Samsung Analyst Day 2013: Cfo sang hoon lee-invest in our future

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Samsung Analyst Day 2013: Cfo sang hoon lee-invest in our future

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Samsung Analyst Day 2013: Cfo sang hoon lee-invest in our future

  1. 1. Invest in our future Sang-hoon Lee
  2. 2. Disclaimer The materials in this report include forward-looking statements which can generally be identified by phrases such as Samsung Electronics (SEC) or its management "believes," "expects," "anticipates," "foresees," "forecasts," "estimates" or other words or phrases of similar implications. Similarly, such statements that describe the company's business strategy, outlook, objectives, plans, intentions or goals are also forward-looking statements. All such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in the presentation files above. 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 report.
  3. 3. Sustainable Growth & Profitability Enhance Competitive Edge Capex R&D Patent Mkt. HR M&A Maximize Mgmt Effectiveness Finance Risk Management Systems (ERP/SCM)
  4. 4. Sustainable Growth & Profitability Enhance Competitive Edge Capex R&D Patent Mkt. HR M&A Maximize Mgmt Effectiveness Finance Risk Management Systems (ERP/SCM)
  5. 5. Continuous growth 211* 188 136 143 16% CAGR Billion USD 2010 * 2013(E) : Bloomberg Consensus 2011 2012 2013(E) *
  6. 6. Balanced structure DP Semi Component Others 20 % Domestic Device 2010 2013(E) * * 2013(E) : Fn Guide Consensus 28 % 11% CE IM America China 18 % EU / CIS 23 % 2013.1H
  7. 7. Strong improvement OP margin 17 % 14 35 * 11 9 27 32% CAGR 15 14 2010 2011 Billion USD * 2013(E) : Bloomberg Consensus 2012 2013(E) *
  8. 8. Increase in premium product sales have boosted profits 34 23 37 40 % 32 23 23 23 % 21 20 25 % 2012 2013.3Q 14 2010 2011
  9. 9. Improved equity ratios 50 54 49 46 % 12 14 12 8% 2010 2011 2012 2013.3Q
  10. 10. Delivered asset efficiency to minimize working capital increase 15 33. 2 10 * 9.9 % 5 Billion USD 0 2010 2011 Working Capital Increase * Working Capital Increase to Cash flow from Operation 2012 2013.1H
  11. 11. Sustainable Growth & Profitability Enhance Competitive Edge Capex R&D Patent Mkt. HR M&A Maximize Mgmt Effectiveness Finance Risk Management Systems (ERP/SCM)
  12. 12. Sustainable Growth & Profitability Enhance Competitive Edge Capex R&D Patent Mkt. HR M&A Maximize Mgmt Effectiveness Finance Risk Management Systems (ERP/SCM)
  13. 13. Key source of sustainable growth & competitive edge ** 50 41 EBITDA 24 19 25 20 21 22 * Billion USD 2010 * Annual Budget ** Bloomberg Consensus 2011 2012 2013(E)
  14. 14. Manage under strict principles and guidelines Principles Guidelines • Differentiate technology and Profitability • Execution within C/F • Flexible planning to reduce risk • Payback period • IRR
  15. 15. New focus Technology, New Market Capacity, M/S 21 % 15 2010 2011 2012 2013(E)
  16. 16. Continuous investing for growth Overseas 2013 Domestics Overseas Domestics 50K 2010 8 $ B Global R&D investment ranking #2 in 2013, Booz&Co.
  17. 17. Key strategic shifts New focus H/W In-house New directions Comp. • Effective use of global R&D resources • Soft competitive edge S/W Open Innovation Set • New growth engine
  18. 18. Persistent increase in IP risk Threats Changes patent troll and competitors regulations in major countries
  19. 19. Reinforcing IP competitive edge IP Centers • 600 In-house experts Patent Experts • HQ • 3 Regional Early Engagement • Product planning stage
  20. 20. Global top 10 brand value 8 th 9 th $19.5 B 1 No. Brand Awareness 17 th • Smart phone • TV 19 th Samsung GMO, Brand Awareness Survey 2010 * Interbrand 2011 2012 2013
  21. 21. Utilize strong brand assets Brand ideal • “Accelerating discoveries and possibilities” • Fully integrated with all business activities Differentiated strategy • Experiential • Interactive • Localized
  22. 22. ‘People’ as one of our core values Overseas Domestics 2013 Domestics 190K Overseas 2010 11B $
  23. 23. Strategic directions for HR Securing talent Talent Creative Lab Open Innovation S/W
  24. 24. 14 companies, over $1B invested CSR Organic Growth Medison mSpot
  25. 25. Growth objectives via M&A
  26. 26. Sustainable Growth & Profitability Enhance Competitive Edge Capex R&D Patent Mkt. HR M&A Maximize Mgmt Effectiveness Finance Risk Management Systems (ERP/SCM)
  27. 27. Sustainable Growth & Profitability Enhance Competitive Edge Capex R&D Patent Mkt. HR M&A Maximize Mgmt Effectiveness Finance Risk Management Systems (ERP/SCM)
  28. 28. Real-time monitoring under rules & processes Monitoring system Rules & processes
  29. 29. ☞ Increase of government regulations globally Compliance Manual / System Employee Education Compliance Team Monitoring
  30. 30. All employees access Real-time data managed by One system at Any time Non-standardized One Global ERP 54 Countries, 115 Systems ERP ERP ERP ERP ERP ERP ERP Standardization Process / Data ERP • Lack of process standardization For different working places • Complicated system interface ERP
  31. 31. Operational excellence Speed Flexibility • Weekly decision making • Production flexibility (CELL) • Global logistics Hub * S & OP : Sales and Operation Plan • Global S&OP * • Customer collaboration(CPFR) • Retail & channel SCM
  32. 32. PBR & PER declined despite increased ROE and profits 2,000 2.4 x Operating profit 12.3 35 2.0 x 1,500 27 PBR 1.6 x 1.6 x 1,000 1.2 x PER 15 ’10 ’11 7.0 x 14 10 0.8x 500 0 Thousand KRW ’ 09 ’10 Billion USD ’11 ’12 ’13.9 ’ 09 ’12 ’13(E)

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