I wish you and your family good health and prosperity in the year of 2015.
The global economic environment was challenging throughout 2014 despite the gradual recovery of the U.S. economy as political and economic uncertainties persisted including a slowdown of China's growth and growing tension in Russia and the Middle East. Accordingly, South Korea's economy also remained weak. For Samsung Electronics, we continued to face a challenging business environment as the growth of the smartphone market slowed and competition intensified.
However, despite the challenging circumstances, we strived to maintain solid earnings and to enhance shareholder value through our proactive shareholder return policy.
We appreciate the support and interest that you have shown to the company throughout the year, and we would like to share our performances and the key progresses we made in 2014 with you.
In 2014, the revenue was KRW 206 trillion, down 10% from the previous year, and our operating profit and net profit reached KRW 25 trillion and KRW 23 trillion, respectively.
For the Memory business, amid stable market supply and demand conditions, we continued to improve earnings by enhancing cost competitiveness through the expansion of cutting-edge process technology and by increasing sales of differentiated and high value-added products such as SSD.
In the System LSI business, despite continued difficulties including lower demand from major customers, we reinforced our technology leadership for the future by developing the next generation 14nm product.
For our Display business, earnings declined due to an increase in cost from the start-up of our LCD factory in China and slowdown in OLED panel shipments on weaker demand. However, we strengthened the foundation for future growth by enhancing technological competitiveness through commercialization of the world's first curved displays and mass production of flexible displays.
In the Mobile business, amid weak sales of smartphones due to intensified competition, tablet growth also stagnated due to a slowdown in global demand, leading to a decrease in revenue and profit compared to the previous year.
For the TV business, despite intensifying competition, we were able to reinforce our market leadership by expanding sales of premium products such as UHD, curved and large size TVs over 60", and maintained No.1 in market share for the ninth consecutive year since 2006.
In the current IT industry, sustained growth is difficult to achieve if one does not become a first mover or a game changer through innovations. Against this backdrop, Samsung Electronics invested KRW 15 trillion in R&D in 2014 and continued to expand global R&D centers and secure outstanding talent pool. Now, more than 70,000 R&D personnel are working on technology/product innovation at 36 R&D centers in 17 nations around the world. Along with this, we also focused on securing outside talent and technology via the newly created Open Innovation Center.
As a result, we successfully mass-produced the world's first 20nm DRAM and V-NAND with 3bit technology, proving our superior technological prowess. In addition, we led innovations in smartphone design and UX by launching Galaxy Note Edge with the world's first bended display. We also launched wearable products such as Gear S and Gear VR. Moreover, by securing an open source platform through our acquisition of SmartThings, we were able to introduce at CES new IoT technology based on automatic ID technology that utilizes diverse sensors.
Through such efforts, we registered 4,952 U.S. patents in 2014 (No.2), reinforcing the foundation for our technology leadership and sustained growth in the future. In addition, we renewed our image as an innovative company with 36 Innovation Awards at CES 2015 and were ranked No.3 in the Boston Consulting Group's list of the most innovative companies.
Further, our brand value in 2014 reached $ 45.5 billion (No.7 in the world) according to Interbrand, up by 15% from the previous year as a result of our continued effort to enhance brand competitiveness.
As Samsung Electronics' stock price remained flat throughout 2014, we focused on improving shareholder value by increasing shareholder returns.
We conducted a large scale buyback of over KRW 2 trillion, and decided to increase dividend per share to KRW 20,000 per common share and KRW 20,050 per preferred share, up 40% compared to the previous year.
In particular, we substantially increased dividend per share for the third consecutive year following the increase in 2012 by 45% and in 2013 by 79%, demonstrating our commitment to shareholders.
Meanwhile, we held two Investor Forum events in 2014 in Hong Kong and New York to share our future direction of technology with shareholders.
As uncertainties in the global economy are expected to persist in 2015 due to an increase in the U.S. interest rate, economic recession in the Eurozone, and financial risks in emerging countries resulting from a sharp fall in crude oil prices, we expect growth in our core product markets to slow and competitions to intensify.
However, we will strive to overcome the challenges and achieve better results with our ceaseless effort to be prepared for and cope with the difficulties.
For our core businesses, we will focus more on developing premium products and reinforcing technology leadership to secure competitive advantage. By doing so, we will maintain our absolute superiority not only in advanced markets but also in growth segments such as emerging and low-priced markets.
For our growth businesses such as Digital appliances, Printing Solutions, Networks, Health & Medical equipment, System LSI, and LED, we will strive to increase sales and create profit in order to improve their contribution to the overall business.
In 2015, we will implement a focused strategy to build a world-class B2B business with the renewed organization structure. Through this, we will solidify the growth momentum in advanced market and achieve high growth in emerging market to position Samsung as a global leader in the B2B business.
In addition, to enhance device competitiveness based on solid soft competitiveness, we will promptly produce contents and services and strengthen service platforms such as Big data and Cloud.
We will pursue more aggressively the IoT business including Smart Health and Smart Home as one of the new growth engines of Samsung Electronics.
And we will embed into our Samsung Electronics DNA a creative corporate culture with the help of elements such as MOSAIC, which was introduced in 2014 to improve collective knowledge.
Despite persisting global macroeconomic uncertainties and an unfavorable business environment, all executives and employees of Samsung Electronics will strive to make the best results in the industry, based on the principle that solid business results contribute to improving shareholder value.
In addition, we will continue to focus on delivering returns to shareholders, and do our best to provide long-term guideline on shareholder return.
Moreover, we will continue to make an effort to communicate with shareholders by sharing the vision of Samsung Electronics through IR activities.
Samsung Electronics has grown rapidly and faced many challenges over the years, as we did in 2014. However, we have always swiftly responded to changes in the business environment and transformed ourselves to turn the challenges into opportunities as we did following the semiconductor crisis, the Asian financial crisis and global financial crisis of 2008.
After a storm, comes the calm. After the winter, a tree becomes stronger. We will again turn the obstacles into an opportunity to reach the next level.
I would like to once again wish all of you and your family the best of health and happiness in 2015. Thank you.
Vice Chairman & CEO
Samsung Electronics Co., Ltd