Transcript 슬라이드 1 - HS Ad 관리자

“Korea’s First Marketing Communication Group”
Investor Presentation
June, 2005
NOTICE
This publication is produced and distributed for private circulation by GIIR Inc. All
information is based on GIIR’s internal market expectation studies, management account
figures and/or outside sources GIIR believes to be reliable. GIIR accepts no legal
responsibility for the reliability of information contained herein.
Please note that unexpected changes in the market situation may lead to changes in GIIR
views, with or without prior notice. It should also be noted that GIIR’s business results
may not be in line with current estimates included in this publication. This publication
should not be construed as an offer or a solicitation of an offer to buy or sell securities
or other financial instruments.
2
GIIR At a glance
3
GIIR Chronology
2005
2004
2002
2001
1984
Established
1991
Tokyo
Office
1995
Beijing
Office
1996
New York
Office
Busan
Office
1999
1997
Dubai
Office
Listed on
the
Korea
Stock
Exchange
(3500 KS)
4
On N Off
BCC
20/20
Corporate
Division
Re-Birth
GIIR
as
&
Mexico a member of
LG
Ad
Office
WPP
WTL
Panama
Office
GIIR Today
GIIR
LG Ad
LG Ad USA
(WTL)
Wunderman
Korea
On N Off
5
Alchemedia
Brand
Connection
Company
20/20
Strategy
6
Two Growth Options for GIIR


Single ad agency
·
Slowdown of growth in domestic ad market
·
Decrease in LG clients loyalty
·
Difficulty of managing account conflicts
Marketing communication group
·
Maintain strong relationship with LG clients and develop new
relationship with Non-LG clients
·
Clear role and responsibility
− Finance / IR / HR / Training / Procurement – GIIR
− Business operations of advertising agency – Operating companies
·
Economies of scale
·
Synergy effect from partnership w/ independent agencies
·
Establish new disciplines and create expert organization
7
GIIR Growth Strategy

Criteria of business creation :
Integration, growth potential, synergy

Acquisition
·
·

Establish new entities
·
·
·

Acquisition of ad agencies and media agencies
− On N Off
Strong client relationship and key talent
Leverage supporting functions of GIIR(e.g finance)
Combination of key client relationship
Niche based agencies focusing on specific categories or
demographic targets
− Brand Connection Company & 20/20
New business
·
·
Market research, CRM, Branding & Identity, Star Management, etc.
JVs with WPP companies
8
GIIR Today & Tomorrow

LG Ad vs. other OCs
Others
Others
LG Ad
Tomorrow
LG Ad

LG vs. Non-LG
Non-LG
Clients
Non-LG
Clients
LG Clients

LG Clients
Tomorrow
Advertising vs. Marketing
Marketing
Marketing
Advertising
Tomorrow
9
Advertising
GIIR Future Direction
WPP Brands & Resources
New
Business
General
General
Niche
Niche
Agency
Agency
Agency
Agency
Synergy
Media
Mkt’g
Specialist
Agency
Agency
Comm.
Synergy
GIIR
(Supporting & Coordinating)
10
Star
CRM
Mobile
Internet
….
LG Ad Growth Strategy

Domestic business
·
Minimize business loss by maintaining the relationship with existing
clients
·
New business wins
− Substitute client losses with better clients from same categories
− Win new clients with bigger growth potential

Global business
·
Increase the share of LGE global adex
− 70% of total LGE Global by 2007 (40% as of Dec. 2004)
·
Different tactics in consideration of the level of ad market maturity
in different regions
·
Form equity based JVs between GIIR(LG Ad) and WPP companies to
establish “LG Ad Global” in key strategic markets
11
Options for Surplus Cash

Current cash position
·

3 options for surplus cash
·
·
·

KRW 58.1bn(GIIR) and KRW 12.0bn(LG Ad) as of end of 1Q 2005
* before dividend payout (April 2005)
Maintain healthy dividend
− Considering DPS, payout ratio and dividend yield
Acquisition and investment
Stock buyback / cancellation program
Dividend history
FY01
FY02
FY03
FY04
Earnings Per Share
1,037
859
1,165
877
Dividend Per Share
500
1,000
1,000
1,000
Payout Ratio (%)
48.2
116.4
85.9
114.0
Dividend Yield (%)
3.7
7.6
4.6
5.6
(in KRW)
12
Appendix : Business Splits
(KRW, bn)
1Q ’04
1Q ‘05
YoY
Total Billings
137.3
121.7
-11.4%
Domestic
116.1
99.1
-14.6%
(% to total)
(84.6%)
(81.4%)
LG
85.8
73.0
(73.9%)
(73.7%)
30.3
26.1
(26.1%)
(26.3%)
21.2
22.7
(15.4%)
(18.7%)
(% to domestic)
Non-LG
(% to domestic)
Overseas
(% to total)
13
-14.9%
-13.9%
7.1%
Appendix : Business Wins/Losses

Major business win/loss in 2005 YTD
WIN
(KRW, bn)
1Q
LOSS
IRevo
Baskin Robbins Korea
Pulmuone
Namkwang E&C
LG Fashion - Lafuma
Woori Securities
Erom(On N Off)
PowerComm
Haier(On N Off)
2Q
PowerComm(On N Off)
K-2
Seohai Construction
Hite Beer(Creative)
BBQ Chicken
LG Cyon(Creative)
Dongwon F&B
Korea Diary & Beef Farmers Assc.
LG H&H – ReEn
Total
46.3
28.0
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