4Q sales 61.55 trillion won, operating profit 9.05 trillion won
Memory to recover in the first half of the year
Profitability improvement such as set division and premium products
Samsung Electronics announced on the 28th that it recorded 61.5 trillion won in sales and 9.5 trillion won in operating profit in the fourth quarter of 2020. Annually, it achieved sales of 23.69 trillion won and operating profit of 35.99 trillion won. Annual operating profit is the fourth highest ever.
4Q operating profit increased 26.35% compared to the same period last year, but decreased 26.76% compared to the previous quarter. Sales also increased by 2.78% compared to the same period last year and decreased by 8.08% compared to the third quarter.
Looking at the 4Q results of each division, the semiconductor recorded sales of 18.18 trillion won and operating profit of 3.85 trillion won. In the memory business, the mobile market showed strong growth in the fourth quarter, and the data center and PC markets were also healthy, maintaining solid demand. However, earnings weakened due to continued price declines, a weak dollar, and initial costs for new lines.
The display business recorded sales of KRW 9.96 trillion and operating profit of KRW 1.75 trillion. It achieved the highest performance thanks to the recovery in demand for major products such as smartphones and TVs. For small and medium-sized displays, performance improved significantly compared to the previous quarter due to strong demand from major customers. For large-sized displays, demand for TV and monitor panels continued due to the expansion of non-face-to-face services, and the average panel sales price rose, resulting in a decrease in losses compared to the previous quarter.
The IM (mobile business) division recorded sales of 22.34 trillion won and operating profit of 2.4 trillion won, while the CE (home appliance) division recorded sales of 13.61 trillion won and 820 billion won, respectively.
In the wireless business, sales and profits declined QoQ due to intensifying competition at the end of the year and increased marketing expenses, but continued efforts to improve cost structures such as parts standardization maintained a double-digit operating margin. The network’s performance improved thanks to response to domestic 5G expansion and expansion of overseas 4G and 5G sales.
During the peak season at the end of the year, CE sales continued to be strong, mainly in advanced markets, but profitability declined due to the impact of rising costs. This year, growth compared to the previous year is expected due to continued demand for pent-ups centered on advanced markets.
Meanwhile, Samsung Electronics plans to continue strengthening its ESG response to solidify the foundation for sustainable management. Accordingly, the Sustainability Management Council, a company-wide consultative body, was upgraded to the CFO supervision, while the Sustainability Management Office, which had been operated under the existing Management Support Office, was expanded to a Sustainability Management Promotion Center directly under the CEO.
The company plans to establish a Sustainability Management Office at the divisional level to implement sustainability into products and services throughout the entire life cycle, from product planning to R&D, marketing, and AS.
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