Dentsu Group (4324) investor relations material

Executive summary

• Q1 FY2026 delivered organic growth of 0.8% and operating margin of 12.8%, both slightly above expectations, with statutory net profit surging 540.5% year-over-year to JPY 40.2 billion, driven by asset sales.

• Underlying operating profit rose 11.5% to JPY 37.8 billion, and comprehensive income reached JPY 45,383 million.

• Japan led with 4.7% organic growth and operating margin above 30%, while Americas and APAC saw declines.

• Major client wins included Heineken, Farmers Insurance, Samsung Electronics Europe, and Tapestry, with continued industry recognition at Adfest and Spikes Asia.

• Strategic focus on client centricity, agility, collaboration, and AI-powered solutions to drive long-term growth.

Financial highlights

• Consolidated net revenue rose 2.7% year-on-year to JPY 295.1 billion, with total revenue at JPY 357,129 million.

• Underlying operating profit increased 11.5% to JPY 37.8 billion, and underlying net profit rose 18.4% to JPY 19.6 billion.

• Statutory operating profit surged 155.5% to JPY 65 billion, and statutory basic EPS jumped 540.4% to JPY 154.68.

• Net debt increased to JPY 196.0 billion, with net debt/underlying EBITDA at 1.28x.

• Total assets as of March 31, 2026, were JPY 3,044,735 million, with total equity at JPY 477,850 million.

Outlook and guidance

• Full-year 2026 guidance reiterated: organic growth rate of 0–1%, revenue of JPY 1,491.5 billion, and operating margin target of 13%.

• Japan expected to grow 2–3%, Americas around -2%, EMEA and APAC both around 1%.

• No dividend payment expected for FY2026; distributable profit projected to improve by JPY 70–80 billion.

• Macro uncertainty from geopolitical risks and resource prices limits visibility.

• Underlying operating profit is projected at JPY 166.3 billion, and profit attributable to owners at JPY 69.7 billion.