Dentsu posted a 6% fall in organic revenue for the September quarter as technology and finance clients delayed advertising spend.
The Japan-based advertising group revised its full year guidance again, this time to -5% (from zero and -2% previously) with no change expected to client spending in the fourth quarter.
The company has frozen hiring, cut external spending and reduced travel & entertainment costs.
The result is at the low end of global holding company peers reporting September quarter results.
IPG’s reported a 0.4% fall in organic revenue growth for the September quarter, weighed down by cautious technology clients and marketers concerned about dark economic winds.
However, Omnicom posted "strong" organic revenue growth of 3.3%, Publicis reported organic growth up 5.3% and Havas 4.5%.
Dentsu CEO Hiroshi Igarashi says he is focused on returning the group to growth.
“Through One dentsu we are creating a unified global network that combines client centricity with speed, agility and scale ensuring we deliver against our clients’ need for growth,” he says.
“To achieve this vision, we have aligned our leadership structure and talent around our core capabilities and strategic priorities.
“We have seen progress in the US market with the accelerated roll-out of One dentsu. Revenues have stabilised and we have a number of account wins that demonstrates what we can achieve when we drive collaboration and empower our people to thrive.
“As we look forward, our positioning at the convergence of marketing, technology and consulting provides us with a unique opportunity to seamlessly integrate our services to deliver growth solutions for our clients.“
Net revenue was up 1.6% to JPY 279 billion compared to the same quarter in 2022.
Group underlying operating profit fell 10.4% to JPY 37.5 billion.
Japan reported organic growth of +3% led by strength in Customer Transformation & Technology.
The Americas posted an organic decline of -6.6% as weakness in client spend from the technology and finance sectors continued to impact revenue, combined with project delays.
EMEA reported a third quarter organic decline of -17.2% and APAC (ex Japan) fell -9.1% due client losses and reduced project scope in Customer Transformation & Technology.
September quarter 2023:
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