Dentsu Group has released Q2 2022 financial results which show organic growth of 8.2% with Dentsu Japan Network at 7.9% and Dentsu International at 8.4%. Net revenue rose 19.3% from the previous year to JPY 260 billion ($1.95 billion), up from the 16.4% gain posted in Q1.
The APAC region saw growth from markets including Australia, India, Korea, and Singapore.
The group saw strong growth from its Customer Transformation & Technology division, which grew 22.5% on year in Q2 to make up nearly a third of revenues.
“We continue to grow revenues in Customer Transformation & Technology both organically and through acquisition and I am delighted to welcome all 950 employees from both Pexlify and Extentia who joined the Dentsu Group in recent weeks,” said Hiroshi Igarashi, President and CEO, Dentsu Group Inc.
Looking ahead, Igarashi said: “Whilst the macro-outlook may remain uncertain, we enter the second half of the year with confidence. Our improved revenue mix, our deep client relationships, strong balance sheet underpinned by the transformation the Group has undertaken over the past two years positions us well for the future.”
H1 FY2022: Key Financials
Group net revenue JPY 518.9 bn (YoY +17.8%, +11.5% on a constant currency basis)
- 14.6% growth in net revenue at Dentsu Japan Network, and 20.2% (9.5% on a constant currency basis) at Dentsu International.
- Net revenue increased due to organic growth of JPY 39.2 bn, currency positively impacted by JPY 24.7 bn, and M&A contributed JPY 14.3 bn.
Group organic growth was 8.2%. (8.9% excluding Russia)
- 9.0% organic growth at Dentsu Japan Network, and 7.6% at Dentsu International (8.8% excluding Russia). H1 FY2022 saw growth in all regions by continued growth in media as well as increased client spend on digital transformation initiatives.
Group underlying operating profit increased by 25.6% (19.8% on a constant currency basis) yoy to JPY 89.9 bn. Operating margin improved by 100 bp (120 bp on a constant currency basis) to 17.3% reflecting operating leverage from higher revenues and the continued focus on costs.
- At Dentsu Japan Network, underlying operating profit was JPY 57.1 bn (YoY +32.6%); operating margin of 26.5% (YoY +360 bp)
- At Dentsu International, underlying operating profit was JPY 36.1 bn (YoY +16.8%, +5.1% on a constant currency basis); operating margin excluding Russia of 12.5% and operating margin including Russia of 11.9% (YoY -20 bp, -50 bp on a constant currency basis).