Invest in our future

Sang-hoon Lee

DISCLAIMER

The materials in this report include forward-looking statements which can generally be identified by phrases such as Samsung Electronics (SEC) or its management "believes," "expects," "anticipates," "foresees," "forecasts," "estimates" or other words or phrases of similar implications. Similarly, such statements that describe the company's business strategy, outlook, objectives, plans, intentions or goals are also forward-looking statements. All such statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in the presentation files above. For us, particular uncertainties which could adversely or positively affect our future results include: The behavior of financial markets including fluctuations in exchange rates, interest rates and commodity prices Strategic actions including dispositions and acquisitions Unanticipated dramatic developments in our major businesses including CE (Consumer Electronics), IM (IT & Mobile communications), DS (Device Solutions) Numerous other matters at the national and international levels which could affect our future results These uncertainties may cause our actual results to be materially different from those expressed in this report.

Sustainable Growth & Profitability

Enhance Competitive Edge Capex R&D Patent Mkt. HR M&A

Maximize Mgmt Effectiveness Finance

Management

Risk

(ERP/SCM)

Systems

Sustainable Growth & Profitability

Enhance Competitive Edge Capex R&D Patent Mkt. HR M&A

Maximize Mgmt Effectiveness Finance

Management

Risk

(ERP/SCM)

Systems

Continuous growth
211* 188 136 143

16%
CAGR

Billion USD

2010 * 2013(E) : Bloomberg Consensus

2011

2012

2013(E) *

Balanced structure

DP Semi CE
Device Component Others

20 %

Domestic

America

11%

28 %

China

18 %

IM

EU / CIS

23 %

2010

2013(E) *

2013.1H

* 2013(E) : Fn Guide Consensus

Strong improvement
14 11 9

OP margin

17 % 35 * 27

32%
CAGR

15
Billion USD

14

2010 * 2013(E) : Bloomberg Consensus

2011

2012

2013(E) *

Increase in premium product sales have boosted profits

34 37 32 23 23

40 %

23

23 % 25 %

20 14 2010 2011

21

2012

2013.3Q

Improved equity ratios

50 54 49

46 %
12 14 12

8%

2010

2011

2012

2013.3Q

Delivered asset efficiency to minimize working capital increase

15

33. 2

10

* 9.9 %

Billion USD 0

2010

2011

2012

2013.1H

Working Capital Increase * Working Capital Increase to Cash flow from Operation

Sustainable Growth & Profitability

Enhance Competitive Edge Capex R&D Patent Mkt. HR M&A

Maximize Mgmt Effectiveness Finance

Management

Risk

(ERP/SCM)

Systems

Sustainable Growth & Profitability

Enhance Competitive Edge Capex R&D Patent Mkt. HR M&A

Maximize Mgmt Effectiveness Finance

Management

Risk

(ERP/SCM)

Systems

Key source of sustainable growth & competitive edge

** 50

41 EBITDA 24 19
Billion USD

25 20

21

22 *

2010 * Annual Budget ** Bloomberg Consensus

2011

2012

2013(E)

Manage under strict principles and guidelines

Principles
Differentiate technology and Profitability Flexible planning to reduce risk

Guidelines
Execution within C/F IRR Payback period

New focus
Capacity, M/S

Technology, New Market

21 %
15

2010

2011

2012

2013(E)

Continuous investing for growth

Overseas Domestics

2013

Overseas Domestics

50K

2010

$ B

Global R&D investment ranking #2 in 2013, Booz&Co.

Key strategic shifts

New focus
H/W In-house Comp.

New directions

Effective use of global R&D resources Soft competitive edge

S/W

Open
Innovation

Set

New growth engine

Persistent increase in IP risk

Threats

Changes

patent troll and competitors

regulations in major countries

Reinforcing IP competitive edge

HQ 3 Regional

IP Centers

600 In-house experts

Patent Experts

Early Engagement

Product planning stage

Global top 10 brand value

8 th
9 th

$19.5 B 19 th

17 th

No. Brand Awareness

Smart phone TV
Samsung GMO, Brand Awareness Survey

2010 * Interbrand

2011

2012

2013

Utilize strong brand assets

Brand ideal
Accelerating discoveries and possibilities Fully integrated with all business activities

Differentiated strategy
Experiential Interactive Localized

People as one of our core values

Overseas Domestics

2013

Domestics

190K

Overseas

2010

11B

Strategic directions for HR

Securing talent
Talent Creative Lab Open Innovation S/W

14 companies, over $1B invested

CSR

Organic Growth
Medison mSpot

Growth objectives via M&A

Sustainable Growth & Profitability

Enhance Competitive Edge Capex R&D Patent Mkt. HR M&A

Maximize Mgmt Effectiveness Finance

Management

Risk

(ERP/SCM)

Systems

Sustainable Growth & Profitability

Enhance Competitive Edge Capex R&D Patent Mkt. HR M&A

Maximize Mgmt Effectiveness Finance

Management

Risk

(ERP/SCM)

Systems

Real-time monitoring under rules & processes

Monitoring system Rules & processes

 Increase of government regulations globally

Compliance Manual / System

Employee Education

Compliance Team
Monitoring

All employees access Real-time data managed by One system at Any time
Non-standardized
54 Countries, 115 Systems
ERP ERP

One Global ERP

ERP

ERP
ERP
ERP

ERP

Standardization Process / Data

ERP

ERP

Lack of process standardization For different working places Complicated system interface

Operational excellence

Speed
Weekly decision making Production flexibility (CELL) Global logistics Hub

Flexibility
Global S&OP * Customer collaboration(CPFR) Retail & channel SCM

* S & OP : Sales and Operation Plan

PBR & PER declined despite increased ROE and profits

2,000

2.4 x 2.0 x

12.3
27 15 10

Operating profit

35
PER

1,500

PBR 1.6 x 1.6 x

1.2 x 0.8x

1,000

14

7.0 x

500

0 Thousand KRW

Billion USD

09

10

11

12

13.9

09

10

11

12

13(E)