expected to be

4Q11 OP % 23 5.1

1Q12 26 6.1

1Q11 29 7.6

depressed due to unfavorable weather, However, sales will improve from strong seasonality and expansion of new launched brands
16

Non-operating Gains/Losses
Analysis
95
Finance Losses Equity Method Losses
(Wbn)

Equity Method Gains(Losses)

4Q 11
Ace Digitech

(Wbn)

9 148

84

QoQ -

1Q 12 -

YoY
+ 5.1

1Q 11 -5.1

Samsung Petro-chem

-1.1

- 2.3

-3.4

- 22.4

19.0

Others

0.2

+ 0.1

0.3

+ 0.2

0.1

Total O P R P

-0.9

- 2.2

-3.1

- 17.1

14.0

17

Appendix

Quarterly Business Results

(Wbn)

(Consolidated/K-IFRS)
11.1Q 11.2Q 11.3Q 11.4Q
FY2011

10.1Q

10.2Q

10.3Q

10.4Q

FY2010

12.1Q

1,170 516 321 317 16

1,327 591 368 343 25

1,258 570 371 289 28

1,358 591 352 404 11

5,113 2,267 1,413 1,353 80

1,399 621 384 376 18

1,481 650 406 397 28

1,317 593 396 294 34

1,384 551 361 454 18

5,581 2,415 1,547 1,521 98

1,429 613 376 429 11

Chemicals E M

F a s h i o n O t h e r s Operating Profit Chemicals E M

91
25 39 28 -1 -7 8 91 79

103
69 23 11 1 -4 8 108 88

87
39 40 8 1 -15 10 82 66

49
25 -3 9 17 15 64 44

330
159 98 55 18 -25 40 345 276

103
36 36 29 2 -7 14 110 92

63
23 27 11 2 -7 56 55

72
2 68 5 -3 7 79 72

49
10 18 23 -2 -17 -1 31 40

287
71 149 68 -1 -24 13 276 259

95
26 43 26 -8 -3 84 64
19

F a s h i o n O t h e r s
F i n a n c e incomes/expenses

Equtiy Method Gains/losses

Recurring Profit N e t P r o f i t

This document is provided for the convenience of investors only, before the completion of an external audit. Some figures may be subject to change according to the audit outcomes.

Quarterly Business Results

(Wbn)

(Non-consolidated/K-IFRS)

10.1Q

10.2Q

10.3Q

10.4Q

FY2010

11.1Q

11.2Q

11.3Q

11.4Q

FY2011

12.1Q

1,161 519 321 308 14 98 30 37

1,305 592 367 322 24 102 69 23

1,232 568 371 270 23 90 39 39

1,306 551 351 385 19 23 28 2

5,004 2,231 1,410 1,284 80 313 167 101

1,352 598 383 353 18 104 36 33

1,451 652 405 367 27 65 23 28

1,311 607 393 292 19 64 4 51

1,303 524 362 406 11 49 9 12

5,417 2,381 1,543 1,418 75 282 72 124

1,372 595 375 391 11 101 26 44

Chemicals
E M

F a s h i o n O t h e r s
Operating Profit

Chemicals
E M

F a s h i o n O t h e r s
F i n a n c e incomes/expenses

30
-7 91 78

11
-1 -3 99 79

10
2 -14 76 67

12
-18 -1 22 16

63
-18 -25 288 240

33
2 -6 98 81

13
1 -6 59 55

8
1 7 71 63

28
-18 31 42

82
4 -23 259 241

31
-8 94 74

Recurring Profit Net Profit

This document is provided for the convenience of investors only, before the completion of an external audit. Some figures may be subject to change according to the audit outcomes.

20