Samsung SDI reported a revenue of 22.7 trillion won and an operating profit of 1.6334 trillion won for the year 2023.
Compared to the previous year, revenue increased by 2.5842 trillion won (12.8%), achieving the highest revenue performance to date. However, the operating profit saw a decrease of 174.6 billion won (9.7%).
The automotive battery business recorded a 40% growth in revenue and a 93% increase in operating profit compared to the previous year.
In the fourth quarter of 2023, Samsung SDI achieved revenues of 5.5648 trillion won and an operating profit of 311.8 billion won.
Compared to the same period last year, revenue decreased by 401.1 billion won (6.7%), while operating profit fell by 179 billion won (36.5%). From the previous quarter, revenue decreased by 383.3 billion won (6.4%) and operating profit by 184.2 billion won (37.1%).
Revenue in the battery sector was recorded at 49.983 trillion won, a decline of 343.3 billion won (6.4%) compared to the same period last year, and a decrease of 341.6 billion won (6.4%) from the previous quarter. The operating profit reached 226.1 billion won, which is a decrease of 133 billion won (37.0%) compared to last year and a drop of 185.7 billion won (45.1%) compared to the prior quarter. The operating profit margin stood at 4.5%.
Large and medium-sized batteries maintained sales at similar levels to the previous quarter. Automotive batteries saw increased sales due to the continued expansion of P5 sales, utilized in premium vehicles, while sales of ESS batteries fell due to reduced demand in the energy sector. Operating profit declined compared to the previous quarter due to short-term profit impacts from raw material price drops.
Sales and operating profit for small batteries were affected by increased market inventory due to delayed demand recovery in power tools, micro-mobility, and IT products.
The electronics materials division posted revenues of 566.5 billion won, marking a decrease of 57.8 billion won (9.3%) from the previous year and a decline of 41.7 billion won (6.9%) from the prior quarter. Operating profit reached 85.7 billion won, down 46 billion won (35.0%) from the same period last year but slightly improved by 1.5 billion won (1.6%) from the previous quarter.
Sales in the electronics materials sector continued to grow due to mass production of new OLED materials, while semiconductor materials saw increased sales and profitability compared to the previous quarter due to market demand recovery and new product launches. However, sales of polarizing films decreased due to weakening demand.
Large and medium-sized batteries plan to expand their sales of new products. For automotive batteries, mass production of high-capacity premium battery products, the P6, is set to begin, aiming to enhance sales and improve profitability. ESS batteries will promote the sales of an integrated ESS system, the ‘SBB (Samsung Battery Box),’ which has enhanced energy density and safety.
Sales of small batteries are expected to decrease due to seasonal off-peak influences. The circular batteries are expected to secure new customers in markets such as Southeast Asia and anticipate increased demand. There will be continued sample supply of 46Φ batteries and ongoing order activities. Pouch batteries are expected to see sales growth due to the launch of new flagship smartphones.
The electronics materials division is also expected to see revenue declines due to seasonal off-peak effects. However, semiconductor materials are projected to experience revenue growth due to recovering demand in the front end and expanded sales of new products.
This year, the automotive battery market is expected to grow by approximately 18%, reaching about 184.8 billion dollars compared to last year.
Despite short-term growth slowdowns anticipated due to prolonged high interest rates and economic downturns, recovery in growth is expected in the second half of the year due to potential interest rate cuts. Additionally, the influence of environmental policies like the IRA in the U.S. and strengthened CO2 regulations in Europe by 2025 is likely to support medium to long-term growth.
Samsung SDI aims to enhance sales and profitability through the expansion of premium products like P5 and P6, while ensuring smooth preparations for new platform orders and the operation of new bases in the U.S.
The ESS battery market is projected to grow by 18%, reaching 25.6 billion dollars compared to last year.
As growth continues in major markets like North America, Europe, and China, an increase in new demand is expected due to domestic and South American policies promoting ESS industry development.
Samsung SDI plans to expand new orders using new products like the SBB (Samsung Battery Box) and prepare LFP products to meet market demand.
The small battery market is projected to grow by 3% to a scale of 43.8 billion dollars compared to last year.
While overall demand for power tools is expected to remain stagnant, increased demand for professional-use products is likely to result from product diversification and increased electrification due to environmental regulations.
Additionally, sales by OEMs using circular batteries and market growth in Southeast Asia due to E-Scooters are expected to continue.
Demand for small batteries in IT is anticipated to increase compared to last year, particularly for smartphone batteries, which are expected to expand with flagship models.
Samsung SDI plans to identify new applications and business opportunities while developing new products on time to secure market competitiveness.
This year, the electronics materials market is forecasted to see increased demand focusing on high-value-added materials such as large LCD TVs, mobile OLED panels, and semiconductor materials.
Samsung SDI aims to achieve revenue growth and improved profitability by expanding the supply of high-value-added products and diversifying customers, ensuring timely entry of high-functionality new materials.
Choi Yun-ho, CEO of Samsung SDI, stated, “Despite the global economic downturn in 2023, we have achieved significant results in revenue growth and profitability improvement in our core business of electric vehicle batteries, while also securing a foundation for future sustainable growth,” adding, “In 2024, we will continue to pursue qualitative growth with profitability advantages based on ‘super-gap technology competitiveness, cost innovation, and expansion of new customers.'”
Samsung SDI has declared a dividend of 1,000 won per share (1,050 won for preferred shares) for 2023, amounting to a total dividend of 66.9 billion won.
Samsung SDI previously announced in January 2022 that they would set the basic dividend at 1,000 won (1,050 won for preferred shares) over the next three years, alongside additional dividends of 5% to 10% of annual free cash flow.
For 2023, they recorded a deficit due to large-scale facility investments, opting to conduct only the basic dividend.
Samsung SDI plans to accelerate its ESG management further.
In March 2023, Samsung SDI joined the Global Battery Alliance to build a sustainable battery value chain and received top ratings in the Co-Prosperity Index evaluation conducted by the Co-Prosperity Commission in November, achieving notable results.
This year, Samsung SDI plans to continue promoting eight key environmental management tasks, while also focusing on responding to EU battery regulations, calculating and setting reduction targets for Scope 3 emissions, and expanding ESG management across the supply chain.
Moreover, they aim to establish a safer business environment and further strengthen compliance management to solidify a foundation for sustainable growth.
By Sang-jin, daedusj@autodiary.kr