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

Dentsu Inc. announced its consolidated financial results for the third quarter of the fiscal year ending December 2016 (January 1, 2016 to September 30, 2016) on November 14.

<Consolidated Results>
During the cumulative third quarter period, the Group's performance in its domestic business remained solid. Gross profit reached ¥269,616 million (a 5.5% increase compared to the same period last year*¹), driven by sponsorship sales for the 31st Olympic Games (Rio de Janeiro 2016) and the Tokyo 2020 Olympic and Paralympic Games, as well as contributions from domestic Group companies. Furthermore, the organic growth rate of gross profit for overseas operations increased by 5.7% year-on-year. By region, Europe, Middle East, and Africa (EMEA) grew 6.7%, the Americas grew 2.3%, and Asia-Pacific (excluding Japan; APAC) grew 9.1%, achieving positive growth in all regions. Excluding currency effects, overseas gross profit increased 13.0%.
As a result, revenue for the first nine months of the fiscal year was ¥588,278 million (up 0.6% year-on-year), gross profit was ¥552,107 million (up 1.7%), adjusted operating profit*² was ¥102,233 million (up 7.2%), Operating profit was ¥83,998 million (up 17.2% year-on-year). Adjusted quarterly profit attributable to owners of the parent company*3 was ¥63,958 million (up 6.2% year-on-year). Quarterly profit attributable to owners of the parent company was ¥51,151 million (up 17.3% year-on-year).
※1 The same period of the previous year corresponds to the same period of the previous year (January 1, 2015 to September 30, 2015) for the current consolidated cumulative third quarter period (January 1, 2016 to September 30, 2016). For the same period of the previous year, the consolidated period for the Company and consolidated subsidiaries with a March fiscal year-end was January 1, 2015 to September 30, 2015, while the consolidated period for consolidated subsidiaries with a December fiscal year-end was the same period.
※2 Adjusted operating profit is a profit metric 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, gains or losses on the sale of fixed assets, and other temporary factors.
※3 Adjusted quarterly profit attributable to owners of the parent is an indicator measuring recurring profit attributable to owners of the parent. It excludes from quarterly profit: adjustments related to operating profit; revaluation gains/losses on earn-out obligations and acquisition-related put options; and the tax equivalent and non-controlling interest share equivalent related to these items.

<Reportable Segment Performance>
a. Domestic Business
Gross profit for Domestic Operations was ¥269,616 million (up 5.5% year-on-year), and adjusted operating profit was ¥74.3 billion (up 20.7% year-on-year).
b. Overseas Business
For overseas operations, gross profit decreased 1.6% year-on-year to ¥282,612 million and adjusted operating profit decreased 17.2% to ¥27,926 million, primarily due to the yen's appreciation against foreign currencies.

<Non-consolidated Results>
The company's non-consolidated results (Japanese GAAP) showed net sales of ¥1,185,891 million (up 3.6% year-on-year), gross profit of ¥176,598 million (up 6.1%), operating profit of ¥50,580 million (up 30.7%), ordinary profit was ¥80,004 million (up 33.3%), and quarterly net profit was ¥80,082 million (up 84.2%).

＜Consolidated Performance Forecast for Fiscal Year 2016＞
As the results for the first nine months of the current fiscal year are 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.

Dentsu Inc. News Release
http://www.dentsu.co.jp/news/release/2016/1114-009077.html