Campaign UK
Feb 14, 2025

Dentsu prioritises media in new growth plan following $820 million loss

Dentsu has allocated $328 million to rebuild the business in 2025, with a further $295 million to be invested over the next three years.

Dentsu: reported a loss of $1.5bn in FY2024. Photo: Getty.
Dentsu: reported a loss of $1.5bn in FY2024. Photo: Getty.

Dentsu reported a loss of ¥125 billion ($820 million or £650 million) in 2024 versus a profit of ¥45.3 billion a year earlier, after taking a ¥210.1 billion ($1.38 billion) goodwill impairment on the value of its operations.

The impairment was ¥153 billion ($1 billion) in EMEA and ¥57.1billion ($370 million) in the Americas.

As a result, it has cut its profit guidance for 2025 to group organic growth of around 1% and operating margin of approximately 12%. 

For the full year 2024, net revenues increased by 5.7% year on year, with organic growth declining by 0.1%.

For Q4 2024, net revenues rose 4.2% year on year to ¥335.8 billion ($2.2 billion).

By region, Japan organic revenue grew by 8.4% in Q4 and 4% in FY2024. The Americas declined by 2.9% in Q4 and by 4.1% across the year. EMEA grew by 3.5% in Q4 and 2.2% in 2024. For APAC growth declined by 3.9% in Q4 and 7% in 2024.

Dentsu said: "Key markets such as the UK and Germany experienced continued client spend reduction against the backdrop of economic uncertainty."

To restore profitability, Dentsu unveiled a new “Mid-term management plan” focusing on media, rather than customer experience management, in efforts to compete with rivals, including the proposed new Omnicom.

The plan includes a “Media ++” strategy which will focus on selling media to clients “plus” extra services such as creative CMX and/or other products and services.

The plan will be put in place across the Americas, EMEA and APAC, and will involve more investment in Japan and the US, where Dentsu already has a large revenue base. 

The group will allocate more money and people to large and medium-sized clients and work on enhancing the “added value” of its media business.

Hiroshi Igarashi, president and global chief executive of Dentsu, confirmed it would also “re-evaluate our underperforming businesses and rebuild our business structure” as part of the MTMP.

He added: “Our ultimate goal is to regain competitiveness and return to a growth trajectory.” 

Dentsu’s MTMP starts this year and will run through 2027.

In that time, its goal is to achieve organic growth of 4%, and 16-17% in operating margin in FY2027.

A one-off cost of ¥50 billion ($328 million) has been allocated for the “rebuilding” of the business in FY2025 and Dentsu committed a further ¥45 billion ($295 million) investment for the key markets and businesses over the course of the three-year plan.

Source:
Campaign UK

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