2013 The Third Quarter s Results

Transcription

1 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 Proforma yoy Proforma % Current Previous Proforma Turnover 2,945,048 1,412, ,514, Net sales 1,662,485 1,412, ,519, Gross profit 414, , , Gross profit margin 24.9% 17.6% % Operating income 34,739 38,116 (8.9) 25, Non-operating income/loss 8, Net income 20,694 19, , EBITDA 78,311 50, , Adjusted operating income 66,322 41, , Operating margin 16.0% 16.6% (0.6) 14.3% Adjusted EPS 192.8yen 93.0yen yen Currency JPY/US$ (Jan-June average) 96.7yen 79.4yen JPY/GBP (Jan-June average) 149.4yen 125.2yen *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) year on year (Proforma) (JPY) bn bn Currency +9.7bn Currency +31.4bn Acquisitions bn Acquisitions +7.2bn Organic Gross profit after currency &acquisitions adjustment 391.5bn Organic growth +5.8% Organic +22.8bn +22.8bn 414.3bn 414.3bn 3

5 3. Gross profit by region Gross profit yoy% v.s proforma % Adjusted operating income yoy% v.s proforma % Organic growth % Japan 221, , operating margin 20.4% EMEA 71, , Americas 67, APAC 54, internal transaction (non Japan related) Dentsu Aegis Network total 193, , operating margin 10.9% (2.3) Consolidated adjustment & others Dentsu consolidated gross profit 414, , operating margin 16.0% (0.6) *Organic growth in regional segments and total of dentsu aegis network is based on local accounting standard *yoy% is compared with dentsu network result 4

6 4. Operating margin (adjusted operating income base) Dentsu consolidated Japan DAN forecast (annual) 13.4% 13.3% 13.0% 17.7% 17.1% 13.4% 11.1% 10.9% 19.0% 17.4% 15.1% 18.2% 16.6% 14.9% 13.8% 13.3% 11.9% 20.4% 18.4% 16.0% 14.9% 10.9% 10.9% 18.6% 8.3% Apr 1-Sept 30 Apr 1-Mar 31 Apr 1-Sept 30 Apr 1-Mar 31 Apr 1-Sept 30 Apr 1-Mar 31 Apr 1-Sept 30 Apr 1-Dec 31 Apr 1-Mar *DAN: From, DAN includes Aegis 5

7 5. Operating income to Net income 2012 Operating income 34,739 38,116 (8.9) Net non-operating income 8, Non-operating income 17,432 7, Non-operating expenses 9,180 6, Ordinary income 42,991 39, Net extraordinary income (loss) 1,455 2,576 - Extraordinary income 5, ,054.8 Extraordinary loss 3,579 2, Income before income taxes and minority interests 44,446 36, Income taxes 22,592 15, Minority interests in income 1,159 1, Net income 20,694 19,

8 6. Balance sheet End of Dec End of March Current assets 1,116,429 1,122,602 (0.5) Fixed assets 1,212,323 1,082, Total assets 2,328,752 2,205, Current Liabilities 1,017,625 1,317,554 (22.8) Fixed liabilities 466, , Total liabilities 1,483,977 1,596,931 (7.1) Shareholders' equity 698, , Other comprehensive income accumulated 121,848 14, Minority interests 24,668 24, Net assets 844, , Total liabilities and net assets total 2,328,752 2,205, JPY/GBP yen yen JPY/US$ 97.8 yen 86.6 yen *Currency: B/S (end of Dec): Sept 30,, B/S (End of March): Dec 31,

9 7. Net Debt End of Dec End of March Total debt 360, ,852 Cash and marketable securities 134, ,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 *LTM: Last twelve month, (Aegis Group Figure: 9 months from Jan-Sept, ) 8

10 8. Dentsu Aegis Network Jan-Dec gross profit growth (unaudited) Organic growth % (Jan-Dec) Organic growth % (Oct-Dec) EMEA Americas APAC DAN total *Based on local accounting standard (unaudited) 9

11 9. Fiscal year (Apr to March) forecast forecast (annual) H2 Oct-Mar forecast H1 Apr-Sept actual Net sales 2,292,000 1,209,639 1,082, Gross profit 578, , , Operating income befor amortization 107,800 67,688 40, Operating income 65,600 46,315 19, (12.8) Ordinary income 72,400 48,350 24, Net income 33,100 22,965 10,134 (8.9) (14.9)

12 Appendix

13 1. Definition Proforma: Turnover: EBITDA: Adjusted operating income: Operating margin: Adjusted EPS Currency: Acquisitions: Organic: Aegis 2012 Jan-June result consolidated into Dentsu FY2012 Apr-Sept result based on J-GAAP assuming Dentsu acquired Aegis in Jan 1, 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 Aegis turnover(like dentsu s sales) + Dentsu group sales (unaudited) Operating profit before amortization of goodwill and depreciation Operating profit before amortization of goodwill and M&A related intangible asset Adjusted operating income divided by gross profit Net income before amortization of goodwill and M&A related intangible asset * divided by average share outstanding (ignore impact on income tax ) adjustment Currency movements comparing prior period reported gross profit at reported currency to prior period gross profit at constant currency The effect of business acquired or disposal since the beginning of the prior year 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 Q Current Previous Net sales 1,662,485 1,412, Gross profit 414, , Gross profit margin 24.9% 17.6% +7.3 SG&A 379, , Operating income 34,739 38,116 (8.9) v.s. Gross profit 8.4% 15.3% (6.9) Ordinary income 42,991 39, Income before income taxes and minority interests 44,446 36, Net income 20,694 19, Operating income before amortization of goodwill and other intangible assets 66,322 41,

15 3. Amortization for goodwill and intangible asset B/S JPY amount end of Dec amortization Amortization of goodwill 512,301 19,845 related to Aegis 450,547 16,362 Amortization of intangible assets 217,988 11,737 related to Aegis 209,800 10,748 Amortization of goodwill and intangible assets 31,582 related to Aegis 27,110 Currency JPY /GBP yen yen 14

16 4. Quarterly Result Q3 Q2 Q1 Net sales 580, , , Gross profit 145, , , Gross profit margin 25.0% % % +6.8 SG&A 129, , , Operating income 15,455 (3.4) 20, v.s. Gross profit 10.6% (7.9) 13.7% (0.9) -0.6% - Ordinary income 18,942 (2.8) 22, ,450 (87.4) Income before income taxes and minority interests 20, , Net income 10,560 (0.3) 13, ,698 - Operating income before amortization of goodwill and other intangible assets 26, , ,032 (4.9) 15

17 5. Result for Q3 (non-consolidated) 2012 Current Previous Net sales 1,107,536 1,037, Gross profit 156, , gross profit margin 14.1% 13.8% SG&A 123, , Operating income 32,487 24, v.s. gross profit 20.8% 17.3% Ordinary income 49,681 28, Income before income taxes 49,369 25, Net income 36,982 15,

18 6. Quarterly Result (non-consolidated) Q3 Q2 Q1 Net sales 389, , , Gross profit 55, , , gross profit margin 14.2% % % +0.4 SG&A 41, , , Operating income 14, , , v.s. gross profit 25.4% % % (0.7) Ordinary income 19, , , Income before income taxes 18, , , Net income 13, , ,

19 7. Net Sales by Business Category (Non-Consolidated) % of total 2012 % of total Newspapers 80, ,294 (5.1) 7.4 Magazines 25,594 (6.4) , Radio 11,256 (6.6) ,049 (8.3) 1.2 Television 523, , Time 225,182 (1.3) , Spot 298, ,988 (1.9) 26.3 Interactive Media 47, , OOH Media 38, , Creative 143, , Marketing/Promotion 142, ,385 (4.5) 11.9 Content Services 64, , Others 30, , Total 1,107, ,037,

20 8. Net Sales by Industry (Non-Consolidated) % of total 2012 % of total Information/Communications 146, , Beverages/Cigarettes 123, ,602 (0.2) 11.1 Cosmetics/Toiletries 89,141 (2.3) ,208 (2.0) 8.8 Finance/Insurance 86, , Automobiles/Related Products 77, , Distribution/Retailing 74,393 (0.4) , Foodstuffs 66, , Food Services/Other Services 59, , Pharmaceuticals/Medical Supplies 52,228 (0.4) ,414 (2.2) 5.1 Hobbies/Sporting Goods 49, ,590 (4.9) 4.0 Transportation/Leisure 45, , Home Electric Appliances/AV Equipment 41,296 (7.7) ,735 (19.5) 4.3 Government/Organizations 39, ,212 (16.0) 3.8 Real Estate/Housing Facilities 32, ,338 (4.7) 2.8 Apparel/Fashion, Accessories/Personal Items 31,768 (6.8) , Others 90, ,822 (1.0) 8.2 Total 1,107, ,037,

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