Innovative & Competitive
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Innovative & Competitive 2018 ANNUAL REPORT Innovative & Competitive Hanwha Corporation Achieving the Dream as World’s Leading Company Established as the first Hanwha entity under the founding philosophy of ‘contributing to the nation and society’, Hanwha Corporation has realigned its business operations to focus on explosives, defense, trade, and machinery, striving to become a leading global company that promotes contents the development of humanity and advances human values. 01 Innovative & Competitive 04 Business Highlights 09 Financial Highlights 10 Board of Directors 11 Affiliates 14 Explosives Business 18 Defense Business 24 Trade Business 28 Machinery Business 32 Corporate Responsibilities 38 Global Network 40 Corporate Timeline 41 Financial Report 002 Innovative & Competitive 2018 ANNUAL REPORT 003 Hanwha Corporation, Hanwha Corporation has played a crucial role in supporting the nation’s economic development Innovative & Competitive for the past sixty years. With our innovative endeavors to improve management efficiency, we have realigned our business operations to focus on the Explosives and Defense Divisions as well as our global expertise-based Trade Division. We successfully completed our merger with Hanwha TechM (currently Hanwha Corporation/Machinery Division) in October 2014. We also strengthened our position as the nation’s largest total defense contractor after launching Hanwha affiliates in the defense sector: Hanwha Techwin and Hanwha Thales in June 2015, and Hanwha Defense in May 2016. This has allowed us to move forward with our vision to be a global top 10 defense industry player. Based on our broad business experience, we have also created new core technologies, sustaining market growth and expansion abroad. 004 Business Highlights 2018 ANNUAL REPORT 005 Explosives EXPLOSIVES EXPLOSIVES The Explosives Division is continuing Deeper Innovation to strengthen its overseas business by Hanwha Mining Services The root of expanding mining services business Ammonium nitrate explosives, gunpowder, and as well as export of wide range of comprehensive blasting services, Hanwha products through our established particularly targeting large mines overseas. subsidiaries in Australia, Chile and Group Indonesia. In Australia, the division Wider Growth DEFENSE Hanwha TRADE successfully acquired a new customer ● Operation of mining services in Australia Corporation on the basis of recently acquired local ● Operation of mining services in Indonesia mining services business. The Division ● Export of explosives plant to Vietnam also continues to win additional mining ● Mining services in Latin America (in the planning stage) services in Indonesia, advancing its position in the international market. MACHINERY Major Results The Explosives Division built four global networks including those in Indonesia and Singapore. This was achieved by establishing subsidiaries in Australia and Chile, which advanced the Division into the mining service business in Australia as Business Highlights well as Central and South America. That said, the Division has been accelerating its overseas expansion after acquiring a in 2017 local mining service company in Australia. It also took steps to maximize its revenues Hanwha Corporation has four business divisions: by strengthening its domestic business explosives, defense, trade, and machinery. All of them are committed to helping to build foundations. This involved launching a a happier and healthier future for everyone. range of new products, such as electronic detonators, and continuously expanding the business of raw materials for explosives and applications. 006 Business Highlights 2018 ANNUAL REPORT 007 Defense Trade DEFENSE The Defense Division is continuously Deeper Innovation TRADE Trade Division is concentrating its Deeper Innovation expanding its existing portfolio of effort on businesses such as Petroleum ● Propulsion System ● Establishing stable profit basis through concentrating Improving national precision guided munitions and Developing cutting edge propulsion system, such as dual- Global and Defense that it owns expertise its effort on businesses that it possesses competitive ammunitions, based on its expertise pulse rocket motor and DACS which rapidly improve above its competitors. Additionally, advantage/market leading capability. security with and technology amassed for over mobility and accuracy rate of precision guided munitions. Leading Trade Division is putting its effort in ● Minimizing potential loss though establishment of forty years. As the nation’s leading ● Navigation System establishing stable profit basis by efficient enterprise risk management system and advanced defense defense contractor, it is also Developing various types of integrated navigation system Company reinforcing businesses that it holds reinforcing its risk management capability. including MEMS (Micro Electro Mechanical System), RLG ● Preoccupying strategic markets and securing market enhancing its global competitiveness market leading capability such as Steel/ technology (Ring Laser Gyroscope), FOG (Fiber Optic Gyroscope), etc. leading capability though utilization and concentration of through active advancements into ● Laser Equipment Bearing/Agricultural and exploring new effort onto global network. global markets and partnerships with Developing high energy laser technology for future business model by reinforcing project leading global players. projectile weapons including Laser Range Finder which organizing business such as healthcare Wider Growth can be equipped on ground-based launchers, helicopters, and automation facilities. Furthermore, ● Petroleum/Steel/Industrial Machinery/Merchandise Trade combat fighters, etc. concerning its global network, Trade ● Defense weapons system supply/project business Division is strengthening its network Wider Growth ● Hospital system export business regarding Middle East and network’s profit basis by securing and CIS region ● Pursuing synergy through expansion of interchange expertise in core businesses such as ● Domestic energy plant supply business among four defense units of Hanwha Group in the Petroleum/Defense and consistently ● LPG station operation business areas of R&D, PR & marketing, purchasing, etc. exploring independent business ● Onshore oilfield operation business in California, ● Increasing depth in the business area as an expert of United States opportunities within its strategic precision strike weapon systems through business ● LNG Project in Qatar markets such as China, South East Asia alignment among the affiliates. ● Strengthening competitive advantage in sales in the and Middle East. strategic points including the Middle East and expanding Major Results the range of export products. Major Results Achieved over continuous growth Trade Division has enhanced financial in sales through commencement of profitability by building process of 230mm-class MRL, Chunmoo business, investment business management and increase in export sales and winning new reinforcing capability of diagnosing development business of precision guided business risk and has constructed stable munition and ammunition. profit basis despite of external market fluctuation. Furthermore, we constantly reinforce professional human resource and capabilities of project and tender business for expanding future profit basis. 008 Business Highlights 2018 ANNUAL REPORT Financial Highlights 009 Machinery 2017 2016 2015 MACHINERY The Division has created a range Deeper Innovation of high-value equipment such as ● Thermal Technologies Total engineering industrial machinery and machine We supply thermal equipment systems used in a broad tools through continuous technological range of areas, including steel and automobile solutions provider development with a focus on thermal, manufacturing, displays, and the environment. automation, and precision processing We also provide high-efficiency industrial furnaces and TOTAL ASSETS REVENUE OPERATING PROFIT NET PROFIT technologies. Based on its advanced energy plant facilities by combining energy reduction, vacuum, drive system, and process control technologies. technologies in the aviation business, In addition, we have secured technologies for the the Division is also gaining recognition integrated operation of turn-key thermal equipment 160.2 50.4 2,159 1,311 KRW in trillions KRW in trillions KRW in billions KRW in billions as a leading global player in the areas projects. This involves cell process equipment of aviation auxiliaries and application that is required for the photovoltaic business, components. It is introducing advanced a key operation of the Hanwha Group. ● technologies through continuous Automation Technologies 154.9 47.1 1,686 1,289 Our integrated automation technologies, ranging from (2016) (2016) (2016) (2016) R&D, while helping to improve the design and procurement to installation and post- quality and productivity of domestic management, were instrumental in building the world’s 145.6 41.4 758 121 and overseas companies. first fully-automated tire handling system. We also design (2015) (2015) (2015) (2015) and manufacture automotive powertrain that are the core parts of automobile driving, based on flexible installations and precision assembly technologies. ● Precision Processing Technologies Major Results Our efforts in this field include (1) a 24-hour unmanned The Division enhanced its competitiveness production system that boasts 0.1um ultra-precision in aviation business by establishing control and 5/1,000-level