"K-Food Drives Growth" CJ CheilJedang Surpasses 5 Trillion Won in Q3 Sales for the First Time (Comprehensive)

Sales excluding CJ Logistics reach 5.1399 trillion KRW, up 22% YoY
Overseas food sales up 23% and operating profit up 50% due to K-Food boom... Schwans operating profit more than doubles
Bio sales exceed 1.3 trillion KRW in Q3 following Q2

[Asia Economy Reporter Eunmo Koo] CJ CheilJedang continued its growth momentum in the third quarter by recording strong performance, driven by steady growth in its global businesses such as K-Food and bio. Quarterly sales excluding its subsidiary CJ Logistics surpassed 5 trillion KRW for the first time in history.

CJ CheilJedang announced on the 14th through a public disclosure that its consolidated operating profit for the third quarter of this year reached 484.2 billion KRW, an increase of 11.8% compared to the same period last year. Sales during the same period rose 16.9% to 8.0119 trillion KRW. On a separate basis excluding CJ Logistics, operating profit increased 20.0% year-on-year to 386.7 billion KRW, and sales grew 21.7% to 5.1399 trillion KRW.

By business segment, the food business saw sales grow 18.4% year-on-year to 3.0558 trillion KRW, supported by strong overseas sales of the ‘Bibigo’ brand-centered K-Food, and operating profit increased 12.5% to 209.3 billion KRW. The food business surpassed 3 trillion KRW in quarterly sales and 200 billion KRW in operating profit for the first time ever.

The overseas business led the improvement in performance. Expansion continued in major business countries including the United States, focusing on Bibigo brand Global Strategic Products (GSP) such as dumplings, chicken, processed rice, rolls, K-sauces, kimchi, and seaweed. Profitability significantly improved due to increased sales of high-margin core product groups and cost structure improvements. In particular, Schwan’s saw operating profit more than double thanks to productivity improvements, promotion efficiency, and fixed cost reductions driven by sales growth.

By country, K-Food expanded its territory not only in the U.S., where GSP sales increased by more than 40%, but also in Europe and China, where business competitiveness has recently been actively strengthened. In the U.S., dumpling sales in the grocery channel rose 62%, pushing market share beyond 44% and firmly securing the top position. Frozen ready meals sales increased by 81%, and frozen pizza sales grew by 44%. In Europe and China, K-Food influence expanded centered on the flagship product, dumplings.

Meanwhile, domestic food sales recorded 1.6736 trillion KRW, a 15.1% increase from the previous year. The company continuously introduced products with high quality and cost-effectiveness comparable to dining out, in line with changing consumer trends, and expanded the distribution share of growth channels such as online, B2B, and convenience stores. Additionally, efforts to reduce costs responded comprehensively to rising expenses and raw material costs.

The bio business segment, focused on green bio such as amino acids and seasoning materials, posted sales of 1.3094 trillion KRW, up 25.4% year-on-year, surpassing 1.3 trillion KRW for the second consecutive quarter. Operating profit rose 25.8% to 160.3 billion KRW despite the burden of raw material costs.

For the flagship product amino acids, the company continued its growth momentum leveraging market dominance superior to global competitors, and further strengthened its position based on advanced compatible production technologies and excellent locations worldwide. The company also explained that differentiated tech marketing providing both products and solutions simultaneously contributed to the growth of high-margin specialty products.

CJ Feed & Care, an independent feed and livestock corporation, recorded sales of 774.7 billion KRW, up 28.9% from the same period last year, and operating profit of 17.1 billion KRW, an increase of 94.3%. Although profitability stagnated due to cost burdens from rising grain prices for about a year until the last quarter, profitability greatly improved recently as livestock prices in key business countries such as Vietnam and Indonesia turned upward and productivity steadily increased.

CJ CheilJedang plans to continue reducing costs and driving domestic and overseas growth of core products by strengthening purchasing and production capabilities amid expected increased uncertainty in the global economic situation for the time being. In food, the company will focus its capabilities on expanding the global territory of K-Food and improving profitability, while accelerating the development of plant-based foods. In bio, it will strengthen competitiveness in future new growth businesses such as marine biodegradable material PHA and red bio businesses centered on CJ Bioscience.

A CJ CheilJedang official stated, “We will secure structural competitiveness and continue innovative growth through the development of high value-added new products and strengthening new businesses for future preparation, as well as investment in research and development (R&D).”