Dentsu Inc. Announces Consolidated Financial Results for the Second Quarter of the Fiscal Year Ending December 2016 (IFRS)

Dentsu Inc. announced its consolidated financial results for the first half of the fiscal year ending December 2016 (January 1, 2016 to June 30, 2016) on August 12.

<Consolidated Results>
During the second quarter cumulative period, the Group's performance in domestic operations remained solid. Gross profit reached ¥182,467 million (an 8.4% increase compared to the same period last year), driven by sponsorship sales for the Tokyo 2020 Olympic and Paralympic Games and contributions from domestic Group companies. Furthermore, the organic growth rate of gross profit for overseas operations increased by 6.0% year-on-year, exceeding the 4.5% growth recorded in the first half of the fiscal year. By region, Europe, Middle East, and Africa (EMEA) grew 7.6%, the Americas grew 0.3%, and Asia-Pacific (excluding Japan; APAC) grew 11.5%, achieving positive growth in all regions. Excluding foreign exchange effects, overseas gross profit increased 10.7%.

As a result, revenue for the first half of the fiscal year was ¥393,167 million (up 2.3% ^{compared to the same period last year*1} ), gross profit was ¥368,619 million (up 3.5%), ^{adjusted operating profit*2 was ¥} 68,612 million (up 8.6%), Operating profit was ¥58,651 million (up 34.7% year-on-year), ^{adjusted quarterly profit} attrib ^{utable to owners of the parent company*3 was ¥43,559 million} (up 7.2% year-on-year), and quarterly profit attributable to owners of the parent company was ¥35,785 million (up 54.0% year-on-year).

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※1 The same period of the previous year corresponds to the same period of the previous year (January 1, 2015 to June 30, 2015) for the current consolidated cumulative second quarter period (January 1, 2016 to June 30, 2016). For the same period last year, the consolidated period for the Company and consolidated subsidiaries with a March fiscal year-end was January 1, 2015 to June 30, 2015, while the consolidated period for consolidated subsidiaries with a December fiscal year-end was the same period.

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※2 Adjusted operating profit is a profit indicator measuring the performance of ongoing operations, derived by excluding from operating profit the amortization of intangible assets related to acquisitions, M&A-related expenses, impairment losses, and gains or losses on the sale of fixed assets.

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※3 Adjusted quarterly profit attributable to owners of the parent is an indicator measuring the recurring profit or loss attributable to owners of the parent. It excludes from quarterly profit: adjustments related to operating profit; revaluation gains or losses on earn-out obligations and acquisition-related put options; and the tax equivalent and non-controlling interest share equivalent related to these items.

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<Reportable Segment Performance>
a. Domestic Business
Gross profit for Domestic Operations was ¥182,467 million (up 8.4% year-on-year), and adjusted operating profit was ¥52,399 million (up 27.8% year-on-year).

b. Overseas Business
For overseas operations, gross profit was ¥186,231 million (down 1.0% year-on-year) and adjusted operating profit was ¥16,222 million (down 27.4% year-on-year) due to the yen appreciating against foreign currencies.

&nbsp; ＜Non-consolidated Results＞
The company's non-consolidated results (Japanese GAAP) showed net sales of ¥808,936 million (up 5.2% year-on-year), gross profit of ¥120,455 million (up 9.1%), operating profit of ¥35,668 million (up 34.1%), ordinary profit was ¥62,096 million (up 32.3% YoY), and quarterly net profit was ¥51,739 million (up 59.1% YoY).

＜Consolidated Performance Forecast for Fiscal Year 2016＞
As the results for the first half of the current fiscal year were largely in line with expectations, the full-year (January 1, 2016 to December 31, 2016) earnings forecast announced on May 16, 2016 remains unchanged.

The full-year outlook announced on May 16, 2016, projects revenue of ¥817.2 billion, gross profit of ¥768.7 billion, adjusted operating profit of ¥155.0 billion, operating profit of ¥132.4 billion, adjusted net income attributable to owners of the parent of ¥104.5 billion, and net income attributable to owners of the parent of ¥81.2 billion.

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Dentsu Inc. News Release
http://www.dentsu.co.jp/news/release/2016/0812-009008.html