Slides
Page 1
2025 3Q Earnings Release SK Innovation October 2025 Investor Relations
Page 2
This presentation contains forward-looking statements with respect to financial conditions, results of operations and business of SK Innovation, and plans and objectives of the management of SK Innovation. Statements that are not historical facts, including statements about SK Innovation’s beliefs and expectations, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results or performance of SK Innovation to be materially different from any future results or performance expressed or implied by such forward-looking statements. Financial results for 3Q 2025 are subject to change according to the audit by the external independent auditor. Disclaimer 2
Page 3
Contents Table of Highlights1 Financial Results2 Business Highlights3 Appendix4 3
Page 4
4 Highlights To supply up to 7.2 GWh to US Flatiron Energy over four years beginning in 2026 First mass production and supply of LFP batteries; accelerating growth through diversification of product lineup and business portfolio G SK On Secures U.S. ESS Supply Contract Marking an Entry into Global Market SK On–SK EnmoveMerged Entity Official Launch on November 1st Strengthened financial structure and created synergy to establish a foundation for SK On’s self-sustainable growth Drive new market entry and business expansion through initiatives such as integrated battery–immersion cooling package projects
Page 5
Contents Table of Highlights1 Financial Results2 Business Highlights3 Appendix4 5
Page 6
1.5 1.6 1.6 2.1 1.8 -2.4 % 0.8% -0.2% -2.2 % 2.8 % '24.3Q '24.4Q '25.1Q '25.2Q '25.3Q 6 Type '25.2Q '25.3Q QoQ FY 2024 Revenue 19,306.6 20,533.2 +1,226.6 74,717.0 Operating Profit -417.6 573.5 +991.1 315.5 EBITDA 379.2 1,366.8 +987.6 2,764.0 Non- Operating Profit -843.2 -504.5 +338.7 -2,695.3 ProfitBefore Tax -1,260.8 69.0 +1,329.8 -2,379.8 Key Business Results (Unit KRW in Billion) (Unit: KRW in Trillion) (*) SKE, SKTI, SKET, SKIPC, SKGC, SKEN, SKEO, SKI E&S, SKI Staff etc. OP Margin Energy/Chemical(*) Sales 91% Battery/ Material Revenue 9%17.7 19.4 21.1 19.3 Total Revenue 20.5 Financial Result Financial Highlights
Page 7
7 Key Financial Results Type ’24 end ’25.3Q vs ’24 end Assets 110,530.1 107,898.5 -2,631.6 - Cash, etc. 16,101.0 15,980.3 -120.7 Account receivable 7,038.0 6,105.3 -932.7 Inventory 10,335.6 9,160.3 -1,175.3 - Tangible & intangible assets 59,657.2 59,264.6 -392.6 Liabilities 70,881.2 69,095.2 -1,786.0 - Account payable 9,912.1 7,349.8 -2,562.3 - Debt 44,627.6 44,840.5 +212.9 Shareholder’s equity 39,648.9 38,803.3 -845.6 Debt/Equity 179% 178% -1%pt Net Debt 28,526.6 28,860.2 +333.6 17.4 17.4 59.7 59.3 17.4 15.3 16.1 16.0 '24 end '25.3Q 39.6 38.8 16.3 16.9 9.9 7.3 44.6 44.8 '24 end '25.3Q Shareholder’s equity Other liabilities Account payable Debt Other assets Tangible/ intangible assets Account receivable & inventory Cash 110.5 110.5 Balance Sheet Asset Composition Liabilities & Equity Composition (Unit: KRW in Trillion) (Unit: KRW in Trillion) 107.9 107.9 (Unit : KRW in Billion)
Page 8
Contents Table of Highlights1 Financial Results2 Business Highlights3 Appendix4 8
Page 9
Refining 9 12,134.3 11,686.8 11,918.1 11,118.7 12,442.1 '24.3Q '24.4Q '25.1Q '25.2Q '25.3Q -5.1% 2.9% 0.3% -4.2% 2.4% Operating profit rose KRW 770.5 billion QoQ, driven by higher margin and oil prices amid U.S. peak demand season -616.6 342.4 36.3 -466.3 Revenue * Includes SKE, SKTI, SKIPC, SKET’s refining business performance (Unit: KRW in Billion) Oil price & Crack ($/B) '25.2Q '25.3Q QoQ DubaiQuarter Average 66.9 69.9 +3.0 DubaiLast Month of Quarter Average 69.3 70.0 +0.7 Gasoline 9.8 8.5 -1.3 Diesel 15.7 18.8 +3.1 Kerosene 14.1 16.1 +2.0 304.2 Despite inflation concerns and continued OPEC+ production increase, refining margins and operating profit are expected to remain resilient amid global supply disruptions and the onset of winter peak demand season 4Q Market Outlook Financial Highlights & Outlook Operating profit surged QoQ as refining margin and oil prices rose amid tight crude supply during the U.S. driving season 3Q Financial Highlights Oil price & Product Crack Operating Profit OP Margin
Page 10
Petrochemical 10 2,625.3 2,373.4 2,477.0 2,268.6 2,415.2 '24.3Q '24.4Q '25.1Q '25.2Q '25.3Q -0.5% -3.5% -4.6% -5.2% -1.5% Despite declines in BZ and Olefin spreads, improved PX spread narrowed operating losses -14.4 -84.2 -114.3 -118.6 -36.8 Recorded an operating loss due to weakened BZ, PE, and PP Aromatic PX supply is expected to decline; however, due to the impact of the US–China trade conflict and new BZ capacity additions, product spreads are to be subdued Olefin Spreads expected to declineas product demand recovery is delayed due to the US– China trade conflict Spread by Product Average PX Utilization Rate Financial Highlights & Outlook 4Q Market Outlook 3Q Financial Highlights Revenue OP Margin Operating Profit (Unit: KRW in Billion) Utilization Rate '25.2Q '25.3Q QoQ PX(Ulsan) 33% 65% +32%p PX(Incheon) 63% 84% +21%p Spread ($/MT) '25.2Q '25.3Q QoQ PX 230 252 +22 BZ 152 137 -15 PE 275 264 -11 PP 328 276 -52
Page 11
1,064.9 970.7 972.2 893.8 980.5 '24.3Q '24.4Q '25.1Q '25.2Q '25.3Q 16.4% 14.4% 12.5% 15.1% 17.4% Operating profit rose by KRW 36 billion QoQ due to theseasonal peak period 174.4 139.5 121.4 134.6 Lubricants 11 170.6 Operating profit increased QoQ, driven by higher sales volume and inventory gains from rising raw material prices Financial Highlights & Outlook Market expected to remain subdued as demand weakens entering the seasonal off-peak period 4Q Market Outlook 3Q Financial Highlights Revenue OP Margin Operating Profit (Unit: KRW in Billion)
Page 12
355.5 379.2 383.1 341.7 320.0 '24.3Q '24.4Q '25.1Q '25.2Q '25.3Q Operating profit decreased by KRW 19.7 billion QoQ due to lower gas sales price, etc. 131.1 145.8 120.4 109.0 E&P 12 89.3 QoQoperating profit declined due to falling gas sales price and an increased share of gas sales Unit: 1k bbl '25.2Q '25.3Q Sales volume 5,946 6,338 % of Gas 58% 60% * NBP: National Balancing Point (European natural gas exchange) Category '25.2Q '25.3Q QoQ Brent ($/B) 67.8 69.1 +1.3 WTI ($/B) 63.9 65.0 +1.1 NBP($/mmbtu) 11.4 10.9 -0.5 Benchmark Financial Highlights & Outlook 3Q Financial Highlights 36.9% 38.4% 31.4% 31.9% 27.9% Revenue OP Margin Operating Profit (Unit: KRW in Billion)
Page 13
SK On(Merged Entity)Current OP Margin1) Battery Business Current OP Margin SK On(Merged Entity) Current Revenue1) 1,430.8 1,598.7 1,605.4 2,107.7 1,807.9 '24.3Q '24.4Q '25.1Q '25.2Q '25.3Q ~~~~ Revenue 13 Battery (SK On· SK Trading Int’l· SK Entermmerger basis) Financial Highlights & Outlook 4Q Market Outlook 3Q Financial Highlights 24.0 -311.1 (-359.4) -163.3 (-299.3) 60.9 (-66.4) 17.9 (-124.8) 9,315.8 -3.2% SK On completed mergers with SK Trading Int’l on November 1, 2024, and SK Entermon February 1, 2025. The consolidated financials exclude intercompany transactions within SK Innovation and therefore differ from SK On’s (merged entity) actual performance 1) -18.6% 8,834.2 OP Margin 8,740.7 -6.9% 0. 2% 6,160.6 -22.5% While performance is expected to weaken due to soft U.S. demand and initial costs from new plants, battery business portfolio expansion will accelerate by strengthening ESS business Operating profit declined due to lower battery sales, affected by OEM summer breaks and the phase-out of US EV purchase incentives 13 1.7% -5.0% -1.9% 0.7% The integrated SK On entity maintained positive earnings through increased utilization of European plants and improved cost and operational efficiency Operating Profit (Battery) (Unit: KRW in Billion)
Page 14
23.6 31.2 23.8 19.5 23.5 '24.3Q '24.4Q '25.1Q '25.2Q '25.3Q -275.1% -237.8% -230.2% -275.4% -2 1 3 . 2 % Operating loss reduced by KRW 3.6 billion due to cost-reduction efforts -50.1-74.0 -74.2 -54.8 -53.7 Materials 14 4Q Market Outlook 3Q Financial Highlights Financial Highlights & Outlook Revenue Pursue cost improvements and expand ESS-related orders despitegrowing policy uncertainty in the US The above results exclude internal transactions within SK Innovation and thus differ from SKIET’s consolidated financial statements SKIET’s consolidated 3Q 2025 revenue was KRW 79.1 billion, with an operating loss of KRW 47.2 billion (OP margin of -59.7%) Company-wide cost-cutting efforts reduced operating losses from the previous quarter OP Margin ※ ※ Operating Profit (Unit: KRW in Billion)
Page 15
2,529.8 3,135.0 3,752.1 2,545.3 2,527.8 '24.3Q '24.4Q '25.1Q '25.2Q '25.3Q 13.9% 3.6% 5.1% 4.5% 10.1% 351.6 114.2 193.1 115.0 SKI E&S 15 255.4 Key Benchmark Financial Highlights & Outlook Operating profit increased QoQ, driven by high power plant utilization throughenhanced competitiveness in cargo delivery during summer season Financial Highlights & Outlook 3Q Financial Highlights Despite expected SMP declines, maintain stable profit generation by commencing commercial production of the CB Gas Fields and maximizing city gas sales during the winter season 4Q Market Outlook ‘24.1Q~’24.4Q results are recalculated figures based on the merged entity※ Operating profit increased by KRW 140.4 billion QoQ due to higher power plant utilization during the summer season JCC: Japan Crude Cocktail HHP: Henry Hub Price JKM: Japan Korea Marker SMP: System Marginal Price * Revenue Type '25.2Q '25.3Q QoQ JCC ($/B) 74.9 72.3 -2.7 HHP ($/mmbtu) 3.4 3.1 -0.3 JKM ($/mmbtu) 12.5 12.5 - SMP (KRW/kWh) 121.2 114.8 -6.4 OP Margin Operating Profit (Unit: KRW in Billion)
Page 16
Contents Table of Highlights1 Financial Results 2 Business Highlights3 Appendix4 16
Page 17
17 Type Revenue Operating Profit Type '25.3Q QoQ '25.2Q '25.3Q QoQ Refining1) 11,118.7 12,442.1 +1,323.4 -466.3 304.2 +770.5 Petrochemical2) 2,268.6 2,415.2 +146.6 -118.6 -36.8 +81.8 Lubricants 893.8 980.5 +86.7 134.6 170.6 +36.0 E&P3) 341.7 320.0 -21.7 109.0 89.3 -19.7 Battery 2,107.7 1,807.9 -299.8 -66.4 -124.8 -58.4 Materials4) 19.5 23.5 +4.0 -53.7 -50.1 +3.6 E&S 2,545.3 2,527.8 -17.5 115.0 255.4 +140.4 Others5) 11.3 16.2 +4.9 -71.2 -34.3 +36.9 Total 19,306.6 20,533.2 +1,226.6 -417.6 573.5 +991.1 Business Performance (Excluding intercompany transactions) 1) Refining SKE, SKTI, SKET, SKIPC ‘s petroleum businesses 2) Petrochem SKGC, SKIPC’s petrochemical businesses 4) Materials Reflects SKI’s consolidated financial data excluding internal transactions and thus differs from SKIET’s performance (Unit: KRW in Billion) 3) E&P Includes the performance of the Peru 88 and 56 blocks currently attributed to SKI 5) Others Staff, etc.
Page 18
18 BatteryProduction Capacity Korea China EU US Total Unit: GWh 45 45 78 '23A '24A '25E [China] 5 7 7 '23A '24A '25E [Korea] 22 22 59 '23A '24A '25E [US] Operating sites Region Plant Capacity(GWh) Commercial Production Korea Korea PlantNo. 1 and 2 (Seosan) 7.0 3Q18 Korea Plant No.3 (Seosan) 14.0 2026 Europe Hungary Plant No.1 (Komarom) 7.5 1Q20 Hungary Plant No.2 (Komarom) 10.0 1Q22 Hungary Plant No.3 (Ivancsa) 30.0 2Q24 US US Plant No.1 (Georgia) 10.0 1Q22 US Plant No.2 (Georgia) 12.0 4Q22 BlueOvalSK (Kentucky Plant No 1) 37.0 3Q25 BlueOvalSK (Tennessee) 45.0 2026 HMG North AmericaJV (Georgia) 35.0 2026 China BEST JV (Changzhou) 7.5 2Q20 EUE JV (Huizhou) 10.0 1Q21 SKOJ JV Bld1+2 (Yancheng) 27.0 1Q21 SKOY (Yancheng) 33.0 4Q25 ※ Production capacity is calculated on a full-operation bas 18 48 48 '23A '24A '25E [Europe] 5 5 5 5 7 7 18 28 45 45 45 78 8 8 18 18 48 48 22 22 22 59 30 40 88 89 121 192 '20 '21 '22 '23 '24 '25E
Page 19
19 Region Key Blocks Output* Production Australia Caldita–Barossa gas fields 1.3 million tons (perannum) 4Q25 US Woodford gas field 1.1 million tons (per annum) 3Q14 Vietnam 15-1/05 Block N/A 2026(E) 15-1 Block 3,100 B/D 4Q03 15-2/17 Block N/A Exploration ongoing 16-2 Block N/A Exploration ongoing China 17/03 Block 9,500 B/D 2Q23 Peru 88 Block 8,500 B/D 25,000 BOE/D (Gas) 2004~ 56 Block 2,000 B/D 8,000 BOE/D (Gas) 2008~ Libya NC174 Block 240 B/D 2Q04 Malaysia SK427 Block N/A Exploration ongoing KETAPU Cluster N/A Exploration ongoing SKI E&S(LNG) E&P Update (*) Based on the company’s shareholding (~’24) (~’27) (~’30) Vietnam 16-2 Malaysia SK427 Vietnam 15-1/05 Vietnam 15-2/17 Exploration Exploration Development Exploration Exploration Exploration Production Development Production Development Development Production