Dentsu hit by revenue slide outside Japan

Chris Pash
By Chris Pash | 15 May 2024
Credit: Diana Polekhina via Unsplash

Denstu posted continuing falls in revenue, dragged down by an underperforming international business, but with home base Japan reporting growth.

March quarter organic growth was down 3.7% as the global advertising group restructures.

The result was in line with internal forecasts and the company was on track to deliver about 1% organic growth for the full year. 

The company said recovery was weighted to the second half of the year, with new client wins and an easing of existing “headwinds”. 

The result lags other global advertising groups. IPG  posted 1.3% organic growth in net revenue  for the March quarter, Havas 2%, Omnicom 4%,  Publicis Groupe  5.3% and WPP reported like-for-like revenue less pass-through costs down 1.6%.

Dentsu has been shedding staff and reorganising, freezing hiring, cutting external spending and reducing travel and entertainment costs.

However, Japan organic growth was 2.4% in the March quarter, ahead of expectations, with a recovery in advertising, double-digit growth in Internet media and a "healthy" TV spot market. 

“The Japanese market remains strong with a continued recovery in advertising and improved client pitch win rates,” the company said.

The Americas was down -6.6%, EMEA -9.4% and APAC -7.1%, in line with expectations with improvements in some markets, including China.  

The Australia business, which has seen a recent round of redundancies, is shown with “less than” negative 10% growth in the March quarter. 

Dentsu in February said it was going to rebuild its core business in Australia, following more negative growth numbers.

But the company sees better results ahead.

“Our confidence comes from a stronger outlook in the second half of the year,” said CEO Hiroshi Igarashi.

“The group will benefit from momentum in client wins, yet to impact revenues, from cycling out of accounts lost in 2023 and a significant easing of comparables. 

“We believe the future of our industry is driven by client demands for greater integration of services. 

“Clients are searching for a marketing transformation partner that can deliver true integration of media, dynamic content and data insights via solutions that seamlessly connect brand potential to business impact. 

“This aligns perfectly with our strategy of growing our clients’ businesses through integrated growth solutions.  Our promise to clients is that we are innovating to impact. 

“By simplifying and integrating our offerings into an ecosystem which makes sense to clients, we can continue to push the boundaries of what’s possible through experience and business transformation.”

dentsu march quarter 2024 from results announcement

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