"Choco Pie and Dr. You Popular" Orion Achieves Record Q3 Performance... Leaps Toward Becoming a Global Food Company

Sales of 597.4 Billion KRW, Operating Profit of 107.8 Billion KRW... 12.7% and 6% Increase
Global-Level Profitability Through Efficiency and Profit-Focused Management

[Asia Economy Reporter Lee Seon-ae] Orion Group announced on the 9th that its business company Orion recorded consolidated sales of 597.4 billion KRW and operating profit of 107.8 billion KRW in the third quarter of 2020. This once again surpassed last year's record, which was the highest performance in the third quarter since the company's founding.

Compared to the same period last year, sales grew by 12.7% and operating profit by 6.0%. Despite the difficult global economic situation due to the novel coronavirus disease (COVID-19), global subsidiaries including those in Korea, China, Vietnam, and Russia achieved solid growth, laying the foundation for sustained growth. In particular, for China and Vietnam, while the first and fourth quarters are heavily influenced by the 'Seol' (Lunar New Year) season, the third quarter reflects pure growth, making it even more meaningful.

Orion Group's continuous focus on efficiency and profit-centered management has shone through, maintaining a global food company-level operating profit margin of 18%. All subsidiaries in China, Vietnam, and Russia achieved operating profit margins exceeding 19%, steadily conducting business in the global market.

The China subsidiary saw sales grow by 14.4% and operating profit by 1.6% compared to the same period last year. The launch of Choco Pie Strawberry and Chalc Choco Pie in the first half drove performance, with Choco Pie sales increasing by 43% year-on-year. ‘Maigumi’ (Guozi Guozi), which grew by 31% year-on-year, and Tao Kae Noi’s successful market entry with its seaweed snacks also supported the growth trend. This year's most anticipated products, ‘Dr. You Protein Bar’ (Dr. You Protein Nut Bar) and ‘Dr. You Energy Bar’ (Dr. You Energy Nut Bar), are actively pioneering the nutrition bar market in China. Expansion of 3rd and 4th tier TT channels for securing shelf space and product display also progressed smoothly. However, operating profit growth was limited due to promotions during the initial launch of nut bars (protein bars, energy bars) and rising costs of key raw materials such as potato flakes.

In the fourth quarter, coinciding with the peak pie season in winter, Orion plans to strengthen promotion and marketing of major pie products. Additionally, it will exhibit Dr. You Protein Bar, Energy Bar, and ‘Orion Jeju Yongamcheon’ (Haoriyou Longyanquan) at China’s largest ‘International Import Expo’ to expand sales channels targeting small and medium-sized retailers and consumer contact point promotions.

The Vietnam subsidiary recorded sales growth of 18.2% and operating profit growth of 23.2% year-on-year. Efficient sales and marketing activities utilizing online media advertising, along with rapid growth in new categories such as rice snacks and mass-produced bread, led to double-digit growth in both sales and operating profit. The rice snack ‘An’ (An, 安), popular locally in Vietnam, successfully launched a new katsuo-bushi flavor in September, achieving approximately 7 billion KRW in sales in the third quarter. The mass-produced bread ‘C'est Bon’ also established itself as a breakfast substitute, with third-quarter sales exceeding 4 billion KRW.

In the fourth quarter, Orion plans to continue the high growth trend with new pie and snack products such as ‘Choco Pie Yogurt’ and ‘Poca Chip (Osta) Egg Yolk’ launched in the third quarter, while further strengthening sales activities targeting convenience stores and chain stores.

The Russia subsidiary saw steady growth in Choco Pie and biscuit product lines, with sales increasing by 16.1% and operating profit by 46.2% year-on-year. Choco Pies filled with jams such as raspberry, cherry, blackcurrant, and mango performed well, leading the pie category to grow by 18%, maintaining double-digit growth. In the fourth quarter, Orion plans to actively launch new products tailored to local consumer tastes and test the biscuit lineup for market penetration.

The Korea subsidiary recorded sales growth of 6.4% and operating profit growth of 2.7% year-on-year. This was due to maximizing sales and profits through thorough data-driven management of product production and inventory control within channels, as well as actively responding to changed consumer behaviors such as bulk purchases online amid the COVID-19 situation. Notably, recently launched products like ‘Choco Pie Banana’ and ‘Dr. You Drink Protein’ consecutively became hits, driving growth.

In the fourth quarter, Orion plans to aggressively launch new products with new forms and flavors in categories such as snacks, biscuits, and jelly to drive growth, while laying the foundation for the beverage business with products like ‘Orion Jeju Yongamsu’ and ‘Dr. You Drink’. The group’s new growth engine, the bio business, will also proceed with establishing a joint venture in China and discovering excellent domestic bio companies.

An Orion official said, “Despite the difficult situation caused by COVID-19, all global subsidiaries achieved growth in sales and operating profit through aggressive new product launches, pioneering new categories, and efficiency- and profit-centered management. We will continue to lead the market by introducing new products and actively promote three major new businesses?convenient meal replacements, beverages, and bio?to make a second leap forward as a global food and healthcare company.”

This content was produced with the assistance of AI translation services.