Samsung Electronics Overcomes 'C Shock' with Generous Dividends and Bold Investments

2020 Annual and Q4 Earnings Announcement
Last Year Annual Revenue of KRW 236.807 Trillion (Third Highest Ever) and Operating Profit of KRW 35.9939 Trillion (Fourth Highest Ever)
Total Capital Expenditure of KRW 38.5 Trillion Executed (Semiconductors KRW 32.9 Trillion, DP KRW 3.9 Trillion)
Three-Year Shareholder Return Policy Also Disclosed...Regular Dividend Increased to KRW 9.8 Trillion

[Asia Economy Reporters Kim Hyewon, Jeong Hyeonjin] Despite the variable of the COVID-19 pandemic last year, Samsung Electronics, which posted solid earnings, will pay out 13 trillion won in dividends. From this year through 2023, the regular dividend amount will be increased to 9.8 trillion won annually, exceeding market expectations with an 'unprecedented' shareholder return policy. The National Pension Service, the de facto largest shareholder of Samsung Electronics, will earn over 1 trillion won from this dividend. ▶Related article on page 5

On the 28th, Samsung Electronics officially announced its shareholder return policy for 2021?2023 and the 2020 year-end dividend. The existing year-end dividend for Samsung Electronics is 354 won per common share, but an additional one-time special dividend of 1,578 won will be added, making the total dividend 1,932 won per share. For preferred shares, the year-end dividend is 355 won plus the special dividend of 1,578 won, totaling 1,933 won per share. The total dividend amount is approximately 13.1243 trillion won. Dividends will be deposited within one month after the regular shareholders' meeting.

From this year for three years, the regular dividend amount will be increased from the existing 9.6 trillion won annually to 9.8 trillion won. In addition to the regular dividend, the existing policy of returning any residual funds within 50% of free cash flow over three years will be maintained.

Samsung Electronics can hold such a dividend feast thanks to its earnings surprise despite the US-China trade dispute and the COVID-19 pandemic. On this day, Samsung Electronics announced that its operating profit based on consolidated financial statements last year was 35.9939 trillion won, an increase of 29.62% compared to the previous year. This is the fourth highest operating profit in history. Sales reached 236.807 trillion won, up 2.78% from the previous year, marking the third highest sales record ever. Due to the prolonged COVID-19 pandemic, pent-up consumption sentiment, and the activation of the untact economy, all sectors including semiconductors, smartphones, and home appliances performed well. Last year's capital expenditure was 38.5 trillion won, a 43% increase from the previous year.

This year, with expectations of entering a semiconductor supercycle, Samsung Electronics is also optimistic about a recovery in the industry. However, uncertainties in the global economy such as the resurgence of COVID-19 and unfavorable exchange rates remain. Choi Yoonho, President and Head of Samsung Electronics' Management Support Office, said, "Despite many difficulties including COVID-19, all stakeholders including employees and partners worked hard to enable the payment of a special dividend. We will actively utilize our resources to expand strategic facility investments and pursue meaningful mergers and acquisitions (M&A) over the next three years, while also achieving results in areas such as environment, social, governance (ESG), and compliance to enhance shareholder value."