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Overview of FY2017 performance
• In FY2017 the Dentsu Group delivered total gross profit growth of 9.2% (constant currency basis) and organic gross profit growth of 0.1%.
• FY2017 saw Dentsu in Japan deliver a resilient performance against the backdrop of a challenging market. While the market continued the transition to digital media, Dentsu in Japan remained focused on further developing its digital capabilities to offer clients new opportunities for consumer engagement and growth.
• The international business, Dentsu Aegis Network, delivered total gross profit growth of 17.1% with a record year for net new business; $5.2bn of net new media billings. This success will drive above peer group average organic growth in FY2018.
• In FY2017, Dentsu Aegis Network made a total of 31 acquisitions and investments to accelerate its growth strategy.
• Dentsu in Japan is committed to the completion of environmental/infrastructural overhaul for future growth by accelerating the work environment reforms.
• The Dentsu Group forecasts an improving market in FY2018, driven by an increase in advertising spend. While the operating environment remains challenging, the Group enters FY2018 with strong momentum.
Toshihiro Yamamoto, President and CEO, Dentsu Inc., said: “In FY2017, Dentsu Group delivered a resilient performance in a challenging market. Following the pull back in performance in Q2 FY2017, Dentsu Group achieved sequential quarter on quarter improvement in organic gross profit growth across the business.
Clients are looking for a more data-driven approach with greater insights and addressability. Dentsu in Japan continues to deliver against our digital ambitions and remains focused on our People Driven Marketing (PDM) initiative - an integrated framework which executes full-funnel marketing through the integration of on-line and off-line activities.
Dentsu Aegis Network continues to invest in data capabilities. The M1 platform is a key pillar of our data strategy and is the first phase in realizing our vision for all media planning and activation to be people based. FY2018 will see the rollout of the M1 platform outside of the US.
At Dentsu in Japan, we are committed to accomplishing our work environment reforms for future growth by the end of FY2018. Looking ahead, the record year for net new business at Dentsu Aegis Network showcases the strength of our talent and the competitiveness of our product. We are upbeat about the prospects for further new business growth in FY2018. We remain committed to differentiating our product offering and momentum is with the business as we enter FY2018.”
International results (extract)
Dentsu Aegis Network delivered organic gross profit growth of 0.4% in FY2017, including 1.2% in Q4 FY2017. Q4 FY2017 showed an improvement of 140 bps on Q3 FY2017 organic growth rate driven by new business wins and strength in the media agencies.
FY2017 was a record year for net new business at Dentsu Aegis Network, generating $5.2bn in media billings. The pitch pipeline remains healthy and we remain upbeat about the prospects for further business growth in FY2018. We expect to return to outperforming the peer group in FY2018 driven by our strong new business performance in FY2017.