Dentsu Inc. Announces IFRS Financial Results for the First Half of Fiscal Year Ending December 2015
Dentsu Inc. announced its consolidated financial results for the first half of the fiscal year ending December 2015 (April 1, 2015 to September 30, 2015) on November 11.
<Consolidated Results>
During this cumulative second quarter period, the Group's performance in its domestic business saw a decline due to the aftermath of the 2014 FIFA World Cup Brazil. However, contributions from the 15th IAAF World Championships in Athletics in Beijing, sponsorship sales for the Tokyo 2020 Olympic and Paralympic Games, and domestic group companies resulted in gross profit of ¥161,330 million (up 1.9% year-on-year). and adjusted operating profit reached ¥33,897 million (up 0.2% year-on-year), both exceeding the previous year's figures. Furthermore, the organic growth rate of gross profit for overseas operations during the first half of the fiscal year recorded double-digit growth of 11.8% year-on-year, driven by contributions from new clients. By region, EMEA (Europe, Middle East, Africa: +13.8%), Americas (North and South America: +9.1%), and APAC (Asia-Pacific excluding Japan: +12.8%) contributed. Adjusted operating profit for overseas operations was ¥223,450 million (up 47.7%), significantly exceeding the prior-year period.
As a result, revenue for the first half of the fiscal year was ¥373,947 million (up 13.6% year-on-year), gross profit was ¥349,207 million (up 14.4%), *adjusted operating profit was ¥56,110 million (up 14.6%), Operating profit was ¥43,829 million (up 11.8% YoY), profit attributable to owners of the parent for the quarter was ¥26,054 million (up 23.8% YoY), and adjusted profit attributable to owners of the parent for the quarter was ¥36,831 million (up 22.5% YoY).
*Adjusted operating profit is a profit metric that measures the performance of recurring business operations by excluding temporary factors from operating profit, such as amortization of intangible assets related to acquisitions, impairment losses, gains/losses on sales of fixed assets, and acquisition-related costs.
<Reportable Segment Performance>
a. Domestic Business
Gross profit for Domestic Operations was ¥161,330 million (up 1.9% year-on-year), and adjusted operating profit was ¥33,897 million (up 0.2% year-on-year).
b. Overseas Business
Gross profit for overseas operations was ¥188,106 million (up 27.8% year-on-year), and adjusted operating profit was ¥22,345 million (up 47.7% year-on-year).
For overseas subsidiaries and other companies with a fiscal year-end of December 31, the results for the first half of the current fiscal year generally reflect the six-month period from January 1, 2015, to June 30, 2015.
＜Non-consolidated Results＞
The company's non-consolidated results (Japanese GAAP) showed net sales of ¥740,822 million (up 0.8% year-on-year), gross profit of ¥105,121 million (down 2.1%), operating profit of ¥22,192 million (down 4.5%), ordinary profit was ¥41,046 million (down 5.3%), and quarterly net profit was ¥36,144 million (up 8.3%).
For detailed results for the first half of the current fiscal year, please refer to: http://www.dentsu.co.jp/ir/
(Reference: Scope of Consolidated Financial Statements)
The scope of consolidated financial statements includes 706 consolidated subsidiaries and 64 equity-method affiliates. The breakdown by reporting segment is as follows: for consolidated subsidiaries, 81 domestic and 625 overseas; for equity-method affiliates, 21 domestic and 43 overseas.
＜Regarding the Consolidated Performance Outlook for Fiscal Year 2015＞
Consolidated results for the first half of the current fiscal year are largely in line with expectations. Therefore, the full-year (April 1, 2015 to December 31, 2015) earnings forecast announced on May 14, 2015 remains unchanged. The pro forma (January 1, 2015 to December 31, 2015) earnings forecast also remains unchanged.
(Reference:Consolidated Earnings Forecast Announced onMay14, 2015)
- Full-Year (April 1, 2015 -December 31, 2015) Performance Forecast
Revenue: ¥664.9 billion, Gross Profit: ¥643.3 billion, Operating Profit: ¥100.0 billion, Adjusted Operating Profit: ¥122.3 billion, Net Profit (attributable to owners of the parent): ¥63.5 billion.
- Pro FormaForecast(January 1, 2015 -December 31,2015)
Revenue: ¥776.4 billion (up 7.0% YoY), Gross Profit: ¥735.1 billion (up 8.6% YoY), Operating profit: ¥120.3 billion (down 12.5% YoY), Adjusted operating profit: ¥148.8 billion (up 11.5% YoY), Net income attributable to owners of the parent: ¥76.4 billion (down 6.2% YoY), Adjusted net income attributable to owners of the parent: ¥99.0 billion (up 11.0% YoY). The adjusted operating margin is expected to increase by 0.5 percentage points to 20.2%.
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