Cheil Worldwide (030000) Q1 2025 earnings summary

Executive summary

• Gross profit increased 10.9% year-over-year to KRW 433.5 billion, driven by expansion in ATL business, digital growth, and new non-Samsung clients.

• Operating profit rose 7.2% year-over-year to KRW 58.5 billion, despite higher SG&A from labor cost investments.

• Net income attributable to owners was KRW 28.3 billion, down 35.5% year-over-year, mainly due to higher non-operating and tax expenses.

• Overseas operations contributed 70.8% of revenue and 80.2% of gross profit, highlighting the global network's importance.

• Digital business maintained double-digit growth, especially in dotcom and commerce segments.

Financial highlights

• Q1 2025 consolidated revenue rose 2.1% year-over-year to KRW 1,039.4 billion; gross profit up to KRW 433.5 billion; operating profit up to KRW 58.5 billion.

• Net income declined from KRW 43.4 billion to KRW 28.0 billion (-35%) due to higher non-operating expenses.

• SG&A expenses rose 12% year-over-year, mainly from increased salaries.

• Operating margin slightly decreased from 13.9% to 13.5%.

• Basic and diluted EPS for Q1 2025: KRW 280, down from KRW 422 in Q1 2024.

Outlook and guidance

• Targeting top-line growth rate of 5%+ year-over-year and improved profitability.

• Plans to expand digital, retail, and data-centered businesses.

• Focus on developing new non-Samsung clients in industries like automobile, healthcare, and travel.

• Digital advertising expected to grow steadily, driven by AI and measurable performance.

• Global ad market growth forecast for 2025 is 6.5%, down from 8.1% in 2024, reflecting macroeconomic uncertainties.