Dentsu reported a slight net organic revenue decline for full-year 2024 of 0.1% but noted sequential quarterly improvement throughout the year with Q4 organic growth 2.6%. The results were in line with recent guidance.  

The firm took a Q4 goodwill impairment charge of 210.1 billion yen (about $1.38 billion) against results in the Americas and Europe Middle East & Africa regions, “reflecting a more conservative outlook for the International business.”  

The charge resulted in an operating loss of 192.2 billion yen (nearly $1.26 billion) for the period.  

Full-year reported net revenue was up 5.7%. The organic figures exclude the impact of M&A and currency fluctuations. 

The firm said the outlook for 2025 is currently for organic growth of about 1% with a decline in operating profit margin to 12% “mainly due to upfront investments to restore competitiveness.” 

The firm said it plans to a take roughly $327 billion in restructuring costs this year. “We intend to invest in optimizing headcount mainly in the International businesses, as well as implementing IT systems to further enhance efficiency in our operations.” 

The company said that it had also set targets under a new mid-term management plan to achieve 4% organic growth by 2027 with operating margins in the 16% to 17% range. The aim of this new management plan is to restore growth, “with the recognition that Dentsu’s position has relatively shifted in the face of intensifying competition with an emergence of highly-scaled players both within and outside the industry accompanied by large-scale investments made by tech and consulting companies, particularly in the field of AI.” 

In the Americas region, which account for about 30% of the firm’s revenue, the Q4 organic revenue decline was 2.9% with a full-year shortfall of 4.1%.  

The company cited a reduction in budgets by existing clients, new projects not being able to offset the reduction, and the “negative impact of sales cycle delays due to persistently high interest rates.”  

Media operations in the region were broadly flat year on year with some improvement in Q4. The first half was impacted by 2023 client losses which subsided in H2. Creative remained negative for the full year although the company noted that “synergies with [production operation] Tag are beginning to produce results.” 

“In our new Mid-Term Management Plan,” stated President and Global CEO Hiroshi Igarashi, “We will conduct a thorough review of our core business strengths, be more selective and focused on what we do, and adopt a differentiated strategy to meet our diversifying client needs.” 

He added that “While we will continue to invest in data and technology and our people and culture, we will also invest into areas where we can increase our media capabilities in our key markets. At the same time, we will reevaluate our underperforming businesses and rebuild our business structure.”