Earnings Release Q4 2020

Samsung Electronics

January 2021
Disclaimer

The financial information in this document are consolidated earnings results based on K-IFRS.

This document is provided for the convenience of investors only, before the external audit on our Q4 2020 financial results is

completed. The audit outcomes may cause some parts of this document to change.

This document contains "forward-looking statements" - that is, statements related to future, not past, events. In this context,

"forward-looking statements" often address our expected future business and financial performance, and often contain words

such as "expects”, "anticipates”, "intends”, "plans”, "believes”, "seeks” or "will ". “Forward-looking statements" by their nature

address matters that are, to different degrees, uncertain. For us, particular uncertainties which could adversely or positively affect

our future results include:

· The behavior of financial markets including fluctuations in exchange rates, interest rates and commodity prices

· Strategic actions including dispositions and acquisitions

· Unanticipated dramatic developments in our major businesses including CE (Consumer Electronics),

IM (IT & Mobile communications), DS (Device Solutions)

· Numerous other matters at the national and international levels which could affect our future results

These uncertainties may cause our actual results to be materially different from those expressed in this document.
Income Statement

(Unit: KRW Trillion) Q4 ’20 % of sales Q3 ’20 % of sales Q4 ’19 FY ’20 % of sales FY ’19 % of sales
Sales 61.55 100.0% 66.96 100.0% 59.88 236.81 100.0% 230.40 100.0%
Cost of Sales 37.80 61.4% 39.97 59.7% 38.55 144.49 61.0% 147.24 63.9%
Gross Profit 23.75 38.6% 26.99 40.3% 21.33 92.32 39.0% 83.16 36.1%
SG&A expenses 14.70 23.9% 14.64 21.9% 14.17 56.32 23.8% 55.39 24.0%
- R&D expenses 5.22 8.5% 5.31 7.9% 4.92 21.11 8.9% 19.91 8.6%
Operating Profit 9.05 14.7% 12.35 18.4% 7.16 35.99 15.2% 27.77 12.1%
Other non-operating income/expense △0.34 - 0.06 0.1% 0.06 △1.10 - 0.36 0.2%
Equity method gain/loss 0.13 0.2% 0.23 0.3% 0.16 0.51 0.2% 0.41 0.2%
Finance income/expense 0.14 0.2% 0.21 0.3% 0.34 0.95 0.4% 1.89 0.8%
Profit Before Income Tax 8.97 14.6% 12.84 19.2% 7.72 36.35 15.3% 30.43 13.2%
Income tax 2.37 3.8% 3.48 5.2% 2.49 9.94 4.2% 8.69 3.8%
Net profit 6.61 10.7% 9.36 14.0% 5.23 26.41 11.2% 21.74 9.4%
Profit attributable to owners of the parent 6.45 10.5% 9.27 13.8% 5.23 26.09 11.0% 21.51 9.3%
Earnings Per Share (KRW Won) 949 1,364 769 3,841 3,166

Key Profitability Indicators

Q4 ’20 Q3 ’20 Q4 ’19 FY ’20 FY ’19 Q4 '19 Q3 '20 Q4 '20

ROE 10% 14% 8% 10% 9%

Profitability (Net profit/Sales) 0.11 0.14 0.09 0.11 0.09 29%
23% 26%
Asset turnover (Sales/Asset) 0.67 0.74 0.69 0.65 0.67
14%
Leverage (Asset/Equity) 1.36 1.35 1.36 1.36 1.36 8% 10%
EBITDA Margin 26% 29% 23% 27% 24% ROE EBITDA Margin
1
Segment Sales & Operating Profit

Sales
(Unit: KRW Trillion) Q4 ’20 Q3 ’20 Q4 ’19 QoQ YoY FY ’20 FY ’19 YoY
Total 61.55 66.96 59.88 8%↓ 3%↑ 236.81 230.40 3%↑
CE 13.61 14.09 12.87 3%↓ 6%↑ 48.17 45.32 6%↑
VD 8.51 8.24 8.09 3%↑ 5%↑ 27.71 26.18 6%↑
IM 22.34 30.49 24.95 27%↓ 10%↓ 99.59 107.27 7%↓
Mobile 21.46 29.81 24.05 28%↓ 11%↓ 96.02 102.33 6%↓
DS 27.92 25.93 24.74 8%↑ 13%↑ 103.04 95.52 8%↑
Semiconductor 18.18 18.80 16.79 3%↓ 8%↑ 72.86 64.94 12%↑
- Memory 13.51 14.28 13.18 5%↓ 2%↑ 55.54 50.22 11%↑
DP 9.96 7.32 8.05 36%↑ 24%↑ 30.59 31.05 2%↓
Harman 2.92 2.62 2.73 12%↑ 7%↑ 9.18 10.08 9%↓

Operating Profit
(Unit: KRW Trillion) Q4 ’20 Q3 ’20 Q4 ’19 QoQ YoY FY ’20 FY ’19 YoY
Total 9.05 12.35 7.16 △3.31 1.89 35.99 27.77 8.23
CE 0.82 1.56 0.79 △0.74 0.03 3.56 2.51 1.05
IM 2.42 4.45 2.52 △2.03 △0.10 11.47 9.27 2.20
DS 5.63 6.04 3.66 △0.41 1.97 21.12 15.58 5.54
Semiconductor 3.85 5.54 3.45 △1.69 0.40 18.81 14.02 4.79
DP 1.75 0.47 0.22 1.28 1.53 2.24 1.58 0.66
Harman 0.18 0.15 0.12 0.03 0.06 0.06 0.32 △0.27
※ CE : Consumer Electronics, IM : IT & Mobile communications, DS : Device Solutions, DP : Display Panel
※ Sales and operating profit of each business stated above reflect the organizational structure as of 2020, and the sales of business units include intersegment sales.
※ CE is restated due to the reclassification of the Health&medical equipment business, which has been included in CE from 2020.
2
※ Harman’s sales and operating profit figures are based on Samsung Electronics’ fiscal year, and acquisition related expenses are reflected.
Q4 Results and Outlook by Business Unit

Semiconductor D P
[Q4 '20 Results] [Q4 '20 Results]
□ Memory : Earnings weakened due to an ASP decline, currency effects, and
initial cost associated with new fabs despite strong demand from □ Mobile : Earnings improved significantly Q-Q thanks to a higher
mobile led by launches of new models and solid demand from
consumer products utilization rate due to strong demand from a major
- DRAM : Proactively addressed mobile/consumer demand, using our flexible customer amid a gradual recovery of smartphone demand
product mix strategy
- NAND : Sales grew for mobile and laptop with full-fledged conversion to □ Large : Loss narrowed Q-Q due to increased ASP
6th-generation V-NAND
□ S.LSI/ : Earnings declined due to currency effects from a weak US dollar,
Foundry among other factors, despite continued growth in orders from
major global customers [Q1 '21 Outlook]

[Q1 '21 Outlook] □ Mobile : Earnings to weaken sequentially due to a decline in sales,
□ Memory : Earnings to weaken due to a weak dollar and continued initial but utilization to improve Y-Y as major customers adopt
costs from new fabs despite solid mobile demand led by 5G
expansion and server demand recovery led by data centers OLED for more models with the expansion of 5G
- DRAM : Enhance cost competitiveness by increasing portion of 1z-nano
□ Large : Address LCD demand without disruption while preparing
- NAND : Strengthen market leadership by expanding portion of advanced
process, high-performance, value-added products timely launches of QD-display products
□ S.LSI : Increase SoC/CIS/DDI supply for flagship smartphones
□ Foundry : Expand mass production of EUV 5-nano SoCs and 8-nano HPC chips
[2021 Outlook]
[2021 Outlook]
□ Memory : DRAM market highly likely to recover in 1H21 due to solid □ Mobile : Further differentiate technologies & enhance cost
demand from mobile/server competitiveness and continue to expand application areas
Uncertainties from currency effects and geopolitical risks remain
Strengthen cost competitiveness and market leadership by to embrace the rapidly expanding 5G smartphone market
expanding application of EUV while accelerating conversion to and recovering smartphone demand
1z-nano DRAM and 6th-generation V-NAND
□ S.LSI : Increase supply mainly for products with solid demand (eg, 5G □ Large : Establish strong foundation within the premium TV
SoCs, high-resolution sensors, and DDIs)
segment via timely development of QD display
□ Foundry : Secure foundation for future growth by actively addressing
demand for advanced processes and diversifying areas of
application within areas such as HPC/network/automotive
3
Q4 Results and Outlook by Business Unit

I M C E
[Q4 '20 Results] [Q4 '20 Results]
□ Mobile : Revenue decreased Q-Q due to intensified competition in □ TV : Earnings weakened Q-Q due to higher costs, but sales
the year-end season, and profit decreased due to increase
increased for premium products, including QLED/ultra-large/
in marketing costs during peak seasonality
lifestyle TVs as we actively addressed the release of
Kept margin in the double digits thanks to improvements
in our cost structure pent-up demand in advanced markets and strengthened
competitiveness in contactless sales
□ N/W : Performance improved as a result of 5G expansion in
Korea and 4G/5G business expansion overseas, □ DA : Revenue improved Y-Y led by increasing sales of premium
including in North America products, such as Bespoke and Grande AI appliances

[Q1 '21 Outlook]

[Q1 '21 Outlook]
□ Mobile : Revenue and profit to improve Q-Q as the early launch of
the S21 drives sales growth of flagship models and □ TV : Create sales opportunities by conducting promotional
increases ASP and with the release of new mass market activities tailored by region via close cooperation with
models channel partners; improve profitability via timely launches
· S21 features unique design, enhanced camera experience, of new products, including Neo QLED; and increase sales
S-Pen, and more of premium products
□ N/W : Continue with network rollouts focusing on overseas
□ DA : Grow earnings by introducing innovative new products
markets, including North America and Japan
and driving premium product sales
[2021 Outlook]
[2021 Outlook]
□ Mobile : Strengthen leadership in flagship lineup by expanding S21
sales and popularizing the foldable category □ TV : Amid persistent uncertainties on the socioeconomic front,
Increase smartphone sales by fully addressing replacement including COVID-19, work to continue growing by
demand for 5G with mass-market 5G models
capitalizing on our global SCM capabilities; introduce new
Continue to add to our foundation for growth with tablets premium products, including Neo QLED/Micro LED;
and wearable devices
establish sales strategy enabling flexible responses to
Further extend the Galaxy ecosystem based on strategic
market volatility using experience gained in 2020
partnerships
Enhance cost structure and operational efficiency to secure □ DA : Continue to grow by applying cutting-edge technology to
solid profitability our premium products such as Bespoke models,
□ N/W : Remain active in 5G commercialization globally while strengthening online/B2B businesses, and building a stable
continuing to seek new business opportunities supply chain based on global SCM capabilities

4
[Appendix 1] Financial Position
(Unit : KRW Billion)
Dec 31, Sep 30, Dec 31,
2020 2020 2019
Assets 378,235.7 375,788.7 352,564.5

- Cash
※
124,727.0 117,910.8 112,152.7

- A/R 30,965.1 40,379.9 35,131.3

- Inventories 32,043.1 32,442.8 26,766.5

- Investments 25,265.2 22,053.3 20,196.9

- PP&E 128,952.9 124,777.4 119,825.5

- Intangible Assets 18,468.5 18,980.8 20,703.5

- Other Assets 17,813.9 19,243.7 17,788.1

Total Assets 378,235.7 375,788.7 352,564.5

Liabilities 102,287.7 99,652.6 89,684.1

- Debts 20,217.4 19,626.5 18,412.0

- Trade Accounts and N/P 9,739.2 11,688.2 8,718.2

- Other Accounts and N/P
36,229.3 31,891.3 31,362.1
& Accrued Expenses
- Current income tax liabilities 4,430.3 4,660.1 1,387.8
- Unearned Revenue
2,119.9 2,100.2 1,969.4
& Other Advances
- Other Liabilities 29,551.6 29,686.3 27,834.6

Shareholders' Equity 275,948.0 276,136.1 262,880.4

- Capital Stock 897.5 897.5 897.5

Total Liabilities &
378,235.7 375,788.7 352,564.5
Shareholder's Equity
※ Cash = Cash and Cash equivalents, Short-term financial instruments, Short-term financial assets at amortized cost,
Long-term time deposits, etc.

Dec 31, Sep 30, Dec 31,

2020 2020 2019
Current ratio ※ 262% 279% 284%

Liability/Equity 37% 36% 34%

Debt/Equity 7% 7% 7%

Net debt/Equity △38% △36% △36%

※ Current ratio = Current assets/Current liabilities
[Appendix 2] Cash Flow
(Unit : KRW Trillion)
Q4 ’20 FY '20 FY '19

Cash (Beginning of period) ※ 117.91 112.15 104.21

Cash flows from operating activities 24.51 65.29 45.38

Net profit 6.61 26.41 21.74

Depreciation 7.08 27.12 26.57

Cash flows from investing activities △11.60 △40.32 △29.57

Purchases of PP&E △10.61 △37.59 △25.37

Cash flows from financing activities △1.99 △8.33 △9.48

Increase in debts 0.46 1.34 0.16

Acquisition of treasury stock - - -

Payment of dividends △2.46 △9.68 △9.64

Increase in cash 6.82 12.57 7.94

Cash (End of period) ※ 124.73 124.73 112.15

※ Cash = Cash and Cash equivalents, Short-term financial instruments, Short-term financial assets at amortized cost,
Long-term time deposits, etc.

□ Current State of Net Cash (Net Cash =Cash※ - Debts)

(Unit : KRW Trillion)
Dec 31, Sep 30, Dec 31,
2020 2020 2019
Net Cash 104.51 98.28 93.74
※ Cash = Cash and Cash equivalents, Short-term financial instruments, Short-term financial assets at amortized cost,
Long-term time deposits, etc.