Dentsu Group Inc. has released its Q1 FY2023 results reporting an organic revenue decline of -1.6% while reporting a boost in net revenues of +4.5% year on year.
APAC (excluding Japan) saw a decline in organic revenue of -7.8%. According to Dentsu, “The region was impacted by client losses and lower spend from existing clients, particularly in the Tech sector.” This coupled with lower spending in China and India as well as the switch off of ATV and lower spends in Indonesia have also had an impact, it said.
Dentsu retained its outlook for the rest of the year saying “Despite a slightly slower start to the year, the Group reiterates FY2023 net revenue, operating margin, and underlying EPS guidance issued in February, with a stronger than expected contribution from recent acquisitions.” It added that it “guides to organic growth of 1-2% for FY2023 versus c.4% previously.”
In March, the company announced two acquisitions were announced to expand it in CT&T and aim for 50% of net revenues generated by this business. The acquistions were Shift7, a US based B2B experience and commerce agency, and Tag.
“Our strategy of growing revenues in the fast growth market of Customer Transformation & Technology is progressing well, with 35% of net revenues generated by CT&T in the first quarter,” said Hiroshi Igarashi, President and CEO, Dentsu Group Inc.
“Our services empower our clients to transform their data, technology, and organizational capabilities to deliver differentiated customer experiences that drive growth.”
Regional breakdown for Q1 2023
Dentsu reiterates guidance issued in February 2023. Group organic growth is now forecasted at 1 to 2% for FY2023.