Earnings Release

Earnings Release Q1 2015
Samsung Electronics
April 2015
Disclaimer
The financial information in this document are consolidated earnings results based on K-IFRS.
This document is provided for the convenience of investors only, before the external audit on our 1Q 2015
financial results is completed. The audit outcomes may cause some parts of this document to change.
This document contains "forward-looking statements" - that is, statements related to future, not past, events.
In this context, "forward-looking statements" often address our expected future business and financial
performance, and often contain words such as "expects”, "anticipates”, "intends”, "plans”, "believes”, "seeks”
or "will ". “Forward-looking statements" by their nature address matters that are, to different degrees, uncertain.
For us, particular uncertainties which could adversely or positively affect our future results include:
· The behavior of financial markets including fluctuations in exchange rates, interest rates and commodity
prices
· Strategic actions including dispositions and acquisitions
· Unanticipated dramatic developments in our major businesses including CE (Consumer Electronics),
IM (IT & Mobile communications), DS (Device Solutions)
· Numerous other matters at the national and international levels which could affect our future results
These uncertainties may cause our actual results to be materially different from those expressed in this document.
Income Statement
1Q ’15
% of sales
4Q ’14
% of sales
1Q ’14
47.12
100.0%
52.73
100.0%
53.68
28.96
61.5%
33.85
64.2%
32.05
Gross Profit
18.16
38.5%
18.88
35.8%
21.63
SG&A expenses
12.18
25.9%
13.60
25.8%
13.14
3.49
7.4%
3.65
6.9%
3.69
5.98
12.7%
5.29
10.0%
8.49
Other non-operating income/expense
0.05
0.1%
△0.21
-
0.96
Equity method gain/loss
0.06
0.1%
0.25
0.5%
0.03
Finance income/expense
0.13
0.3%
0.27
0.5%
0.17
6.22
13.2%
5.59
10.6%
9.65
1.59
3.4%
0.25
0.5%
2.07
4.63
9.8%
5.35
10.1%
7.57
(Unit: KRW Trillion)
Sales
Cost of Sales
- R&D expenses
Operating Profit
Profit Before Income Tax
Income tax
Net profit
Key Profitability Indicators
1Q ’15
4Q ’14
1Q ’14
1Q ’14
11%
13%
20%
23%
Profitability (Net profit/Sales)
0.10
0.10
0.14
Asset turnover (Sales/Asset)
0.82
0.95
0.98
Leverage (Asset/Equity)
1.36
1.40
1.44
ROE
EBITDA Margin
22%
18%
23%
4Q ’14
1Q ’15
22%
18%
20%
13%
ROE
11%
EBITDA Margin
1
Segment Sales & Operating Profit
Sales
(Unit: KRW Trillion)
Total
CE
VD
IM
Mobile
DS
Semiconductor
- Memory
DP
1Q ’15
QoQ
4Q ’14
1Q ’14
47.12
11%↓
52.73
53.68
10.26
28%↓
14.27
11.32
6.22
36%↓
9.79
7.39
25.89
2%↓
26.29
32.44
24.99
0.1%↓
25.02
31.37
17.10
3%↓
17.71
15.56
10.27
4%↓
10.66
9.39
8.32
2%↑
8.18
6.29
6.85
3%↓
7.05
6.10
Operating Profit
1Q ’15
QoQ
4Q ’14
1Q ’14
5.98
0.69
5.29
8.49
CE
△0.14
△0.32
0.18
0.19
IM
2.74
0.78
1.96
6.43
DS
3.39
0.25
3.13
1.87
Semiconductor
2.93
0.23
2.70
1.95
DP
0.52
0.05
0.47
△0.08
(Unit: KRW Trillion)
Total
Note) CE (Consumer Electronics), IM (IT & Mobile communications), DS (Device Solutions), DP (Display Panel)
※ Sales for each business unit includes intersegment sales.
※ 2014 sales and operating profit of each business stated above reflect the organizational structure as of 2015.
2
Q1 Results and Outlook by Business Units
Semiconductor
DP
[Q1 Results]
[Q1 Results]
□ Memory : Mobile/server demand remained solid despite seasonality
- DRAM : Continuously enhanced cost competitiveness by 20㎚ migration
; Increased sales of differentiated products (e.g. DDR4/LPDDR4)
- NAND : Increased sales of solution products (e.g. SSD/UFS)
□ S.LSI : Revenue decreased QoQ under low seasonality; profitability
improved led by 14㎚ ramp-up and utilization increase
□ OLED: Shipments increased including new premium products
□ LCD: Solid performance driven by expansion of premium TV panel
sales despite shipment decrease under weak seasonality
· TV panel shipments: decreased by high single-digit % QoQ
decreased by mid single-digit % YoY
[ 2Q Outlook]
□ OLED : Focus on shipment expansion through addressing
new product demand
However, factors for cost increase exist due to
A3 line ramp-up
□ LCD : Expect solid demand for TV panel due to China Labor day
and new product launches; Actively address the demand
with product mix focused on profitability
[ 2Q Outlook]
□ Memory: Expect strong mobile demand driven by new flagship
smartphones ; Server DRAM and SSD demand for datacenters
to continue to grow
□ S.LSI: Expect earnings to improve as 14nm AP and LSI supply
increase in earnest for new flagship smartphone
[’15 Outlook]
□ DRAM: Expect mobile/sever DRAM demand to sustain solid growth
driven by launches of smartphones with higher specification
and continued solid server demand
□ NAND: High-density mobile storage demand to increase and SSD
adoption to expand; Enhance competitiveness by expanding
supply of high value-added products
□ S.LSI: Expect earnings to improve throughout the year driven by
expansion of 14nm FinFET sales and high value-added
LSI products shipments
[‘15 Outlook]
□ OLED: Expect shipment increase driven by new set product
launches and expansion of external sales; Expect higher
profitability; Shipments of flexible products to increase,
which are mid to long-term growth engines
□ LCD: In 1st half, expect continued solid shipments due to favorable
supply and demand condition
In 2nd half, risk exists due to supply increase and demand
decrease from exchange rate impact
3
Q1 Results and Outlook by Business Units
IM
CE
[Q1 Results]
[Q1 Results]
□ Mobile : Earnings improved QoQ due to decreased marketing expenses
and expansion of new mid/low-end smartphones (e.g. A/E/J) ;
Revenue declined slightly QoQ due to decreased shipments
of tablet and feature-phones
☞ Marketing expenses decreased due to seasonality and
stabilized inventory
- Smartphone: Shipments increased QoQ led by mid to low-end
products, ASP declined QoQ
□ Network: Revenue declined QoQ due to decreased investment in
LTE network by overseas carriers
□ TV : Under weak seasonality, earnings declined QoQ led by
decreased demand due to exchange rate impact in Europe/
emerging markets, as well as by increased material cost
[2Q Outlook]
□ Market: Expect smartphone and tablet demand to stagnate
due to continued weak seasonality
□ SEC: Expect earnings improvement led by increased high-end sales
with S6 global expansion, while smartphone shipments to
remain at similar level due to decreased mid/low-end sales;
Expect marketing expenses to increase due to S6 expansion
[’15 Outlook]
□ Market: Expect product/marketing competitions to intensify amid
a slowdown of smartphone growth; Risk for weaker
demand exists due to exchange rate impact (e.g. weak €)
□ SEC: Pursue smartphone shipments growth by enhancing product
competitiveness; Enhance R&D/marketing cost efficiency
by streamlining line ups
- LCD TV shipments increased YoY within the regions that are not
impacted by exchange rates
· North America YoY 8%↑, Asia YoY 16%↑
- Portion of premium products(UHD/Curved) continued to increase
· UHD TV portion 4Q 8% → 1Q 11%
□ DA: Earnings improved YoY led by increased premium product
sales
- FDR/FSR : YoY 77%↑, Drum Washing Machine : YoY 18%↑
※ FDR : French Door Refrigerator, FSR : Food Showcase Refrigerator
[2Q Outlook]
□ TV: Expect continued exchange rate impact in Europe/CIS and
similar market demand as the previous quarter
- Focus on recovering profitability through expanding premium
product sales amid new product launch
□ DA: Expect earnings improvement by increased premium
products sales and strong seasonality of air conditioner
[’15 Outlook]
□ TV: Expect demand to grow led by spread of UHD amid
competition over new technologies
□ DA: Expect premium product demand and demand in US to
increase
4
[Appendix 1] Statement of Financial Position (K-IFRS)
(Unit : KRW Billion)
Mar 31,
2015
Dec 31,
2014
Mar 31,
2014
109,990.5
115,146.0
116,246.0
- Cash ※
56,128.6
61,817.3
61,478.4
- A/R
24,911.7
24,694.6
25,235.9
- Inventories
19,119.8
17,317.5
19,648.5
9,830.4
11,316.6
9,883.2
117,259.9
115,277.0
109,046.6
- Investments
17,439.7
17,900.0
14,677.0
- PP&E
83,442.4
80,873.0
76,519.0
5,338.5
4,785.5
4,120.2
11,039.3
11,718.5
13,730.4
227,250.4
230,423.0
225,292.6
59,631.1
62,334.8
69,730.9
- Debts
9,847.3
11,265.5
12,479.4
- Trade Accounts and N/P
8,736.9
7,914.7
10,263.0
- Other Accounts and N/P
& Accrued Expenses
21,126.1
23,195.2
19,987.8
- Income Tax Payables
2,109.1
2,161.1
5,116.7
- Unearned Revenue
& Other Advances
2,482.8
2,588.9
2,830.1
15,328.9
15,209.4
19,053.9
Shareholders' Equity
167,619.3
168,088.2
155,561.7
- Capital Stock
897.5
897.5
897.5
227,250.4
230,423.0
225,292.6
Current Assets
- Other Current Assets
Non Current Assets
- Intangible Assets
- Other Non Current Assets
Total Assets
Liabilities
- Other Liabilities
Total Liabilities &
Shareholder's Equity
※ Cash = Cash and Cash equivalents + Short-term financial instruments + Short-term available-for-sale securities
Mar 31,
2015
Dec 31,
2014
Mar 31,
2014
Current ratio ※
223%
221%
214%
Liability/Equity
36%
37%
45%
6%
7%
8%
-28%
-30%
-31%
Debt/Equity
Net debt/Equity
※ Current ratio = Current assets/Current liabilities
[Appendix 2] Cash Flow Statement (K-IFRS)
(Unit : KRW Trillion)
1Q '15
※
4Q '14
1Q '14
61.82
66.95
54.50
5.12
5.41
12.21
Net profit
4.63
5.35
7.57
Depreciation
4.56
4.38
4.00
Cash flows from investing activities
-7.47
-6.76
-6.54
-7.76
-7.56
-5.94
-2.62
-3.96
1.26
-1.27
-2.76
1.25
-5.69
-5.13
6.98
56.13
61.82
61.48
Cash (Beginning of period)
Cash flows from operating activities
Increase in tangible assets
Cash flows from financing activities
Increase in debts
Increase in cash
Cash (End of period)※
※ Cash = Cash and Cash equivalents + Short-term financial instruments + Short-term available-for-sale securities
□ Current State of Net Cash (Net Cash =Cash ※ - Debts)
(Unit : KRW Trillion)
Net Cash
Mar 31,
2015
Dec 31,
2014
Mar 31,
2014
46.28
50.55
49.00
※ Cash = Cash and Cash equivalents + Short-term financial instruments + Short-term available-for-sale securities
Similar pages