The Dentsu Group s 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 conditions of the Dentsu Group. Such forward-looking statements, based on information known to the management as of May 2, 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.
Overview of FY29 Changes in Net Sales 1 5-5 -1 (%) There are signs that the Japanese ad market has started to bottom out. Steadily implemented measures under the new Medium-term Management Plan -15-2 Non-consolidated Consolidated 1H 2H 1H 2H 1H 2H 1H 2H FY27 FY28 FY29 FY21 (E) Achieved increased operating income in the 2nd half 13
Digital: A Substantial Increase in Non-consolidated Net Sales Changes in Non-consolidated Net Sales of Interactive Media 25, 2, (Millions of yen) Net sales of interactive media (non-consolidated) 2,796 Strengthened capacity to make proposals in the digital domain and to provide integrated solutions 15, 1, 11,266 12,724 12,964 13,256 13,81 Expanded the mobile, SEM and solutions segments in addition to PC media services 5, Expanded our client portfolio 1H 2H 1H 2H 1H 2H FY27 FY28 FY29 14
Promotions: Growth Above the Market Average % Changes in Marketing Promotional Net Sales 2 15 1 (%) Total domestic market * Dentsu (non-consolidated) ** Established the Dentsu Promotion Center to strengthen frontline capability 5-5 Established the Solution Creative Office to provide added-value services -1-15 -2 1H 2H 1H 2H 1H 2H FY27 FY28 FY29 Implemented BPR (business process reengineering) for greater profitability * Total domestic market: year-on-year change in total sales of the POP/PR/Exhibitions industry segment Source: Current Survey of Selected Service Industries, Mar 21 (METI) **Dentsu (non-consolidated): year-on-year change in Dentsu s non-consolidated net sales in the Marketing/Promotion category 15
Global: Expanded Client Bases in Overseas Markets Diverse Client Portfolio Changes in Overseas Operating Income (Millions of yen) 3, 2,649 Overseas operating income 2,24 2, 1,282 1,418 1, -1, -669-1,29-2, 1H 2H 1H 2H 1H 2H FY27 FY28 FY29 International Accolades McGarryBowen named Advertising Age s 29 Agency of the Year Dentsu Inc. named Media Agency of the Year at the 56th International Advertising Festival (Cannes Lions 29) Media Palette (Taiwan) named Best Media Agency of the Year by the Taiwan Advertisers Association Dentsu Communications named Agency of the Year at Ad Club Bangalore s Big Bang Awards Dentsu Media (Indonesia) named Best of the Best (Media Agency) by mix, a trade journal 16
Global: Enhanced Range of Services Enhanced Range of Services The Americas / Europe Content Dentsu Sports America (est. Jul 29) Dentsu Entertainment USA (est. Apr 21) Brand Agencies Dentsu America McGarryBowen Attik Dentsu UK (reorganized in Aug 29) Digital Dentsu Interactive (acquired in Jan 21) PR Digital Dentsu BlueFocus (to be established in June 21) China / the rest of Asia Promotions Suntrend Group (capital & business alliance in Jan 21) Brand Agencies Dentsu Brand Agency Network &c. Clickstreamers India Media Dentsu Media Korea (est. Dec 29) Dentsu Media Hong Kong (est. Mar 21) 17
Platform: Enhanced Collaboration with Key Players Clients Transport Telecom Distribution Media The Dentsu Group New marketing intelligence Build new information channels Internet companies Digital devices Content providers Media services Consumers Commerce Data services Solutions 18 Mobile
Cost Control: For a Robust Earnings Structure Changes in Operating Expenses and the Ratio of Operating Expenses to Gross Profit (consolidated) (Millions of yen) (%) 6, Operating expenses 54,21 52,522 Operating expense ratio 5, 48,726 29.5 31.7 43,178 31.1 3.2 39,85 39,312 4, 27.3 4 3 Group-wide efforts to reduce operating expenses (a 12.7 billion yen reduction in FY29) 3, 24.3 2 Increased cost consciousness 2, 1 1, Optimized sourcing 1H 2H 1H 2H 1H 2H FY27 FY28 FY29 19
To Accomplish Our Medium-term Management Plan Taking on the Platform Era Dentsu 213 The Dentsu Group s Operating Income (Projection) (Billions of yen) Services Business Model Global Business Human Resources Cost 8 7 6 5 7. 4 37.3 39.7 Medium-term Goals (FY213) Consolidated operating income: 7. billion Increase operating margin to 2% or higher 3 2 1 15.8 ROE: 8% FY29 (budget) FY29 (actual) FY21 (budget) FY213 (E) 2