Earnings Release

Earnings Release Q3 2013
Samsung Electronics
October 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 3Q 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
3Q ’13
% of sales
2Q ’13
% of sales
3Q ’12
59.08
100.0%
57.46
100.0%
52.18
35.53
60.1%
34.34
59.8%
31.99
Gross Profit
23.56
39.9%
23.12
40.2%
20.19
SG&A expenses
13.39
22.7%
13.59
23.7%
12.13
3.66
6.2%
3.54
6.2%
2.98
Operating Profit
10.16
17.2%
9.53
16.6%
8.06
Other non-operating income/expense
△0.03
-
0.09
0.2%
0.06
Equity method gain/loss
0.15
0.3%
0.21
0.4%
0.13
Finance income/expense
△0.04
-
-
-
0.05
Profit Before Income Tax
10.24
17.3%
9.83
17.1%
8.30
1.99
3.4%
2.05
3.6%
1.74
8.24
14.0%
7.77
13.5%
6.56
3Q ’13
2Q ’13
3Q ’12
25%
24%
24%
Profitability (Net profit/Sales)
0.14
0.14
0.13
Asset turnover (Sales/Asset)
1.21
1.19
1.26
Leverage (Asset/Equity)
1.47
1.48
1.53
24%
23%
23%
(Unit: KRW Trillion)
Sales
Cost of Sales
- R&D expenses
Income tax
Net profit
Key Profitability Indicators
ROE
EBITDA Margin
3Q ’12
2Q ’13
24%
24%
23%
23%
ROE
3Q ’13
25%
24%
EBITDA Margin
1
Segment Sales & Operating Profit
Sales
(Unit: KRW Trillion)
Total
CE
VD
IM
Mobile
DS
Semiconductor
- Memory
DP
3Q ’13
QoQ
2Q ’13
3Q ’12
59.08
3%↑
57.46
52.18
12.05
6%↓
12.78
12.22
7.68
3%↓
7.94
8.23
36.57
3%↑
35.54
29.30
35.20
2%↑
34.58
28.40
17.90
5%↑
17.05
17.40
9.74
12%↑
8.68
8.72
6.37
12%↑
5.70
5.22
8.09
1%↓
8.18
8.46
2Q ’13
3Q ’12
Operating Profit
(Unit: KRW Trillion)
3Q ’13
QoQ
10.16
7%↑
9.53
8.06
CE
0.35
18%↓
0.43
0.40
IM
6.70
7%↑
6.28
5.63
DS
3.09
6%↑
2.92
2.22
Semiconductor
2.06
17%↑
1.76
1.02
DP
0.98
12%↓
1.12
1.17
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
3Q Results
Semiconductor
DP
[Memory]
[ LCD ]
□ Market : Demand remained solid in all segments,
mobile/server/PC/game console
□ Market : Panel price declined due to rising inventories in the industry
while demand down QoQ despite entering peak season
- DRAM : Demand up led by new mobile/game device launches;
Server DRAM demand remained strong;
PC demand up due to seasonality
- TV panel : Demand declined due to inventory issues from flat
set demand in Europe and set sales decrease in China
※ 7%↓QoQ, 7%↓YoY
- NAND : Demand up led by new smartphone launches;
Solid demand growth continued driven by
broader SSD adoption in PC/datacenter
- IT panel : Tablet demand growth continued, while panel demand
for notebook/monitor declined due to flat PC market
demand growth
※ 1%↑QoQ
□ Samsung : Earnings improved led by increased sales of
high value-added/differentiated products while
advancing migration to cutting-edge process
- DRAM : Expanded sales of high value-added DRAM for
mobile/server/new game consoles while
increasing migration to 20nm-class
- NAND : Expanded high value-added solution product offerings
with broader adoption of 3bit MLC while
increasing migrations to 10nm-class
[System LSI]
□ Sales slightly increased as mobile AP demand grew
led by major customer’s new product launches
□ Samsung: Despite increased panel shipments,
earnings down due to price decline
- TV panel : shipment increased by mid single digit % QoQ
decreased by low single digit % YoY
· Increased sales of 60”+ large-size TV/UHD line ups
and expanded customer base
- IT panel : Increased sales momentum of panels for tablet and
premium notebook/monitor (high-resolution/PLS)
[ OLED ]
□ High-end smartphone panel sales increased including
new products such as Note 3, etc.
3
3Q Results
IM
C E
[Handset]
[TV]
□ Market : Handset/tablet demand up entering peak season
□ Market : FPTV market grew QoQ driven by North America and
emerging market growth, despite demand decrease
QoQ and YoY in EU/China
- Smartphone/tablet demand increased by high single digit QoQ
due to increased new product launches in the market
□ Samsung : Earnings improved driven by smartphone/tablet
sales volume increase and effective marketing cost
management
- Smartphone : Total shipments up QoQ led by increased sales
of mass-market models;
High-end model shipments stayed at similar
level QoQ driven by solid sales of current models
with NoteⅢ launch
- Tablet : Shipments sharply increased due to enhanced
product line-ups with Tab3 expansion
-P
C
: Improved product mix by focusing on mid/high-end
[Network]
□ Earnings improved QoQ due to increased LTE equipment sales
in overseas market
- ASP declined in large-size TV market due to intensified
competition in developed market
(50/55” LED TV ASP in Developed Market : △5%↓ QoQ)
□ Samsung : Reinforced 60”+ large-size TV line-ups in
North America;
Sales increased in China driven by enhanced
mass-market line-ups
- Increased shipments of high value-added products including
60”+ large-size TV products
· 60”+ large-size TV sales portion : 12% in 2Q → 14% in 3Q
- Increased premium product sales in emerging market
· F7/8000 shipments increased 3% QoQ in emerging market
[ Digital Appliances]
□ Market : Emerging market growth to decline,
under continued trend of global market slowdown
□ Samsung: Focused on improving competitiveness by enhancing
mass-market model line-ups
4
4Q Outlook
Semiconductor
□ Memory
IM
□ Handset
- DRAM : Expect tight market due to solid demand for
mobile/server under industry supply uncertainty
- NAND : Expect market tightness due to solid demand for mobile
and SSD (PC/Datacenter)
□ System LSI
- Expect mobile AP demand to grow led by major customer’s new
products; high-pixel image sensor demand to increase
- Expect smartphone/tablet market growth to continue due to
seasonality, while competitions to intensify further
- Smartphone: Expect balanced growth in both developed and
emerging market
∙ Developed markets : Expect demand growth driven by seasonal
promotions, e.g. LTE subscriptions
in North America and Korea
∙ Emerging markets : Expect steady demand growth led by
mass-market smartphone sales
- Tablet : Expect healthy demand growth led by year-end promotions
DP
□ LCD
- Expect possibly weaker panel demand led by low TV demand
despite entering peak season
ㆍTV panel : Expect market inventory issues to continue
while over 60”+ large-size/UHD demand to grow
ㆍIT panel : Tablet panel portion growth to continue
□ OLED : Enhance market leadership by improving differentiated
product offerings such as 5.7” FHD (Glass & Curved)
CE
□ TV
- Expect demand growth in developed market entering peak season;
while the world-cup pull-in demand to drive growth in Latin America
and other emerging markets, etc.
∙ Competitions to intensify over 60”+ large-size/UHD TVs in
developed market and China
□ Digital Appliances
- Market demand to remain weak due to uncertainties in
the global economy
5
[Appendix 1] Statement of Financial Position (K-IFRS)
(Unit : KRW Billion)
3Q '13
2Q '13
3Q '12
110,166
104,791
82,077
- Cash *
52,684
46,986
30,336
- A/R
26,283
27,108
24,371
- Inventories
21,935
21,562
19,474
9,265
9,135
7,896
100,647
98,971
94,650
- Investments
16,130
15,725
14,802
- PP&E
71,361
70,398
68,996
- Intangible Assets
3,971
4,062
3,698
- Other Non Current Assets
9,185
8,786
7,154
210,813
203,762
176,727
66,374
65,382
60,188
- Debts
11,756
13,825
15,345
- Trade Accounts and N/P
11,457
10,527
11,064
- Other Accounts and N/P
& Accrued Expenses
18,846
18,043
14,479
- Income Tax Payables
3,509
3,066
3,356
- Unearned Revenue
& Other Advances
2,998
2,884
2,515
17,808
17,037
13,429
Shareholders' Equity
144,439
138,380
116,539
- Capital Stock
898
898
898
210,813
203,762
176,727
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
3Q '13
2Q '13
3Q '12
Current ratio *
203%
197%
172%
Liability/Equity
46%
47%
52%
Debt/Equity
8%
10%
13%
-28%
-24%
-13%
Net debt/Equity
※ Current ratio * = Current assets/Current liabilities
[Appendix 2] Cash Flow Statement (K-IFRS)
(Unit : KRW Trillion)
3Q '13
2Q '13
3Q '12
46.99
43.56
23.80
15.01
8.60
11.54
Net profit
8.24
7.77
6.56
Depreciation
3.94
3.81
3.87
-7.07
-6.00
-5.75
-6.20
-5.47
-4.94
-1.54
0.42
0.84
-1.46
1.33
0.93
5.70
3.43
6.53
52.68
46.99
30.34
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
3Q '13
2Q '13
3Q '12
40.93
33.16
14.99
※ Cash * = Cash and Cash equivalents + Short-term financial instruments + Short-term available-for-sale securities