Dentsu Inc. (President: Yutaka Narita; Head Office: Tokyo; Capital: 58,967.1 million yen) held a meeting of the Board of Directors on May 15 at its Tokyo Head Office to close the accounts for its fiscal 01/02 term (ended March 31, 2002) and finalize the consolidated balance sheet and consolidated income statement.

Throughout fiscal 01/02, Japanese businesses were forced to operate in an increasingly challenging environment, as evidenced by a 2.4% decline in gross domestic product in real terms from the prior year. The economy was marked by a downturn of the IT industry combined with stagnant personal consumption and deflationary pressure. The terrorist attacks in the United States further aggravated the uncertainty over the future economic outlook. The advertising industry was also affected by the economic slowdown, which effectively cut advertising expenditures in Japan for calendar 2001 by 0.9% year on year.

In this operating environment, Dentsu's business slowed, especially in the second half of the fiscal year, and, as a result, it failed to match the record performance achieved a year earlier. Nevertheless, the past fiscal year was still the second-best year in Dentsu's history (following the prior year) for both consolidated and non-consolidated performance in terms of billings, gross profit, operating income, ordinary income and net income.

Dentsu posted consolidated billings of 1,789.4 billion yen, a 1.4% decline year on year; gross profit of 293.9 billion yen, a 2.6% decline; operating income of 61.1 billion yen, a 15.6% decline; ordinary income of 59.7 billion yen, a 17.0% decline; and net income of 27.4 billion yen, a 33.6% decline.

Initiatives to control personnel and general sales expenses paid off, and as a result the operating income margin* reached 20.8% (versus 24.8% achieved a year earlier), exceeding the management target of 20%.

Non-consolidated results for Dentsu in fiscal 01/02 showed billings of 1,433.3 billion yen, a 4.3% decline year on year; gross profit of 207.8 billion yen, a 6.8% decline; operating income of 45.9 billion yen, a 15.2% decline; ordinary income of 46.1 billion yen, a 17.6% decline; and net income of 23.0 billion yen, a 7.8% decline.

*Operating income margin = operating income ÷ gross profit × 100

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