Earnings Release

Earnings Release Q2 2013
Samsung Electronics
July 2013
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 Q2 2013
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
2Q ’13
% of sales
1Q ’13
% of sales
2Q ’12
57.46
100.0%
52.87
100.0%
47.60
34.34
59.8%
31.38
59.4%
29.97
Gross Profit
23.12
40.2%
21.49
40.6%
17.63
SG&A expenses
13.59
23.7%
12.71
24.0%
11.16
3.54
6.2%
3.33
6.3%
2.87
9.53
16.6%
8.78
16.6%
6.46
Other non-operating income/expense
0.09
0.2%
△0.10
△0.2%
0.26
Equity method gain/loss
0.21
0.4%
0.18
0.3%
0.27
Finance income/expense
△0.003
-
0.19
0.4%
△0.26
9.83
17.1%
9.05
17.1%
6.73
2.05
3.6%
1.89
3.6%
1.54
7.77
13.5%
7.15
13.5%
5.19
2Q ’13
1Q ’13
2Q ’12
24%
23%
20%
Profitability (Net profit/Sales)
0.14
0.14
0.11
21%
Asset turnover (Sales/Asset)
1.19
1.14
1.18
20%
Leverage (Asset/Equity)
1.48
1.49
1.52
23%
24%
21%
(Unit: KRW Trillion)
Sales
Cost of Sales
- R&D expenses
Operating Profit
Profit Before Income Tax
Income tax
Net profit
Key Profitability Indicators
ROE
EBITDA Margin
2Q ’12
ROE
1Q ’13
2Q ’13
24%
24%
23%
23%
EBITDA Margin
1
Segment Sales & Operating Profit
Sales
(Unit: KRW Trillion)
Total
CE
VD
IM
Mobile
DS
Semiconductor
- Memory
DP
2Q ’13
QoQ
1Q ’13
2Q ’12
57.46
9%↑
52.87
47.60
12.78
14%↑
11.24
12.83
7.94
7%↑
7.43
8.58
35.54
8%↑
32.82
23.36
34.58
9%↑
31.77
22.43
17.05
8%↑
15.81
17.03
8.68
1%↑
8.58
8.60
5.70
11%↑
5.12
5.42
8.18
15%↑
7.11
8.25
1Q ’13
2Q ’12
Operating Profit
(Unit: KRW Trillion)
2Q ’13
QoQ
9.53
9%↑
8.78
6.46
CE
0.43
83%↑
0.23
0.73
IM
6.28
3%↓
6.51
4.13
DS
2.92
58%↑
1.85
1.69
Semiconductor
1.76
64%↑
1.07
1.03
DP
1.12
46%↑
0.77
0.71
Total
Note) CE (Consumer Electronics), IM (IT & Mobile communications), DS (Device Solutions), DP (Display Panel)
※ Sales for each business unit includes intersegment sales.
※ 2012 sales and operating profit of each business stated above reflect the organizational change in 2013.
2
2Q results
Semiconductor
DP
[Memory]
[ LCD ]
□ Market : Low PC demand continued, while mobile demand
□ Market : Demand increased QoQ led by new SET product
launches and promotion effects
remained solid, SSD market growth continued
- DRAM : PC DRAM demand remained low, while server/mobile
- TV panel : Demand up 6%↑QoQ led by China due to
Labor Day holidays and subsidy program promotions
demand remained solid
- NAND : Smartphone/mass-market tablet demand grew,
- IT panel : Demand increased 9%↑QoQ
Demand growth continued led by tablet panels
broad SSD adoption led solid demand to continue
□ Samsung: Improved earnings by expanding portion
of high value-added/differentiated products
and enhancing cost competitiveness
- TV panel ASP improved led by high-end product launches
(60”+/UHD); IT panel price remained weak
□ Samsung : Earnings improved slightly led by
- DRAM : Actively addressed growing high value-added specialty
products demand (mobile/server)
and increased shipments
- NAND : Enhanced cost competitiveness through 1xnm
process migration;
Increased portion of high-margin solution products
and 3bit products
[System LSI]
□ Overall sales declined due to lower Mobile AP shipments
increased high value-added panel shipments
- TV panel : Shipments up high-single digit-% QoQ
but down high-single digit-% YoY
· Successfully launched 60”+ ultra large-screen TV and UHD
and expanded customer base
- IT panel : High value-added product sales growth continued,
including high-resolution PLS
[ OLED ]
□ Improved earnings led by OLED panel shipment growth for
premium smartphones
3
2Q results
IM
[TV]
[Handset]
□ Market : Under weak seasonality,
smartphone demand increased slightly
- Smartphone : Demand increased by low single digit-% QoQ
- Tablet : Demand decreased in developed markets
but increased in emerging markets
□ Samsung : Smartphone sales grew led by solid S4 shipments,
marginal profit decline due to increased costs
of new product launches, R&D and
retail channels investments, etc.
- Smartphone : Shipments increased with Global S4 launch
and regional growth in America (continent)
and China
- Tablet : Expanded product line-ups, including Note 8.0
-P
C
C E
: Shipments declined due to weak demand
[Network]
□ Earnings declined QoQ due to delayed investments for LTE
network by some carriers
□ Market : FPTV market grew slightly QoQ, under
weak seasonality and low demand in EU market
- Market demand up low-single digit-% QoQ and YoY
 LED portion growth continued in developed market
(1Q 88%  2Q 90%)
□ Samsung : Improved product line-ups in strategic markets,
including North America and China
and shipments increased
- High value-added product shipments grew
· F7/8000 series : shipments increased 7%↑ QoQ
· 60”↑ large-size TV sales portion : 9% in 1Q → 12% in 2Q
- Enhanced mid to low-end product line-ups in EM,
including China; shipments increased
[ Digital Appliances ]
□ Market : Under low-growth market condition, seasonal demand
for Air-conditioners improved
□ Samsung : Earnings grew led by improved key product
line-ups, shipment growth, and seasonal effects
for Air-conditioner
4
Outlook
Semiconductor
□ Memory
- DRAM : Expect steady mobile demand to continue led by
new smartphone launches,
PC demand to grow slightly due to seasonality;
Demand growth led by Server-DRAM for datacenter
and graphic-DRAM for new game consoles
- NAND : Expect demand growth to continue driven by new
mobile product launch and expanded SSD adoption
by PC/Datacenter
□ S.LSI
- Expect strong drive to improve shipments, including 28nm AP
and high-pixel image sensors
DP
□ LCD
- Expect strong seasonality despite headwinds, including delayed
EU demand recovery
ㆍTV panel : Size increase to continue led by
60”+ ultra large screen / UHD market growth
ㆍ IT panel :Tablet panel demand growth led by
mid to low-price products
□ OLED : Expect smartphone panel demand growth to continue
IM
□ Expect smartphone and tablet markets growth to continue
under strong seasonality, while competition to intensify
led by new product launches
- Smartphone : Expect balanced growth in DM and EM
∙ Developed markets : LTE replacement demand to continue,
and expect competition for year-end promotions
∙ Emerging markets : Expect ramp up growth led by
mass-market smartphone, including China
- Tablet : Expect high growth in both DM and EM
∙ Expect competition to intensify as new product offerings
to expand
CE
□ TV
- Expect demand growth under strong seasonality, and
new premium market competition to start, including UHD TV
 Expect sales competition to phase-in after new premium
product launches in 3Q
□ Digital Appliances
- Expect low market growth to continue and demand to increase
led by emerging market
ㆍExpanding line-ups featuring various sizes and high resolution
5
[Appendix 1] Statement of Financial Position (K-IFRS)
(Unit : KRW Billion)
2Q '13
1Q '13
2Q '12
104,791
95,198
73,460
- Cash *
46,986
43,559
23,804
- A/R
27,108
23,398
24,117
- Inventories
21,562
19,502
17,443
9,135
8,739
8,096
98,971
95,645
92,840
- Investments
15,725
14,630
13,078
- PP&E
70,398
68,766
68,840
- Intangible Assets
4,062
4,077
3,673
- Other Non Current Assets
8,786
8,172
7,249
203,762
190,843
166,300
65,382
62,037
56,036
- Debts
13,825
12,356
14,472
- Trade Accounts and N/P
10,527
10,478
10,516
- Other Accounts and N/P
& Accrued Expenses
18,043
16,690
14,267
- Income Tax Payables
3,066
4,291
2,327
- Unearned Revenue
& Other Advances
2,884
3,053
2,769
17,037
15,169
11,685
Shareholders' Equity
138,380
128,806
110,264
- Capital Stock
898
898
898
203,762
190,843
166,300
Current Assets
- Other Current Assets
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
2Q '13
1Q '13
2Q '12
Current ratio *
197%
189%
165%
Liability/Equity
47%
48%
51%
Debt/Equity
10%
10%
13%
Net debt/Equity
-24%
-24%
-8%
※ Current ratio * = Current assets/Current liabilities
[Appendix 2] Cash Flow Statement (K-IFRS)
(Unit : KRW Trillion)
2Q '13
1Q '13
2Q '12
43.56
37.45
25.39
8.60
12.82
5.93
Net profit
7.77
7.15
5.19
Depreciation
3.81
3.78
3.74
Others
-2.98
1.89
-3.00
-6.00
-4.45
-6.48
-5.47
-3.40
-6.18
0.42
-2.62
-0.78
1.33
-2.69
0.27
3.43
6.11
-1.59
46.99
43.56
23.80
Cash (Beginning of period)*
Cash flows from operating activities
Cash flows from investing 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
2Q '13
1Q '13
2Q '12
33.16
31.20
9.33
※ Cash * = Cash and Cash equivalents + Short-term financial instruments + Short-term available-for-sale securities
[ '13 CAPEX Plan ]
- Total 24 trillion won (Semiconductor 13 trillion won, DP 6.5 trillion won, etc.)
※ For 2013, our capital investment is planned for 24 trillion won, an increase of more than
one trillion won from the record-high amount we reported last year.
It is possible for the budgeted amount to increase based on the market conditions of
the second half and the next year.