Earnings Release

Earnings Release Q3 2012
Samsung Electronics
October 2012
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 Q3 2012 financial
results is completed. The audit outcomes may cause some parts of this document to change.
Thi document
This
d
contains
i "forward-looking
"f
d l ki
statements"" - that
h is,
i statements related
l d to future,
f
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"
statements by their nature address matters that are,
are to different degrees,
degrees uncertain.
uncertain
“Forward-looking
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), Semiconductor, DP (Display Panel)
· Numerous other
h matters at the
h nationall and
d internationall levels
l
l which
h h could
ld affect
ff
our future
f
results
l
These uncertainties may cause our actual results to be materially different from those expressed in this document.
Segment Sales & Operating Profit
Sales
(Unit: Trillion Won)
Total
DMC
CE
- VD
IM
- Mobile
DS
Semiconductor
- Memory
DP
- LCD
Others
3Q ’12
12
Y-on-Y
Y
on Y
3Q ‘11
11
2Q ’12
12
52.18
26%↑
41.27
47.60
41.90
41%↑
29.71
36.57
11.60
2%↑
11.40
12.15
8.23
2%↓
8.38
8.58
29.92
67%↑
17.94
24.04
26.25
82%↑
14.42
20.52
17.40
6%↑
16.49
17.03
8.72
8%↓
9.48
8.60
5.22
5%↓
5.50
5.42
8.46
19%↑
7.08
8.25
5 40
5.40
0 5%↓
0.5%↓
5 42
5.42
5 63
5.63
△7.12
-
△4.93
△6.00
3Q ’12
12
Y on Y
Y-on-Y
3Q ‘11
11
2Q ’12
12
8.12
91%↑
4.25
6.72
5.88
112%↑
2.77
4.90
CE
0 43
0.43
38%↑
0 31
0.31
0 76
0.76
IM
5.63
132%↑
2.42
4.19
2.29
50%↑
1.53
1.88
Semiconductor
1.15
28%↓
1.59
1.11
DP
1.09
-
△0.09
0.75
△0.05
-
△0.05
△0.06
※ Sales includes intersegment sales
Operating Profit
(Unit:
i Trillion
illi
Won)
Total
DMC
DS
Others
Note) DMC (Digital Media & Communications), CE (Consumer Electronics), IM (IT & Mobile communications), DS (Device Solutions), DP (Display Panel)
※ Information on annual earnings was re-stated according to the current business divisions.
1
Income Statement
3Q ’12
% of sales
Y-on-Y
3Q ’11
% of sales
2Q ’12
% of sales
52.18
100%
26%↑
41.27
100%
47.60
100%
Cost of Sales
31.99
61.3%
15%↑
27.75
67.2%
29.97
63.0%
Gross Profit
20.19
38.7%
49%↑
13.52
32.8%
17.63
37.0%
R&D expenses
2.98
5.7%
22%↑
2.43
5.9%
2.87
6.0%
SG&A expenses
9.22
17.7%
36%↑
6.80
16.5%
8.36
17.6%
Oth operating
Other
ti
profits/losses
fit /l
0 13
0.13
0 3%
0.3%
-
△0.04
0 04
△0.1%
0 1%
0 33
0.33
0 7%
0.7%
8.12
15.6%
91%↑
4.25
10.3%
6.72
14.1%
Equity method gains/losses
0.13
0.3%
55%↓
0.29
0.7%
0.27
0.6%
Finance incomes/expenses
p
0.05
0.1%
-
△0.41
△1.0%
△0.26
△0.6%
8.30
15.9%
101%↑
4.13
10.0%
6.73
14.1%
1.74
3.3%
152%↑
0.69
1.7%
1.54
3.2%
6.56
12.6%
91%↑
3.44
8.3%
5.19
10.9%
(Unit: Trillion Won)
Sales
Operating Profit
Profit Before Income Tax
Income tax
Net profit
Key Profitability Indicators
3Q
Q ’12
ROE
22%
3Q
Q ’11
2Q
Q ’12
24%
15%
20%
Profitability (Net income/Sales)
0.13
0.08
0.11
Asset turnover ((Sales/Asset)
/
)
1.26
1.17
1.18
Leverage (Asset/Equity)
1.52
1.50
1.52
23%
18%
22%
EBITDA Margin
24%
23%
18%
20%
15%
3Q ’11
ROE
2Q ’12
EBITDA Margin
3Q ’12
2
Cash Flow Statement
(Unit: Trillion Won)
3Q ’12
Cash (Beginning of period)*
23.80
25.39
11.54
5.93
Net profit
6.56
5.19
Depreciation
3.87
3.74
Others
1.11
△3.00
△5.75
5 75
△6.48
6 48
△4.94
△6.18
Cash flow from Finance
0.84
△0.78
Increase in Debt
0 93
0.93
0 27
0.27
6.54
△1.59
30.34
23.80
Cash flow from Operation
C h flow
Cash
fl
from
f
Investment
I
Increase in tangible assets
Net increase in cash
Cash (End of period)*
2Q ’12
* Cash = Cash + Cash equivalents + Short
Short-term
term financial instruments + Short
Short-term
term available-for-sale
available for sale securities
Cash Balance
Cash
21.75
9.60
3Q ’11
Net Cash
26.88
25.39
12.23
11.52
4Q ’11
1Q ’12
30.34
23.80
9.33
2Q ’12
14.99
3Q ’12
3
Statement of Financial Position
3Q ’12
2Q ’12
3Q ’11
82.08
73.46
67.21
Cash*
30.34
23.80
21.75
Trade accounts and notes receivable
24.37
24.12
21.73
Inventories
19.47
17.44
16.63
Non-current assets
94.65
92.84
80.95
Investments
14.80
13.66
12.01
PP&E
69.00
68.84
59.66
176.73
166.30
148.16
15.34
14.47
12.15
60.19
56.04
49.50
116.54
110.26
98.66
(Unit: Trillion Won)
Current assets
Total assets
Debt
Total liabilities
Total shareholders’ equity
* Cash = Cash + Cash equivalents + Short-term financial instruments + Short-term available-for-sale securities
Key Financial Indicators
3Q ’12
12
2Q ’12
12
3Q ’11
11
Current ratio*
172%
165%
161%
Liability/Equity
52%
51%
50%
Debt/Equity
13%
13%
12%
△13%
△8%
△10%
Net debt/Equity
* Current ratio= Current assets/Current liabilities
4
3Q results
Semiconductor
DP
[Memory]
[ LCD ]
□ Market : PC DRAM demand continued to be weak due to
weak seasonal effect; Mobile/server DRAM demand
remained relatively strong
□ Market : Panel demand grew 2%QoQ due to solid demand in
emerging markets and competition for new product
launches in tablet market
- DRAM : PC DRAM oversupply
l persisted
i t d amid
id weakk back-to-school
b kt
h l
demand. However, mobile DRAM demand continued to
increase led by strong smartphone demand
- NAND : Demand increased due to new mobile device launches
in end
end-3Q,
3Q, while suppliers remained conservative about capex
□ Samsung : Focused on securing profit by expanding portions of
high value-added products
- DRAM : Concentrated on sales expansion of high value-added
products such as mobile/server DRAM products
- NAND : Improved product mix by increasing sales of solution products
(eMMC, SSD, etc.). Also, achieved cost reduction by increasing
portions of 20nm-class process
[System LSI]
□ Earnings increased by expanding leading-edge process and
high value-added product sales
- With 32nm migration
g
gaining
g
g momentum,, sales for high
g value-added
products increased (32nm quad core AP, etc.)
- CIS sales slightly decreased due to demand decline for low-pixel products
- TV panel : Shipments increased steadily by 9%QoQ
9%QoQ, led by demand
for Chinese National holiday season and demand growth in
preparation for year-end peak season
· Prices of some products rose slightly due to constrained supply
((mainlyy 32” & 40” TV panels)
p
)
- IT panel : Although demand for tablet panels continued to grow,
overall IT panel demand declined 1%QoQ as demand for
note PC/ monitor panels remained weak
□ Samsung : Earnings momentum continued driven by strong
growth in OLED segment and sales expansion of
high value-added TV/tablet LCD panels
- TV panel shipment : flat QoQ, mid-10% YoY growth
g value-added p
• Sales of high
panels continued to increase
(40”+ 3D/LED TV, tablet, etc.)
- OLED : Strong growth momentum continued led by sales increase
of OLED panels for high-end smartphones (due to new product
launches, etc)
5
3Q results
IM
CE
[Handset]
[TV]
□ Market : Solid demand growth QoQ backed by positive
seasonality and new product launches
□ Market : FPTV demand slowed down amid summer holiday
season, etc., leading to intensified market competition
- Smartphone
p
: Low-10% Q
QoQ
Qg
growth
- Feature phone : Around 10% QoQ growth
□ Samsung : Substantial increase in revenue/profit QoQ driven
by rising sales in high-end smartphones,
enhanced p
product mixes,, etc.
- LED TV demand increased mid-30%
mid 30% QoQ on expansion of
mass-market products
· LED TV portion : mid-60% in ’12.2Q → low-70% in ‘12.3Q
□ Samsung : Secured solid earnings due to expanded portion of
strategic LED TVs amid price competition
- Smartphone : Shipments increased significantly due to global
expansion of GalaxySⅢ and reinforced line-ups of
mid/low-end products
- Pursued sales expansion of large size premium LED TVs
(7/8000, above 60” TVs etc.) in developed markets and regional
strategic LED models (32”/40”) in emerging markets
- Feature p
phone : Shipments
increased slightly
QoQ
p
g yQ
Q led byy
seasonal effect
- LED TV portion : mid-80%
mid 80% in ‘12.2Q
12.2Q → around 90% in ‘12.3Q
12.3Q
- ASP increased QoQ on product mix improvement
[Network/IT]
□ Network : LTE equipment sales increased. However, margins
decreased amid price competition.
[ Digital Appliances ]
□ Earnings declined due to slowed demand in developed markets
and weak seasonality for air conditioners
- Sales portion of premium products and emerging markets increased
on sales expansion efforts
□ IT: Focused on securing earnings by increasing Note PC sales in
emerging markets amid weak PC demand
6
Market outlook (4Q)
Semiconductor
□ Memory
- DRAM : PC DRAM oversupply to continue due to weak year-end
IM
□ Handset
- Demand to be led by smartphones and emerging markets amid
demand; Mobile DRAM demand to increase with new mobile
year-end seasonal effect and expanded new product competition
device launches
· Smartphone : Competition for new product launches to intensify
in each OS and price range
- NAND : Tight supply-demand conditions expected due to seasonal
demand increase and new mobile product launches
□ System LSI
- Strong growth expected due to seasonal demand increase and
growing
i demand
d
d for
f mobile
bil AP and
d CIS led
l d by
b new mobile
bil devices
d i
· Feature phone : Demand to grow QoQ due to solid seasonality
- Tablet : Market demand to increase due to new product launches,
price competition, etc.
□ Network/ IT
- Network : LTE network to expand in overseas markets (US, Japan, etc.)
- IT : Note PC demand to increase QoQ led by year-end promotions, etc.
DP
□ TV
- Demand to increase led by year-end seasonality and Chinese
New Year effect
· Demand for LED/large size TVs to grow under China’s energy
subsidy policy
□ IT
CE
□ TV
- Overall market demand to grow with intensified sales competition
in the p
peak season (mid-20%
(
QoQ,
Q
Q, mid-single-digit%
g
g
YoY))
· LED TV portion : low-70% in ‘12.3Q → around 80% in ‘12.4Q
□ Digital Appliances
- Demand growth to slow down because of developed market economy,
- Tablet : Demand growth to continue with launch of new products, etc.
however, overall market demand to increase slightly, led by emerging
- NB/MNT : Weak demand to be persisted by seasonality
markets
7
[Appendix 1] Statement of Financial Position (K-IFRS)
(Unit : KRW 100 Million)
3Q '12
(A)
Current Assets
2Q '12
(B)
3Q '11
(C)
Q-on-Q
(A - B)
Y-on-Y
(A - C)
820,774
734,602
672,143
86,172
148,631
- Cash ※
303,366
238,042
217,509
65,324
85,857
- A/R
243,713
241,174
217,323
2,539
26,390
- Inventories
194,738
174,430
166,296
20,308
28,442
78,957
80,956
71,015
-1,999
7,942
946,497
928,398
809,516
18,099
136,981
- Investment
148,024
136,603
120,072
11,421
27,952
- PP&E
689,958
688,396
596,598
1,562
93,360
- Intangible Assets
36,977
36,729
34,082
248
2,895
- Other Non Current Assets
71,538
66,670
58,764
4,868
12,774
1,767,271
1,663,000
1,481,659
104,271
285,612
601,883
560,359
495,016
41,524
106,867
- Debts
153,448
144,717
121,522
8,731
31,926
- Trade Accounts and N/P
110,642
105,163
112,756
5,479
-2,114
- Other Accounts and N/P
& Accrued Expenses
144,791
142,669
130,063
2,122
14,728
- Income Tax Payable
33,563
23,274
11,502
10,289
22,061
- Unearned Revenue &
Other Advances
25,148
27,685
21,162
-2,537
3,986
134,291
116,851
98,011
17,440
36,280
1,165,388
1,102,641
986,643
62,747
178,745
8,975
8,975
8,975
0
0
1,767,271
1,663,000
1,481,659
104,271
285,612
- Other Current Assets
Non Current Assets
Total Assets
Liabilities
- Other Liabilities
Shareholders' Equity
- Capital Stock
Total Liabilities &
Shareholder's Equity
※ Cash = Cash + Cash equivalents + Short-term financial instruments + Short-term available-for-sale securities
[Appendix 2] Income Statement (K-IFRS)
(Unit : KRW 100 Million)
3Q '12
(A)
Sales
2Q '12
%
(B)
3Q '11
%
(C)
%
Q-on-Q
Y-on-Y
(A - B)
(A - C)
521,773
100%
475,970
100%
412,740
100%
45,803
109,033
319,896
61.3%
299,712
63.0%
277,542
67.2%
20,184
42,354
201,877
38.7%
176,258
37.0%
135,197
32.8%
25,619
66,680
R&D
29,756
5.7%
28,729
6.0%
24,292
5.9%
1,027
5,464
SG&A
92,187
17.7%
83,594
17.6%
67,992
16.5%
8,593
24,195
- Wages & Fee
21,131
4.0%
19,962
4.2%
16,489
4.0%
1,169
4,642
- Marketing Expenses
36,783
7.0%
31,257
6.6%
23,321
5.7%
5,526
13,462
1,313
0.3%
3,307
0.7%
-384
-0.1%
-1,994
1,697
81,247
15.6%
67,241
14.1%
42,529
10.3%
14,006
38,718
1,326
0.3%
2,688
0.6%
2,921
0.7%
-1,362
-1,595
451
0.1%
-2,628
-0.6%
-4,127
-1.0%
3,079
4,578
756
0.1%
362
0.1%
96
0.0%
394
660
77
0.0%
-3,688
-0.8%
-5,565
-1.3%
3,765
5,642
Income Before
Income Taxes
83,024
15.9%
67,301
14.1%
41,322
10.0%
15,723
41,702
- Income Taxes
17,375
3.3%
15,366
3.2%
6,906
1.7%
2,009
10,469
65,649
12.6%
51,934
10.9%
34,417
8.3%
13,715
31,232
Cost of Sales
Gross Profit
Other
Operating Profits
Operating Profits
Gain(or Loss) on Equity
Method Investment
Finance Incomes
/ Expenses
- Interest Gain (or Loss)
- F/X Related Gain (or Loss)
Net Income