Innocean to invest $370 million in new growth drivers

Innocean Worldwide Inc., the global marketing communications arm of Hyundai Motor Group, will invest 500 billion won ($370 million) for four years until 2026 to bolster its new growth drivers amid rapid changes in the marketing landscape in line with fast digitalization.

The company is expected to earn 220 billion won in operating profit and 1.3 trillion won in gross profit in 2026 with the new investment, Innocean Chief Executive Officer Lee Yong-woo said during the company's investors relations (IR) session on Wednesday.

Innocean raked in 136.9 billion won in operating profit and 765.1 billion won in gross profit in 2022.

The investment will be spent to nurture its new growth engines in content, digital and data and mobility services, Lee said.

“The online advertising market is expanding and content mediums are becoming more diverse,” said Lee. “Against this backdrop, it is important to achieve incremental growth under a clear goal.”  

ACTIVE M&As AND PARTNERSHIPS

To deal with the fast changes in the advertising and marketing industry driven by digitalization, Innocean is seeking active mergers and acquisitions and collaboration to stay competitive.

The Korean marketing and advertising agency is currently considering an acquisition of a major data marketing company in Europe to enhance its digital and data capability so it can take a leap to become a data-driven marketing giant with massive coverage of the region.

“Europe is the next biggest marketing market after North America,” said an official of Innocean. “It is a must to merge with a data-driven marketing agency amid growing demand for digital marketing.”

For its mainstay advertising business, the company is set to enhance collaboration with content production companies, it said.

Innocean in August joined hands with Korean content producer Imaginus to set up a content-producing joint venture studio Studio Abit not only to enhance its mainstay advertising content production but also to create a wide range of commercial entertainment content ranging from series to movies.

It will also venture into the mobility service sector by discovering an electric vehicle-related content value chain.

The company plans to develop a system that will enable an EV to transmit content and collect data. For this, it will actively seek partnerships with its affiliates and outside companies.

In August, Innocean signed a memorandum of understanding with EVSIS, a Korean EV charging platform company, to collaborate in the field of mobility content, advertising and marketing.

The advertising agency aims to rake in 10 billion won in gross profit from this new mobility business in 2026.

It also aims to earn 680 billion won and 610 billion won in gross profit from the content and digital and data businesses, respectively, in the same year.

SHAREHOLDER-FRIENDLY POLICY

Innocean on Wednesday also announced to grant its shareholders bonus shares at a 1:1 ratio as part of its efforts to invigorate its stock trading.  

After the company issues new bonus shares on Nov. 30, its total issued shares will double to 40 million shares.

It set a target to up its earnings per share to 6,700 won by 2026 versus 3,530 won in 2022.

Innocean shares traded down 0.5% at 43,850 won on Friday morning, extending their losses for two straight days.

Write to Mi-Kyoung Lee at capital@hankyung.com

Sookyung Seo edited this article.