David Blecken
May 16, 2017

Baseball and digital drive profits for Dentsu

Digital services contributed close to 60 percent of Dentsu Aegis Network's gross profit according to the company's Q1 FY2017 consolidated financial results.

Dentsu's Tokyo headquarters
Dentsu's Tokyo headquarters

Dentsu Group has reported organic gross profit growth of 3.9 percent and total gross profit growth of 17.7 percent for the first quarter of 2017. Total revenue for the period stood at 229,813 million yen (just over US$2 billion), up 15.2 percent from 199,542 million yen ($1.7 billion) a year ago. Total gross profit was 217,261 million yen ($1.9 billion), up 16.2 percent.

The company separates its Japan and global operations. Japan saw organic gross profit growth of 4.7 percent, which Dentsu attributes to business from the World Baseball Classic and digital marketing services. Dentsu Aegis Network posted organic gross profit growth of 3.1 percent.

Dentsu said digital services now account for 56.9 percent of gross profit for Dentsu Aegis Network, an increase of 9.1 percent year-on-year. The company said recent acquisitions such as Merkle had played an important role in profit growth.

Organic gross profit growth for Dentsu Aegis Network stood at 4.5 percent in Asia-Pacific, with Taiwan, India, Indonesia, Singapore and Australia performing strongly. Dentsu described China as “stable”. The Americas delivered organic gross profit growth of 0.6 percent, with Argentina and Columbia singled out for strong performance but Brazil labeled “challenging”. Organic gross profit growth in EMEA was 5.8 percent, with the UK also “stable” despite concerns around Brexit.

Dentsu said acquisitions continued to advance Dentsu Aegis Network’s agenda. It made three in this year’s first quarter, entering Sri Lanka with the purchase of Grant Group, buying Dwi Sapta in Indonesia and blue-infinity in Switzerland. Grant Group is a creative agency, Dwi Sapta creative and media, and blue-infinity a ‘digital transformation’ specialist.

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