India still impacted by annualisation of client losses in media from Q2 2023: dentsu

However, in its earnings report for Q1 FY2024, dentsu says that it is seeing momentum with creative client wins in India which are yet to impact revenues

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India is still impacted by the annualisation of client losses in media from Q2 2023, reported dentsu in its Q1 FY2024 results update.

However, it added that it is seeing momentum with creative client wins in India which are yet to impact revenues. 

“The Group will benefit from momentum in client wins, yet to impact revenues, from cycling out of accounts lost in 2023 and a significant easing of comparables,” said Hiroshi Igarashi, President and Global CEO, dentsu Group Inc.

dentsu Group reports Q1 organic growth of -3.7% in Q1 of the financial year 2024. “The soft start to the year was in line with internal expectations,” it added.

dentsu’s APAC business reported an organic revenue decline of -7.1%, in line with expectations with improvements in some markets, including China. 

In 2024, the advertising network’s focus remains on internal investments and returning the group to growth. The Group will continue to accelerate the shift to One dentsu to create a unified global network, further integrating the group’s diverse capabilities. 

Igarashi added, “We believe the future of our industry is driven by client demands for greater integration of services. Clients are searching for a marketing transformation partner that can deliver true integration of media, dynamic content and data insights via solutions that seamlessly connect brand potential to business impact. This aligns perfectly with our strategy of growing our clients’ businesses through integrated growth solutions.”

Total net revenue from Customer Transformation and Technology is reported at 30% of Group net revenues in Q1 FY24. In the APAC (ex-Japan) region, growing at 7.1%, the contribution of Customer Transformation and Technology in the overall revenue stood at 9%.

dentsu’s underlying operating profit declined 23.6% (cc) YoY to JPY 29.8 bn. Operating margin declined by 310bp to 10.4% (cc) 

It wrote in the statement, “The fall in operating profit YoY is due to a lower revenue figure, but first-quarter operating profit is in line with internal expectations.

Group underlying net profit (attributable to owners of the parent) decreased by 31.1% YoY to JPY 15.8 bn due to the fall in underlying operating profit. 

Group statutory operating profit and net profit (attributable to owners of the parent) were respectively JPY 14.5 bn and JPY 5.6 bn. 

The Group’s organic growth is forecast at 1% for FY2024 with operating margins of 15%.