Cheil Worldwide Reports Q3 Operating Profit of 95.6 Billion KRW, Up 2% YoY

"Digital Business, Expansion of Non-Affiliated Advertisers"

Cheil Worldwide announced on the 31st that its consolidated operating profit for the third quarter of this year reached 95.6 billion KRW, a 2% increase compared to the same period last year. Gross profit was 428.5 billion KRW, up 7% from the same period last year.

Although gross profit increased by 7% compared to last year, operating profit grew by only 2% due to an 8% rise in selling and administrative expenses driven by investments in digital-focused personnel. Gross profit refers to the amount remaining after deducting the cost of sales from revenue. In the advertising industry, since production tends to increase in certain quarters, performance is measured based on gross profit rather than revenue.

Cheil Worldwide explained that its growth was driven by the non-media advertising (BTL) business, which includes digital, events, and promotions. Looking at the company's business composition, digital business accounted for 55%, BTL for 30%, and traditional advertising (ATL) for 15%. Compared to last year, the proportion of BTL business increased while ATL decreased. The BTL business was boosted by offline experience events for the Olympics and new products. The digital sector grew centered on content production services while operating platforms such as dot-com and e-commerce.

Cheil Worldwide also expanded its client base beyond Samsung affiliates. Currently, the company counts Dongseo Food, KT, Netflix, and Shinhan Financial Group as major clients domestically. In the North American market, leveraging expertise in pharmaceuticals and biotechnology, it serves clients such as Biogen and Philip Morris. In the Chinese market, where it has automotive expertise, BMW and FAW-Volkswagen are among its clients.

Along with the earnings announcement, Cheil Worldwide emphasized its annual management goal to grow gross profit by more than 5% on a yearly basis. Regarding profitability, the company aims to maintain last year’s level despite increased labor and selling expenses.

A Cheil Worldwide representative stated, "We will minimize the impact of external uncertainties and strengthen a sustainable business foundation by expanding our digital business and non-affiliated clients," adding, "We will also continuously consider investments such as mergers and acquisitions."

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