Dentsu Group — Strength in Japan feeds FY25 profit upgrade

Dentsu Group’s better-than-expected Q325 profit performance, which was driven by Japan, and the phasing of restructuring costs and investment have enabled management to upgrade underlying profit guidance for the year. The regional revenue trends remain consistent with prior quarters, with Japan leading the charge and outperforming management’s expectations, while international markets remain weak with trends quite mixed. Relative to its peers, Dentsu’s organic growth position is broadly in the middle of the pack. Although the upgrade is encouraging, there is uncertainty due to management’s ongoing search for strategic partnerships for its international business and regarding the FY25 dividend.