Cheil Worldwide's Q3 Operating Profit Falls 19.7% YoY to 77 Billion Won
Revenue Falls 12.6% to 1.039 Trillion Won
Impact of Advertisers' Budget Optimization and Won Strength
Additional 140 Billion Won Worth of Shares to Be Bought Back and Retired
Cheil Worldwide's revenue and operating profit both declined in the third quarter of this year, due to major advertisers' efforts to optimize marketing budgets and the won's strength.
Cheil Worldwide disclosed on October 30 that it recorded consolidated revenue of 1.039 trillion won and operating profit of 77 billion won in the third quarter of this year. These figures were down 12.6% and 19.7%, respectively, from the same period a year earlier. Net income fell 29.7% to 45.6 billion won. Gross profit, a key performance indicator in the advertising industry, declined 6.4% year over year to 428.1 billion won.
A Cheil Worldwide official cited "major clients' efforts to optimize marketing budgets and the impact of the won's strength" as the reasons for the decline, adding, "However, we maintained growth at key overseas bases, including in North America and Latin America."
Cheil Worldwide is working to protect its performance by securing non-affiliated advertisers. Non-affiliated advertisers accounted for 29% of gross profit in the third quarter, up 2.2 percentage points from the same period a year earlier. The company secured Amazon Ads, Temasek, Carlsberg, Kakao Commerce, and Subway as new advertisers.
The business mix by service was 55% digital, 29% retail and BTL, and 16% traditional media advertising (ATL).
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The company will also continue its shareholder return policy. Cheil Worldwide retired all treasury shares, equivalent to 12% of its previously issued shares. The shares were valued at 282.8 billion won based on their book value. The company plans to buy back and retire an additional 140 billion won worth of shares by September 2027 and maintain a dividend payout ratio of 60% of consolidated net income.
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