Tokyo-based ad holding company Dentsu reported a 72% revenue gain to 594 billion yen (about $5.8 billion at today’s exchange rate) for its fiscal year ended March 31. The big gain was due largely to acquisition of Aegis Group in March of 2013. Net income was up 6.8% to 38.8 billion yen (about $380 million).
The company reported organic revenue growth (which excludes the impact of acquisitions, divestitures and currency fluctuations) of 7.7% for the year, which was on the high end compared to other holding companies most recent yearly results. Both WPP and Omnicom, for example reported 2013 organic growth of 3.5%, while MDC Partners posted organic growth of 8.3%. That said, both Omnicom and WPP generated nearly three times the annual revenue posted by Dentsu, while MDC reported about $1.15 billion.
With Aegis Group (renamed the Dentsu Aegis Network) now in its fold, nearly half (48%) of Dentsu’s revenue is generated outside of Japan. The company is currently forecasting that by its fiscal year 2017, 55% of its revenues will come from outside of the home country.
Results were helped by a gradually improving ad economy in Japan. Dentsu said that ad spending in the country was up for the second straight year in 2013, although last year’s increase was a modest 1.4%.
“The Japanese economy slowly recovered against a backdrop of monetary easing measures…with signs of an upturn in capital investment and improved corporate performance,” the company said. But the global economy “remained uncertain due to concerns about the growing economic slowdown seen in China and other emerging economies.”
For the company’s current fiscal year, which ends next March, Dentsu is forecasting a revenue increase of about 4.9% and an operating income gain of 1.4%.
The company said it hopes to achieve an average 3% to 5% organic revenue growth rate between now and fiscal year 2017. By then it also intends to generate a minimum of 35% of its revenue from digital businesses versus the current 28%.