Samsung SDI reported a management performance of 20.1241 trillion KRW in revenue and 1.808 trillion KRW in operating profit for 2022. Both revenue and operating profit are the highest ever recorded, marking the first time revenue has surpassed 20 trillion KRW.
Compared to the previous year, revenue increased by 6.5709 trillion KRW (48.5%), and operating profit rose by 740.4 billion KRW (69.4%).
For the fourth quarter of 2022, Samsung SDI achieved a revenue of 5.9659 trillion KRW and an operating profit of 490.8 billion KRW, the highest quarterly revenue recorded to date.
Compared to the same quarter last year, revenue increased by 2.1499 trillion KRW (56.3%) and operating profit also increased by 225.1 billion KRW (84.7%). Compared to the previous quarter, revenue rose by 597.9 billion KRW (11.1%), while operating profit decreased by 75.1 billion KRW (△13.3%) due to one-off costs.
Revenue from the energy sector reached 5.3416 trillion KRW, up 71.9% year-on-year and up 10.5% from the previous quarter. Operating profit was 359.1 billion KRW, increasing by 198.8% year-on-year but decreasing by 25.9% from the last quarter.
Despite concerns over demand slowdown for medium and large batteries, revenue expanded compared to the previous quarter. Automotive batteries, particularly the P5 (Gen.5), saw continued revenue growth, and ESS batteries supplied for power projects significantly increased sales. Operating profit maintained the previous quarter’s level when excluding one-off costs.
Small batteries recorded revenue levels similar to the previous quarter. Although demand for cylindrical batteries in power tools weakened, long-term supply contracts with major customers minimized sales impacts, and sales for electric vehicle batteries increased, maintaining the previous quarter’s levels.
Revenue from the electronic materials segment was 624.3 billion KRW, a decrease of 11.9% year-on-year but an increase of 16.9% compared to the previous quarter. Operating profit was 131.7 billion KRW, down 9.5% year-on-year, but up 62.4% from the last quarter.
This segment saw an increase in revenue and improved profitability compared to the previous quarter, largely driven by high-value display materials. Sales of polarizers increased due to customer diversification, while sales of display process materials like OLED benefitted from new platforms from major clients, and semiconductor process materials maintained revenue due to increased sales of high-value products.
In the first quarter, medium and large batteries are expected to continue expanding sales, centered on P5.
Both automotive batteries and ESS batteries are anticipated to see significant growth compared to the same period last year. Automotive batteries are expected to see considerable increases in P5 sales due to the ramp-up of new production lines in Hungary and increased supply for customers’ new models.
For small batteries, while sales may decrease compared to the previous quarter due to seasonal lulls, growth is expected to continue compared to the same period last year. Sales of cylindrical batteries used for power tools are expected to decline due to seasonal impacts, but growth for electric vehicles is anticipated to be significant. Additionally, demand for power tools is expected to recover in the second quarter, leading to increased sales.
Pouch-type batteries are anticipated to see increased revenue due to the effect of new flagship smartphone releases.
Electronic materials are expected to see a decrease in revenue due to seasonal lulls. However, there are plans to minimize the revenue decline for polarizers and semiconductor process materials through new product supply.
This year, the automotive battery market is expected to grow approximately 39% year-on-year, reaching about $159 billion.
While there are concerns that a slowdown in global economic growth may dampen automotive consumer sentiment, the acceleration of electrification strategies by automotive manufacturers and alleviation of supply chain issues are expected to continually boost electric vehicle production.
Samsung SDI is projected to maintain strong growth this year by increasing the proportion of premium product sales, particularly focusing on P5. Additionally, they plan to continue order activities for medium- to long-term growth and prepare next-generation products such as solid-state batteries.
The small battery market is forecasted to grow around 7% year-on-year to $38 billion.
In the case of non-IT small batteries, growth in power tools is expected to slow down due to a slump in the housing market. However, the cylindrical battery market for electric vehicles is expected to maintain high growth, and robust growth is anticipated in the micro-mobility sector. Samsung SDI plans to respond proactively to electric vehicle market growth, with plans to launch high-capacity and high-output new products from the first quarter to enhance product competitiveness according to market and application characteristics.
For IT small batteries, the smartphone market is predicted to stagnate due to economic downturn, but demand for flagship models is expected to increase with the expansion of foldable phone production. Samsung SDI intends to pursue sales increases through timely new product launches.
This year, the electronic materials market is expected to experience slight negative growth due to a slowdown in demand from front-end markets, but high-value materials are expected to maintain demand levels similar to last year. Samsung SDI plans to expand the supply of high-value products and ensure timely supply of high-functional new products to maintain profitability.
Samsung SDI has decided on a dividend of 1,030 KRW per common share (1,080 KRW per preferred share) for 2022.
This includes a base dividend of 1,000 KRW (1,050 KRW for preferred shares) and an additional return of 5% of annual free cash flow, totaling 69 billion KRW in dividends.
Samsung SDI announced last January that through its new shareholder return policy, it would set a base dividend of 1,000 KRW (1,050 KRW for preferred shares) for the next three years and conduct additional dividends of 5% to 10% of annual free cash flow.
This year, Samsung SDI will commence full-scale ESG management.
First, Samsung SDI plans to accelerate its global ESG management system by establishing and reinforcing ESG dedicated organizations in its business divisions and overseas subsidiaries. To strengthen its climate change response capabilities, it intends to assess and set reduction targets for Scope 3 emissions, which refer to indirect greenhouse gas emissions occurring throughout the company’s value chain.
In addition, it plans to identify and implement key projects for eco-friendly management, thereby leading in the ESG field.
Choi Yun-ho, CEO of Samsung SDI, stated, “All business divisions have achieved their management objectives, recording the best results ever,” and added, “We will do our best to execute the strategies prepared for this year without any disruptions, ensuring a year of qualitative growth that accelerates our superior technological competitiveness and top-notch quality, underpinning profitability advantages.”
Lee Sang-jin daedusj@autodiary.kr