Dentsu Group (4324) investor relations material

Executive summary

• Organic growth for FY2025 slightly exceeded guidance, with Japan achieving 6.2% organic growth and record net revenue and operating profit, while international profitability improved due to restructuring.

• Significant goodwill impairment losses were recorded, totaling JPY 396.1 billion (including JPY 310.1 billion in Q4), mainly in Americas and EMEA, reducing goodwill balance by more than half.

• Net loss attributable to owners widened to JPY 327.6 billion, driven by impairment losses, despite stable underlying profit.

• No year-end dividend for FY2025 and none forecasted for FY2026 due to negative distributable profit.

• New management structure announced to accelerate transformation, with Mr. Sano appointed as next CEO and new leadership in US CXM.

Financial highlights

• Full-year organic growth rate was 0.5%, slightly above guidance; consolidated net revenue increased 0.3% year-on-year to JPY 1,197.5 billion.

• Underlying operating profit decreased 2.1% year-on-year to JPY 172.5 billion; operating margin was 14.4% (down 40bps YoY).

• Statutory operating loss of JPY 289.2 billion and net loss of JPY 327.6 billion due to impairment.

• Underlying net profit attributable to owners rose 0.7% to JPY 93.5 billion, aided by lower corporate income tax.

• Underlying basic EPS: JPY 360.38 (+1.4% YoY); statutory basic EPS: JPY -1,262.04.

Outlook and guidance

• FY2026 organic growth rate expected at 0%-1% overall; Japan 2%-3%, Americas -2%, EMEA and APAC circa 1%.

• Net revenue forecast: JPY 1,230.2 billion (+2.7% YoY); underlying operating profit: JPY 166.3 billion (-3.6% YoY); operating margin in the 13% range.

• Profit attributable to owners forecast at JPY 69.7 billion; basic EPS at JPY 268.50.

• No dividend planned for FY2026.

• Targeting 16% operating margin in FY2027 through profitability improvements.