Dentsu Aegis Reports 1.5% Revenue Decline After Australian Slump

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Slower than expected business in Australia has forced Dentsu Aegis Network (DAN) to revise its international performance guidance for the remainder of 2019.

The Japanese outfit recorded a 1.5 per cent organic revenue decline internationally for the first half of the year, led by a 2.1 per cent dip in Japan.

As a result, it has cut organic growth guidance from 6.1 per cent to 1.4 per cent. The operating margin target has been lowered from 20.3 per cent to 17.4 per cent.

The company put much of the blame for the results on the Chinese and Australian markets, pointing out if these regions were to be removed from the financials, organic revenue would have grown 0.9 per cent over the period.

“In the international business, organic growth guidance is lowered to reflect the weaker than expected first half performance mainly in the Australian and Chinese markets,” the agency said in its financial statement.

“Organic growth guidance is downgraded from three per cent or above, and expectations are for organic growth to be positive for the full year.”

Despite the poor results, the company was still bullish about the remainder of the year.

“We still expect to see a ramp up of revenues in the second half driven by new account wins in the US and Europe and the cycling out of accounts lost in the second half of FY2018,” Dentsu said.

Dentsu Inc president and CEO Toshihiro Yamamoto said: “Although our business has expanded beyond advertising and is increasingly diverse in nature, our role and value are crystal clear: to find and execute the best solution for our clients. This is why it is imperative that we discover, connect and develop the diversity that will comprise One Dentsu.”

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