Dentsu Now Gets More Revenue Outside Japan Than Inside It

The Tokyo-Based Agency Company Is Continuing Its Path To Becoming More Global, More Digital

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The Densu Aegis Network encompasses the company's agency businesses outside Japan.
The Densu Aegis Network encompasses the company's agency businesses outside Japan.

Dentsu Inc., the world's fifth-largest agency company, has crossed a threshold to becoming a more international player: Now more than half its revenue comes from outside its historic market of Japan.

The 114-year-old Tokyo-based company said it generated 50.7% of gross profit from outside Japan in the year ended March 31, up from 46.7% in the year earlier. Before the company acquired U.K.-based Aegis Group in 2013 for nearly $5 billion, only about 15% of revenue came from beyond its home market. The company has baptized its ad businesses outside Japan as the Dentsu Aegis Network, with agency brands including Carat, Isobar, iProspect, McGarryBowen and Vizeum.

Leading up to 2017, Dentsu set targets of going more international and also more digital. Digital accounted for 30% of revenue in 2014, up from 27% the year before.

Dentsu reported gross profit, the company's proxy for revenue, of 676.9 billion yen ($6.2 billion), up 10.1% in yen, for the fiscal year ended March 31 (fiscal 2014). Business was boosted by growth in Asian countries outside Japan (14.4%) and the Americas (7.9%)

Overall, the company's organic growth was 5.8%.

Net profit was 79.8 billion yen ($730 million), up 20.1% from the year earlier.

The company forecasts that gross profit will increase 8.6% in yen in calendar 2015 compared to calendar 2014.

Dentsu will begin reporting its results on a calendar-year basis, rather than March 31 fiscal year, effective in 2015. Dentsu's 2014 results were calculated for the first time based on International Financial Reporting Standards instead of Japanese generally accepted accounting principles. Both changes are designed to make the company's performance more easily comparable to other agency giants.

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