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Samsung Electronics Results 
Q3 2014 
Summary and Commentary 
Note: Samsung Q3 = Calendar Q3 
Aquilla
Aquilla 
Samsung Electronics 
•Samsung Electronics is the largest company within the 
Samsung Group, a “Chaebol” conglomer...
Aquilla 
Key Data Points 
Q3 ’14 (₩) Q3 ’14 ($) Q2 ’14 (₩) Q3 ’13 (₩) YoY ₩ 
Revenue 47.4 T₩ 45.2 B$ 52.4 T₩ 59.1 T₩ - 20%...
Aquilla 
27% 
24% 
21% 
18% 
15% 
12% 
9% 
6% 
3% 
Source: Samsung Electronics Results 
Net Profit 
Net Profit Declines 
•...
Tablet Units - Peaked? Tracking the trailing 12 months (current and 3 
Tablet Units 
Tablets kU Tablets Trailing 12m kU 
A...
South Korea B$ 
America B$ 
Europe B$ 
Asia/Africa B$ 
Aquilla 
Source: Samsung Electronics Results 
Regional Splits (to Q...
Aquilla 
8% 
7% 
6% 
5% 
4% 
3% 
2% 
1% 
Source: Samsung Electronics Results 
Marketing Spend (to Q2 ’14) 
Heavy Spend - D...
Samsung’s Q3 Results Analysis - Full Slide Deck 
Aquilla
Samsung’s Q3 Results Analysis 
These popular slides cover an in-depth analysis of Samsung’s Q3 results 
The slides shown a...
Aquilla 
Nick Graves, CEO • nick@aquilla-europe.com • +44 780 225 6536 
Aquilla Europe Ltd • Kennett Cottage • OX9 3QS • U...
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Samsung q3'14 commentary introduction

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These popular slides cover an in-depth analysis of Samsung’s Q3 results

The slides shown are an introduction
To receive the full set, including charts, commentary, interpretation and outlook plus all slides in full colour:

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Samsung q3'14 commentary introduction

  1. 1. Samsung Electronics Results Q3 2014 Summary and Commentary Note: Samsung Q3 = Calendar Q3 Aquilla
  2. 2. Aquilla Samsung Electronics •Samsung Electronics is the largest company within the Samsung Group, a “Chaebol” conglomerate based in the town of Samsung, in South Korea. •Samsung Electronics comprises three main divisions, one of which is usually reported in two parts. These are: •Device Solutions, which includes: •The Semi-conductor Division, abbreviated to “Semi” •and the Display Panel Division, abbreviated to “DP” •Consumer Electronics Division, abbreviated to “CE” •IT & Mobile Communications Division, abbreviated to “IM”. This includes the smartphone and tablet business. •In 2013, Samsung Electronics accounted for 64% of the revenue and 92% of the Net Income of Samsung Group •This report focuses entirely on Samsung Electronics
  3. 3. Aquilla Key Data Points Q3 ’14 (₩) Q3 ’14 ($) Q2 ’14 (₩) Q3 ’13 (₩) YoY ₩ Revenue 47.4 T₩ 45.2 B$ 52.4 T₩ 59.1 T₩ - 20% Net Income 4.2 T₩ 4.0 B$ 6.3 T₩ 8.2 T₩ -49% Semi-Conductor Div Sales 9.9 T₩ 9.4 B$ 9.8 T₩ 9.7 T₩ + 2% DP Division Sales (Display) 6.3 T₩ 6.0 B$ 6.3 T₩ 8.1 T₩ - 23% CE Division Sales (CE) 11.6 T₩ 11.0 B$ 13.0 T₩ 12.0 T₩ - 4% IM Division Sales (Mobile) 24.6 T₩ 23.4 B$ 28.5 T₩ 36.6 T₩ - 33% Smartphone Sales (IDC) Units 78.1 M 74.3 M 80.4 M - 3% Tablet Sales (IDC) Units 9.9 M 8.5 M 9.7 M + 2% Note: USD Figures are as reported by Samsung Electronics Source: Samsung Electronics Results, IDC
  4. 4. Aquilla 27% 24% 21% 18% 15% 12% 9% 6% 3% Source: Samsung Electronics Results Net Profit Net Profit Declines •Net Profit declined again to $4.0B, or 9% of revenues, disappointing (but not surprising) the market •The core reason remains under performing smartphone sales due to increasing competition, especially from China •Signs of panic appeared in rumours of multiple executive changes in the IM division •Samsung is consistently behind Apple in profitability, whose net profitability is now some 11% higher at 20% of sales •There were few currency effects, as the Korean Won strengthened a mere 1% against the USD from Q3 2013. Comparative Net Income CQ3 2014 Google Apple Microsoft 0% 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Net Profit (%) Net Profit (B$) Samsung Electronics Net Profit Net Profit B$ Net Profit %
  5. 5. Tablet Units - Peaked? Tracking the trailing 12 months (current and 3 Tablet Units Tablets kU Tablets Trailing 12m kU Aquilla previous Quarters) eliminates seasonality, and gives a better indication of the longer term trends 80,000 65,000 50,000 35,000 20,000 5,000 -10,000 Source: Gartner, IDC and others 20,000 15,000 10,000 5,000 0 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Trailing 12m Q Units Units (000s) (000s)
  6. 6. South Korea B$ America B$ Europe B$ Asia/Africa B$ Aquilla Source: Samsung Electronics Results Regional Splits (to Q2 ’14) Home Market Recovers •South Korea has proved weak over the past 6 quarters, but recovered a little, gaining 12% YoY America Dominates •The America region remains the engine of growth, and grew 14% YoY, though begins to show signs of saturation Europe Fades Further •29% YoY growth in 2012 has given way to decline in 2014, with a further 11% drop in Q2. Factors include market saturation, the gloss rubbing off the Samsung machine, and Europe remaining in recession Asia/Africa Continues •A 7% uptick is solid, and could continue for a while China Worrying •Massive 44% growth in 2013 has reversed to a 9% decline in Q2, amidst strong local competition Most recent Share YoY 10% 12% 34% 14% 19% -11% 21% 7% 15% -9% Note: Q3 2014 detailed breakdowns not yet available from Samsung China B$ 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Regional Splits
  7. 7. Aquilla 8% 7% 6% 5% 4% 3% 2% 1% Source: Samsung Electronics Results Marketing Spend (to Q2 ’14) Heavy Spend - Desperation? •Much of Samsung’s success in smartphones, particularly in the US and Europe, was attributed to massive spend on advertising and sales promotion. Peaking at $3.4B in Q4 2012, the spend was clearly high •Amidst slowing revenues Samsung almost matched this in Q2, with $3.2B spend •Of this Sales Promotion was at its highest ever, at $2.1B, suggesting some desperation to keep sales moving •The company stated in its results call that Q3 will see a much lower marketing spend than Q2 - this data is not yet available •Samsung will also be challenged to match the powerful viral marketing success of Xiaomi in China, without the core product differentials that Apple brings Tracking the trailing 12 months (current and 3 previous Quarters) eliminates seasonality, and gives a better indication of the longer term trends 0% 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 Q1 '10 Q2 '10 Q3 '10 Q4 '10 Q1 '11 Q2 '11 Q3 '11 Q4 '11 Q1 '12 Q2 '12 Q3 '12 Q4 '12 Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1 '14 Q2 '14 Q3 '14 Q4 '14 Percent of Rev T 12m Marketing (M$) Samsung Electronics Marketing Spend Advertising M$ Sales Promotion M$ Percentage of Revenue Trailing 12m
  8. 8. Samsung’s Q3 Results Analysis - Full Slide Deck Aquilla
  9. 9. Samsung’s Q3 Results Analysis These popular slides cover an in-depth analysis of Samsung’s Q3 results The slides shown are an introduction To receive the full set, including charts, commentary, interpretation and outlook plus all slides in full colour contact Aquilla Europe nick@aquilla-europe.com Aquilla
  10. 10. Aquilla Nick Graves, CEO • nick@aquilla-europe.com • +44 780 225 6536 Aquilla Europe Ltd • Kennett Cottage • OX9 3QS • UK • www.aquilla-europe.com

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