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Dentsu Inc weighs restructure plans amidst “rapidly changing business environment”

Dentsu Inc has revealed potential plans to restructure within the holding company in response to the “rapidly changing business environment”, effective in January 2020. This may see the group splitting into operating company and a pure holding company, a statement read.

The pure holding company will also hold the shares of the post-split operating company and the existing operating companies in Japan, and the shares of Dentsu Aegis Network.

The decision comes on the back of Dentsu’s financial report for the first half of 2018, which saw the company experiencing a 62.9% decrease in net profit to 10.8 billion yen. The company also saw a 5.6% fall to 40.5 billion yen for its operating profit. In addition, the company delivered a total growth of revenue less cost of sales of 7.6% and organic growth of 4.0% for the first half of 2018.

Dentsu Inc delivered total growth of revenue less cost of sales of 4.7% and organic growth of 4.7%, citing the growth to an increase in digital-related services and new business wins. Meanwhile, Dentsu Aegis Network delivered total growth of revenue less cost of sales of 9.7% and organic growth of 3.4% as it secured new business wins last half of 2017.

”The digital and technological revolution that our clients are facing continues to provide enormous opportunity for the Dentsu Group, and we are well positioned to take advantage of the opportunities that a fast-changing market provides. Flexible thinking and creativity remain at our core as we innovate across the marketing mix and deliver long-term value for our clients,” Toshihiro Yamamoto, president and CEO, Dentsu Inc. said.

Most recently, Microsoft extended its relationship with Dentsu Aegis Network for its global media planning and buying business. In a statement to Adweek, Microsoft corporate VP of brand, advertising and research Kathleen Hall confirmed the extension, adding that it followed a review of its global media agencies.

In addition, Dentsu Aegis Network expanded to China through its strategic alignment with Merkle and &c. This was in a bid to create offering across digital and performance media, data, analytics, CRM, marketing technology, and loyalty programmes in China through the tie-up.

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