Dentsu Group (TYO: 4324)

Currency in JPY

Last close As at 25/01/2023

JPY4,300.00

50.00 (1.18%)

Market capitalisation

JPY1,161,710m

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.

CT&T benefits from structural tailwinds as companies look to invest to optimise to meet the demands of their own customers, a process which may even accelerate as economic pressures become more pronounced. Dentsu’s latest global ad spend forecast is +8.7% for FY22, with gains of 5.4% for FY23 and 5.1% for FY24 pencilled in. Digital spend is forecast at 55.5% of FY22 global ad spend, with linear TV the next largest media, making up 26.1%. The Japanese ad market still lags the digital transition curve, with TV prominent. Digital is faster growing but is still well below the global share.

Sector

TMT

Equity Analyst

Fiona Orford-Williams

Fiona Orford-Williams

Director, TMT

Key Management

  • Hiroshi Igarashi

    President & CEO

  • Kate Stewart

    IR director

Balance Sheet

Forecast net cash (¥m)

131257

Forecast gearing ratio (%)

N/A

Share Price Performance

Price Performance
% 1M 3M 12M
Actual 3.4 (7.7) 3.9
Relative (0.6) (11.7) 1.6
52 week high/low ¥5020.0/¥3860.0

Financials

Dentsu’s Q322 results show an organic net revenue decline of 3.7% (-4.7% including Russia), reflecting a particularly tough comparative with Q321 in Japan. This masks continuing good progress in building revenues from Customer Transformation & Technology (CT&T), which grew over 20% and now constitutes 32.6% of group revenues. Alongside the figures, Dentsu announced a further restructuring from 1 January 2023 that removes the distinction between Dentsu Japan Network (DJN) and Dentsu International (DI). The reconfigured global management team will reflect the group’s increasing diversity and includes the first non-Japanese CFO.

Y/E Dec Revenue (¥m) EBITDA (¥m) PBT (¥m) EPS (fd) (¥) P/E (x) P/CF (x)
2020A 939242.0 91013.0 123471.0 249.0 17.3 N/A
2021A 1085592.0 226326.0 146020.0 389.0 11.1 0.0
2022E 1240000.0 221152.0 172461.0 437.0 9.8 0.1
2023E 1264862.0 219840.0 172569.0 457.0 9.4 0.1

Thematics

Consumer

IPO apocalypse

TMT

ESG, moving beyond the box tick

TMT

Direct tech investors

Consumer

Circular economy business models

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