Dentsu reports 10.2% growth in APAC (ex Japan) for Q2 2021

Dentsu Group has released its financial results for the second quarter of the year as well as the first half, reporting that Australia and the APAC region experienced double-digit growth in the quarter.

For the June quarter, Dentsu Group reported 15% organic growth, while group revenue less cost of sales was 20% year-on-year to reach JPY218.1 billion.

There was organic growth reported for Dentsu Japan Network (12%) and Dentsu International (17%) following a 2.4% decline for the latter in Q1.

Dentsu Q2 Results 2021 [click to enlarge]

Off the back of the latest figures, Dentsu Group updated its financial forecast, revealing that it now expects high single-digit organic growth for 2021.

Meanwhile, plans to deliver long-held 2022 margin targets of 20% for Dentsu Japan Network and 15% for Dentsu International are now expected to occur a year earlier than expected.

APAC (excluding Japan) reported 3.6% organic growth in the first half of 2021 and 10.2% in the June quarter. That growth was driven by strong results in Australia, Indonesia, South Korea, Singapore and Thailand, Dentsu reported.

Australia’s growth was linked with the expansion of a number of existing client relationships across service lines.

Dentsu H1 Revenue Less Cost Of Sales Per Region [click to enlarge]

Dentsu Group president and CEO, Toshiro Yamamoto, said: “Dentsu Group delivered a strong second-quarter performance, reflecting the growing consumer and client confidence we see across all regions. Underling profit growth continues to be strong, exceeding our expectations, and demonstrates our commitment to our margin targets.

“The second quarter saw a return to acquisitions for the Group with the announcement of an agreement to acquire LiveArea, a global customer experience and commerce agency that will join the Merkle brand within Dentsu International.”

In terms of the half-year results, group organic growth was 4.5% for Dentsu Group, following “a significant rebound in performance as revenues continued to recover across all regions”.

Group underlying operating profit increased by 35.8% (35.9% on a constant currency basis) year-on-year to JPY71.6 billion, and group revenue less cost of sales was JPY440.5 billion, up 5.6% on a constant currency basis.

Dentsu Half Year Results [click to enlarge]

Yamamoto added: “The greatest opportunity for brands today, as they build strategies to re-emerge from the pandemic, is customer experience transformation. Creating competitive differentiation through marketing strategies, supported by data, technology platforms, and analytics is where we see the greatest demand for our services.

“These services also transform our revenue profile, generating a higher level of recurring revenues through ongoing managed services whilst also transforming our ability to deliver services from lower-cost locations.”

“Whilst the future path of the pandemic remains uncertain, our full-year guidance confirms our confidence in the outlook for the second half of FY2021, as well as our ability to meet our medium-term targets by 2024.”


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