SAMSUNG ENGINEERING

IR Presentation 2011

SAMSUNG ENGINEERING

IR Presentation 2011

Contents

01 ㅣ Business Update

02 ㅣ Investment Highlights

03 ㅣ Appendix

-3-

Business Portfolio

Hydrocarbon

• CDU/VDU• Heavy Oil Upgrading• Aromatics, HDS

Refinery

• Ethylene• EO/EG• PDH

Petrochemicals

• Polymers• Fertilizers• Fine Chemicals

• Thermal(Coal-IGCC, Oil/Gas Fired)

Power

Industrial

• Steel Mills• Non-Ferrous Plants(Al, Copper, Nickel)

Metallurgy

• IT Facilities• Pharmaceutical • Industrial Manufacturing Facilities

Industries

• Water Treatment• Wastewater Treatment• Desalination• Ultra-Pure/Reuse• O&M

Water Treatment

Infrastructure

• Transportation(Rail/Road)

Infrastructure

• Offshore Platforms• FPSO (FLNG)• Pipeline• GOSP

Upstream

Gas

• Gas Processing• LNG (liquefaction, terminal)

Business Updateㅣ01

-4-

5,846

Hydrocarbon

3,2154,035

12,000

8,300

I & I (Industrial & Infrastructure)

Business Results and Outlook

14,500

Remarkable growth achieved as a result of enhanced global competency and new business

Revenue Trend

(1BN KRW)

New Order Trend

* Consolidated Base

10,117

16,000

14,000

(1BN KRW)

5,300

9,032

19,000

Business Updateㅣ01

71% 81% 74%

26%

29%19%

'08 '09 '10 '11(E) '12(E) '13(E)

78%

95%

55%

45%

22%

5%

'08 '09 '10 '11(E) '12(E) '13(E)

-5-

Business Results and Outlook

[Region] [Product]

* Consolidated Base

Diversification of regions and products facilitates momentum for growth

Middle East57%

Africa11%

Asia10%

America8%

Domestic14%

I&I9%Gas

7%

Petrochem22%

Refiney62%

Upstream6%

Refiney36%Gas

11%

Petrochem25%

I&I 22%2010

2010

Domestic13%

America7%

Asia 9%

Africa19%

Middle East52%

Hydrocarbon

(1TR KRW)

I & I (Industrial & Infrastructure)

Business Updateㅣ01

2010 Order Backlog OverviewOrder Backlog Trend

8.3

14.0

17.2

22.9

26.9

31.4

91%

82%

78%

9%

18%

22%

'08 '09 '10 '11(E) '12(E) '13(E)

2009

2009

-6-

Stable profitability maintained based on differentiated execution capabilities

16.7%15.2%15.3%

14.4%

6.6%5.6%

8.1% 7.9%

9.2%8.3% 8.3% 8.5%

'07 '08 '09 '10

Key Financial Index

‘07 ‘08 ‘09 ‘10

EPS(KRW)

3,900 5,000 6,200 8,300

EBITDA(BN KRW)

161 197 345 438

ROE 29% 35% 32% 35%

Business Updateㅣ01

Gross Profit Margin Recurring Profit Margin

Operating Profit Margin

Margin Trend Investment Index

-7-

17% 18% 17% 18% 21% 23%

0.78 0.86 0.90 1.11 1.30 1.32Global Operation Reinforcement

Early recruitment of talents and enhanced global operations

4,1004,700

5,900

7,500

9,200

11,000

2,500

700 865 1,0211,350 1,900

'08 '09 '10 '11(E) '12(E) '13(E)

Procurement Offices : U.S., Italy, India, China, Saudi Arabia, etc

Integrated construction offices for streamlined project execution

Real TimeWorking

Environment

Differentiated Competency For Each Global Office

Head Office

India

(SEI)

FY10: 532 employees

à FY11: 670 employees

Saudi Arabia

(IK-EPC)

FY10: 126 employees

à FY11: 160 employees

United States

(SEA)

FY10: 34 employees

à FY11: 100 employees

Business Updateㅣ01

Overseas Employment

Per Capital Sales (1 Bn KRW)

Total EmployeesOverseas Employees

Recruitment Trend Overseas Strategy

Human Resource Update

Detail Engineering +

Head Office Work Sharing

Independent business

System

Basic Engineering

+ Local Marketing

-8-

Growth StrategyInvestment Highlightsㅣ02

Differentiated Marketing

Differentiated Marketing

• Strategic investments for new market entrance• Product : Break into Upstream and build up I&I sector• Region : Enter new markets using regional-specific marketing

EnhancedCost Competency

EnhancedCost Competency

• Engineering : Facilitate value engineering• Procurement : Enhance Global Sourcing and Vendor Alliance • Construction : Integrate construction offices for streamlined

project execution

ReinforcedBusiness Capability

ReinforcedBusiness Capability

• Increase capability by securing skilled manpower in advance • Promote new business by cultivating execution capability• Expand global operations

EnsuredSystem Competency

EnsuredSystem Competency

• Establish Engineering Data Warehouse• Improve business efficiency by systemizing• Develop global Corporate culture

-9-

Investment Highlightsㅣ02

GrowthGrowth

ProfitabilityProfitability

ShareholderValue

ShareholderValue

StabilityStability

Investment Points

Accelerated Global Operation with Market, Client, Product Diversification• Enter hydrocarbon upstream market such as LNG, GOSP, Offshore, etc• Penetrate non-hydrocarbon market such as metallurgy, power, desalination, etc

• Differentiated quality, cost, delivery, and value engineering management

• Continue stable profitability with system management

• Excellent Cash Flow: No Debt (since 2005)

• Conservative foreign exchange rate policy for risk hedging

• Maintain confidence by achieving business goals

• Priority on shareholder value: payout ratio of 30%, share buy-back etc.

Continue 40% Annual Growth in Revenue

Stable Profitability through Avg. 30% EPS Growth

Strong Balance Sheet

Build Credibility with Management Philosophy

-10-

‘09-‘10 YoY△ 11%

+ 23%

+ 31%

+ 30%

+ 30%

+ 34%

+ 34%

△ 0.1P

△ 0.2P

0.2P

0.2P

Income StatementAppendixㅣ03

2008 2009 2010

New Order 5,846 10,117 9,032

Backlog 8,252 13,955 17,151

Revenue 3,215 4,035 5,299

Gross Profit 464 617 804

Operating Profit 179 325 421

Recurring Profit 267 336 451

Net Income 201 247 332

Gross Profit(%) 14.4% 15.3% 15.2%

Operating Profit(%) 5.6% 8.1% 7.9%

Recurring Profit(%) 8.3% 8.3% 8.5%

Net Income(%) 6.2% 6.1% 6.3%

* Consolidated Base

(1 BN KRW)

-11-

Balance SheetAppendixㅣ03

2007 2008 2009 2010

Total Assets 1,632 2,077 2,769 3,411

Current Assets 1,352 1,739 2,305 2,710

Non-current Assets 280 338 464 701

Total Liabilities 1,106 1,497 2,006 2,449

Current Liabilities 993 1,344 1,852 2,257

Long-term Liabilities 113 153 154 192

Total Equities 526 580 763 962

Capital Stock 200 200 200 200

Capital Surplus 57 56 56 56

Retained Earnings 317 498 682 939

Capital Adjustment △48 △154 △175 △233

* Consolidated Base

(1 BN KRW)

-12-

104

280

119

62

'10 '11(E)

New HQ Investment IT

800710

1,2181,044

1,384

43 56136 166

399

'07 '08 '09 '10 '11(E)

Net Cash Capex

Cash & Dividends

* Consolidated Base

’07 ’08 ‘09 ‘10

Dividends(DPS)

1,200 1,500 2,000 2,500

PayoutRatio

30% 30% 30% 30%

Current Dividend

Rate1.3% 3.4% 1.9% 1.3%

ParDividend

Rate24% 30% 40% 50%

166

399

(1 BN KRW)

(1 BN KRW)

Key Stability Index Dividends & Investment Outlook

CAPEX Plan

** Head Office Base

Appendixㅣ03

-13-

Tokyo

Thailand

Shanghai

Budapest

Mexico

Houston

Vietnam

New DelhiSaudi Arabia Trinidad &

Tobago

SubsidiariesOverseas Branch OfficesGlobal Engineering CentersProject OfficesInternational Procurement Offices

Head OfficeSeoul, Korea

Samsung Engineering India Delhi

Samsung Engineering Saudi Arabia Al-Jubail

Slovakia

Abu Dhabi

Samsung Engineering America Houston

Samsung Engineering Thailand Rayong

Malaysia

Saudi Arabia

Ma’aden Amonia Project (Ras, Al Zour)Jubail Refinery Complex / GAS ASU

Aramco DHT Project (Ras Tanura)

Global NetworkAppendixㅣ03

Italy

Australia

Venezuela

Algeria

-14-

Energy CFE LNG Terminal Mexico 2011.08Commission Federal de Electricidad 6302008Energy Bapco Lube base Oil Bahrain 2011.06Bahrain Petroleum Company 314

Energy Aramco Jubail #3 Aromatics Saudi Arabia 2013.03Saudi Arabian Oil Company 699

Energy Aramco Jubail #4 Coker Saudi Arabia 2013.05Saudi Arabian Oil Company 428

Energy NIGC ASU Saudi Arabia 2011.11National Industrial Gases Company 305

2009 Petrochemical Fertil Fertilizer UAE 2013.01Ruwais Fertilizer Industries 1,223

Energy Petrotrin ULSD T&T 2012.03Petroleum Company of T&T 220

Energy Takeer Refinery #3 UAE 2013.04Abu Dhabi Oil Refining Company 2,728

Energy S-Oil Aromatics Korea 2011.01S-Oil 1,050

Petrochemical ONGC Ethylene India 2012.08Oil and Natural Gas Corporation 960

Energy Sonatrach Refinery Algeria 2012.08Sonatrach 2,185

Petrochemical CO2 Recovery Vietnam 2011.02PVFCCO 27

I&I SULB Section Mill Plant Bahrain 2012.07SULB National Company 326

Energy Sabah Oil & Gas Terminal Malaysia 2013.12Petronas 766

2010

Energy DHDS Project India 2012.09Nagarjuna Oil Corporation Limited. 47

Petrochemical Borouge 3 (Polyolefins) UAE 2013.09Abu Dhabi Polymers Company Ltd. 552

I&I Norte II CCPP Mexico 2013.05La Comision Federal de Electricidad 270

Petrochemical Borouge 3 (LDPE) UAE 2013.09Abu Dhabi Polymers 170

Energy Shah Gas Development UAE 2013.08Abu Dhabi National Oil Company 1,496

Petrochemical Chlorine # 7 United States 2012.12Dow Chemical 411

Petrochemical Acrylic Acid Saudi Arabia 2013.02SAMCO 689

Category Project Region Client Award(in mil $)

CompletionYr. Awarded

Major On-going ProjectsAppendixㅣ03