Earnings Release

Earnings Release Q1 2016
Samsung Electronics
April 2016
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 2016
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 ’16
% of sales
1Q ’15
% of sales
4Q ’15
49.78
100.0%
47.12
100.0%
53.32
30.37
61.0%
28.96
61.5%
33.96
Gross Profit
19.41
39.0%
18.16
38.5%
19.35
SG&A expenses
12.73
25.6%
12.18
25.9%
13.21
3.57
7.2%
3.49
7.4%
3.46
6.68
13.4%
5.98
12.7%
6.14
Other non-operating income/expense
0.36
0.7%
0.05
0.1%
△2.50
Equity method gain/loss
0.01
0.02%
0.06
0.1%
0.99
Finance income/expense
0.07
0.1%
0.13
0.3%
0.10
7.12
14.3%
6.22
13.2%
4.72
1.87
3.8%
1.59
3.4%
1.50
5.25
10.6%
4.63
9.8%
3.22
(Unit: KRW Trillion)
Sales
Cost of Sales
- R&D expenses
Operating Profit
Profit Before Income Tax
Income tax
Net profit
Key Profitability Indicators
1Q ’16
1Q ’15
4Q ’15
1Q ’15
4Q ’15
12%
11%
7%
22%
21%
Profitability (Net profit/Sales)
0.11
0.10
0.06
Asset turnover (Sales/Asset)
0.82
0.82
0.90
Leverage (Asset/Equity)
1.35
1.36
1.36
24%
22%
21%
ROE
EBITDA Margin
1Q ’16
24%
12%
11%
7%
ROE
EBITDA Margin
1
Segment Sales & Operating Profit
Sales
(Unit: KRW Trillion)
Total
1Q ’16
YoY
1Q ’15
QoQ
4Q ’15
49.78
6%↑
47.12
7%↓
53.32
10.62
4%↑
10.26
23%↓
13.85
6.42
3%↑
6.22
31%↓
9.37
27.60
7%↑
25.89
10%↑
25.00
26.94
8%↑
24.99
12%↑
24.08
17.18
0.4%↑
17.10
13%↓
19.74
Semiconductor
11.15
9%↑
10.27
16%↓
13.21
- Memory
7.94
5%↓
8.32
5%↓
8.34
6.04
12%↓
6.85
8%↓
6.53
CE
VD
IM
Mobile
DS
DP
Operating Profit
(Unit: KRW Trillion)
Total
1Q ’16
YoY
1Q ’15
QoQ
4Q ’15
6.68
0.70
5.98
0.54
6.14
CE
0.51
0.65
△0.14
△0.31
0.82
IM
3.89
1.15
2.74
1.66
2.23
DS
2.33
△1.06
3.39
△0.65
2.98
2.63
△0.30
2.93
△0.17
2.80
△0.27
△0.79
0.52
△0.57
0.30
Semiconductor
DP
Note) CE (Consumer Electronics), IM (IT & Mobile communications), DS (Device Solutions), DP (Display Panel)
※ Sales for each business unit includes intersegment sales.
※ 2015 sales and operating profit of each business stated above reflect the organizational structure as of 2016.
2
Q1 Results and Outlook by Business Units
Semiconductor
DP
[Q1 Results]
[Q1 Results]
□ Memory : Expanded sales of high value-added products,
while continuously improving cost structure
- DRAM : Increased sales of high-density server/mobile DRAM;
Expanded 20nm migration
- NAND : Solution product portion increased; Accelerated
mass-production of 3rd gen V-NAND
□ S.LSI : Earnings decreased QoQ due to customer inventory
adjustment, but improved YoY driven by 14nm supply increase
□ OLED: Earnings improved, driven by launch of new high-end
[ Q2 Outlook]
□ Memory: Expect solid demand for server/mobile DRAM and SSD
- DRAM : Address increasing demand for high-value added products
for server/mobile/graphics
- NAND : Focus on sales expansion of V-NAND SSD for enterprise
□ S.LSI: Expect earnings to improve, driven by supply increase for
premium smartphones
[ ‘16 Outlook]
□ Memory: Expect content growth and cloud service expansion to
drive demand growth for high-density products in
mobile/server applications
- DRAM : Focus on profitability-focused product mix
- NAND : Expand sales of high-density solution products such as
V-NAND server SSD
□ S.LSI : Strive to improve profitability by increasing 14nm shipments
and enhancing SoC product line-up
products and expanded panel shipments
- OLED shipments: (units) increased by mid-single% QoQ
□ LCD : Earnings declined due to imbalance of supply/demand,
and yield issue in adopting new TV Panel production
technology
[ Q2 Outlook]
□ OLED : Maintain solid earnings by addressing increasing
market demand
□ LCD : Expect earnings to increase amid improved market
supply/demand balance, driven by stabilized yield for
new technology and supply expansion for
UHD/ultra large-size products
[ ‘16 Outlook]
□ OLED : Improve utilization by expanding customer base
Expand high value-added product line-ups
□ LCD : Reinforce high value-added line-ups (UHD/Curved/ultralarge size); Strengthen cost competitiveness under
improved balance of supply/demand in the 2H
3
Q1 Results and Outlook by Business Units
IM
CE
[Q1 Results]
[Q1 Results]
□ Mobile : Earnings increased QoQ led by improved product mix
with S7, and improved profitability of mid to low-end
through streamlined line-up
- Strong sales of S7 due to enhanced practical features as well as
early introduction
- Global sales expansion of 2016 A/J series
□ TV : Earnings improved YoY substantially driven by expanded
sales of premium product such as SUHD
- Trend toward large-sized and high value-added TVs
(UHD/Curved) expanded
. UHD TV Shipments 98%↑YoY, Curved TV 57%↑YoY
- Shipments increased substantially, mainly in North America,
Europe, and Latin America
□ Network : Earnings decreased slightly QoQ as LTE investments
reduced
[Q2 Outlook]
□ Market : Expect smartphone/tablet demand to remain flat QoQ
amid weak seasonality
□ DA : Earnings improved YoY due to expanded sales of premium
products including the Chef Collection and Active/Add Wash,
mainly in North America and domestic market
[Q2 Outlook]
□ Samsung : Focus on global expansion of S7 sales and
maintaining solid profitability of mid to low-end products
□ TV : Expect earnings to improve QoQ driven by 2016 SUHD model
launches and TV demand from sports events, e.g. Olympics
[ ‘16 Outlook]
□ DA : Under strong seasonality for Air Conditioner and Refrigerator,
expect earnings to improve led by expanded sales of new
premium product, e.g. Family Hub / Twin Cooling refrigerator
□ Market: Expect smartphone demand growth to slow YoY,
while tablet demand to decrease YoY
□ Samsung : Focus on increasing earnings YoY through high-end
sales growth and solid profitability of mid to low-end
products
- High : Launch new flagship model while sustaining solid S7 sales in 2H
- Mid/Low : Focus on enhancing line-up competitiveness and
maintaining cost efficiency, etc.
[ ‘16 Outlook]
□ TV : Expect global TV demand to slow; Focus on growth
through strengthening premium product sales
□ DA : Focus on launching of innovative new products and
enhancing B2B business
4
[Appendix 1] Financial Position
(Unit : KRW Billion)
Mar 31,
2016
Dec 31,
2015
Mar 31,
2015
241,239.8
242,179.5
227,250.4
72,670.7
71,536.0
58,910.1
- A/R
25,505.6
25,168.0
24,911.7
- Inventories
18,749.9
18,811.8
19,119.8
- Investments
12,325.7
13,565.9
14,658.2
- PP&E
85,565.3
86,477.1
83,442.4
5,375.0
5,396.3
5,338.5
21,047.6
21,224.4
20,869.7
241,239.8
242,179.5
227,250.4
62,913.6
63,119.7
59,631.1
11,265.6
12,874.0
9,847.3
- Trade Accounts and N/P
7,829.7
6,187.3
8,736.9
- Other Accounts and N/P
& Accrued Expenses
20,164.9
20,493.1
21,126.1
- Income Tax Payables
1,894.9
3,401.6
2,109.1
- Unearned Revenue
& Other Advances
2,655.9
2,336.2
2,482.8
19,102.6
17,827.5
15,328.9
Shareholders' Equity
178,326.2
179,059.8
167,619.3
- Capital Stock
897.5
897.5
897.5
241,239.8
242,179.5
227,250.4
Assets
- Cash
※
- Intangible Assets
- Other 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,
Long-term time deposits, etc.
Mar 31,
2016
Dec 31,
2015
Mar 31,
2015
Current ratio ※
258%
247%
223%
Liability/Equity
35%
35%
36%
6%
7%
6%
-34%
-33%
-29%
Debt/Equity
Net debt/Equity
※ Current ratio = Current assets/Current liabilities
[Appendix 2] Cash Flow
(Unit : KRW Trillion)
1Q '16
4Q '15
1Q '15
※
71.54
69.77
65.67
Cash flows from operating activities
8.72
12.36
5.12
Net profit
5.25
3.22
4.63
Depreciation
5.12
5.05
4.56
-1.66
4.08
-4.07
-3.39
-6.28
-8.54
-4.74
-5.76
-7.76
-4.26
-3.59
-2.62
Increase in debts
-1.45
0.15
-1.27
Acquisition of treasury stock
-2.90
-3.69
-1.32
Cash (Beginning of period)
Others
Cash flows from investing activities
Increase in tangible assets
Cash flows from financing activities
-
Payment of dividends
Increase in cash
Cash (End of period)※
-0.05
-
1.13
1.77
-6.76
72.67
71.54
58.91
※ Cash = Cash and Cash equivalents, Short-term financial instruments, Short-term available-for-sale securities,
Long-term time deposits, etc.
□ Current State of Net Cash (Net Cash =Cash※ - Debts)
(Unit : KRW Trillion)
Net Cash
Mar 31,
2016
Dec 31,
2015
Mar 31,
2015
61.41
58.66
49.06
※ Cash = Cash and Cash equivalents, Short-term financial instruments, Short-term available-for-sale securities,
Long-term time deposits, etc.