Samsung Electronics Announce the Capital Expenditure,Progress of Shares Buyback, Shareholder Return Program

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Samsung Electronics Capital Expenditure to Reach Approximately KRW 46.2 Trillion in 2017
Tuesday, October 31st, 2017
samsung

[SEOUL KOREA] Samsung expects capital expenditure (Capex) for 2017 to be approximately KRW 46.2 trillion, a significant increase from 2016. Capex for the semiconductor and display businesses will be KRW 29.5 trillion and KRW 14.1 trillion, respectively.
In the third quarter, the company invested KRW 10.4 trillion, including KRW 7.2 trillion for the semiconductor business and KRW 2.7 trillion for the display segment. This brings the cumulative capital expenditure to KRW 32.9 trillion, as of the end of the third quarter.

In the Memory Business, investments are mainly focused on:
1) the Pyeongtaek fab to expand capacity to address rising demand for V-NAND;
2) DRAM process migration; and
3) supplementing any capacity loss resulting from the migration.

For the foundry business, Samsung is increasing its 10nm capacity to address rising demand for cutting-edge process technology. For the OLED business, Samsung has been concentrating its investments on expanding capacity for flexible panels to respond to growing demand.

In the fourth quarter, a substantial portion of the investments will be made in the semiconductor business to build infrastructure related to new sites and clean-rooms.

Samsung Electronics BOD Approves Fourth Phase of Share Repurchase and Third Quarter Dividend

Progress of Shares Buyback

Samsung Electronics Board of Directors (BOD) approved the fourth and final phase of the share buyback and cancellation on October 31.

The final phase will start on November 1, 2017 and take approximately three months to complete, in which the company will repurchase and cancel 712,000 common shares and 178,000 preferred shares.

Samsung announced in January that it would implement a share buyback of KRW 9.3 trillion won in 2017. With the expected conclusion of the fourth phase, the company’s share buyback and cancellation of 2017 will be completed.

For the first three phases, Samsung has invested approximately KRW 7 trillion. It repurchased and cancelled 1.02 million common shares and 255,000 preferred shares in the first phase; 900,000 common shares and 225,000 preferred shares in the second phase; and 670,000 common shares and 168,000 preferred shares in the third phase. In sum, it is 2.59 million common shares and 648,000 preferred shares that have been repurchased and cancelled in the first three phases.

Quarterly Dividends

The BOD also approved the third quarter dividend of KRW 7,000 per share for both common and preferred.

 

samsung Electronics Announces Enhanced Shareholder Return Program for 2018-2020, Boosting Dividends

Samsung Electronics's Shareholder Return Program for 2018-2020, which includes significant enhancements in dividend policy and is set to deliver long-term value for its shareholders.
The program builds on the previous Shareholder Value Enhancement Program it announced in 2015 that was well received by the market, and reinforces the Company’s commitment to creating shareholder value and returning significant capital to its shareholders.
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The Company will increase annual dividends in 2017 by 20 percent, which will be followed by a 100 percent rise in dividends in 2018. The 2019 and 2020 dividends will be kept at the same level with 2018.

This will translate into approximately 29 trillion won of total dividend returns in the 2018 to 2020 period which will provide shareholders with a more transparent and predictable return profile.
·
Future M&A investments will not be deducted from free cash flow (FCF). This policy change will increase the amount of capital available to return to shareholders and result in greater transparency and predictability. The portion of FCF allocated for shareholder returns will be set at minimum 50 percent over the three year period.
·
After dividend payouts, any remaining portion of the 50 percent of FCF available for shareholder returns will be used either for additional cash dividends or share buybacks as deemed appropriate.
Following the introduction of the three-year shareholder return initiative in 2015, Samsung Electronics has made significant enhancements to its shareholder return policy, returning more than 10 trillion won in the form of dividends and 20 trillion won in share buybacks. In April 2017, the Company also cancelled 50 percent of its treasury shares worth approximately 20 trillion won in market value.

The Company's share price has more than doubled since the beginning of 2016, a validation of our shareholders' approval of the improvements in our shareholder policy and confidence in the steps the Company is taking. Samsung Electronics remains committed to delivering sustainable shareholder value and will continue to enhance long-term value creation.

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