Earnings Release

Earnings Release Q1 2012
S
Samsung
Electronics
El t
i
April 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 our external audit on Q1 2012 financial
results of our headquarters 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”,
p
, "anticipates”,
p
, "intends”,, "plans”,
p
, "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,
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 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.
Segment Sales & Operating Profit
Sales
(Unit: Trillion Won)
Total
DMC
CE
- VD
IM
- Mobile
DS
Semiconductor
- Memory
DP
- LCD
Others
1Q ’12
Y-on-Y
1Q ‘11
4Q ’11
45.27
22%↑
36.99
47.30
34.25
40%↑
24.50
35.23
10.67
2%↑
10.47
14.00
7.71
0.3%↑
7.68
10.88
23.22
70%↑
13.69
20.78
18.90
86%↑
10.14
17.18
16.33
5%↑
15.55
17.61
7.98
13%↓
9.18
9.17
4 89
4.89
17%↓
5 87
5.87
5 45
5.45
8.54
31%↑
6.51
8.55
17%↑
5.27
6.25
6.18
△5.31
-
△3.06
△5.54
1Q ’12
Y-on-Y
1Q ‘11
4Q ’11
5.85
98%↑
2.95
5.30
4 77
4.77
209%↑
1 54
1.54
3 20
3.20
CE
0.53
550%↑
0.08
0.66
IM
4.27
193%↑
1.46
2.54
1.06
25%↓
1.42
2.06
Semiconductor
0 76
0.76
54%↓
1 64
1.64
2 31
2.31
DP
0.28
-
△0.23
△0.22
0.02
-
△0.01
0.04
※ Sales includes intersegment sales
Operating Profit
(Unit: Trillion Won)
Total
DMC
DS
Others
Note) DMC (Digital Media & Communications), CE (Consumer Electronics), IM (IT & Mobile communications), DS (Device Solutions), DP (Display Panel)
1
Income Statement
1Q ’12
% of sales
Y-on-Y
1Q ’11
% of sales
4Q ’11
% of sales
45.27
100%
22%↑
36.99
100%
47.30
100%
30.14
66.6%
16%↑
26.05
70.4%
31.51
66.6%
15.13
33.4%
38%↑
10.93
29.6%
15.79
33.4%
R&D expenses
2.73
6.0%
16%↑
2.34
6.3%
2.74
5.8%
SG&A expenses
6.77
14.9%
17%↑
5.79
15.7%
8.46
17.9%
Other operating profits/losses
0.21
0.5%
40%↑
0.15
0.4%
0.70
1.5%
5.85
12.9%
98%↑
2.95
8.0%
5.30
11.2%
Equity method gains/losses
0.37
0.8%
2%↓
0.38
1.0%
0.32
0.7%
Finance incomes/expenses
0.13
0.3%
108%↑
0.06
0.2%
△0.14
△0.3%
6.35
14.0%
87%↑
3.39
9.2%
5.47
11.6%
1 30
1.30
2 9%
2.9%
116%↑
0 60
0.60
1 6%
1.6%
1 47
1.47
3 1%
3.1%
5.05
11.2%
81%↑
2.78
7.5%
4.00
8.5%
(Unit: Trillion Won)
Sales
Cost of Sales
Gross Profit
Operating Profit
Profit Before Income Tax
Income tax
Net profit
Key Profitability Indicators
1Q ’12
1Q ’11
4Q ’11
19%
12%
17%
Profitability (Net income/Sales)
0.11
0.08
0.08
Asset turnover (Sales/Asset)
1.15
1.09
1.31
Leverage (Asset/Equity)
1.52
1.50
1.52
21%
16%
19%
ROE
EBITDA Margin
21%
19%
16%
19%
17%
12%
1Q ’11
ROE
4Q ’11
EBITDA Margin
1Q ’12
2
Cash Flow Statement
1Q ’12
12
4Q ’11
11
26.88
21.75
8.43
7.32
Net profit
5.05
4.00
Depreciation
3.49
3.49
△0.11
△0.17
△8.02
△4.74
△7.69
△5.93
Cash flow from Finance
△1.99
2.85
Increase in Debts
△0.74
2.81
Net increase in cash
△1.49
5.13
Cash
h (End
d off period)
i d*
25.39
26.88
((Unit: Trillion Won))
Cash (Beginning of period)*
Cash flow from Operation
Others
Cash flow from Investment
g
assets
Increase in tangible
* Cash = Cash + Cash equivalents + Short-term financial instruments + Short-term available-for-sale securities
Cash Balance
Cash
22.34
10.79
’11 1Q
Net Cash
19.07
26.88
25.39
12.23
11.52
’11 4Q
’12 1Q
21.75
8 10
8.10
9.60
’11 2Q
’11 3Q
3
Statement of Financial Position
(Unit: Trillion Won)
1Q ’12
4Q ’11
1Q ’11
Current assets
71.29
71.50
60.96
Cash*
25.39
26.88
22.34
Trade accounts and notes receivable
21.90
21.88
17.74
Inventories
16.36
15.72
14.18
Non-current assets
88.86
84.13
75.58
Investments
13.49
12.82
12.18
PP&E
66.00
62.04
55.18
160.16
155.63
136.53
13.87
14.65
11.55
54.65
53.79
45.03
105.51
101.84
91.50
Total assets
Debts
Total liabilities
Total shareholders’ equity
* Cash = Cash + Cash equivalents + Short-term financial instruments + Short-term available-for-sale securities
Key
y Financial Indicators
1Q ’12
4Q ’11
1Q ’11
158%
161%
160%
Liability/Equity
52%
53%
49%
Debt/Equity
13%
14%
13%
△11%
△12%
△12%
Current ratio*
Net debt/Equity
* Current ratio= Current assets/Current liabilities
4
1Q results
Semiconductor
[Memory]
□ Market : Price of major
declined amid weak
j products
p
seasonality
- DRAM : PC demand decreased ; price competition continued in
Mobile DRAM market
- NAND : Weak channel demand and spot price
Embedded
E b dd d products’
d t ’ demand
d
d remained
i d solid
lid amid
id price
i
pressure
□ Samsung : Earnings declined amid price decrease of major
products. Focused on geometry migration and
sales of differentiated products
- DRAM : Focused on sales of high value-added specialty products
for server/mobile applications
- NAND : Minimized sales to channels and expanded
high value-added/solution products line-up
[System LSI]
□ Earnings slowed down as sales decreased QoQ
amid low seasonality
Display Panel
[ LCD ]
□ Market : Panel demand declined due to low seasonal
demand for set products, except for tablet panels
- TV panel : Demand decreased sequentially (9%↓ QoQ)
due to economic slow down in Europe and
weak demand in emerging markets (China,
(China etc.)
etc )
- IT panel : Demand for tablet panels increased, but
demand for monitor and note PC panels was weak
□ Samsung : Focused on improving profitability
by enhancing value-added product line-up
(tablet panel, 3D/LED panel, etc.)
- TV panel shipment : Mid-10%↓QoQ, low-20%↑YoY
• Increased portion of value-added 3D/LED TV panels
and sales of tablet panels
※ SMD : Profit improved QoQ due to shipment increase of
OLED panels for smartphone
- Affected by line conversion and inventory adjustment by OEMs
ahead of new product launches, etc.
- Strengthened technology competitiveness by expanding 32㎚
process capacity and promoting geometry migration
5
1Q results
IM
CE
[Handset]
[TV]
□ Market : Demand decreased low teens% QoQ
amid low seasonal demand
□ Market : Overall market demand decreased QoQ,
QoQ
amid low seasonality and demand slowdown
in the developed markets
- Demand for smartphones and feature phones decreased QoQ
due to demand slowdown in developed markets
□ Samsung : Earnings increased significantly QoQ led by
product mix improvement
→ Strong smartphone sales
- Smartphone : Shipments increased across all regions,
especially
p
y in the emerging
g g markets
· Steady sales of the existing models (Galaxy SⅡ, Ace, Y, etc.)
and sales expansion of high-end strategic models
(Galaxy Note, LTE, etc.)
- Demand declined low-30%QoQ (remained flat on a YoY basis)
portion : Approx.
pp
50% in ’11.4Q → high-50%
g
in ’12.1Q
- LED TV p
□ Samsung : Outgrew the market with solid earnings
led by increased sales of strategic
LED TVs in developed/emerging markets
※ Shipment and earnings improved substantially YoY
- Expanded line-up of premium LED TVs (7/8000 series) for
developed markets and localized LED TVs for emerging markets
- LED TV portion : Approx. 60% in ’11. 4Q → mid-60% in ’12.1Q
- ASP increased QoQ led by product mix improvement
[Network/IT]
□ Network: Solid earnings driven by LTE business expansion
□ IT: Solid earnings led by sales expansion of mid/highend
d PCs,
PC mid/high-speed
id/hi h
d multifunction
l if
i printers,
i
etc.
[ Digital appliances ]
□ Sales declined slightly QoQ amid market demand
slowdown. Profitability improved due to increasing portion
of premium products and raw material cost decline, etc
Market outlook (2Q)
Semiconductor
□ Memory
IM
□ Handset
- DRAM : PC DRAM market situation to improve amid demand
turnaround. Price competition to persist in mobile DRAM
market
- Handset : Demand to grow slightly QoQ, especially smarthphones
- NAND : Channel demand to remain weak vs. demand for embedded
products to increase led by new mobile devices and note PCs
adopting SSD
- Tablet : Competition in new product launches to continue
□ System LSI
- S.
S LSI : Demand fo
for 32nm mobile AP and high-pixel
high pi el image
sensors to increase, led by launches of new set products
Display Panel
□ LCD
- Demand to grow amid new set product launches and
· LTE smartphones to lead mid/high-end demand growth
in US/Japan/Korea
□ Network/ IT
- Network : LTE infrastructure expansion to continue in the US
Domestic LTE demand to slowdown
- IT : PC demand
d
d to
t grow slightly
li htl amid
id market
k t recovery
Demand for printers to slowdown due to low seasonality
CE
□ TV
- Overall market demand to be driven by growth of emerging market
sales promotion related with Chinese Labor day, Olympics, and
and LED TVs
back-to-school period
· LED TV portion to grow : High-50% in 1Q → mid-60% in 2Q
- However, risk factors co-exist including continued oversupply
conditions, macro-economic uncertainties, etc.
□ Digital appliances : Overall market to grow slightly led by
demand growth in the emerging markets and seasonal demand
for air conditioners, etc.
※ Outlook for 2nd Half : Solid earnings momentum to continue due to demand increase for the set products and improved
demand-supply conditions for the components amid seasonal pick-up,
pick-up etc.
etc
- Component business : Demand-supply conditions to improve with launches of new products (eg: PC, mobile devices)
- Brand business : Demand for smart-phones expected to increase. Demand for TV/digital appliances to continue growing in
the emerging markets and to improve in the developed markets
7
[Appendix 1] Statement of Financial Position (K-IFRS)
(Unit : KRW 100 Million)
1Q '12
(A)
Current Assets
FY '11
(B)
1Q '11
(C)
Q-on-Q
(A - B)
Y-on-Y
(A - C)
712,928
715,020
609,571
-2,092
103,357
- Cash ※
253,902
268,776
223,408
-14,874
30,494
- A/R
219,003
218,821
177,433
182
41,570
- Inventories
163,565
157,167
141,763
6,398
21,802
76,458
70,256
66,967
6,202
9,491
888,638
841,292
755,751
47,346
132,887
- Investment
134,874
128,184
121,801
6,690
13,073
- PP&E
659,984
620,440
551,821
39,544
108,163
- Intangible Assets
33,291
33,552
28,714
-261
4,577
- Other Non Current Assets
60,489
59,116
53,415
1,373
7,074
1,601,566
1,556,312
1,365,322
45,254
236,244
546,499
537,859
450,334
8,640
96,165
- Debts
138,688
146,466
115,478
-7,778
23,210
- Trade Accounts and N/P
116,714
102,767
97,026
13,947
19,688
- Other Accounts and N/P
& Accrued Expenses
139,223
160,565
116,532
-21,342
22,691
- Income Tax Payable
23,843
12,628
16,839
11,215
7,004
- Unearned Revenue &
Other Advances
30,884
31,658
22,609
-774
8,275
- Other Liabilities
97,147
83,775
81,850
13,372
15,297
1,055,067
1,018,453
914,988
36,614
140,079
8,975
8,975
8,975
0
0
1,601,566
1,556,312
1,365,322
45,254
236,244
- Other Current Assets
Non Current Assets
Total Assets
Liabilities
Shareholders' Equity
- Capital Stock
Total Liabilities &
Shareholder's Equity
※ Cash = Cash + Cash equivalent + Short-term financial instruments + Marketable securities
[Appendix 2] Income Statement (K-IFRS)
(Unit : KRW 100 Million)
1Q '12
(A)
Sales
4Q '11
%
(B)
1Q '11
%
(C)
%
Q-on-Q
Y-on-Y
(A - B)
(A - C)
452,705
100%
473,040
100%
369,850
100%
-20,335
82,855
301,384
66.6%
315,093
66.6%
260,544
70.4%
-13,709
40,840
151,321
33.4%
157,947
33.4%
109,306
29.6%
-6,626
42,015
R&D
27,284
6.0%
27,424
5.8%
23,441
6.3%
-140
3,843
SG&A
67,671
14.9%
84,576
17.9%
57,911
15.7%
-16,905
9,760
- Wages & Fee
18,159
4.0%
18,304
3.9%
15,458
4.2%
-145
2,701
- Marketing Expenses
21,536
4.8%
31,700
6.7%
17,197
4.6%
-10,164
4,339
2,138
0.5%
7,017
1.5%
1,531
0.4%
-4,879
607
58,504
12.9%
52,964
11.2%
29,485
8.0%
5,540
29,019
Gain(or Loss) on Equity
Method Investment
3,673
0.8%
3,208
0.7%
3,756
1.0%
465
-83
Finance Incomes
/ Expenses
1,325
0.3%
-1,428
-0.3%
636
0.2%
2,753
689
303
0.1%
234
0.0%
116
0.0%
69
187
2,288
0.5%
-2,021
-0.4%
700
0.2%
4,309
1,588
Income Before
Income Taxes
63,503
14.0%
54,744
11.6%
33,877
9.2%
8,759
29,626
- Income Taxes
13,018
2.9%
14,731
3.1%
6,030
1.6%
-1,713
6,988
50,485
11.2%
40,013
8.5%
27,847
7.5%
10,472
22,638
Cost of Sales
Gross Profit
Other
Operating Profits
Operating Profits
- Interest Gain (or Loss)
- F/X Related Gain (or Loss)
Net Income
[Appendix 3] Segment Information (K-IFRS)
(Unit : trillion KRW)
FY '11
1Q
2Q
3Q
4Q
Total
24.50
26.77
29.71
35.23
116.22
CE
10.47
11.23
11.32
14.00
47.02
IM
13.69
15.03
17.94
20.78
67.45
15.55
16.12
16.49
17.61
65.77
Semiconductor
9.18
9.16
9.48
9.17
36.99
DP
6.51
7.09
7.08
8.55
29.24
1.54
2.19
2.77
3.20
9.70
CE
0.08
0.47
0.34
0.66
1.55
IM
1.46
1.71
2.42
2.54
8.13
1.42
1.59
1.53
2.06
6.61
Semiconductor
1.64
1.79
1.59
2.31
7.34
DP
-0.23
-0.21
-0.09
-0.22
-0.75
DMC
Sales
DS
DMC
Operating
Profits
DS
※ The results of the semiconductor and DP are the same as
before the organizational change.