Woongjin CowayWoongjin Coway

June 2006

0

1

This presentation contains historical information of the Companywhich should not be regarded as an indication of future performance or results. This presentation also contains forward-looking statements that are, by their nature, subject to significant risks and uncertainties. These forward-looking statements reflect our current views with respect to future events and are not a guarantee of future performance or results. Actual results may differ materially from information contained in the forward-looking statements as a result of a number of factors beyond our control.

DisclaimerDisclaimer

Today’s agendaToday’s agenda

Company overviewCompany overviewCompany overview

Investment highlightsInvestment highlightsInvestment highlights

Financial updateFinancial updateFinancial update

3

2004

1994

2005

1990

1998

2001

First air cleaner

production and sales

First air cleaner

production and sales

2000

Listed on KRX

Listed on KRX

Started bidetrental serviceStarted bidetrental service

Launched system

kitchen brand

Launched system

kitchen brand

Founded

Woongjin Coway is an integrated product and rental service provider focusing on high-end health and environmental products

Entered water purifier

business

Entered water purifier

business

Launched water purifier rental service

Launched water purifier rental service

Started air cleaner

rental service

Started air cleaner

rental service

Started food waste processor

rental service

Started food waste processor

rental service

Our history Merged with WoongjinCoway Development

Merged with WoongjinCoway Development

1989

4

Source: Public filings as of June 23, 2006 Note: Foreign ownership of Woongjin Coway is 34.6% as of June 30, 2006•Based on total shares outstanding of 74,263,122 •Subsidiaries sources as of June 30, 2006

Current ownership structure and subsidiariesMajor shareholders and related partiesMajor shareholders and related parties

Seok KeumYoon27%

Others62%

Other relatedparties

1%

Mgmt.2%

FamilyMembers

3%

WoongjinThinkBig

5%

SubsidiariesSubsidiaries

Current ownership* Current ownership*

Stake %

Seok Keum Yoon 27.2%

Woongjin ThinkBig 5.2%

Direct Family Members 2.6%

Management 1.9%

Other related parties 1.3%

Stake % Description

Woongjin Coway(Thailand) Co., Ltd.

100% Thailand sales subsidiary

Woongjin Japan 50.0% Japan sales subsidiary

Woongjin Ho-wi Home Appliance Co., Ltd.

91.9% Chinese subsidiary

Woongjin Coway (M) SDN. BHD

100% Malaysia subsidiary

Today’s agendaToday’s agenda

Company overviewCompany overviewCompany overview

Investment highlightsInvestment highlightsInvestment highlights

Financial updateFinancial updateFinancial update

6

Key investment highlights

Robust demand for well-being living productsRobust demand for well-being living products

Extensive CODY network covering broad customer baseExtensive CODY network covering broad customer base

Dominant leadership with strong brand power and focus on R&DDominant leadership with strong brand power and focus on R&D

Focus on enhancing shareholder valueFocus on enhancing shareholder value

Established rental business modelEstablished rental business model

7

Demand of well-being living products is robust with significant room for growth

Woongjin Coway’s products Woongjin Coway’s products

Japan

Source: National Statistics Office, Korean Water Purifier Producers Commission, Japanese industry press

Product Market Share Korean Penetration

ExpectedSaturation Rate

Growth Rate(Q1’05->Q1’06)

Water purifier

Bidet

Air purifier

46%

42%

47%

25%

9.5%

10%

55%~60% 18.0%

17.9%

29.2%

45%~50%

50%~60%

8

Rental program Membership program3

Strong revenue stream with the solid income structure

Membership fees

Outright sale with lump sum payment

2

3

Member-ship serviceProduct

= +

Note: 5.8% of 2005 and 5.1% of Q1’06 revenues derived from other sources, including small electrical home appliances prior to discontinuation(only for 2005) following the merger, system kitchen, and overseas sales

: % of total revenues

1 232

Rental programmonthly rental charge≈ ( + ) / 60

Lump sum payments

1

82.4%83.7%

‘05 Q1’06

4.5%3.5% 7.2%

7.7%

‘05 Q1’06‘05 Q1’06

Monthly service fee :Approx. W21,900

ASP for water purifier :Approx. W1,590,000

Monthly membership fee :Approx. W13,000

9

Illustrative cash flow structure of rental business

Source: Company¹ Rental fee with VAT excluded

Hypothetical cash flow structure of rental business (standard water purifier model : CP-01)Hypothetical cash flow structure of rental business (standard water purifier model : CP-01)

-200,000

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

at sale yr1 yr2 yr3 yr4 yr5

Cash flow

-100,000

-80,000

-60,000

-40,000

-20,000

0

20,000

40,000

mth1 mth2 mth3 mth4 mth5 mth6

Cash flow in accounting perspective

[unit : KRW]

10

1,487

3,085

4,828

7,7458,561

9,434

11,168

'00 '01 '02 '03 '04 '05 May'06

Unparalleled sales network – “CODY”

23119

294457

575705 749

'00 '01 '02 '03 '04 '05 Q1'06

Number of Cody agents

Net increase in Bidet rental subscribers

Distribution platform supported by an extended network of CODYs

●Unique network marketing with a directand personalized sales agent program“CODY” (COway laDY)

●Leverage allowing the companypenetrating into new businesses

●Gaining instant market leadership throughconstant on-site customer coverage

Woongjin Coway’s unique CODY agent system enables the company to maintain its dominant leadership in the rental service markets in Korea

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Broad customer base

With a more diversified product portfolio targeting the same customers, there are plenty of cross selling opportunities to fuel our future growth as 80% of our

customers use only one rental product

Subscriber CAGR: 19.2% (’03–’06)

Subscribers(Rental + Membership) account by products (thousands unit)Subscribers(Rental + Membership) account by products (thousands unit)

1.09%1.00%

[Cancellation trend]

Q4 ‘05 Q1 ‘06Q1 ‘05

1.10%2,664

3,2463,775 3,899

2003 2004 2005 Q1 2006

Water purifier Air cleaner Water softener Bidet

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Woongjin Coway enjoys a dominant market position due to unparalleled brand recognition

Jan Feb Mar Apr Jun Aug OctMay Jul Sep DecNov

Jan 2005Award:Grand prize, 2005 First Brand Award by Korea Customers’Forum

Jan 2005Award:Grand prize, 2005 First Brand Award by Korea Customers’Forum

Mar 2005Award:1st prize, Korea Brand Power Index (K-BPI)

Mar 2005Award:1st prize, Korea Brand Power Index (K-BPI)

Apr 2005Award:1st prize, 2005 Global Brand Award by Japan Management Association

Apr 2005Award:1st prize, 2005 Global Brand Award by Japan Management Association

Apr 2005Award:Korea Marketing Award by Korea Management Association Consulting

Apr 2005Award:Korea Marketing Award by Korea Management Association Consulting

Jun 2005Award:Korea Best Brand Award by HankyungEconomic Daily

Jun 2005Award:Korea Best Brand Award by HankyungEconomic Daily

Sep 2005Award:1st prize, Korean Customer Satisfaction Index by Korea Management Association Consulting

Sep 2005Award:1st prize, Korean Customer Satisfaction Index by Korea Management Association Consulting

Oct 2005Award:1st prize, Customer Well-being Brand Award by Korea Standard Association

Oct 2005Award:1st prize, Customer Well-being Brand Award by Korea Standard Association

Nov2005Award:Gold prize, Korea Customer Satisfaction Award

Nov2005Award:Gold prize, Korea Customer Satisfaction Award

Source: Gallup research as of Dec. 2005

No.1 brand recognition in KoreaNo.1 brand recognition in Korea

Top position as a health and environment companyTop position as a health and environment company

Product Top of mind brand

Water purifier 94.3%

Air purifier 62.7%

Bidet 90.5%

Company P WJ Coway Company S Company L Company C

[unit : %]

13.7

29.9

19.2

36.242.4

13

173218

274

2003 2004 2005

Focus on enhancing shareholder value

Dividend payout policy

Woongjin Coway’s DPS1 (KRW)

Strong cashflowgeneration

Woongjin Coway’s EBITDA2 (KRWbn)

Share buyback & cancellation

Focus on enhancing

shareholder value

Share buybacks and cancellations

2003: 1 million share buyback2004: 5 million share buyback2005: 3 million shares cancelled

Increase companytransparency

Merger with Woongjin CowayDevelopment eliminates complex related-party transactions

1 Figures of Woongjin Coway Development 2 2003 and 2004 figures of pre-merger Woongjin Coway Development

150250

340

2003 2004 2005

Today’s agendaToday’s agenda

Company overviewCompany overviewCompany overview

Investment highlightsInvestment highlightsInvestment highlights

Financial updateFinancial updateFinancial update

15

Sales & profit trend

The combined company will benefit from the stellar financial performance of WoongjinCoway Development with higher top line and bottom line growth

Sales trend (KRW billions) Sales trend (KRW billions) EBITDA (KRW billions)EBITDA (KRW billions)

EBIT (KRW billions)EBIT (KRW billions) EPS (KRW)EPS (KRW)

Woongjin Coway (before merger) Woongjin Coway Development Woongjin Coway (post-merger)

Woongjin Coway (before merger) Woongjin Coway Development Woongjin Coway (post-merger)

309828

1,2001,008

‘04 ‘05 06EQ1 ‘06

267

635 9511,439 1,341

‘04 ‘05 ‘06E

49

218 274350

67

‘04 ‘05 06EQ1 ‘06

33

113 97154

20

‘04 ‘05 06EQ1 ‘06

16

Other financial information Total debt and cash (KRW billions) Total debt and cash (KRW billions)

Rental asset and capital expenditure (KRW billions)Rental asset and capital expenditure (KRW billions)

Total debt Cash

Rental Asset Capital expenditure

Net debt

2004 2005

11669 191

9768

2004 2005 2006E

183176196

2311 23

Q1 2006

139171

31

17

Appendix

Income StatementIncome StatementIncome Statement

Balance SheetBalance SheetBalance Sheet

18

Income statement

2003 2004 2005 Sales 827.1 827.8 1,008.1 Growth 0.1% 21.8% COGS 265.8 303.8 363.7

% of sales 32.1% 36.7% 36.1% Gross profit 561.3 523.9 644.4 Gross profit margin 67.9% 63.3% 63.9% Selling and administrative expenses 474.7 412.5 547.5

Operating income 86.7 111.5 96.8 Operating income margin 10.5% 13.5% 9.6% Non-operating income (expenses) (4.7) (10.9) (10.9)

Ordinary income 82.0 100.6 86.0 Ordinary income margin 9.9% 12.2% 8.5% Income tax 24.4 29.6 25.1

Net income 57.6 71.0 60.9 Net income margin 7.0% 8.6% 6.0%

(KRW billions)(KRW billions)

Note: 2003 and 2004 figures are for Woongjin Coway Development

19

Balance sheet

2003 2004 2005 Cash 1.7 0.9 18.6 Short-term financial instruments, investment securities and loans

0.8 0.2 0.2

Trade, accounting and other receivables 91.6 31.6 63.3 Inventories 32.3 37.8 42.2 Other current assets 43.1 92.5 148.9 Total current assets 169.5 162.9 273.2 PPE, net 303.9 337.4 369.8 Intangibles, net 2.4 0.6 23.7 Other non-current assets 67.9 25.8 48.5 Total assets 543.7 526.8 715.2 Trade payables 77.1 76.0 32.6 ST borrowings 83.8 0.0 69.8 Accounts payable-other 73.7 61.5 75.7 Other current liabilities 74.7 112.3 176.1 Total current liabilities 309.2 249.8 354.2 Debentures 51.5 36.0 0.0 Other non-current liabilities 40.0 36.1 19.0 Total liabilities 400.8 321.9 373.2 Total shareholders' equity 142.8 204.9 342.0 Total liabilities and shareholders' equity 543.7 526.8 715.2

Note: 2003 and 2004 figures are for Woongjin Coway Development

(KRW billions)(KRW billions)