Samsung Biologics Surpasses '1 Trillion KRW in Sales' in 9 Years Since Establishment (Comprehensive)

Operating Profit Up 219.3%

John Rim, CEO of Samsung Biologics, is presenting at the JP Morgan Healthcare Conference last January. (Photo by Samsung Biologics)

[Asia Economy Reporter Kim Ji-hee] Samsung Biologics recorded sales of 1.1648 trillion won last year, surpassing 1 trillion won in annual sales for the first time in its 9 years since establishment. Despite the challenges posed by the COVID-19 pandemic, the company increased factory utilization rates and achieved order results beyond expectations, leading to significant growth in both sales and operating profit.

Samsung Biologics announced on the 26th that its annual sales for 2020 increased by 66% compared to the previous year, reaching 1.1648 trillion won. Operating profit during the same period rose by 219.3% to 292.8 billion won.

With this, Samsung Biologics entered the "1 trillion won sales club" for the first time since its founding in April 2011. Compared to 2015, when sales began in earnest, this represents more than a 12-fold increase. The average annual sales growth rate over the past five years reached 66.4%.

The operating profit margin nearly doubled from 13% in 2019 to 25% in 2020 due to the operating leverage effect. The operating leverage effect refers to the phenomenon in business sectors with a high proportion of fixed costs where, once sales exceed a certain level, operating profit increases at a greater rate than sales.

Last year, Samsung Biologics secured orders worth 1.78 billion dollars, including a contract for contract manufacturing (CMO) worth 627 million dollars with multinational pharmaceutical company GSK. This is 2.5 times the amount of the previous year. Samsung Biologics stated, "Despite the difficult environment caused by the COVID-19 pandemic, strengthening company-wide order capabilities through rapid responses such as supporting on-site inspections and audits by global regulatory agencies via non-face-to-face real-time virtual tours was effective."

In January, Samsung Biologics announced at the online 'JP Morgan Healthcare Conference' that it had secured a total of 47 CMO contracts to date and successfully opened a global CDO R&D center. This year, the company plans to focus on the efficient operation of production facilities and early order acquisition for the 4th plant.