SEOUL, Korea – October 26, 2023 – SAMSUNG SDI today reported financial results for the third quarter that ended September 30, 2023.

The company announced that it posted KRW 5.948 trillion in revenue and KRW 496 billion in operating profit in the third quarter of 2023 fiscal year. 

Overview of the Third Quarter 2023 Earnings Results

Propelled by strong sales of automotive batteries, SAMSUNG SDI recorded a new high in its third quarter results. In particular, the operating profit from sales of prismatic and cylindrical batteries for automotive applications jumped over 60% from the same period last year.

Looking at year-over-year figures, the revenue increased by KRW 580.1 billion (10.8%) and the operating profit decreased by KRW 69.9 billion (△12.3%). Both revenue and operating profit saw quarter-on-quarter increases by KRW 107.5 billion (1.8%) and KRW 45.8 billion (10.2%), respectively. The company posted an operating margin of 8.3%. 

The Third Quarter Earnings Results by Business

The Energy Business reported KRW 5.338 trillion in revenue, up by KRW 506.1 billion (10.5%) versus the previous year and by KRW 69.7 billion (1.3%) compared to the preceding quarter. The operating profit fell by KRW 73 billion (△15.1%) to KRW 411.8 billion but it was a 6.1 percent increase (KRW 23.7 billion) from the last quarter with the operating margin at 7.7%.

In the Automotive & ESS Battery Business, the electric vehicle battery sales demonstrated a high performance stoked by the earlier-than-expected completion of the ramp-up at the company's factory in Hungary, which led to strong sales of the P5 product for the premium segment and produced the highest quarterly result. The ESS battery sales decreased in the quarter, due to pent-up demand for new products mostly turning to the fourth quarter.

The Small Battery Business exited the third quarter with similar results to the last quarter. Cylindrical battery sales showed a modest pickup, largely thanks to increased demand for automotive applications, despite influences from slow recovery of demand for power tools. Pouch battery sales declined due to sluggish demand for IT applications. 

The Electronic Materials Business reported KRW 608.2 billion won in revenue, growing by KRW 74.3 billion (13.9%) from a year earlier and by KRW 37.7 billion (6.6%) from three months earlier. The operating profit was KRW 84.2 billion won, up by KRW 3.1 billion (3.8%) year-over-year and by KRW 22.1 billion (35.6%) quarter-over-quarter, posting 13.8% in operating margin. 

Despite the market demand on halt, display materials reported higher revenue and profit as OLED materials and polarizer films enjoyed expanded demand for mobile devices and big screen TVs, respectively. Semiconductor materials, however, came out with a decline in sales due to the slowed demand on a major customer's end.

Business Outlook for the Fourth Quarter 2023

SAMSUNG SDI anticipates the company would continue its growth momentum into the fourth quarter, having improved results from the preceding quarter and the year-ago period. 

Q4 sales of EV batteries is expected to further expand centering on P5, while ESS battery sales is forecast to grow, pivoting on utility and UPS solutions, in line with expanding sales of new products. With next-generation lineups, SAMSUNG SDI will continue its efforts to win new customers for P6, the company's next generation product, whereas it is also set to start the full-fledged supply of solid-state battery samples for the customer. 

Although it is forecast that the market situation will remain contracted in the next quarter, the Small Battery Business is bidding to expand the cylindrical battery sales mainly targeting the mobility market encompassing e-bikes and EVs, while planning to seek new business opportunities in South East and West Asia. As for 46-phi batteries, sample supplies for customers will commence in the coming quarter.

With a forecast of recovering market sentiment, the Electronic Materials Business looks to expand sales, improving the profitability down the line. The OLED materials sales is expected to sustain growth into the fourth quarter on the back of the mass production of a new platform. The division plans to continue raising the sales of the polarizer film by securing new customers including those in China. Semiconductor materials are also forecast to see higher sales as they are chosen for new applications. 

ESG Management Activities

Since its declaration of environment-friendly management in October last year, SAMSUNG SDI has been delivering strong execution of its eight strategic tasks such as transition to renewable energy, expansion of carbon-labeled products, and reduction of water use. 

In June this year, the company became the first rechargeable battery maker to have two of its products receive carbon footprint labels from Carbon Trust, a U.K. certification agency. In September, all of SAMSUNG SDI's operations in Korea achieved the highest status of Zero Waste to Landfill certification - the Platinum standard.

In addition to its environmental efforts, SAMSUNG SDI recently obtained the 'Best' rating in an assessment of mutually developing relationships with suppliers named 'Win-Win Index,' which is conducted by Korea's Commission for Corporate Partnership. To bolster the supply chain engagement in the ESG practice, the company is providing its key partners with support in calculating their greenhouse gas emissions as well as training on preemptive environmental risk management, enhancing the ESG competitiveness in co-prosperity.

"Amid the headwinds in the business environment, we emerged with better results than the previous quarter thanks to the hard work of everyone involved – employees and partners alike,” said President and CEO Yoon-ho Choi and highlighted, “SAMSUNG SDI will continue securing ‘super-gap’ technological competitiveness through the development of next-generation batteries while expanding qualitative and profitable growth with unrelenting efforts for acquiring new customers."