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Olympics Advertising Japan

Dentsu profit grows in first half of 2016 alongside acquisition and investment spree

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By Charlotte McEleny, Asia Editor

August 15, 2016 | 3 min read

Dentsu profit growth reached over nine per cent for the first half of the year, despite key markets like its home of Japan seeing a slowdown economically.

Dentsu Aegis

Dentsu grows gross profit in first half of 2016

In Japan its gross profit growth was 8.4 per cent, while its international business Dentsu Aegis Network fared slightly better at 10.7 per cent. It said its Japanese profit growth was buoyed somewhat by sponsorship sales associated with the Tokyo 2020 Olympic and Paralympic Games.

In the face of a challenging economic outlook Dentsu has been on a spending spree, specifically in the areas of digital marketing. According to the group, it made 15 acquisitions or investments in the first half of 2016 and has made further since, including Merkle Group.

Tadashi Ishii, president and chief executive officer of Dentsu Inc., said; “Despite being at the epicenter of a marketing industry which is undergoing significant change, at an increasingly fast pace, the Group has continued to build a track record of strong performance, mainly due to our strategic focus on the digital economy. We will therefore continue to invest in integrating digital capabilities across the organization, so that we remain ahead of the peer group and to ensure we retain the ability to provide our clients with best-in-class solutions. This will support us in continuing to outperform the market for the remainder of this year and beyond.”

In APAC, with Japan taken out of the picture, the business was over-performing. According to Dentsu, APAC Dentsu Aegis Network delivered organic gross profit growth of 11.5 per cent in H1 FY2016, including 16.8 per cent in Q2 FY2016. Key markets for performance included China, Australia, India, Vietnam, the Philippines, Taiwan and South Korea.

However, in the Americas the picture wasn’t as positive as Dentsu Aegis Network produced organic gross profit growth of 0.3 per cent in H1 FY2016, including 2.4 per cent in Q2 FY2016. According to Dentsu, Canada continued to perform well but the US remained impacted by FY2015 account losses at mcgarrybowen.

Dentsu Aegis Network in EMEA delivered organic gross profit growth of 7.6 per cent in H1 FY2016, including 5.0 per cent in Q2 FY2016.

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