Dentsu APAC (excl Japan) posts organic revenue decline of 3.1% in Q1 of 2021
Dentsu Group reported its first quarter results for 2021 (ended March 31, 2021 – reported on an IFRS basis). In Q1 of 2021, Dentsu Japan Network organic revenue declined -0.9%, while Dentsu International organic revenue declined -3.5%. The Group’s underlying operating profit increased by 20.8% (22.4% on a constant currency basis) yoy to JPY 44.9 billion.
At Dentsu International, underlying operating profit was JPY 12.2 billion (YoY +41.8%, +49.7% on a constant currency basis) reflecting the robust cost measures that were implemented last year to protect profitability. In APAC (excluding Japan) Q1 2021 organic revenue registered a decline of -3.1%.
The APAC region also saw continued improvement throughout the quarter, reporting positive organic growth for March. Client confidence is improving across the region with positive growth for the quarter recorded in India, Indonesia, Singapore and Taiwan. China saw a number of new business wins across all three service lines. The Creative in APAC was flat for the quarter as client spend returned, while Media saw improvement throughout the quarter. Pitch activity across the region is increasing across all three service lines.
Commenting on the quarterly results, Toshihiro Yamamoto, President and CEO, Dentsu Group Inc., said, “Our first quarter results showed a continued progressive improvement in our organic performance despite the pre-COVID-19 comparators facing the Group for most of the quarter. Consumer and client confidence is returning, and this is reflected in the positive momentum in our revenue growth. Profit has been particularly strong, demonstrating our relentless focus on costs and commitment to growing our margins.”
He added that while uncertainties remain about the progress of the pandemic, and, in particular, with new waves affecting several countries, “we believe that our momentum will continue to build, underpinning the medium-term commitments we gave in February.”
“Our people across the Group have continued to show dedication and diligence with many still working from home. I would like to offer them all my full thanks and appreciation. Strong progress has been made against each of the four objectives of our comprehensive review to accelerate the transformation of our business. We are tracking ahead of many of our internal targets and demonstrating that we are prepared to take unprecedented action to transform our service to clients and give returns to shareholders. This includes radical rationalisation of brands and divestment of assets,” Yamamoto added.
He further said, “As we look forward to the remainder of 2021 and beyond, Dentsu Group remains well positioned to benefit from the cyclical recovery in digital solutions and media spend, combined with our leading position in the structural growth area of Customer Transformation & Technology. Client demand for CX Transformation services, commerce and loyalty and B2B services remains strong as our clients adapt to meeting their consumers wherever and however they choose to engage with brands. Our unique opportunity is in the seamless integration of our services to provide bigger, more comprehensive answers for our clients. We are combining our strengths in consumer intelligence, modern creative, data and technology to deliver top line growth for our clients through Integrated Growth Solutions.”