Samsung SDI Posts Record Q3 Revenue of 5 Trillion KRW and Operating Profit Surpasses 500 Billion KRW

2022 Q3 Earnings Announcement
Cumulative Results Surpass Last Year's Annual Figures
Large and Medium-Sized Batteries Show Significant Growth

[Asia Economy Reporter Choi Seoyoon] Samsung SDI announced on the 26th that it recorded sales of 5.368 trillion KRW and an operating profit of 565.9 billion KRW in the third quarter. Both sales and operating profit are all-time highs.

In particular, this is the first time sales exceeded 5 trillion KRW and operating profit surpassed 500 billion KRW. Compared to the same period last year, sales increased by 56.1% (1.9282 trillion KRW) and operating profit rose by 51.5% (192.4 billion KRW). Along with this, the energy division recorded a double-digit operating profit margin.

As a result, Samsung SDI's cumulative performance for the third quarter this year exceeded the full-year figures of the previous year. This was due to the effectiveness of the company's qualitative growth strategy focused on profitability superiority, despite the rise in raw material costs caused by the global economic downturn and inflation.

Energy Division Sales Increase 76% Year-on-Year... Operating Profit Margin at 10%

Looking at the operating results by business division, the energy division's sales reached 4.834 trillion KRW, up 76.4% year-on-year and 18.7% quarter-on-quarter. Operating profit was 484.8 billion KRW, up 140.2% year-on-year and 98.0% quarter-on-quarter, with an operating profit margin of 10.0%.

Compared to the previous quarter, medium- and large-sized batteries achieved significant performance improvements. Automotive batteries saw increased sales and improved profitability by expanding sales of high-value-added products such as the P5 (Gen.5) amid steady demand for premium electric vehicles. ESS batteries improved profitability by reflecting raw material cost increases in prices and expanding sales in Europe.

Small batteries grew sales centered on high-value-added products and improved profitability. Sales of cylindrical batteries for electric vehicles and ultra-high-power power tools increased, leading to improved performance.

The electronic materials division saw a decline in sales and profits compared to the previous quarter due to weak demand in the front-end industries. Sales were 534 billion KRW, down 23.6% year-on-year and 20.2% quarter-on-quarter. Operating profit was 81.1 billion KRW, down 52.8% year-on-year and 55.9% quarter-on-quarter.

Although sales of polarizing films decreased due to weakened demand in front-end industries such as TVs, relatively favorable profitability was maintained thanks to the start of supply for new platforms of OLED materials and increased sales of semiconductor materials.

Q4 Outlook: Increase in Medium- and Large-Sized Battery Sales... Seasonal Effect

Samsung SDI is expected to continue its growth trend in the fourth quarter of this year. Medium- and large-sized battery sales are expected to increase based on the traditional seasonal effect in Q4.

Automotive batteries will see expanded sales with the year-end demand increase and the launch of new models equipped with P5 (Gen.5) batteries, and will continue to pursue orders for next-generation platforms such as P6 (Gen.6) batteries and 46Φ (diameter 46mm) batteries. ESS batteries are expected to increase sales mainly for power use in the Americas.

Small batteries are expected to expand sales centered on cylindrical batteries for electric vehicles. Cylindrical batteries for power tools will minimize the impact of demand slowdown based on long-term supply contracts, and pouch-type batteries for IT are expected to see new product entries from major customers.

In Q4, electronic materials are expected to expand sales mainly in display materials. OLED materials will increase sales with the full-scale mass production of new platform products, and semiconductor materials are expected to achieve steady sales due to expansion effects from major customers. Polarizing films are expected to improve sales and profitability compared to Q3 through customer diversification, increased demand from new TV product launches next year, development of high-value-added products, and promotion of polarizing film supply for OLED.

Accelerating Proactive ESG Management... Continuous Discovery of Additional Tasks Beyond 8 Major Challenges

Meanwhile, Samsung SDI explained that it is actively and proactively engaging in ESG management activities. In September, it completed joining RE100, committing to supply 100% of its electricity consumption from renewable energy by 2050, and in early October, it declared its commitment to eco-friendly management both internally and externally.

Under two themes?'Climate Change Response' for greenhouse gas reduction and 'Resource Circulation' for leading an eco-friendly ecosystem?it announced an environmental management strategy selecting and promoting eight detailed tasks.

Samsung SDI plans to expand recovery of key battery raw materials such as cobalt, nickel, and lithium through battery recycling and convert all company work vehicles to zero-emission vehicles as part of its detailed tasks.

In addition to the eight major tasks, Samsung SDI will continuously discover and promote additional tasks to further strengthen ESG management.

Choi Yunho, CEO of Samsung SDI, said, "Achieving record-high performance despite rising raw material costs and concerns over market demand slowdown is the result of the collective efforts of all Samsung SDI employees. We will accelerate the execution of our three management policies?'super-gap technological competitiveness,' 'best quality,' and 'qualitative growth with profitability superiority'?to become a global top-tier company by 2030, while striving to fulfill our social responsibilities through eco-friendly management."

This content was produced with the assistance of AI translation services.