SK On Yoo Jung-joon "Realizing Future Growth Value through Merger Synergy"

CEO Letter Regarding SK Trading International Merger

Yoo Jung-joon, Vice Chairman and CEO of SK On

Yoo Jung-joon, Vice Chairman and CEO of SK On, stated regarding the merger with SK Trading International, "We will maintain an independent operational system and realize future growth value by creating synergy through 'separately yet together.'

According to industry sources on the 3rd, Yoo sent a CEO letter to all SK On employees on the 1st, saying, "Let's overcome the uncertain management environment and secure differentiated competitiveness to move 'further together.'

SK On, a subsidiary of SK Innovation, and SK Trading International completed the merger process on the 1st. They will operate as in-house independent companies (CIC) according to each business characteristic. The merged corporation's name is SK On, and the CIC is named 'SK On Trading International.'

Yoo said, "Based on merger synergy, SK On will transform into a 'global battery & trading company' that balances growth and stability." Yoo led the trading business as the inaugural corporate representative of SK Energy International in 2008.

He emphasized, "By combining the experiences and know-how of SK On and SKTI, the battery business division can enhance raw material sourcing competitiveness to improve product costs, and the trading business division can expand its business model beyond the existing oil-centered structure to include metal trading."

Since raw materials account for about 60-70% of manufacturing costs in the battery business, differentiated raw material procurement capabilities are essential. SK Trading International has generated stable profits annually based on its expertise in crude oil and petroleum product trading. Accordingly, after the merger, it is expected to gradually expand its business area to include trading of key battery minerals such as lithium, nickel, and cobalt.

Yoo stated, "SK On's new success in moving further can be achieved when all leaders and members unite," urging, "For this, everyone must continuously communicate and cooperate and do their best to achieve results in their respective positions."

He added, "As Vice Chairman, I will take the lead in creating a SUPEX environment so that both management and employees can focus on their work and maximize performance," and concluded, "Let's trust each other and keep moving forward."

SK On will also merge with SK Entum on February 1st next year. Upon completing the scheduled merger process, it is expected to significantly improve its profit structure by generating an additional annual EBITDA of about 500 billion KRW compared to before the merger.