Highlights in FY2008 (ended Dec. 2008)

Financial Overview (Non-consolidated)

(in millions of won)

-	FY2008	FY2007	Rate of change	Remarks
Sales	2,644,236	2,253,044	17.4%	Sales increased year-on-year, thanks to greater sales of high value-added tires.
Operating income	256,383	274,047	(6.4%)	Operating income and net income fell from a year ago due mainly to soaring materials prices.
Net income	25,412	162,305	(84.3%)

The Company announced the consolidated results of its tire division for the fiscal year ending Dec. 2008. Sales reached 4,076,500 million won, an increase of 25.8 percent compared to the previous year's result of 3,241,200 million won. The figure also exceeded the company's sales target, which was set at 3,877,800 million yen, by 5.1 percent. The company attributed the strong results to the 35% year-on-year increase in sales of ultra high-performance (UHP) tires, which became a large contributing factor. By region, sales of these UHP tires were up 48 percent in Europe and 21 percent in the Americas. OE sales rose by 42 percent. The company says it aims to achieve sales of 4,325,500 million won for the fiscal year ending Dec. 2009. (From a press release on Jan. 19, 2008)

Contracts

-Volkswagen

The Company will supply Volkswagen with tires for use in the new Tiguan sport utility vehicles (SUVs). It will supply Volkswagen 70,000 tires, manufactured at Hankooks' Geumsan Plant in Korea, starting in Jan. 2008. These tires will be 215/65R16H in size. (From a press release on Jan. 14, 2009)

Partnerships

Michelin has raised its stake in Hankook Tyres to 8.9%. In March 2006, Michelin had already raised its stake in Hankook to 6.3%. This acquisition is in line with the agreements signed by the two companies in 2003, pursuant to which Michelin could increase its stake in Hankook Tyres to up to 10%. (From a press release on Jun. 18, 2008)

R&D Structure

Facility	Location
Main R&D Center	Daejeon, Korea
Akron Technical Center	Ohio, USA
China Technical Center (CTC)	Jiaxing, Zheziang Province China
Europe Technical Center (ETC)	Hannover, Germany
Japan Technical Liaison office (JTC)	Osaka, Japan

R&D Expenditure

(in millions of won)

-	FY2008	FY2007	FY2006
Amount	85,846	83,243	74,284
% of sales	3.2%	3.7%	3.6%

New product developments (FY2008)

-In Mar. 2008, the Company released the XQ Optimo nova premium tires.

-In Jun. 2008, the Company released the Enfren eco tires.

R&D achievements (FY2008)

Area of Development	Development period	Major achievements
Contract research
Development of green tire forming technology and 3D analysis technique for vulcanizing processes	Mar. 2007 - Feb. 2008	Analyzed rubber flow behavior in the molding process of green tires
Study of silica synthesis technology and its nano rubber compound application	Oct. 2007 - Sep. 2008	Developed high-quality rubber materials by using nano-silica compounds
Development of Ride Tire Model	Jan. 2008 - Dec. 2008	Developed Ride Tire Models after conducting virtual road tests to simulate tire vibration in different driving conditions
R&D Center
Development of technology to improve belt durability of truck and bus radial tires (TBRs)	Jan. 2007 - Dec. 2008	Improved belt durability of truck and bus radial tires (TBRs)

Capital Expenditure

-The Company iinvested a total of 209,011 million won in FY2008, focusing on expanding its production capacity.

-The planned amount of investment in 2009 is 299,939 million won, which includes 140,434 million won to be spent for installing additional production facilities.

Investment projects

-Geumsan Plant (Korea)

The Company will invest 275.5 billion won in a project to expand its facility in Geumsan. The project will be carried out in two stages. The first phase of the project, which cost 76.3 billion won and was already completed in January 2008, raised the plant's daily production capacity by 4,000 tires. The Company is set to spend an additional 199.2 billion won in the second-phase, which targets a further increase of 12,000 tires a day by June 2009. After the second phase is completed, the facility's daily production capacity will be increased from the current 46,000 tires to 62,000 tires. On a yearly basis, its capacity will go up from the current 17.7 million tires to 22.0 million tires. (From a press release on Jun. 4, 2008)