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Dentsu Group (TYO: 4324)

Last close As at 26/10/2024

JPY4,636.00

▲ −8.00 (−0.17%)

Market capitalisation

JPY1,232,248m

Dentsu Group operates in around 120 countries. It works with leading organisations to deliver experience transformation, through media, customer experience and creative services, and business transformation services.

Dentsu’s May release of its global ad spend forecasts saw it lift current year projections from 4.6% to 5.0%, with 4.2% (unchanged) for FY25 and 4.2% (previously 4.3%) for FY26. The main uplift was in digital ad spend, up from +6.5% to +7.4% for FY24, putting it just shy of 60% of the total ad-spend pie. Across the forecast period through to 2026, ad spend is forecast to increase at a CAGR of 4.5%, led by digital at +6.7%.

Latest Insights

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TMT | Update

Dentsu Group — Positive momentum

TMT | Update

Dentsu Group — FY24 prospects weighted to H2

TMT | Update

Dentsu Group — Return to organic growth forecast for FY24

TMT | Update

Dentsu Group — One dentsu initiative set to improve efficiency
Dentsu Group_resized
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Sector

TMT

Equity Analyst

Fiona Orford-Williams

Fiona Orford-Williams

Director, TMT

Milo Bussell

Analyst, Consumer and TMT

Key Management

  • Hiroshi Igarashi

    President & CEO

  • Sayako Fujimura

    Head of IR

  • Yushin Soga

    CFO

Balance Sheet

Forecast net debt (¥m)

25700

Forecast gearing ratio (%)

3

Share Price Performance

Price Performance
% 1M 3M 12M
Actual 4.1 16.2 6.7
Relative 4.9 23.1 (9.3)
52 week high/low ¥4770.0/¥3557.0

Financials

Dentsu will be presenting on its ESG strategy and progress on its mindset and behaviour reform at a webinar on 30 September. H124 figures showed sequential quarterly improvements, with organic growth of 0.2% in Q2. Encouragingly, this is partly from improved pitch win rates in all four reporting regions, underpinning growth projections through H224 and into FY25, despite a persistently difficult macroeconomic backdrop. The One dentsu initiative is driving collaborative efforts across the group and we expect this to be at the heart of the new medium-term strategy, to be unveiled in H2. In the meantime, the Business transformation (BX) offering is proving effective in Japan and is now being rolled out more widely. The shares continue to be valued well below peers and we would expect this discount to narrow with improving operational performance.

Y/E Dec Revenue (¥m) EBITDA (¥m) PBT (¥m) EPS (fd) (¥) P/E (x) P/CF (x)
2022A 1243883.0 217500.0 187589.0 485.0 9.6 0.1
2023A 1289301.0 175742.0 151315.0 337.0 13.8 0.1
2024E 1356700.0 203377.0 159804.0 380.0 12.2 0.1
2025E 1393000.0 218527.0 178741.0 409.0 11.3 0.1