Dentsu Aegis Network Posts Q2 Profit Slump Of 39.2%, As Its Aussie Ops Weigh Heavily On Results

Dentsu Aegis Network Posts Q2 Profit Slump Of 39.2%, As Its Aussie Ops Weigh Heavily On Results
SHARE
THIS



Japanese-based Dentsu Aegis Network (DAN) has revealed its Q2 results to June that showed the holding company’s revenue, less cost of sales, declined by nearly 18 per cent to US$169.5 million, while its operating profit declined by 39.2 per cent YOY to $37.5 million. The pandemic is being blamed on the poor result.

The APAC region – where Australia plays – fared the worst. Australia, India and Thailand all saw organic de-growth of over 20 per cent, the company has revealed.

Only DAN’s operations in Switzerland, Germany, Russia saw growth in the quarter from April through to June.

Of the holding companies to report the quarter, Omnicom was worst with organic growth down 23 per cent, then Dentsu, Publicis next down 13 per cent and IPG down 9.9 per cent. WPP reports on August 27.

Due to cost reductions across the business in the face of CV-19, DAN’s operating profit increased by nearly 15 per cent, even as its revenue less cost of sales dropped by nine per cent.

Furthermore, operating margin increased 270 basis points YOY to 12.9 per cent. The group is tracking ahead of the targeted seven per cent cost reduction against the planned FY2020 consolidated cost base.

Given the ongoing gloomy outlook for its operations globally, DAN declined to make a detailed guidance for FY2020.

Instead, the network noted that “the impact from COVI-19 continues to cause a slowdown in demand for services across the industry. The timing and level of recovery is expected to vary by market – yet the overall macro-economic trend remains uncertain.”

DAN expects the second half of FY2020 to show a modest improvement in the rate of organic revenue decline versus the second quarter. Q2 FY2020 is still expected to have been the weakest quarter, but the decline in revenue will exceed the running rate of cost savings in the second half of FY2020.

Although coy on details, DAN expects to further squeeze costs across the business and expects a slow recovery come 2021. It has announced  a comprehensive review and accelerated transformation plan to manage all parts of its operation during the COVID environment but no more details were disclosed.

 

 

 

Please login with linkedin to comment

Dentsu Aegis Network

Latest News

QUT Business School Launches “Make it Real” Via BCM Group
  • Campaigns

QUT Business School Launches “Make it Real” Via BCM Group

Queensland University of Technology (QUT) Business School has launched a new brand platform, developed by BCM Group, built to encourage prospective students to upskill, invest in themselves, and nurture their inner entrepreneur.

Making A Name For Your Brand In A New Market: Tips For Launching A Campaign Globally
  • Opinion

Making A Name For Your Brand In A New Market: Tips For Launching A Campaign Globally

Jacqueline Gonzales [featured image] is the Head of Global Marketing at Squarespace. In this piece, she shares her best pieces of advice for launching a campaign globally. It’s estimated that we see between 6,000 to 10,000 ads every single day. In today’s digital landscape we’re constantly bombarded by so many different brand messages from every […]

Opinion

by B&T Magazine

B&T Magazine
Acast Announces New Podcast ‘The Elements’
  • Media

Acast Announces New Podcast ‘The Elements’

From the audio producer of The Teacher’s Pet comes The Elements, a new Acast Creator Network podcast hosted by Thredbo survivor Stuart Diver. The Elements is a  podcast that journeys into the heart of surviving a natural disaster and will be hosted and distributed by the creator-first podcast company Acast as part of the Acast Creator […]