57% Year-Over-Year Growth Following Samsung Bioepis Spin-off
Securities Firms: "Growth Momentum to Continue This Year"
Securities Firms: "Growth Momentum to Continue This Year"
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Samsung Biologics Plant 2. / Photo = Samsung Biologics |
[Korea Financial Times, Yang Hyunwoo] Samsung Biologics has written a new chapter in history. Following its industry-first breakthrough of KRW 1 trillion in operating profit in 2023, the company has reached the KRW 2 trillion milestone just two years later. The achievement is considered even more significant as it was accomplished after the spin-off from Samsung Bioepis. Given this growth trajectory, observers predict that annual operating profit of KRW 3 trillion is within reach.
Setting New Operating Profit Record in Two Years
According to Samsung Biologics on the 23nd, the company recorded an operating profit of KRW 2.0692 trillion (consolidated basis) last year. This represents a 57% increase from the previous year, making Samsung Biologics the first in the industry to surpass KRW 2 trillion in annual operating profit. During the same period, revenue grew 30% to KRW 4.557 trillion.
The strong performance was driven by the ramp-up of Plant 4 and improved operational efficiency at Plants 1-3. The company explained, "While Plants 1-3 maintained stable operations, full operation of Plant 4 made a significant contribution."
Favorable exchange rates also contributed to the improved performance. Contract Development and Manufacturing Organization (CDMO) contracts are typically denominated in dollars. As the Korean won weakens, profits increase when converted to won. Last year, the dollar/won exchange rate averaged around KRW 1,420, up about 4% from the previous year.
Samsung Biologics previously recorded its best-ever performance in 2023, surpassing KRW 1 trillion in operating profit. It was also the first time the company reached the KRW 1 trillion level in annual operating profit. At that time, revenue was KRW 3.6846 trillion and operating profit was KRW 1.1137 trillion, up 23% and 13% year-over-year, respectively.
The company forecasts continued growth this year based on strengthened competitiveness through pure CDMO operations. Samsung Biologics' revenue guidance for this year is KRW 5.32 trillion, approximately 17% higher than last year. This forecast does not include revenue contributions from the acquisition of the Rockville, Maryland plant, and updated projections reflecting related performance will be provided after the acquisition is completed.
Kwon Hae-soon, a researcher at Eugene Investment & Securities, stated, "Long-term contracts with major pharmaceutical companies will continue through expanded production capacity and portfolio, as well as services that meet global clients' supply chain requirements," adding, "Growth momentum will also continue."
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Pure CDMO Competitiveness Highlighted After Spin-off
Attention is focused on the fact that Samsung Biologics' record operating profit was achieved after its spin-off from Samsung Bioepis. Samsung Biologics separated from Samsung Bioepis in November last year and re-launched as a pure CDMO company.
The spin-off was a strategic move to minimize business risks, improve management efficiency, and secure client trust. Due to the nature of the CDMO business, which involves receiving orders from clients to develop and manufacture pharmaceuticals, clients competing with Samsung Biologics' subsidiary Samsung Bioepis might have been hesitant to place orders with Samsung Biologics. However, the spin-off cleanly resolved such conflicts of interest.
The market anticipates Samsung Biologics' growth to continue this year as well. Seo Geun-hee, a researcher at Samsung Securities, analyzed, "While Plant 4 has scheduled temporary operational adjustments for regular maintenance, the impact on profitability is limited," adding, "Solid growth will continue with revenue contributions from increased Plant 5 utilization rates."
He added, "When the U.S. Biosecurity Act takes effect at the end of 2025, 2026 will mark an important turning point when securing volumes from China diversification begins in earnest," noting, "Portfolio diversification is also expected through expansion beyond antibody CMO to next-generation modalities."
At the recent 2026 J.P. Morgan Healthcare Conference (JPMHC), John Rim, CEO of Samsung Biologics, announced a strategy to accelerate the "three-pillar" expansion strategy of production capacity, portfolio, and global presence to become a global top-tier CDMO company.
This includes ▲expansion and diversification of production capacity ▲portfolio expansion encompassing the entire Contract Research Development and Manufacturing Organization (CRDMO) spectrum ▲improved customer satisfaction through expanded global presence.
He also unveiled plans for digital transformation (DX) to innovate biopharmaceutical manufacturing. The plan involves creating an intelligent manufacturing environment through artificial intelligence (AI) and digital twins, and maximizing operational efficiency and manufacturing productivity through data intelligence-based operations and decision-making that learns, understands, and infers data with AI.
CEO John Rim emphasized, "While accelerating the three-pillar expansion strategy, we will strengthen core competencies to continue future growth," adding, "We will further solidify our overwhelming competitive advantage through our core values of '4E (customer satisfaction, quality competitiveness, operational efficiency, employee capabilities)' and execution strategy of '3S (standardization, simplification, scalability).'"
Yang Hyunwoo (yhw@fntimes.com)
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