Hyosung : 3Q.2023 Hyosung Corporation Earnings Release

Appendix

Quarterly Profit/Loss Statement (Consolidated)

Gross Profit Margin	3.1%	10.7%	15.1%
Operating Profit Margin	(5.9%)	2.1%	5.5%

Balance Sheet (Consolidated)

Net Debt to Equity Ratio

37.7%

41.4%

3.7%p

Quarterly P/L Trends (Consolidated)

OPM	15.1%	23.0%	20.3%	13.6%
NPM	13.8%	19.8%	19.9%	8.3%

OPM	10.4%	3.9%	(5.9%)	(1.4%)
NPM	5.1%	4.9%	(4.7%)	(2.5%)

			3Q
OPM	1.5%	2.1%	5.5%
NPM	(1.3%)	0.4%	1.9%

18.1%

15.2%

1.7%

0.7%

Financial Performance by Company

Apply (to)

Turnaround driven by Equity Method gains despite unabated challenges across global economy

(2.4%)

(34.3%)

(3.2)

(51.2)

	• 3Q23 turned to profit QoQ and YoY
15.7%	- Turned to profit with improvements in equity method subsidiaries

even against the backdrop of weak global macro conditions - Gains/Losses on equity method

: ￦53.0bn loss (3Q22) → ￦1.7bn loss (2Q23) → ￦23.1bn (3Q23)

1) Hyosung Heavy: Margin continued to improve QoQ and YoY

2) Hyosung Chemical: Reduced losses QoQ given full production/sale

following successful revamping of PP/DH plant at Vina Chemical

- Others: Brand loyalty fees up, Transworld (Transportation), etc down QoQ

• TNS, turned to loss (Revenue decreased both QoQ and YoY)

Sales Decrease in U.S. Market, Better sales expected from New Orders in Europe and India Banks

(4.0%)

(8.7)

• 3Q23: Sales down QoQ due to delayed revenue recognition
• • Existing orders booked as revenue in the U.S. & Indonesia
  • Expanded a sales pipe-line in U.S. market, but revenue expected to be recognized in 4Q
  • New orders from Europe, the U.K. and India
  • Diversification achieved through acquiring domestic customer for SCO
• 4Q23: key status of the business
• • Sluggish demand recovery of the U.S. retail due to lower investment
  • Order Expansion from Africa/Southeast Asia/Europe
  • Expansion of overseas market with new business: SCO (Self Check-Out) and robotic coffee shop

Profit Cut due to Lower Sales of Maserati, but Expected to Turn Profit with Better Sales of Both Ferrari and Maserati in Q4

(1.2%)

(6.4%)

(0.8) (3.5)

• Ferrari: Sales volume expected to continue to increase in 4Q23
• • Sales volume decreased QoQ; 87 cars sold in 3Q23 (93 cars in 2Q23), 340 cars expected to be sold in 2023 (vs. 291 cars sold in 2022)
  • OP expected to increase in 2023 with sales of new SUV, Purosangue
• Maserati: Lower sales of new SUV, Grecale in 3Q23

(1.6%)

(7.0)

• • Sales volume decreased QoQ; 93 cars sold in 3Q23 (122 cars in 2Q23)
  • Sales anticipated to decrease (460 cars expected to be sold in 2023)
• HGS: 3Q23 Profit down QoQ
• • Profit and margin slightly decreased due to lower sales volume
  • Early sales of Russia Project(early recognition of sales in 2Q, 12.5bn KRW), a lack of plant production volume (profit margin 4.7% → 4.5%)
  • Revenue expected to increase QoQ in 4Q
  • Margin expected to improve (4.5% → 5%) with the sales of existing orders and an increase of sales volume (155% up QoQ)
• Overseas production & distribution subsidiaries:

• OP increased QoQ with the combination of widening spreads and better sales
• Revenue increased, turned to profit QoQ in U.S.

SPANDEX - Modest Recovery in Global Demand / Tire Cord - Sequentially weaker on extended subpar Demand Cycle

(5.1%)

(110.8)

	•	Textile
		- SPANDEX : Sales/OP softened QoQ due mainly to ASP decline which
		offset volume gains, Volume gains were in line with continued - albeit
3.3%	2.6%	modest - global demand recovery
* (One-off): Unplanned outage at Guangdong works in China
		- PTMG : commercial start-up of new plants(Vietnam) adding structurally
		to long-term earnings power of spandex segment
		- PET/NY : Weaker profitability given intensified competition while overall
		supply-demand equation remains out of balance
	•	Trading & Others
		- Trading : Volume gains underpinned sales revenue whereas broadly
		weaker ASP dented OP given more acute competition
		- Tire Cord : OP declined QoQ, Demand for replacement tires
		limited due to delayed recovery of tire business

- NF₃ : Nearly flat QoQ, relatively firm in China

Delayed Tire Cord demand Recover / Aramid & Carbon Fiber maintaining high profitability

• PET T/C: Continued global demand decline / sales and profit slumped

• Steel Cord: At or close to the end of the downturn cycle

• Tech Yarn & GST: Topline nearly flat QoQ

• Aramid: Margin remained healthy thanks to strong demand

• Carbon Fiber: Strong demand and sustained high profitability

• Spandex: Profitability recovery is beginning (Turn to Profit)

• PP homo(Korea)-Propane(CP) Spread QoQ

(19.9%)

(0.4%)

(14.3%)

(2.8)

(139.8) (103.3)

- Reduced losses vs. 2Q due to lower prices of propane, a key feed- stock for PP, which resulted in improved spread for 3Q vs. 2Q

Achieving double-digit operating profit margin in the power sector, leading to improved profitability

• Heavy: Reached 12% OPM with higher-margin project sales - U.S. subsidiary turned profitable due to increase production

7.1%	7.6%	9.1%	- Major orders secured from France, UK Grid, and CIS
- Expanding orders in Asian market (China, India, and Taiwan)

- Changwon City MOU for expanding ultra-high-voltage facilities

• Construction: Focusing on low-risk,high-profitability projects - Expansion of low-risk,fixed-conditions public project orders - Size up existing contract to improve profitability

- Subcontracting only, with zero exposure to self development