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Dentsu Group (TYO: 4324)

Last close As at 23/11/2024

JPY3,761.00

▲ 69.00 (1.87%)

Market capitalisation

JPY999,674m

Dentsu Group operates in around 120 countries. It works with leading organisations to deliver experience transformation, through media, customer experience and creative services, and business transformation services.

Dentsu’s May release of its global ad spend forecasts saw it lift current year projections from 4.6% to 5.0%, with 4.2% (unchanged) for FY25 and 4.2% (previously 4.3%) for FY26. The main uplift was in digital ad spend, up from +6.5% to +7.4% for FY24, putting it just shy of 60% of the total ad-spend pie. Across the forecast period through to 2026, ad spend is forecast to increase at a CAGR of 4.5%, led by digital at +6.7%.

Latest Insights

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TMT | Update

Dentsu Group — Still fighting market headwinds

TMT | Update

Dentsu Group — Positive momentum

TMT | Update

Dentsu Group — FY24 prospects weighted to H2

TMT | Update

Dentsu Group — Return to organic growth forecast for FY24
Dentsu Group_resized
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Sector

TMT

Equity Analyst

Fiona Orford-Williams

Fiona Orford-Williams

Director, TMT

Key Management

  • Hiroshi Igarashi

    President & CEO

  • Sayako Fujimura

    Head of IR

  • Yushin Soga

    CFO

Balance Sheet

Forecast net debt (¥m)

187742

Forecast gearing ratio (%)

20

Share Price Performance

Price Performance
% 1M 3M 12M
Actual (22.2) (14.3) (6.3)
Relative (22.5) (15.2) (17.7)
52 week high/low ¥4861.0/¥3557.0

Financials

Dentsu posted Q324 organic net revenue growth of 0.3%, making a decline of 1.1% over the nine-month period. This is slightly below expectations at the half-year and, as the market for larger, transformational projects is still stagnant, management has trimmed full year organic revenue growth guidance to 0% (was 1%) and that for adjusted operating profit by 7%. There are positive elements to these figures, in particular continuing progress in Japan and good new business boosted by the ‘one dentsu’ initiative. The unveiling of the mid-term management plan has been delayed to February 2025, with the FY24 figures. Post the reaction to the Q3 figures, the shares now trade at a 10% discount to peers on EV/EBITDA.

Y/E Dec Revenue (¥m) EBITDA (¥m) PBT (¥m) EPS (fd) (¥) P/E (x) P/CF (x)
2022A 1246401.0 217519.0 187608.0 485.0 7.8 0.1
2023A 1304552.0 178127.0 151631.0 338.0 11.1 0.1
2024E 1400100.0 190189.0 151362.0 348.0 10.8 0.1
2025E 1440000.0 206086.0 165139.0 382.0 9.8 0.0

Research

Update

TMT

Dentsu Group — Positive momentum

Update

TMT

Dentsu Group — FY24 prospects weighted to H2

TMT

Update

Dentsu Group — Still fighting market headwinds
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Thematics

thematic

TMT

MediaWatch – One step forward, two steps back

thematic

TMT

MediaWatch – Encouragements and frustrations

thematic

TMT

MediaWatch – Glimpses of positivity

thematic

TMT

MediaWatch – Rinse and repeat
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