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Dentsu Group has reported a modest return to growth in its latest earnings results for H1 2024, marked by a 0.2% year-on-year increase in organic revenue.
The Group highlighted this growth was part of a period of sequential quarterly progress, driven by an increase in client pitch wins across all four regions. The company also cited its "One Dentsu" strategy—which focuses on operating as a unified global network—as an instrumental part of these improvements. Despite a challenging global macroeconomic environment, Dentsu also reaffirmed its full-year guidance of approximately 1% organic growth and a 15% operating margin, reflecting a cautiously optimistic outlook.
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By geography, Japan was among the top performers, achieving a 1.8% organic revenue increase (slightly down from 2.4% in Q1), with net revenue reaching ¥287.4 billion (approximately $1.95 billion USD). For the first half of the year, Japan saw a 2.1% organic revenue growth, driven largely by double-digit growth in internet media and Business Transformation (BX), alongside high single-digit growth in Digital Transformation (DX). This performance was driven by increased client spending from both existing and new clients.
In contrast, the APAC region (excluding Japan) continued to encounter challenges, experiencing a 6.2% decline in organic revenue during Q2, with an overall regional drop in organic growth in H1 2024 to 6.6% The decline was largely attributed to ongoing client losses and underperformance in the Customer Transformation and Technology (CT&T) segment, particularly in Australia. Despite some positive signs in markets like Thailand and Indonesia, where strong local client relationships helped stabilise performance, the overall outlook for APAC remains challenging. Dentsu's strategy for the second half of the year will focus on strengthening cross-selling efforts across the region as part of the broader One Dentsu strategy, but the region is expected to only meet internal expectations for the full year.
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Meanwhile, the Americas and EMEA regions showed a more mixed performance. The Americas saw a 3.7% decline in organic revenue in Q2, reflecting ongoing challenges, though this marks a continued recovery from Q4 2023. Over the first half of 2024, the region reported a 6.6% decline, but the improvement in Q2 suggests that efforts to stabilise are beginning to take effect. EMEA reported 7.8% organic growth in Q2, largely due to a rebound from one-off negative impacts in the prior year and stronger-than-expected media performance in several local markets. However, despite this positive Q2 performance, the region’s organic revenue for H1 2024 still saw a slight decline of 0.9%, indicating that while EMEA is showing signs of recovery, it is still working to overcome earlier challenges.
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Looking ahead, Dentsu said it is committed to enhancing organic growth and leveraging its integrated growth solutions to drive client impact on a global scale.
Hiroshi Igarashi, president and global CEO of Dentsu Group Inc, said: "The second quarter saw a return to growth, with the group reporting organic revenue growth of 0.2% YoY. The group has seen continued sequential quarterly improvement with momentum in our client pitch win rate. We reiterate our full-year guidance of approximately 1% organic growth and c. 15% operating margin.”
He also emphasised the broader strategic goals, saying over the last six months, “we have made decisive progress in aligning our people, brand, and market presence to strengthen our Dentsu proposition. We have unlocked our collective power and potential by operating as One Dentsu, which is beginning to show a positive impact on performance. Our H1 net new media wins across Americas, EMEA and APAC are the highest for the past five half years and Japan has seen a recovery in pitch win rates."
As for the broader economic context, Igarashi acknowledged: "Whilst we remain conscious of the less certain macro environment within which we are operating, with a less confident consumer, we believe clients are continuing to invest in innovation and marketing to drive volume growth within their businesses. Now more than ever clients need integrated growth solutions, integration of data and media – One Dentsu ensures we can create differentiated solutions for our clients to drive their business growth."
- Group net revenue: ¥287.4 billion (YoY +11.0%)
- Organic growth: +0.2%
- Operating margin: 11.5% (up 290bp YoY)
- Japan Q2 organic revenue: +1.8%
- APAC Q2 organic revenue: -6.2%
- Americas Q2 organic revenue: -3.7%
- EMEA Q2 organic revenue: +7.8%