Release Date: February 02, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Samsung SDI Co Ltd FRA:XSDG reported a 26.4% increase in Q4 revenue quarter-over-quarter, driven by expanded US sales in the ESS market.
- The company achieved an all-time high quarterly revenue in the ESS segment, with a 50% global BBU market share based on battery cell sales.
- Technological advancements were made, including a joint development agreement with BMW for all solid-state batteries and an MOU with Hyundai Motor Company for robot batteries.
- The Electronic Materials business maintained consistent performance, with a solid operating profit of KRW39 billion in Q4.
- Samsung SDI Co Ltd (FRA:XSDG) plans to maximize ESS sales to achieve 100% production capacity utilization and leverage AMPC incentives for profitability.
Negative Points
- The company reported an operating loss of KRW299 billion in Q4 2025, with a net income loss of KRW208 billion.
- Annual revenue for the battery business decreased by 21% year-over-year due to a decline in EV sales and delayed recovery in demand for small batteries.
- The Electronic Materials business experienced a slight year-over-year decrease in revenue due to reduced sales of OLED materials.
- The global EV battery market is expected to grow only about 6% excluding China, influenced by easing green policies and adjustments by major OEMs.
- Samsung SDI Co Ltd (FRA:XSDG) faces challenges in improving utilization rates at its Hungary plant due to relaxed European emissions regulations and increased penetration of Chinese EVs.
Q & A Highlights
Q: Could you provide guidance for full-year performance and update us on order momentum following the start of operations at the US ESS line? How is the company assessing the risk of potential oversupply?
A: Jae-kyun Oh, EVP for Business Management Operation, stated that the market environment is improving compared to last year, with expectations of turning to quarterly profit in the second half. ESS profitability is expected to improve significantly as US local production ramps up. Yonghui Cho, EVP from ESS Business, added that the US ESS market is expanding due to AI data center growth and non-China battery supply preferences. The company believes the pace of capacity additions will be constrained, reducing the risk of oversupply.
Q: With the US ESS capacity increasing and AMPC benefits being reflected, could you share your outlook on ESS business profitability?
A: Yonghui Cho, EVP from ESS Business, explained that ESS revenue is expected to increase by close to 50% year over year. Locally produced US products will benefit from AMPC and reduced tariff exposure, driving a meaningful improvement in profitability. The ramp-up of new US LFP production lines will further enhance profitability.
Q: How do you see BBU demand evolving with the expansion of AI data centers, and what is your outlook for BBU sales?
A: Jong Sun Park, EVP from Strategic Marketing Office, noted that the BBU market is expected to grow at a CAGR of approximately 14% from 2025 to 2030, driven by data center expansion. Samsung SDI plans to launch BBU dedicated cells with tabless technology to enhance performance and expects more than 20% year-over-year sales growth.
Q: Could you provide an update on current customer inventory levels for cylindrical batteries for power tools and the demand for tabless-based products?
A: Jong Sun Park, EVP from Strategic Marketing Office, stated that customer inventory levels are approaching normalized levels, and demand for tabless-based products is increasing. Samsung SDI plans to scale up sales of tabless products, which are expanding beyond power tools into BBUs and hybrid EVs, expecting them to account for more than 10% of cylindrical battery revenue this year.
Q: Could you outline your plans to improve utilization at the Hungary plant and progress on new order wins with European customers?
A: Jong Sun Park, EVP from Strategic Marketing Office, mentioned that utilization is expected to improve due to expanding supply for existing projects and new supply projects scheduled for this year. Samsung SDI is pursuing entry into high-growth segments and actively working to secure new customers, expecting tangible progress in the first half of the year.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
