Dentsu Group has had a strong start to 2022, with a record-high performance in its first-quarter report.
The global advertising group reported 9.1% organic growth, Dentsu Japan Network 10.0% and Dentsu International 8.4%
After a better than expected start 2022, the Q1 report has updated its projected organic growth for FY2022 from 4% to 5% from 4% previously. Dentsu Japan Network still expects 2% to 3% organic growth and Dentsu International increases guidance to 5% to 6% from 4% to 5% previously.
The report also noted the operating margin guidance of 17.7% remains as costs are expected to rise in Japan through the year as highlighted in February.
Dentsu Group Q1 noted that the company retains confidence in the medium-term targets of 4 to 5% Group organic growth, 18% Group margins with a pay-out ratio reaching 35.0% by 2024.
Elsewhere, the report noted that in the APAC region – excluding Japan – organic growth was 5.2%. CXM – its customer experience management business – reported almost 20% growth in the first quarter driven by client demand for analytics and marketing technology implementation.
Australia was also given a special mention in the report with a 12.0% organic growth showing continued recovery with new client wins across Media, CXM and Creative.
Hiroshi Igarashi, president and CEO of Dentsu Group Inc., said: “Dentsu Group has seen a strong start to the year with organic growth ahead of expectations as clients continue to invest in brand experiences informed by data and analytics.
“The changing macro impact from the Russia-Ukraine conflict, inflation, interest rates rises around the world, and the continued COVID-19 restrictions in China are well reported – however, we feel confident in our ability to deliver growth in 2022. Today we upgrade our 2022 organic growth outlook, guiding to 4-5% for Dentsu Group from 4% previously.
“As we continue to grow our net revenues in Customer Transformation & Technology the Group becomes more exposed to a faster growing area of our industry, allowing us to deliver a truly differentiated offer to our clients as we shift our business to a hybrid agency/consultancy,” he said.
“Our strengths in first-party data, combined with identity resolution, data management, marketing technology, data sciences, loyalty, CRM, personalization, and media/creative services, have created differentiation against an evolving competitive landscape. We have our sights set on becoming the market leader enabling and activating the total customer experience as we look to grow Customer Transformation & Technology to 50% of our Group net revenue over time.
“The situation in Ukraine remains at the forefront of our minds and we continue to support our colleagues in the region with accommodation arrangements, border transfers and legal assistance. We continue to be led by one of our Group’s guiding principles “we must be a force for good”, in line with our position as a B2B2S (Business to Business to Society) company. I would like to thank all of our 65,000 employees across the Group for their hard work and continued dedication,” Igarashi added.