Earnings Release

Earnings Release Q2 2012
S
Samsung
Electronics
El t
i
July 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 the external audit on our Q2 2012 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”,
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
2Q ’12
Y-on-Y
2Q ‘11
1Q ’12
47.60
21%↑
39.44
45.27
36.57
37%↑
26.77
34.25
12.15
7%↑
11.32
10.75
8.58
9%↑
7.86
7.71
24.04
60%↑
15.03
23.22
20.52
75%↑
11.69
18.90
17.03
6%↑
16.12
16.33
8.60
6%↓
9.16
7.98
5 42
5.42
8%↓
5 89
5.89
4 89
4.89
8.25
16%↑
7.09
8.54
2%↓
5.76
6.18
5.63
△6.00
-
△3.45
△5.31
2Q ’12
Y-on-Y
2Q ‘11
1Q ’12
6.72
79%↑
3.75
5.85
4 90
4.90
124%↑
2 19
2.19
4 77
4.77
CE
0.76
66%↑
0.46
0.48
IM
4.19
145%↑
1.71
4.27
1.88
18%↑
1.59
1.06
Semiconductor
1 11
1.11
38%↓
1 79
1.79
0 76
0.76
DP
0.75
흑자전환
△0.21
0.28
-
△0.03
0.02
※ Sales includes intersegment sales
Operating Profit
(Unit: Trillion Won)
Total
DMC
DS
Others
△0.06
Note) DMC (Digital Media & Communications), CE (Consumer Electronics), IM (IT & Mobile communications), DS (Device Solutions), DP (Display Panel)
※ Information on quarterly and annual earnings was re-stated according to the current business divisions.
1
Income Statement
2Q ’12
% of sales
Y-on-Y
2Q ’11
% of sales
1Q ’12
% of sales
47.60
100%
21%↑
39.44
100%
45.27
100%
29.97
63.0%
12%↑
26.83
68.0%
30.14
66.6%
17.63
37.0%
40%↑
12.61
32.0%
15.13
33.4%
R&D expenses
2.87
6.0%
17%↑
2.46
6.2%
2.73
6.0%
SG&A expenses
8.36
17.6%
31%↑
6.37
16.2%
6.77
14.9%
Other operating profits/losses
0.33
0.7%
-
△0.02
△0.1%
0.21
0.5%
6.72
14.1%
79%↑
3.75
9.5%
5.85
12.9%
0.27
0.6%
35%↓
0.41
1.0%
0.37
0.8%
△0.26
△0.6%
-
0.002
0.01%
0.13
0.3%
6.73
14.1%
62%↑
4.16
10.6%
6.35
14.0%
1 54
1.54
3 2%
3.2%
133%↑
0 66
0.66
1 7%
1.7%
1 30
1.30
2 9%
2.9%
5.19
10.9%
48%↑
3.51
8.9%
5.05
11.2%
(Unit: Trillion Won)
Sales
Cost of Sales
Gross Profit
Operating Profit
Equity method gains/losses
Finance incomes/expenses
Profit Before Income Tax
Income tax
Net profit
Key Profitability Indicators
2Q ’12
2Q ’11
1Q ’12
20%
15%
19%
Profitability (Net income/Sales)
0.11
0.09
0.11
Asset turnover (Sales/Asset)
1.18
1.16
1.15
Leverage (Asset/Equity)
1.52
1.48
1.52
22%
17%
21%
ROE
EBITDA Margin
21%
17%
19%
22%
20%
15%
ROE
2Q ’11
1Q ’12
EBITDA Margin
2Q ’12
2
Cash Flow Statement
2Q ’12
12
1Q ’12
12
25.39
26.88
5.93
8.43
Net profit
5.19
5.05
Depreciation
3.74
3.49
△3.00
△0.11
△6.48
△8.02
△6.18
△7.69
△0.78
△1.99
0.27
△0.74
Net increase in cash
△1.59
△1.49
Cash
h (End
d off period)
i d*
23.80
25.39
((Unit: Trillion Won))
Cash (Beginning of period)*
Cash flow from Operation
Others
Cash flow from Investment
g
assets
Increase in tangible
Cash flow from Finance
Increase in Debt
* Cash = Cash + Cash equivalents + Short-term financial instruments + Short-term available-for-sale securities
Cash Balance
Cash
19.07
8 10
8.10
2Q ’11
Net Cash
26.88
25.39
12.23
11.52
4Q ’11
1Q ’12
21.75
9.60
3Q ’11
23.80
9.33
2Q ’12
3
Statement of Financial Position
2Q ’12
1Q ’12
2Q ’11
73.46
71.29
59.44
Cash*
23.80
25.39
19.07
Trade accounts and notes receivable
24.12
21.90
19.90
Inventories
17.44
16.36
14.06
Non-current assets
92.84
88.86
78.53
Investments
13.66
13.49
12.35
PP&E
68.84
66.00
57.38
166.30
160.16
137.97
14.47
13.87
10.97
56.04
54.65
43.36
110.26
105.51
94.61
(Unit: Trillion Won)
Current assets
Total assets
Debt
Total liabilities
Total shareholders’ equity
* Cash = Cash + Cash equivalents + Short-term financial instruments + Short-term available-for-sale securities
Key
y Financial Indicators
2Q ’12
1Q ’12
2Q ’11
Current ratio*
165%
158%
163%
Liability/Equity
51%
52%
46%
Debt/Equity
13%
13%
12%
△8%
△11%
△9%
Net debt/Equity
* Current ratio= Current assets/Current liabilities
4
2Q results
Semiconductor
DP
[Memory]
[ LCD ]
□ Market : Weak PC demand continued amid low seasonality
Demand for mobile/server was relatively solid
□ Market : Panel demand was weaker than expected
due to weak set product demand led by low
seasonality and economic slowdown
- DRAM : PC DRAM price increased but demand remained weak,
while solid demand for mobile DRAM continued led by
new smartphone launches,
launches etc.
etc
- NAND : Demand improved QoQ on new mobile product launches,
but price pressure persisted
□ Samsung : Focused on securing profit by reinforcing
high value-added product sales
- DRAM : Had positive effects from PC DRAM price increases
Expanded mobile/server DRAM sales portions and
accelerated below 30nm migration
- NAND : Expanded sales for solution products (eMMC, SSD, etc.)
and portions of 20nm
20nm-class
class process
[System LSI]
□ Demand increased for mobile AP and CIS on new mobile
product launches
p
- Mobile AP sales increased including 32㎚ quad-core products
- CIS demand growth continued led by strong demand for
smartphones and more diversified applications
- TV panel : Demand growth slowed down due to the continued
economic weakness in Europe and the postponement
of TV purchases in China upon the announcement of
the subsidy policy
※ The price of some products increased slightly due to supply
constrains (mainly 32”& 40” TVs)
d ffor ttablet
bl t panels
l led
l d market
k t growth
th
- IT panell : St
Strong d
demand
Weak demand for note PC/monitor panels persisted
□ Samsung : Earnings improved due to a product mix
enhancement with an increased portion of
value added products
value-added
- TV panel shipment : Mid-single-digit % ↑ (QoQ)
Low-10% ↑ (YoY)
• Sales of value-added panels continued to increase
((3D & LED TV/tablet
/
p
panels,, etc.))
※ OLED : Earning momentum continued as sales of OLED panels
increased amid new smartphone product launches
5
2Q results
IM
CE
[Handset]
[TV]
□ Market
Ma ket : Demand grew
g e slightly
slightl QoQ amid weak
eak seasonality
seasonalit
Ma ket : Demand increased
inc eased slightl
□ Market
slightly QoQ amid
demand slowdown in developed markets
and weak seasonality
- Smartphone : Demand increased by low single digit % QoQ
- Featurephone : Demand decreased slightly QoQ
□ Samsung : Revenue and profit increased QoQ due to
product
d t mix
i improvement
i
t led
l d by
b high-end
hi h d
smartphone sales increase
- Smartphone : Shipments increased QoQ with a successful launch
of GalaxySⅢ and solid sales of Galaxy Note
- Featurephone
p
: Shipments
p
decreased due to demand slowdown
amid weak seasonality
- ASP increased QoQ due to product mix improvement
[Network/IT]
- Demand grew mid-single-digit % QoQ (remained flat YoY)
50% in 1Q → low
60% in 2Q
Mid-50%
low-60%
- LED TV portion : Mid
□ Samsung : Earnings improved due to the increased sales
of new products & region-specific LED TVs
※ Shipments and earnings improved significantly YoY
added premium
- Developed market : Increased sales for value
value-added
models (ES 7/8000, etc.)
- Emerging market : Expanded region-specific/strategic
LED TV model line-up
- LED TV portion : Mid-60% in 1Q → mid-80% in 2Q
□ Network: Earnings declined QoQ due to the decreased
sales of LTE equipment
[ Digital Appliances ]
□ IT : Sales for PC/Printers declined QoQ
amid low seasonal demand
□ Market : Emerging market demand increased while
developed market demand slowed down
□ Samsung : Sales for air conditioners increased,
focused on product mix improvement with
premium product line-ups
6
Market Outlook [3Q]
Semiconductor
□ Memory
- DRAM : PC DRAM demand to remain weak with milder
seasonality; Mobile DRAM demand to grow, but
competition to intensify amid supply increase
- NAND : Supply & demand situation to improve due to an
increase in demand from new mobile application
launches and moderate supply growth. However,
competition is to intensify in the solution market
□ System LSI
- Solid growth momentum of 32nm mobile AP and CIS to be
continued by launches of new high-end mobile products
DP
□ TV
- Demand expected to grow amid TV makers’ preparation for
the yyear-end p
peak demand and Chinese National holidays
y
· Expect China’s subsidy policy to stimulate TV demand
□ IT
- Tablet : Demand to increase due to the market diversification
by new players
- NB/MNT : Demand to remain weak due to economic slowdown
※ Risks such as delayed economic recovery of developed
markets persist
IM
□ Handset
- Demand to increase QoQ driven by the growth of smartphones
and emerging markets amid seasonality
· Smartphone : New products with diverse price ranges
to be released
· Featurephone : Demand to increase slightly QoQ
- Tablet : Competition to continue with new product launches
□ Network/IT
N
k/IT
- Network : LTE network to continue expansion in overseas
markets (US, Japan, etc)
- IT : PCs/Printers demand to increase QoQ with limited growth
CE
□ TV
- Emerging market/LED TV demand growth to drive the overall
market demand
· LED TV portion : low-60% in 2Q → low-70% in 3Q
※ Demand growth in developed markets may possibly turn
negative due to the European economic slowdown
□ Digital Appliances
- Amid low demand growth in developed markets, market demand
to increase slightly due to continuous growth in emerging markets
7
[Appendix 1] Statement of Financial Position (K-IFRS)
(Unit : KRW 100 Million)
2Q '12
(A)
Current Assets
1Q '12
(B)
2Q '11
(C)
Q-on-Q
(A - B)
Y-on-Y
(A - C)
734,602
712,928
594,445
21,674
140,157
- Cash ※
238,042
253,902
190,714
-15,860
47,328
- A/R
241,173
219,003
199,020
22,170
42,153
- Inventories
174,430
163,565
140,604
10,865
33,826
80,957
76,458
64,107
4,499
16,850
928,398
888,638
785,252
39,760
143,146
- Investment
136,603
134,874
123,534
1,729
13,069
- PP&E
688,396
659,984
573,806
28,412
114,590
- Intangible Assets
36,729
33,291
33,274
3,438
3,455
- Other Non Current Assets
66,670
60,489
54,638
6,181
12,032
1,663,000
1,601,566
1,379,697
61,434
283,303
560,359
546,499
433,615
13,860
126,744
- Debts
144,716
138,688
109,696
6,028
35,020
- Trade Accounts and N/P
105,163
116,714
89,556
-11,551
15,607
- Other Accounts and N/P
& Accrued Expenses
142,669
138,687
114,157
3,982
28,512
- Income Tax Payable
23,274
23,843
10,906
-569
12,368
- Unearned Revenue &
Other Advances
27,685
30,884
24,883
-3,199
2,802
116,852
97,683
84,417
19,169
32,435
1,102,641
1,055,067
946,082
47,574
156,559
8,975
8,975
8,975
0
0
1,663,000
1,601,566
1,379,697
61,434
283,303
- Other Current Assets
Non Current Assets
Total Assets
Liabilities
- Other 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)
2Q '12
(A)
Sales
1Q '12
%
(B)
2Q '11
%
(C)
%
Q-on-Q
Y-on-Y
(A - B)
(A - C)
475,970
100%
452,705
100%
394,389
100%
23,265
81,581
299,712
63.0%
301,384
66.6%
268,272
68.0%
-1,672
31,440
176,258
37.0%
151,321
33.4%
126,117
32.0%
24,937
50,141
R&D
28,729
6.0%
27,284
6.0%
24,641
6.2%
1,445
4,088
SG&A
83,594
17.6%
67,671
14.9%
63,740
16.2%
15,923
19,854
- Wages & Fee
19,962
4.2%
18,159
4.0%
15,977
4.1%
1,803
3,985
- Marketing Expenses
31,257
6.6%
21,536
4.8%
21,877
5.5%
9,721
9,380
3,307
0.7%
2,138
0.5%
-217
-0.1%
1,169
3,524
67,241
14.1%
58,504
12.9%
37,519
9.5%
8,737
29,722
2,688
0.6%
3,673
0.8%
4,107
1.0%
-985
-1,419
-2,628
-0.6%
1,326
0.3%
20
0.0%
-3,954
-2,648
362
0.1%
303
0.1%
170
0.0%
59
192
-3,688
-0.8%
2,288
0.5%
238
0.1%
-5,976
-3,926
Income Before
Income Taxes
67,301
14.1%
63,503
14.0%
41,646
10.6%
3,798
25,655
- Income Taxes
15,366
3.2%
13,018
2.9%
6,582
1.7%
2,348
8,784
51,934
10.9%
50,485
11.2%
35,064
8.9%
1,449
16,870
Cost of Sales
Gross Profit
Other
Operating Profits
Operating Profits
Gain(or Loss) on Equity
Method Investment
Finance Incomes
/ Expenses
- Interest Gain (or Loss)
- F/X Related Gain (or Loss)
Net Income