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Amorepacific Group Q1 2021 Earnings

Global 2021-04-28
  • Sales increased to KRW 1.3875 trillion (8.5%) and operating profit increased to KRW 197.7 billion (191.1%)

Amorepacific Group recorded KRW 1.3875 trillion in sales (+8.5% Year-on-Year) and KRW 197.7 billion in operating profit (+191.1% Year-on-Year) in 1Q 2021.

Despite the ongoing COVID-19 pandemic, Amorepacific Group has managed to bounce back in Q1 2021. With the high growth of the online channel and its turnaround in the Chinese market, the total sales increased. Operating profit rebounded, driven largely by the strong sales in luxury brands including Sulwhasoo. In total, sales in the beauty (cosmetics) market, excluding daily beauty, were KRW 1.2954 trillion.

The main affiliate Amorepacific recorded KRW 1.2528 trillion in sales (+10.8%) and KRW 176.2 billion (+189.2%) in operating profit. In the Korean market, sales went up by 6.9% to KRW 813.5 billion and operating sales by 44.7% to KRW 125.3 billion, while in overseas market, sales rose to KRW 447.4 billion (+19.6%) and operating profit recorded KRW 52.3 billion turning a profit.

In Korea, the online sales were up by more than 30% and the travel retail channel also showed growth. Channel mix improved and brand portfolio restructured focusing on luxury brand, which contributed to the increased operating profit. Drawing particular attention was the high growth of luxury brands. Sulwhasoo hit growth with intensive strengthening strategy for Concentrated Ginseng Renewing and Timetreasure products, and HERA strengthened its luxury skincare category with the release of Signia Luminesource Radiance Firming Serum. Premium brands also showed over 10% growth in the online channel through concentrated marketing for LANEIGE Radian-C Cream alongside other star products. The launch of influencer collaborating brand Soluderm, and the release of innovative products including Mamonde Probiotics Ceramide Cream and Hanyul Yuja VITA-CTM Serum built up the brand competitiveness, and daily beauty brands including mise-en-scene, LABO-H and Illiyoon with a focus on developing a new growth engine, mostly through their premium hair and body care lineups.

In the overseas markets, Amorepacific turned a profit with sales up 20%. In China, high sales of brands, especially Sulwhasoo on Women's Day (March 8), and the growth of the online channel drove 30% gain in total sales. Sulwhasoo showed strong sales across all ASEAN regions particularly in Thailand and Vietnam, where sales growth was led by Sulwhasoo and LANEIGE. In the North American market, sales in the online channel including Amazon increased, and LANEIGE Lip Treatment Balm made a good showing. In the European market, innisfree entered Sephora seeing Amorepacific gain momentum for sales growth, mostly through multi-brand shops.

Major affiliates achieved an overall operating profit growth with efficient channel management and improvement of the overall profit structure. innisfree reported a significant rise of operating profit through offline channel restructuring and an online-focused sales strategy. Though sales went down to KRW 89 billion (-17.2%), operating profit increased to KRW 95 billion (+88.2%). AESTURA recorded sales growth of 23.7% to KRW 29.7 billion driven by the high growth of its star products including Atobarrier and recorded operating profit growth of 205.9% to 5 billion. ETUDE posted sales of KRW 28.1 billion (-18.7%) with a new travel retail and offline channel strategy and thus managed to reduce its deficit as the fixed cost decreased after the closure of some of its directly managed shops. For eSpoir, the decline in sales resulted in sales of KRW 12.5 billion (-9.1%) and increased marketing expenses led to turn a loss. AMOS PROFESSIONAL scaled down its travel retail channel to focus more on salons and as a result, sales reached KRW 17 billion (-8.8%) and operating profit was KRW 4.2 billion (-4.4%). OSULLOC successfully made a turnaround with sales of KRW 16.6 billion (+31.2%) and operating profit of 17 billion with increased online sales, particularly of its gift set.

This year, Amorepacific plans to push forward with its three business strategies: strong brand, digital transformation, and business fundamentals innovation. It will continue to explore the unique value of its brands and develop Engine Products as a response to the demand of the times while working more closely with Korean and international digital platforms to enhance its online presence. Furthermore, it will revamp its structure and fundamental position, and improve profitability with potential engines for its future growth including inner-beauty products and dermocosmetics.

[Amorepacific Group Q1 2021 Earnings] (Unit: KRW 100 million / Growth: YoY growth rate)

[Amorepacific Group Q1 2021 Earnings]
Category Q1 2020 Q1 2021 Growth (YoY)
Sales 12,793 13,875 +8.5%
679 1,977 +191.1%

[Q1 2021 Earnings of Major Beauty Affiliates] (Unit: KRW 100 million / Growth: YoY growth rate)

[Q1 2021 Earnings of Major Beauty Affiliates]
Category Total Korean International
Sales 12,528 +10.8% 8,135 +6.9% 4,474 +19.6%
1,762 +189.2% 1,253 +44.7% 523 Turned a profit

[Q1 2021 Earnings of Other Affiliates] (Unit: KRW 100 million / Growth: YoY growth rate)

[Q1 2021 Earnings of Other Affiliates]
Affiliate innisfree AESTURA ETUDE HOSUE
Sales 890 -17.2% 297 +23.7% 281 -18.7%
95 +88.2% 50 +205.9% -5 Deficit reduced
Sales 125 -9.1% 170 -8.8% 166 +31.2%
-3 Turned a loss 42 -4.4% 17 Turned a profit