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Dentsu reports strong global revenue growth with Australia seeing last quarter recovery

Japanese ad giant, Dentsu Group, has reported 5.4% growth in global revenues with the Australian arm showing a strong recovery after a weak start to the year in the company’s 2017 consolidated results.

In a global market described as ‘difficult’ by rival Publicis in its annual report last week, Dentsu reported a 10.8% increase in total group revenues with international operations – the Dentsu Aegis Network – reporting operating profit growth of 3.1% for the year.

Dentsu CEO Pr Toshihiro Yamamoto: “We are upbeat about the prospects for further new business growth in FY2018.”

Those profits though were dragged down by the domestic Japanese arm’s performance that saw an 18.4% fall. Overall, the group reported an operating profit of 137bn Japanese Yen with an EBITDA of 194bn, up 5.4% for the year.

Dentsu’s board put the stronger performance of the international operations down to new wins and the strength of the talent in its media agencies.

APAC’s performance was lacklustre with an organic profit decline of 0.6%, while Australia – where Dentsu operates Carat, Isobar and MKTG – saw a fourth quarter recovery after poor second and third quarters.

Dentsu president and CEO, Toshihiro Yamamoto, said the global operations are looking towards data-driven advertising to drive profits in 2018 with the M1 addressable media platform being rolled out internationally during the year.

“Dentsu Aegis Network continues to invest in data capabilities,” said Yamamoto in the release. “The M1 platform is a key pillar of our data strategy and is the first phase in realizing our vision for all media planning and activation to be people based. FY2018 will see the rollout of the M1 platform outside of the US.

“At Dentsu in Japan, we are committed to accomplishing our work environment reforms for future growth by the end of FY2018.

“Looking ahead, the record year for net new business at Dentsu Aegis Network showcases the strength of our talent and the competitiveness of our product. We are upbeat about the prospects for further new business growth in FY2018. We remain committed to differentiating our product offering and momentum is with the business as we enter FY2018.”

The company is expecting low to mid-single digit organic gross profit growth for Dentsu Aegis next year, forecasting in its network ad spend report that global growth will be 3.6% in 2018 on the back of the Winter Olympics, FIFA World Cup in Russia and US Congressional elections.

 

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