Dentsu Upbeat Despite Profits Slide

20 May 2003

Japanese agency giant Dentsu is confident it will post its first billings rise in three years over the coming twelve months.

The group – which controls around one-quarter of the globe’s second largest ad market and is rated world number five in AdAge’s 2002 rankings – believes its billings will increase by 2.5% to ¥1.73 trillion ($14.8 billion; €12.7bn; £9.1bn) in the fiscal year commencing April 1. It is also predicting 1.7% growth for Japanese adspend in 2003 after two years of decline.

The upbeat trading forecast accompanied disappointing full-year results for the twelve months to March 31. Billings slipped 5.4% to ¥1.69 trillion, operating income slumped 23.2% to ¥46.9bn and net earnings tumbled 16.4% to ¥23bn. Despite the forecast billings rise, net income is expected to slip 3.9% in the coming twelve months to ¥22bn.

Dentsu is banking on a strong ad rebound in the second half, with broadband ISPs, cosmetics and toiletries manufacturers and the auto industry expected to be growth sectors. “The first half is likely to be extremely tough,” prophesied chief financial officer Hitoshi Hanatsuka. “We are assuming a recovery in the second half.”

Data sourced from: multiple sources; additional content by WARC staff