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Dentsu reports flat Australian revenues as global profits slump

Dentsu Aegis Network’s Australian revenues were flat as parent Dentsu Inc reported a first quarter profit slump due to the advertising giant’s continuing crack down on employee overwork in its home operations.

The Japanese behemoth claimed efforts to reform its “work environment” caused a 13 percent fall in the company’s operating profits against Q1 last year.

Dentsu CEO Toshihiro Yamamoto: “The operating environment remains challenging.”

In an announcement posted earlier this year, Dentsu said it would undertake “comprehensive reforms” to “eliminate excessive overtime”and create a “better working environment in Japan”.

The changes are being implemented three years after Dentsu was rapped for the death of its employee Matsuri Takahashi, whose suicide was ruled by officials as being caused by ‘karoshi’ – a Japanese term which refers to “death by overwork”.

Nevertheless, the company saw its Q1 revenue rise by 5.7 percent from 2017, a figure helped by new business wins from the group’s international arm, Dentsu Aegis Network.

The Japan operation posted total revenue growth of 1.9 percent, which was attributed to a 23 percent rise in its digital business. Meanwhile, DAN’s digital contribution was said to have grown by 61 percent.

Outside of Japan, the Asia-Pacific markets of China and Australia both fared poorly, posting no organic growth.

Taiwan and Thailand saw more success with up to five percent growth from Q1 last year, while India emerged the strongest regional market with up to 10 percent revenue growth.

DAN chief executive Jerry Buhlmann said: “We have delivered a robust performance in the first quarter.

“Our continued good new business performance demonstrates the strength of our product, talent, and capabilities and supports continued momentum in the business.

“In a fast-changing market, our integrated operating model means we are well-placed to deliver seamless and highly innovative solutions built around our clients’ needs. We remain focused on leading in digital, data, and content to deliver better performance for our clients.”

Dentsu Inc president and chief executive Toshihiro Yamamoto added, “The operating environment remains challenging, yet momentum is with the business.”

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