Samsung SDI (006400) Q4 2024 earnings summary

Executive summary

• FY24 revenue declined 23% year-over-year to KRW 16.6 trillion, with operating profit dropping 77% to KRW 363 billion and net income falling 72% to KRW 576 billion; Q4 2024 revenue was KRW 3.8 trillion, down 5% sequentially and 29% year-over-year, with an operating loss of KRW 257 billion and net loss of KRW 243 billion.

• Discontinued operations (polarizer film) are now reported separately; including these, Q4 revenue was KRW 4.5 trillion and annual revenue KRW 17.9 trillion.

• Battery segment saw record ESS revenue but overall segment performance weakened due to sluggish EV, powertool, and micromobility demand.

• Major business highlights include early operation of the Stellantis JV, new JV with GM, U.S. EV business expansion, and significant technology advancements in solid-state and prismatic batteries.

• Achieved ESG milestones: CO2 verification, platinum zero waste validation, improved ESG ratings, and Dow Jones Sustainability World Index inclusion.

Financial highlights

• Q4 operating loss was KRW 257 billion; including discontinued operations, the loss was KRW 243 billion.

• Q4 pre-tax loss was KRW 347 billion, impacted by equity market results and asset impairments.

• Annual R&D spending rose to KRW 1.3 trillion, and CAPEX reached KRW 6.6 trillion.

• Total assets increased to KRW 40.6 trillion, with liabilities at KRW 19.2 trillion and total debt at KRW 11.6 trillion, mainly due to CAPEX and EV battery investments.

• FY24 EBITDA margin was 5.9%; operating margin dropped to 2.2%.

Outlook and guidance

• 2025 global battery market expected to grow 21% year-over-year, led by U.S. and Europe, but macro and policy uncertainties remain high.

• Company expects performance to bottom in Q1 2025 and gradually improve from Q2 as inventory adjustments end and demand recovers.

• Focus on expanding EV and ESS sales, advancing battery technology, and improving cost structure; CAPEX for 2025 will decrease year-over-year, with selective investment in strategic projects.

• U.S. and EU regulatory changes seen as opportunities, but potential delays in market recovery due to subsidy and consumer headwinds.