1.

Financial Performance
One way to analyze the company’s financial performance and identify how it might be improved is by
looking closely at its financial ratios. Samsung's main financial ratios that investors and creditors can
consider in providing investment or loans to the company include profitability ratios, liquidity ratios,
solvency ratios, and activity ratios.
A. Profitability Ratio
Samsung’s profitability ratio in the last 5 years has been calculated as below:
Ratio 2015 2016 2017 2018 2019
Gross profit
margin 38.46% 40.42% 46.03% 45.69% 36.09%
Operating
profit margin 17.94% 20.52% 27.20% 28.62% 16.80%
Net profit
margin 9.50% 11.26% 17.61% 18.19% 9.44%
Return on
Asset 14.86% 15.80% 21.60% 20.56% 10.98%
Return on
Investment 7.87% 8.67% 13.98% 13.07% 6.17%

Profitability Ratio is a ratio to determine the company's ability to get profit from income related to sales,
assets and equity based on certain measurement bases. Gross profit margin, operating margin and net
profit margin are indicators that show the efficiency of the company's products in generating profits. A
company that has a larger margin means that it generates a greater profit than a company that has a small
margin when measured in the same sales value. In terms of gross profit margin, operating margin and net
profit margin, those of Samsung always increase every year. However, the biggest increase was seen in
2017, where each margin increased by around 6%. This is due to the successful sales of the Galaxy Note
8 smartphone and also the largest portion of Samsung's revenue from the semiconductor chip business.
However, in 2019 each margin then experienced a drastic decline of around 8% due to weak chip sales
and a drop in semiconductor prices due to oversupply and declining market demand for display panels.
The weakening demand for mobile phone device is another cause.
Return on Asset is used to assess the quality and performance of the company in generating net income
from the utilization of its assets. Return on Investment shows more how much net income can be
generated from all investments or the utilization of wealth owned by the company. The higher or better
the ROA or ROI ratio the company has, the better the company's performance in generating net income.
ROA and ROI of Samsung tends to increase every year but decreased slightly in 2018. Then in 2019 they
decreased quite drastically compared to the previous year. Again this is due to weaker chip sales, lower
semiconductor prices, and lower demand for mobile devices.
B. Liquidity Ratio
Samsung’s liquidity ratio in the last 5 years has been calculated as below:
Ratio 2015 2016 2017 2018 2019
Current ratio 2.47 2.59 2.19 2.53 2.84
Quick ratio 2.10 2.25 1.82 2.11 2.42
Cash ratio 0.45 0.59 0.45 0.44 0.42

Liquidity Ratio is a ratio that measures a company's ability to pay off its short-term liabilities at maturity.
In general, the higher the liquidity ratio, the higher the margin of safety that is owned by the company to
pay off its current liability. A liquidity ratio greater than 1,0 indicates that the company has a good ability
to pay off its liabilities and is less likely to experience financial difficulties. In addition, if the current ratio
of a company is more than 3,0, it does not mean that the company is in good financial condition. It may
be that the company does not allocate current assets optimally, does not utilize current assets efficiently,
and does not manage its capital properly. Samsung's current ratio and quick ratios are still good at above
1,0 and below 3,0, but the cash ratio is still below 1,0, which means that Samsung still has to sell or
convert its current assets to pay all its current liabilities.
C. Solvency/Leverage Ratio
Samsung’s solvency ratio in the last 5 years has been calculated as below:
Ratio 2015 2016 2017 2018 2019
Debt to Asset
ratio 0.26 0.26 0.29 0.27 0.25
Debt to Equity
ratio 0.35 0.36 0.41 0.37 0.34
Times Interest
Earned ratio 3.59 3.87 7.26 8.10 4.68

The solvency ratio is the ratio between the amount of assets owned by the company and the amount of
debt that must be borne and paid. From this solvency ratio, we can find out the company's ability to pay
off its debt if the company has to be liquidated. Debt to asset ratio assess how much the company relies
on debt to finance its assets. The lower this ratio means the better for the company's finances, because the
security of the funds is getting better. While debt to equity ratio (DER) describes the relative portion of
equity and debt that is used to finance the company's assets. It would be very good if this ratio is less than
1, which means debt is smaller than equity. Debt must not be greater than equity so that the company's
burden does not increase. A low ratio means that the company's condition is getting better because the
portion of debt to capital is getting smaller. Times Interest Earned ratio measures the company's ability to
pay off interest expenses in the future. From the calculation, the proportion of Samsung's DER is still
quite good because DER is less than 1,0 that means debt is still smaller than equity. In fact, it is very
difficult to find companies that have a DER value of less than 1,0, unless the company is a small
company. Middle and upper scale companies generally have a DER value of more than 1,0. That is why
many investors do not hesitate to invest in Samsung.
D. Activity Ratio
Samsung’s activity ratio in the last 5 years has been calculated as below:
Ratio 2015 2016 2017 2018 2019
Account
receiveable
turnover ratio 7.76 8.06 9.33 8.02 6.49
Inventory
turnover ratio 6.56 6.55 5.18 4.57 5.50
Fixed asset
turnover ratio 2.32 2.21 2.15 2.11 1.92
Total asset
turnover ratio 0.83 0.77 0.79 0.72 0.65

Activity Ratios or often referred to as Efficiency Ratios are a type of financial ratio analysis that measures
how effectively companies use their assets to generate revenue. In other words, this activity ratio
measures the ability of a business to convert various types of assets or non-cash assets into cash. The
faster the company can turn its assets into cash or sales, the more efficient it will perform. This activity
ratio analysis will be more meaningful when compared to similar industries. We can see that the activity
ratios above are decreasing with decreasing or weakening sales until 2019, especially fixed asset turnover
ratio and total asset turnover ratio. While account receivable turnover until 2017 has increased but then
decreased in 2018 and 2019 due to receivables that increased more than in previous years. Inventory
turnover until 2018 has decreased but then increased in 2019 due to inventory that decreased more than in
previous years. Overall, Samsung's activity ratios are still good, but they still need to be compared with
those of other companies in the same industry.

2. Priority Areas and Samsung’s Alignment with UN SDGs

A. Priority Areas
Samsung identify sustainability issues that impact their business and share their progress with
stakeholders in a transparent way through their sustainability report. Samsung pool all relevant issues
based on media reports, peer benchmarking, global standards and initiatives on sustainable management,
and expert opinions, and then identify the most meaningful / relevant material issues through an expert
review and discussion with related departments. In identifying the most important issues of 2020, they
applied the sustainability management criteria for the technology and communications category specified
by the Sustainability Accounting Standards Board (SASB) Materiality Map. Material issues were
prioritized according to social impact such as the economic, social, and environmental interests of
stakeholders, as well as business impacts, such as revenue, costs, and reputation. The results of the
materiality assessment are finalized after the review of experts in sustainable management and the
Corporate Sustainability Management Office.

From the Materiality Map, 6 priority areas of the sustainable management issues are obtained as well as
activities and results that have been achieved, including:
Priority Sustainability Samsung’s Main Activities and Results in 2019 UN SDGs
Areas Issues
Climate Energy  Achieved 92% in renewable energy use rate in 7 Affordable
Actions management the United States, China, and Europe (aim to and Clean
GSG reach 100% by the end of 2020) Energy
management  Received a 2019 Green Power Leadership 13 Climate
Award for Excellence from the United States Action
Environmental Protection Agency (EPA)
Circular Recycling  Expanded the use of sustainable materials 12
Economy and circular including renewable plastics, bioplastics, and Responsible
economy sustainably-sourced papers Consumption
 Expanded the application of modular design to and Production
products including BESPOKE Refrigerator and 15 Life on
Cube Air Purifier Land
Labor & Labor  Held educational sessions on labor and human 8 Decent
Human practice and rights in hand with international organizations Work and
Rights human rights including the International Organization for Economic
Migration (IOM) Growth
 Held stakeholder engagement forum in Vietnam
 to strengthen communication with our
stakeholders
Privacy & Privacy,  Developed and released the Samsung Data 9 Industry,
Cybersecur Cybersecurity Protection Guidelines Innovation,
ity and  Samsung Knox platform 3.2 was rated “strong” and
freedom of in 27 out of 30 categories in Gartner’s May Infrastructure
speech 2019 report

Corporate Transparency in Appointed an Independent Director as the 16 Peace,

Governanc governance Chairman of the Board for the first time Justice, and
e Strong
Institutions
Complianc Ethical  Enhanced the independence of the Corporate 16 Peace,
e management Compliance Team, which reports directly to the Justice, and
and compliance CEO since reorganization Strong
 An independent expert group, Samsung Institutions
Compliance Committee, was launched to
oversee business

B. Sustainable Development Goals (SDGs)

One of the elements in the Sustainability Foundation formed by Samsung is the adoption of the UN
SDGs. At the United Nations General Assembly in September 2015, the Sustainable Development Goals
(SDGs) were adopted for the purpose of establishing a sustainable society across the world through
community development, environmental protection and inclusive economic growth. The timeline for
these UN SDGs runs from 2016 until 2030. As a global corporate citizen, Samsung aim to take account of
the SDGs in how they run their business. Samsung focus on the SDGs most relevant to their businesses
and established approaches to help achieve them. Based on these approaches, Samsung have engaged in a
variety of sustainability activities to help achieve these goals.
1) UN SDGs
At its 2015 General Assembly, the UN adopted the Sustainable Development Goals (SDGs) to establish a
sustainable society across the world. While the Millennium Development Goals (MDGs) established in
2000 focused on underdeveloped countries, the SDGs are universal goals for all countries, including
developed nations. To achieve the SDGs, civil society and private-sector companies, as well as
governments and experts, need to be proactively involved. The SDGs contain 17 Goals and 169 Targets
that are expected to be achieved by 2030.
2) Samsung’s Alignment with the UN SDGs
Samsung adopted and internalized these SDGs in its 6 Sustainability Pillars, which include:

Samsung adopted 12 of the 17 SDGs categories in running their business, including the following
approaches and activities in 2020:
SDGs Samsung’s Approach Major Activity
3 GOOD HEALTH AND We are committed to  EHS Innovation Day
WELL-BEING. Ensure healthy minimizing health and (Environment, Health, and
lives and promote well-being for
environmental impacts related to Safety)
all at all ages the use of chemicals of concern.  Disclosure of regulated
In addition, we strive to create materials use
an environment where our
employees can work without
concerns over their health and
safety in the manufacturing
processes.
4 QUALITY EDUCATION. We run customized education  Samsung Smart School
Ensure quality education and programs to promote the  Samsung Innovation
promote life-long learning development of local Campus
opportunities for all communities, while providing a  Samsung Solve For
variety of support through ICT Tomorrow
knowledge and expert personnel  Dream Class
to enable local residents and  Semiconductor Academy
communities to build  Junior Software Academy
capabilities necessary to plan for
a better future.
5 GENDER EQUALITY. We have a firm belief that  Female leadership training
Achieve gender equality and ensuring equal opportunities is and mentoring
empower all women and girls key to economic growth,  Work support for childbirth
political stability, and social and childcare
change. We endeavor to find  Certified as family-friendly
new ways to help women company by the Korean
globally and prepare youth for Ministry of Gender
the future. Equality and Family
6 CLEAN WATER AND We make efficient use of water  World Water Day
SANITATION. AND through the 3Rs (Reduce, Reuse,  Participation in CDP
SANITATION and Recycle) campaign. When (Carbon Disclosure
Ensure availability and treating wastewater from Project) Water
sustainable worksites, we apply an in-house
management of water and standard which is stricter than
sanitation for all legal requirements of each
country and safely process them
to minimize the impact on water
resources.
7 AFFORDABLE AND We are fully aware of our Renewable energy used in 2019:
CLEAN ENERGY. Ensure responsibility to expand our 3,217 GWh
access to sustainable energy for renewable energy use to tackle
all global climate change. As such,
we strive to expand the use of
renewable energy at our
worksites via the installation of
solar panels and geothermal
units, we have signed Power
Purchasing Agreements, and
have pursued Green Pricing
8 DECENT WORK AND We are committed to pursuing  C-Lab (Creative Lab)
ECONOMIC GROWTH. innovation and new growth  Smart factory support
Promote sustainable economic drivers to share related program for 505 companies
growth, full employment and technology with our society. As (June 2018 – June 2019)
decent work for all such, we run programs and
systems to build an
innovative culture and expand
investments in R&Ds and
 productivity growth.
9 INDUSTRY, INNOVATION We strive to improve the  4C Accessibility Design
AND INFRASTRUCTURE. accessibility of our IT devices Principles
Build resilient infrastructure, and technology to allow all  Expanded Knox platform-
promote sustainable consumers to benefit equally adopted products range
industrialization from cutting-edge technology.
We also comply
with international laws and
regulations related to
cybersecurity and protect
consumers' basic rights to
maintain world-class security
for our products and services.
10 REDUCED We offer equal opportunities to  Work support system for
INEQUALITIES. Reduce all employees and applicants. In employees with disabilities
inequality within and among addition, we do not tolerate any  Scored 100 out of100 on
countries kinds of discrimination in our the Human Rights
HR management on the grounds Campaign Foundation's
of gender, race, nationality, Corporate Equality Index
religion, age, marital status,
sexual orientation, gender
identity/sexual expression,
social status, physical
disabilities, pregnancy, military
service, genetic information or
political propensity.
12 RESPONSIBLE We have five circular economy  Expanded modular design-
CONSUMPTION AND principles—the expansion of the adopted products range
PRODUCTION. Ensure use of recycled materials,  Earth Day campaign
sustainable consumption and product durability improvement,  Launched smartphone
production patterns compact product packaging, cases using recycled
reduction in the use of virgin plastics
natural resources, and the
extension of product life
span/use. We will continue to
strive to minimize our
environmental footprint through
the recycling and reuse of
resources
13 CLIMATE ACTION. Take We have prioritized climate  CDP Climate Change:
urgent action to combat climate change issues according to the ‘Carbon management
change and its impacts degree of their importance and Honors Club’
impact, devising a strategy to  Disclose information based
respond to them. Furthermore, on Task Force on Climate-
we have invested in facilities related Financial

15 LIFE ON LAND. Protect the
ecosystem and preserve
blodiversity (forests, deserts,
land, etc.)
17 PARTNERSHIPS FOR THE
GOALS. Strengthen the means
of implementation and revitailze
the global partnership for
sustainable development
and optimized the operation of Disclosures (TCFD)
equipments to reduce GHG guidelines
emissions.
We are committed to Stream ecosystem protection
minimizing the impact of our activities
operation on biodiversity. In
particular, we have consistently
undertaken ecosystem protection
activities, including the
identification of endangered
species near our worksites and
protection of their habitats..
We run local programs to  Education and medical
address a variety of social issues support activities in
related to education, medical response to COVID-19
care, employment and  Galaxy Clean-up
environment by sharing our partnership
advanced technology and  Public-private AI Council
cooperating with stakeholders.  Cobalt for Development