LG Energy Solution : 2024 1Q Review Report

LG ENERGY SOLUTION, LTD.

Interim Condensed Separate Financial Statements As of March 31, 2024, and December 31, 2023, and

For the Three-Month Periods Ended March 31, 2024 and 2023

(With the Independent Auditor's Review Report Thereon)

LG ENERGY SOLUTION, LTD.

Table of Contents

Report on Review of Interim Condensed Separate Financial Statements

	Page
Interim Condensed Separate Financial Statements
As of March 31, 2024, and December 31, 2023, and
For the Three-Month Periods Ended March 31, 2024 and 2023:
Interim Condensed Separate Statements of Financial Position	1
Interim Condensed Separate Statements of Profit or Loss	2
Interim Condensed Separate Statements of Comprehensive Income	3
Interim Condensed Separate Statements of Changes in Equity	4
Interim Condensed Separate Statements of Cash Flows	5
Notes to the Interim Condensed Separate Financial Statements	6

Deloitte Anjin LLC

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07326, Korea

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www.deloitteanjin.co.kr

Report on Review of Interim Condensed Separate Financial Statements

English Translation of Independent Auditor's Review Report Originally Issued in Korean on May 10, 2024

To the Shareholders and the Board of Directors of

LG Energy Solution, Ltd.:

Reviewed financial statements

We have reviewed the accompanying interim condensed separate financial statements of LG Energy Solution, Ltd. (the "Company"). These interim condensed separate financial statements consist of the interim condensed separate statement of financial position as of March 31, 2024, and the related interim condensed separate statements of profit or loss, interim condensed separate statements of comprehensive income, interim condensed separate statements of changes in equity and interim condensed separate statements of cash flows for the three-month periods ended March 31, 2024 and 2023, all expressed in Korean won, and a summary of significant accounting policies and other explanatory information.

Management's responsibility for the interim condensed separate financial statements

Management is responsible for the preparation and presentation of these interim condensed separate financial statements in accordance with Korean International Financial Reporting Standard ("K-IFRS") 1034 Interim Financial Reporting, and for such internal control as management determines is necessary to enable the preparation of interim condensed separate financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's responsibility

Our responsibility is to express a conclusion on these interim condensed separate financial statements based on our review.

We conducted our review in accordance with the review standards for interim financial statements in the Republic of Korea. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Korean Standards on Auditing ("KSAs") and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim condensed separate financial statements are not prepared, in all material respects, in accordance with K-IFRS 1034 Interim Financial Reporting.

Other matters

We have audited the separate statement of financial position as of December 31, 2023, and the related separate statement of profit or loss, separate statement of comprehensive income, separate statement of changes in equity and separate statement of cash flows for the year then ended in accordance with KSAs. We expressed an unqualified opinion on those separate financial statements, not presented herein, in our audit report dated March 7, 2024.

The accompanying separate statement of financial position as of December 31, 2023, presented for comparative purposes, is not different, in all material respects, from the above audited separate statement of financial position

May 10, 2024

This review report is effective as of May 10, 2024, the independent auditor's review report date. Accordingly, certain material subsequent events or circumstances may have occurred during the period from the independent auditor's review report date to the time this review report is used. Such events and circumstances could significantly affect the accompanying interim condensed separate financial statements and may result in modifications to this review report.

LG ENERGY SOLUTION, LTD. (the "Company")

Interim condensed separate financial statements

as of March 31, 2024, and December 31, 2023, and

for the three-month periods ended March 31, 2024 and 2023

"The accompanying interim condensed separate financial statements, including all footnotes and disclosures, have been prepared by, and are the responsibility of, the Company."

Dong Myung Kim

Chief Executive Officer

LG Energy Solution, Ltd.

LG Energy Solution, Ltd.

Interim condensed separate statements of financial position

As of March 31, 2024, and December 31, 2023

(Korean won in millions)
	Notes			March 31, 2024		December 31, 2023
Assets
Current assets
Cash and cash equivalents	3,5,6		￦	1,803,807		￦	1,855,224
Trade receivables	3,5,7,29			1,840,454			2,289,892
Other receivables	3,5,7,29			1,661,397			1,173,761
Prepaid income taxes				17,184			15,132
Other current financial assets	3,5,8			96,597			65,400
Other current assets	13			133,910			118,776
Inventories	9			1,291,031			1,265,558
				6,844,380			6,783,743
Non-current assets
Trade receivables	3,5,7			145,989			127,946
Other receivables	3,5,7,29			138,805			153,173
Other non-current financial assets	3,5,8			376,140			287,187
Investments in subsidiaries	10			11,469,740			9,847,300
Investments in associates and joint ventures	10			274,221			271,463
Deferred tax assets	27			1,705,667			1,598,516
Property, plant and equipment	11			3,490,450			3,383,740
Intangible assets	12			744,101			712,217
Investment properties	32			201,418			212,650
Other non-current assets	13,16			144,939			168,004
				18,691,470			16,762,196
Total assets			￦	25,535,850		￦	23,545,939
Liabilities
Current liabilities
Trade payables	3,5,29		￦	900,052		￦	1,097,287
Other payables	3,5,29			823,239			983,134
Borrowings	3,5,11,14,30			706,783			670,418
Other current financial liabilities	3,5,8			55,367			58,440
Current provisions	15			334,018			374,710
Other current liabilities	17,31			523,423			326,930
				3,342,882			3,510,919
Non-current liabilities
Other payables	3,5,29			3,338			3,368
Borrowings	3,5,11,14,30			4,847,449			3,149,383
Other non-current financial liabilities	3,5,8			68,249			68,368
Non-current provisions	15			213,520			152,295
Other non-current liabilities	17,31			63,571			60,112
				5,196,127			3,433,526
Total liabilities				8,539,009			6,944,445
Equity
Share capital	19			117,000			117,000
Capital surplus	19			17,589,722			17,589,722
Accumulated other comprehensive income				(52,115)		(53,516)
Accumulated deficit	20			(657,766)			(1,051,712)
Total equity				16,996,841			16,601,494
Total liabilities and equity			￦	25,535,850		￦	23,545,939

The accompanying notes are an integral part of the interim condensed separate financial statements.

1

LG Energy Solution, Ltd.

Interim condensed separate statements of profit or loss

For the three-month periods ended March 31, 2024 and 2023

(Korean won in millions)
		Notes			March 31, 2024			March 31, 2023
Revenue		21,29,31 ￦	1,907,931		￦	3,298,683
Cost of sales	21,22,29			1,437,437			2,851,299
Gross profit					470,494			447,384
Selling and administrative expenses	21,22,23,29		742,480			541,175
Operating loss	21			(271,986)		(93,791)
Finance income	5,24,29			194,697			264,403
Finance costs	5,24,29			192,711			197,405
Other non-operating income	25			681,363			169,964
Other non-operating expenses	26			60,432			117,367
Profit before income tax expense					350,931			25,804
Income tax expense (benefit)	27			(43,517)			3,646
Profit for the period				￦	394,448		￦	22,158
Earnings per share attributable to
the equity holders of the Company	28
(in Korean won)
Basic earnings per share				￦	1,686		￦	95

The accompanying notes are an integral part of the interim condensed separate financial statements.

2

LG Energy Solution, Ltd.

Interim condensed separate statements of comprehensive income

For the three-month periods ended March 31, 2024 and 2023

(Korean won in millions)

Notes		March 31, 2024			March 31, 2023
Profit for the period	￦	394,448 ￦	22,158
Other comprehensive income:

Items that will not be subsequently reclassified to profit or loss:
Remeasurements of net defined benefit liabilities	16
Gain on valuation of financial assets at fair value	5
through other comprehensive income ("FVOCI")
Income tax effect of other comprehensive income
Items that may be subsequently reclassified to profit or loss:
Gain on cash flow hedge	5
Income tax effect of other comprehensive income

(651)	780
1,437		8,853
(180)	(2,543)
606		7,090
380		574
(87)	(152)
293		422

Other comprehensive income for the period, net of tax		899			7,512
Total comprehensive income for the period, net of tax	￦	395,347 ￦	29,670

The accompanying notes are an integral part of the interim condensed separate financial statements.

3

LG Energy Solution, Ltd.

Interim condensed separate statements of changes in equity

For the three-month periods ended March 31, 2024 and 2023

(Korean won in millions)
										Accumulated
										other	Retained earnings
				Share	Capital		comprehensive		(accumulated
	Notes			capital			surplus			income (loss)			deficit)			Total
As of January 1, 2023			￦	117,000 ￦	17,589,722	￦	46,640	￦	(958,790)	￦	16,794,572
Total comprehensive income for the period:
Profit for the period				-			-			-			22,158		22,158
Remeasurements of net defined benefit liabilities	16			-			-			-			574		574
Gain on valuation of financial assets at FVOCI				-			-			6,516		-			6,516
Gain on cash flow hedge	5			-			-			422		-			422
Total comprehensive income for the period				-			-			6,938		22,732		29,670
As of March 31, 2023			￦	117,000 ￦	17,589,722	￦	53,578	￦	(936,058)		￦	16,824,242
As of January 1, 2024
		￦	117,000 ￦	17,589,722		￦	(53,516)	￦	(1,051,712)		￦	16,601,494
Total comprehensive income for the period:
Profit for the period				-			-			-			394,448		394,448
Remeasurements of net defined benefit liabilities	16			-			-			-			(502)		(502)
Gain on valuation of financial assets at FVOCI				-			-			1,108		-			1,108
Gain on cash flow hedge	5			-			-			293		-			293
Total comprehensive income for the period
			-			-			1,401		393,946		395,347
As of March 31, 2024			￦	117,000 ￦	17,589,722		￦	(52,115)	￦	(657,766)		￦	16,996,841

The accompanying notes are an integral part of the interim condensed separate financial statements.

4

LG Energy Solution, Ltd.

Interim condensed separate statements of cash flows

For the three-month periods ended March 31, 2024 and 2023

(Korean won in millions)
	Notes		March 31, 2024	March 31, 2023
Cash flows from operating activities:
Cash generated from operations	30	￦	251,724 ￦	56,444
Interest received			15,048				38,664
Interest paid			(43,026)				(1,356)
Dividends received			280,860				-
Income tax paid			(78,425)				(19,399)
Net cash provided by operating activities			426,181				74,353
Cash flows from investing activities:
Cash inflow from investing activities:
Decrease in other receivables			5,000				-
Decrease in other non-current receivables			1,898				1,813
Proceeds from disposal of property, plant and equipment			423				3,320
Proceeds from disposal of intangible assets			3				-
			7,324				5,133
Cash outflow for investing activities:
Increase in other non-current receivables			(5,203)				(4,107)
Acquisition of investments in subsidiaries			(1,622,440)				(614,085)
Acquisition of investments in associates			(2,758)				(46,575)
Acquisition of financial instruments			(156)				(15,405)
Acquisition of property, plant and equipment			(415,785)				(493,020)
Acquisition of intangible assets			(26,874)				(22,962)
Other cash outflow for investing activities			-				(4,431)
			(2,073,216)				(1,200,585)
Net cash used in investing activities			(2,065,892)				(1,195,452)
Cash flows from financing activities:
Cash inflow from financing activities:
Increase in borrowings	30		1,595,376				-
			1,595,376				-
Cash outflow for financing activities:
Repayment of borrowings	30		(7,078)				(4,261)
			(7,078)				(4,261)
Net cash provided by (used in) financing activities			1,588,298				(4,261)
Net decrease in cash and cash equivalents			(51,413)				(1,125,360)
Cash and cash equivalents at the beginning of the period			1,855,224				4,828,152
Effects of exchange rate changes on cash and cash equivalents			(4)				78
Cash and cash equivalents at the end of the period		￦	1,803,807 ￦	3,702,870

The accompanying notes are an integral part of the interim condensed separate financial statements.

5