Modest Q1 Gains For Dentsu

Dentsu Group reported a first-quarter revenue gain of 0.7% to 199,542,000,000 Japanese yen (about $1.83 billion at today’s exchange rate). Underlying net profit was up 2.6% to 21,552,000,000 yen ($198 million). 

The company said results were suppressed (including a 3.7% impact on gross profit) partly by currency fluctuations, particularly the strengthening Japanese yen against both the dollar the British pound.

As result, the firm has revised downward its projected results for the full year. It’s now forecasting a gross profit growth of about 1% versus the previous guidance of 7.2% with an underlying operating profit decline of 3.4%. Earlier it expected a decline of just 1%.   

Dentsu Aegis Network, which manages the company’s operations outside of Japan, posted 4.5% organic gross profit growth for the first-quarter period but reported a 2% organic gross profit decline in the Americas. Softness in the region was attributed to account losses at mcgarrybowen as well as the “challenging environment” in Brazil. 



Last year mcgarrybowen lost business from both Chase and Sears, while winning Olive Garden. More recently it was one of the big winners in the Clorox review and picked up a piece of the JCPenney business. As a result, Dentsu said, the agency’s negative impact on the group’s performance will be “alleviated” in the second half of the year. 

Organic growth in the Asia-Pacific region (outside Japan) was more than 5% and nearly 11% in the Europe, Middle East and Africa region.

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