Dentsu saw negative organic growth and weaker profits in the quarter ended March 31. Organic revenue for the group declined by 1.6%, compared to the corresponding quarter in the previous year. However, the network's recent acquisitions -- Shift7 and Tag -- have boosted the Q1 net revenue, which rose more than 4.5% year-on-year.
In the March quarter, the network's net revenue was close to $2 billion (JPY 269.6 billion).
The global advertising group is now forecasting an organic growth of 1% to 2% for the year, from 4% previously. "The Group continues to expect performance to be second-half weighted driven by a number of one-off events later in the year. Underlying basic EPS guidance of 461 yen is re-confirmed, supported by a reduction in financing costs," read the company's official statement.
Hiroshi Igarashi, President and CEO, Dentsu Group Inc., said: "The first quarter was impacted by a lengthening of the sales cycle for Customer Transformation & Technology contracts in the US, as highlighted in the fourth quarter. A growing pipeline and increase in new business wins in the first quarter provides greater visibility for an improvement in second-half growth.
Our strategy of growing revenues in the fast-growth market of Customer Transformation & Technology is progressing well, with 35% of net revenues generated by CT&T in the first quarter. Our services empower our clients to transform their data, technology, and organizational capabilities to deliver differentiated customer experiences that drive growth."