Samsung SDI (006400) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was KRW 3,176.8 billion, down 34% YoY and 15% QoQ, with an operating loss of KRW 434.1 billion and a net loss of KRW 215.9 billion, reflecting weak market demand and operational challenges.

• Battery/Energy Solution segment accounted for 94% of sales, with a 34.9% revenue decline and an operating loss of KRW 452.4 billion, impacted by EV destocking, low fab utilization, and seasonality.

• Electronic Materials contributed 6% of sales, saw slight revenue growth and improved profitability, driven by OLED and semiconductor demand.

• Major one-off: Sale of the polarizer film business, with related assets/liabilities classified as held for sale.

• Key developments include ramp-up of U.S. prismatic battery fab, Stellantis JV line, GM JV groundbreaking, and MOU with Hyundai for robot batteries.

Financial highlights

• Q1 revenue: KRW 3,176.8 billion (down 34% YoY, 15% QoQ); operating loss: KRW 434.1 billion; net loss: KRW 215.9 billion.

• Gross margin was 6.4%, operating margin -13.7%, and net margin -6.8%.

• Basic EPS was -3,298 KRW, compared to 4,084 KRW in the prior year.

• Cash and cash equivalents at quarter-end were KRW 1,352.8 billion.

• CapEx for Q1 was KRW 774.4 billion, mainly for Energy Solution.

Outlook and guidance

• Q2 expected to improve from Q1 bottom, with gradual demand recovery but ongoing volatility from tariffs and political uncertainties.

• No cash dividends planned for 2025–2027 due to negative free cash flow from facility investments.

• Capital raised from a rights offering (KRW 1,728.2 billion) will fund joint ventures and solid-state battery investments.

• ESS segment anticipates continued strong growth, targeting over 20% annual revenue increase, supported by AI data center and renewable energy trends.

• Small battery segment expects loss reduction in Q2, with full recovery in H2 and focus on new applications in HEV and robotics.