dentsu’s Q2 FY2021 revenue growth sees rebound as client confidence improves

dentsu group’s Q2 FY2021 organic revenue growth saw a significant rebound in performance, at 15.0%. Dentsu Japan Network grew at 12.0% and Dentsu International saw a growth of 17.0%.

“As we pass the anniversary of the start of the pandemic, revenues continue to recover across all regions with strong growth in digital solutions. Client confidence is restoring with spending levels more resilient and predictable,” the company said in a statement.

Operating profit for the quarter was up 71.6 per cent y-o-y for the second quarter, while operating margin for the quarter was 12.2 per cent. Operating margin registered a growth of 370 basis points over the corresponding quarter last year.

Commenting on the numbers, Toshihiro Yamamoto, President and CEO, Dentsu Group Inc., said, “Dentsu Group delivered a strong second quarter performance, reflecting the growing consumer and client confidence we see across all regions. Underling profit growth continues to be strong, exceeding our expectations, and demonstrates our commitment to our margin targets.

The second quarter saw a return to acquisitions for the Group with the announcement of an agreement to acquire LiveArea, a global customer experience and commerce agency that will join the Merkle brand within Dentsu International.

The acquisition perfectly aligns with Dentsu Group’s stated ambition of reaching 50% of revenue LCoS generated through Customer Transformation & Technology, encompassing the fast growth areas of customer experience and commerce.

These structural growth areas drive deeper client relationships as we become embedded within our clients’ data and technology. The greatest opportunity for brands today, as they build strategies to re-emerge from the pandemic, is customer experience transformation. Creating competitive differentiation through marketing strategies, supported by data, technology platforms, and analytics is where we see the greatest demand for our services. These services also transform our revenue profile, generating a higher level of recurring revenues through ongoing managed services whilst also transforming our ability to deliver services from lower cost locations.

With many of our people still working from home, their wellbeing and our future of work approach continue to be a priority for myself and the wider executive leadership team. The extraordinary talent throughout the organisation ensures we are well positioned to remain leaders in our industry. I would like to express my personal thanks to all our 64,000 people across the Group.

Whilst the future path of the pandemic remains uncertain, our full year guidance confirms our confidence in the outlook for the second half of FY2021, as well as our ability to meet our medium-term targets by 2024.”