[Q3] Company reports KRW 3.94 trillion ($2.8 billion) in revenue and KRW 129 billion in operating profit, with profit and loss from discontinued polarizer film business separately stated
[Q4] Revenue to improve upon early mass production of StarPlus Energy, expansion into premium vehicles in Europe, and increased sales of SBB for utilities, whereas improvement in overall performance could remain limited due to slowing demand
The company aims to lay the groundwork for mid- to long-term growth centered on prismatic premium batteries and seize new opportunities as market demand recovers
SEOUL, Korea – October 30, 2024 – SAMSUNG SDI today reported financial results for the third quarter that ended September 30, 2024.
The company announced that it generated KRW 3.94 trillion ($2.8 billion) in revenue, down 30 percent from a year earlier, and KRW 129.9 billion in operating profit, a 72 percent decrease during the same period.
The revenue and operating profit fell 4 percent and 46 percent, respectively, from the previous quarter.
Third Quarter Earnings Results by Business
Following the decision to discontinue the polarizer film business, the profit and loss from discontinued operations is separately stated from the third quarter results. When including the polarizer film business, sales were KRW 4.25 trillion in revenue and KRW 141.3 billion in operating profit.
The battery business posted KRW 3.67 trillion in revenue, down 31 percent year-on-year and 5 percent quarter-on-quarter. The operating profit was KRW 63.5 billion, down 85 percent year-on-year and 69 percent quarter-on-quarter.
While revenue from prismatic battery declined due to slowing demand in the European electric vehicle market and the impact of foreign exchange rates, sales of P6 batteries in the United States increased, and both revenue and operating profit from ESS batteries grew significantly due to the launch of SBB 1.5 with enhanced energy density and safety.
The cylindrical battery sales declined due to the base effect of a one-time gain in the previous quarter and lower utilization rates due to decreasing sales of electric vehicles. The pouch battery sales and operating profit both increased driven by the launch of new smartphones.
Electronic materials revenue reached KRW 263.6 billion, representing a 0.2 percent increase from the previous year and a 24 percent rise from the last quarter. Operating profit also saw significant growth, rising to KRW 66.4 billion—up 24 percent year-on-year and 102 percent quarter-on-quarter.
The revenue and operating profit improved significantly, led by high value OLED materials, and semiconductor materials result remained on par with the previous quarter.
Business Outlook for the Fourth Quarter 2024
Despite a challenging business environment, including the slowdown in demand growth for electric vehicles, SAMSUNG SDI laid the groundwork for mid- to long-term growth in the third quarter. This was achieved by signing a joint venture contract with GM for prismatic premium batteries, winning new orders from major OEMs in Europe and Asia, and launching SBB 1.5 for utilities.
StarPlus Energy, a joint venture with Stellantis, will begin mass production of EV battery cells at its first plant in the United States with an early start-up in December, and is expected to ramp up sales of high value products following the launch of new vehicles by major EU customers. However, improvement in the overall performance could be limited, considering possible inventory adjustments by major customers in response to slow market demand.
ESS batteries are forecast to drive the overall performance improvement, supported by strong sales of SBB products for utility in the US and expected sales increases in Europe, including high-power batteries for uninterruptible power supplies (UPS).
The cylindrical battery business is expected to face challenging circumstances in the fourth quarter, including the delayed recovery in demand. SAMSUNG SDI plans to minimize the impact of the slowdown in demand through partnerships with major customers and continue its efforts for mid- to long-term growth, including developing new premium products and entering the E4Wheeler market.
The 46-series battery, which is on track for mass production in early 2025, is in discussions with major customers and is expected to see tangible results before year-end.
For the electronic material business, the company expects major customers to reduce inventories and operations due to continued weak market demand. On the semiconductor material sector, the company aims to maintain its market share by keeping major customers, while pursuing new entries in SOD and EMC materials. Additionally, the company will introduce OLED materials in a timely manner to align with the launch of new products from major customers.
"Despite the challenging business conditions both internally and externally, we have laid the foundation for mid- to long-term growth centered on prismatic premium batteries," said Choi Yoon-ho, President of SAMSUNG SDI. "Based on our differentiated technology competitiveness and outstanding product quality, we will seize new opportunities in line with the recovery in market demand."
ESG Management Activities
Under the guiding principle of 'ESG management lies at the core of our business strategy and offers a differentiating competitive edge,’ SAMSUNG SDI announced its commitment to an environment-friendly management in 2022 and is currently promoting eight strategic tasks, including switching to renewable energy, expanding battery recycling, and reducing water consumption at its business sites.
SAMSUNG SDI started in July to recover and recycle lithium retracted from cathode washing wastewater and established a local recycling system at the StarPlus Energy plant.
Additionally, SAMSUNG SDI became the first company in the rechargeable battery industry to receive carbon footprint certification from the Carbon Trust in the UK for two products in June of last year, and received certification for two more products in August of this year.
SAMSUNG SDI is also committed to expanding its ESG management across the supply chain, including initiatives to help partners enhance their ESG capabilities.
In recognition of these efforts, SAMSUNG SDI recently received an overall rating of A+ from the Korea Institute of Corporate Governance and Sustainability, the leading ESG rating institution in Korea.
