NEW DELHI: Japan-based advertising and public relations giant, Dentsu has reported an annual operating loss of $1.3 billion for the financial year. It is the second consecutive year the holding company has reported red in its ledgers. The group's annual revenues fell 11.1 per cent on an organic basis, with declines of 13 per cent at Dentsu International and 8.3 per cent at Dentsu Japan.
Dentsu has taken an impairment charge of 140.3 billion yen on the value of the international business. It blamed the pandemic for causing “a slowdown in demand across our industry” but its results were significantly weaker than some of its rivals.
Dentsu said there was a pattern of improvement between Q2, the worst of the pandemic, and Q4 but it still suffered double-digit declines in all three key regions, the Americas (down 13 per cent), EMEA (down 14.4 per cent) and APAC (10.9 per cent) in Q4.
The holding company has been reeling under big losses and the impact of the Coronavirus crisis has been quite evident on its performance. A few months ago, it indicated plans to lay off around 6,000 global employees.
It has also rolled out a new four-year “mid-term” management plan, running until the end of 2024, with four pillars of transformation and growth, operations and margin, capital allocation priorities and shareholder returns, and social impact.
Denstu Group Inc president & CEO Toshihiro Yamamoto said, “Our strategy of Integrated Growth Solutions remains the centre point of our vision with particular focus on the strongest growing sectors, customer transformation and technology, which we expect to reach 50 per cent of group revenue over time. With 95 of the world’s top 100 advertisers already our clients, our opportunity as a group is to deepen our existing client relationships. The long-term effect of the pandemic will be to further boost digital use and innovation across the world. This fits precisely with our competitive advantage as one of the very few integrated global communication, data and marketing innovators.”