2018 New Year's Message from Chairman Kim

My beloved members of the Hanwha family,

Warm greetings to every Hanwha member around the globe on this joyous New Year filled with hope. Last year, despite macro-environmental business uncertainties, we posted our highest ever revenue and profit in Hanwha Group's history. While some credit is due, in part, to improvements in the external business environment in some industries, the larger credit goes to every Hanwha employee who worked tirelessly together to enable the growth of this company, and allow us to go further.

It’s been twenty years since the Asian financial crisis and the IMF bailout. And while we can all recall hardships and sacrifices during those times, we've also come out of it not only stronger but also transformed. We continue to lead this transformation, but we're grounded in our fundamentals – fundamentals upon which we are building our new future. People are taking notice, we're gaining recognition and raising the prominence of Hanwha in all corners of the world.

We are still facing strong winds of change in an era that is both tumultuous and exciting. The 4th industrial revolution is now upon us, a disruptor of both consumer and industrial markets. To compete in it requires change that is nothing short of revolutionary. To succeed, we need to embrace the immutable truth that "a person who does not think ahead about the distant future is sure to be troubled by worries close at hand (Confucius)." We have to invest in our affiliate companies and help them build the core competencies that can compete at the global level and win ten years from now in future markets. We must do this together.

And together, let us demonstrate the power of Hanwha when it is united and how we are stronger in the face of crisis. Let us show we are not merely weathering the surging waves of change, but riding them and taking advantage of all the opportunities they present, sure to carry us to a bigger world, a better world.

Amidst all changes from the outside, I would like to call upon every Hanwha team member to change ourselves from within. Let us make an enterprise-wide effort to innovate, revamp and optimize so that we may be competitive for the future and become world-class. We cannot do this by merely holding on to what works today or cutting costs and reducing investments. On the contrary, we must be aggressive, implementing strategies that drive changes for future growth and going beyond just closing the gaps between us and our competitors. We must lead and build on the foundation for tomorrow. For this, every Hanwha company must commit to developing sustainable core competencies with which to compete globally. This requires advancing the business structure to developing products and technologies that are not about keeping up, but leading the way. Our goal is to deliver substantial changes and outcomes across the board.

A unit of one may not seem like a lot but its effect can be astounding. One degree between 211℉ and 212℉ is what makes water boil—it is what makes the difference. And so, if innovation could be measured as temperature, at Hanwha, we must raise it by just one degree. This one degree of innovation, effort and persistence by each and every one of you will bring out the potential in yourselves, your teams, and the revolutionary change we seek.

We must also invest in our people and cultivate a culture that can compete globally. The company that succeeds in this age of the 4th industrial revolution will be the one that has the right people. People who can completely change their way of thinking without limits, without boundaries. People who can lead by embracing disruptive innovations. These are the people we need, and our companies must be there to support them. Our companies need to nurture and train experts here and abroad – those who can lead with knowledge and invest in technologies that can fascinate the next generation. We must continue to build a culture of entrepreneurial spirit and communication that is synonymous with the youthful passion we so much value at Hanwha. Between the millennials and the baby boomers of our generations, we can create an effective synergy that will take root and enable us to work better than ever before. Working with speed, working smart, and working safe are not to be just words to be spoken but they must be part of our culture. They are the basic requirements of the digital innovation era and the era beyond; so, let's start by incorporating them into our daily routines.

Lastly, at Hanwha, we must always act with integrity and continue to garner trust, as we go further together. The social and ethical yardstick by which enterprises are measured worldwide is becoming ever more rigorous. We must never compromise our integrity or put our customers' trust in us at risk for the sake of profit or growth. Like a commander on the battlefield who risks his life for the greater good, so must an enterprise do everything it can to keep the trust of its customers. At Hanwha, our loyalty to our customers comes first, before all else.

Only a gain earned fair and square through market competition will be valued. Any act to seek easy gains, for example, by pressuring suppliers for unjustifiable price reductions, will not be tolerated. Profits gained by such means may be disguised as financial gains in the short term but they will never be sustainable in a competitive market. We must always take the right path, however difficult. It must be a path that involves cooperation, a path on which the weak are not taken advantage of but where the benefits are mutual and can help us go further, together.

Dear Hanwha family, the Olympic Winter Games PyeongChang 2018, an event of great national significance, will at last be held in South Korea next month. This is an unprecedented opportunity as the first event of the New Year for South Korea to take center stage before the international community. We at Hanwha should actively take part and contribute in this once-in-a-life-time event. Instead of regarding the Olympics simply as an event organized and hosted by the country, we should look to the Olympic spirit of fair play and to the athletes who practice them. Let us compete as the Olympians do, this year, on our journey to become No. 1, with a fervent drive to innovate, like never before.

I wish you and your families a New Year filled with good health and true happiness.

January 2, 2018

Seung Youn Kim
Chairman
Hanwha Group