Dentsu profits down again
Dentsu has posted its results for the third quarter of the 2023 calendar year, with profits remaining down as the Japanese advertising holding group continues to grapple with reduced client spend.
Reported net revenue was up slightly after taking a fall Q2, with an increase of 1.6% year-on-year (YoY) for ¥279 billion (A$2.86 billion), compared to ¥274 billion (A$2.81) in the corresponding quarter for 2022.
However, the group continued its cost mitigation efforts to counter the impacts of revenue declines, attributing a decline of -6% in organic revenue to weakness in client spend in the technology and finance sectors and project delays in Customer Transformation & Technology (CT&T).
Dentsu’s underlying operating profit was also down -10.4% YoY to ¥37.5 billion (A$384 million), compared to ¥41.9 billion (A$429 million) in Q3 2022.
In the APAC region (excluding Japan), organic revenue decline was down -9.1%, which Dentsu attributed to client loses and reduced project scope in CT&T.
In terms of organic growth, the region recorded an 8% fall, with Australia reported as one of 11 markets to report less than -5% organic growth.
The result in ANZ was attributed to economic certainty and rising inflation, which Dentsu pointed to as the drivers of lower consumer spend and business confidence that resulted in reduced client spend an increased deferrals.
Hiroshi Igarashi, president and CEO of Dentsu Group said: “Our third quarter performance continued to show the impact of the reduced spend from clients in the technology and finance sectors, as well as project delays within Customer Transformation & Technology.
“I and the wider Executive team remain focused on returning the Group to growth. Through One dentsu we are creating a unified global network that combines client centricity with speed, agility and scale ensuring we deliver against our clients’ need for growth. To achieve this vision, we have aligned our leadership structure and talent around our core capabilities and strategic priorities.”
He continued: “As we look forward, our positioning at the convergence of marketing, technology and consulting provides us with a unique opportunity to seamlessly integrate our services to deliver growth solutions for our clients.”
Dentsu has updated its financial guidance for 2023 to the following:
I guess that payrise I was promised in 2018 won’t be coming any time soon 🙁
User ID not verified.
Have your say