the Bestthe Best

Time Time

2006 MODETOUR NETWORK Investor Relations

2

▶MARKET ENVIRONMENT▶MARKET ENVIRONMENT

KEY STRATEGYKEY STRATEGY

APPENDIXAPPENDIX

MODETOUR TODAYMODETOUR TODAY

3

MARKET ENVIRONMENT

Stable Growth in Overseas Travel Industry

• faster increase in overseas travelers than economic growth and population increase

25.43%6,925 13.86%11,328 0.42%48,497 2006(e)

17.97%5,52114.19%10,0770.42%48,2942005

36.94%4,68024.55%8,8250.44%48,0822004

-0.70%3,417-0.53%7,0850.49%47,8492003

30.02%3,44217.08%7,1230.55%47,6152002

22.16%2,64710.46%6,0840.73%47,3542001

56.20%2,16719.90%5,5080.84%47,0082000

GrowthPerson(1000)GrowthPerson(1000)GrowthPerson(1000)

Overseas travelersTotal DeparturesPopulationYear

5.5 6.1 7.1 7.18.8

10.1

2.2 2.63.4 3.4

4.75.5

00 01 02 03 04 05

Total DeparturesUnit: one million persons

Overseas travelers

Source: Korea National Tourism Organization, National Statistics Office

4

MARKET ENVIRONMENT

Social Changes Supporting Growth in Travel Industry

Flexible Holiday System

Aging Society

IncreasingDisposable Income

Five-day Work Week &Five-day School Week Increase in demand for near destination and

short term travel packagesIncrease in individual tour and family tour such as F.I.T and S.I.T

Increase in demand for overseas travel Stable demand in high value-added goods of consumer groups unaffected by business cycle

Stable consumer group of the package productsPotential purchasers of the high value-addedtravel goods Based on Baby Boom Generation

Strong Korean Won &Expanding seats supplied

Higher value than domestic tour

5

MARKET ENVIRONMENT

Stable Growth in Overseas Travel Industry

15.9

21.1

33.6

30.2

2016.3

15.114.512.4

0

5

10

15

20

25

30

35

40

1993 1994 1995 1996 1997 1999 2001 2004 2005

rate of travelingoversea

DETAILS

33.6% of all responders over the

age of 15 has an experience in

traveling abroad in 2005.

Having overseas travel

experience once: 14.5% is the

highest rate. (2004)

Korean people have an average

0.68 traveling experience in

2005.

9.5

12.312.1

14.5

3.13.5

4.5

6.5

1.71.81.52.7

1.62.6

3.2

6.5

0

2

4

6

8

10

12

14

16

once twice three times more than fourtimes

1997 1999 2001 2004 Source: Korea National Tourism Organization

6

18.8 20.5 19.5 20.2 20.5 20.8 20.3 22.2

18.4 18.4 19.9 18.9 19.2 18.1 19.3 15.8

27.6 23.3 19.3 20.4 17 14.8 15 11.8

35.2 37.7 41.3 40.5 43.2 46.3 45.4 50.2

0%

20%

40%

60%

80%

100%

2000 2001 2002 2003 2004 2005 20053Q

20063Q

H

J

L

MODE

MARKET ENVIRONMENT

Major Travel Companies’ Dominant Growth • expanded market share of major travel companies resulted from

strong competition

BIG4 Travel AgenciesOther Agencies(Unit: %)

Source: KATA

87 85 83 82 80 78 78 74

13 15 17 18 20 22 22 26

0

25

50

75

100

2000 2001 2002 2003 2004 2005 H12005

H12006

M/S of Bing 4 Travel Companies to Overseas Travelers

M/S Trend of Big 4 Travel Companies

7

4.53

5.71

6.927.43

8.62

10.38

2.413.11 3.28

3.69 4.14.66

5.86

3.11 3.283.69 4.1 4.05 4.29

3.54 3.53 3.4 3.3 3.54

12.69

3.74

0

2

4

6

8

10

12

14

2000 2001 2002 2003 2004 2005 2006.H1

H

MODE

L

J

Market Share to the Total Travelers

MARKET ENVIRONMENT

Market Share

Big 4 Companies’ Customers to Total Travelers

3538

41 4143

4650

1921 20 20 21 21 2218

20 19 19 1816

28

23

1715

12

20

0

10

20

30

40

50

60

2000 2001 2002 2003 2004 2005 2006. 3Q

H

MODE

L

J

Market Share in Big 4 Companies

Each Company’s Customers to Big 4 Companies’

8

MARKET ENVIRONMENT

Continuous Increase in SOHO Travel Agencies

Outbound Travel Agencies ↑Domestic Travel Agencies ↓

Retailers Having Relations with MODETOUR ↑

6,259

5,961

4,963

4,0343,362

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

2001 2002 2003 2004 2005

3,556

3,981

794

3,653

4,240

712

3,706

4,612

728

3,844

4,985

794

4,206

5,565

770

0

1,000

2,000

3,000

4,000

5,000

6,000

2002 2003 2004 2005 2006. 3Q

Inbound Outbound General

Source: KTA

retailers

9

MARKET ENVIRONMENTMARKET ENVIRONMENT

KEY STRATEGYKEY STRATEGY

APPENDIXAPPENDIX

▶MODETOUR TODAY▶MODETOUR TODAY

10

MODETOUR TODAY

Comprehensive Travel Company with 17-year Experience

• nationwide sales network

Travel package salesAirplane ticket sales

Major Businesses

Baeknak B/D #188-3 Euljiro-il-ga, Jung-gu, Seoul, KoreaAddress

www.modetour.comHomepage

February 14, 1989Established

on

Full time regular employees: 600(as of October 2006)

Number of Employees

KRW 4.2 billion

Woo, Chong-woong

Capital

CEO

Offices in Metropolitan Area

Gangnam, Gangseo, Northern Regional,Samsung, Bundaing,Shinchon, Jongno,Gwanghwamun and Yeongdeungpo

Regional Branches/Offices

Branches: Gwangju,Busan, Daejeon, Daegu, Chuncheon, Cheonan, Incheon, Cheongju, Jeonju,Changwon, Suwon, Bucheon, Ilsan, Anyang, Ulsan, SuncheonOffice: Incheon Airport

Central Region Team/ Seosomun Team

COMPANY PROFILE Nationwide Marketing Network

Busan

Incheon

Gwangju

Incheon Airport Office

Chuncheon

Anyang

Ilsan

Ulsan

Cheonan

Bucheon

ChangwonJeonju Daegu

Daejeon

Cheongju

Suwon

Suncheon

11

MODETOUR TODAY

Initial Founder of Whole Sale Travel Company in Korea Tourism Industry

• leading Korean culture of travel after the establishment in 1989 • a large number of retails with high loyalty

Source: National Statistics Office

0

2

4

6

8

10

Number of Overseas Tourists (1 million persons)

Established Mode Tour, Korean First Wholesale Travel Company

Overseas Tourists

TourismRevenues

Booming Tourism Industry

Secondary BoomingInternalResettlement

Expansion of BusinessNetwork NationwideIncluding Busan

Trademark Registration ofCompany Logo, MODETOUR

Cited as a “Company with Great Service Quality” by the Ministry of Industry,

Commerce, and Energy for 2 Years in a Row

Selected as the Best Travel Service Company in the Asia-

Pacific Region by PATA

Received Award As an Exemplary Company for

Paying Corporate Taxes

Listed on the KOSDAQ

80 82 84 86 88 90 92 94 96 98 00 02 04 05

Awarded Silver Tower

Development of MODETOUR and Korean Tourism Industry

12

Group of Professional Travel Agents

• more than 80% of full time employees holding a tourism license • average 4.04 years of full time employee’s continuous service• average 8.9 years of 47 team managers’ continuous service • average 20.6 years of the board of directors’ career in travel industry

69%

18% 14%

52%

22% 26%

Under 3 3-5 5 and more

Industry Avg.

MODETOUR

ProductPlanning

Sale

Planning/Office

Internet Biz 2.7 years

6.4 years

4 years

MODETOUR TODAY

8.3 years

Source: Study on the Work Satisfaction of Employees of Travel Agencies

Average Number of Years of Continuous Service in the Industry Average Number of Years of Continuous Service

13

MODETOUR TODAY

Higher Labor Productivity than Competitor

• package tourists per employee• lower selling and administration expense per tourist

331 346317

374433

503 521554

0

100

200

300

400

500

600

2002 2003 2004 2005

H company MODETOUR

Tourists per Employee

(Unit: persons)

(Source: Financial Supervisory Service, KATA)

Selling and Administration Expense per Tourist

(Unit: won)

198,791

155,197

187,455

156,722

197,012175,505168,447

149,183

162,795

138,727

0

50,000

100,000

150,000

200,000

250,000

2001 2002 2003 2004 2005

H company MODETOUR

14

MODETOUR TODAY

Air-ticket Sales Air-ticket Sales Structure

9% Air Commission (E’)

Air Fare (D’)Air-ticket Sales Revenue(7% Agent Comm.)

9% Air Commission (E)

Air Fare (D)

Land Service Fee (C)

Agent Commission (B)

Value Added (A)

Expenses(Hotel, Coach,Meal, Airlines)not included in financial statement

Package Sales Package Sales Structure

Package Sales Revenue

Air-ticket Sales Revenue

Selling and Administrative Expense

☞ According to the business relations, Revenue and Commission reported on financial statement can be changed.

Agent Comm. (B)

Value Added (A)

9% Air comm. (E)

AgentComm. (B)

Selling and Administrative Expense

9% Air Comm. (E’) Air-ticket Sales Revenue

9% AirComm. (E’)70% of

46.8 46.89 51.34

36.2 36.21 33.13 30.24

7.97 7.22 6.458.51 8.94

54.02

8.5

8.31 9.29

0

20

40

60

80

100

2003 2004 2005 2006. 3Qaccumulated

ValueAdded

AgentComm.

LandService

Air Fare

Package BD

15

MODETOUR TODAY

Sales Structure

• a change in the ratio of selling and administrative expense to sales

Trend in Selling and

Administration

- Continuous reduction in labor costs

- Increase in advertising expense

(Stepping up brand marketing)

Control on Planned Selling and Administrative Expense

- Advertising expense: 5% of sales

- Diminish the rate of labor costs to

30% of sales

- Regulate the rate of commission to

40% of sales

DETAILS

44 37 38 33 3223

1 1 1 2 35

39 39 45 43 4443

18 14 14 13 12 13

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2001 2002 2003 2004 2005 2006. 3Qaccumulated

Others

Commission

Advertising

Labor costs

Ratio of Selling and Administrative Expense to Sales

16

9 8 8 8

37 44 44 48

109 7 577 7 7

19 14 13 14

18 19 20 19

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2003 2004 2005 Oct.2006

17 12 12 9

36 4332 41

7 5

53

20 20

3032

10 7 89

9 12 13 8

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2003 2004 2005 Oct.2006

MODETOUR TODAY

MODETOUR Tourists and Profits Divided by Destinations

China

Japan

Europe

America

South-East Asia

South Pacific, Guam & Saipan

Yearly Tourists Ratio to Destinations Yearly Profit Ratio to Destinations

17

MODETOUR TODAYMODETOUR TODAY

▶KEY STRATEGY▶KEY STRATEGYAPPENDIXAPPENDIX

MARKET ENVIRONMENTMARKET ENVIRONMENT

18

KEY STRATEGY – prospective effectiveness

Sales Ability Product Planning Skill Overall Processing Skill

• Competitive S&A expense per tourist• Keep our reputation in tourism industry• Keep the relations with retailers and the business showings• Build up distribution channels • Implement strategy of Best Partner

• Strengthen buying power of airplane seats• Collecting new information on destination• Taking advantage of business know-how• Communicating with business partners (using travel planner program)

• Retaining competent tour conductors by offering training and benefits• Cash payment system• Possessing the ability to control problem occurred in destination

Internal Innovation to Improve Productivity

Enhancing Customer Loyalty and

Maximizing Value-added

Effective Brand Marketing Activities

Raising Capital Strength for Promotion Activities

(charter business, long term hotel lease, M&A, etc.)

MARKET LEADER MARKET LEADER

19

Brand Marketing

• Strategic marketing for building loyalty and positioning brand image• Various sales supporting activities through PPL, CF, CM, Billboard, Best Partner retails • CRM for returning customers → enhancing and improving ability of customer satisfaction team• Cooperative marketing and business → collecting marketing networks and sales channels (web portals, mart, etc.)

PLAN

Marketing ToolBillboard, PPL

Newspaper AdvertisingRadio, CM

TV Commercial

Strengthening the ability of Customer Satisfaction TeamVarious CRM Activities

~ing

KEY STRATEGY

launched in October 2006

20

Online Business

• Offering abundant information and qualified various contents• Improving net profit margin through B2BC business• Real time search and reservation system ex) booking engine for Airplane & Hotel• Developing travel solutions and offering service for making web site• On-line travel retailers

Contents Related Team

Developing & DistributingBooking Services

Revenue Increase of On-line retails

PLAN~ing

• Expanding Contents Providing Function to Global Network

• Supplementing Specialized Personnel in Contents Part

• Strengthening E-COMMERCE

• Introducing an Ideal Travel Package, On-line Marketing

• Fostering On-line Community

KEY STRATEGY

21

Expansion of Sales Capacity

Best Partner • Maintaining retails with high loyalty through different support• Expanding BP retails with Brand Marketing (TV ad)

4.3%

2004.1

6.6%

2004.12

9.5%

2005.6

11.3%

2005

Offering MODE magazine and catalog firstly

Naming MODETOUR’s PRO Retail

Offering MODE CRS and Travel Planner program

Supporting improving sales activities

- Regular service training

- Improving ability to understand products through

study tour

Being linked with MODETOUR’s web site

Offering subsidy when achieving one’s sales goal

Operating own call center

Promoting cooperatively2006. 3Q

26%

KEY STRATEGY

Customers from Best Partners

Supporting Activities

22

Expansion of Sales Capacity

• Tie-up Business → Expanding alliance sales channels to finance company, portal website, shopping mall, mart, etc.• Stable expansion of business field by accumulating cooperative business know-how

9.1%

2004.1

13.3%

2004.12

18.8%

2005.6

19.7%

2005

Customers from Cooperative Channels

2006.1H

23%

KEY STRATEGY

Financial

Media &Portal

Shopping Mall &Large-sizedMart and Leisure

23

• Being Competitive in Special Fields (cruise, language study, etc.)• Improving Product Planning Capacity for VVIP• Gaining Distinctive Sales Channels

Diversification of Business

• M&A with company having competitiveness and specialized in a specific fields such as Backpacking, Cruise, Language Study. • Positive charter business and long term lease of resort • Developing new travel destination and gaining semi-exclusive selling right • Enhancing VVIP package sale

PLAN

Equity Investment in Blue Travel Co., Ltd.& Cooperative business

Exclusive Shuttle Contract of Managaha Island in Saipan

Expanding Using Funds for CharterFY05 13billion → 2006.7 12.4billion won

VVIP Marketing Team (JM Mode)

Expectedeffect

~ing

• Co-developing and Using Contents• Diversifying Products to Surely Leave• Increase of Members per Group through Expanding Sales Network & Joint Promotion

Backpacking travel products sale increased in summer 2006 about 80% than 2005.

Strengthening Alliance with Companies in Various Fields

KEY STRATEGY

Joint Establishment of TOURTAINMENT Inc. with OLIVE NINE Co., Ltd. and Munhwa Broadcasting Corporation

• Coordinating Overseas Location of TV Drama & Movie• Supplying Travel Product Related with the Location

24

MODETOUR TODAYMODETOUR TODAY

KEY STRATEGYKEY STRATEGY

▶APPENDIX▶APPENDIX

MARKET ENVIRONMENTMARKET ENVIRONMENT

25

Appendix

SHAREHOLDERS BREAKDOWN

OtherShareholders

58.07%Foreign

Investors 5.35%

E.S.O.P. 9.50%

CEO & Directors27.08%

Senior Managing Director: Han Ok-minManaging Director & CFO: Sohn Ho-gwonDirector: Ji Hyeong-hoonDirector: Yang Byeong-seonAuditor: Lee Sang-guk

Name: Hong, Seong-geun Career Background - Koryeo Tour - President, Tour Industry People’s Mountain Climbing Club (TMC)

Name: Hong, Ki-chung Career Background - Koryeo Tour - Board of Director of Korea Association of Travel Agents

Name: Woo, Chong-woong Career Background - Koryeo Tour - Director, Seoul Fencing Association, Korea Sports Council

CEO/Chairman

President

Vice president

(as of November 2006)

26

Appendix

FY05 FY04 FY03

Growth Rate of Sales

22.91% 39.77% 16.55%

Growth Rate of Assets

124.05% 52.42% 6.61%

Growth Rate of Net Income

2.47% 189.70%

-45.16%

FY05 FY04 FY03

Ratio of Operating Profit to Net Sales

8.23% 9.46% 2.08%

Ratio of Net Income to Net Sales

7.54% 9.04% 4.36%

ROE 28.45% 62.73% 37.45%

FY05 FY04 FY03

Debt Ratio 81.62% 97.77%

148.34%

Debt Dependence Ratio

- - -

Current Ratio

159.29%

80.86%

143.12%

FY05 FY04 FY03 FY02

Turnover Ratio of Assets

2.02 3.22 3.05 3.06

Receivables Turnover

21.5 29.16 20.27 13.81

GROWTH PROFITABILITY

STABILITY ACTIVITY

Key Financial Ratio

27

Summarized Balance Sheet

(Unit: a million won)

　3Q 2006

(Accumulated)

FY05 FY04 FY03 FY02 FY01

Current Asset 48,535 16,646 4,186 5,803 5,452 4,274

Non-Current Asset 25,429 9,902 7,662 1,970 1,839 1,109

Total Asset 73,964 26,548 11,848 7,773 7,292 5,383

Current Liabilities 24,640 10,450 5,177 4,055 3,844 3,907

Non-Current Liabilities 2,172 1,480 680 588 1,304 1,133

Total Liabilities 26,812 11,931 5,857 4,643 5,149 5,041

Capital Stock 4,200 2,100 1,700 1,700 1,700 1,700

Capital Surplus 29,886 5,294 - - - -

Retained Earnings 13,160 7,223 4,291 1,430 442 (1,357)

Total Stock Holders Equity

47,152 14,616 5,991 3,130 2,142 342

Appendix

• Please, be aware of the fact that this financial result in the accumulated third quarter of 2006 is not examined by external auditor so it can be revised according to the result of audit.

28

Appendix

Summarized Income Statement

Q3 2006(Accumulate

d)FY05 FY04 FY03 FY02 FY01

SalesRevenue

18,154 17,952 16,602 12,303 10,409 7,198

27,551 19,352 14,212 9,563 8,293 4,630

1,315 1,568 815 764 715 528

47,020 38,874 31,629 22,630 19,417 12,356

S&A Expense 39,336 35,675 28,638 22,158 17,671 12,763

Operating Profit 7,684 3,198 2,991 471 1,745 (406)

Non-operating Income 1,281 941 1,182 686 884 613

Non-operating Expense 129 87 158 103 171 89

Ordinary Income 8,836 4,052 4,015 1,055 2,459 117

Extraordinary Gain - - - - - -

Extraordinary Loss - - - - - -

Net Income before Taxes 8,836 4,052 4,015 1,055 2,459 117

Income Taxes 2,478 1,121 1,154 67 658 2

Net Income 6,358 2,931 2,860 987 1,800 115

(Unit: a million won)

(Air ticket)

(Package)

(Additional Revenue)

(Total)

• Please, be aware of the fact that this financial result in the accumulated third quarter of 2006 is not examined by external auditor so it can be revised according to the result of audit.

29

Thank you. Thank you. 2006 MODETOUR NETWORK INVESTOR RELATIONS