Cosmax (A192820) Q2 2024 earnings summary

Executive summary

• Consolidated sales reached 551.5 KRW bn in Q2 2024, up 15.1% YoY, with Korea leading growth and Southeast Asia outperforming guidance.

• Leading global ODM specializing in cosmetics, with over 90% of sales from ODM contracts and a diversified client base in 100+ countries.

• Operating profit rose 1.5% YoY to 46.7 KRW bn in Q2 2024, while net income increased 28.9% YoY to 35.3 KRW bn.

• Maintains strong R&D focus, with 25% of employees in research roles and significant investment in innovation and sustainability.

• Expanding into AI-driven personalized beauty platforms and renewable energy, with new business lines showing early revenue and growth potential.

Financial highlights

• Q2 2024 gross profit increased 35.0% YoY to 112.0 KRW bn, with a stable cost ratio at 79.7%.

• 2024 H1 consolidated revenue: ₩1,078.3 billion, down from ₩1,777.5 billion in 2023 H1.

• Operating income for H1 2024: ₩92.2 billion; net income: ₩54.9 billion.

• Cash and equivalents at period end: ₩307.7 billion; total assets: ₩1,883.1 billion.

• SG&A expenses rose 76.8% YoY in Q2 2024, impacting operating leverage.

Outlook and guidance

• Southeast Asia exceeded annual guidance, driven by strong category growth and favorable business conditions.

• Continued focus on global expansion, digital transformation, and personalized beauty solutions.

• Plans for further investment in AI, platform development, and renewable energy to drive future growth.

• Anticipates ongoing market volatility but expects growth in online and personalized product segments.