AMOREPACIFIC (002790) Q2 2024 earnings summary

Executive summary

• Revenue decreased 2.4% year-over-year to 1.01 trillion KRW, while operating profit rose 4.2% to 12.2 billion KRW, and net profit surged 1717.3% to 537.3 billion KRW, driven by non-recurring items.

• Consolidated H1 2024 sales fell 1.3% year-over-year to KRW 2,012.5 billion, with operating profit up 2.0% to KRW 95.3 billion.

• Major subsidiary Amorepacific saw revenue fall 4.3% and operating profit drop 29.5% year-over-year; main subsidiary sales fell 2.3% YoY to KRW 1,816.2 billion, but operating profit increased 9.4% to KRW 76.8 billion.

• COSRX's two-month earnings were consolidated, contributing to overall group results; COSRX became a consolidated subsidiary in April 2024 after increasing stake to 90.2%.

• Domestic business sales declined 2.9% YoY, with operating profit down 14.6%; overseas sales remained flat, with strong growth in North America and EMEA offsetting a 32% drop in China.

Financial highlights

• Group revenue: 1.01 trillion KRW (-2.4% YoY); operating profit: 12.2 billion KRW (+4.2% YoY); net profit: 537.3 billion KRW (+1717.3% YoY).

• H1 2024 consolidated revenue: KRW 2,012.5 billion (down 1.3% YoY); operating profit: KRW 95.3 billion (up 2.0% YoY); net income attributable to controlling interests: KRW 231.9 billion.

• Amorepacific revenue: 904.8 billion KRW (-4.3% YoY); operating profit: 4.2 billion KRW (-29.5% YoY).

• Major subsidiaries: Innisfree revenue -13.4%, Etude -10.3%, Espoir +15.3%, Amos Professional +6.8%, Osulloc +11.8%.

• Operating profit of major subsidiaries up 52% to 7.7 billion KRW; Innisfree turned to profit.

Outlook and guidance

• Overseas business expected to benefit from COSRX consolidation and strong growth in Western regions; focus on strengthening brand competitiveness and expanding global business, especially in North America.

• Continued investment in R&D and digital transformation to drive future growth.

• Commitment to sustainability and climate initiatives, with SBTi approval for 2030/2050 targets.

• Domestic business faces challenges from declining travel retail and new commerce channels.