Dentsu Group

CN: 4324

Market CapJPY1116146m

Last Close JPY3870

Dentsu Group is a holding company with two operational networks: Dentsu Japan Network (DJN) and Dentsu International (DI). Operating in over 145 countries, Dentsu Group provides a wide range of client-centric integrated communications, media and digital services.

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Investment summary

Dentsu posted a very strong performance for Q321, with revenue less cost of sales (RLCoS) up 27.8% on an organic basis and a substantial uplift in operating margin to 23.5%, from 12.2% in Q221. Full-year guidance is raised, having been lifted in August, with an indication of a FY21 margin of 18.0% after greater intended investment in Q4. Proposed board changes for the new year split the chairman and CEO roles, with the existing CEO retiring and appointments of independent non-executives planned. The better performance and balance sheet strength support an uplift in DPS, with ¥113.5 now expected for the full year (previously ¥101).

Y/E Dec
Revenue (¥m)
EBITDA (¥m)
PBT (¥m)
EPS (fd) (¥)
P/E (x)
P/CF (x)
2019A 1047881.0 160279.0 101340.0 271.0 14.3 0.2
2020A 939243.0 90063.0 123470.0 249.0 15.5 N/A
2021E 1068700.0 189458.0 135174.0 376.0 10.3 0.0
2022E 1125000.0 234091.0 140543.0 383.0 10.1 0.1
Industry outlook

In July, Dentsu lifted its global ad spend forecast to +10.4% in FY21 and +7.2% for FY22. Digital spend is set to increase by 15.6%. The Japanese ad market still lags the digital transition curve, with TV prominent, but faster growth in digital will improve digital’s share of spend to 38.1% in FY21, still well below the 50% global share. The FY20 postponement of the Tokyo Olympics contributed to a y-o-y ad spend decline of 16.6% in Japan. Forecast recovery is 4.4% in FY21, and +4.2% in FY22.

Last updated on 25/11/2021
Content on Dentsu Group
ESG conversation one: Dentsu
TMT | Edison TV | 1 July 2021
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Share price graph
Balance sheet
Forecast net cash (¥m) 13881
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual (3.6) (4.3) 12.2
Relative* (5.1) (8.6) (2.1)
52-week high/low ¥4420.0/¥2919.0
*% relative to local index
Key management
Kate Stewart IR director