The Tokyo-based Dentsu Group has announced stronger than expected Q4 earnings to close its fiscal year on a positive note. Organic growth at Dentsu Japan Network was up 17.3 per cent in Q4 and by 12.1 per cent at Dentsu International.
The numbers saw the Group post 13.1 per cent organic growth rate, while underlying profit rose 44 per cent, with operating margins rising 18.3 per cent.
Australia was also singled out by Tokyo bosses, its local Aussie operations posting 20 per cent growth in Q4.
Japan proved to the be the holding company’s best performing region, organic growth up a staggering 17.9 per cent. APAC – where Australia operates – was up 4.7 per cent but held back by a two per cent decline in the Chinese market. The US was up 10.6 per cent and Europe, Middle East and Africa were up 11.1 per cent.
Group revenue of JPY 976.5 billion (US$8.5 billion) for the year came in 16.9 per cent higher year-on-year and beat 2019 levels, with underlying operating profit 27 per cent above 2019 levels.
The holding company is now predicting organic growth close to five per cent over the next three years. The company has also announced it has set aside $US3 billion for new acquisitions.
Dentsu Group CEO Hiroshi Igarashi (main photo) commented: “In the structural growth area of customer transformation and technology we see a long period of investment as our clients look to understand their customers better than ever.
“The greatest opportunity for brands today, as they build strategies for re-emergence from the Covid-19 driven recession, is customer experience transformation.”
Wendy Clark, global chief executive of Dentsu International, added: “2021 has been a defining year for Dentsu International, with positive performance and restoration of growth across all regions and all service lines, as well as achievement of our long-held operating profit margin target of 15 per cent, one year ahead of plan.
“This performance is testament to the talent, focus and resilience of our people who delivered our topline growth through more than 4000 new business wins and expanded assignments with our largest clients. Today, 83 of our top 100 clients are now working with us across two or more service lines. At the same time our transformation and cost restructuring efforts have delivered a 30 per cent YOY improvement in our underlying profit.
“We look ahead with humble confidence and deep appreciation for our people and our clients who are foundational to our success. There is still much to do and in 2022 we’ll build on our positive momentum by continuing to focus on our people, our clients and our work, while maintaining disciplined cost delivery. Done well we are convinced that 2022 will be our best year yet,” Clark said.
