Attain the largest 3Q sales and operating profit 2018-10-31

- Rental sales at home and abroad amounted to 451 thousand units, the largest quarterly record
- The largest sales and operating profit from Malaysia subsidiary
- Plan to further enhance sales competence and overseas business in 4Q

Coway announced that it achieved the largest 3Q sales and operating profit. Sales and operating profit increased 6.4% and 5% year-on-year to KRW 669.8 billion and KRW 130.4 billion, respectively, in 3Q 2018 on a consolidated basis of K-IFRS.

The outstanding operating performance was mainly attributable to the largest rental sales at home and abroad, soaring growth in overseas business, and solid growth of mattress rental sales.

▲ The Largest Rental Sales at Home and Abroad in 3Q
Rental unit sales at home and abroad amounted to 451 thousand, an increase of 13.1% year-on-year, the largest among 3Q records. Particularly, overseas rental unit sales rose by 59.5% to 129 thousand. Accumulated rental unit sales as of 3Q also increased 9.9% to 1.42 million, a record high.

Outstanding operating performance in the domestic business resulted mainly from not only solid sales growth of existing products such as water purifier, air purifier, and mattress but also the increase of rental accounts backed by the launch of FWSS. Soaring operating performance in overseas business depends on continuous sales growth of Malaysia subsidiary and US subsidiary.

The number of net rental account adds reached 145 thousand, an increase of 99.8% year-on-year, attributable to rental sales growth at home and abroad and total number of accounts surpassed 6.88 million – 5.85 million in Korea and 1.03 million in the world. Especially, the number of accounts from overseas subsidiaries first exceeded one million. Coway expects the number of accounts to be reached at 7.11 million within this year.

▲ Soaring Growth in Overseas Business
Overseas sales increased 33.8% from the previous year to KRW 137.7 billion on the strength of the launch of new products, business expansion of overseas subsidiaries, and diversification of local sales channels.

Particularly, Malaysia subsidiary and US subsidiary continued robust sales growth. Sales of Malaysia subsidiary in 3Q stood at KRW 92.3 billion, an increase of 67.8% year-on-year, the highest on a quarterly basis.

Operating profit was KRW 17.0 billion, the largest ever. The number of accounts also increased 48.6% from the previous year to 894 thousand, nearly reaching one million which is the target of this year. Sales of US subsidiary jumped 35.5% year-on-year to KRW 21.1 billion due to the growth of door-to-door sales and fast-selling air purifiers. The number of accounts at US subsidiary also increased 3.4% from the previous year to 113 thousand.

▲ Solid Growth of Mattress Rental Sales
Mattress rental sales in 3Q was 38 thousand units, an increase of 3.5% year-on-year, recording the highest among 3Q results. The number of accounts in mattress rental sales increased 18.7% to 415 thousand.

▲ Aim to Continue Growth in 4Q
To maintain solid growth in 4Q, Coway intends to focus on enhancing fee combination system aimed at increasing product sales, expanding sales of air purifiers and FWSS, promoting B2B and B2G transactions. As for overseas business, Coway will make efforts to explore new markets in Southeast Asia where the success of Malaysia subsidiary can be transplanted.

Jae-ho Lee, the CFO of Coway, said, “In 3Q, we achieved outstanding operating performance backed by unwavering growth of health appliance sector in Korea and major overseas subsidiaries. We will focus on increasing product sales and boosting business expansion of overseas subsidiaries to maintain upward trend in operating performance in 4Q as well.”
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