Dentsu Reorganizing As Growth Sputters

Dentsu posted an organic revenue decline in the first quarter of 1.6%.

In the firm’s home base of Japan, where it cited a decrease in traditional media spending by clients, the drop was 2.7%. The stalled growth comes as the company is preparing for a major restructuring.

In international markets, which are overseen by Dentsu Aegis Network, the organic revenue drop was 0.7%. The company cited weakness in the Asia-Pacific region, noting that the primary problem market was Australia.

Reported revenue across the company was up 3.5% to ¥250.6 billion (about $2.3 billion).

In the America’s region, organic growth was 0.1% — a sharp drop from the 4.6% growth the company posted in the region in the first quarter of 2018.

The company said the slowdown was due to “timing of client spend and the cycling out of several client accounts.” But the firm added it expects improvement in the Americas region in the second half as the impact of new business wins kicks in.



In March, Dentsu said shareholders endorsed plans for a company restructuring in which the parent Dentsu Group will effectively support all subsidiaries. Currently, Dentsu in Japan and Dentsu Aegis Network are run as separate operations.

“The new structure will allow for greater corporate governance and improved integration between Dentsu in Japan and Dentsu Aegis Network,” stated Toshihiro Yamamoto, president-CEO Dentsu Inc. “Workstreams are already underway across many of our corporate functions and business lines.”

The new structure is scheduled to take effect January 1, 2020.


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