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2017 4Q Earnings Release

2018-01-31
Samsung Electro-Mechanics Announces 2017 4Q Performance

4Q revenue was KRW 1.717 trillion and operating profit was KRW 106.8 billion
- Compared to the previous financial quarter (2017 3Q), revenue declined by 7% and operating profit increased by 3%
- Compared to the same financial quarter of previous year (2016 4Q), revenue increased by 28% and operating profit improved significantly

Earnings expanded due to increase in demand for MLCC and increase in sale of RF-PCB for OLED

Annual revenue for 2017 was KRW 6.8385 trillion and operating profit was KRW 306.2 billion
- Compared to previous year, the revenue increased by 13.4% and operating profit increased by 1,155%
- Recorded the largest annual performance since 2013

Samsung Electro-Mechanics disclosed that it recorded revenue of KRW 1.717 trillion and operating profit of KRW 106.8 billion on a consolidated basis in the fourth financial quarter on January 30, [2018].


Revenue declined by KRW 124.1 billion (7%) compared to the previous financial quarter and increased by KRW 372 billion (28%) compared to the same financial quarter of previous year. Operating profit increased by KRW 3.6 billion (3%) compared to the previous financial quarter and by KRW 153.3 billion compared to the same financial quarter of previous year, which shifted [Samsung Electro-Mechanics] to the black.


Samsung Electro-Mechanics explained that, though seasonal off-season affected the revenue to narrowly decline compared to the previous financial quarter, its profitability has improved due to the increase in demand for MLCC (Multi-Layer Ceramic Capacitor) and the expansion in sale of RFPCB (Rigid Flex Printed Circuit Board) for OLED. Meanwhile, in annual terms, [Samsung Electro-Mechanics] recorded KRW 6.8385 trillion in revenue and KRW 306.2 billion in operating profit. Compared to the previous year, revenue increased by 13.4% and operating profit increased by 1,155%, thereby recording the largest performance in four years after 2013 (revenue of KRW 8.2566 trillion and operating profit of KRW 464 billion).


※ 4Q Performance and Outlook by Business

* In order to increase the level of understanding concerning the names of the business units, the DM Business Unit is changed to Module Solution Business Unit, the LCR Business Unit is changed to Component Solution Business Unit, and the ACI Business Unit is changed to the Substrate Solution Business Unit.


The Module Solution Unit recorded KRW 580.8 billion in 4Q revenue, which was a decline of 29% compared to the previous financial quarter caused by the inventory adjustment by the strategic buyers and the slowing growth of the Chinese smartphone market. The adoption of dual camera is forecasted to expand from the flagship models to the popular models this year, which is anticipated to increase revenue compared to the previous year.
Meanwhile, with the growth of the autonomous navigation and advanced driver-assistance system (ADAS) markets, the revenue from cameras for automotive electronics is also expected to continue its growth trend.


The Component Solution Unit recorded revenue of KRW 696.7 billion, which is an increase of 15% compared to the previous financial quarter. The business performance improved due to the increase in demand for high-end MLCC that is subminiature and high capacity and MLCC for industrial use and automotive electronics.
Pursuant to the outlook of increased demand with the achievement of high-performance by the set, MLCC for IT is expected to maintain profitability by increasing the percentage of high value-added products. The product line-ups for MLCC for industrial use and automotive electronics will also be enhanced with a focus on autonomous navigation, electric vehicles, and 5G.


The 4Q revenue for The Substrate Solution Unit was KRW 434.5 billion, which was an increase of 9% compared to the previous financial quarter. Thanks to the expansion of supply of RFPCB for OLED by overseas buyers, the substrate business turned black after twelve financial quarters since 2014 4Q.
The substrate business plans to improve its profitability with high value-added products, such as RFPCB for OLED, adoption of which is anticipated to expand for smartphones, and main substrate that apply microcircuit technology (mSAP).



※ Quarterly Business Performance

[Unit: KRW 100 million]

Category Fiscal Year 2016 Fiscal Year 2017
4Q Annual 3Q 4Q Annual
Revenue 13,450 60,330 18,412 17,170 68,385
Operating Profit △465 244 1,032 1,068 3,062
Earnings Before Tax △590 321 985 795 2,535
Net Profit △353 147 719 543 1,617

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