Dentsu Group

CN: 4324

Market CapJPY1211321m

Last Close JPY4200

Dentsu Group is a holding company with two operational networks: Dentsu Japan Network and Dentsu International. 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 Group’s interim results showed a strong recovery in Q221 for both Dentsu Japan (DJN) and Dentsu International (DI), with organic revenue less cost of sales (LCoS) up 15.0% in Q221, giving an increase of 5.4% for H121. The pick-up in operating margins was also well ahead of expectations and the targets for FY22e (20% for DJN and 15% for DI) may even be achieved in FY21 as the transformation plan kicks in. Management issued new guidance for FY21, including a good uplift in the planned dividend.

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 15.5 0.1
2020A 939243.0 90061.0 123470.0 249.0 16.9 0.1
2021E 1039276.0 204649.0 117810.0 334.0 12.6 0.0
2022E 1104632.0 240271.0 151432.0 374.0 11.2 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 21/09/2021
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 debt (¥m) 62195
Forecast gearing ratio (%) 8
Price performance
%
1m
3m
12m
Actual 7.1 11.6 26.3
Relative* (2.4) 2.6 0.7
52-week high/low ¥4370.0/¥2919.0
*% relative to local index
Key management
Kate Stewart IR director