Dentsu Group reported a 4.9% fall in organic revenue for full year 2023, which the company said was “in line with expectations.” The company downgraded its revenue outlook throughout last year and in November said revenues might fall by as much as 5%.  

The fourth quarter organic revenue decline was 6.6%.  

And this year the firm said it expects to stem the bleeding – it’s current full-year growth outlook is an estimated 1%. “Whilst the macro environment remains uncertain the group expects to see a return to spend from technology clients but expects growth to be second half weighted due to the impact of cycling out of lost clients,” in the first half of 2024, the company stated.  

The company noted that its Americas, EMEA and APAC regions continued to see delays of larger transformational projects for its customer transformation and technology division, “partly as a result of the increased cost of capital globally. CT&T revenues reached 32% of Group revenues in 2023. 

For the full year by region, Japan reported organic growth of 1.6% with growth led by CT&T.  Americas reported a decline of 7.2%, in line with expectations, as continued delays in CT&T projects and reduced media spend from clients impacted growth.  

EMEA revenue fell 10.9% partly due to the previously reported impact from the DACH (Germany, Austria, Switzerland) cluster in the second and third quarter. The Asia Pacific regions (excluding Japan) recorded an organic drop of 8.2% due to delays in client spending and reduced project scope in Customer Transformation & Technology.  

In the fourth quarter, Japan posted a gain of 0.9%. Declines were recorded elsewhere: Americas -9.3%, EMEA -13.6%, APAC -8.6%. 

Hiroshi Igarashi, president and global CEO, Dentsu Group Inc., stated: “2023 was a challenging year for the Group, with internal and external headwinds impacting both our organic revenues and profitability... As we look forward to 2024, we see some of those headwinds dissipating. We expect to see a return to spend from technology clients – particularly in the US market.” 

In US, in addition to underspending by technology and finance clients, there were client losses in the first half of the year that will continue to impact revenues through the first half of this year, the company said. While win rates improved in the fourth quarter, “the sales cycle however remains extended.” Creative saw incremental project-based revenue from existing clients and saw a number of new client wins.