Current Status & Outlook for the Dentsu Group

Outlook for the International business

  • The international business represents 56.5% of our consolidated gross profit. In the January-June period, we saw contribution from aggressive M&A activities, in particular the acquisition of Merkle, which was completed in September 2016. On a constant –currency-basis, gross profit in the international business expanded by 27.2%.
  • Meanwhile, organic gross profit growth was 0.1%, nearly flat compared with a year earlier.
  • The results were negatively impacted by several factors including strong performance in comparative periods, organic gross profit growth of 6.0% last year and 11.8% in the same period of the fiscal year before. In addition, we are facing challenging market conditions, as evidenced by earnings performance at our peers. We won 1.9 billion worth net new business wins in the H1, however we expect to realize the benefits of some new business wins from Q3 2017.
  • We made downward revision of our forecast for the international business this time, up to now, DAN has achieved quarterly organic growth which outperforms the average of the global peers in the fifteen consecutive quarters.
  • There is not a major change in this trend, DAN is still aiming the outperformance of the market and the average of the peers.
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