economic performance
- management results
- net sales
- capital structure
- employee welfare
- contribution to the national economy and global communities
management results
During the past three years the Company has achieved remarkable business results. Future-oriented investments, business diversification, and marketing innovation, along with the Company's increased brand value through breakthrough products and technologies, will help promote continuous sustainability.
- business results
- three-year financial overview
three-year financial overview
Looking back the last 3 years management accomplishment, average 75trillion won sales a year record and getting more than 7trillion won net profit made our stable management accomplishment. We confirmed we are the one of the world class company by hitting the record $ 10 billion net profit in 2004 in the standard of our headquarter’s net profit. Plus, net debt to equity ratio dropped to 15% from 38%.
| classification | 2003 | 2004 | 2005 |
|---|---|---|---|
| net debt equity ratio | 38% | 19% | 15% |
| interest earned ratio | 29.3% | 69.2% | 34.8% |
| capital adequacy ratio | 44% | 53% | 56% |
| debt ratio | 126% | 90% | 79% |
| asset turnover | 0.97% | 1.20% | 1.12% |
investment for the future
SAMSUNG Electronics has been preparing for the future growth over a long period of time. This has been our intrinsic competence that leads to successful business performance and sound financial structure. Our core strategy for sustainable growth is an investment in technology. Through ongoing research and development activities, we achieve cost competitiveness for the future. R&D investment during 2005 amounted to 5.4 trillion Korean Won, taking 9.4% of sales, similar to the 8% allocations of the three-year rolling average. This figure will expand to 10% in the coming years. Keenly aware that global technology competitiveness sways the future of a company, SAMSUNG pours efforts and investment in R&D to secure a strong viability no matter what changes occur in the business climate.
Efforts geared toward technology are evident in the many patents the Company has turned over in recent years. During the past three years. the Company registered 14,216 patents in Korea and 9,620 overseas. The Company belongs to a group of leading firms that register over a 1,000 patents per year in the united States. The Company has used its retained earnings as a sole source of the investment to further strengthen the business.
| section | 2003 | 2004 | 2005 |
|---|---|---|---|
| registered patents in Korea | 2,732 | 4,039 | 6,762 |
| registered patents overseas | 4,456 | 5,111 | 5,072 |
| registered patents in the USA | 1,383 | 1,585 | 1,560 |
competitiveness and as a result, the core competence of the Company has grown every year. Ongoing investment has contributed to heightening competitiveness in products and business cores. Future investment has resulted in eight product groups.
diversified business area
Memory chips have made SAMSUNG Electronics a blue chip company during the past decade. However, the Company’s dependence on the semiconductor industry has been vulnerable point because of the volatility of the semiconductor market. To overcome business and market risks, the business diversification has been actively pursued.
In 2005, the sales contribution from the Telecommunications 26%, semiconductor 25% LCD 11%, Digital Media 22%, and Home Appliance 7%. The Company was able to establish a stable business structure, in which no single business unit’s financial volatility has a significant impact on the overall performance of the Company.
Furthermore, the core component technology from Device Solution, both mobile handset and Telecommunication network business of Telecommunications and manufacturing competitiveness from Digital Media and Appliances will create a tremendous synergy that will propel the company to lead the digital convergence era.
marketing-driven Brand Promotions
The integral part of sustainable development besides unrivaled technology and product is a proactive approach to the ever-changing market by grasping customer needs even before they realize exactly what they are. In order to actively cope with this change, SAMSUNG Electronics has adopted ‘Market Driven Change’ and utilized it in its marketing and to fulfill its social responsibilities. As more resources are being allocated in global marketing, the Company’s brand identity in many global communities was enhanced. According to a prominent organization that specializes in brand-identity research service and survey, SAMSUNG brand value was computed at US $14.9 billion in 2005, which placed brand power at 20th position among multinationals.
SAMSUNG Electronics has grown to be a leading global company through an ongoing management innovation, emphasis on R&D, and improved financial structure. Furthermore, the current investment will serve as a foundation for the future growth.
However, the Company will continue to seek for further growth and do our utmost to earn the respect from the people.
