Global CFO message

As members of the Group's management team, it is essential that we make decisions from a medium- to long-term perspective and work vigorously toward growth together with dentsu's diverse and talented people around the world, so that we can pass on dentsu, a vibrant organization with a 125-year history, to future generations and enable it to prosper for years to come.

As Global CFO, I will strengthen financial governance and build a solid business foundation. At the same time, through proactive communication with all our stakeholders, I will work to restore trust in dentsu and achieve sustainable improvement of corporate value.

In the consolidated financial results for 2025, performance in the Japan business remained strong. However, the Group recorded a statutory net loss as a result of recognizing significant goodwill impairment losses in the International business in the second and fourth quarters.

The goodwill impairment loss recognized in the fourth quarter did not result from a rapid deterioration in the medium-term outlook for the International business. Rather, it resulted from a revision of the assumptions for impairment testing, as of February 2026, to a level at which no further goodwill impairment losses were expected to arise. As a result, we believe that the possibility of recognizing additional goodwill impairment losses going forward has become extremely limited.

Although we forecast statutory net profit of approximately 70 billion yen for 2026, we are focusing on restoring profitability through the reevaluation of underperforming businesses and rebuilding the business foundation across the three International regions. The benefits of these initiatives are steadily becoming visible. In 2025, both China and Australia returned to profitability on an underlying operating profit basis, while operating cash flow in the International business also returned to positive.

In August 2026, we announced the Mid-Term Management Plan Update. From 2026 through 2028, the Group will prioritize improving financial soundness and strengthening the foundation for sustainable competitiveness. As the most important KPI supporting these objectives, we have set a target operating margin of 16% for 2028. The fundamental principle behind the Mid-Term Management Plan Update is not only to pursue short-term margin improvement but also to enhance corporate value by balancing profitability improvement with investments we believe are necessary to strengthen our future competitiveness.

In 2026, the first year of the updated plan, we will maintain strong growth in the Japan business while continuing to improve profitability in the International business. We will steadily rebuild our business foundation and reevaluate underperforming businesses while continuing to invest in priority areas.

With respect to shareholder returns, we aim for the early resumption of dividends while maintaining an appropriate balance between growth investments and financial soundness. Improving financial soundness is not solely for resuming dividends. We believe that securing the capacity to invest for future growth and building a strong financial foundation capable of withstanding changes in the business environment are essential prerequisites for improving corporate value over the medium to long term. In addition, a shelf registration for bond-type class shares has been filed to preserve flexibility for future growth investments and strengthen the financial foundation.

Going forward, toward realizing the Group's ambition of becoming a "Growth Partner" that delivers the greatest impact on the growth of our clients and society, we will steadily build the foundation for a return to growth over the three years through 2028 and translate this into sustainable growth beyond that period.