Cosmax Q4: Stellar China and SEA growth helps firm achieve record-high numbers

10-Mar-2022 - Last updated on 10-Mar-2022 at 02:08 GMT

Cosmax has achieved record-high sales and operating profit figures due to strong performance in China and South East Asia. [Getty Images]

South Korean ODM company Cosmax has achieved record-high sales and operating profit figures due to strong performance in China and South East Asia, which helped to offset a decline in the US.

In the fourth quarter (Q4) of 2021, the company recorded year-on-year sales growth of 19% to KRW421.2bn (U$324m). Operating profit surged by 190% to KRW30.4bn (U$24.7m).

Overall, its consolidated 2021 sales increased by 15% to KRW1.59tn (U$1.29bn) in sales while operating profit recorded an 84% increase to KRW122.6bn (U$99.4m).

“In 2021, Cosmax reaffirmed its competitiveness by achieving record-high sales and operating profit amid difficult market conditions,” said Lee Kyung-soo, chairman of Cosmax, in a statement.

“We have continued organic growth and reinforced strong win-win partnerships with the clients by developing market-leading products and responding actively to online clients.”

In China, the firm’s second-largest market, achieved sales grew 38% to KRW182.8bn (U$148.2m), breaking a quarterly record it attributed to the ‘excellent performance’ of its Shanghai office.

In SEA, sales grew by 47% to KRW15.3bn (U$12.4m) in Q4. This was driven by a 153% increase in sales in Indonesia.

The performance was thanks in part to its strategic partnership with Unilever as well as the growth of online direct-to-consumer brands.

The tremendous growth of the business in Indonesia helped to offset a 29% decline in Thailand, which suffered from production delays as a result of global supply chain issues.

Its home market of Korea, which accounts for more than half of the business, also grew at a steady pace on the back of good performance from major clients, as well as key cosmetic categories such as essences, creams, eye shadows and foundations.

However, in the US, Cosmax saw performance decline by 32% to KRW30.8bn (U$25m) due to the high base from hand sanitiser sales in 4Q20.

“Though the macro-environment still worked as headwinds to our US business, we have developed strategic plans to lay the groundwork for success in the upcoming years,” said Lee.

The company is set to celebrate its 30^th anniversary this year and has lined up plans to achieve its target of KRW3tn (U$2.5bn) in sales in 2022.

In beauty and personal care, Cosmax is eyeing opportunities in customised cosmetics and is set to unveil a smart factory that will be equipped to fulfil personalised beauty requests.

Cosmax is also targeting the rapidly growing pet care market with grooming products as well as food.