Currency in JPY
Last close As at 28/03/2023
▲ −115.00 (−2.55%)
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%.
President & CEO
Forecast net cash (¥m)
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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.
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