Overview of 1H/FY2010 and Future Management Policies

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1 12 Overview of /FY21 and Future Management Policies Tatsuyoshi Takashima President & CEO Cautionary Statement This document contains forward-looking statements regarding the intent, belief or current expectations of Dentsu Inc. or its management with respect to the results of operations and financial position of the Dentsu Group. Such forward-looking statements, based on information known to the management as of November 12, 21, are not guarantees of future performance and involve risks and uncertainties. Actual results may differ from those in the forward-looking statements as a result of various factors. Unless otherwise stated, the following discussion is based on the Dentsu Group s consolidated financial statements prepared in accordance with Generally Accepted Accounting Principles in Japan.

2 13 Overview of the First Half of FY21 Changes in Dentsu Group Earnings 1, Net Sales % Gross Profit % Capitalized on communications opportunities China and the US in particular made significant contributions. Improved the profitability of our services Operating Income % Continued with cost-reducing initiatives FY28 FY29 FY21

3 Factors that Contributed to the Strong FY21 Earnings 15 Changes in Contribution* to Non-consolidated Net Sales by Business Category (%) 1 5 Clients were won over by our integrated campaign and creative execution proposals Others その他 Content コンテンツサーヒ ス services Marketing/Promotion マーケティンク / フ ロモーション Creative クリエーティブ OOH OOHMedia メディア Interactive インタラクティフ メテ ィア Media Television テレビスポット (Spot) Television テレビタイム(Time) Radio ラジオ Magazines 雑誌 Newspapers 新聞 Change (year on year) 前年比 上期 下期 上期 下期 上期 下期 上期 下期 上期 下期 上期 下期 上期 下期 上期 Clients reassessed the functions, roles and effects of each medium. FY23 年度 FY24 年度 FY25 年度 FY26 年度 FY27 年度 FY28 年度 FY29 年度 21 FY 21 年度 * Contribution: The degree to which the changes in net sales of each business category pushed up (or down) the growth of non-consolidated net sales: (Net sales by business category for current term - net sales by business category for previous term) / non-consolidated net sales of the same period in the previous year 14

4 15 Digital: Increased Earnings Due to Enhanced Client Services Changes in Non-consolidated Net Sales of Interactive Media 25 2 Non-consolidated net sales of interactive media Significant growth in the mobile, SEM and solutions segments Expanded our client portfolio 1 5 Will pursue aggressive business activities through the Dentsu Digital Fund (1 billion yen) FY27 FY28 FY29 FY 21 Partnered with Apple to expand Apple s iad SM mobile advertising network to Japan

5 16 Global-1: Steady Expansion of Our Client Base Diverse Non-Japanese Client Portfolio Changes in Overseas Operating Income Dentsu McGarry Bowen 4. Overseas operating income Dentsu Innovation Interactive Beijing Dentsu and Other Offices in China and India Dentsu London FY27 FY28 FY29 FY 21

6 17 Global-2: New Managerial Structure Tim Andree DNW CEO, North America CEO 28- Executive Officer, Dentsu Inc. 26- CEO, Dentsu America Jim Kelly DNW Europe CEO One of the co-founders of RKCR (currently RKCR/Y&R ) Nicholas Rey DNW CFO Formerly: CFO, Ogilvy New York CFO, Euro RSCG CFO, Grey Group Asia Pacific A structure for expanded business in the Americas and Europe Dentsu Network West (DNW) Renato Loes Will assume the position of DNW Latin America CEO in December 21 Currently President of Leo Burnett Brasil and Leo Burnett Latin America A hub for stronger solutions capabilities Global Solutions Center

7 18 Platform: Three Business Strategies Digital Content Distribution Platform Marketing Intelligence Platform Smart Grid Platform

8 19 Continued Efforts to Achieve Greater Profitability Changes in Operating Expenses and the Ratio of Operating Expenses to Gross Profit (consolidated) Operating expenses Operating expense ratio 31.7% % 31.1% 29.5% % 26.2% 24.3% 4% 3% 2% Improvement in gross profit margins of businesses in the non-four traditional mass media category Continued efforts to reduce operating expenses 1% 1 % Streamlining of administrative departments 27 FY27 FY28 29 FY29 21 FY 21

9 2 To Achieve Our Medium-Term Goals The Dentsu Group s Operating Income (Projection) 22.5 billion 7. Growth in the global, digital and platform businesses Innovation in solutions and media services Continued efforts for greater profitability 3 2 Medium-Term Goals (FY213) 1 Consolidated operating income: 7. billion Increase operating margin to: 2% or higher FY29 (actual) FY21 (E) FY213 (E) ROE: 8%