Earnings Release Q3 2021

Transcription

Earnings Release Q3 2021Samsung ElectronicsOctober 2021

DisclaimerThe 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 review on our Q3 2021 financial results iscompleted. The review 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 wordssuch as "expects”, "anticipates”, "intends”, "plans”, "believes”, "seeks” or "will ". “Forward-looking statements" by their natureaddress matters that are, to different degrees, uncertain. For us, particular uncertainties which could adversely or positively affectour 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 resultsThese uncertainties may cause our actual results to be materially different from those expressed in this document.

Income StatementQ3 ’21% of salesQ2 ’21% of salesQ3 2%39.9731.0842.0%26.6141.8%26.99SG&A expenses15.2620.6%14.0422.0%14.64- R&D .35(Unit: KRW Trillion)SalesCost of SalesGross ProfitOperating ProfitOther non-operating income/expense0.10- 0.14-0.06Equity method gain/loss0.27-0.19-0.23Finance .84Income tax4.06-3.25-3.48Net 27Profit Before Income TaxProfit attributable to owners of the parentBasic Earnings Per Share(KRW)1,7761,3911,364Key Profitability IndicatorsQ3 ’21Q2 ’21Q3 ’2017%14%14%Profitability (Net profit/Sales)0.170.150.14Asset turnover (Sales/Asset)0.750.670.74Leverage (Asset/Equity)1.381.371.3532%31%29%ROEEBITDA Margin3Q '202Q '213Q '2129%31%32%14%14%ROE17%EBITDA Margin1

Segment Sales & Operating ProfitSalesQ3 ’21Q2 ’21Q3 ’20QoQYoY73.9863.6766.9616% 10% 14.1013.4014.095% 0.1% 7.827.178.249% 5% 28.4222.6730.4925% 7% 27.3421.4329.8128% 8% 35.0929.4625.9319% 35% 26.4122.7418.8016% 40% 20.8317.8814.2817% 46% 8.866.877.3229% 21% 2.402.422.621% 8% Q3 ’21Q2 ’21Q3 ’20QoQYoY15.8212.5712.353.253.46CE0.761.061.56 0.30 0.79IM3.363.244.450.12 491.280.470.211.020.150.110.150.050.00(Unit: KRW Trillion)TotalCEVDIMMobileDSSemiconductor- MemoryDPHarmanOperating Profit(Unit: KRW Trillion)TotalSemiconductorDPHarman※ CE : Consumer Electronics, IM : IT & Mobile communications, DS : Device Solutions, DP : Display Panel※ Sales and operating profit of each business stated above reflect the organizational structure as of 2021, and the sales of business units include intersegment sales.※ Harman’s sales and operating profit figures are based on Samsung Electronics’ fiscal year, and acquisition related expenses are reflected.2

Q3 Results and Outlook by Business UnitSemiconductor【 Q3 '21 Results 】 Memory: Amid favorable pricing due to sustained strength in demand centered onserver, results grew significantly as we actively addressed demand frommajor customers and reduced costs by expanding portion of cutting-edgeprocesses- DRAM: Actively addressed strong demand for server and enhanced marketcompetitiveness by expanding portion of 15-nano DRAM- NAND: Increased sales of high-density server SSDs and share of 128-layer V-NANDD P【 Q3 '21 Results 】 Mobile: Results grew Q-Q on the back of significant improvements in sales ofhigh-end products, including foldables, as well as profitability thanks toeffects of releases of new smartphones by major customers Large: Loss increased due to LCD panel ASP declines and reduced production S.LSI: Demand for SoCs/DDIs increased on launches by major mobile customers Foundry: Earnings improved by increasing supply of products to global customers【 Q4 '21 Outlook】【 Q4 '21 Outlook】 Mobile: Demand for new smartphones by major customers to continue, and Memory: Fundamental demand for server to stay strong thanks to increase indatacenter investments, but need to check effects of prolongedcomponent supply issues on demand- DRAM: Actively address demand from major server customers and demand for PCsadopting new CPUs- NAND: Under stable supply by leveraging SCM capabilities, maintain differentiationby expanding portion of high-value products S.LSI: Increase supply of SoCs and related products for new smartphone productssales of laptops and gaming devices to increase backed by seasonalityExpect to generate solid earnings Large: Aim to mass produce QD display products and supply them to ourcustomersLosses to continue due to declines in LCD panel ASP Foundry: Accelerate improvements in results by actively addressing demand foradvanced processes【 '22 Outlook 】【 '22 Outlook 】 Mobile: OLED portion of market to increase with wider deployments of 5G Memory: Despite demand risks, such as effects of living-with-COVID-19 policies andongoing component supply issues, demand for server to be robust due towider adoption of new CPUs and increase in enterprise IT investmentsBolster cost competitiveness and market leadership by mass producing14-nano DRAM based on the highest number of EUV layers and176-layer V-NAND with lowest stack height, while actively addressingdemand by continually expanding production of 15-nano DRAM and128-layer V-NAND S.LSI: Enter full-fledged growth by expanding lineup of SoCs, including productsfor the volume zonenetworks under a recovery of smartphone demand; and OLED salesexpansion for non-smartphone applications, including laptops andtablets, to be in full swingConcerns stemming from a supply crunch of components such as DDIsremain factors Large: Push to secure a position in premium TV segment with QD display Foundry: Secure technology leadership via applying 3nm GAA-an industry first-andkeep improving results by addressing demand via increased activeinvestments3

Q3 Results and Outlook by Business UnitI MC E【 Q3 '21 Results 】【 Q3 '21 Results 】 Mobile: Market demand grew Q-Q due to alleviating influences of COVID-19Despite a continuation of supply constraints, smartphone sales increased Y-Ythanks to strong performances of foldables and the enhanced mass-marketlineup, and Device Ecosystem products, such as wearables, continued to growIncreased marketing investments, aimed at mainstreaming the foldablecategory, had some impact on profitability TV: Ahead of peak seasonality, demand grew Q-Q but decreased compared to lastyear when it was affected by strong pent-up demandExpanded sales of premium products, such as Neo QLED and Lifestyle products,but results decreased due to cost increases related to raw material prices andglobal logistics issues N/W: Expanded business overseas, including in North America and Japan, andcontinued to respond to domestic demand for 5G network deployments DA: Increased sales by launching BESPOKE in more countries and introducing newhome appliances, but earnings declined due to impacts of raw material andlogistics costs【 Q4 '21 Outlook】 Mobile: Market demand to increase as a result of year-end seasonality, althoughuncertainties over component supply constraints to lingerAchieve double-digit growth by continuing to expand premium smartphonesales by using BESPOKE to focus consumers’ aspirations on foldables, bymaintaining sales momentum of Galaxy S series, by proactively targetingreplacement demand for mass market 5G models, and by increasing sales ofGalaxy Ecosystem products N/W: Push for growth by expanding sales in the global market, including in NorthAmerica and Southwest Asia【 '22 Outlook 】 Mobile: Smartphone market to keep growing and wearables market to maintain highgrowth despite lingering risks, such as continuing effects of COVID-19Reinforce leadership of flagship products by establishing foldables as animportant category within premium market with innovations in technology,new experiences and unique differentiation with Bespoke EditionsAchieve solid performance by strengthening mass-market 5G lineupand Device Ecosystem business.Strengthen foundation for growth by developing advanced technologies andcollaborating with global leading companies N/W: Address expansion of the domestic 5G network and seek opportunities toexpand overseas, including in North America, Japan, Southwest Asia, and EuropePrepare for future by improving in-house chip that is vital for 5G while alsostrengthening virtualization solutions【 Q4 '21 Outlook】 TV: Market demand to rise Q-Q on effects of strong end-year seasonality, but todecrease Y-Y with a transition to living-with-COVID-19 policies, mainly inadvanced marketsTarget demand for premium products during peak seasonality with differentiatedonline promotions in each country and minimize logistics/operation risks byutilizing our global SCM capabilities DA: Accelerate global expansion of BESPOKE and bolster year-end promotions/onlinemarketingPursue profitability improvements by expanding sales of premium products andby optimizing supply efficiency by region【 '22 Outlook 】 TV: Strong market demand trend to reverse and overall market to slow due tosupply/logistics issues amid COVID-19 uncertaintiesCapture premium demand with Neo QLED/8K/Micro LED products and add togrowth momentum by creating sales opportunities with our differentiatedlifestyle products DA: Introduce new BESPOKE products and keep expanding BESPOKE’s global sales;and enhance supply competitiveness by improving productivity and strengtheningSCM to respond flexibly to external changes4

[Appendix 1] Financial Position(Unit : KRW Billion)Sep 30,2021June 30,2021Sep .2117,910.8- A/R42,369.735,624.940,379.9- Inventories37,801.733,592.432,442.8- 9.9124,777.4- Intangible Assets20,753.620,747.018,980.8- Other 5,788.7113,654.6102,453.499,652.6- Debts19,069.616,734.919,626.5- Trade Accounts and N/P13,865.711,052.611,688.2- Other Accounts and N/P& Accrued Expenses38,174.835,293.031,891.3- Current income tax liabilities4,380.14,231.04,660.1- Unearned Revenue& Other Advances2,163.61,952.92,100.2- Other Liabilities36,000.833,189.029,686.3Shareholders' 0,420.7384,777.7375,788.7Assets※- Cash- PP&ETotal AssetsLiabilities- Capital StockTotal Liabilities &Shareholder's Equity※ Cash Cash and Cash equivalents, Short-term financial instruments, Short-term financial assets at amortized cost,Long-term time deposits, etc.Sep 30,2021June 30,2021Sep 30,2020Current ratio ※260%264%279%Liability/Equity38%36%36%6%6%7% 34% 33% 36%Debt/EquityNet debt/Equity※ Current ratio Current assets/Current liabilities

[Appendix 2] Cash Flow(Unit : KRW Trillion)Q3 ’21Q2 ’21Q3 68.067.216.84Cash flows from investing activities 11.51 14.36 9.13Purchases of PP&E 11.22 13.53 8.54Cash flows from financing activities 0.55 19.050.501.94 3.472.90--- 2.48 15.58 2.409.37 20.774.52120.47111.10117.91Cash (Beginning of period) ※Cash flows from operating activitiesNet profitDepreciationIncrease in debtsAcquisition of treasury stockPayment of dividendsIncrease in cashCash (End of period) ※※ Cash Cash and Cash equivalents, Short-term financial instruments, Short-term financial assets at amortized cost,Long-term time deposits, etc. Current State of Net Cash (Net Cash Cash※ - Debts)(Unit : KRW Trillion)Sep 30,2021Net Cash101.40June 30,2021Sep 30,202094.37※ Cash Cash and Cash equivalents, Short-term financial instruments, Short-term financial assets at amortized cost,Long-term time deposits, etc.98.28

Sales Q3 ’21 Q2 ’21 Q3 ’20 QoQ YoY 73.98 63.67 66.96 16% 10% . Semiconductor 26.41 22.74 18.80 16% 40% - Memory 20.83 17.88 14.28 17% 46% . marketing Pursue profitability improvements by expanding sales of premi