[JY Era 100 Days] 327 Trillion Won Profit Over 8 Years... Chairman's Ability Proven by Performance

② Lee Jae-yong Proves Management Skills with Results
Operating Profit 500 Times That of Grandfather Lee Byung-chul
Annual Average Profit 4.8 Times That of Father Lee Kun-hee

[Asia Economy Reporter Park Sun-mi] From 2015, when Chairman Lee fully took charge of the company, to 2022, Samsung Electronics recorded a total operating profit of 326.98 trillion KRW over eight years. This amount is 500 times the operating profit of 675.1 billion KRW earned from the founding of the company by his grandfather, Lee Byung-chul, in 1969 until the baton was passed to former Chairman Lee Kun-hee in 1987. Former Chairman Lee Kun-hee generated 229.8169 trillion KRW in operating profit over 27 years from 1988 to 2014. During the eight years that Chairman Lee Jae-yong led the company, Samsung Electronics earned more money than the previous two generations did in 45 years combined.

The average annual operating profit is also highest during Chairman Lee’s tenure among the three generations. From 2015 to 2022, Samsung Electronics recorded an average annual operating profit of 40.8725 trillion KRW. This is more than 4.8 times the average annual 8.5117 trillion KRW during the former chairman’s era (1988?2014). During the founder’s era (1969?1987), Samsung Electronics’ average annual operating profit was only 35.5 billion KRW.

Looking at operating profit margins, Samsung Electronics under Lee Jae-yong is on a different level compared to the past. Since Chairman Lee took the helm, the profit margin has never fallen below double digits. In contrast, during the last eight years of the former chairman’s rule, half of those years had single-digit operating profit margins, with some years falling below 5%. Samsung under Lee Jae-yong has grown explosively.

The performance Samsung Electronics built over the past decade under Chairman Lee’s leadership is sufficient proof of his management capabilities. Of course, the record-breaking achievements under Chairman Lee are built on the solid foundation laid by the founder and former chairman. The semiconductor division, which currently generates about 70% of Samsung Electronics’ total operating profit, was established by the founder and developed through bold investments made by the former chairman. It can be said that Chairman Lee is now reaping the fruits of those efforts.

To continue Samsung Electronics’ record-breaking performance streak, it must overcome variables in the global economic environment. Currently, falling semiconductor prices and a slowdown in global economic growth are holding Samsung back. However, despite these challenges, there is strong optimism that Samsung will maintain its growth trajectory. For example, the results of investments and mergers and acquisitions made after Chairman Lee inherited management rights have begun to become visible.

A representative example is the 2016 acquisition of Harman. The acquisition amount was $8 billion (approximately 9.4 trillion KRW at the time), making it the largest merger and acquisition in Samsung Electronics’ history. Harman’s operating profit was only 57.4 billion KRW in the year following the acquisition. However, six years later, in 2022, it recorded an operating profit of 700 billion KRW. Recently, the IT and electronics industries have all been rushing into the automotive parts business, and Samsung’s acquisition of Harman is considered the starting point.