Samsung 2002 Annual Report Download

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FINANCIAL HIGHLIGHTS
2002 33.8
Sales
40.5
In billions of U.S. dollars
In trillions of Korean won
A Year of Achievements

Table of contents

  • Page 1
    FINANCIAL HIGHLIGHTS A Year of Achievements Sales 2002 In billions of U.S. dollars In trillions of Korean won 33.8 40.5

  • Page 2
    3 Operating Profit Net Income Net Debt / Equity 6.0 5.9 -23.8 % 7.2 7.05 Yearly average exchange rate: Won/US Dollar: 1,251.16/1 Exchange rate on December 31, 2002: Won/US Dollar: 1,200.40/1

  • Page 3
    .... Last year, we paid record dividends to our shareholders and won accolades for our efforts to open ourselves to shareholder scrutiny. Asset Benchmark Research lauded us for "Finest Corporate Governance in South Korea," and Finance Asia named us the "Best Managed Company in Asia." Noting our strong...

  • Page 4
    ... us kudos for the "Best Communication of Shareholder Value in Asia" and "Best IR by a Korean Company." With corporate governance emerging as one of the world's most explosive business issues this year, it is clear that we are headed in the right direction. Ultimately, the best judge of our efforts...

  • Page 5
    CONNECTION, CONVERGENCE, COMMUNICATION Where imagination meets technology

  • Page 6
    ... by Samsung Electronics-provides enhanced levels of capability and performance, and maximum user workload for supercomputers, workstations, and servers. CONNECTION: Imagine a company whose mission is to help people connect with those they love the most. To make this world a little smaller. To open...

  • Page 7
    Transforming new values into fresh delights

  • Page 8
    ... and built-in wireless Internet connection give ample power for anywhere, anytime computing. CONVERGENCE: Digital data, music, pictures. Computing, telecommunications, broadcasting. And now, your washing machine, vacuum cleaner, refrigerator. This is what digital convergence means to us. Not just...

  • Page 9
    Crossing the boundary into tomorrow

  • Page 10
    ... with the world's largest TFT-LCD TV, perfect for bringing theatersized HDTV to your bedroom or living room. COMMUNICATION: It's easier to say than to do. To imagine the future across every continent, medium, and company. But at Samsung Electronics, we practice what we preach, developing new...

  • Page 11
    MESSAGE FROM THE CEO SPH-X780 Camera phones twist into the future with this limber folding phone with a rotating camera (with 2X zoom) and twisting 65,000-color LCD viewfinder that lets you take pictures from any conceivable angle. Leading the digital convergence revolution

  • Page 12
    ... through diversification. T his year, our Telecommunication Network surged to become the world's third largest market share leader in mobile handset sales (thanks to a whopping 48% increase in annual sales), and the Device Solution Network pushed semiconductor sales to 12.8 trillion won, making us...

  • Page 13
    ...CPUs for PDAs. 05 SEC develops the world's first 70nm chip design process. 16 BusinessWeek ranks SEC the world's number one InfoTech company in its annual Info Tech 100. Media Network continues to be the number one television manufacturer in the world, while the Digital Appliance Network is on the...

  • Page 14
    ...mass production of the world's first 1GHz Rambus DRAM. 13 SEC partners with Microsoft to develop handheld PCs. 14 SEC reaches annual production of 10 million large-sized TFT-LCD panels. 21 IR gives SEC its annual award for "Best Shareholder Communication in Asia." 06 SEC announces the first Korean...

  • Page 15
    ...-generation Net Theater, Fresh Closet, Step Vacuum, and Mobile Hub-is designed to be simple, accessible, and to wow consumers with great value and design. Designing Tomorrow For example, take a look at our new DuoCam, a digital camera with a built-in digital camcorder. DuoCam represents a unique...

  • Page 16
    ... the same music, television, or DVDs. That's where Net Theater sparkles. The six components of this high-end home theater system are designed to connect a set-top box, hard disk drive, and home server all in one brilliantly streamlined avenue to family entertainment. From its ultra-contemporary 50...

  • Page 17
    ... on Step Vacuum to start vacuuming and wheels help you guide it wherever you need to go (a slim-line rotation head helps you clean tight spots). Need to grab a blanket from a high shelf? Step on top of Step Vacuum and its wheels cleverly spring inward for safety. (All tools, filters, and bags are...

  • Page 18
    ... drive designed to handle your growing digital video and music collection, Mobile Hub adapts to whatever your needs are. Think of it as a vast portable digital video (or music) player-an MP3 player for video. Designed for stand alone use or on the road with a built-in WiFi connection to the Internet...

  • Page 19
    Digital Media ¦¢ NETWORK

  • Page 20
    21 What happens when work meets play? What lies at the intersection of home and office, where consumer electronics meets information technology? How deeply can each product, each person, lead other people to other products?

  • Page 21
    ... the world's largest plasma TV is the ultimate home theater screen. With Digital Natural Image engineTM‚ for a truly lifelike picture, two built-in tuners for picture-in-picture viewing, and 3D sound, you can get to a movie theater without leaving home. And thanks to its ultralight and slim design...

  • Page 22
    ... plasma, DLP, LCD televisions and monitors available today, Samsung Electronics continues to be the world's numberone choice for display devices. In 2002, we shipped more than 13 million TV sets, winning 10.2% of the global market. In 2002, we maintained our grip on the top market share in PC...

  • Page 23
    ...also improve our overall brand market share. Our new DVD-HDD recorders and DVD recorders are perfect tools for consumers' increasing interest in digital video and need for time-shifting, devices. Similarly, our new portable DVD player with a 10inch TFT-the largest screen of any portable DVDP on the...

  • Page 24
    ..., supplied the DVD-ROM for Microsoft's X-Box, and even developed new optical drives for Dell, which in turn recognized us as its best supplier of the year. Is anyone wondering why we're becoming one of the world's top suppliers of digital convergence tools? 172W LCD Wide type 17 inches, Samsung...

  • Page 25
    Telecommunication ¦¢ NETWORK Remember when mobile phones were just for talking? This year, Samsung Electronics Telecommunication Network showed the world that phones are also for seeing with brilliant high-definition color TFT-LCD screens, built-in cameras, and high-speed data connections.

  • Page 26
    27

  • Page 27
    ...-Z100 Earlier this year, Samsung Electronics demonstrated the world's first working 3G UMTS mobile phone. Replete with GPRS Class 8, WAP, MMS, and Java, a camcorder (with rotating camera) that supports video streaming, and a high quality TFT screen with 260,000 colors, the SGH-Z100 is a significant...

  • Page 28
    ...ever. With Samsung Electronics in al leader of wireless digital convergence, from Asia to Europe and throughout the Americas. NETWORK 29 the GSM market for just one year, European consumers have already learned that we are one of the world's best-selling premium mobile wireless brands. Spanish GQ...

  • Page 29
    ... cubic zirconium studs outlining a white LED digital clock. Inside is an equally shinning jewel: a 65,000-color interior LCD. Polyphonic ringtones, screensavers, and games make this phone fit for a bride. SGH-D700 Ready to hear and see through your phone? Samsung Electronics' new camera phones are...

  • Page 30
    ... part of our company-from memory and a much larger market than ever before. This will spur additional sales of our High Speed AceMAP Solution, a platform for any combination of network services including voice, video, and data. AceMAP is specifically intended to facilitate the unified communications...

  • Page 31
    Digital Appliance ¦¢ NETWORK When refrigerators, air conditioners, washing machines, microwave ovens, and vacuum cleaners all become the leading edge of a digital revolution, it is clear that the history of digital convergence has reached a critical turning point.

  • Page 32
    33

  • Page 33
    HomePADTM Refrigerator Samsung brings the wireless revolution to the kitchen with this mobile control panel, called HomePADTM. With a detachable 10.4-inch LCD touch screen and wireless LAN access, every member of your family can instantaneously share schedules, surf the Internet, and watch TV ...

  • Page 34
    ... domestic market share in home appliances and five number-one products: air conditioners, refrigerators, microwave ovens, washing machines, and vacuum cleaners. With a huge investment in R&D and the debut of Hauzen, our new premium home appliance brand, the Digital Appliance Network is turning 2002...

  • Page 35
    ... aggressive promotions and advertising as well as a new retail partnership with Best Buy, the largest volume retailer of home appliances in North America. Thanks to this surge in our new premium products, our air conditioner business also grew by more than 30% in 2002. Our super-slim wall mounted...

  • Page 36
    ... Network stands ready for the future of digital convergence. Wine Cellar Samsung Electronics' new Wine Cellar creates the perfect conditions for long-term wine storage: a low vibration, low-sound environment in a modern design using natural woods. Big Wash 4D This washing machine saves on wash time...

  • Page 37
    Device Solution ¦¢ NETWORK

  • Page 38
    39 How far ahead can you see? This year, we turned a year's worth of uncertainties into a year of opportunity and innovation. Next year, we'll maximize the value of our products even more.

  • Page 39
    512Mb DDR The world's highest-density memory chip in mass production- pioneered by Samsung Electronics-provides enhanced levels of capability and performance, and maximum user workload for supercomputers, workstations, and servers.

  • Page 40
    ...¦¢ In 2002, Samsung Electronics's Device Solution Network overwhelmed its rivals with a surge in sales, market share, and profitability. We leapt over two competitors to become the world's second-biggest semiconductor company and secured our fifth consecutive year as the world's number-one TFT-LCD...

  • Page 41
    ... to win market share for tomorrow's high-performance server, workstation, and supercomputer memory is huge. According to Gartner Dataquest, the market for 1GB DDR SDRAMs is expected to reach 13 billion dollars by 2006-and we are well-prepared to meet market demands with timely investments and...

  • Page 42
    ...) The industry leader for display driver IC products, Samsung Electronics creates essential ICs for the widest range of flat-screen display devices (TFT-LCD and STN-LCD) in many sizes. 19-inch TFT-LCD Samsung Electronics is one of the world's leading suppliers of TFT-LCD screens like this 19-inch...

  • Page 43
    SOCIAL CONTRIBUTIONS the pursuit of humanity

  • Page 44
    ... is an integral part of our culture. In 2002, more than 13,000 Samsung Electronics employees shared their time in more than 306 volunteer programs. Through matching grants and our annual Global Volunteer Service Festival, we contributed to hundreds of community service programs around the world-from...

  • Page 45
    ...kilometer "fun run" in Budapest, Hungary. Our support extends into the virtual world (e-sports) as well: Samsung is the worldwide sponsor for the World Cyber Games, the world's largest and the most renowned contest bringing together digital e-athletes from 45 countries for online multiplayer games.

  • Page 46
    for all tomorrow's winners

  • Page 47
    .... Samsung Electronics' leadership in Green Management and rigorous enforcement of environment, health, and safety (EHS) standards leaves no doubt about our commitment to the planet. We stringently meet domestic and international environment and safety certifications and work hard to develop eco...

  • Page 48
    49 FINANCIAL OVE RVI EW 2002 50 52 55 57 58 62 64 Independent Auditor's Report Non-consolidated Balance Sheets Non-consolidated Income Statements Non-consolidated Statements of Appropriations Retained Earnings Non-consolidated Statements of Cash Flows Non-consolidated Five-Year ...

  • Page 49
    ...Report To the Board of Directors and Shareholders of Samsung Electronics Co., Ltd. We have audited the accompanying non-consolidated balance sheets of Samsung Electronics Co., Ltd. (the "Company") as of December 31, 2002...the accounting principles used and significant estimates made by management, ...

  • Page 50
    51 December 31, 2002, the shares in Samsung Life Insurance Co., Ltd. were not sold. As of the balance sheet date, the ultimate effect of these matters on the financial position of the Company cannot presently reasonably be determined. As discussed in Note 25 to the accompanying financial ...

  • Page 51
    Non-Consolidated Balance Sheets 2002 December 31, 2002 and 2001 2001 2002 2001 In millions of Korean won In thousands of U.S.dollars ASSETS Current assets: Cash and cash equivalents Short-term financial instruments Marketable securities Trade accounts and notes receivable, net of allowance ...

  • Page 52
    ... Non-Consolidated Balance Sheets 2002 December 31, 2002 and 2001 2001 2002 2001 In millions of Korean won In thousands of U.S.dollars LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Trade accounts and notes payable Current portion of long-term debt Other accounts and notes payable...

  • Page 53
    Non-Consolidated Balance Sheets 2002 December 31, 2002 and 2001 2001 2002 2001 In millions of Korean won In thousands of U.S.dollars LIABILITIES AND SHAREHOLDERS' EQUITY Commitments and contingencies Shareholder's equity: Capital stock Common stock Preferred stock Capital surplus Paid-in ...

  • Page 54
    ... of U.S.dollars Sales: Domestic Export Total sales Cost of sales Gross profit Selling, general and administrative expenses Operating profit Non-operating income: Interest and dividend income Foreign exchange gain Gain on foreign currency translation Earnings from equity-method investments Others...

  • Page 55
    ...years ended December 31, 2002 and 2001 2001 2002 2001 In millions of Korean won In thousands of U.S.dollars Non-operating expenses: ...Net income before income taxes Income tax expense Net income Basic earnings per share Diluted earnings per share 100,501 222,905 17,547 42,206 489,704 ￦ 872,863...

  • Page 56
    ... of equity-method investees Interim dividends (Dividend rate : 10% of per value) Net income Total retained earnings before appropriations Appropriations: Legal reserve Reserve for business rationalization Reserve for research and human resource development Cash dividends (Common stock : 100% in 2002...

  • Page 57
    ... of U.S.dollars Cash flows from operating activities: Net income Items not involving operating cash flows: Depreciation and amortization Provision for severance benefits Loss on foreign currency translation Gain on foreign currency translation Earnings from equity-method investments Loss on...

  • Page 58
    ... and 2001 2001 2002 2001 In millions of Korean won In thousands of U.S.dollars Changes in operating assets and liabilities: Decrease (increase) in trade accounts and notes receivable Decrease (increase) in inventories Increase in trade accounts and notes payable Increase in accrued expenses...

  • Page 59
    ... and 2001 2001 2002 2001 In millions of Korean won In thousands of U.S.dollars Cash flows from investing activities: Increase in short-term financial instruments Proceeds from disposal of marketable securities Acquisition of marketable securities Increase in other accounts and notes receivable...

  • Page 60
    ...and 2001 2001 2002 2001 In millions of Korean won In thousands of U.S.dollars Cash flows from financing activities: Increase(decrease) in other accounts and notes payable Repayment of long-term debt Repayment of foreign currency notes and bonds Proceeds from long-term debt Repayment of current...

  • Page 61
    ...2002 Sales: Domestic Export Total sales Cost of sales Gross profit Selling, general and administrative expenses Operating profit Non-operating income: Interest and dividend income Foreign exchange gain Gain on foreign currency translation Earnings from equity method investments... per share ￦ ...

  • Page 62
    ...dollars Sales: Domestic Export Total sales Cost of sales Gross profit Selling, general and administrative expenses Operating profit Non-operating income: Interest and dividend income Foreign exchange gain Gain on foreign currency translation Earnings from equity method investments... per share $ 83...

  • Page 63
    Consolidated Five-Year Financial Summary 2002 Sales: Domestic Export Total sales Cost of sales Gross profit Selling, general and administrative expenses Operating profit Non-operating income: Interest and dividend income Foreign exchange gain Gain on foreign currency translation Others ...

  • Page 64
    65 Consolidated Five-Year Financial Summary 2002 For the years ended December 31, 1998-2002 2001 2000 1999 1998 In thousands of U.S. dollars Sales: Domestic Export Total sales Cost of sales Gross profit Selling, general and administrative expenses Operating profit Non-operating income: ...

  • Page 65
    ... representative and first vice president Bayerische Landesbank, Tokyo office [1995-2001] • Senior investment manager and head of international marketing, Credit Suisse [1991-1995] Kun-Hee Lee • Chairman & CEO, Samsung Electronics [1998-present] • Member, International Olympic Committee [1996...

  • Page 66
    ... & CEO, Kookmin Investment Trust Management [1998-2000] • Managing director, Korea Long Term Credit Bank [1998] Goran Sture Malm • Outside director, Samsung Electronics [2001-present] • Chairman & CEO, Icon Medialab Asia [2000-present] • President, Dell Computer Asia Pacific & Senior...

  • Page 67
    GLOBAL NETWORK HEAD OFFICE Samsung Main Building 250-2 ga, Taepyong-ro, Jung-gu Seoul, Korea Tel: 82-2-727-7114 Fax: 82-2-727-7985 www.samsung.com KOREAN PRODUCTION BASES Suwon Complex 416, Maetan 3-dong, Paldal-gu Suwon, Gyonggi-do, Korea Tel: 82-31-200-1114 Fax: 82-31-200-1530 Giheung Plant San...

  • Page 68
    ...Kejian Mobile Telecommunication Technology Co.,Ltd. (SSKMT) Shenzhen, China Tel: 86-755-668-0200 Samsung Electronics ASIA Production Bases P.T. Samsung Electronics Indonesia (SEIN) Cikarang, Bekasi, Indonesia Tel: 62-21-893-4005 Samsung Electronics Display (M) Sdn. Bhd. (SDMA) Seremban Malaysia Tel...

  • Page 69
    Sales Bases Samsung Electronics Australia Pty. Ltd. (SEAU) Sydney, Australia Tel: 61-2-9638-5200 Samsung Asia Private Ltd. (SAPL) Singapore, Singapore Tel: 65-8333-200 Samsung Electronics Philippines Co. (SEPCO) Manila, Philippines Tel: 63-2-526-3796 Samsung Japan Corporation (SJC) Tokyo, Japan Tel:...

  • Page 70
    ...Sao Paulo, Brazil Tel: 55-11-5641-8500 Sales Bases ! Samsung Electronics America, Inc. (SEA) Ridgefield Park, New Jersey, U.S.A. Tel: 1-201-229-4000 Samsung Electronics Canada Inc. (SECA) Ontario, Canada Tel: 1-905-819-5060 Samsung Telecommunications America, Inc. (STA) Richardson, Texas, U.S.A. Tel...