● Posting an increase in both sales and operating profits, through innovation of the business model, despite the pandemi

● Expecting to post 250 – 300 bn won in operating profits in ’21 ··· to make it the first year of ESG management, _ base_d on RE100  

In 2020, SKC (President Lee Wan-jae) posted 2,702.2 billion won and 190.8 billion won in sales and operating profits, which is a 14.5% and 36.5% y-o-y increase respectively, in the face of a difficult situation, caused by COVID-19. Specifically, it accomplished a feat of posting profits in all business sectors. It set up a plan for posting operating profits of between 250 – 300 billion won in 2021 and for expanding ESG (environmental, social, and governance) activities, setting the year as the first year of ESG management.

SKC announced these management results of 2020 at a session held at its headquarters in Jongno-gu, Seoul on February 9. The session was broadcasted live through YouTube, as it was the previous year.

In 2020, the company accomplished one business model innovation after another. In January, it transformed itself into a business that specializes in secondary batteries, by making a foray into a copper foil. In February, it split off the chemical business, laying the basis for worldwide growth. It sold off its equity shares in SKC Kolon PI and SK Bioland, whose business model (BM) innovation synergy is not high. In December, it incorporated SKC solmics as a wholly-owned subsidiary, and it integrated semiconductor-related businesses into one, thus laying the basis for accelerated growth.

As a result of BM innovation, SKC posted profits in business sectors. SK nexilis, the company’s wholly-owned subsidiary that specializes in copper foil for EV batteries, posted 371.1 billion won in sales and 52.9 billion won in operating profits, despite a drop in operations, due to a strike early in the year and an unfavorable situation caused by COVID-19. This good result was obtained on the back of the early commencement of operation of Factory 4, as well as an increase in sales, following the expansion of the EV markets in Europe and China. The result will improve further with the start of the commercial operation of Factory 5. Currently, SK nexilis is in full operation to make up for the shortage in supply.

As for SK picglobal, a global joint venture in the chemical business, it posted 699.1 billion won in sales and 88.2 billion won in operating profits. Its sales and operating profits recorded a slight decrease, compared to the previous year, due to the periodical overhaul in 4Q, but it posted a handsome operating profit on the back of a good result in the sale of PO (propylene oxide) and PG (propylene glycol). It is expected that the sales of both PO and PG will increase in 2021, on the back of this solid demand. SK picglobal plans to continue to increase the number of customers for products with high added value, focusing on individual hygiene.

Looking at the industrial material business sector, it posted 9,929 billion won in sales and 63.1 billion won in operating profits in 2020. Its sales posted a modest y-o-y growth, but its operating profits grew about two-fold. The good result was mainly due to the increase in the shares of high-quality products, such as a flexible OLED protective film that differs from competitors, and to the improvement in the performance results on the part of overseas subsidiaries. In 2021, the sector plans to continue to grow, through the expansion of the tech-savvy, eco-friendly business.

As for the semiconductor material business sector, it turned a profit, posting 395.3 billion won in sales and 17.4 billion won in operating profits. The improved result was on the back of an increase in the sales of products with high added value, such as ceramic parts and CMP pads. The sector expects to post a better result this year on the back of the super-cycle trend in memory/foundry, and it expects to see an acceleration of improved profit rates, amid commercialization of the CMP Pad Factory in Cheonan.

In 2021, we at SKC plan to focus on the following 4 management guidelines that were designed to enhance our corporate value: First of all, we will strive to clearly define our corporate identity (CI), so employees may have a firmer sense of belonging to a business specializing in materials for secondary batteries. Then, we will push ahead with the expansion of our business portfolio and the acceleration of the creation of results. We will also expand our activities, setting the year as the first year of ESG management. In connection with RE100, the first of its kind adopted in the country, we will push forward with the business, using oil that was obtained from pyrolysis of refused plastics. Finally, we will upgrade the strength of our financial story execution, through solid communication with customers, investors, and markets.

Commenting on the matter, an SKC official said, “As a result of the strenuous promotion of business model innovation throughout 2020, we posted a much better result, compared to the preceding year, despite the unfavorable situation caused by COVID-19. We expect to post 250 – 300 bn won in operating profits in ’21 on the back of this solid trend.”

Our divided profit, which is to be distributed to shareholders this year, will be a thousand won per share, as it was in the preceding year. The SKC official added, “We are going through a difficult period, but have decided to pay dividends at a level similar to the preceding year, in order to return profits to shareholders as much as possible.”