[Q2] Quarterly revenue of KRW 4.45 trillion, operating profit at KRW 280.2 billion
Under strategy of profitable and qualitative growth, company maintains relatively solid performance
[H2] Company to focus on revenue maximization, cost structure innovation and future technology acquisition
SAMSUNG SDI CEO Yoon-ho Choi remarks, "The difficult situation persisting in the second half may turn into a critical opportunity for the company when tackled with well-prepared countermeasures. The company will continue to gain a differentiated competitive edge in a bid to be the first to capture new opportunities when the market turns around."
SEOUL, Korea – July 30, 2024 – SAMSUNG SDI today reported financial results for the second quarter that ended June 30, 2024.
The company announced that it generated revenue of KRW 4.45 trillion in revenue and KRW 280.2 billion in operating profit.
The revenue declined 24 percent year-over-year and 13 percent quarter-over-quarter while the operating profit had 38-percent decrease from a year ago and 5-percent increase from the previous quarter.
The Second Quarter 2024 Earnings Results by Business
The energy business posted KRW 3.87 trillion in revenue, falling 15 percent on-quarter and 27 percent on-year. The operating profit was KRW 208 billion, which declined 3 percent sequentially and 46% from the corresponding period last, with the operating margin at 5.4 percent.
The Automotive & ESS Business recorded the earnings falling short of the market expectations as sluggish demand led to a decline in sales. The energy storage system (ESS) unit, however, had both revenue and profit go up in the second quarter thanks to robust sales of high-power products for the uninterruptible power system (UPS) solution as well as SAMSUNG Battery Box (SBB), SAMSUNG SDI's containerized ESS product for a utility-scale solution. This came amid booming data center demand propelled by the rise of artificial intelligence (AI), on top of expanding renewable energy push.
While the quarterly revenue for the Small Battery Business declined due to inventory adjustments at customers in power-tool and mobility sectors, the operating profit increased owing to one-off compensation from long-term agreements. Under the contracted market demand, pouch battery revenue decreased.
The Electronic Materials business reported revenue of KRW 577.2 billion, up 5 percent quarterly and 1 percent yearly. The operating profit rose to KRW 72.2 billion, which increased in comparisons between quarters and years, by 36 percent and 16 percent, respectively. The operating margin was 12.5 percent.
The polarizer film portion of revenue and profit went up with solid sales of high-value large-panel products while semiconductor materials earnings improved as the sales increased at a major customer. The Electronic Materials Business narrowed the drop in revenue of OLED materials, with supply for new IT application.
Business Outlook for the Second Half 2024
Despite facing the headwinds of the electric vehicle adoption curve entering the chasm, SAMSUNG SDI maintained solid performance in the first half of 2024 under its management strategy of 'profitable and qualitative growth,' setting itself ready to accelerate growth acceleration once the market turns around.
SAMSUNG SDI's preparation for commercialization of all solid-state battery (ASB) is well on course as it expanded the sample supply to five customers this year. The drive to launch LFP battery mass-production in 2026 is also going strong with the setup of a dedicated pilot line, with an aim to capture expanding demand in volume-segment and entry-level EV markets. As for 46-phi battery, the company secured a new customer for micro-mobility application, with mass-production planned to begin about a year earlier than scheduled, around early 2025.
The company was recently awarded with a large-scale ESS project from one of the biggest clean energy companies in the United States. Additional talks on initiating long-term supply of SBB are underway with its key customers as well.
In the second half, the timing of market recovery is expected to come later than anticipated. However, the company maintains the forecast that the EV industry’s high growth will remain unaffected in the longer term.
The Automotive & ESS Battery Business is looking to see the earnings gradually improve throughout the second half, with muted EV market demand likely taking a steady upturn in the fourth quarter. SAMSUNG SDI plans to expand the supply of P6 product for the US market while pushing forward mass-production at StarPlus Energy in order to improve results and continually improve profitability.
The ESS battery part is anticipated to maintain an upward trend in sales, with demand for utility and UPS solutions playing a key role. The company vows to continue revenue growth and profitability improvement, by securing new projects from key customers in North America.
The Small Battery Business will focus on increasing sales via pursuit of new business opportunities.
On the cylindrical battery side, the company plans to expand business opportunities in market sectors of power tools, outdoor power equipment (OPE), and special vehicles, by leveraging differentiated products with long life and quick charging features. The focus of 46-phi battery will be on preparing for mass-production and acquiring new projects. For pouch battery, the company will press on expanding sales towards new flagship models while duly preparing for timely supply for upcoming models at customers.
The Electronic Materials Business is poised to perform better than the previous half, drawing on strong performances expected of semiconductor materials and OLED materials.
SAMSUNG SDI plans to improve the semiconductor materials unit by capitalizing on the recovering memory chip market, while looking to increase supply of OLED materials for new platforms by key customers.
The company expects the polarizer film demand to slow down, due to inventory buildups at customers. However, the demand will likely turn upbeat in the fourth quarter where high-season events await like Black Friday and China’s Double 11.
Alongside efforts to yield better earnings results in the second half, SAMSUNG SDI plans to continue paving the way for sustained future growth by focusing on maximizing revenue to overcome demand slowdown, driving cost innovation for higher profitability, and acquiring future technologies that will put itself in the market-leading position.
"The difficult situation persisting in the second half may turn into a critical opportunity for the company when tackled with well-prepared countermeasures," remarked SAMSUNG SDI CEO Yoon-ho Choi. "The company will continue to gain a differentiated competitive edge in a bid to be the first to capture new opportunities when the market turns around.""
ESG Management Activities
On June 28, SAMSUNG SDI released the Sustainability Report 2024 that details its environmental, social, and corporate governance (ESG) activities and outcomes.
In addition to its commitment to the environment-friendly management tasks such as transitioning to renewable energy and cutting greenhouse gas emissions, the report enumerates how SAMSUNG SDI is reinforcing supply chain sustainability, and employee safety and health while establishing a diverse and inclusive work culture and global talent acquisition framework. It also contains key corporate governance activities such as introduction of a senior independent director system, along with its ethics and compliance commitments and outcomes.
