Global CFO message

Promoting the creation of a solid business foundation for a return to growth and aiming to achieve sustained improvement in corporate value

Dentsu is a company with a history of 125 years. In order to pass on its vibrancy to the next generation and ensure its continued development, I believe that it is important to make decisions from 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. Furthermore, I will aim to restore trust in dentsu by proactively engaging and communicating with all stakeholders, leading to sustained improvement in our corporate value while achieving growth.

In our consolidated results for fiscal year 2025, although the Japan business continued to perform strongly, the International business recorded a large goodwill impairment, resulting in a net loss.
The goodwill impairment loss recognized in the fourth quarter was not due to a rapid deterioration in the medium- to long-term outlook of the International business. Rather, it resulted from a revision of the assumptions used in the impairment test to a level that, based on current expectations, minimizes the likelihood of future goodwill impairment losses. As a result, we believe the risk of additional goodwill impairment losses going forward has become extremely limited.

Restoring profitability in the International business remains one of the Group’s most important management priorities. In the Mid-Term Management Plan announced in February 2025, we positioned this as the top priority for fiscal year 2025 and steadily advanced initiatives to rebuild the business foundation and reevaluate underperforming businesses within the International business.

In fiscal year 2026, we will strengthen our competitive advantage through continued internal investments, thereby establishing a clear path toward a medium-term recovery in profitability. While maintaining the solid growth of the Japan business, we will also aim to improve the growth rate of the International business, which has experienced negative organic growth for the past several years.
Although we expect to record expenses related to the rebuilding the business foundation again in fiscal year 2026, the likelihood of additional goodwill impairment losses is now extremely limited, and we forecast a return to net profit.

Considering the recent performance and changes in the business environment, we have withdrawn certain key financial targets set for fiscal year 2027, the final year of our Mid-Term Management Plan. Meanwhile, we will continue to work toward achieving our operating margin target of 16% by advancing various initiatives. We also plan to disclose, at an early stage within fiscal year 2026, new strategies to further accelerate the transformation outlined in the Mid-Term Management Plan.

As a result of the significant goodwill impairment loss recognized in fiscal year 2025, retained earnings at Dentsu Group Inc. on a non-consolidated basis turned substantially negative. Accordingly, I regret to announce that we have decided not to pay a dividend for fiscal year 2025 and currently forecast no dividend for fiscal year 2026 as well.
We take this situation very seriously and will work to restore competitive advantage and profitability through a focused approach to priority markets and business domains, thereby improving EPS and maximizing TSR. In addition, we will promote the sale of non-core assets and make every effort to resume dividend payments in the future.
Furthermore, in order to secure financial flexibility for future growth investments without causing dilution of common shares, we have filed a shelf registration for bond-type preferred shares.

Going forward, we will continue to pursue our Group’s vision: ‘To be at the forefront of people-centered transformations that shape society’ by steadily rebuilding our business and strengthening our earning power, achieving robust growth, and aiming for sustained improvement in corporate value.