Dentsu Q3 2014
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Q3 Results from Dentsu

Q3 Results from Dentsu

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Dentsu Q3 2014 Presentation Transcript

  • 1. 2013 The Third Quarter’s Results Please be reminded that the figures shown in this presentation may be different from those shown in the financial statements as this presentation has been prepared for investors to understand our businesses. Please refer to the annotations on Appendix for each definition of the indicators February 13, 2014
  • 2. Disclaimer Forward-Looking Statements This presentation contains statements about Dentsu that are or may be forward-looking statements. All statements other than statements of historical facts included in this presentation may be forward-looking statements. Without limitation, any statements preceded or followed by or that include the words “targets”, “plans”, “believes”, “expects”, “aims”, “intends”, “will”, “may”, “anticipates”, “estimates”, “projects” or, words or terms of similar substance or the negative thereof, are forward-looking statements. Forward-looking statements include statements relating to the following: information on future capital expenditures, expenses, revenues, earnings, synergies, economic performance, and future prospects. Such forward-looking statements involve risks and uncertainties that could significantly affect expected results and are based on certain key assumptions. Many factors could cause actual results to differ materially from those projected or implied in any forward-looking statements. Due to such uncertainties and risks, readers are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. Risks, uncertainties or other factors that could cause actual results to differ materially from those expressed in any forward-looking statement include, without limitation ⅰ Risk related to fluctuations in the economic and business environment ⅱ Risk related to structural changes in the media ⅲ Risk related to our ability to realize our financial targets ⅳ Risk related to common business practices ⅴ Risk related to competition among advertising agencies ⅵ Risk related to the development of systems and databases ⅶ Risk related to legal or regulatory changes ⅷ Risk of litigation Dentsu disclaims any obligation to update any forward-looking or other statements contained herein, except as required by applicable law. 1
  • 3. 1. Summary 2012 Q3 YTD yoy 2013 Q3 YTD 2012 Q3 YTD Current Previous Turnover 2,945,048 1,412,195 + 108.5 2,514,945 + 17.1 Net sales 1,662,485 1,412,195 + 17.7 1,519,630 + 9.4 414,373 248,963 + 66.4 352,882 + 17.4 24.9% 17.6% + 7.3 23.2% + 1.7 34,739 38,116 (8.9) 25,895 + 34.2 8,251 981 + 740.8 ▲ 656 Net income 20,694 19,939 + 3.8 4,452 + 364.8 EBITDA 78,311 50,146 + 56.2 61,598 + 27.1 Adjusted operating income 66,322 41,355 + 60.4 50,546 + 31.2 16.0% 16.6% (0.6) 14.3% + 1.7 192.8yen 93.0yen + 107.2 116.8yen + 65.0 96.7yen 79.4yen + 21.8 149.4yen 125.2yen + 19.3 JPY mn Gross profit Gross profit margin Operating income Non-operating income/loss Operating margin Adjusted EPS yoy % Proforma Proforma % Proforma - Currency JPY/US$ (Jan-June average) JPY/GBP (Jan-June average) *Adjusted operating income and adjusted EPS: Amortization of goodwill and M&A related intangible asset needs to be added back 2
  • 4. 2. Gross profit growth year on year (JPY) 2012 Q3 YTD Currency year on year (Proforma) (JPY) 2013 Q3 YTD Q3 YTD Currency +9.7bn +132.7bn Acquisitions Organic 2012 248.9bn Gross profit after currency &acquisitions adjustment 391.5bn Acquisitions Organic growth +5.8% +22.8bn 414.3bn Organic 2013 Q3 YTD 352.8bn +31.4bn +7.2bn +22.8bn 414.3bn 3
  • 5. 3. Gross profit by region 2013 Q3 YTD JPY mn Gross profit Japan 221,534 yoy% v.s proforma % Adjusted operating income yoy% proforma Organic growth % % v.s + 7.4 operating margin 45,274 + 27.9 + 27.9 20.4% + 7.4 + 3.3 + 3.3 + 7.5 EMEA 71,763 + 29.3 - - - + 3.2 Americas 67,672 + 178.4 + 34.6 - - - + 6.7 APAC 54,160 + 237.2 + 32.2 - - - + 7.1 - - - internal transaction (non Japan related) Dentsu Aegis Network total ▲ 120 + 2,795.0 - - 193,476 + 352.0 + 31.9 operating margin Consolidated adjustment & others Dentsu consolidated gross profit operating margin 21,103 + 273.6 10.9% ▲ 637 414,373 - - + 66.4 + 17.4 ▲ 55 (2.3) - + 42.2 - + 5.5 + 0.8 - 66,322 + 60.4 + 31.2 16.0% (0.6) - + 1.7 *Organic growth in regional segments and total of dentsu aegis network is based on local accounting standard *yoy% is compared with dentsu network result + 5.8 4
  • 6. 4. Operating margin (adjusted operating income base) Dentsu consolidated Japan DAN 2013 forecast (annual) 20.4% 19.0% 17.7% 17.4% 15.1% 17.1% 13.4% 13.3% 13.0% 11.1% 18.2% 13.3% 10.9% 16.0% 14.9% 16.6% 14.9% 13.4% 18.6% 18.4% 13.8% 11.9% 10.9% 10.9% 8.3% Apr 1-Sept Apr 1-Mar Apr 1-Sept Apr 1-Mar Apr 1-Sept Apr 1-Mar Apr 1-Sept Apr 1-Dec Apr 1-Mar 30 31 2010 *DAN: From 2013, DAN includes Aegis 30 31 2011 30 31 2012 30 31 31 2013 5
  • 7. 5. Operating income to Net income JPY mn Operating income 2013 Q3 YTD 2012 Q3 YTD yoy % 34,739 38,116 (8.9) Net non-operating income 8,251 981 + 740.8 Non-operating income 17,432 7,414 + 135.1 9,180 6,433 + 42.7 42,991 39,098 + 10.0 1,455 ▲ 2,576 Extraordinary income 5,034 233 + 2,054.8 Extraordinary loss 3,579 2,810 + 27.4 Income before income taxes and minority interests 44,446 36,521 + 21.7 Income taxes 22,592 15,464 + 46.1 1,159 1,117 + 3.8 20,694 19,939 + 3.8 Non-operating expenses Ordinary income Net extraordinary income (loss) Minority interests in income Net income - 6
  • 8. 6. Balance sheet JPY mn 2013 End of Dec 2013 End of March yoy % Current assets 1,116,429 1,122,602 (0.5) Fixed assets 1,212,323 1,082,966 + 11.9 Total assets 2,328,752 2,205,569 + 5.6 Current Liabilities 1,017,625 1,317,554 (22.8) 466,351 279,377 + 66.9 1,483,977 1,596,931 (7.1) Shareholders' equity 698,258 570,419 + 22.4 Other comprehensive income accumulated 121,848 14,076 + 765.6 24,668 24,141 + 2.2 844,775 608,637 + 38.8 2,328,752 2,205,569 + 5.6 Fixed liabilities Total liabilities Minority interests Net assets Total liabilities and net assets total JPY/GBP 158.1 yen 139.5 yen + 13.3 JPY/US$ 97.8 yen 86.6 yen + 12.9 *Currency: B/S (end of Dec): Sept 30, 2013, B/S (End of March): Dec 31, 2012 7
  • 9. 7. Net Debt 2013 End of Dec 2013 End of March Total debt 360,157 215,852 Cash and marketable securities 134,506 208,473 Net debt 225,650 7,379 EBITDA (LTM) 102,900 74,734 Net debt / EBITDA (LTM) 2.19 x 0.10 x Net debt equity ratio 0.28 x 0.01 x JPY mn *LTM: Last twelve month, (Aegis Group Figure: 9 months from Jan-Sept, 2013) 8
  • 10. 8. Dentsu Aegis Network Jan-Dec gross profit growth (unaudited) Organic growth % (Jan-Dec) Organic growth % (Oct-Dec) EMEA + 2.3 + 0.4 Americas + 7.6 + 10.2 APAC + 9.1 + 14.1 + 5.9 + 6.8 DAN total *Based on local accounting standard (unaudited) 9
  • 11. 9. Fiscal year 2013 (Apr to March) forecast JPY mn Net sales 2013 forecast (annual) 2013 H2 Oct-Mar forecast 2013 H1 Apr-Sept actual 2,292,000 1,209,639 1,082,360 + 18.1 + 18.6 + 17.5 578,500 309,306 269,193 + 67.2 + 68.8 + 65.5 107,800 67,688 40,111 + 71.5 + 75.3 + 65.5 65,600 46,315 19,284 + 12.2 + 27.4 (12.8) 72,400 48,350 24,049 yoy % + 22.7 + 22.7 + 21.6 Net income 33,100 22,965 10,134 (8.9) (14.9) + 8.4 yoy % Gross profit yoy % Operating income befor amortization yoy % Operating income yoy % Ordinary income yoy % 10
  • 12. Appendix
  • 13. 1. Definition  Proforma: Aegis 2012 Jan-June result consolidated into Dentsu FY2012 Apr-Sept result based on J-GAAP assuming Dentsu acquired Aegis in Jan 1, 2012. GBP amount of amortization of goodwill and M&A related intangible asset is the same as FY13 Apr-Sept actual . Exchange rate is different between Proforma and FY13 Apr-Sept actual  Turnover: Aegis turnover(like dentsu’s sales) + Dentsu group sales (unaudited)  EBITDA: Operating profit before amortization of goodwill and depreciation  Adjusted operating income: Operating profit before amortization of goodwill and M&A related intangible asset  Operating margin: Adjusted operating income divided by gross profit  Adjusted EPS Net income before amortization of goodwill and M&A related intangible asset * divided by average share outstanding (ignore impact on income tax ) adjustment  Currency: Currency movements comparing prior period reported gross profit at reported currency to prior period gross profit at constant currency  Acquisitions: The effect of business acquired or disposal since the beginning of the prior year  Organic: Organic growth represents the constant currency year on year growth after adjusting for the effect of business acquired or disposal of since the beginning of the prior year. This is calculated by comparing current period reported gross profit to prior period gross profit, adjusted for the pre-acquisition or pre-disposal gross profit as applicable, and stated at constant exchange rate, in order to derive like-for-like growth 12
  • 14. 2. Result for Q3 2013 2013 Q3 YTD 2012 Q3 YTD Current Previous 1,662,485 1,412,195 +17.7 414,373 248,963 +66.4 24.9% 17.6% +7.3 379,634 210,846 +80.1 34,739 38,116 (8.9) 8.4% 15.3% (6.9) Ordinary income 42,991 39,098 +10.0 Income before income taxes and minority interests 44,446 36,521 +21.7 Net income 20,694 19,939 +3.8 Operating income before amortization of goodwill and other intangible assets 66,322 41,355 +60.4 JPY mn Net sales Gross profit Gross profit margin SG&A Operating income v.s. Gross profit yoy % 13
  • 15. 3. Amortization for goodwill and intangible asset B/S JPY amount end of Dec JPY mn Amortization of goodwill related to Aegis Amortization of intangible assets related to Aegis 19,845 450,547 16,362 217,988 11,737 209,800 10,748 31,582 related to Aegis JPY /GBP amortization 512,301 Amortization of goodwill and intangible assets Currency 2013 Q3 YTD 27,110 158.1 yen 149.4 yen 14
  • 16. 4. Quarterly Result JPY mn 2013 Q3 Net sales 580,125 +18.1 568,130 +20.0 514,229 +14.9 Gross profit 145,180 +68.2 146,311 +69.8 122,882 +60.7 25.0% +7.5 25.8% +7.6 23.9% +6.8 129,725 +84.5 126,309 +71.5 123,599 +84.7 15,455 (3.4) 20,001 +59.5 ▲ 717 - 10.6% (7.9) 13.7% (0.9) -0.6% - Ordinary income 18,942 (2.8) 22,599 +172.7 1,450 Income before income taxes and minority interests 20,498 +9.1 24,360 +226.1 ▲ 412 - Net income 10,560 (0.3) 13,833 +299.5 ▲ 3,698 - Operating income before amortization of goodwill and other intangible assets 26,210 +53.1 30,079 +119.9 10,032 Gross profit margin SG&A Operating income v.s. Gross profit yoy % 2013 Q2 yoy % 2013 Q1 yoy % (87.4) (4.9) 15
  • 17. 5. Result for Q3 2013 (non-consolidated) 2013 Q3 YTD 2012 Q3 YTD Current Previous 1,107,536 1,037,789 + 6.7 156,152 142,699 + 9.4 14.1% 13.8% + 0.3 123,664 117,993 + 4.8 32,487 24,705 + 31.5 20.8% 17.3% + 3.5 Ordinary income 49,681 28,565 + 73.9 Income before income taxes 49,369 25,286 + 95.2 Net income 36,982 15,869 + 133.0 JPY mn Net sales Gross profit gross profit margin SG&A Operating income v.s. gross profit yoy % 16
  • 18. 6. Quarterly Result (non-consolidated) JPY mn 2013 Q3 Net sales 389,952 +7.8 367,336 +7.8 350,246 +4.4 55,498 +12.6 52,764 +8.3 47,889 +7.2 14.2% +0.6 14.4% +0.1 13.7% +0.4 SG&A 41,401 +7.1 42,434 +0.0 39,829 +8.0 Operating income 14,097 +32.7 10,330 +64.5 8,060 +3.3 25.4% +3.8 19.6% +6.7 16.8% (0.7) Ordinary income 19,486 +39.0 14,155 +704.5 15,578 +20.1 Income before income taxes 18,696 +42.1 15,912 +2753.7 14,760 +27.6 Net income 13,845 +78.4 12,517 +38523.0 10,619 +31.5 Gross profit gross profit margin v.s. gross profit yoy % 2013 Q2 yoy % 2013 Q1 yoy % 17
  • 19. 7. Net Sales by Business Category (Non-Consolidated) JPY mn 2013 Q3 YTD yoy % % of total 2012 Q3 YTD yoy % % of total Newspapers 80,497 +4.1 7.3 77,294 (5.1) 7.4 Magazines 25,594 (6.4) 2.3 27,330 +1.6 2.6 Radio 11,256 (6.6) 1.0 12,049 (8.3) 1.2 Television 523,982 +4.6 47.3 501,096 +1.4 48.3 Time 225,182 (1.3) 20.3 228,107 +5.6 22.0 Spot 298,799 +9.5 27.0 272,988 (1.9) 26.3 Interactive Media 47,365 +21.2 4.3 39,085 +10.4 3.8 OOH Media 38,908 +8.2 3.5 35,949 +4.6 3.5 Creative 143,265 +7.6 12.9 133,118 +1.2 12.8 Marketing/Promotion 142,285 +15.3 12.8 123,385 (4.5) 11.9 Content Services 64,276 +4.2 5.8 61,682 +1.1 5.9 Others 30,104 +12.3 2.7 26,796 +28.0 2.6 1,107,536 +6.7 100.0 1,037,789 +0.9 100.0 Total 18
  • 20. 8. Net Sales by Industry (Non-Consolidated) 2013 Q3 YTD JPY mn yoy % % of total 2012 Q3 YTD yoy % Information/Communications 146,294 +4.3 13.2 140,285 Beverages/Cigarettes 123,672 +7.0 11.2 115,602 (0.2) 11.1 Cosmetics/Toiletries 89,141 8.0 91,208 (2.0) 8.8 Finance/Insurance 86,607 +25.5 7.8 69,020 +1.0 6.7 Automobiles/Related Products 77,571 +28.1 7.0 60,567 +23.7 5.8 Distribution/Retailing 74,393 6.7 74,725 +9.8 7.2 Foodstuffs 66,892 +4.4 6.0 64,069 +5.5 6.2 Food Services/Other Services 59,413 +14.1 5.4 52,086 +3.9 5.0 Pharmaceuticals/Medical Supplies 52,228 4.7 52,414 (2.2) 5.1 Hobbies/Sporting Goods 49,552 +19.1 4.5 41,590 (4.9) 4.0 Transportation/Leisure 45,696 +3.8 4.1 44,008 +4.8 4.2 Home Electric Appliances/AV Equipment 41,296 3.7 44,735 (19.5) 4.3 Government/Organizations 39,503 +0.7 3.6 39,212 (16.0) 3.8 Real Estate/Housing Facilities 32,679 +11.4 3.0 29,338 (4.7) 2.8 Apparel/Fashion, Accessories/Personal Items 31,768 2.9 34,101 Others 90,823 +7.1 8.2 84,822 1,107,536 +6.7 100.0 1,037,789 Total (2.3) (0.4) (0.4) (7.7) (6.8) +4.7 % of total +10.0 (1.0) +0.9 13.5 3.3 8.2 100.0 19