Samsung SDI Announces Fourth Quarter and Fiscal Year 2022 Results  

□ [Q4] Quarterly revenue of KRW 5.96 trillion, operating profit at KRW 490.8 billion

□ To continue the growth momentum across all segments, strengthening the product competitiveness ​

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SEOUL, Korea – January 30, 2023 – Samsung SDI today reported financial results for the fourth quarter that ended December 31, 2022 and the results for the fiscal year 2022.

The Company announced that it posted a record annual revenue of KRW 20.12 trillion and operating profit of KRW 1.8 trillion. Both the revenue and operating profit in FY2022 were historic highs and it was the first time for the Company to exceed the 20 trillion mark in its annual revenue.   

□ Overview of Fourth Quarter Earnings Results

Samsung SDI’s fourth quarter revenue stood at KRW 5.96 trillion and operating profit at KRW 490.8 billion, hitting the record highs in its quarterly results. 

From the corresponding period last year, the revenue was up by KRW 2.14 trillion (56.3%), and the operating profit jumped by KRW 225 billion (84.7%). The quarter-on-quarter revenue increased by KRW 597.9 billion (11.1%) whereas the operating profit declined by KRW 75.1 billion (△13.3%).

□ Fourth Quarter Earnings Results by Business

The Company’s energy businesses posted KRW 5.34 trillion in the revenue, up by 71.9% year-on-year and by 10.5% quarter-on-quarter. The operating profit it produced was KRW 359.1 billion, which is up 198.8% from a year earlier but down 25.9% from the third quarter. 

Despite concerns over sluggish demand in the fourth quarter, The Automotive & ESS Business saw a significant jump in the revenue from the previous quarter. Automotive battery revenue continued to expand pushed by strong supply of P5 (Gen5), and ESS batteries recorded a higher revenue thanks to increased utility sales. Profitability remained about the same level as in the previous quarter, with one-time costs excluded. 

The Small Battery Business maintained a quarterly revenue on par with the previous quarter. Amid a slump in power tool demand, Samsung SDI managed to mitigate the impact from such low demand by focusing on making long-term supply agreements with key customers. With increased sales of EV batteries, the revenue stood at about the same level as the last quarter.

The Electronic Materials Business posted KRW 624.3 billion in revenue, which was down 11.9% from the corresponding period last year, and up 16.9% from a quarter earlier. The operating profit was KRW 131.7 billion, down 9.5% year-to-year and up 62.4% quarter-to-quarter.

In the fourth quarter, the Electronic Materials Business saw a higher revenue and better quarter-on-quarter profitability, propelled by increased sales volumes of high-value display materials. Upon diversification of customer portfolio, polarizer film sales went up, leading to the revenue increase. The revenue of display materials including those for OLEDs also rose on account of supply initiated for new platform applications, and semiconductor materials maintained its revenue level with the sales expanding in high-value products.

□ Business Outlook for the First Quarter 2023

In the first quarter of 2023, the P5 sales will lead the sales expansion for the Automotive & ESS Battery Business. The Company expects to see revenues going up in both automotive and ESS batteries compared to the same period last year. Automotive batteries will post higher sales of P5 being built into new vehicle models, boosted by new production line in Hungary.

Due to seasonal lull, the first quarter sales of the Small Battery Business will drop from the previous quarter but the year-on-year growth is expected to be positive. In cylindrical battery segment, the seasonal lull is likely to affect the power tool battery sales while EV battery sales is expected to jump up. The power tool demand will bounce back in the second quarter, improving the sales, according to the Company.

Pouch battery sales is expected to rise slightly compared to the previous quarter, stoked by release of new flagship smartphone models.

The Electronic Materials Business is forecast to see a decline in sales due to a seasonal low-demand. However, the Company plans to minimize the expected decline through supplies of polarizer films and semiconductor materials. 

□ Business Outlook for the FY 2023

The automotive battery market is projected to grow by 40% from the previous year, reaching a value of 159 billion dollars, by the end of 2023.

There are looming concerns over weakening consumer demand for vehicles overcast by rising global interest rates and slowing growth. However, with major OEM’s push for electrification and ease of supply chain disruptions that persisted all last year, the EV production is forecast to continue its expansion. 

Samsung SDI plans to continue its high growth from the last year, where P5 battery will propel the sales increase in the premium EV market. Also, the Company will maintain its drive for obtaining projects and developing and producing next generation products such as solid-state battery, to pave way for the mid-to-long term growth.

The small-sized lithium battery market is forecast to grow by 7% from the last year, reaching 38 billion dollars. 

For non-IT applications, whereas power tool market growth is expected to slow down due to the downbeat housing demand, EV market will continue its high growth and micro-mobility demand is likely to stay afloat. Samsung SDI will keep up with growing EV market demand by launching new products with high capacity and high power in the first quarter, furthering its product competitiveness.

In the market for IT applications, smartphone battery market is projected to be sluggish yet rising popularity of foldable phones will push the demand for battery products for flagship smartphones. Samsung SDI will focus on expanding sales with timely supply of new products.

The electronic materials market this year is forecast to see a slight decline due to sluggish demand in related electronics markets, but the demand for high-value materials is expected to stay at a similar level to the last year’s. Samsung SDI plans to maintain the status quo in profitability by expanding the supply of high-value products and providing high-functional products timely.  

□ Shareholder Return Policy

Samsung SDI decided on the shareholder return with the total payouts of KRW 69 billion having KRW 1,030 common dividends and KRW 1,080 preferred dividends, which indexed its ordinary dividend KRW 1,000 (preferred share KRW 1,050) with 5% of the free cash flows generated in 2022.

Last January, Samsung SDI disclosed and announced the shareholder return policy for the three-year term that pays out ordinary dividend of KRW 1,000 from common shares with additional 5 to 10% of the annual free cash flows.

□ ESG Management Activities

In the New Year, Samsung SDI’s drive for global ESG management will be in full swing.

The Company plans on establishing and reinforcing dedicated ESG working groups under each business unit and overseas operation. Also, to bolster its capability in taking action against the climate change, Samsung SDI plans to assess and calculate scope 3 carbon emissions, which encompass indirect emissions occurring throughout the entire value chain, and formulate carbon reduction plans accordingly. 

The Company pledges to take the lead in the ESG management by continuing its efforts in identifying and carrying out even more environmental management tasks.

“It was a milestone year where all business segments reached the annual business targets, producing all-time high results,” said President and CEO YOONHO CHOI. “We will endeavor to execute each and every business strategy as planned and make 2023 a truly fruitful year, stepping up as a company fully geared with super-gap technology competitiveness, the best quality, and profitable qualitative growth.”