Dentsu Group (TYO: 4324)

Currency in JPY

Last close As at 04/02/2023

JPY4,045.00

−85.00 (−2.06%)

Market capitalisation

JPY1,115,782m

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 +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%.

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 (2.4) (11.9) (2.7)
Relative (6.1) (13.0) (4.1)
52 week high/low ¥5020.0/¥3965.0

Financials

Dentsu has restructured from 1 January 2023, removing the distinction between Dentsu Japan Network and Dentsu International. The reconfigured global management team reflects the group’s increasing diversity and includes the first non-Japanese CFO. Q322 results showed 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. A further small CT&T acquisition in Australia was made in December.

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 16.2 N/A
2021A 1085592.0 226326.0 146020.0 389.0 10.4 0.0
2022E 1240000.0 221152.0 172461.0 437.0 9.3 0.1
2023E 1264862.0 219840.0 172569.0 457.0 8.9 0.1

Thematics

Digital Marketing and Internet Media Technology Platform

TMT

MediaWatch – January 2023

Consumer

IPO apocalypse

TMT

ESG, moving beyond the box tick

TMT

Direct tech investors

Subscribe to Edison

Get access to the very latest content matched to your personal investment style.

Sign up for free