Gross Profit Rises 11%
Increased Volume from Existing Advertisers... Overseas Business Continues to Grow
Cheil Worldwide achieved a rebound in its first-quarter performance this year, driven by increased volume from existing advertisers, the acquisition of new clients, and the overseas business performance of its subsidiaries.
Cheil Worldwide CI. Provided by Cheil Worldwide
On April 25, Cheil Worldwide announced in a regulatory filing that its consolidated operating profit for the first quarter of this year was provisionally tallied at 58.5 billion KRW, up 7.24% from the same period last year. During the same period, revenue increased by 2.1% to 1.0394 trillion KRW. Gross profit, calculated by subtracting cost of sales from revenue, rose by 11% year-on-year to 433.5 billion KRW.
In the advertising industry, the proportion of outsourcing costs paid to partners such as production companies is significant, so gross profit excluding these costs is considered a key performance indicator. Cheil Worldwide's gross profit saw double-digit growth both at the domestic headquarters and overseas. The headquarters recorded a 13% year-on-year increase in gross profit to 85.9 billion KRW, driven by increased volume from existing advertisers and the acquisition of new clients. Overseas subsidiaries also continued to grow in key regions such as North America, the Middle East, and Central and South America, resulting in a 10% increase in consolidated subsidiaries’ gross profit to 347.6 billion KRW.
In the first quarter, Cheil Worldwide’s business mix by service was 54% digital, 31% BTL (below-the-line advertising), and 15% ATL (above-the-line advertising). Among these, ATL for non-affiliated advertisers in key regions such as Korea and North America grew by 22% compared to the same period last year.
Cheil Worldwide plans to continue its management strategy with the goal of achieving more than 5% annual growth in gross profit and improving profitability this year. The company intends to strengthen its core businesses focused on digital platforms, retail, and data, while also expanding its business areas. In addition, Cheil Worldwide aims to enhance its expertise in sectors such as automotive, healthcare, travel, and food and beverage, and to develop large-scale advertisers.
Furthermore, the company stated that it will focus on improving the profitability of underperforming subsidiaries and will continue to enhance its growth base through investments such as mergers and acquisitions (M&A), while also maintaining shareholder returns.
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