Samsung Electronics Sets Sales Record

Sales exceed 100 tln won level for the first time despite adverse economic conditions

Samsung Electronics Co. posted 118 trillion won in sales last year, the largest in its history, surpassing the 100 trillion won level for the first time, with an operating profit of 5.7 trillion won. The sales figure is up 15 percent YoY with net profit coming in at 5.53 trillion won.
The company, during the announcement of its 2008 performance results, said the slumbering global economy hurt its performance, especially semiconductor chips and LCD panels, with prices taking a steep dive and marketing expenses jumping for cell phones and digital TVs in particular.
The company also said the prices of D-RAM and memory chips also fell steeply due to reduced demand during the peak season and the prices of NAND flash memory chips also fell, incurring a 4.81 trillion won sales deficit with a 690 billion won loss in operating profit. The company said the chip sector suffered a 14 percent deficit in operating profit, but many of its rivals sustained up to a 40 percent loss, which helped LG expand its market share.
The LCD panel sector also saw its prices fall due to slackened demand, reducing its fourth quarter sales compared to the third quarter, posting 3.55 trillion won in sales and an operating profit of 230 billion won. In the areas of information and communication, the company has been able to expand its sales of those products by 14 percent, with the sales of cell phones up 5 percent YoY, despite the slumping global economy.
Fourth quarter cell phone sales of 10.32 trillion won set a quarterly record, with operating profit coming in at 170 billion won.
The company said its goal is to sell more than 200 million handsets this year by offering various models tailor-made to suit the needs of the customers in each region.
The digital sector did well with the sale of digital TVs rising sharply despite tough competition and the won's weakness vis-a-vis U.S. dollar, posting 2.41 trillion won in sales on a non-consolidated basis. Operating profit, however, fell 170 billion won. The sector's consolidated sales amounted to 12.62 trillion won last year with operating profit of 110 billion won. The company predicts the business environment will deteriorate further this year, and it should react rapidly to changes through closely monitoring market trends around the world. The company expects the first quarter to be the worst, as it is the slow season for many of its products, and it will strive to expand the gap with its close competitors in all areas of its operation when the business climate improves in the second half.
The company held a strategy meeting at its Suwon complex for its key managers in the digital media communication sector including those stationed overseas.
At the meeting they decided on a number of key strategies, including one that will have the company map out its management strategy by quarter in the face of the rapidly changing business climate for digital media products.
An official said many at the meeting called for short-term management strategies to be reviewed every three-months, instead of the current six-month strategy, so that the company can respond to changes in marketing conditions more effectively.
He said all of the participants in the meeting agreed that the company should take advantage of the current market downturn to expand market shares and cope with the various difficulties through effective management strategies.
Heads of departments reported the management strategies of their departments and agreed to boost synergy among the operating units in the sector based on the three major objectives including speed and effectiveness to achieve the sector's ultimate objective of becoming a top-rated global company.
Therefore, the DMC sector has decided to go all-out to push its globalization strategy under President Choi Ji-sung's call for an effort to make all of the sector's products tops in their respective markets around the world.
Last year, the division was able to rank second in market share in China, though at a huge cost, to show that the sector can do the same in other markets.
At the meeting they also decided to maintain more than 10 percent in operating profits over sales. nw

President Choi Ji-sung of Samsung Electronics Digital Media Division