What Happened to Doosan Bobcat, a 'A highly profitable company'?... Operating Profits Plummet 50%

[Korea Financial Times, Shin Haeju] Doosan Bobcat (CEO and Vice Chairman Park Sung-chul), known as a profitable affiliate of Doosan Group, is going through a gloomy time this year. The company has increased the number of executives while expanding its business scale, but it is not performing well.

As of the end of September, there were a total of 13 unregistered executives at Doosan Bobcat. Excluding the two overseas workers who did not report their income in Korea, the average annual salary of 11 of them was 436 million won. This is a 47.3% increase from the average annual salary of 296 million won of the seven unregistered executives (nine, including the two overseas expatriates) a year ago.

Doosan Bobcat increased the number of unregistered executives from 9 to 14 this year. Looking at the duties of the people on the executive list this year, they include management consulting, global business strategy, finance, legal and regulatory compliance, and marketing creative director (marketing and CD) for the EMEA region.
Vice President Kim Seong-dae, who has been an advisor to Doosan Bobcat since this year, served as the Chief Financial Officer (CFO) at Oricom, an advertising agency subsidiary of Doosan Corporation, from 2019 to 2023. Managing Director Lee Jun-ho, who is in charge of finance, was in the CFP (Corporate Financing Project) team in charge of M&A at Doosan Corporation until last year, and moved to Doosan Bobcat this year.

Managing Director Park Seong-beom also worked at Doosan Corporation’s legal office and was in charge of compliance monitoring at Doosan Bobcat this year. Managing Director Kim Dae-wang served as the head of the Global Business Development team at Doosan Bobcat last year and was promoted to a new executive this year. Managing Director Park Jeong-won, who served as creative director of marketing for EMEA, was removed from the list of domestic executives in the third quarter of this year as the company switched from overseas expatriate to local corporation hires.

A company official responded to the reason for the increase in executives by saying, “It is to continuously strengthen the headquarters’ capabilities and leadership as the business scale grows and the number of people to manage increases.”


Doosan Bobcat's company size is getting bigger and bigger. The company, which recorded sales of KRW 5.86 trillion and operating profit of KRW 595.3 billion in 2021, grew to sales of KRW 8.63 trillion and operating profit of KRW 1.07 trillion in 2022. Last year, it recorded sales of KRW 9.76 trillion and operating profit of KRW 1.39 trillion. However, this year's performance, which increased the number of executives by five, is on a downward curve. In the first quarter of this year, sales decreased by 4.40% year-on-year to KRW 2.51 trillion, and operating profit decreased by 15.34% to KRW 342.1 billion. In the second quarter, sales and operating profit decreased by 19.95% and 51.03% year-on-year to KRW 2.27 trillion and KRW 242.2 billion, respectively. The decline was even greater in the third quarter. Sales and operating profit decreased by 27.61% and 59.35% year-on-year, respectively, to KRW 1.82 trillion and KRW 128.1 billion.
Doosan Bobcat is a foreign holding company with subsidiaries in North America, Europe, Africa, Asia, and Latin America. As its overseas business is its mainstay, sales of small equipment and industrial vehicles, which are its main products, fell by more than 20% year-on-year due to declining market demand and dealers' inventory adjustments due to high interest rates in the United States.

Doosan Bobcat sells its products through specialized dealers, accounting for 86.9% of its total sales. When the economy is not doing well, dealers purchase less inventory. Portable power sales also decreased by 17.3% year-on-year due to slowing demand caused by falling international oil prices.

By region, sales in North America, which accounts for 74% of Doosan Bobcat sales, decreased by 29% year-on-year due to slowing demand caused by presidential election uncertainty. EMEA and ALAO (Asia, Latin America, Oceania) regions decreased by 28.4% and 15.9%, respectively.

Shin Haeju (hjs0509@fntimes.com)