Good morning. This is Ike Kim, Vice President of the Management Support Office at Samsung SDI. Before we begin, I would like to introduce the management team present. We have our CFO, Young-No Kwon, Head of Battery Strategic Marketing team, Michael Son , and Head of Electronic Materials Strategy Marketing team, Kyungh oon Kim, joining today's call. We will now start the 2018 second quarter earnings presentation. First, regarding the second quarter results. Q2 revenue was KRW 2,248 billion, which is an 18% increase quarter-on-quarter. By business division, battery division revenue was KRW 1,727.3 billion, which is a 22% increase quarter-on-quarter, mainly driven by large increase in ESS sales and solid performance of EV and cylindrical battery sales. Electronic materials revenue was KRW 518.8 billion, which is a 6% quarter-on-quarter increase, thanks to increase in semiconductor material and polarizer sales.
Operating profit at company level was KRW 152.8 billion, which is 112% increase quarter-on-quarter. Pre-tax profit was KRW 141.2 billion, and net profit was KRW 104.7 billion. Next is our financial standings on the right-hand side. Assets as of end of Q2 was KRW 16,890.5 billion. As a result of revenue increase, current assets, including accounts receivables, increased by about KRW 351.6 billion, and non-current assets increased by KRW 195.6 billion, due to increased intangible assets from facility investments. Liabilities was KRW 5,134.8 billion, increasing by KRW 437.7 billion due to factors including borrowings and increased accounts payables. Shareholders' equity was KRW 11,755.7 billion, an increase by KRW 109.5 billion, mainly due to retained earnings growth. Cash also increased by KRW 395.5 billion due to proceeds from the sales of Samsung C&T and borrowings.
Next is the second quarter performance of each business division and the second half outlook. In quarter two, mid to large size battery revenue increased significantly both year-on-year and quarter-on-quarter. In particular, ESS revenue recorded a sharp increase, improving its profitability. In the automotive battery business, revenue increased especially around PHEV models, and ESS revenue increased significantly from active response to domestic, commercial, and utility demand. In the second half, EVs are expected to drive growth in the automotive battery market, and for ESS, overseas demand is expected to show a sharp increase compared to the first half, while domestic ESS demand continued to remain solid. In the second half, we are expecting a revenue growth from our new EV products, and ESS is also expected to continue the revenue growth, especially around domestic and overseas utility and commercial demand.
As a result, second half profitability is expected to improve compared to the first half. Next is small-sized battery. The second quarter small-sized battery revenue increased, mainly driven by strong sales of cylindrical batteries. In particular, high power, high-end cylindrical batteries for power tools continue to remain strong, while non-IT small battery sales, such as for ESS, has also maintained a solid trend supporting overall small battery sales. Even though polymer battery sales decreased temporarily in quarter two due to overall lower growth of the smartphone market and absence of new flagship models, we expect to record revenue increase on a full year basis by increasing our revenue within our major customers. In the second half, small-sized batteries demand is expected to be driven by cylindrical batteries with increased lithium-ion batteries adoption by applications such as power tools, gardening tools, e-bikes, and EV.
Polymer demand is also expected to maintain an increasing trend with launch of new flagship handsets in the second half. We will strengthen our leadership in the cylindrical market with further increasing high-end product revenue and increase our share of the flagship handsets scheduled for launch in the second half by our major customers. Next is electronic materials division. In Q2, electronic materials revenue increased by 6% thanks to strong sales of semiconductor material and polarizing films. Semiconductor material revenue continued this growth trend, started in quarter one, with the operation of the new fab by the major customer. In display materials, revenue continued to increase together with customer diversification as the share of Chinese revenue increased in both polarizing film and OLED. The semiconductor market is expected to maintain strong growth in the second half.
For display panels, LCD TV demand is expected to be concentrated mainly in the 65 inch and above large panel sizes, and mobile OLED is expected-
Digital growth grow with wider adoption of OLED by mobile handset makers. In semiconductor materials, we will actively work on customer expansion and respond to the trend of scaling. For polarizing films, we will secure profitability by operating the business around large size and mobile applications. For OLED, we'll focus on revenue growth through new platform entries and customer diversification. This completes the presentation. Start the training session, which will be interpreted consecutively.
The first question will be provided by SK Kim from Daiwa Capital Markets. Please go ahead, sir.
I have two questions, both about batteries. First question about small size batteries. Despite the weak demand from flagship smartphones, you were able to maintain your margins for small size batteries quite strongly in the second quarter. What was the main reason for that? Do you think it will be possible to maintain your current margins for small size batteries going forward? Second question is about the mid to large size batteries, which I assume the profitability would have improved significantly during second quarter. Do you see any additional improvements for profitability of mid to small size batteries in the second half? If you exclude the ESS business and just look at the EV mid to large size battery, when do you think you'll be able to reach break-even point?
To answer your first question regarding the small size batteries, yes, as you mentioned, the revenue for polymers in the second quarter decreased mainly due to the fact that there were no launches of new flagship smartphones during the second quarter. However, the cylindrical small size battery sales remained quite strong, especially for demands from applications such as power tools and e-bikes. We were able to continue to sell, especially to the high-end of the cylindrical battery market. Even though the soft or weak demand from the premium handset segment is a negative factor, we're also seeing that in the overall mobile phone or handset market, we're seeing greater demand for larger size batteries from the new models. Also, greater adoption of, for example, two size, two cell batteries. Also, there's continuous demand growth from the mid to low-end segment of the handset market.
These are all continuing to drive a demand for small size batteries from the handset market. Also, there's future growth opportunities with new applications such as 5G and IoT. We believe that we will be able to continue growth as well as improve further profitability through these applications as well. Also, looking at how there is continuous growth in the global small size battery market, especially around the cylindrical batteries, we will also be continuing to increase our cylindrical small size battery sales and have greater contribution from our cylindrical business to our overall small size battery business profitability.
BEP를 달성할 것이냐라는 시점에 관해서 문제는 지난번 분기 때도 말씀을 드린 걸로 기억을 하는데, 원소재 가격이 가격에 반영되지 않는 어떤 불합리한 조건으로 계약된 초기 프로젝트 영향으로 인해서 단기적으로 수익성을 획기적으로 개선시키기는 다소 어려움이 있습니다. 하지만 고객들과 기존 계약의 거래 조건을 계속적으로 개선시키고 있고, 또 신규 프로젝트가 본격화되는 시점이 도래하고 있기 때문에 빠른 시간 내에 자동차용 전지도 수익성을 개선할 수 있도록 노력을 하겠습니다. 이상입니다.
To answer your question about mid to large size battery business. To answer your question, yes, we believe that there is additional improvements that we can re-achieve the profitability of the mid to large size batteries in the second half. Looking towards the second half, we expect the profitability of the ESS business to be maintained. Also, to see a significant increase in the volume of EV battery demand. We expect our performance of mid to large size batteries to continue to improve as we go through the second half. About your other question of when do we expect to reach break-even point for our EV batteries.
As we mentioned during the last conference call, because some of our early EV battery contracts were not tied into the raw material price changes, it's difficult for us to dramatically improve the profitability of our EV battery business in the near term. However, we are continuing to negotiate with our customers to improve the trade terms. Also, we are seeing now new projects coming online. We will continue to exert efforts to improve the profitability of the business in the near term or quickly.
네, 감사합니다. 다음 질문 받겠습니다. 다음으로 질문해 주실 분은 하이투자증권의 정원석 님입니다. The following question will be presented by Won-seok Jung from Hi Investment & Securities. Please go ahead, sir.
네, 안녕하세요. 하이투자증권 정원석입니다. 두 가지 질문드리려고 하는데요. 하나는 중대형 전지 관련해서 최근에 중국 CATL이 BMW하고 전기차 공급 계약을 맺고 독일에 현지 공장을 짓는다고 발표를 했는데, 거기 관련해서 삼성SDI 영향이 어떠할지 말씀 부탁드리고요. 두 번째로는 최근에 바닥을 좀 잡긴 했지만 LCD 패널 가격이 상반기에 굉장히 큰 폭으로 하락을 했는데, 편광필름 편가 추이가 어떻게 되고 있는지 궁금하고요. 향후에 이 편광필름 사업 방향에 대해서 계속적으로 공급 과잉으로 갈 경우에 어떻게 전개해 나갈 계획이신지 궁금합니다.
I have two questions. First question is about news that there's a Chinese company that has signed a contract for EV batteries with BMW and is now planning to build a battery plant in Germany. What would be the impact of such a contract on SDI's business? Second question is about the polarizer film trends, the ASP trends, because the LCD panel prices itself decreased quite steeply during the first half, even though it seems to be bottoming out a little bit. What were the ASP trends that you saw in your polarizer business? If there's continuous price decreases or oversupply in polarizers, what is your plan or how do you plan to respond?
네, 손미카엘 전무입니다. 제가 첫 번째 중대형 전지 관련 질문에 답변을 드리겠습니다. 사실 글로벌 OEM의 자동차 전지 관련해서 추가 공급선을 확보하는 것은 전기차 생산이 최근에 급격히 증가하는 과정에서 안정적인 조달을 위해서 사실은 불가피한 선택이라고 판단을 합니다. 그런데 이런 시장의 확대가 당사에게도 새로운 공급 기회를 동시에 열어주고 있기 때문에 좋은 결과로 이어지고 있습니다. 기존 주요 고객들이 신규 전지 공급업체를 선정한다 하더라도 사업 초기부터 저희가 쌓아온 상호 협력과 신뢰, 그리고 당사 제품의 성능, 특히 안정성, 생산성 등을 토대로 해서 장기간 높은 점유율을 유지해 나갈 것으로 전망을 하고 있습니다. 이상입니다.
Regarding your first question, we think that from a global OEM's perspective, especially given the rapid increase of EV production that's expected going forward, it will be inevitable for them to try to find additional sources or additional suppliers in order to ensure stable supply of the batteries. On the other hand, this is giving us additional market growth opportunities. Overall, it actually ends up giving us a positive result in our EV battery business. Even though the major customers would sign up new EV suppliers, we have been establishing a very long track record of collaboration and trust with these existing key customers. Also, our batteries have been proven already in terms of performance, stability, and also production. That's why we expect to continue to maintain a large share of the customer's business.
두 번째 질문 답변드리겠습니다. 전자재료 사업부의 중경원 전무입니다. 말씀하신 것처럼 LCD 패널 가격은 지속적으로 하락세를 보여왔고, 최근에는 하락폭이 일부 완만해지고 있고 일부 모델은 편가 인상이 시작된 것은 사실입니다만, 편광에 대한 편가 인하 압박도 굉장히 심하게 요구되는 상황입니다. 그럼에도 불구하고 저희는 모바일용 고부가 편광필름 및 TV용 편광 재료인 PET, 즉 페트 차별화를 통해서
대면적 TV의 편광필름 판매 확대를 꾸준하게 해왔고, 이런 방향을 통해서 수익성을 개선해 오고 있었습니다. 하반기에도 예측하고 있는 것처럼 LCD 업황은 어려울 것으로 전망이 되지만, 저희 중국에 있는 Wuxi 공장의 강점을 활용해서 고부가 제품 확대 및 차별화 신제품 진입을 통해서 수익을 더 개선할 수 있을 것으로 전망하고 있습니다. 이상입니다.
To answer your second question. Yes, as you mentioned, the LCD panel prices have gone through a quite steep decline in the first half, even though it seems that the speed of decrease is leveling off a little bit. Actually, there were some LCD models that were able to increase their ASPs despite this trend. The overall decline in LCD panel prices, yes, have come to us in terms of very strong pressure to lower the polarizer prices as well. We have been, therefore, focusing our business more on the high end. For example, polarizers for mobile applications as well as PET, which is a polarizer material that goes into TVs. We've been focusing on, especially the PETs for large panel sized TVs. By focusing on the higher end of the market, we were able to gain and secure profitability.
In the second half, overall LCD industry outlook still remains quite challenging, but we will try to respond by especially leveraging the advantages that we have in the Wuxi plant to focus on high value add or high end of part of the polarizer market, and also to focus on the differentiated products that we can offer.
네, 감사합니다. 다음 질문 받겠습니다.
[Foreign language] The following question will be provided by Junghoon Jang from Samsung Securities. Please go ahead, sir.
네, 질문 기회 주셔서 감사합니다. 저도 두 가지 질문드릴 텐데요. 전기용 전지 위주로 문의 드리겠습니다. 첫 번째는 지금 상반기에 원자재 가격의 하락이 눈에 띄는데요. 리튬 가격 연초 대비 30%, 코발트도 전고점 대비 한 15에서 20% 정도 빠지고 있는데 아까 부사장님께서 하반기 순이익 개선의 기대감 말씀을 주시면서도 평가에 대한 메탈가 전이에 대한 시기적인 문제들 포함해서 말씀을 주시긴 했는데, 원가에서만 봤을 때는 하반기에 이런 메탈 가격의 하락이 어느 정도 영향을 미칠 수 있을지에 대한 궁금증이 생깁니다. 이 설명 부탁드리겠고요. 두 번째로는, 지금 앞단의 전방 산업에서의 성장이 두드러지고 있는데, 2020년이든 25년이든 저희 입장에서 봤을 때 누적 수주에 대한 개념도 좋겠고요. 아니면 저희가 특정 시기에 CapEx를 어느 정도로 갖고 가는지에 대한 궁금증이 생깁니다. 이 부분들이랑 이렇게 했을 경우에 우리 이제 자금 이슈들은 어떻게 해결하실 계획이 계신지 이 두 가지 말씀 부탁드리겠습니다. 감사합니다.
I have two questions for both the mid to large size battery business. As you know, a lot of the metal raw materials that go into batteries, including lithium and cobalt prices, have declined quite significantly during the first half. Even though during the previous Q&A you mentioned that there were some early contracts that did not tie in changes of the raw materials to your supply prices. I still would like to hear about the amount of impact that your business would have if the raw material prices decrease. How much of an impact do you see if your costs go down in terms of raw materials? How much impact in terms of your margins in the second half, for example?
Second question is, given the downstream industries for the mid to large size batteries are expected to grow quite significantly in the long term to year 2020 or 2025. In terms of your businesses, how much CapEx, for example, do you think you would need to do? How much orders do you think you'll be able to accumulate, whether it's from a back order concept? In terms of financing, funding these CapEx needs, what plans do you have in terms of financing the CapEx needs that are tied into your downstream growth?
두 가지 질문에 대해서 권영호 부사장이 답변드리겠습니다. 첫 번째 질문인 원소재 가격 안정이 하반기 손익에 어떤 영향을 미칠 것이냐에 대해서는, 금년 2분기부터 코발트, 리튬을 중심으로 한 주요 원소재가 하향 안정세에 들어왔고, 하반기에도 이 추세는 지속될 것으로 지금 전망을 하고 있습니다. 따라서, 수익성 측면에서 상당히 긍정적인 영향을 미칠 수 있을 것으로 지금 보고 있고, 다만 한 가지, 저희들의 구매 시점하고 적용 시점하고 시차가 조금 있을 수 있기 때문에 그런 요소는 있습니다마는 하여튼 매우 긍정적인 요소로 작용할 거다라고 말씀드리겠습니다. 저희들이 참고적으로 누차에 걸쳐서 말씀드렸습니다마는 원소재가에 대한 저희들의 기본 방침은 원소재 가격 연동성을 저희들 제품 판가에 연동을 시켜서 원소재가 변동에 따른 리스크를 최소화시킨다는 게 저희 방침이라고 말씀드리겠습니다.
Regarding your first question. Yes, the raw materials for the batteries have maintained a very stable trend in the first half, and we expect this trend to continue in the second half. From the raw materials perspective itself, we think that there will be significant positive impact on the profitability. However, there's also some time lag between our actual procurement and when we use the raw materials. Overall, the decrease and the stable trend of the raw materials is a very positive factor. At the company level, our policy regarding raw material sourcing and our sales price is to link the raw material prices to our sales price so that we're not exposed to the risk of fluctuation of raw material prices.
두 번째 질문은 중대형 전지의 중장기 사업 전망에 대해서 질문을 하신 걸로 제가 들었는데, 하여튼 중대형 전지 부문은 다 아시겠습니다만, 전방 산업 시장 수요가 급격하게 성장을 하고 있고, 그에 따라 저희들도 충분히 대비를 하고 있기 때문에, 성장성에 대해서는 크게 저희들이 걱정을 하지 않는데, 여하에 "성장성과 수익성 두 마리 토끼를 다 잡을 것이냐"라는 측면에 고민을 하고 있고, 과거와 같이 성장성에 집착해서 수익성을 잃어버리는 그런 잘못을 범하지 않으려고 노력을 하고 있습니다. 그래서 저희들은 항상 성장성과 수익성 두 마리 토끼를 앞으로 잡겠다라고 말씀을 드리겠고. 그럼에도 불구하고 급격한 양적 성장은 필수적이기 때문에 그에 따른 CapEx의 증가는 불가피합니다. 그래서 일정 부분 외부 차입이 불가피하겠습니다만, 계속적으로 저희들 EBITDA도 증가를 하고 있기 때문에 저희들이 감내할 수 있는 수준 내에서 투자 재원 조달도 충분히 가능하다고 말씀드리겠습니다.
Your second question was about the mid to long term business of the mid to large size battery business. As you mentioned, we expect there to be a very rapid pace in the demand from the downstream market. In terms of meeting that large increase in demand, because we are well prepared, we're not actually concerned about the growth itself. Our focus is actually getting the right balance, striking the right balance between growth and profitability, so that we don't repeat the past experience of focusing too much on growth so that we do not capture the full profitability opportunity. We will be focusing on a good balance between growth and profitability. Given the very steep increase in the downstream demand that's expected, a rapid increase in the volume itself, we believe will be essential.
That would require a significant CapEx investment, which we would partially fund from outside sources. Also because we expect our EBITDA itself to grow quite rapidly, we expect that we will be able to fund our CapEx with the sources combining both internal and external that would be at a sustainable level.
네, 감사합니다. 다음 질문 받겠습니다.
[Foreign language] 다음으로 질문해 주실 분은 NH투자증권의 고정우 님입니다. The following question will be presented by Jungwoo from NH Investment & Securities. Please go ahead, sir.
네, NH투자증권의 고정우입니다. 우선 질문 기회 주셔서 감사합니다. 저는 ESS 쪽 질문 한 가지랑 L자형 전지 쪽 질문 총 두 가지가 있는데요. 우선 ESS 쪽 관련해서는 상반기 ESS 업황이 피크일 것이라는 우려가 일부 시각에서 제기 중인데요. 올 하반기와 내년 ESS 수요 전망은 회사 측에서 어떻게 보시는지 궁금하고요. 그리고 한국 정부의 REC 가중치 연장이나 삼성전자의 사업장 내 신재생 에너지 설치 계획 등과 같은 영향이 어떻게 가늠하시는지에 대해서도 궁금합니다. 이어서 L자형 전지 관련해서는요. 북미 스마트폰 업체가 L자형 배터리를 스마트폰에 적용하고 있는데요. L자형 배터리가 새로운 메인스트림이 될 것이라고 보시는지요? 그리고 저희 회사의 대응 방안도 있는지 궁금합니다. 공유 가능하시면 말씀 부탁드립니다. 감사합니다.
I have two questions. First question is about the ESS business. There are some people in the market that are saying that the ESS demand has actually peaked already in the first half and would start to decline in the second half. I would like to see your view, the company's view on the ESS industry outlook for second half as well as next year. Also, what do you think would be the impact of factors such as the possibility of the Korean government extending the REC multiplier or Samsung Electronics, for example, adopting renewable energy facilities within its own plants? Do you think that there will be an impact on your business due to these movements? If so, what would they be? Second question is about how an L-shaped battery was adopted in the flagship of a North American smartphone company.
Do you think that an L-shaped battery may become the next mainstream battery for handsets? What is your plans to respond to the L-shape?
네, 두 가지 질문에 제가 답변드리겠습니다. 손미카엘 전무입니다. 첫 번째 질문은 하반기하고 내년 ESS 수요 전망에 관련된 질문이셨는데, 작년 하반기부터 금년까지 저희 정부 정책에 따라서 국내 수요 증가가 매출 증가에 크게 기여한 것이 사실입니다. 우선 정부 정책은 두 가지로 요약할 수 있는데, 첫 번째는 전력 수요가 높은 기업이 ESS를 설치하고 피크 수요를 절감할 수 있도록 전기 요금을 할인해 주는 촉진 요금제입니다. 두 번째는 태양광하고 풍력발전소와 연계해서 ESS를 설치할 경우에 5.0 또는 4.5 정도의 높은 REC 가중치를 부여해서 ESS 설치의 경제성을 높이는 정책입니다. 이 중에서 특히 상업용 ESS 촉진 요금제는 혜택이 지속적으로 감소할 것으로 예정되어 있어서 향후 수요는 좀 감소할 것으로 보고 있지만, 전력용 ESS는 반면에 최근 REC 가중치가 2019년까지도 현행대로 유지되는 것으로 지난번에 정책 결정이 났고, 2020년부터서야 소폭 하향되는 것으로 되어서 내년까지도 적어도 수요는 계속 강할 것으로 전망이 됩니다.
또한 미국이나 유럽, 호주 등 주요 선진국 시장에서의 수요 증가는 지속되어서 글로벌로 봤을 때 ESS 시장은 금년 하반기, 또 내년은 물론 중기적으로 견조한 성장세가 지속될 것으로 기대를 하고 있습니다. 최근 삼성전자의 태양광 설치 계획이 기사화됐었는데, 이 부분은 아직 좀 구체적으로 말씀드릴 사항은 없습니다.
To answer your first question about the ESS demand outlook that we have for the second half of next year. As you mentioned, a large part of the ESS demand that we have been seeing since second half of last year is the Korean government policy that's been promoting ESS demand is how companies that have large electricity demand, if they install an ESS, they would be eligible for a promotional or lower power prices. The second part of it was, if a company, a utility installs either a solar or a wind power generation facility and then installs an ESS together with that, they would be eligible for a higher REC multiplier of 5.0 or 4.5.
Of these two government factors, the first part, for example, giving companies with ESS a lower electricity price, that benefit is expected to decrease in the near future. Therefore, we're also anticipating that demand from such companies commercial will start to decrease. The second part of the government policy, which offers a higher or REC multiplier for utilities, will be maintained. The government is also already decided to maintain the same benefit, not only until next year, but to continue that until 2020 and only start to slowly decrease the multiplier from 2020 and after. The same benefit from the utility side for ESS demand will continue at least until next year. That's why we expect utility ESS demand domestically to remain quite solid until next year.
At the same time, overseas ESS demand from countries such as the U.S., Europe, and other developed markets are also continuing to remain strong. Overall, combining domestic and global, we expect that second half as well as next year in the midterm, ESS demand will remain solid. You also mentioned about a recent media report. There was a media report of Samsung Electronics planning to install solar facilities within its plants. We have nothing specific to share with you, though.
두 번째 질문은 L-shape 배터리의 향후 전망에 대한 질문이셨는데, L-shape 배터리는 통상 용량을 더 확보할 수 있는 반면에 그만큼 원가가 상승하는 부분이 있습니다. 그래서 이게 메인스트림이 될지의 여부는 주요 고객들이 어떠한 전략적인 결정을 하느냐에 따라서 달려져 있기 때문에 조금 주시를 해봐야 될 것으로 보고요. 아무튼 저희는 고객의 니즈하고 업계의 동향을 아주 정밀하게 모니터링해서 필요시에 적기 대응할 수 있는 준비를 해갈 것입니다.
Your second question was whether the L-shape battery would become a mainstream in the handset segment. There are pros and cons to the L-shape. The pro would be that you can actually put more battery capacity onto the device. Second is, the downside is though that the L-shape actually costs more. Whether the L-shape battery will be a mainstream or not, actually, I think it's dependent upon the strategic decisions of the major customers, and that's why we are very carefully monitoring both the customer needs as well as market trends so that we are prepared to respond appropriately at the right time.
네, 다음 질문을 받도록 하겠습니다. 다음으로 질문해 주실 분은 미래에셋대우의 김철중 님입니다. The following question will be provided by Cheoljung Kim from 미래에셋대우. Please go ahead, sir.
네, 질문 기회 주셔서 감사합니다. 저는 원통형 전지에 관련돼서 질문이 있는데요. 먼저 첫 번째로 원통형 지금 견조한 실적 지속되고 있는데 어플리케이션별로 비중이 어떻게 되는지, 그리고 향후에 어떤 어플리케이션의 성장이 예상되는지 궁금하고요. 두 번째로는 원통형 전지 증설 현황이나 향후 전망, 그리고 폴리머 대비 수익성은 현재 어떤 수준인지 궁금합니다. 감사합니다.
Yes, I have a question about your cylindrical battery business. Can you share with us the share of your cylindrical battery business divided into applications? Also, which application do you think will be growing most in the cylindrical battery business? Second question is about, can you share us the plans of expanding your facilities for cylindrical, and also can you compare the profitability of your cylindrical battery versus polymer batteries?
네, 두 가지 질문에 대해서 손미카엘 전무가 답변드리겠습니다. 첫 번째는 원통형 전지 관련한 질문이셨는데, 저희 원형 전지 매출은 전동공구가 약 절반 이상을 차지를 합니다. 그 밖에 e-bike라든지 ESS, EV 애플리케이션 등 다양한 애플리케이션으로 원통형 전지를 판매하고 있고요. 전동공구는 특히 리튬이온 배터리로의 전환 수요가 굉장히 높아서 장기적으로도 평균 10% 이상의 연평균 성장이 기대가 됩니다. 저희는 올해 고부가 제품 중심으로 해서 판매가 대폭 증가할 것으로 예상하고 있습니다. 또한 e-bike, EV, ESS 등 모든 애플리케이션에서 연간 수요의 고성장이 예상이 돼서 저희 매출도 따라서 증가가 될 것으로 보입니다. 이외에도 판매와 개발 중인 다수의 애플리케이션이 있습니다.
To answer your question about our cylindrical batteries, about more than half of our cylindrical battery revenue is for power tools, and the rest are E-bikes, ESS, and EVs mainly. Especially in the power tools, there is a very strong demand of converting onto lithium-ion batteries, LIBs. We think that because of this very strong demand for conversion, there will be around 10% annual growth for power tool batteries in the long term. We have been able to increase our sales, especially on the high end of the market. There was significant increase of our sales in the high end. Also, there will be high demand growth in all of the applications, whether it's E-bikes or EVs or ESS. That's why we are also expecting significant increase of our revenue from the cylindrical battery business going forward.
Also, there are, other than these, numerous new applications that are either starting to sell or in the development phase.
두 번째는 원형 증설하고 수익성 관련한 질문을 주셨는데, 우선 원형 수요는 아시다시피 아주 고성장이 지속되고 있기 때문에 저희는 현재 풀 가동 중입니다. 그리고 내년 수요에 대비하기 위해서 적기 증설을 한창 진행 중에 있고요. 또한 수익성 관련해서는 저희가 고출력하고 21700 등의 new form factor의 고부가 제품 판매 비중이 지속적으로 확대되고 있어서 수익성은 지속적으로 견조하게 한 수준을 보일 것 같습니다. 감사합니다.
You also asked about our expansion plans and profitability. Because we expect very strong growth in these cylindrical batteries, our current facilities are utilized at full capacity. Also to prepare for next year's demand, we are currently in the process of expanding our facilities. Regarding profitability, because we have been able to focus on the higher end of the market, especially with the new form factors such as 21700, we expect our profitability also to remain strong going forward.
네, 감사합니다. 마지막으로 한 분만 더 질문을 받도록 하겠습니다. 네, 감사합니다. 질문이 없으신 관계로 이상으로 마치도록 하겠습니다. 추가 문의 사항이 있으신 분들은 당사 IR팀에 별도로 문의해 주십시오. 감사합니다.
Since there's no further questions, we will end the conference call here. Please forward any additional questions to our IR team. Thank you.