Samsung SDS has achieved the milestone of 10 trillion won (US$8.89 billion) in annual sales for the first time in the Korean IT industry. The company strengthened its position as the No. 1 in the industry by widening its gap with LG CNS, which is expected to post 3 trillion won in annual sales.
Samsung SDS disclosed its provisional business results on Jan. 24. It estimated its sales in 2018 at 10.03 trillion won, up 8 percent from the previous year. Its operating profit was estimated at 877.4 billion won, an increase of 20 percent, and its operating margin at 8.48 percent.
In the fourth quarter of 2018, Samsung SDS recorded a new quarterly high as its sales and operating profit amounted to 2.78 trillion won and 2.58 trillion won, up 15 percent and 29 percent from the third quarter, respectively.
Samsung SDS has grown in size by expanding its investment in solutions and platforms and nurturing its logistics business. Sales rose from 7.85 trillion won in 2015 to 8.18 trillion won in 2016 and 9.3 trillion won in 2017.
Samsung SDS achieved 31 percent growth in four IT sectors -- intelligent factories, cloud computing, AI and data analysis, and solutions. This significantly contributed to boosting its sales to 10 trillion won, the company explained.
Samsung SDS has focused on investing in the four strategic businesses under a vision to become a data-based digital transformation leader. Moreover, it has employed a strategy to expand new businesses that link e-commerce with the external logistics business.
Although Samsung SDS succeeded in transforming itself into a solution and platform company while lowering its dependence on system integration (SI), it still relies heavily on deals with other Samsung Group subsidiaries. Under government pressure, IT companies affiliated with large conglomerates have been striving to strengthen their business with external companies. Samsung SDS will also resume public and financial projects that the company gave up after the revision of the Software Industrial Promotion Act in 2013.