Dentsu Reports First-Half Organic Growth Of 7.2%

Dentsu reported first-half revenue growth of 2.3% to 393,167,000,000 Japanese yen (a little more than $3.9 billion at today’s exchange rate).

Gross profit — defined as revenue less direct costs, and the metric used to report the Tokyo-based holding company’s organic growth — was 368,619,000,000 JY (nearly $3.7 billion). The firm reported organic growth for the first half of 7.2% including 9.5% for the second quarter.

The company’s operations in Japan delivered organic growth of 8.5% for the first half (12.2% for Q2). Growth there was driven by sponsorship sales associated with the Tokyo 2020 Olympic and Paralympic Games, per the company.

Dentsu Aegis Network, the unit that oversees Dentsu’s international operations, reported organic gross profit growth of 6% for the first half and 7.2% for the second quarter.



In the Americas, organic growth was negligible at 0.3% for the first half, but improved during Q2 to 2.4%. The company said that the U.S. operations were still recovering from 2015 losses at ad shop mcgarrybowen.

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 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. 

Guidance for full-year 2016 performance remains unchanged, with organic growth expected to be about 1% with an underlying operating profit decline of 3.4%. 

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