Good morning, and welcome, everyone. This is Jaeha Shin, Executive Vice President of APR.

Thank you for joining our first quarter 2026 earnings call. We sincerely appreciate the continued interest and support from our shareholders and investors.

Today, we will start with the performance review followed by a Q&A session. Please note that our results are preliminary and subject to change during the audit process.

Furthermore, any forward-looking statement reflects our current outlook and may be impacted by market volatility. With that, let's review our results for the first quarter of 2026.

Please turn to page 3, quarterly revenue trends. In the first quarter of 2026, APR recorded consolidated revenue of 593 billion won, achieving another record-high quarterly performance.

While the first quarter is typically considered seasonally slower period, we continue to see strong demand and growing brand awareness across global markets. As a result, revenue surpassed the previous quarter, reaching nearly 600 billion won, marking a new quarterly high.

This quarter demonstrated our ability to overcome seasonality through sustained demand, with growth momentum broadening across regions such as Europe, Southeast Asia, and Latin America, leading to another phase of record growth. Next, please turn to page 4 for our first quarter results.

In the first quarter of 2026, APR once again delivered record-high quarterly revenue and operating profit. Revenue increased 123% year-over-year to 593 billion won, while operating profit increased 174% to 152 billion won.

Our operating margin reached 25.7%, up 4.8 percentage points from a year earlier. As a note, APR has early adopted IFRS 18 starting from 2026.

For comparability, the prior periods' financial information in this presentation have been restated on the same basis. Please note that some restated figures may differ from our previously disclosed materials.

Next, please turn to page 5 for our revenue breakdown by business division. Starting with the Cosmetic Division, revenue reached 453 billion won, up 174% year-over-year.

Since the first quarter of 2025, this division has delivered triple-digit growth for five consecutive quarters, surpassing 450 billion won in quarterly revenue and once again setting a new all-time high. The Cosmetic Division is also building a more balanced growth structure with sales no longer concentrated in only a few products.

All-the-hero products, such as the Zero Pore Pad, continue to perform strongly, while newer products are also becoming key growth drivers, supporting broad-based growth across multiple SKUs. This trend is also reflected in our PDRN product line.

As global awareness continue to expand, cumulative sales of PDRN products surpassed 50 million units in February. Moving on to the Home Beauty Device Division, revenue reached 133 billion won, increased 46% year-over-year.

Demand remained solid in key markets, while expanded regions and channels supported steady growth in new markets, leading to another record-high quarterly results. In the first quarter, we also launched Booster Pro X2, the next-generation model of our flagship device Booster Pro.

With upgraded performance and newly added mode, it further enhanced both the technology and the user experience of our device lineup. Lastly, revenue from the Others Division declined 20% year-over-year to 8 billion won, mainly due to the reduced contribution from non-core businesses.

Please turn to page 6, first quarter results by regions. In the first quarter of 2026, overseas revenue reached 528 billion won, representing an 180% increase year-over-year.

Since the second quarter of 2024, our overseas revenue has reached a new quarterly high for seven consecutive quarters. The overseas sales mix also increased significantly, rising from 71% to 89% this quarter.

The growth, led by the US, continued to expand globally, with the US and others region together accounting for 74% of total revenue. We will provide further regional details on the next page.

Please turn to page 7 for the regional revenue details in the first quarter of 2026. Despite the usual seasonal slowdown in the first quarter, APR continued to deliver strong growth as awareness of both our products and our brand expanded across global markets.

At the same time, we strengthened our global competitiveness by broadening our bestseller lineup and expanding our sales channels in line with rapidly growing demand. Let me walk you through the performance by region.

Starting with Korea, revenue reached 65 billion won. The domestic business recorded negative growth, mainly due to the reduced contribution from non-core business division.

In the United States, revenue reached 249 billion won, representing a 251% increase from a year earlier. Our bestseller portfolio continued to expand, while demand remained solid across online channels.

This is also reflected in the gradual increase in Medicube's market share across key channels. On the offline side, following our entry into the Ulta Beauty in August 2025, we further accelerated expansion by launching in Target in April this year.

Going forward, we plan to further strengthen our position in online channels, while also increasing brand visibility and diversifying our growth base through broader online expansion. In Japan, revenue reached 59 billion won, up 101% year-over-year.

Demand remained solid, resulting in more than a doubling of revenue from a year earlier. We also saw both online and offline channels grow together, with synergies between the two channels continuing to expand.

In Greater China, revenue reached 31 billion won, increased 8% year-over-year. Lastly, in Others regions, revenue reached 190 billion won, representing 216% growth year-over-year.

After surpassing 100 billion won in quarterly revenue for the first time in the fourth quarter of last year, demand continued to expand across global markets, leading to another quarter of very strong growth. Please refer to page 8 for our summarized consolidated financial statements.

This final summary is provided for the reference purposes only. This concludes the APR's earnings call for the first quarter of 2026.

We will now move on to the Q&A session. Thank you.

Good morning. Congratulations on the strong results.

I have two questions. First, the first quarter result was really good, and I wonder if you will update the guidance.

The driver should be from the United States and Europe. If you have any detailed figures, please share it with us.

Second, going forward to the second quarter, Costco and Walmart will have your products? What is your expectations regarding revenue by quarters and by years?

Due to the geopolitical risks, there might be some increase in costs, and can you please provide colors on that?

Regarding guidance and the upward in guidance, we don't really plan to provide a upward estimation in the guidance, but the first quarter surpassed our guidance. This is my personal idea.

We believe that we will reach a made a 2 trillion won in revenue, and we're very active in our businesses. As you said, in Europe and in the United States, we have our own targets, but we cannot really disclose a specific targets in revenue for those two regions, but maybe in separate IR sessions, we can provide the numbers.

This is not an official release, but according to Bloomberg, actually we shared information with the Bloomberg, and we plan to enter Costco and Walmart. We will, but a specific schedules will be announced later, but what we can tell you at this moment is that going through second and third quarters, we will enter those two markets, the Walmart and Costco.

Regarding the targets, yearly targets and quarterly targets by channels are not yet set. Like I said, offline sales mix in the United States have been remaining at 2% 20%.

Regarding the impact of the Middle East issue, of course raw material prices have been surging, and with our suppliers, we have been discussing how we can calm down the impact. We are very closely working together with our suppliers, but there should be some changes in costs, but how many percentages will be increased are not really estimated yet, but it shouldn't be that large.

The thing that we are concerned about is logistics, because last quarter, logistics cost has increased a lot. There should be two factors behind the large increase in logistics.

As you understand, sea freight is not really going smoothly, especially for the long distance, like to the United States and Europe. The freight cost has increased a lot, plus the portion of the air freight is quite high, and coming into this year, the portion of air freight has been increasing even further.

The cost of air freight will make an impact, but to reduce air freight and to make logistics cost more efficient, under the circumstance of the revenue increase, the supply chain should be stabilized, for the product, our supply should be also stabilized. These issues are being resolved at the moment, but at the same time, we would like to also tell you that the demand at the global level is increasing, supply becomes short.

This is kind of the repetitive cycle and patterns of the demand and supply from our side. Coming into the latter half of this year, we believe the bottleneck issues will be resolved to large extent, we believe.

Next question, please.

Thank you very much, and I'm really happy to hear all the good news, and I have questions about the European market specifically. Sales by region, you have that information, and you have 70 billion won increase.

I believe that your sales have been recorded this March, but I think the sales from Sephora and other retailers I see are very significant, I'm curious, is that mainly coming from the UK? Also, offline market, I would like to follow up more.

Since you have been expanding in the offline market as well, the execution itself might be different from online market. What is your offline market strategy?

For example, stock management or sales or marketing management, what is your strategy? If you're interested in increasing labor or people, then I would like to know more about this information.

In other regions, including the UK, or across all European markets, I think we still have upside potential, and according to our business strategy, I cannot give you a specific information about other regions at this point of time, and I'd like to give you a color instead. Across all European markets, the UK, [clears throat] for example, in Amazon or TikTok online marketplaces, we are having really significant growth, and we have significant growth in the first quarter, in other regions such as France and Spain, Germany, we're starting to run online markets.

Because of the supply chain issue and because we started selling our product in the UK, I think we have some different market growth. Still, since we started selling our products in the UK, the UK market is very significant, and also B2B market revenues are included in the European markets, and B2B revenues are also significant.

When it comes to offline market strategy, we believe that it is very important, and when it comes to priority, of course, the US and Western or European market expansion would be very important in our strategy. When demand is created, then we can expand into the offline markets.

I believe that we can increase sales in offline markets over the years to come, and in global markets, in order to operate our brands, instead of recruiting in local labor market, we would focus more on communication and design our strategy and help global sales partners to execute sales our brands in the local markets. Next question, please.

Good morning. Thank you for this opportunity to ask a question.

I have three questions. First off, IFRS is applied now, the figures have been changed a little bit.

Before applying the new regulation, the OP inside is 145.6 billion won, but the operating profit is quite large in others, and for the B2B portion, I'm wondering the information, the sales mix of the B2B. Looking at the details of SG&A and marketing and the transportation cost, how much portion of the two are representing?

Before applying IFRS, well, for the number 18 of that standard, and the operating profits are reflected there, and to follow the global standard, we decided to apply it earlier than the regulation set. You mentioned the difference between before and after the IFRS, and well, regarding the revenue, there's no changes, but regarding the foreign currency conversion and so on, there have been some changes.

It is a little hard to disclose much details, but for more details, on May 15, we are going to provide announcement, we are going to share more details on that day. Next...

Yes. My name is Cha Tae-young from the communication team.

Regarding the second number, regarding in other region, you mentioned the proportions of vendors. We have many vendors, it is really hard to break all down, but those vendors we call cross-borders at the global level, and their proportion as of the first quarter is 40%, middle 40%.

Then, regarding the first quarter, you also asked about cost compared to revenue, SG&A 19%, and the commissions 17%, and transportation 7%. That should be the rough figures.

Next question, please.

Hello. I'm happy to hear all the good earnings, and thank you for having me.

I think your earnings in Q1 is very good, and sustainable revenue growth and guidance would be very pleased to hear, and also I'd like to listen to the color in Q2. Also, home beauty device, what is your roadmap?

I'd like to hear an update if you have any.

As for now, I think profitability in Q1 can be sustainable or not, I think it can be sustainable. I cannot give you the specific scope.

However, I believe that profitability can remain. Because in Q1, we were not in the situation to optimize because of the stock shortage and logistics price expenditures, and there were some inefficiency in operating perspective, and in marketing expenses, I believe we have spent similar amount of money QoQ.

However, still profitability remains, and sales increased. Still, we have really good OP margin.

In my opinion, as for now, the OP margin remains healthy and will also remain similar. To give you a color in Q2, I believe we will maintain healthy growth in Q2 as well, because we have seasonal factor, because it will be off-season or low season.

Still, the demand and sales are very good regardless of the seasonality. I believe the sales in Q2 might be similar to Q1 or will edge up a little bit, in my opinion and perspective.

When it comes to home beauty devices, Booster Pro X2 have been launched domestically and in near countries, but still in different countries, old versions are still selling. At the end of the first half of this year, in Europe and the US, this Booster Pro or new version or X2 will be launched.

Recently, there was an announcement, the ultrasonic device. In Korea and in Asian countries, this device will be launched as well.

This will be another factor to our growth. Additionally, aside from these two devices, there will be a couple more devices to be newly launched in the market.

I'll answer next questions. Thank you very much.

Good morning. Thank you for this opportunity to ask a question.

Revenue in Korea has been a little decreasing. You said non-core business.

Are you talking about Nerdy or something else? Second, Cosmetics is really good in revenue, and yes, I can see very clearly Medicube is going well, and the categories is keep expanding, and also the markets are also expanding.

How about Aprilskin? For example, mask pack, face mask pack, and some pack and I'm wondering about Aprilskin performance.

Also, you said you are going to enter some marts in the United States, and a part of selling on Amazon will be displayed in those marts? Thank you.

Regarding domestic businesses, yes, the impact of the fashion division is quite large still. Medicube is increasing both home and abroad, but GlamD and other non-core businesses have decreased albeit slightly.

There has been a change in sales mix, and rather than our own website, we are focusing on Olive Young. The revenue recognition is different between Olive Young and on our own website.

When those products are sold in Olive Young, the revenue numbers might be decreased in accounting. For Booster Pro X2, at the end of first quarter, we launched it, and then we also stopped selling the older version, and that's why the revenue decreased a little bit.

For Aprilskin, as you said, in Korea, Japan, and the rest of the Asian region, tint, which is lip products, has been a major product that has been sold very well, but we have some concerns in Aprilskin because there are not many hero products. We have to diversify our products in Aprilskin business.

At the global level, we are expecting growth YoY, and based on this growth, maybe we can sell those products beyond Asia, expanding the businesses to the United States and European markets. At the moment, we focus on Medicube for those markets as well.

As a SKU strategies, the Amazon and marts products are same, that's what you asked. We cannot really disclose any details, but of course, the demand is expanding from online to offline, and that's why we see an increase in revenue in offline channels this way.

Of course, there are much more revenue coming from online. Top products are well served in displays of the offline market as well.

The channels, the number of channels per se are increasing, but of course, we are going to differentiate the products that we sell by retailers. For example, for certain items, we are preparing Walmart or Ulta Beauty's exclusive products.

To sum it up, at the top picture, we share the SKUs, but by channel basis, we also provide some custom-made products. Next question, please.

Thank you for having me. I have three questions.

First, the US offline markets in Q1, Ulta and Target sales might be recognized, and what is the size of sales from the US? My second question is about you talked about air freights in Q2, I'm curious about the increased expense from air freights.

My last question is about tariffs, especially in the US. I'm curious about the size of duty drawback or tariff refund, and I'm curious about the size in profit, gains and loss.

Let me check this part and get back to you. In Q1, offline market sales recognition, I think the size is not very significant to give you rough information.

I think it is about 10%, and from offline, the sales will gradually increase. The second question was about air freight, right?

The air freight might be different based on the standard of recognition by country or region. However, we spent a lot of money in Q4, and quarterly expense for air freight is about 1- 10 billion Korean won, and I think the cost increased in Q1 as well for air freight.

I believe that we spent about 20 billion Korean won for air freight in Q1, if I'm right. When it comes to air freight cost, I believe that the cost will remain high a little bit in Q1, but it will be a little bit smaller than Q1, and the cost will also decrease in Q3.

When we have enough safety stock through better SCM, then the air freight cost will decrease, we're trying to solve these issues. The impact from tariffs,

I think the amount of tariff refunds, as far as I know, for the confirmed amount is about 20 billion Korean won, and it is not coming from at once. It will be installment, so as soon as in Q2, I think the amount will be recognized from Q2, and the point of time, it's not confirmed yet, and the amount is not confirmed yet either.

We're getting this refund, and starting from Q3, we'll starting to recognize this amount of tariff refund, and for retrospective amount, I think maybe we should wait at the end of this year. I'll take that question.

Thank you very much.

Thank you so much for another opportunity to ask a question. I have a question regarding Amazon in the European market.

Yes, your experiences in the US market for Amazon was very good, and claiming that, when do you expect the online channel contributions to be seen visibly in European Amazon? In European markets, including the UK, Spain, and Germany, is expectedly going well.

Continuing from what I said just now, can you please share with us more details regarding online sales in the European market? Lastly, the size of the markets.

Amazon contribution in the US market is 60%, you said. How about European Amazon market?

Is 60% is pretty much the target for the European Amazon market as well? Thank you.

For your first question, when do we expect the online channels' contribution to sales mix, right, in European market? Yes.

Yes, actually, in the Q1, we've seen the contribution. It's already started coming out.

By quarters over time, the contribution ratio will increase. Even on about monthly basis, we see the increase, and promotional and events and influencers collaborations are strengthened.

From early this year, we set up and we built up the team for European market. Of course, there should be some learning curves of our teams compared to the United States, which is existing market, but we still believe that we will see a better result in the second quarter.

After the UK, France, Germany, Spain, and Italy are the markets that we have high expectations, but it's not necessarily about the second quarter and how much we see an increase in revenue there, because we don't have any data yet, but in the UK market, we've seen a rapid growth, and so based on the learning curve from the UK experiences, maybe we can see an increase in revenue in those other markets, and not only us, but also other K-beauty brands are performing very well in our target markets as well. That is a very good stimulus for us, and also that is really good benchmark as well.

In this call, we cannot really disclose the online market performance. That is our policy, confidentiality policy, but the sales mix of the online-offline, like I said, in the US, online marketplace ratio is higher, but in European markets, out of 28 countries, online marketplaces are running in five only.

We started it from this year, the sales mix of online and offline are 5 to 5, 50-50. We believe that online contributions will increase over time, but at this moment, the ratio is 50 to 50 in online-offline sales mix.

Next question, please.

I think I have heard wrong, and in Q2, the sales guidance or your targets revenue might be similar to Q1 according to your earlier statement, is that right? I think we're expecting Prime Day in Q2, it might not be similar to Q1.

Can you double check this? Also in the US, you have started selling your products in Ulta from last year, and your sales have grown QoQ.

What is the sales in Q1? I'd like to double check.

Also, thank you very much for your answer in advance.

The revenues in Q2 is your question, right? Let me double check.

I said the sales in Q2 might be similar to Q1 or will edge up a little bit in Q2. That's what I mentioned earlier, because Q2 normally is off-season or slow season.

Still, that our operating profit will be healthy. Amazon Prime Day is planned for June, and I believe that it will be late June, it will not be recognized for Q2 sales.

I did not include that promotional day in Q2. That's why I said sales in Q2 might be a little bit smaller to Q1 or edge up a little bit, because I did not include that promotional event.

This is not official guidance, and this is my personal opinion or my perspective to give you a color on the guidance, but I'm still positive for Q2 sales expectation. Sales from Ulta QoQ increased in Q4, and what is it in Q1?

I don't have any numbers right now, and based on channel mix, it is really difficult for me to give you the breakdown by channel, because I don't have a exact data right now. Let me double check it across all offline channels, and if I have any chance for IR call later, then I will give you the exact information.

Thank you very much once again for joining us today out of your busy schedules, and thank you for your attention and interest. I would like to look forward to your attention and interest, and so from now on, we would like to close our conference call.

Thank you very much.