Samsung SDI (006400) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was KRW 3.9 trillion, down 4% QoQ and 30% YoY, with operating profit at KRW 129.9 billion, down 46% QoQ and 72% YoY, reflecting slowed market demand and discontinued polarizer business.

• Net profit reached KRW 230.4 billion, including KRW 3.6 billion from discontinued operations, down 24% QoQ and 63% YoY.

• Battery segment revenue dropped 5% QoQ and 31% YoY, while Electronic Materials grew 24% QoQ and was flat YoY.

• ESG initiatives advanced, including lithium recycling, carbon footprint certifications, and top ESG rating from KCGS.

Financial highlights

• Gross margin was 19.3% in Q3 2024, down from 22.6% in Q2 2024 and up from 17.2% in Q3 2023.

• Operating margin decreased to 3.3% from 5.9% in Q2 2024 and 8.3% in Q3 2023.

• Electronic materials revenue rose 24% QoQ to KRW 263 billion, with OLED materials operating profit up 102% QoQ and 24% YoY to KRW 66.4 billion.

• Total assets increased to KRW 38.1 trillion, liabilities to KRW 17.92 trillion, and equity to KRW 21 trillion; debt-to-equity ratio rose to 80%.

• Non-operating profit rose 46% QoQ but was down 48% YoY.

Outlook and guidance

• 4Q24 earnings expected to improve, driven by ESS growth, while EV battery sales may see limited recovery due to sluggish demand.

• Small battery segment to focus on expanding cylindrical sales and preparing for mass production of new products.

• European EV demand expected to rebound in 2025, supported by stricter CO2 regulations and renewed policy incentives.

• ESS demand in the U.S. projected to expand significantly, with long-term growth driven by AI and renewables.

• Electronic Materials to pursue new customer/platform entries and sustain OLED material growth.