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Taihan Electric Wire Co., LTDInvestor Relations 2010

1

IndexIndex

1. Company Overview

2. Financial Structure Improvement

3. Wire & Cable Business

4. 2015 VISION

1. Company Overview

3

회사명 대한전선주식회사

대표이사 강 희 전

업종 전기전자

설립일 1955년 2월 21일

본점 위치 서울 중구 회현동1가 194-15

주제품 전선류 제조, 판매

종업원수 837명

홈페이지 www.taihan.com

대주주 및자사주54.3%

외국인5.0%

기관1.5%

소액주주39.2%

일반현황Business Structure

Loans W530bn

Land Development Benefit+α

Investment Stocks and BondsW1,400bn

Cable Biz Investments

Optical Fiber Cable Capacity

1,460,000F.Km

Global # 9

Energy Cable Capacity

36,000M/T

Company Overview

4

Cable Business (2009)

Power CablePower Cable

•Extra High Voltage

• Medium and Low Voltage

•Bare Wire for Overhead Transmission Line

Sales

W542.7bn

CommoditiesCommodities

•Nuclear Power Cable

•Enameled Cable

•Fire resistant

Sales

W271.7bn

Base MetalBase Metal

•Copper RodSales

W120.6bn

CommunicationsCommunications

•Optical Cable

•OPGW

Sales

W117.3bn

• Data Cable

• Wireless Telecommunication Cable

Sales : W2,192bn Sales : W2,192bn

Operating Profit : W97.7bnOperating Profit : W97.7bn

Business Structure

5

Iinvestments (2009)

Wire & CableWire & Cable

•M-TEC•TSC•STCC

Sales W451.6bn

OP

W22.6bn

TelecomTelecom

•STC

•Skytel

Sales W432.4bn

OP

W35.2bn

ConstructionConstruction

•TEC Construction

•Namkwang E&C

•TEC&R

Sales W958.4bn

OP

W18.9bn

OthersOthers

•Hilton Hotel•Novelis Korea

•Daekyung M&E

Sales W2,014.6bn

OP

W117.2bn

• Muju Resort• TEC&Co etc.

Sales : W3,857bn Sales : W3,857bn

Operating Profit : W194bnOperating Profit : W194bn

•KTC

•TMC•Optomagic

•Unitel

•Onse Telecom

Business Structure

2. Financial Structure Improvement

7

Options 2009 2010 (Plan) 2011 (Plan)

Issued RCPS of W170bnIssued BW of W350bn

Paid-in Capital Increase of W200bn

Taihan ST W60bnKorea Rental W38.2bnTrybrands W17.8bnNovelis Korea W96.1bnRecalling financial product of Prysmian W250bnBond and Securities disposal at W65.3bn

Disposal of affiliates such as Novelis Korea W280bnDisposal of Prysmian’s share at W350bnBond and Securities disposal at W50bn

Disposal of assets W200bn

Liquidation of Si-heung plant W170bnOthers W70bn

Liquidation of Anyang plant W200bnOthers W50bn

W1,047.4bn W1,120bn W450bn

CapitalIncrease

Selling OffInvestments

Real-estate

TOTAL

Financial Improvement

8

Financial Improvement

(Unit: W bn)

2,290

1,520

1,070

2009 2010(E) 2011(E)

349%

120%

190%

0.43

1.63

0.68

2009 2010(E) 2011(E)

Debt/Equity(%) Interest coverage rate(x)

Debt Simulations Financial Structure

9

Si-Heung Plant Site Project

Overview Taihan Cash Flow

Options Comments

Locations 113-121, siheung-dong, Geumcheon-Gu, Seoul, Korea

Size 82,630.60㎡

Period 2009. 08 ~ 2013. 12 (52 months)

Schedule

2010. 2Q Zoning Change

2011. 1Q Approval of Development Plan

2011. 2Q Starting Construction

Refinancing

W170bn

Development Benefit

W90bn(E)

10

Overview Taihan Cash Flow

Options Comments

Location 785, Gwanyang-dong, Dongan-Gu, Anyang-Si, Gyeonggi-do, Korea

Size 269,036㎡

Period 2008. 09 ~ 2015. 02 (78 months)

Schedule

2010. 3Q Zoning Chang

2011. 2Q Approval of development Plan

2012. 1Q Starting Construction

Refinancing

W200bn (Land value Increment)

Development Benefit

W300bn(E)

Anyang Plant Site Project

3. Wire & Cable Business

12

2009 Results of Global Major Players

-5%

-26%

-27%

-28%

-24%

-30%

대한전선

Nexans

Prysmian

Draka

Holdings

SEI

General

Cable

’09 Sales Growth Rate (YoY) ’09 OP Growth Rate (YoY)

19%

-43%

-14%

-47%

-93%

-39%

Taihan

Cable Business Overview

13

Strengthen Product MixStrengthen Product Mix

Global Market ExpansionGlobal Market Expansion

Developing New Growth engineDeveloping New Growth engine

Improving Efficiency of ProductionImproving Efficiency of Production

Cable Biz Growth Strategy

14

Strengthen Product Mix

EHV : Focus on High-End Products

• Expanding EHV cable sales

(base on copper)

• Developing and Commercializing 500kV Cable

87%

52% 49%

28%

13%

48% 51%

72%

2009 2010(E) 2011(E) 2015(E)

HV

EHV

(Unit : 10,000F.KM)

• Securing competiveness, expanding market Coverage

• Optpmagic : #1 Optical fiber manufacturerin domestic Optical fiber Capacity :5,000,000 F.Km 100,000,000F.Km

• Securing global production base :Producing 32,500,000F.KM until 2015

16 20

2042

42

42

84 84126

168

24

100

146

188

234

2009 2010(E) 2011(E) 2015(E)

Optical Cable

OPGW

Expansion

Optical : Expansion of Capacity

15

해외시장 확대Securing & strengthening HV, EHV Production Base

Production BaseOverseas Branch

STCC

M-TEC

TSC Taihan

China

Export Portion 70%

HV Plant1 6

2010 2015

Branch8 11

2010 2015

Global Market Expansion

16

Next Generation Power Grids

Power Plant

Solar Power

Energy Storage

Smart Home

Smart Hospital

Smart Public Office

Smart Building

Smart Plant

Electric Car

DC XLPEDC XLPEHVDCHVDCCableCable

Developing New Growth Engine

17

Continuous Growth for Items Development

Items Remarks Prospect & Plan Schedule

HVDC Cable

• Large-scale power transmission• Better efficiency in long-distance transmission

• Increasing alternative demand into better efficient power transmission products

• ’09~’10.12 : Development• ’11~ : Sales

DC XLPE• Connecting cable from island to continent and from country to country

• Growing interest in green energy

• ’09.09~’12.12 : Cable Development Completion

Smart Grid

• Next generation power grid, optimizing energy efficiency- Automatic meter reading system - Solar/Wind power cable- Electric vehicle charging solution

• Consortium with KEPCO for Smart place sector

• ’10~’13 : Developing smart place products

Developing New Growth Engine

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MES & Automatic Distribution System Synergy from Plant Relocation

MES (Manufacturing Execution System)

- Total production management system, applying RFID technology

Automatic Distribution System- Improving work productivity and

production process control

““HighHigh--tech Factorytech Factory””

Tex Reduction

- First 5 years 100, next 2 years 50%

Upgrade Productivity- Increasing productivity through

improving production process

““Tex BenefitTex Benefit”” + + ““Upgrade ProductivityUpgrade Productivity””

Funding a syndicate loan W250 from KD bank for building Dang-Jin new plant

Completed W100bn financing in 2009, and Scheduled to support W150bn in 2010

Improving Efficiency of Production

19

Products

Power Cable

Commodities

Base Metal

Optical TelecomCopperTelecom

2007 2008 2009

363.9 510.3 542.7

393.6 390.7 271.7

1,120.9 1,226.8 1,206.4

44.0 56.0 68.7

68.8 58.7 48.6

565.0

300.0

1,185.0

79.6

49.4

Sales Breakdown (KRW Bn) Description

OP Margin(Subtracting

Non-recurring items )

3.8% 4.2% 5.2% 5.4%

2010E

Revenue by Products

2015E

7.9%

975.9

404.9

1,033.3

180.2

67.5

Expanding production facilities- EHV, HV: 17,000M/T→34,000M/T

(100% up until 2015)- Optical telecom: 1,000,000F·km→

2,340,000F·km(134% up until 2015)

Securing overseas production base- EHV, HV line to overseas in Saudi,

Vietnam, Mexico, South Africa andChina

- Optical telecom facility investment inSaudi and Mexico

Enhancing technological edge- EHV, HV: Developing DC XLPE cable

and submarine cable - Optical telecom: Securing technology

about ultra bend fiber cable and optical fiber and power wire composite cable

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Performance Projection

• 2009 non-operating profit and loss- Gain on sales of Novelis Korea at W84.5bn and Taihan ST at W27bn among the total gain W123.3bn of disposal of investment assets- 2009 Interest income at W83.8bn and interest expense at W163.1bn - Related to TGH(Prysmian) loss account for W196.3bn of total loss W232.6bn of equity method investment- Total bad debt expenses at W110.9bn is related to loan to Young-Jo, construction company in Korea

• Key Assumptions of ’10~’15 Performance- FX: 1,100 Won/$, Copper price: $6,000/Ton - OP: Expansion of high profit margin business such as HV, EHV and Fiber Telecom and continuous

strong market position will result in forecast of achieving 7% OPM in 2015Subtracting KRW 28bn for Dang-Jin rent fee after 2012

(억원, %) 2008 1Q ‘09 2Q ‘09 3Q ‘09 4Q ’09 2010E 2012E

584.4 629.1

22.2(3.5%)

29.0(4.6%)

24.531.3

-101.6

-73.9

15.2(2.6%)

22.0(3.8%)

2,3002,270

77.0(3.4%)

105.0(4.6%)

87.9115.9

17.624.4

-

140(6.1%)

163.5

-83.0

- -64.4

572.1

14.9(2.6%)

21.7(3.8%)

17.224.0

75.6

55.9

474.5

18.1(3.8%)

24.9(5.2%)

20.527.3

-421.6

-326.4

2,444.5

82.2(3.4%)

92.0

112.1

70.8

2009 2015E

Sales 2,260.1

70.5(3.1%)

97.7(4.3%)

80.2107.4

-361.3

-277.1

2,800

OP임대료 제외

200(7.1%)

EBITDA임대료제외

230

RP -

NP -

4. VISION 2015

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New Leadership for Future Growth

• Focus on Wire & Cable Business

• Creating new organization culturewith reliance and communication

• Regaining the confidence from market, strengthening transparent management

Change – Back to the Basic

Vision 2015

Global Leading Company

Securing Global Production Base with Competitive

Cost

Construction of Green & High Efficient Dangjin Plant

Finding New Growth Engine :

Smart Grid, Submarine Cable

Focusing on High Value-Added

Products

Sales W5trSales W5tr

OP W400bnOP W400bn

New Leadership

2010Global Leading Company - TEC

Thank You