Dentsu Soken (4812) Q1 2025 earnings summary

Executive summary

• Net sales rose 8.5% year-over-year to ¥40,244 million in Q1 FY2025, driven by Manufacturing Solutions and Communication IT.

• Operating profit increased 0.4% to ¥5,779 million despite higher SG&A expenses from increased headcount and sales support.

• Ordinary profit increased 4.5% to ¥5,995 million.

• Profit attributable to owners of parent was ¥4,109 million, nearly flat year-over-year due to the absence of extraordinary gains.

• A new three-year medium-term management plan was launched, aiming for aggressive growth and higher value creation.

Financial highlights

• Gross profit rose to ¥14,397 million, but gross margin declined by 0.8 points to 35.8%.

• Operating margin decreased by 1.1 points to 14.4% due to higher personnel and SG&A expenses.

• Comprehensive income decreased 8.1% year-over-year to ¥3,920 million.

• EPS for Q1 FY2025 was ¥63.15, nearly unchanged from ¥63.29 in Q1 FY2024.

• Number of employees increased 19.2% year-over-year to 4,389.

Outlook and guidance

• FY2025 forecasts remain unchanged: net sales projected at ¥170,000 million (+11.4% YoY), operating profit at ¥23,000 million (+9.3% YoY), and profit attributable to owners of parent at ¥16,000 million (+5.8% YoY), EPS ¥245.87.

• All reportable segments and service categories are expected to see year-over-year growth.

• No revisions to previously announced forecasts.