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Currency in JPY
Last close As at 30/03/2023
JPY4,535.00
▲ 115.00 (2.60%)
Market capitalisation
JPY1,198,182m
Dentsu Group is a holding company, operating in over 145 countries. It 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 +3.8% for FY23, revised down from +5.4%, with 4.8% for FY24 and 4.5% for FY25 pencilled in. Digital spend is forecast at 57% of FY23 global ad spend. The Japanese ad market still lags the digital transition curve, with a digital share of 49%, and with TV remaining prominent at 26%.
Director, TMT
Hiroshi Igarashi
President & CEO
Kate Stewart
IR director
Forecast net cash (¥m)
131257
Forecast gearing ratio (%)
N/A
| % | 1M | 3M | 12M |
|---|---|---|---|
| Actual | 3.8 | 10.6 | (8.8) |
| Relative | 3.7 | 5.1 | (8.9) |
| 52 week high/low | ¥5020.0/¥4045.0 |
Dentsu reported record FY22 headline results, bolstered by a Q4 in which it delivered organic net revenue growth of 3.5%. Good progress continues in Customer Transformation and Technology (CT&T), up 17.5% y-o-y and constituting 32% of FY22 revenues. Management forecasts FY23 organic revenue growth at 4%, reflecting a tougher macro backdrop. Guidance on FY23 underlying operating margin is for a dip to 17.5% as the group invests more in CT&T and the One dentsu initiative. It is set to rebound to 18.0% in FY24 as benefits start to flow. Year-end net cash of ¥71.3bn and an appetite for leverage of 1.0–1.5x provide ample resource for both capex and M&A. Our FY23 estimates are under review.
| 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 | 18.2 | N/A |
| 2021A | 1085592.0 | 226326.0 | 146020.0 | 389.0 | 11.7 | 0.0 |
| 2022E | 1240000.0 | 221152.0 | 172461.0 | 437.0 | 10.4 | 0.1 |
| 2023E | 1264862.0 | 219840.0 | 172569.0 | 457.0 | 9.9 | 0.1 |
