P&G and L'Oreal's OEM Soars 69.5%
- Chaileedo Press
- Mar 16, 2023
- 4 min read
Intercos specifically mentioned that the size of its direct sales in China is still relatively small. So increasing its market share in China will also be one of its key plans for 2023.
Recently, the leading global supplier and strategic innovation partner to the color cosmetics and skincare industry, Intercos, released its financial results for the year 2022. According to the financial report, the company's net sales were €835.6 million ($886.7 million), up 24% year-on-year. Its net income was €45 million ($47.8 million), a soar of 69.5% year-on-year.
"Our Group’s 2022 results exceeded our expectations, with the key operating and financial indicators at record levels." Renato Semerari, CEO of Intercos, said in the financial report. Such a bright performance by Intercos also reflects the gradual recovery of the overall dynamism of the global colour cosmetics market.
In Intercos's financial results for the past five years, CHAILEEDO found that its performance was not good overall due to the impact of the global pandemic on the colour cosmetics market in the past few years. Its net income was represneted in a downward trend from 2019 to 2021, and even down by almost 30% in 2021.
However, after the IPO in 2021, Intercos starts to achieve significant growth in net income. By 2022, Intercos' results have started to return to growth and are quite impressive. According to the financial report, net sales for 2022 were €835.6 million ($886.7 million), an increase of 24% year-on-year. Its net income was €45 million ($47.8 million), which was still not as good as 2018, but significantly better than the pre-epidemic level.
In fact, last year, all of Intercos segments grew and exceeded their pre-epidemic levels, with double-digit year-on-year growth in the Make Up, Hair & Body. The Skincare segment, although slightly weaker, still maintained positive growth of 2%.
Specifically, Make Up, the largest segment for Intercos, achieved the highest growth, with a clear recovery in the business, up 16% on the pre-epidemic level, especially in North America and Europe, where its key customers, emerging brands and multinational companies, were significant growth drivers.
According to the results, the Make Up segment accounted for 65.5% of Intercos' total revenue, up 3.5 percentage points from last year, with full-year revenue of €547 million ($580 million), up 31% year-on-year. It also achieved a 27% year-on-year increase in the fourth quarter, with revenue of €120 million ($127.3 million).
Its Hair & Body also achieved 24% growth, with full-year revenue of €157 million ($166.6 million). Its growth accelerated in the fourth quarter achieving revenue of €47.9 million ($50.8 million) and a 47% year-on-year growth rate.
However, the overall revenue share of Intercos's Skincare segment declined by 3.4 percentage points compared to 2021 with full-year revenue of €130 million ($138 million), up 2% year-on-year and even negative growth of 3% in the fourth quarter. In this regard, Intercos said that the segment was mainly affected by the contraction of consumption in China in the second half of the year and only achieved more solid growth.
As a leading global company, Intercos's results also reflect to a certain extent the current state of recovery in the market. As far as the financial data is concerned, the mainstay of Intercos's make-up segment revenue comes mostly from emerging brands in Europe and the US. This shows that the global makeup recovery fever has started in Europe and the US, where the epidemic control was relaxed earlier.
According to the financial report, EMEA (Europe, Middle East and Africa) remains the main market for Intercos, accounting for 48.2% of total revenue, with revenue of €402.7 million ($427.3 million) in 2022, up 23% year-on-year. The second largest market, the Americas, had total revenue of €289.2 million ($306.9 million), up 34% year-on-year. In both of these markets, emerging brands and multinational companies were the main drivers of revenue growth.
In contrast, Asia, where China is located, achieved only 10% growth, with full-year revenue of €143.7 million ($152.5 million). However, Intercos mentioned that the decline in China was partially offset by revenue growth in the colour cosmetics segment in Korea, despite poor market feedback in the skincare segment in the region. However, overall, the market recovery in Asia is still not as strong as that in Europe and the US.
In terms of future market expansion, Intercos mentioned in particular that its direct sales in China are still relatively small compared to the overall beauty market. So increasing its market share in China will also be one of its key plans for 2023.
In fact, Intercos is already a service provider and partner for a number of Chinese brands. It is also expanding its cooperation with emerging Chinese brands. Public information shows that Intercos’ Chinese clients include a number of head brands such as Florasis, Perfect Diary, MAOGEPING and PROYA.
In MAOGEPING's recent public prospectus, Intercos Technology (Suzhou Industrial Park) Co., Ltd. is its top-ranked outsourced manufacturer. At the China International Import Expo in 2022, Yatsen also signed a strategic cooperation agreement with Intercos, aiming to develop in-depth cooperation in beauty research. In 2022, Fan Bingbing officially announced her first makeup collection for her own beauty brand, Fan Beauty Secret. She has also chosen Intercos as its provider.
But it is clear that Intercos wants more than that. In its earnings report, Intercos said that it hopes to further increase its share of the Chinese market through the expansion of new Western brands in China as the market recovers.
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