Dentsu Group (4324) investor relations material

Executive summary

• Fiscal 2025 organic growth slightly exceeded guidance, with Japan achieving 6.2% organic growth and record net revenue, while international profitability improved due to restructuring and business reviews.

• Significant goodwill impairment losses, including JPY 396.1 billion (mainly in Americas and EMEA), resulted in a net loss of JPY 327.6 billion.

• No year-end dividend for fiscal 2025 and none forecasted for 2026 due to negative distributable profit.

• New management structure announced to accelerate transformation, with Takeshi Sano as next CEO.

• FY2026 aims for continued Japan growth, US CXM recovery, and further competitiveness and profitability.

Financial highlights

• Full-year organic growth rate was 0.5%, with consolidated net revenue up 0.3% year-on-year to about JPY 1.2 trillion; underlying operating profit decreased 2.1% to JPY 172.5 billion, with a 14.4% operating margin.

• Statutory net loss was JPY 327.6 billion, mainly due to goodwill impairment; underlying net profit was JPY 93.5 billion (+0.7% YoY).

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

• Net debt/EBITDA at 0.95x at year-end; cash and cash equivalents at year-end were JPY 295.2 billion.

Outlook and guidance

• Fiscal 2026 organic growth rate expected at 0%-1%; Japan to grow 2%-3%, Americas at -2%, EMEA and APAC at 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.

• Group forecasts operating profit of JPY 152.6 billion and net profit of JPY 69.7 billion; basic EPS at JPY 268.50.

• No dividend planned for FY2026; dividend resumption targeted for the future.

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