Russian Market Drives Growth... Orion Posts Solid Q3 Results

Sales Reach 828.9 Billion Won, Operating Profit 137.9 Billion Won
Up 7% and 1% Year-on-Year, Respectively
Double-Digit Growth in Sales for Russian Subsidiary

Orion continued its growth in the third quarter despite the global economic slowdown, driven by the strong performance of its Russian subsidiary and expanded exports from its Korean subsidiary.

On November 13, Orion announced through a public disclosure that its consolidated sales for the third quarter of this year reached 828.9 billion won, a 7% increase compared to the same period last year, while operating profit rose by 0.6% to 137.9 billion won. For the cumulative period from January to September, sales grew by 7.4% to 2.4079 trillion won, and operating profit increased by 1.8% to 390.7 billion won. Overseas sales accounted for 68.8% of the total.

Despite continued challenges such as the global economic slowdown and weakened consumer sentiment in the third quarter, Orion's strategy of strengthening product competitiveness and focusing on growth channels proved effective, resulting in increased sales. In particular, the Russian subsidiary continued its double-digit high growth, driving overall performance. The establishment of a multi-product system, including Choco Pie Watermelon, Fresh Pie, and Almeni Jelly, is rapidly boosting local demand, which is expected to further accelerate future sales growth. The Korean subsidiary contributed to the increase in sales through expanded exports of Kkobuk Chip, Cham Bungeoppang, and Yegam. Although the rising unit prices of key raw materials such as cacao, oils, and almonds increased manufacturing costs, improvements in production efficiency and cost optimization enabled Orion to defend its profitability.

By subsidiary, the Korean unit posted sales of 282.6 billion won, up 4.3% year-on-year, while operating profit decreased by 3.8% to 42.1 billion won. Despite sluggish domestic consumption and continued store closures, growth was driven by increased domestic demand for low-sugar granola bars and expanded exports to the Americas due to the rising popularity of 'K-snacks.' Operating profit saw only a minimal decline, thanks to enhanced production and operational efficiency and strengthened cost management, despite a one-off cost of 5.4 billion won related to the voluntary recall of Cham Bungeoppang.

In the fourth quarter, Orion plans to expand production lines to increase the supply of high-demand products such as pies, biscuits, and granola. The company will also continue to build the Jincheon Integrated Center as scheduled, laying the foundation for further expansion in both domestic and international markets. Additionally, Orion will identify new export markets in Africa, the Middle East, and other regions, including the Americas and Europe, and diversify its product portfolio to sustain external growth. Given that high exchange rates are expected to further increase raw material costs, Orion will make every effort to defend profitability.

The Chinese subsidiary achieved sales of 337.3 billion won, up 4.7%, and operating profit of 67 billion won, up 5.4%. Despite sluggish performance in traditional channels such as discount stores, Orion successfully shifted its strategy to focus on high-growth channels like snack shops, convenience stores, and e-commerce. Expanding exclusive products for the rapidly growing snack shop segment particularly contributed to sales growth. Although the prices of key raw materials and marketing costs remained high, improvements in production efficiency and more effective promotions helped drive operating profit back to growth.

In the fourth quarter, Orion will continue to expand exclusive product lines in high-growth channels such as snack shops. The company also plans to rapidly broaden the distribution of the low-sugar Choco Pie, launched in October, to further solidify its leadership in the pie market. In addition, Orion will refine its sales strategies for key accounts in high-purchasing power areas and pre-launch special products targeting gift demand for the Chinese New Year holiday in February next year, aiming to maintain its growth momentum.

The Vietnamese subsidiary recorded sales of 120.5 billion won, a 1% decrease due to sluggish domestic consumption and exchange rate effects, but saw a 1.5% increase in sales volume. Operating profit dropped by 10.7% to 21.3 billion won, as higher raw material costs and intensified competition with global companies in the potato snack segment led to increased marketing expenses aimed at strengthening market dominance.

In the fourth quarter, with the completion of the rice snack production line expansion, a total of 13 lines will be operational and new product launches are planned. Orion expects to secure the top market share in the rice snack segment within the year, following its current leadership in the fresh potato chip market. The company also plans to preempt demand by preparing a diverse range of gift products for the upcoming 'Tet' season, tailored to different channels and price points.

The Russian subsidiary achieved sales of 89.6 billion won, a 44.7% increase, and operating profit of 11.7 billion won, up 26.9%. Focusing on a multi-product strategy, the subsidiary saw increased sales volumes for channel-specific products such as Choco Pie Watermelon and Fresh Pie Passion Fruit, as well as Choco Boy (Choco Songi) and Jelly Boy (Almeni), all contributing to the strong results. With factory utilization rates exceeding 120% due to surging demand, production is being maintained at maximum capacity. Despite rising raw material costs, profit increased significantly in line with sales growth.

In the fourth quarter, Orion will accelerate product diversification and increase supply. The new Bungo (Cham Bungeoppang) product began production in October following the completion of its manufacturing line, and the successful Fresh Pie has expanded its dedicated line to boost capacity. Based on this, Orion plans to further strengthen its market dominance in the rapidly growing pie category. In addition, to meet fast-rising local demand, the company is steadily pushing forward with the construction of a new factory building at the Tver plant, targeting completion by 2027.

The Indian subsidiary recorded sales of 8.4 billion won, a 38.7% increase, marking a significant turning point for growth. In its fifth year in the local market, Orion is expanding shelf presence in traditional retail stores in the northeastern region and sustaining high growth through region-specific sales strategies and the launch of products at the 20-rupee price point.

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