Dentsu reports 'no green shoots' in Australian market as the entire group restructures

Josh McDonnell
By Josh McDonnell | 15 November 2019

Dentsu Inc, the parent company of the Dentsu Aegis Network in Australia, has revealed plans for a company-wide restructure to become a "pure holding company" by 2020.

Dentsu Inc. will shift to a pure holding company structure on January 1, 2020. This has been reported heavily throughout the year, with Dentsu now stating that all other businesses trading under variants of the company name, such as Dentsu Aegis Network, will now fall under the Dentsu name.

At the same time, Dentsu Group Inc. will establish an in-house company, Dentsu Japan Network, to formulate business plans and build the infrastructure for the Groups overall operations in Japan.

To manage international markets, Dentsu Aegis Network will have a centralised HQ, managed out of London.

"People within Dentsu are connected openly across countries and organisations on a global level, bringing together diverse perspectives, and making it a matter of course for innovation to be generated from anyone, anywhere," Dentsu says.

"The aim is to become new Dentsu, that continues to create new value and new businesses by forming flexible teams not only within Dentsu, but also with various external partners."

The news was revealed in conjunction with its Q3 results for FY19, in which the company reported total growth of revenue less cost of sales of 3.3% (constant currency basis) and organic growth of -1.0%.

Internationally however, the company delivered 4.6% growth of revenue less cost of sales (constant currency basis) and -1.0% organic growth.

In the third quarter, the business faced the "toughest comparables of the year" and organic growth was impacted by further declines in APAC, attributed to the Australian and Chinese markets.

In the APAC region (excluding Japan), Dentsu Aegis Network reported -9.7% organic growth in the first nine months of FY2019 and -12.3% in Q3 FY2019.

The company stated "there are no green shoots of recovery in either market", both of which continue to severely impact the regional and group performance.

"Changes have been made to the regional management team, with Ashish Basin promoted to APAC regional CEO from CEO of South Asia previously. The rest of APAC reported a slightly softer performance in the third quarter versus the second quarter," Dentsu says.

Major accounts including Super Retail GroupVirgin AustraliaAsahi Beverages, the AFL and The Good Guys, have all moved their business out of DAN throughout the year.

Despite this, the agency has seen success in both Perth and Adelaide, retaining Cash Converters in WA, while being appointed to the SA Government's media panel.

DAN's media agencies have begun to turn things around in recent months, with Carat retaining two of its larger accounts including L’Oréal, worth $40 million and private health insurers Medibank and AHM, worth $50m.

Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at

Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.

comments powered by Disqus