DAN Revenue Drops $1.1 Billion, With Australia’s “Underperformance” Partly To Blame

Japanese ad giant Dentsu Aegis Network has posted a full-year loss of ¥80.89bn ($AU1.1bn) for 2019, with the results “adversely affected by underperformance” in Australia, UK, France, China and Brazil.

Dentsu Group, the parent of DAN, posted an organic revenue drop of one per cent for the full year, while DAN revealed a 1.9 per cent drop for 2019, and four per cent for the fourth quarter.

The financial results also reported a fall in organic growth of 0.7 per cent in EMEA for 2019.

Across the Asia Pacific, organic revenue growth was down 12.3 per cent in Asia Pacific.

Dentsu Aegis said: “The overall regional performance deteriorated in the fourth quarter, impacted by continued challenges in the UK and France.”

DAN also reported a revenue less cost of sales increase of 3.5 per cent. The organic revenue declines were affected by underperformance in Australia, Brazil, China, France and the U.K., the company said—otherwise international organic revenue would be up 2.5 per cent.

The financial results referred to DAN’s plan to carry out a restructure across Australia, Brazil, China, France and the UK, which were revealed in December 2019.

Dentsu CEO Toshihiro Yamamoto (feature image) said: “The international business suffered from a continuing weak performance in a number of key markets, leading to the decision to announce a restructuring in December.

“I am confident the restructuring of the International business will deliver the necessary savings and changes to our organisational structure that we need to deliver growth and margin improvement in 2020 and beyond.

“2020 is an exciting year for our business. In January, Dentsu transitioned to a new group structure, bringing the Japan and the international business closer together under the shared understanding of ‘One Dentsu’. This structure will create a solid foundation to allow our people to work across markets and across brands, to deliver growth for our clients.”

There’s no denying it’s been a trying year for DAN Australia. In November, it lost its CEO, Henry Tajer.

There was also a restructuring of its media buying arm Carat. Following the departure of Paul Brooks in 2018,  DAN’s chief client solutions officer, Simon Williams, was promoted into the role of national managing director. A year later, Spark Foundry CEO Sue Squillace was appointed as the new CEO.

During that time, Carat also lost major accounts including Virgin Australia and the AFL.