The second quarter saw significant earnings growth led by strong performance both in the set and component businesses. Overall earnings of the set business improved YOY as well as QOQ due to the continuous sales increase of premium products.

The IT & Mobile Communications (IM) Division saw substantial earnings improvement led by expanded sales of flagship products such as the Galaxy S7 and S7 edge. A streamlined mid-to low-end smartphone lineup also contributed to improved profitability. Operating profit for the IM Division was KRW 4.32 trillion.

The Consumer Electronics (CE) Division achieved significant earnings growth YOY led by strong sales of its premium lineup such as SUHD TVs, Chef Collection Refrigerator, AddWash washer and newly launched air conditioner.

The component business achieved solid performance although overall earnings decreased YOY due to ASP declines in the industry. Earnings for the Display Panel segment improved QOQ led by increased OLED capacity utilization and stabilized LCD panel yields. Demand for semiconductors for mobile and SSD increased and the company achieved solid growth with a competitive edge in differentiated products, including 20-nanometer DRAM, V-NAND and 14-nanometer mobile AP.

The company estimated that the stronger Korean won against major currencies in the second quarter negatively impacted operating profit by approximately KRW 0.3 trillion, reflected mainly in the component business earnings.

Looking ahead to the second half of 2016, the company expects its solid performance to continue compared to the first half, mainly driven by earnings increase in the component business due to sales growth in high value-added products and stable demand and supply conditions. The set business is expected to continue its stable earnings while the IM Division expects marketing expenditure to increase.

In the third quarter, the company expects the component business to maintain its solid performance due to improved demand and supply conditions for memory chips and LCD panels and stable earnings for OLED and System LSI. For the set business, the company forecasts marketing expenditure for the IM business to increase mainly due to a new flagship product launch and fierce competition in the industry. Meanwhile, weak seasonality is likely to impact the CE business.

Capital expenditure (CAPEX) for the second quarter was KRW 4.2 trillion, which includes KRW 2 trillion for the Semiconductor business and KRW 1.6 trillion for the Display Panel business. The accumulated total CAPEX for the first half was KRW 8.8 trillion.

The annual plan for CAPEX has not yet been confirmed but is projected to increase slightly compared to last year. This year’s CAPEX will be concentrated on OLED and V-NAND capacity as the company sees strong market demand for OLED panels for smartphones and V-NAND SSD.

Demand for High-Density, High-Valued Products Drives Higher Earnings

The Semiconductor business posted KRW 12 trillion in consolidated revenue and KRW 2.64 trillion in operating profit for the quarter.

The memory business enjoyed solid growth in demand in the second quarter. Orders for high-density NAND and DRAM products contributed to solid earnings QOQ. This was coupled by a reduction in cost from continuous process migration.

In NAND, shipments of SSD remained strong in the quarter, as enterprise companies increasingly made the transition from HDD to SSD so as to reduce total cost of ownership (TCO). Orders for high-density mobile storage products over 32GB also helped drive sales, mainly due to the expanded adoption by Chinese companies. Samsung actively responded to orders for high-density mobile products over 64GB and enterprise SSD over 4TB and increased supply of the industry’s first 48-layer V-NAND.

In DRAM, demand climbed QOQ as smartphone manufacturers bought more high-density mobile DRAM and demand for high-density products increased following the launch of a new server platform.

A supply imbalance of some applications led to greater demand for Samsung’s 20-nanometer high-density, high value-added mobile and server products.

Looking ahead, for NAND, increased adoption of high-density products and strong seasonality will further drive demand growth in the second half. Growth in high-density, premium SSD products will continue, and the launch of new products by smartphone manufacturers is expected to raise demand for mobile storage. However, supply and demand will be tighter in the second half, due to soft industry supply growth.

For DRAM, the launch of new smartphones and the increasing adoption of 6GB memory chips in high-end smartphones will spur shipments of mobile DRAM in the second half. Shipments of high-density server products will be strong, as more data centers make the transition to a new server platform.

The System LSI business saw gains QOQ, thanks to stronger demand for 14-nanometer mobile AP in premium smartphones and increased sales of high megapixel image sensors. In the second half, increased sales of mid- to low-end mobile AP and LSI products are expected to provide a stable revenue stream.

Improved Display Performance on Strong OLED Sales and LCD Recovery

The Display Panel segment posted KRW 6.42 trillion in consolidated revenue and KRW 0.14 trillion in operating profit for the quarter driven by increased shipments of OLED panels and enhanced yields for new LCD TV panel production technology.

For the OLED business, second quarter earnings improved QOQ due to healthy sales of flagship smartphones and increased demand for flexible panels. High fab utilization rates with the help of an expanded mid to low-end product portfolio also contributed to improved earnings.

For the LCD business, the second quarter saw a continuation of QOQ growth under a gradual recovery in the supply-demand balance. The company was able to achieve growth thanks to improved yields for new TV panel production technology as well as expanded TV sales particularly for large-sized UHD panels.

Looking ahead to the second half, the OLED business, Samsung expects demand for OLED panels to rise despite a likely slowdown in the smartphone market. To remain competitive, the company plans to actively address customer demand and reinforce profitability by expanding the proportion of high value-added products such as flexible and high-resolution displays. Samsung will also seek to secure supply capacity according to market demand while expanding its customer base and new applications.

As for the second-half outlook for the LCD industry, Samsung expects supply and demand to improve thanks to increased demand under strong seasonality as well as continuous UHD TV market growth and size migration towards larger screens. In response, the company will focus on enhancing profitability by improving cost competitiveness and expanding its portfolio to high value-added products including ultra-large size, high-resolution and curved panels.

Mobile Unit Strengthens Competitiveness Amid Slow Global Market

The IM Division posted KRW 26.56 trillion in consolidated revenue and KRW 4.32 trillion in operating profit for the quarter.

Samsung’s earnings improved QOQ thanks to strong sales of its flagship Galaxy S7 and S7 edge smartphones. Additionally the company achieved growth in the second quarter by maintaining the profitability of mid- to low-end models, such as the Galaxy A and J series, and improving the product mix by raising the sales proportion of the Galaxy S7 edge to over 50 percent.

Demand for smartphones and tablets in the second half is forecast to increase, however, market competition is expected to strengthen as other companies release new mobile devices. Despite this outlook, Samsung will focus on YOY earnings increase by strengthening its high-end line-up and maintaining solid profitability of mid to low-end products.

Looking into the third quarter, the release of a new large-screen flagship smartphone will help to maintain solid sales of high-end smartphones led by the Galaxy S7 and S7 edge. Samsung will also focus on expanding smartphone sales including this year’s new Galaxy A and J series and the debut of the Galaxy C series exclusively for the China market.

Samsung will focus on increasing smartphone sales under strong seasonality with the launch of a new model, while expecting marketing expenses to increase QOQ due to seasonality.

As for the Networks business, earnings improved due to increased LTE investment of major carriers in the second quarter.

Solid Performance for Consumer Electronics Despite Sluggish Market

The Consumer Electronics Division – encompassing the Visual Display (VD), Digital Appliances (DA), Printing Solutions and Health & Medical Equipment (HME) businesses – posted KRW 11.55 trillion in consolidated revenue and KRW 1.03 trillion in operating profit for the quarter.

In the second quarter, global TV demand remained flat YOY due to sluggish economic conditions in major emerging markets that offset the growth experienced in developed markets. Amid these challenging conditions, Samsung achieved solid YOY earnings by successfully launching new products, including SUHD TVs, and increasing sales of premium products on the back of global sporting events.

For the appliances business in the second quarter, although growth momentum continued in North America, global demand declined YOY due to slower growth in China and the impact from the economic slowdown in emerging markets. Despite these circumstances, earnings improved from the same period of the previous year thanks to increased sales of premium products such as the Chef Collection refrigerator and the AddWash and activ dualwash washing machines.

Looking ahead to the second half, TV demand is expected to decline YOY due to weakened demand in Europe and a prolonged economic slowdown in emerging markets. In response, Samsung will focus on improving profitability and increasing sales through collaborations with local channel partners and through region-specific promotions. To reinforce its leadership in the premium TV segment, the company will also seek to grow sales of its premium SUHD TV line-up, particularly products featuring its Quantum Dot technology.

Concerning the outlook for appliances in the second half, market growth is expected to be limited due to the aforementioned concerns in Europe and emerging markets. Despite these conditions, Samsung will actively seek opportunities to counter the challenging market dynamics by launching innovative products that offer superior consumer experiences. The company also plans to achieve further growth by enhancing its B2B business in this sector, particularly for built-in kitchens and system air conditioners.

※ Consolidated Sales and Operating Profit by Segment based on K-IFRS (2014~2016.2Q)

Note 1: Sales for each business include intersegment sales

Note 2: CE (Consumer Electronics), IM (IT & Mobile Communications), DS (Device Solutions), DP (Display Panel).

Note 3: Information on annual earnings is stated according to the business divisions as of 2016.

The first quarter saw overall earnings growth led by the early launch and successful sales of the flagship Galaxy S7 and S7 edge, improved memory product mix, expanded 14nm supply of System LSI products and increased sales of OLED panels.

For the Semiconductor business, despite weak memory demand due to seasonality, the Memory Business achieved solid earnings by expanding sales of high value-added products, while continuously reducing costs through technology migrations for DRAM and NAND. Earnings for the Systems LSI Business increased YoY led by increased demand for 14nm products while QoQ earnings decreased.

Overall earnings of the Display Panel business decreased due to a sharp decline in LCD panel earnings although earnings of OLED panels improved mainly driven by the Galaxy S7. The LCD business experienced temporary yield issues while adopting new process technology as well as TV panel price decline.

The IT & Mobile Communications (IM) Division saw a substantial earnings improvement both YoY and QoQ mainly driven by the early launch of Galaxy S7 and its strong sales and improved cost efficiency through the streamlining of mid-to-low-end smartphone lineups. Although the company had a one-time royalty settlement expense in the quarter, the impact on operating profit was equivalent to less than 1 percent of IM revenue.

The Consumer Electronics (CE) Division achieved significant earnings growth YoY led by expanded sales of premium TV models such as SUHD TV and Curved TV in developed markets, and also a notable sales increase of premium home appliance products in North America.

The company estimated that the weaker Korean won against major currencies in the first quarter positively impacted operating profit by approximately KRW 0.4 trillion, reflected mainly in the component business earnings.

In the second quarter, the company expects its solid performance to continue led by steady earnings in the Mobile and Semiconductor businesses plus improvement of the CE and Display Panel businesses.

The IM Division is expected to secure solid earnings by expanding sales of the Galaxy S7 along with strong profitability of mid-to-low-end products. The CE Division expects to see improvements as seasonality should improve air conditioner sales, while flagship SUHD TV sales are expected to increase.

The Semiconductor business will continue to maintain solid earnings by improving the high-value added memory product mix such as V-NAND SSD for servers, and by expanding the supply of System LSI components for premium smartphones.

The Display Panel segment is expected to see earnings improvement compared to the previous quarter as LCD profitability is forecast to rise on stabilized TV panel yields and improved demand and supply conditions.

Looking ahead to the rest of 2016, the company expects the set business to continue to generate higher earnings while focusing on stabilizing the component business in the second half.

For the Semiconductor business, the company’s DRAM business will continue to focus on sustaining solid profitability while enhancing technology competitiveness. For NAND, the company will expand its V-NAND SSD for servers with strong technology leadership. The System LSI Business will strive to improve profitability YoY by increasing 14nm shipments and enhancing mid-to-low-end SoC line-ups.

For the Display Panel business, OLED earnings are expected to improve due to growth driven by an increase in flexible and high-resolution panels. LCD panel profitability is expected to improve in the second half driven by high valued-added products amid better supply and demand conditions.

For the IM Division, the company expects the sales of flagship products to increase YoY, especially with strong demand for flagship products such as the Galaxy S7 and new model launches in the second half. In addition, the company will continue to manage cost efficiencies by streamlining its smartphone lineups.

For the CE Division, the company will focus on profitability by increasing premium products such as SUHD and Curved TVs. With the Olympics and other global sporting events forecast to drive global demand for large-size TVs, the company expects strong improvements in operating results YoY.

The Digital Appliances Business will strive to improve earnings by expanding sales of premium products, including smart appliances, and enhancing its enterprise business.

Meanwhile, capital expenditure (CAPEX) for the first quarter was KRW 4.6 trillion, which includes KRW 2.1 trillion for the Semiconductor business and KRW 1.8 trillion for the Display Panel business. The annual plan for CAPEX has not yet been confirmed but is projected to increase slightly compared to last year’s CAPEX based on various business opportunities. CAPEX for the Display Panel segment may increase as the company sees strong market demand for OLED panels. DRAM CAPEX will remain flexible based on supply and demand conditions but is expected to be lower than 2015.

Solid Performance to Continue in Semiconductor Business

The Semiconductor business – including Memory and System LSI – posted KRW 11.15 trillion in consolidated revenue and KRW 2.63 trillion in operating profit for the quarter. The Memory Business accounted for the bulk of sales with KRW 7.94 trillion in revenue.

Despite weak seasonality during the first quarter, the Memory Business achieved solid earnings by expanding sales of high value-added products, while reducing cost through technology migrations for DRAM and NAND.

For NAND, demand for high-density enterprise SSDs and  mobile storage products increased and the company enhanced profitability and cost competitiveness by expanding production of third-generation V-NAND and 10nm-class planar process migration.

For DRAM, despite weak PC demand, smartphone density continued to grow and server DRAM demand remained solid driven by high-density data centers. Samsung expanded its 20nm product portfolio in the quarter and secured solid profitability through its product mix.

In the second quarter, strong growth in high-density SSD and high value-added solution products over 64GB is expected to continue, led by expansion of cloud services and rising shipments of high performance smartphones. Increased demand for DRAM is also forecast due to a partial recovery in the PC market and launches of new smartphones.

Samsung will seek to maintain its market leadership with differentiated, high value-added products based on its V-NAND competitiveness. The company will also drive DRAM sales by increasing sales of 20nm high-density products, such as 8Gb DDR4/LPDDR4.

As for System LSI, while earnings declined QoQ as a result of component inventory adjustment by customers, solid growth was maintained YoY thanks to increased demand for 14nm process products. In the second quarter, earnings are expected to improve driven by new premium smartphone launches and inventory restocking by customers.

Looking ahead in 2016, Samsung will further improve product competitiveness by diversifying its 14nm foundry customer base and enhancing its product line-up of mobile SoC. In addition, Samsung expects to begin mass production of 10nm products by the end of the year.

Display Panel Segment Seeks Improved Product Mix

The Display Panel segment posted KRW 6.04 trillion in consolidated revenue and KRW 0.27 trillion in operating loss for the quarter.

In the first quarter, shipments of OLED panels improved from the previous quarter, driven by launches of new high-end smartphone panels and strong demand for smartphones in the mid-to-low-end space. Conversely, the company’s LCD panel shipments decreased, affected by weaker demand during low seasonality.

Looking ahead to the second quarter, for OLED panels, Samsung hopes to actively address demand for new products and expand its customer base, while focusing on improving profitability of LCD panels by increasing shipments of strategic premium products such as UHD and large-size panels.

In 2016, the company expects OLED demand will continue to rise helped largely by growth in the mid-to-low-end smartphone segment while the LCD market will continue to be over supplied. In this market, Samsung hopes to actively address demand for new products, increase sales of value-added products and reinforce its leadership by developing new panel applications.

Premium Flagships Enhanced Mobile Profitability

The IM Division – comprising the Mobile Communications and Networks Businesses – posted KRW 27.60 trillion in consolidated revenue, a 6.6-percent YoY increase, and KRW 3.89 trillion in operating profit for the quarter, a 42-percent YoY increase.

While smartphone and tablet demand saw a slight QoQ decrease due to seasonal effects, overall operating profit for the Division increased. This increase was largely due to the early launch and strong global performance of the flagship Galaxy S7 and S7 edge, as evidenced by robust sell-out figures and low inventory levels compared to their predecessors. A streamlined mid-to-low-end smartphone lineup also contributed to improved profitability.

Looking ahead to the second quarter, while demand for smartphones and tablets is forecast to remain flat due to continued weak seasonality, the worldwide rollout of the latest flagship models as well as an increase in shipments of the mid-to-low-end Galaxy A and J series are expected to help the company maintain robust sales momentum and profit.

As for the year ahead, Samsung anticipates softening demand in the smartphone market and negative growth in the tablet market. The company will reinforce its leadership in the premium smartphone segment on the back of the Galaxy S7 and S7 edge, while continuing to increase volume and improve profitability in the mid-to-low-end segment. In addition, the company will continue to expand the Samsung Pay service to global markets and look into new business opportunities.

For the Networks Business, the company will seek growth through the continued rollout of 4G LTE services in new markets around the world, including Southeast Asia.

Positive Outlook for Premium TVs and Home Appliances

The Consumer Electronics Division – encompassing the Visual Display (VD), Digital Appliances (DA), Printing Solutions and Health & Medical Equipment (HME) businesses – posted KRW 10.62 trillion in consolidated revenue and KRW 0.51 trillion in operating profit for the quarter.

In the first quarter, TV market demand decreased YoY due to weak seasonality and economic downturn in emerging markets. Earnings for the VD Business showed significant growth YoY, led by increased sales of premium products such as SUHD and Curved TVs.

For the appliances business, earnings improved compared to the corresponding quarter last year, led by continued growth in the North American market and increased sales of innovative premium products such as Chef Collection refrigerators and the Activewash washing machine.

In the second quarter, TV demand is expected to slightly increase riding on sports events such as the Olympics. The company plans to further improve profitability by continuing to focus on the new and improved SUHD TVs with the world’s only cadmium-free Quantum dot display, while also increasing sales of premium products such as UHD TVs and Curved TVs.

Digital appliance demand is expected to rise due to seasonal growth for air conditioners, despite global market uncertainties. Against this backdrop, Samsung aims to increase profitability by expanding sales of innovative premium products such as a newly launched air conditioner and Family Hub Refrigerator. Additionally, the company expects to improve performance by expanding its enterprise business including built-in kitchens and system air conditioners.

※ Consolidated Sales and Operating Profit by Segment based on K-IFRS (2014~2016.1Q)

Note 1: Sales for each business include intersegment sales.

Note 2: CE (Consumer Electronics), IM (IT & Mobile Communications), DS (Device Solutions), DP (Display Panel).

Note 3: Information on annual earnings is stated according to the business divisions as of 2016.

Samsung posted KRW 53.32 trillion in consolidated revenue and KRW 6.14 trillion in operating profit for the quarter.

Overall, the company reported full-year 2015 revenue of KRW 200.65 trillion and full-year 2015 operating profit of KRW 26.41 trillion.

Facing global economic headwinds, including a sharp fall in oil prices, the company’s fourth quarter earnings fell QoQ, as the components side of the business was impacted by weakened prices for DRAM chips and LCD panels due to overall softer demand in the IT market and PCs.

In terms of currency, due to the strength of the Korean Won compared to major currencies in the fourth quarter, the positive FX impact that significantly contributed to the component business earnings in the third quarter changed to a negative impact of approximately KRW 400 billion, which was generated mostly from the set business.

Expecting challenges in 2016 to maintain earnings due to a difficult business environment and slowing IT demand, the company will strive to improve performance in the second half, by capitalizing on strong seasonal demand for set business products and enhancing the product mix in components business.

The company will make efforts to secure profitability for each business unit while it will also focus on reinforcing mid- to long-term business competitiveness, including new business areas such as the Internet-of-Things (IoT). For IoT, the company plans to focus initially on Smart Home and Smart Health, leveraging the strength of our overall ecosystem.

For the memory business, the company plans to improve competitiveness of its products and solidify its technological leadership by expanding its leading-edge process. As for the System LSI business, the company plans to diversify its foundry customers and enhance the SoC (System-on-Chip) line-up.

For the Display Panel segment, the company plans to secure mid- to long-term growth momentum by leveraging its OLED technology for the development of new panel applications such as transparent, mirror, head-mounted and automotive displays, while strengthening its flexible display technologies.

For the mobile business, the company will focus on strengthening the competitiveness of its software, along with hardware, services and wearable products. For the consumer electronics business, the company plans to lead the Smart Home era with diverse IoT-enabled products.

Looking at the first quarter specifically, challenging business conditions will likely remain due to weak seasonal demand and a slowdown in the IT industry. Therefore, the components business will focus on expanding the proportion of value added products, while the set business will focus on major launches of its new products.

Regarding shareholder return, the company announced a KRW 11.3 trillion special buyback program and a three-year shareholder return policy last year. It completed the first phase of the buyback program on January 12, of which 2.23 million common shares and 1.24 million preferred shares worth KRW 4.25 trillion were repurchased and cancelled.

Capital expenditure (CAPEX) for 2015 totaled KRW 25.5 trillion, including KRW 14.7 trillion and KRW 4.7 trillion for semiconductors and displays, respectively. The 2016 CAPEX plan remains under review.

Samsung to Maintain Leadership with Differentiated Chips

The Semiconductor business registered KRW 2.80 trillion in operating profits on consolidated revenue of KRW 13.21 trillion for the quarter.

In the fourth quarter, weak demand across certain markets, including PCs, impacted the Memory business’s overall revenue, but sales of mobile and server DRAM were solid.

Growing demand for solution products helped lift NAND demand for high-density mobile devices and enterprise SSD for servers and PCs that require greater storage.

System LSI’s profits improved QoQ, driven by the 14-nm foundry business, despite weaker seasonal demand for SoC and LSI (Large-Scale Integration) chips.

Looking ahead in 2016, demand for memory chips will increase due to growth in contents stored in high density servers featuring DRAM and SSD, as well as smartphones with more advanced features.

Samsung will maintain its leadership in the market and drive sales with differentiated, high value-added products. To this end, the company will expand 20-nm process migration and develop 10-nm class process in DRAM. For NAND, production of third-generation V-NAND and SSD products will be expanded to enhance competitiveness. In System LSI, Samsung will continue pursuing customer diversification and expanding its product line-up to achieve long-term growth.

Demand for memory chips in the first quarter, which is a traditionally weak season, will be soft but Samsung will focus on profitability by lifting sales of high density DRAM and NAND storage products, and strengthening cost competitiveness by expanding 20-nm DRAM and third-generation V-NAND production.

Moreover, Samsung will further boost product competitiveness by beginning mass production of second-generation 14-nm process and supplying chips for new premium smartphones.

ASP Decline Weighs on Display Panel Profit

The Display Panel segment posted KRW 6.53 trillion in consolidated revenue and KRW 300 billion in operating profit for the quarter.

In the fourth quarter, the LCD panel segment saw a earnings decline QoQ due to a decrease in shipments of large-size panels and continued decline in Average Selling Price (ASP). For OLED panels, positive factors such as increased shipments and improved line utilization were hampered by a decline in ASP brought on by an expansion in the proportion of mid- to low-end panel sales.

Looking to the first quarter, the LCD market will likely be affected by intensifying competition among panel makers and declining demand due to weak seasonality. In response to these challenging conditions in the first quarter and beyond, Samsung will focus on improving cost efficiency and inventory management while also continuing efforts to expand its customer base.

As for OLED panels, due to an expected slowdown in the smartphone display market in the first quarter, Samsung will concentrate on reinforcing cost competitiveness and promptly responding to market demand for new product releases by key customers. Throughout 2016, the company expects smartphone momentum to slow YoY, with most growth coming from low-end products.

Differentiated Mobile Portfolio to Maintain Solid Performance

The IM Division posted KRW 25.00 trillion in consolidated revenue and KRW 2.23 trillion in operating profit for the quarter.

A slight QoQ decrease in smartphone shipments due to a year-end inventory adjustment and an increased portion of the mid- to low-end products led to the decline in sales while a seasonal increase in marketing expenses slightly impacted profit. As for tablets, quarterly shipments and sales increased due to seasonal demand and steady sales of the Galaxy Tab A and Tab S2.

In the first quarter, although slowing demand for smartphones and tablets is forecast due to seasonality, and in spite of slowing shipments of Samsung smartphones, an enhanced product mix with the introduction of new line-ups, such as the Galaxy A (2016) series, is expected to help stabilize sales and profitability.

As for the outlook for 2016, Samsung expects single-digit percentage growth in both the smartphone and tablet categories amid softening demand and intensifying competition. Despite this challenging environment, the company will focus on increasing smartphone shipments and maintaining a double digit margin through releases of competitive devices and an optimized product portfolio.

Specifically, in the premium smartphone segment Samsung aims to reinforce its market leadership and drive growth with differentiated and innovative products. For the mass market segment, the company will focus on increasing shipments and profitability through competitive product line-ups.

Meanwhile, tablets and wearable devices are expected to expand their contributions to overall business performance while new services such as Samsung Pay will continue to be developed.

As for the Networks Business, continued roll out of 4G LTE services in global markets helped enhance its earnings for the quarter. Looking ahead, Samsung will look to build on its experience and actively expand its LTE services globally.

Premium TVs and Home Appliances to Enhance Profitability

The Consumer Electronics Division – encompassing the Visual Display (VD), Digital Appliances (DA), Printing Solutions and Health & Medical Equipment (HME) businesses – posted KRW 13.85 trillion in consolidated revenue and KRW 0.82 trillion in operating profit for the fourth quarter.

In the fourth quarter, TV market demand increased significantly entering the year-end peak season. Earnings for the VD Business showed strong growth QoQ, led by promotional sales such as Black Friday in North America, and increased sales of premium products such as SUHD TVs.

As the TV market is expected to grow this year, riding on global sporting events including the Olympics, Samsung will continue to focus on securing profitability by actively expanding its SUHD TV line-up with enhanced picture quality and design, while increasing sales of premium products such as curved TVs and large-size TVs that are 60 inches or above.

In the first quarter, however, as TV demand enters a period of weak seasonality, the company will concentrate on introducing the new line-up of SUHD TVs.

For the appliances business, earnings improved QoQ led by continued market growth in North America and increased sales of innovative premium products such as the Chef Collection refrigerators and activewash washing machine.

Looking ahead in 2016, as growth in the appliances market is expected to slow, Samsung will concentrate on improving its performance by increasing sales of premium products such as the Family Hub refrigerator and expanding the enterprise business including air conditioners.

※ Consolidated Sales and Operating Profit by Segment based on K-IFRS (2014-2015)

Note 1: Sales for each business include intersegment sales.

Note 2: CE (Consumer Electronics), IM (IT & Mobile Communications), DS (Device Solutions), DP (Display Panel.

Note 3: Information on annual earnings is stated according to the business divisions as of 2015.