Global CFO message

Promote the creation of a solid business foundation for a return to growth and aim to continuously improve corporate value

Dentsu is a company with a history of over 120 years. In order to pass on its vitality to the next generation and ensure its continued development, we, the management team, believe that it is important to make decisions with a medium- to long-term perspective and work toward growth together with our talented employees around the world. To achieve this, as Global CFO, I will first strengthen financial governance and build a solid business foundation to achieve the financial targets of our Mid-Term Management Plan. Furthermore, while achieving growth, I hope to earn greater trust in dentsu by proactively communicating with all of our stakeholders, leading to sustained improvements in our corporate value.

In our consolidated results for fiscal year 2024, although the Japan business performed very well, the International business recorded a large impairment loss, resulting in a net loss for the second consecutive year.

One factor was the relative weakening of the Group’s position in an increasingly competitive environment. The main reason, however, was an overreliance on an M&A growth strategy, which led to lower profitability and competitiveness in the International business. Taking these harsh results very seriously, on February 14, 2025 we announced a three-year Mid-Term Management Plan with the goal of overcoming these challenges and returning to strong organic growth by fiscal year 2027.

In 2025, the first year of our Mid-Term Management Plan, we will first focus on restoring profitability by reevaluating underperforming businesses and rebuilding our business foundation. Regarding the reevaluation of underperforming businesses, we will implement thorough and swift measures in fiscal year 2025 to address businesses that are not contributing to increasing shareholder value, with the aim of eliminating unprofitable markets by fiscal year 2026. Furthermore, with regard to the rebuilding of our business foundation, we will record a one-time expenses in fiscal year 2025 to simplify organizational structures while pursuing the standardization and sophistication of operations.

With regard to financial policy, we will focus on restoring profitability and competitive advantage, and rebuilding a healthy and efficient balance sheet within three years through disciplined financial activities.

Regarding capital allocation, we will prioritize a one-time expenses related to the rebuilding of our business foundation and internal investments aimed at growth. Meanwhile, with regard to shareholder returns, we will maintain our policy of a “35% payout ratio of underlying basic EPS,” while aiming for stable dividends by maintaining the same amount as the previous fiscal year in fiscal 2025, when investments will take precedence. Although we had restrained M&A activities in fiscal year 2024, we have decided to selectively undertake M&A in line with our business strategies, depending on the progress and outlook of our business recovery, and will make decisions and manage them with stronger discipline than before.

The key financial targets for 2027, the final year of the Mid-Term Management Plan, are an organic growth rate of 4%, an operating margin of 16–17%, and an operating cash flow per year of 140 billion yen. In addition, we have set a management indicator with a greater emphasis on shareholder value: ROE in the mid-teens range.

We see the achievement of these goals as a necessary milestone to embody our Group’s vision: ‘To be at the forefront of people-centered transformations that shape society.’ We are committed to achieving sustainable, strong growth and improving both shareholder value and corporate value.