• by Richard Whitman , Columnist, November 11, 2020

Dentsu Group said today a comprehensive review of business operations announced in August would result in the consolidation of hundreds of the holding company’s brands worldwide into six “global leadership brands.” 

Domestic operations in Japan will be reorganized into four “operating pillars.” 

Details of the review and the restructuring plans are expected to be announced in February 2021. 

The review is also examining the potential sale on non-strategic assets. 

“We simply have too many brands almost, 300 across both Japan and internationally,” stated Toshihiro Yamamoto, president-CEO Dentsu Group Inc. “This radical new structure will be more logical and transparent for our clients, enabling us to serve them better.” It will also be operationally more efficient and allow the firm to “reduce costs significantly.”

The business review update was disclosed in the company’s announcement about third-quarter results issued today. Like the other major holding companies, Dentsu’s performance continues to be impacted by the pandemic, although Q3 showed some improvement over the previous quarter. 

Dentsu Group reported a 14.8% organic revenue decline for the third quarter, with the Group’s Japan and international businesses both in line with that result. 

For the total group, that was a slight improvement over Q2, when the drop reached 17.3% with the international business falling 20%. The Japan business experienced about a two percentage point further decline in Q3. 

In the Americas region, the third-quarter organic decline was 15.3%, a bit better than the 17.1% shortfall in the previous quarter. The EMEA region also improved quarter-to-quarter, but was still down nearly 13% in Q3. APAC narrowed its organic decline from 26% in Q2 to 16% in Q3. 

For the first nine months of the year, net revenue was down 10.7% to ¥602 billion ($5.7 billion). The organic decline across the Group for the period was 10.9%, 7.9% in Japan and 12.9% across the company’s international business. 

The firm also announced an early-retirement program for the Japan business. It indicated there would be more information about Group-wide savings and “implementation costs” before the end of the year.