Earnings Release

Earnings Release Q3 2014
Samsung Electronics
October 2014
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 3Q 2014
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
3Q ’14
% of sales
2Q ’14
% of sales
3Q ’13
47.45
100.0%
52.35
100.0%
59.08
30.71
64.7%
31.67
60.5%
35.53
Gross Profit
16.74
35.3%
20.68
39.5%
23.56
SG&A expenses
12.68
26.7%
13.49
25.8%
13.39
3.34
7.0%
3.70
7.1%
3.66
4.06
8.6%
7.19
13.7%
10.16
0.54
1.1%
0.25
0.5%
△0.03
Equity method gain/loss
0.002
0.0%
0.06
0.1%
0.15
Finance income/expense
0.24
0.5%
0.28
0.5%
△0.04
4.85
10.2%
7.79
14.9%
10.24
0.62
1.3%
1.53
2.9%
1.99
4.22
8.9%
6.25
11.9%
8.24
(Unit: KRW Trillion)
Sales
Cost of Sales
- R&D expenses
Operating Profit
Other non-operating income/expense
Profit Before Income Tax
Income tax
Net profit
Key Profitability Indicators
3Q ’14
2Q ’14
3Q ’13
11%
16%
25%
Profitability (Net profit/Sales)
0.09
0.12
0.14
Asset turnover (Sales/Asset)
0.85
0.95
1.21
Leverage (Asset/Equity)
1.42
1.42
1.47
18%
22%
24%
ROE
EBITDA Margin
3Q ’13
25%
2Q ’14
3Q ’14
22%
24%
18%
16%
ROE
11%
EBITDA Margin
1
Segment Sales & Operating Profit
Sales
(Unit: KRW Trillion)
Total
CE
VD
IM
Mobile
DS
Semiconductor
- Memory
DP
3Q ’14
QoQ
2Q ’14
3Q ’13
47.45
9%↓
52.35
59.08
11.60
11%↓
13.00
12.05
7.21
10%↓
8.06
7.68
24.58
14%↓
28.45
36.57
23.52
15%↓
27.51
35.66
16.29
0.4%↑
16.23
17.90
9.89
1%↑
9.78
9.74
7.93
15%↑
6.92
6.37
6.25
1%↓
6.33
8.09
Operating Profit
3Q ’14
QoQ
2Q ’14
3Q ’13
4.06
△3.13
7.19
10.16
CE
0.05
△0.72
0.77
0.35
IM
1.75
△2.67
4.42
6.70
DS
2.33
0.24
2.09
3.09
Semiconductor
2.26
0.40
1.86
2.06
DP
0.06
△0.16
0.22
0.98
(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.
※ 2013 sales and operating profit of each business stated above reflect the organizational structure as of 2014.
2
Q3 Results and Q4 Market Outlook by Business Units
DP
Semiconductor
[Q3 Results]
[Q3 Results]
□ Memory : Amid solid seasonal demand, improved earnings
□ Earnings declined due to weak OLED shipments despite strong
through profit driven product mix management and
continuous leading edge process migration
- DRAM : Actively addressed increased demands such as mobile
and EDP, while expanding 20nm class portion
- NAND : Expanded shipments of mobile storage and
high-density PC/enterprise SSD products,
while increasing 10nm class/3bit portion of shipments
□ S.LSI : Earnings declined due to lower AP demand and LSI
components inventory adjustment by major customers
[Q4 Outlook]
□ Memory : Expect continued solid demand under peak season
- DRAM : Expect supply-demand balance to remain stable;
Solid demand for new mobile products; Strong demand
for new server platform
- NAND : Expect increased demand for high-density mobile storage
and consumer, while strong high-density SSD demand
for PC/Enterprise to continue
□ S.LSI : Expect revenue to improve driven by increase in
LCD sales
- OLED : Earnings weakened reflecting lower sales QoQ
as customers changed line-ups and adjusted inventories
- LCD : Earnings improved QoQ driven by increased UHD TV
and IT panels shipments and higher TV panel ASP
· TV panel : Shipments decreased by low single-digit % QoQ
increased by mid single-digit % YoY
☞ Shipments expansion continued for premium products
such as UHD and curved panels
· IT panel : Overall shipments expanded; Focused on profit driven
product mix management
[Q4 Outlook]
□ LCD : Expect solid supply and demand condition to continue
led by TV panel size increase and UHD TV market growth
□ OLED : Expect new high-end product shipments to increase;
Focus on expanding customer base and reinforcing
mass-market product line-up
20㎚ AP supply and expansion of LSI products sales
3
Q3 Results and Q4 Market Outlook by Business Units
IM
CE
[Q3 Results]
[Q3 Results]
□ Despite slight growth in shipments, earnings declined QoQ
□ TV : Earnings declined QoQ due to decreased ASP and higher
as ASP decreased due to weak smartphone product mix
panel price, while shipments slowed down following
and sales decrease put pressure on the cost structure
1st half strong sales in Latin America led by the World Cup
- Smartphone: Shipments up slightly driven by mid to low-end
products; ASP down due to reduced price for older
models and declined shipment portion of H/E products;
Marginal impact from new Note4, which was
released around the end of Q3
- Tablet
: Under strong seasonality, Shipments increased led
by expansion of new Tab S
□ Network: Sales slightly improved driven by increased
LTE investments by Local and global carriers
[Q4 Outlook]
□ Expect demand for smartphone and tablet to increase
- In China & Asia, shipments increased QoQ led by
reinforced emerging market product line-ups including
mass-market UHD TV
· LCD TV (QoQ) : China 24%↑, Asia 11%↑
- Increased shipments of new products (Curved/UHD, etc.)
· Curved TV QoQ 62%↑, UHD TV QoQ 31%↑
□ Digital Appliances : Earnings declined QoQ due to sales slowdown
amid low seasonality, while air conditioner shipments decreased
due to earlier-than-expected ending of peak season
- Increased sales of new models of refrigerator
· FDR/FSR sales: QoQ 17%↑, YoY 45%↑
※ FDR : French Door Refrigerator, FSR : Food Showcase Refrigerator
under year-end seasonality while competition among
[Q4 Outlook]
set makers to intensify
□ Expect significantly higher level of market demand growth for TV
- Increased competition for launch of new models by set makers;
Price competition to intensify further for year-end promotion
QoQ, entering strong year-end seasonality in developed market
□ Expect digital appliances demand to increase driven by
US & EU markets
4
[Appendix 1] Statement of Financial Position (K-IFRS)
(Unit : KRW Billion)
Sep 30,
2014
Jun 30,
2014
Sep 30,
2013
119,811.3
112,799.7
110,166.0
- Cash *
66,951.2
60,663.0
52,683.6
- A/R
24,069.5
24,432.9
26,282.7
- Inventories
18,872.7
18,276.1
21,934.6
9,917.9
9,427.7
9,265.1
111,935.2
111,923.4
100,646.9
- Investments
17,709.7
17,548.8
16,130.5
- PP&E
76,012.1
75,593.7
71,360.6
4,684.8
4,220.3
3,971.0
13,528.6
14,560.6
9,184.8
231,746.5
224,723.1
210,812.9
68,278.8
65,209.6
66,374.1
13,938.5
13,972.2
11,755.9
- Trade Accounts and N/P
9,483.4
8,161.6
11,457.0
- Other Accounts and N/P
& Accrued Expenses
17,747.1
17,044.4
18,845.7
- Income Tax Payables
3,943.6
4,304.7
3,508.9
- Unearned Revenue
& Other Advances
3,048.2
2,294.0
2,998.5
20,118.0
19,432.7
17,808.1
Shareholders' Equity
163,467.7
159,513.5
144,438.8
- Capital Stock
897.5
897.5
897.5
231,746.5
224,723.1
210,812.9
Current Assets
- Other Current Assets
Non Current Assets
- Intangible Assets
- Other Non Current Assets
Total Assets
Liabilities
- Debts
- Other Liabilities
Total Liabilities &
Shareholder's Equity
※ Cash * = Cash and Cash equivalents + Short-term financial instruments + Short-term available-for-sale securities
Sep 30,
2014
Current ratio *
Liability/Equity
Debt/Equity
Net debt/Equity
※ Current ratio * = Current assets/Current liabilities
Jun 30,
2014
Sep 30,
2013
225%
226%
203%
42%
41%
46%
9%
9%
8%
-32%
-29%
-28%
[Appendix 2] Cash Flow Statement (K-IFRS)
(Unit : KRW Trillion)
3Q '14
2Q '14
3Q '13
60.66
61.48
46.99
10.44
8.91
15.01
Net profit
4.22
6.25
8.24
Depreciation
4.33
4.20
3.94
Cash flows from investing activities
-3.90
-8.84
-7.07
-3.86
-4.68
-6.20
-0.20
-0.16
-1.54
-0.12
1.91
-1.46
6.29
-0.82
5.70
66.95
60.66
52.68
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
Sep 30,
2014
Jun 30,
2014
Sep 30,
2013
53.01
46.69
40.93
※ Cash * = Cash and Cash equivalents + Short-term financial instruments + Short-term available-for-sale securities
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