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Dentsu announces review of group’s structure as 2Q revenues improve

Dentsu Aegis Network’s Australian operations saw a second quarter recovery after a flat start to the year, the Japanese ad giant has reported in its second quarter results release on Friday.

Along with the financial results, the company also announced a review of its structure which  Dentsu president & CEO, Toshihiro Yamamoto, said would align the group with “the demands of a fast-changing business environment and rapidly evolving client needs.”

Dentsu president & CEO, Toshihiro Yamamoto has announced a review of the group’s structure

In the financial figures, Dentsu said its global operations had seen organic growth of 5.9% over the second quarter of 2018, however underlying profit had declined 1.8% as the company invests in shared service platforms for the group’s operations.

For the quarter Dentsu recorded group revenues of ¥239.5bn, up 11.6% up on the previous year. EBITDA was up 15% to ¥32.8bn. The company’s global operations outside Japan, the Dentsu Aegis Network, recorded organic growth of 4.5% for the quarter.

In the Asia Pacific region, Dentsu Aegis Network reported 0.8% for the quarter, up from the previous period’s flat result with Australia delivering a ‘strong result’.

During the second quarter, Dentsu owned MKTG extended its relationship with the Football Federation of Australia and DentsuX opened a Sydney office to manage the local aspects of the Jaguar Land Rover global account.

Elsewhere in APAC, China remained problematic while India posted double digit organic growth in the second quarter. Singapore also saw a major restructure during the quarter.

Yamamoto, said in a statement: “In Q2 FY2018, Dentsu Group delivered the fourth consecutive quarter of improving growth.

“We continue to build our own momentum in a market which remains challenging. The digital and technological revolution that our clients are facing continues to provide enormous opportunity for the Dentsu Group, and we are well positioned to take advantage of the opportunities that a fast-changing market provides.

“Flexible thinking and creativity remain at our core as we innovate across the marketing mix and deliver long-term value for our clients. 2017 and 2018 have seen internal investment for both Dentsu in Japan and our international business, Dentsu Aegis Network.

“Investments have left the Group in a stronger position, more efficient and more streamlined. By leveraging our enhanced infrastructure, we intend to grow the businesses in 2019 and 2020. At the same time, for the Dentsu Group, the term marks a vital phase for the transformation of our entire Group businesses toward 2020 and beyond.

“This transformation is essential if we are to realize sustainable growth beyond 2021 in a rapidly changing society. In line with this direction, we today announced the next stage in the evolution of the Dentsu Group.

“We have begun to make and analysis of the Group’s holding structure going forward, the aim of which is to ensure that Dentsu Group’s governance and organization is fit for purpose, aligned with the demands of a fast-changing business environment and rapidly evolving client needs. We remain upbeat and optimistic about the prospects for Dentsu Group in 2018 and beyond.”

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