November 2010

3Q 2010 Business Results 3Q 2010 Business Results & Outlook& Outlook

The business results for the third quarter of 2010 currently under audit review are presented here for investors’

convenience. Hence,

please be advised that some of their contents may be altered in the course of audit.

Forecasts and projections contained in this material are based on current business environments and management strategies, and they may differ from the actual results upon changes and unaccounted variables.

From 2010, the business results including all historical data are subject to the IFRS(International Financial Reporting Standards).

Table of Contents

LG Chem

at a Glance

Strategic Performance Review

Differentiated Competitiveness

3Q 2010 Business Results

Divisional Results & Outlook

Appendix

1

2

3

4

7

9

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LG Chem

at a Glance

1

※ Sales and EBIT of 2009 and 2010 are subject to IFRS. Those prior to 2009 are subject to K-GAAP.

•

LG Chem was started in 1947 and is Korea’s first and largest chemical company with an established track of over 60 years and annual revenues of KRW 15.5 trillion in 2009.

•

LG Chem boasts multiple production facilities and an extensive distribution network that spans 15 countries worldwide in Asia, Europe, North and South America.

•

LG Chem currently holds the largest vertically integrated petrochemical production platform in Korea.

•

LG Chem

was reborn as a specialized and diversified chemical company that focuses on petrochemical goods, rechargeable batteries including HEV/EV purpose, and electronic materials.

•

LG Chem

recorded the highest profits in 2009 and ’10.3Q(YTD) results already exceeded that of 2009.

Impressive Revenue Scale…

…with Strong EBIT & EBIT Margins

14,47315,52114,555

11,41410,140

0

5,000

10,000

15,000

20,000

2006 2007 2008 2009

(KRW bn)

2010.3QAccumulated

2010.3QAccumulated

539

1,0661,321

2,098 2,259

5.3%

9.3% 9.1%

13.5%15.6%

0

500

1,000

1,500

2,000

2,500

3,000

2006 2007 2008 2009

(KRW bn)

CAGR: 15.3%

/ 132

Robust Future

Growth Drivers

Profit Growth

in all

Businesses

Global #1 in Core

Businesses

◆

Achieved continuous profit/revenue

growth in all businesses-

Operating Income Growth: 0.5 trillion KRW (’06) → 2.1 trillion KRW (’09)-

I&E Materials / Mobile Energy Revenue Growth: 1.6 trillion KRW (’06) → 4.2 trillion KRW (’09)

◆

Emerging as a Leading player globally-

Upward trend in Ranking amongst Global Chemical Companies by Revenue (Diversified Chemicals): # 11 in ’06 →# 6 in ’09

-

Market Capitalization: 3 trillion KRW (Dec. ’06) → 24 trillion KRW (Oct. ’10)

◆

Global #1 in Polarizers with 30% of market share in 3Q 2010

◆

Market share in small batteries increased from 7% in 2008 to 18%

in 2010

◆

Improved operating margins in petrochemical businesses: 6%(’06) →14%(’09) →16%(’10.3Q YTD)

◆

Stronger global customer base for medium and large batteries-

Automotive batteries: Gained foothold in US/ Europe/ China -

Core customer base: GM, Ford, Eaton, Renault, Volvo, Changan

Motors (China), Hyundai Motors, Kia Motors, CT&T

-

Energy

Storage System: Contract with SCE (Southern California Edison)

◆

Preparing for the future by acquiring battery R&D personnel-

Battery R&D Headcount: 460 people (’06) → 1,000 people (’10)

◆

In the process of building a manufacturing platform for LCD Glass: mass production from 1Q 2012

Strategic Performance Review

/ 13

Distinctive Vertical Integration

3

Differentiated Competitiveness

Naphtha

NCC

Upstream

Downstream

Annual Usage: appx. 5 mil. MT

Ethylene (1,760 KMT/yr)

Ethylene, PropyleneButadiene, BTX

HDPE, LDPE, PP, PS, PVC, ABS, BPA, Rubber, Alcohol, Acrylate, Plasticizer, SAP

LG Chem’s

comprehensive downstream product lines of PO, ABS,

PVC and other various products have complementary business

cycles, enabling the Company to generate stable revenue

Co-existence of upstream and downstream products

Comprehensive downstream product lines

Vertical Integration Structure

Stabilized revenue generating capability under any market conditions

•

One of few petrochemical companies around the globe with a vertical integration structure, featuring both upstream and downstream production capability

•

This structural characteristic delivers stable business performance against industry cyclicality

OCU (140)

HDPE (380)

40

380

LDPE (160)

EDC (280)

VCM (720)

SM (500)

260

160

160

Ethylene (1,000)

Yeosu Plant

190

160

160

195LG Bohai

EDC(330)/VCM(350)

55

LDPE (120)

LLDPE (80)

HDPE (160)

EG (150)

SM (180)

VCM (190)

Daesan Plant

Ethylene (760)

* OCU : Olefin Conversion Unit

*

(KMT/yr) (KMT/yr)

As of October 2010

/ 13

'09.1Q 2Q 3Q 4Q '10.1Q 2Q 3Q

Sales Operating Profit

4

Quarterly Business Results

697629

3.35tn

4.29tn

3.83tn

485

4.05tn

652

4.42tn

(Unit: KRW bn)

IFRS basis

5.03tn

828

5.02tn

779

287

/ 135

3Q 2010 Business Results Income Statements

(Unit: KRW bn)

Classification ’09.3Q ’10.2Q ’10.3Q YoY QoQ

Sales 4,295 5,028 5,021 16.9% -0.1%

Operating Profit 697 828 77911.8% -5.9%

(%) (16.2) (16.5) (15.5)

Pre-tax Income 704 822 79112.4% -3.8%

(%) (16.4) (16.3) (15.7)

Net Income 542 646 599 10.5% -7.2%

/ 13

Classification ’09 ’10.3Q Change

Total Liabilities/ Equity (%)

77.7 63.0 -14.7%p

Debt / Equity (%) 40.7 28.9 -11.8%p

Interest Coverage Ratio 20.2 48.7 28.5

ROE (%) 27.3 35.3 8.0%p

ROA (%) 14.8 20.8 6.0%p

6

Financial Position3Q 2010 Business Results

Financial Position Financial Ratios

(Unit: KRW bn)

Classification ’09 ’10.3Q Change

Asset 10,531 12,054 14.5%

Cash andequivalent

1,107 1,251 13.1%

Liabilities 4,604 4,657 1.2%

Borrowings 2,411 2,140 -11.2%

Shareholder’sEquity

5,927 7,397 24.8%

EBITDA 2,611 2,744

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Divisional Results & Outlook Petrochemicals

Business results Analysis

(Unit: KRW bn)

• Analysis

• Outlook

Operating Profit 491 624 621OP(%) 16.0 16.6 16.5

17%16%14%

13%12%11%

30%31%31%

12%12%

14%

28%29%

30%

'09.3Q '10.2Q '10.3Q

NCC/PO

PVC

ABS/EP

Acrylate /Plasticizer

Rubber /SpecialtyPolymers

3,062

3,7683,765 ▣Maintained high profitability thanks to differentiatedproduct mix despite price adjustments of some products

-NCC/PO : Despite the market fluctuations, stablemargin maintained attributable to increased sales of premium products

-PVC : Solid performance backed by favorable market conditions

-ABS/EP : Margin improved with seasonal demands and stable prices of raw material

-Acrylate /

: Maintained high profitability by continuedPlasticizer supply tightness and robust demands

-Rubber / : Continued solid results based on the tight supplySpecialty

Polymer

▣ Strong product prices thanks to favorable supply and demand balance

▣ Sustainable profits through predominant competitive products

/ 138

I & E MaterialsDivisional Results & Outlook

Business results Analysis

(Unit: KRW bn)

• Analysis

• Outlook

Operating Profit 212 206 159OP(%) 17.1 15.8 12.3

34% 32% 31%

66% 68% 69%

'09.3Q '10.2Q '10.3Q

Optical /ElectronicsMaterials

Battery

1,2941,234 1,300

▣ A slight drop in profits due to weak demand in IT industry-

Optical :

Earnings went down due to decreased Materials utilization rate of customers and increased

raw material cost stemming from strong JPY-

Battery :

Maintained stable sales based on successful partnership with key customers despite weakdemand

▣ Acquired new big customers for Advanced Battery-

Selected as a supplier of EV battery for Ford and Renault, and ESS battery for SCE

▣ Expect stable business performance based on our globalcompetitiveness-

Optical : Secure global No.1 position and enhanceMaterials

differentiated competitiveness-

Battery :

Achieve continuous growth through the internal M/S increase in key customers and new sales for tablet PC, etc.

-

Advanced

: Sales increase due to a launch of GM Volt andBattery Sonata HEV. Continuous efforts into securing

new customers

*ESS (Energy Storage System), SCE (Southern California Edison)

* *

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Appendix

9

Sales & Operating Profit

(Unit: KRW bn)

1Q 2Q 3Q 4Q Total 1Q 2Q 3Q 4Q Total3,350 3,830 4,295 4,046 15,521 4,423 5,028 5,021 14,473

485 629 697 287 2,098 652 828 779 2,2592,582 2,847 3,062 2,959 11,450 3,309 3,765 3,768 10,842

NCC/PO 751 836 911 897 3,395 948 1,082 1,068 3,098PVC 439 416 429 408 1,693 453 455 455 1,363

ABS/EP 724 886 948 900 3,458 998 1,173 1,142 3,312Acrylate/Plasticizer 310 324 351 330 1,315 401 451 478 1,330Synthetic Rubber/

Specialty ResinOperating Profit 380 511 491 226 1,608 490 624 621 1,735

786 1,015 1,234 1,157 4,191 1,159 1,300 1,294 3,753Optical/Electronic 556 724 862 774 2,916 843 917 913 2,672

Battery 248 317 445 375 1,385 353 429 417 1,199Operating Profit 110 121 212 65 507 168 206 159 533

SalesOperating Profit Petrochemicals

I & E Materials

358

LGC2009 2010

1,7391,588 509 605 626385 423 423

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Appendix

Borrowings Cash Flow

10

Classification ’09 ’10.3Q

Total(Overseas Subsidiaries)

2,411(602)100%

2,140(796)100%

KRW Currency 26611%

1638%

C POthers

24917

15013

Foreign Currency(Overseas Subsidiaries)

2,145(602)89%

1,977(796)92%

Loan(Overseas Subsidiaries)

1,011(602)

911(796)

Negotiation Borrowing 949 931FRN 185 136

Short-term(Overseas Subsidiaries)

1,833(429)76%

1,530(539)71%

Long-term(Overseas Subsidiaries)

578(174)24%

610(257)29%

Classification ’09 ’10.3Q

Beginning 514 1,107

Operating/Investing 1,515 696

Net Income 1,539 1,763

Depreciation 533 473

Working Capital 445 -647

CAPEX -1,063 -1,026

Others 61 132

Financing -922 -551

Borrowings -713 -271

Dividends -209 -280

Net Cash Flow 1,107 1,251

☞ The % is calculated to total borrowings.

Borrowings & Cash Flow

(Unit: KRW bn)(Unit: KRW bn)

/ 1311

Appendix CAPEX Plan & Results

(Unit: KRW bn)

Classification ’08 ’09 ’10 Plan ’10.3QAccumulated

Petrochemicals

New / Expansion 223 158 289 155

Maintenance 103 132 174 122

Total 326 290 463 277

I & EMaterials

New / Expansion 270 472 670 559

Maintenance 58 81 125 88

Total 328 553 795 647

Common Expenses

New / Expansion 1 22 - -

Maintenance 71 198 175 102

Total 72 221 175 102

Total

New / Expansion 494 652 959 714

Maintenance 233 411 474 312

Total 727 1,063 1,434 1,026

/ 1312

LG Chem

Global Networks

26 subsidiaries and representative offices around the world

Marketing Subsidiaries (5) : China (1), USA (1), Brazil (1), Europe (1), India (1)Manufacturing Subsidiaries (13) : China (8), Taiwan (1), Vietnam

(1), India (1), USA (1), Poland (1)

Representative Offices (7) : Hochiminh, Bangkok, Singapore, Jakarta, Tokyo, Moscow, Istanbul

LG Chem China Investment (LGCCI)

• LGCCI (Holding Company in China)• Petrochemicals Plant

-

LG DAGU : PVC

- LG YX : ABS, SBL

-

LGCC GZ : ABS&EP Comp’d

-

LGCC TJ : EP Comp’d

- LG BOHAI : EDC, VCM

-

LG BOTIAN : SBS• IT&E Materials, Battery Plant

-

LGCE NJ : Polarizer, Battery

-

LGCE BJ : Polarizer

-

LGCE TP : Polarizer (Taiwan)

• Head Office : Seoul• Research Center : Daejeon• Petrochemicals Plant

-

Yeosu : NCC Complex -

Daesan : NCC Complex

-

Iksan

: ABS

-

Naju

: Acrylate, Plasticizer

-

Ulsan : Plasticizer

-

Gimcheon

: SAP• IT&E Materials, Battery Plant

-

Ochang

: Battery, IT&E

-

Paju

: LCD Glass

LG Chem Head Office, Research Park (1), Plant (8)

China

Poland

India

Vietnam

USA

Korea (Headquarters)

LGCE WR : Polarizer

LGPI : PS, EPS

LG VINA : DOP

Battery for PHEV / EV

Appendix

/ 13

Price TrendsAppendix

13

• The prices are average price of CFR FE Asia for general grade in each product group.

(Unit:U$/MT) (Unit:U$/MT)

PVCPVC ABS/EPABS/EP Acrylate/PlasticizerAcrylate/

PlasticizerRubber/

Specialty PolymersRubber/

Specialty PolymersNCC/PONCC/PO

676636

761

687663707

752733685

729709694

1,0921,079

951874

916

1,1781,238

1,157

1,280

1,328

1,149

1,018

1,2181,165

1,126

1,0361,115

1,2551,2691,2781,314

1,3201,256

1,247

1,458

1,295

1,519

1,4091,454

1,540

1,328

1,557

1,4081,364

1,480

1,255

Nov'09

Dec Jan'10

Feb Mar Apr May Jun Jul Aug Sep Oct

Naphtha Ethylene HDPE(Film) LDPE

878994972955920

1,0061,0301,0431,0241,004927

865

2,0141,9501,9391,803

1,4651,544

1,769 1,827 1,8711,931 1,943

1,859

1,6731,778

1,6311,5551,611

1,8401,7851,776

1,6541,505

1,3691,238

2,8712,709

2,535

1,9041,997

2,3612,490

2,596 2,652

2,499

2,7832,748

Nov'09

Dec Jan'10

Feb Mar Apr May Jun Jul Aug Sep Oct

PVC ABS Oxo-Alcohol BR