Samsung SDI (006400) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was KRW 3,177 billion, down 15% QoQ and 34% YoY, with an operating loss of KRW 434 billion and a net loss of KRW 216 billion, mainly due to weak market demand and battery segment declines.

• Battery/Energy Solution segment accounted for 94% of sales, with a 34.9% revenue decline and an operating loss of KRW 452 billion, impacted by EV and power tool destocking and ESS seasonality.

• Electronic Materials contributed 6% of sales, with slight revenue and profitability improvement driven by OLED demand, and an operating profit of KRW 18.3 billion.

• Major one-off: Sale of the polarizer film business, with related assets/liabilities classified as held for sale.

Financial highlights

• Gross margin dropped to 6.4% in Q1 2025 from 17.5% a year ago; gross profit was KRW 202.3 billion.

• Operating margin was -13.7%, net margin -6.8%, and EBITDA fell 90% YoY to KRW 73 billion.

• Cash and cash equivalents at quarter-end were KRW 1,353 billion, down from KRW 2,355 billion YoY.

• Total assets rose to KRW 40,710 billion, up KRW 5,259 billion YoY, mainly due to EV battery CapEx.

• CapEx for Q1 was KRW 774 billion, mainly for Energy Solution.

Outlook and guidance

• Q2 is expected to show improvement from Q1, with gradual demand recovery, but ongoing volatility from tariffs and political uncertainties.

• No cash dividends planned for 2025–2027 due to continued negative free cash flow from facility investments.

• Capital raised from a rights offering (KRW 1,728.2 billion) will fund joint ventures and solid-state battery investments.

• ESS and BBU markets projected to grow, especially with AI data center expansion and renewable energy trends.

• Focus on new customer acquisition, high-value product sales, and entry into HEV and solid-state battery markets.