Dentsu Inc. Investor Day Our M&A track record

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1 Dentsu Inc. Investor Day Our M&A track record September 4, 2015 Nick Priday CFO Dentsu Aegis Network Innovating The Way Brands Are Built

2 Agenda Our investment priorities Our M&A set-up and structure The importance of M&A Case studies of recent acquisitions Delivering value through financial investment 6 Conclusions & Q&A 1

3 Our investment priorities Innovating The Way Brands Are Built

4 Key focus areas for investment M&A Global functions Property 3

5 Our M&A set-up and structure Innovating The Way Brands Are Built

6 Consistent delivery of acquisition execution Specialised in-house execution team in place: Acquisition targets identified by: - Country management for small, local deals - Global brand management for small / mid-sized cross-border and capability in-fill deals - Executive management for mid to large sized strategic deals Supported by central and regional M&A teams managing pipeline of active deals Monthly review by M&A Committee Well-established M&A policies, practices and procedures in place 5

Consistent delivery of acquisition execution Measure acquisitions against strict investment criteria: Target delivery of ROIC 30% above post-tax WACC Margin enhancement in Year 1 Other investment

7 Consistent delivery of acquisition execution Measure acquisitions against strict investment criteria: Target delivery of ROIC 30% above post-tax WACC Margin enhancement in Year 1 Other investment criteria, include payback and IRR Acquisitions structured to maximise opportunity but minimise risk: Initial consideration limited Minimum 4 year earn-out plans implemented Vendors occasionally retain a minority stake 6

Strong track record of integration and key management retention Management retention relating to acquisitions and investments made since 2006: 71% senior management retention rate 88% of senior

8 Strong track record of integration and key management retention Management retention relating to acquisitions and investments made since 2006: 71% senior management retention rate 88% of senior management have stayed beyond earn-out expiry (excluding those currently in earn-out) 41% of senior operational management group came into the business through acquisition Integration is a key focus area strategic, commercial & functional Consistent re-branding strategy for acquisitions: Re-branding usually takes place early on in Year 1 Dentsu Aegis Network is attractive for vendors: Operating Model enables quick integration and immediate opportunities for vendors No management or referral fees, unlike some peers 7

9 The importance of M&A Innovating The Way Brands Are Built

10 The importance of M&A Accelerating our strategic objectives OFFER VISION Innovating The Way Brands Are Built OBJECTIVES 1. Increase exposure to growth markets and segments 2. Build capability in the digital economy 3. Broaden our services across clients 4. Grow international client base 5. Lead in top 20 markets USA and China 1 st 6. Build a scalable organisation through innovation Strategy driven by culture & accelerated by acquisitions 9

m Dentsu Aegis - number of deals & acquisition investment, 2006-2014 350.5 290.4 254.0 230.0 205.8 143.8 103.7 63.9 12 35.8 16.

11 m Dentsu Aegis - number of deals & acquisition investment, * No. No. Deals deals Cumulative Initial Consideration + earn-outs paid in the year * To 30 June

12 Case studies of recent acquisitions Innovating The Way Brands Are Built

13 Recent acquisitions 12

ecommera Context: ecommerce and content production identified by Isobar as key capabilities necessary to power the end-to-end experience of customers.

14 ecommera Context: ecommerce and content production identified by Isobar as key capabilities necessary to power the end-to-end experience of customers. Initial consideration: 45 million Completion date: June 2015 Geography: Headquartered in London with offices in New York, Bulgaria and India. Capability areas: ecommerce delivery System integration Site design and build 13 24

3 million Completion date: November 2014 Geography: Headquartered in London with offices in

15 Fetch Context: Mobile media spend is increasing significantly as clients, media owners and the AdTech space now focus on this exciting sector of the market. Initial consideration: 28.3 million Completion date: November 2014 Geography: Headquartered in London with offices in San Francisco and New York Capability area: Mobile media marketing Mobile media planning & buying 14 24

16 MKTG Context: Scale Dentsu Aegis Network s global experiential network in the US. Initial consideration: 31.4 million Completion date: May 2014 Geography: Headquartered in New York, with offices in the San Francisco, Los Angeles, Chicago, Cincinnati and London. As well as 50 additional field offices spread across the United States. Capability area: Experiential marketing Strategy, planning, and execution of complex, multinational event campaigns 15

John Brown Context: Provides iprospect with the ability to deliver and publish digital content that drives performance. Initial consideration: 20.

17 John Brown Context: Provides iprospect with the ability to deliver and publish digital content that drives performance. Initial consideration: 20.2 million Completion date: May 2015 Geography: Headquartered in London with offices in South Africa, Hong Kong and Dubai Capability area: Publishing & content marketing Print and digital publishing Digital: site design, development, and film production Content management and strategy 16

18 Delivering value through financial investment Innovating The Way Brands Are Built

19 DAN acquisition return track record On a portfolio basis we have delivered an average Return on Invested Capital of 14.1%, from 2006 to 2014, more than double Dentsu Inc. s post-tax WACC 18

20 Investing in Global functions Creating a platform for future growth FINANCE I.T. H.R. 19

21 Investing in Property Property strategy aligned to our operating model Focused on having all agency brands in 1 location Clear and consistent property strategy 28 re-locations since 2010 All brands in same location in 61 cities 20 20

22 6 Conclusions & Q&A Innovating The Way Brands Are Built

23 Focusing on M&A Accelerating our strategy Successful track record of executing and integrating deals - Supported by well-managed structure and processes - Experienced, integrated team Consistent delivery of creating shareholder value through acquisitions - ROIC well above post-tax WACC Will continue to focus on: - Increasing exposure to faster-growing markets and segments - Building our presence in North America and China - Enhancing our service offering, particularly across the digital landscape 22

24 Dentsu Inc. Investor Day Our M&A track record September 4, 2015 Nick Priday CFO Dentsu Aegis Network Innovating The Way Brands Are Built

[International] Source of Value-Creating Capability: Diversifying the Portfolio on a Global Basis

[International] Source of Value-Creating Capability: Diversifying the Portfolio on a Global Basis Diversifying the portfolio on a global basis Progress and future strategy Tim Andree Director and Executive