Earnings Release

Earnings Release 1Q 2014
S
Samsung
Electronics
El t
i
April 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 1Q 2014
fi
financial
i l results
lt iis completed.
l t d The
Th audit
dit outcomes
t
may cause some parts
t off this
thi document
d
t to
t change.
h
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
p
dramatic developments
p
in our major
j businesses including
g CE ((Consumer Electronics),
),
· Unanticipated
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 ’14
14
% of sales
4Q ’13
13
% of sales
1Q ’13
13
53.68
100.0%
59.28
100.0%
52.87
32.05
59.7%
36.45
61.5%
31.38
Gross Profit
21.63
40.3%
22.83
38.5%
21.49
SG&A expenses
13 14
13.14
24 5%
24.5%
14 52
14.52
24 5%
24.5%
12 71
12.71
3.69
6.9%
3.79
6.4%
3.33
8.49
15.8%
8.31
14.0%
8.78
Other non-operating income/expense
0.96
1.8%
0.86
1.4%
△0.10
E it method
Equity
th d gain/loss
i /l
0 03
0.03
0 1%
0.1%
△0 04
△0.04
-
0 18
0.18
Finance income/expense
0.17
0.3%
0.12
0.2%
0.19
9.65
18.0%
9.25
15.6%
9.05
2.07
3.9%
1.95
3.3%
1.89
7.57
14.1%
7.30
12.3%
7.15
(Unit: KRW Trillion)
Sales
Cost of Sales
- R&D expenses
Operating Profit
Profit Before Income Tax
Income tax
Net profit
Key Profitability Indicators
ROE
1Q ’14
4Q ’13
1Q ’13
1Q ’13
24%
20%
22%
23%
Profitability (Net profit/Sales)
0.14
0.12
0.14
Asset turnover (Sales/Asset)
0 98
0.98
1 20
1.20
1 14
1.14
Leverage (Asset/Equity)
1.44
1.46
1.49
23%
21%
24%
EBITDA Margin
23%
ROE
4Q ’13
1Q ’14
22%
23%
21%
20%
EBITDA Margin
1
Segment Sales & Operating Profit
Sales
(Unit: KRW Trillion)
Total
CE
VD
IM
Mobile
DS
Semiconductor
- Memory
DP
1Q ’14
QoQ
4Q ’13
1Q ’13
53.68
9%↓
59.28
52.87
11.32
21%↓
14.27
11.24
7.39
27%↓
10.07
7.43
32.44
4%↓
33.89
32.82
31.36
4%↓
32.56
32.17
15.56
8%↓
17.00
15.81
9 39
9.39
10%↓
10 44
10.44
8 58
8.58
6.29
3%↓
6.52
5.12
6.10
6%↓
6.46
7.11
4Q ’13
1Q ’13
O
Operating
ti Profit
P fit
(Unit: KRW Trillion)
1Q ’14
QoQ
8.49
2%↑
8.31
8.78
CE
0.19
71%↓
0.66
0.23
IM
6.43
18%↑
5.47
6.51
DS
1.87
13%↓
2.14
1.85
1.95
2%↓
1.99
1.07
0.11
0.77
Total
Semiconductor
DP
△0.08
-
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 change in 2014.
2
1Q Results
Semiconductor
[Memory]
[LCD]
□ Market : Demand for datacenter/game console remained
strong despite weak seasonality
- DRAM
DP
□ Market: Panel demand/ASP declined under weak seasonality
- TV Panel : Demand decreased QoQ due to reduced orders
from set makers (QoQ 10%↓, YoY 3%↓)
: Decline in mobile devices demand under weak seasonality;
· ASP decline continued (QoQ 4%↓)
PC demand stabilized compared to the recent years;
Strong server/game console demand continued
- IT Panel : Overall panel demand decreased including tablet
- NAND : Datacenter SSD and high-density card demand growth
continued, while demand for mobile decreased
□ Samsung : Improved profitability by addressing applications
with relatively solid demand and by expanding
leading-edge process migration
- DRAM : Improved profitability through addressing increased
server/graphic DRAM demand, expanding 20nm-class
migration and enhancing production efficiency
(QoQ 12%↓)
□ Samsung : Earnings down on lower overall shipments
and continued ASP decline
hi
t low
l
i l di it % growth
th QoQ
Q Q
single-digit
- TV panell : shipments,
low-10 % growth YoY
· Higher shipments of UHD; Reinforced Chinese customer
base through new Fab ramp-up
- IT panel : Overall shipment declined while increasing portion
- NAND : Maintained profitability by increasing shipments of
of the high resolution tablet panels
high-density solutions/cards in addition to the expansion
of process migration despite soft pricing environment
[System LSI]
□ Earnings down QoQ due to lower mobile AP demand under
weak seasonality
[OLED]
□ Earnings
g down Q
QoQ
Q due to weak seasonal demand
and impact from new product model replacement, etc
- Started mass production of new high-end 5.1” FHD
- CIS sales increased led by ISOCELL high-pixel product launch
3
1Q Results
IM
C E
[Handset]
[TV]
□ Market
M k t : Lower
L
smartphone/tablet
t h
/t bl t d
demand
d under
d weakk
□ Market
k : FPTV demand
d
d down
d
amid
d weakk seasonality
l (QoQ
(
29%↓)
↓)
seasonality
- Developed market: Channel inventory increased due to intensified
competition from the previous quarter
- Emerging
E
i market
k t:D
Demand
dd
decreased
d under
d weakk market
k t
condition in EM including China
□ Samsung : Profit up QoQ driven by smartphone shipment
growth, efficiently managing marketing expenses,
and
d positive
iti impact
i
t from
f
one-time
ti
expense
adjustments
- Smartphone : Shipment increased ; enhanced high-end
line-ups with S5 launch in addition to existing
S4 & Note3 ; mid to low-end shipments increased
but slight growth YoY (YoY 2%↑)
- Compared to the previous year,
· Latin America : demand grew substantially thanks to
the World Cup impact (YoY 22%↑)
· EU : turned to growth (YoY 3%↑)
· US : demand down (YoY 4%↓)
□ Samsung : Earnings down QoQ due to weak market demand
despite outperforming market growth
- Increased premium product sales in developed markets (US/EU)
· 60”+ large-size LCD TV sales YoY 95%↑, UHD TV QoQ 48%↑
- Shipments up QoQ(3%↑)/YoY(74%↑) by addressing the World
Cup demand in Latin America
with strong sales of Grand 2, etc.
- Tablet
: Reinforced mid to high-end line ups by launching
Note PRO 12.2· and Tab PRO 12”/8”
[Network]
□ Sales decreased QoQ due to weak seasonality
[ Digital Appliances ]
□ Earnings declined due to lower shipments under weak seasonality
and increased expenses associated with new product launch, etc
4
Outlook
Semiconductor
□ Memory : Expect higher demand for mobile devices led by new
mobile product launches and expansion of Chinese LTE
market ; Expect PC DRAM contents to grow ; Expect
increased server DRAM/SSD demand for datacenter to
continue
- FY14 : Expect balanced DRAM supply-demand condition and
increased NAND demand for datacenter/PC SSD to increase
□ System
S
LSI : E
Expect weakk earnings
i
momentum to continue
i
in
i 2Q,
2Q
but improved results in 2H based on seasonal
demand and 20nm production
※ Expect to enhance mid-term growth momentum through
a collaboration with Globalfoundries on 14nm.
DP
□ LCD : Expect market condition to improve driven by demand increase
from the World Cup effect and UHD TV market expansion
- UHD TV : Expect shipment increase of mass market products and
premium products such as curved TV
- FY14 : Expect supply and demand to improve as capacity growth
slows down amid solid demand g
growth
□ OLED : Expect to increase shipments of new high-end smartphone
panels; to expand mid-end line ups; to increase applications
to wearable devices (smart watch), etc.
IM
□ Handset : Slight growth QoQ as weak seasonality to continue
in 2Q
- Smartphone
· High-end : Expect replacement demand growth led by
early upgrade program in North America and
TD-LTE expansion in China
· Low/Mid-end : Expect demand to grow in emerging markets;
p
to intensifyy with new product
p
Competitions
launches among set makers
□ Tablet : Slight demand growth under weak seasonality
- Forecast competition to intensify with line up diversification
by set makers amid slowdown of growth trend
CE
□ TV
- Expect slight demand growth driven by the impact of
the World Cup and new product launches
- In particular, UHD TV market to grow significantly
due to competition over new model launch and line-up expansion
· 2Q Global UHD TV demand : 1.8M ((QoQ 58%↑, D.Search)
□ Digital Appliances
- Forecast market to grow slightly QoQ led by increased demand in
developed market and strong seasonal sales for air conditioner
5
[Appendix 1] Statement of Financial Position (K-IFRS)
(Unit : KRW Billion)
Mar 31,
2014
Dec 31,
2013
Mar 31,
2013
116,246
110,760
95,198
- Cash *
61,478
54,496
43,559
- A/R
25,236
24,989
23,398
- Inventories
19,649
19,135
19,502
9,883
12,141
8,739
109,047
103,315
95,645
- Investments
14,677
12,661
14,630
- PP&E
76,519
75,496
68,766
4,120
3,981
4,077
13,730
11,177
8,172
225,293
214,075
190,843
69,731
64,059
62,037
- Debts
12,479
11,161
12,356
- Trade Accounts and N/P
10,263
8,437
10,478
- Other Accounts and N/P
& Accrued Expenses
19,988
20,541
16,690
- Income Tax Payables
5,117
3,386
4,291
- Unearned Revenue
& Other Advances
2,830
2,882
3,053
19,054
17,652
15,169
Shareholders' Equity
155,562
150,016
128,806
- Capital Stock
898
898
898
225,293
214,075
190,843
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,
2014
Current ratio *
Liability/Equity
Debt/Equity
Net debt/Equity
※ Current ratio * = Current assets/Current liabilities
Dec 31,
2013
Mar 31,
2013
214%
216%
189%
45%
43%
48%
8%
7%
10%
-31%
-29%
-24%
[Appendix 2] Cash Flow Statement (K-IFRS)
(Unit : KRW Trillion)
1Q '14
4Q '13
1Q '13
54.50
52.68
37.45
12.21
10.28
12.82
Net profit
7.57
7.30
7.15
Depreciation
4.00
3.94
3.78
Cash flows from investing activities
-6.54
-7.67
-4.45
-5.94
-8.08
-3.40
1.26
-0.40
-2.62
1.25
-0.38
-2.69
6.98
1.81
6.11
61.48
54.50
43.56
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,
2014
Dec 31,
2013
Mar 31,
2013
49.00
43.34
31.20
※ Cash * = Cash and Cash equivalents + Short-term financial instruments + Short-term available-for-sale securities