Dentsu India continued to be one of the weak markets for Dentsu Group Inc. in the third quarter ending September 30, 2023.
In its Q3 earnings release on Tuesday, Dentsu said that its organic revenue dropped 9.1% in APAC markets (excluding Japan) while the decline was 8.0% in the nine months ending September.
Talking about the group’s performance in major markets, Dentsu Group Inc. said, “India continues to experience the impact of slower client spend in the media business and a weak pipeline.”
As Dentsu relies heavily on Customer Transformation and technology (CT&T) for its growth, the revenues from this segment reached 33% of Group revenues.
In Japan, CT&T continued to report double-digit growth driven by strong performances in Dentsu Digital and Dentsu Consulting.
Internationally, the lengthening of the sales cycle impacted the EMEA and APAC regions, while the US CT&T market saw revenue stabilisation.
Integrated Growth Solutions at the convergence of Marketing, Technology, and Consulting remain at the heart of dentsu’s competitive strategy, the group said.
“Our third quarter performance continued to show the impact of the reduced spend from clients in the technology and finance sectors, as well as project delays within Customer Transformation & Technology,” said Hiroshi Igarashi, President and CEO, Dentsu Group Inc.
“As we look forward, our positioning at the convergence of marketing, technology and consulting provides us with a unique opportunity to seamlessly integrate our services to deliver growth solutions for our clients,” he added.
It is important to note that the group is working to turn around its India business by transforming it into a consulting business under its new CEO Harsha Razdan.
Dentsu's Q3 results have revealed a continuing organic revenue dip, the third quarter has seen a 6.0% decline, continuing the trend of -4.7% for Q2 and -1.6% for Q1.
The Group's underlying operating profit declined 10.4% year-on-year to JPY 37.5 billion, which the Group says was adversely affected by charges relating to severance and charges within the DACH cluster of Germany, Austria and Switzerland.
However, reported net revenue increased by 1.6% in the third quarter, with currency positively impacting by JPY 11.0 billion and M&A contributing JPY 11.1 billion.