Dentsu (DNTUF) 12 Aug 212021 Q2 Earnings call transcript

Thank you very much for participating in the Dentsu Group Inc. Online Fiscal Year 2021 Second Quarter Earnings Call. I am Chuya Aoki from Dentsu Group's IR Office. This call is held on the Zoom webinar. Please be aware that the call is being recorded. held and simultaneously is call in overseas. Japan This to into today. the Instructions] Next, that you like I'd using [Operator materials guide we are Today's materials. our QX presentations on fiscal are and XXXX website earnings named presentation call provided

these For participating, telephone available the participants you. documents make line, to are please via sure

the Joining are, of Toshihiro Yamamoto, Tokyo, today Group. me CEO, from Dentsu

Language] [Foreign

Hiroshi Dentsu Japan Igarashi, Network. CEO,

[Foreign Language]

Yushin Soga, CFO, Dentsu Group.

[Foreign Language] Hi, everyone.

U.S., International. Dentsu Clark, CEO, Global Wendy From the

This is everyone. Hello, Wendy Clark.

CFO, Dentsu International. U.K., the Nick Priday, From

Hello, everybody. Nick here. Priday,

These are the today. participants

plan. call hear Yushin the invite we and the from will by hear continue needed. the financial -- be then After Igarashi please. XXXX that, XXXX Toshi Clark from Following XX scheduled update. the is to evening year may fiscal this if review Yamamoto, QX will X the and explain highlights we Yamamoto. introduction, you. year Japan questions After management update Soga o'clock explain The extended Mr. end minutes mid-term from on Wendy fiscal And at to It in Yamamoto, his Time. will QX presentation, will Mr. the

you. the significant X. page in for our with the the improvement year-on-year quarter our some although the XX.X%, Since a from improvement CEO Thank led in combined in Thank continued in performance, Slide margin with Dentsu morning, delivered QX reaching again year XX% offer differences. XXX is QX, fiscal quarter second for This level pandemic on recovery people to The April been into good XXXX Please to year a earnings post you growth fiscal demonstrates of regional our group's performance number exceed of commitment delivering XXXX of XXXX. spend, last June, attending there confidence This fiscal group's continues Group. are by is This group. to recovery. call. has second Once and the to you of all. at evening take seen recovery have good points basis review. Yamamoto, the The and similar margin we group's as confirms look balance organic our expectations of strength delivery our the media of

seen will investment management, also and which customer is customer returned to transformation the business, We of transformation XX% focus the presentation. within second client with in that technology of continue LiveArea, a customer of significant and of commerce to We quarter Dentsu a global our our of and commerce business. one have join the technology experience our brand customer grow announcement to and in main acquisitions data today's International, demonstration local agency experience, commitment

QX number proceed us X, highlights. to Let Slide

core. all We have their share a the are number aiming quarter. digital renovate second transformation companies with at to from our of successes Today, businesses to

for Dentsu one expansion customer in charge clients, technology. Group, Japan and For technology X partners our X successful digital quarter. strategic of the X strategic There and with of is transformation and transformation Japan from business JP Rakuten digital the as and customer expertise digital typical partners group-wide transformation, Network the together of with Sompo. Dentsu was the that transformation and becoming proved in marketing second Post projects of were chosen in

existing digital Financial well markets International, Dentsu marketing develop business Dentsu new into further as with At Second, co-established our we expanding clients footprint as with Group Amex Group, SMBC digital and relationship beyond services. SMBC as and our financial to a GSK. Nestle such jointly expanded

more approaches committed and and IKEA's proud transition and for for Group models. bring network building X, to together announce co-create economy. nature am new circular, strategies Croda, sustainable, the to inclusive, Institute initiative This INGKA, the to Leadership. like-minded inclusive sustainability Dentsu Cambridge Business International Sustainability positive, restorative for business to Dentsu and has also joined ESG. Council a World of joined CEO-led companies Sustainable Development, Dentsu and Moving I will a global to net the resilient accelerating parent

credit We demonstrating alignment net ambitious, strategy, revolving International facility International's on to leadership. X reductions the the Dentsu function, as our whereby margin linked partly reduction undrawn targets. the of our a even social impact have diversity finance to with such replaced within carbon commitment extended of Dentsu ESG-related emission recently in its facility and sustainability the performance to and is KPI, gender

selected growth. plan to at senior shareholders compensation profitable of International to Dentsu drive In greater interest including has been addition, management to Dentsu alignment the for executives Group's stakeholders, stock extended our

our in details the report. find latest integrated published can You

Group recognition. also the Creativity to Festival commerce a is Dentsu Prix. is performer this Forrester held now Salesforce for Cannes Cloud. recognized industry our our recognized talk of to what Wave will belief was total highest for a on partners. a At was Soga-san Lions, strong Dentsu XX a service in Marketing the the the only ourselves unique, every us Commerce coveted Dentsu our consulting and makes was world. Dentsu evaluation in Grand Cloud over Dentsu Next, criteria, awarded including of hand in commented office Creativity, differentiating through across as for and I from received peers. agency financials. Lions,

medium financial brand client And billion, saw We now have QX since sales and digital and to and of of the the of shows revenue growth post-pandemic of would for with see Starting results. as points a a last strong. A in basis expect term. an in take show from QX spend to half set Thank In organic year-on-year. margin we recovery, XXX low with growth strong XX.X%, reengage we reported you, sequential you XXXX. advertising for remains is XXX cost to quarterly structural slide resulting point QX quarter, growth this quickest technology and to customers. customer in This internationally way for quarter. demand less their increase first the the Yamamoto-san. solutions as for we Demand organic recovery results I improvement of transformation record continue in JPY and headline results. the benefited the Japan XX% both driving our cyclical of operating media like through

results. Americas, basis X.X%. margin expectations, Moving on our Underlying increased to up with to in of we both the demonstrating X, first X QX resulting to digital see half. has exceed In double-digit the our growth, years, first broke X.X% Canada organic points delivering was organic XXX the the rate On XX.X%, growth delivered improving United half saw for growth headline group to XX.X%, operating profit strong across cost was and half Revenue States less in continuing highest Slide group in in of and organic our X commitment Japan, targets. and accounting in our and regions. margins XX% down XX% organic revenues, growth margin QX which in television. X.X% sales in the HX, against growth in in the first XX% reported recovery

following delivered by United and Thailand. double-digit growth We number France, growth Korea, quarter, also across driven in quarter, all recovery organic of service and the revenue at of the expansion at the impacted China saw growth new economic and region growth across in decline of reported from above our lines. impact EMEA, the strong over strongest revenue, quarter, APAC, Spain demonstrating group the high number the of organic reported revenues, QX X.X% a single-digit the quarter. the saw COVID-XX. half. our of existing India the of second the new performance client second was region Australia, Indonesia, Singapore the in by relationships for quarter, XX% the account in in XX% across a of group organic first Australia double-digit cases. resurgence business growth XX% the for reported Kingdom wins and COVID-XX in the XX% a region. recent reporting

with was and the an driven as the solutions. strong advertisement. Digital conversion in remain business first track following We return the to backed demand increased strongest Plus, projects. network offsetting Inc. Australia. Americas XX.X% in businesses, well. environment, XX.X% on driven Media Now new a television digital and clients. the Creative on slightly organic growth Group. demand organic EMEA, improving seen with the both have solutions, first year-on-year by strong restrictions due recovery size continues in in to significant the ISID ISID The overall was last in the XX.X% Dentsu is Creative in one-off we spend saw and for and is boosted QX, place pitch in win in the Japan. media larger Tec down by Japan, by into to Media Over clients the recovery with in closely confident ISID them. reporting of challenged underlying in reporting existing EMEA half. from Japan but the sales growth up performance Dentsu to year saw half. of and the growth Experiential improvement U.S. saw in growth double-digit and are the looking work market International, reporting in pitch in Dentsu positioning increase Dentsu for XX% strong of remains in environment half, be X% growth impacted U.K., operate in collaborative business to continued and particularly growth Dentsu by organic the growth, first digital companies. with a year-on-year by quarter, pitch In strong second business. stronger in for our continue rate with in projects number

half of driven CXM solutions. is XX.X%, And return quarter performance The the revenue. International a demand was for X.X%. minus Dentsu growth first data-driven saw XX% technology-enabled double-digit of to by now second

at one-off underlying amounting from from improving profit to XX.X of year, recognized statutory total. The improvement, sale have assets reconciliation billion X of a totaled is to had profit billion, simultaneously plus XX.X XX.X costs year-on-year, Reconciliation previous offset JPY the we net for operating the operating billion. was X.X% adjusted of to resulting with JPY property of shows profit on profit on Japan that billion and revenue deliver expected improving year-on-year. in a that XX.X sales on by JPY Japan efficiency, operating billion. The an loss less On of JPY underlying in due year-on-year of in of is covers an subsidiaries XX.X for performance lower of cost earn-out plus basis. to revenue approximately first Revenue liabilities JPY expected cost. billion. driver operating made XX on the the promised, but we M&A-related achieving billion profit the movement total revenue liabilities items, previous statutory. the an the profit. items were half. increase less Slide XX.X to the mean operating savings organic the profit Compared cost of year-on-year, the to XX.X profit. year-on-year. explained This the the first of This This costs International operating in growth underlying to the a corporate of slide JPY adjustments result half to impact slide Organic first a was billion was statutory positive able operating from was of of growth. billion improve XXX.X slide to XX.X underlying JPY restructuring Lower-than-expected improvement benefited put-option and a while value movement international half increase. JPY acquisitions. as cost at group transformation year-on-year in revaluation gain increased of are reported JPY Both sales This n whilst Business

JPY underlying statutory was net billion JPY a profit profit XX.X As was the XX.X net which quarter for billion. result, against

Next, for XXXX. our guidance new

JPY We both to of sales DJN XXX.X billion, DI JPY less group of billion organic expecting to revenue operating with XXX.X on are with recovery, at growth. is margin XX.X%. forecast based Underlying deliver a cyclical high and profit single-digit be cost

headquarter's split margin XX.X to On operating early, net group statutory plan, sight building sight and XXXX target JPY XX the XX our Board transformation Dentsu delivered one and balance early, billion. we XX%, years; for confirmed the medium-term year-end -- year we dividend and this margin XXX is of accelerated a per dividend fiscal payout underlying of sale growth XX.X% XX% XX.X be announced both decided to annual the and in the announced improvement assumed. line XXX.XX, dividend into has targets conclude, the basic group. final XX We statutory DJN the XX% record the a which the record announced on sheet for JPY payable embarked restructured margin XX.X International. by to one net group 'XX, of progressive in half On in Dentsu Also, XXXX. will had for is for highest XX. We from our dividend To achieving dividend revenue XX% EPS in we release comprehensive annual underway. determined results. and a have JPY review Since by Today, up is line and in payout XXXX. This International. be February, JPY the expected policy interim In interim months to of year, investing ago Japan capital, started year year. Dentsu and share, returns, We dividend acquisition. the in profit, growth. dividend In Strong LiveArea the X ratio and for JPY and dividends. billion XX% upon of basic buyback reaching shareholder level to is year last JPY the we EPS profit the for income delivering The ratio this recently first

benefit the Thank now the pass growth forward, the 'XX cyclical for in I the your and recovery structural Yamamoto-san. support. you fiscal 'XX Looking to heartful over group technology will from in beyond. year microphone transformation in will and and customer

good. I everything increasing past to turn to We contributing an the landscape to XX. on with as Group's people has purpose through partners, Page and change update I'll exist growth we to drive all the for purpose. a our start months medium-term Please as consumer purpose. Dentsu plan. led realize clients, refer would the is consumers. the to across philosophy management to This XX. XX look over Soga-san. the Please This we like in deliver The of by our do permeates am behavior to better Page our clients. organization media you, complexity growth society Thank Yamamoto. I

clients a They role brands consumer-centric of as linked spend all consumer points performance into of of support of by a technology experience agility and continue to leading sales. marketing greater the consumers, driving a and with strong create to brand integrated, clients need a media our analytics connect expertise customer And our with finally, accountability offer create for by continue seamless As our expand. then approach. and their a powered strong journey, expectations media transmission data clients connecting grow, playing of holistic consumer key platform in need our need to to to increasingly become touch view technology first-party combined to a

of and Our experience, of the and entire beyond consideration, the from purchase, customer entire service the to continuing product responsibilities services and life reflect go and service. C-suite. across loyalty, with the required the transformation requires starting marketing and to to meet needs full customer across customers, awareness, orchestration commerce cycle, a to from including This to the itself sales

in for looking Our range clients are can a support and efficiency. with services. of partners agility them We wider

follow empowers for to our one its digital support fast-changing at solutions our our capabilities our environment. Page to multi-disciplinary relationship, company's to a organizational I transformation demand transform our and and long-standing of please. customer our experience in growth trusted in personalized position expertise, to clients. foundation communications to combining our point. technology of expertise transformation place in remains a that It explain continuous and point with customer and marketing clients management, Integrated with center growth client through agile infrastructure customer our service drive this vision, would strategy long-tenured XX, technology and and environment and Our being us unique prime like experiences. data culture learning this innovative to is customer-centered meet

transmissions HR, other IT, deeper finance, products and chain, to limited services As our marketing, clients not and their to -- will be supply but being a functions. impact, expect

and in by So available customer we expand new the -- CEO contacts transformation CTO, with our by growing the CIO, C-suite. contract technology, entire up the COO, revenues market opening the

are and experience. All the owning total for of whom responsible maximizing customer

business clients integrated client -- benefits the our group will seamless own to growth. the expanding bring transformation technology and across We capabilities. as companies, solutions build contributing marketing such clients Page we XX. look transformation own also to the consumer capabilities communication the customer into as together customer journey our to to technology provide The group

last Japan exposure of continues this the from basis and reached from to our to from XX% grow consolidated Our XX.X% end customer technology our year. Network June, International, XXX increasing revenues, a and XX.X% transformation by of By Dentsu points. Dentsu exposure

of is a our it As other effect stated proposition growth value not a earlier, our join to gives transformation employees. of over Last solutions, like technology service. XXX clients, our a LiveArea, plus-sum and In which time. announced other welcome technology customer we will Page words, XX% important I reach zero-sum agency a It customer from game. is global brand. our an commerce a experience to that to marketing is would of our game, communication half transformation more local customer but halo month, aim our acquisition integrated revenues and group XX. the to than

delivered to technology. lot All expected growth Group. U.S. Group. deliver existing local the solutions. from are technology LiveArea's accelerate with X, of clients. our set and we as look are goals marketing and the operations client to the Network, priorities growth. growth the X, effect of of About located transformation In capabilities margin; are growth allocation whom near social of and please? staff the Igarashi, solutions over be Wendy a the to returns; mainly communication impact Dentsu February, and as the to capital Igara-san, one, will commerce transformation relationship, of will locations. Dentsu we and business the of from locations, of X CEO Page offshore risk and to design, The our our ambition Hiroshi cover International, to and medium-term entire customer four they are of X, the would elevate deepen revenues XX. transmission generated the to growth; Global LiveArea's quality the forward, low-cost revenues of managed the of halo use Japan revenue line pillars against and of and ongoing integrated for in XX% hand XX% our like EU. In and will to strategy growth the and the through services ESG initiatives. shareholder sustainable shortly. And LiveArea's repeating, I've integration I been include of CEO our experience, Dentsu increasing Dentsu pillars: of and transition These capabilities transformation strategy. means of in This line Clark, business to with

this, Thank of societies, Dentsu solutions Japan aiming our partner by and is focusing Network who integrated by growth Japan delivering you, is action. own a X from Dentsu Yamamoto-san. following the to an growth realize our To and integrated This to achieve Page Igarashi, our become on we sustainable Network. CEO clients are XX. competitors. growth differentiating contributes growth

clients' among collaborative relationships. transformation, delivery platform their capabilities the and network transformation focus transformation of domains, to on the transformation to for to X Dentsu will client evolution to transformation, of deeper through inside the group. the business X consider can Japan inside the and The The business organically, and first entire experience Business innovate including necessary the transformation range, customer the the that has contribute that experience, customer marketing marketing We is capabilities about of outside our wider the development communications, that and sustainable inorganically it's clients' the thrives focuses defined and technology. the and All and upgrade the contribute collaboration Network transformation domains customer transformation is transformation. next digital the business to advertising growth. overarch which business

faces work customer different more our natural become becoming clients more to transformation. functions realize for challenges is the closely organization to complex, it inside As

to Consequently, the offices. when extending even set supply goals the clients' the relationships wider responsible priority outside chief support and establish we model of marketing. would division divisions budget the the chain, efforts, the instance, To and client by as and well other partner of marketing, group transmission transformation be HR deeper reach be integrated For we one CEO for other involved. is to the as such of will our

on clients. our longer-term Lastly, focus partnerships and

to a business level, rather short-term As the we a impact clients contractor required long-term services together foreign behave need a are to transformations as with transformation. than and domains deeper campaign-based from business our partner achieve the our have at working by to connecting clients will

client evolve partnerships. will Our relationships into

more Our and current become -- well. structural revenue would be as model

and XX, On the a are slide, an to longer-term how wider of example would Page I with following like we introduce building partnerships the client.

at newly Group X Yamamoto, established CEO, a JP our company the partners of as X Japan Dentsu reported beginning Digital, inside Post of the presentation, was of As chosen the Group.

dual their Post, have back Holding post with been we since communications marketing with history executive Looking and at our supported Dentsu. intimate marketing secondment them Dentsu public of activities. relations employee for and Japan And the oversees Post to Group, with which Japan more March, Japan has Post the collaboration

to impact team divestitures marketing Dentsu customer solutions, Japan to the offer can We from the secondment Post through business, Network. and In digital being Digital technology the Japan entire insurance selected the huge of the with entire dedicated long-term will growth the this, and and addition move the employee as of service, of a that retail other a our and JP integrated bank communications combining partner have transformation personal this Group, the Dentsu. transformation leads including

would transformation me. to partner are in Group, Clark. That hand Japan people's a be like to who Japan. is Wendy for We proud the over infrastructure And the of of Post now to highly responsible you. I all to the very digital for Over is

add personal Igarashi-san. This driving organic for in my business the been to for results. these a record rate quarter everyone growth like continuing operating And Dentsu thanks I delivery expectations. margin posting and would to you, Thank a It's beat International, Clark. XX% to is strong Wendy

client positive performance impact the accelerated and as transformation as Our well QX's focused are of cost demonstrates confidence teams comprehensive review and our reinvestment. consumer of working hard. program beginning and incredibly the restored

simplification, our focusing delivery growth and slide of synthesizes our industry drive entire in ambitions. Now to line This with transformation the our on growth strategy, sustained focus and leadership. tenets profit is

Since our organization optimizing year, simplifying And seeing roughly As brands brands. last X/X the announced results. we we disparate to last brand leadership portfolio from XXX of announcing global are already year, are and our X way are services over XXXX from service to X lines brands. at sit goal just expand we and of our have increasing taking we as and all XXX our an of the client now relationships. number end clients deepen Relatedly, we

client high Our being of measurement In our is stands of continue high. internal manager is employee an engagement invest point, which growth. our part X-year And management to of one of at score, referral client with optimization. layers a a at satisfaction, score all-time our our brand to organization, removed now we've connection for strongest as we'll as transforming metrics

As the clear both forward LiveArea we pleased synergies. experts that business. coming cost that The commerce and immediate integration I to Yamamoto-san revenue welcome bring on to plan we And you and mentioned, deal within end-to-end updating will quarters. in a are have XXX and look

XXXX Levron to Creative talent. Connect. Fred Chief This November. partners And last we technology technology be pleased clients. our accelerating Fred helped provides automation our for our leadership integrated platform, so of Year FCB, lead for he teams, will in behind that investing We at our the where end-to-end and Network network Cannes And key as that month. and joining workflow and I'm our investment Officer spine Agency are Dentsu XXXX in are from us to Global joins

a industry LiveArea partner, alliance the that X critical agency maintaining position Salesforce's areas, lead acquisition. was to number as strengthened partners, position including global in technology with our we the with Finally, continue

of the as are median agency USD network net zero from at along flight our business ranked recent over industry-leading XXXX. pipeline target position those XX% business by as with XX% sustainability [ph] by announcement as strengthening Our an by A- rating, to our new with CDP, new just nonprofit third-party only science-based sustainability And by emissions X reduce opportunities we and with stands commitment underpinned XXXX billion, offensive. by our

We growth create is for strategy integrated slide clients helping network for and growth IKEA. our the digital efficient needed my those go integrated many to next transformation world, case agile, become remained as in to route course, its the in with solutions market at the to early single-minded IKEA shows stores, through pandemic to closed. agency capabilities, slide. the struck Our the most companies, of its adapt, as focused XXXX, next like is, the study major which accelerating When stores to

quickly. to to partner together, immediate a and opportunity Working online ways opportunity connecting short-term sales grow we innovative As an build identified an acted of consumers. brand existing long-term the to Dentsu of and with new IKEA, find

creative implementing Our the data, together media and along customers, CXM view team single to swiftly first-party of of a new with creating IKEA's their accelerate experience. integration came our team the commerce

catalyst increase Our embedding are cookieless e-commerce We proud transformation, opportunity for capabilities collaboration, deliver new we deliver integrated agile a consumer-first resulting XX% established future an level IKEA business online in combined the a the sales new with within teams help for world. prepare our and client technology of mindset ongoing XXXX in to a of to agency the teaming well helping us developing planning saw resulting to a driving in growth IKEA, an and a expertise and ways in and for partnership came transformation of and as as a of new Out on disruption, growth specialists transformation. and working, solution [ph] to sarcoma IKEA. as helping

back hand I'll to Now Yamamoto-san.

Thank you, Wendy.

to brand our will management to already move plan to and announced Page further Shiodome the drive collaboration. pillar simplify explained, XX. cases of refer have consolidation is mid-term building to deeper than and in Japan more the Network group through simplification. which of please structure, margins companies Dentsu The will first XX our be next headquarters operations Now the

corporate of announced publicly services. and information centralize upgrade is at functions, explained, driving specialization and Wendy preparing has needed our And Japan as to Another Dentsu is deduplicating Dentsu Network where increased This optimization XXXX. led leadership reaching services of and aim reduction. a plans brand is with which year of continues functions, deduplication the International, and simplification by has our fiscal X cost to

offshoring Our over long-term will continue to transitions deliver margin and strategies that nearshoring time. and

service our now offshore in line locations. of have reached XX% We CXM are

reductions for cost by XXX% The progressed this is entities to over XXX XX% of about page next of achieved property have of plan which year-end. reducing of illegal year. We XX. And have the the Page planned

great I underway allocation allocation in Third investment the is has ratio capital the when that from XX% non-trading with is the now our as dividend the fiscal shareholder and will a mentioned building progressive assets headquarters our and year XXXX, leaseback news. a have year capital pillar retain in fiscal in already approach sheet. through balance and our inorganic have touched The sale opportunities for am of we 'XX, we of further February the target have we on returns. buyback up market negotiations Soga-san as upon, approach and record and by continue to delivering disciplined to to dividend review growth. I our our in And organic payout Mr. that mentioned announced XX.X% confirmed the 'XX, update And we pleased continue. announce,

again because of I Wendy would Dentsu. to she Dentsu this go to please. Soga. Chair over will final be hand is to the Wendy Business This like regarding Wendy, Sustainable over the is the pillar. Board. discussing

Thank you, Yamamoto-san.

from our the In in sits this best how studies, our work Sustainable we The covers while leadership samples has supports In the to strategies. company own our of at faster deployment the sustainable we integrating to final announced this practices and and question of pillar our from Novozymes months, of growth just industry suggesting our solutions. Dentsu's experience analysis across example recognition clean biological have powered bacteria well moving world Then software draws a to X type growth client Our for business Solutions gentle to to AI Plant is manner? developed at now business Dentsu treatment. strengthen of image and codified a Sustainable to leader the a clients' breadth our global can of clients' our into and training fractions weeks ESG commercial and our of In analyze boardroom app, the grow goals. of a water. area in is, Working case of ways every group's Novozymes, facing Assistant, in of the February, leading social Business are water, strategy, work by Assistant Solutions, agendas. and and as network. a business the core seconds, way Plant sustainability working, delivering wastewater. approach most of an intersection One for Business that we last together, as biological experience. water impact work launch reduced method and good seconds, such the clients' determine

hand I'll back to Now Yamamoto-san.

out XX, you, the plan Page please. committed our in Page in targets February. announced We we Thank to XX. Wendy. laid medium-term remain

structural benefit revenue we active combined Finally, capture to in have throughout to in cycle we first in placed well believe and a Group clients outstanding margin half. transformation in strong customer XXXX. we remain will with continue the the post-pandemic The rebound in the the delivery growth as half, summary, XXXX. remain seen recovery second enter technology And

the guidance financial Our sight of the deliver and early, confidence margin our X group's of to XXXX our single-digit outlook. high line in show target year organic growth

from thank results you you your like -- the to and Thank transformation. our support. seeing very much. And I for We are would

will The Nikko by Maeda-san. first SMBC question Securities, be

Then SMBC Maeda I Securities. have Nikko I questions. am X of

the or QX, evaluate rates, you that do able year, peers, the question. slump But enjoy But the you XX%. high comparison A think describe growth against that and you recent general, your market peers? you've to outperform or why related That can thinking peers your do most your in was have reasons in such of quite also intuitively, your the you been peers? all organic quarter's natural, announced perception? this have Not results. the to previous average position from was your the how And not probably high. First, market, market perspective, The about your extraordinary. in growth rate, did

the you X you think my For is you accelerate the also, positive do had than that's XX% pace so questions. the between are year, reduction, to that's if will transformation And the And question. higher my growth. that of second that costs. too growth X% this transformation effect, why teens you reduction or Or expected? Can't be think pace fiscal you think? bigger originally to cost those cost how cost on in expect So rate? So isn't And cost half? secondly, you achieve growth slow. had you than will be increase higher do expected? of The conservative? that But first Do smaller the

speaking. Maeda-san, thank This Yamamoto you. is

Soga-san add On then ahead. comment. the speak to will and question, Wendy Please to ask Soga-san's I to first go

quarter, on thank first speaking. On Soga question question. and entities, is And XX%. This and -- year, your your for basis, DJN minus XXXX you, we X those Maeda-san, plus level. at back on DI, for haven't group-wide or organic gained growth, this recovered single International, QX, the DI on DJN back to XX% we XX%. If International, QX, look plus last This

the recovered That your we at that's to XXXX, fiscal yes. XXXX say look there peers, some still outperformed difficult already are have of this clear a it's our that peers? we've are we give that being -- peers midway. said, you can our question, have If If situation in to levels. year,

of but from the we in we we're In are recovering the transformation, terms transformation. think still pandemic, midst smoothly of

QX, for last figures business, and year, domestic domestic the business. the the For bad QX weren't so

of and Even In growth we sustain the QX, alone, the me. That's business faces QX high. So their wasn't of recovery? Thank pandemic the which are terms to bad. that yet outperforming to work done because the Japan still recovery. for have for can lows in comparison we That pace recovery you. pandemic. risk say there -- means XXXX we or the not growth at half QX to recover really still or the of is midway hard economic incredibly being to look But natural both we're from from We're of said, first competitive well? that skepticism, year, the if No. this would it in we we've peers, bar

ahead if go anything. you Wendy, please have

our for To at rate. have we we growth growth you, it at first the If than thank growth a in if now the Yamamoto-san. QX, [indiscernible] on on Yes. in peers, we versus Thank X.X% rate. XX% rate at point, absolutely look a in And versus QX, the mix And you sequentially organic your negative and you are we business QX our were question. look international at before.

think us competitors. I on the our you're So gap close seeing

confidence the mix. growth rest we looking absolutely high the in mix for remain of will the from forward And a We year. the To the of for have are rest in the single-digit perspective. of the that an measure year your around organic question projection I

confidence around that We number. have

we of business. grip think low have I unknown of still a I us, with to what is have think margin cautious But delivery on pandemic. seeing because now the you're optimism the get here the

the margin to grip are And confidence, of and ahead a on now of have us our gives We expectations in deliver year. able measure costs a that too.

now perspective, of the we So with an sit the line absolutely mix question of would on costs, close I international To as your we QX. it's to of here from regard our from our we achieving XX% that here committed in have -- as competitors business the year. perspective, sight in midpoint transformation transformation costs

And I see do to that deliver we something, said and us say of We expect to think becomes we're do a so would I we us. do. on what that you're we going going it. theme you hope

of confidence that that. have delivering We

XX-month As period. you know, payback an period payback the was

XXXX, structural us then move So of in XXXX. which into to period we're into a growth in having that benefit year allows

performance this out a with the these present of as the year we you. look our of humble confidence rest in indicators So the we in QX Thank peers. mix to absolutely with being and

thank you. Wendy,

add? But have second of anything delivered the structural On already Soga-san, do point you explanation. much cost, to Wendy has

some Yushin This is you Yes. speaking. asked costs. Maeda-san,

the it effect, originally is same? yes, slow, we the will but As The by than be impact expected impact You smaller this is mentioned is the the said the decline. same. will Against Wendy, to assumed. had going cost increase the Is shrink?

Thank you much for your very question, Maeda-san.

question. from to Ishihara-san next is question on move Securities. will We the The next of Daiwa

have Securities. Daiwa X of Ishihara questions. is I This

XX the There company? will it time. building ratio, kind have What excitement, the billion. concluded. for performance of has operating was is JPY been it of and Guidance Games. regarding sales, that, made. Second If is Tokyo XX at I this contribution question calculation disclosed we the half, And question JPY Olympic the was that the the following. the second on is have profit headquarter First exclude billion

your So it conservative. guidance that seems very is

half, first to to Looking compared expectations? elaborate going profit lower at these Can operating you for numbers, the it second further? to is half according the be your

you Thank question. X questions. like Ishihara-san, I for would to respond your Soga-san to

This Soga Yes. much the for speaking. question. Thank very you is

as is the your as Regarding specific well an client Olympic/Paralympic question. profitability, questions be to. games, performance, this is going cannot Unfortunately, impact on responded have for to how events specific

question. on a giving answer from So I you would refrain straight like to this

is And countries event. world. as However, event. have a context. Olympic one the limited of personal second is for for the group, And the impact the in of this business in outlook But well the the we half, Japan for is XX%. for as XXX the Games the account and Paralympic big Olympic/Paralympic business a it is actuals

regarding the has And assumed. in the the of of about been guidance, for from for profits property full Now sales. half, billion the sales there's JPY first property XX XX billion JPY terms term,

the half, is profit But fourth And risks that reason increases and conservative. is me guidance recovery quarter third concerns. the the the not operating on our there that, with For is well still the are somewhat quarter, numbers second today. from and for COVID-XX and why as

a market the we For that been several I the the past result as And could guidance provided to have taking is as we there market, do consideration, of providing to into that the be years, have our to strong the And in have -- a therefore, upside we basis we for the and February, have intention mentioned guidance. that. guidance achieve you well. believe deviation the

So all is you that the is numbers. interpret should me. how That for

question. you Ishihara-san, the for thank

question, Fiona Orford-Williams-san. Next

Edison. Orford-Williams from Fiona

terms is in whether sorted Dentsu through. be be the let just we've the whether have the about have program operating ask can any of sight of difficulties Is way, Can line in margin. it at that should on progressing that's been my the it's you planned, learned? said achieved of us question FY And been how International? way First know transformation to for of about FY You the FY margin fruit we there 'XX? all, lessons low-hanging as I second X/X 'XX about thinking 'XX, prospects the for If so got far? now

much. you thank Fiona-san, very Yamamoto speaking.

ask will to please Wendy respond. I to like Nick. add then Nick would add, question, after first the if And On

that Thank accelerated going actually Wendy you a program I really think is are the little well, Yes. the Fiona. for your question, earlier. Look, headlines explained transformation bit as

target target. cost reduction. savings And the by plan entities through way our met X/X planned. insignificant. of are about X/X About year not we We've achieved of our And to this our about in the We way XXX% our legal the property legal brand reduction overall to rationalization. entities X/X about of so reduce almost overall, XXX, of through

we is contemplated. So really been than it's good That's a that a we've at done for think I reasons. progress. that say of number previously cost what And had would lower I

perspective. plan I quite managed against from operational really we've to well an this execute think

we've been But or us. levels same these of our to at business, pose reduced cost which we've attrition some for spend we'd these We a budgeted than savings, to support, cost then for have used bill. than the we've savings had We've severance it's third-party a in some but less contemplated. properties to to contemplated. across rise some some deliver previously does than less challenges lower line able for a meant we for been on exit sight because And of time, able

first half. I confidence Thank in to the very to our positive. And half, obviously for expect the margin second in us you. continue Demonstrates the so that's And given performance XXXX. that's underpin the for momentum think which have business been we we our

question. to Wendy. I'll part add, just your the second of This is Fiona,

Our ambition XX%. is long-held margin

year early, delivery. of We with will we that that a and confidence achieve 'XX into heading are the

And going this stick at projection to so that we're with time.

Yes.

margin Just to XXXX. on up pick for the

delivering deliver that say, on margin for you of of that That's this goal goal year. Fiona, make got we that the confidence focus, our in As XXXX now. sure have -- XX% can we've we margin to

do excellent systems We're efficiencies our time, We're business the HR operational functions. amount transformation all effort we've acted And swiftly plan. goal. of organization. perhaps of thanks increasing time, all in effort. But once At that's this good across my achieved, just across colleagues said, I'd in where we and our accelerated we as there. momentum later XX% outlined, year. XX% we're on colleagues been as who centralizing in year, business. of platforms, lot that payroll as and can and I've a next are to the huge efforts. good that the entire have centralized the processes sustainably of I've we're of across really focused taken helping a to half and the It's We've these our such forward we goes As But goal. into from margin point implemented models terms committing consider And with that margin move into progress, in making say margin terms delivering transformation second

well before, our ahead. but on Fiona, But as it? due add growth operating that margin to business, sustain operating This confident to or XXXX, that let year So we me cost achieved speaking, -- Soga business depends the is I've to commented margin. XX% a achieve goal Like this in DI, want on growth. to is of what but we've was comment Japan on in cost improvement, as and business margins XXXX. one reach we're business control recovery

we further what foremost, business rethink So we And by can margin extent we XX%. trend. first achieved and monitoring the to improve then

Japan same. as far or you. So concerned, situation the as the less Nick But Dentsu Dentsu Network spoke is is about International. more Thank

Thank you very much for your question.

Rajesh-san. We next will The the from question take next now question. Panjwani is

the see going very a is dividend So for all, X as quite in to it share questions. the first good performance congratulations sharply. of well second as quarter have up I good per

to do think we when growth proceeds be for the -- activity, what this information second, year based the likely spill from XXXX? are now, you and to further year over seeing seeing will of you on And pitch the are we get First, the strength headquarters? the right in will Dentsu the are of what use sale Y-o-Y

very much question. is Yamamoto This your speaking. you Thank for

to ask second question, question, Soga-san first the like Regarding I would respond. to

thank your you To question. question. for your first I

question. has XXXX, favorable. the past, the going the recent been environment in fiscal year Regarding And this is continue whether very is pitch to in the

difficult for at fiscal pitch the it's For year changing. it's always forecast this XXXX, time. And to environment, very

we also However, that, from are technology. advertising, transformation having said moving to customer

challenges. used, in And is the business Therefore, will can To you not is the the the to conventional as this in the grow to the your from expectations drive building of continue pitch the no by There management expectations agencies second plan case. was going Shiodome provide high called regarding area. now their that to increasingly that market. to question. many agency, are that question, there the believe plans, And your I clients. Integrated for. how growth best the is agency as to are clients proceeds, meet where that Solutions in see trying is by expand. can environment this therefore, must The be mid-term having longer evaluated we are We an type intend Growth our

as well the For June. for announced the sales in building, end Shiodome the of it the and headquarters land, was as building

assets want transformation, Regarding you be is share there lead future today. to I In will the information sold. with to the non-trading no comprehensive the make sale, can through is additional that to sure that it growth. review, going By business we

communicate have we to factors That is capital. into of appropriate return mentioned all. completed, necessary, I investment will consideration, for shareholder the and in in future we cash cash foremost, This if terms growth. policy as and sale allocation. the taking the our will the the Furthermore, terms and all will on well of as regarding that First the also considered method, timing market. Once is is be make hand appropriate

the first Wendy, please ahead for question. go

you Thank question pitch the for Yes. the on pipeline.

GBP X XX% U.S. pitch in in to current we -- As pipeline. billion the to us. for [ph] line media sight have Close of offensive previously referenced, pound, sorry, actually, about

really And we're and and converting, now. are So position that's we a of midst competing that ourselves. positive we the find in

see question Your we think I some normalization. mean palooza. it into last is, the we'll pitch I called quarterly call, in XXXX? that carry does

to it normalize think XXXX. I going in bit a is little

seen who not pitch sense attention the volume their year XXXX pitches they of their handful particular delay wouldn't have into clients we large very Although that and this now -- their a wanted. had given would planned they get that

think into to think growth. organic believe brands say We're do it's I I XXXX, we're some we revenue But again, there reinvesting confidence XXXX. very fair and least that head that experiencing early -- normalizes back. our of So experiencing bounce quickly. as is do that's in on the projections they're a this line reason into midterm of restored at to with stated will

planning accounted for sure. that So for our you. we've in Thank

bit Can year or [ph] you X let's this tell pipeline before? billion about us say, how with, a does year last compare GBP

than to last of is I It's experienced. year. between It about year. Yes. pitches did XX% higher We their -- we than anywhere significantly think see a higher on to people pause fair last XX% it's say, lot put

planned during had which them activity think, why seeing I a we're pitches high right people normalizes is and many now, into saw XXXX. push And so unknowns. such XXXX, We again, which, volume again, with they pandemic into

it at higher, I is don't this it think So quite but level. sustains

their the There time. for you the Rajesh, further question. risen we no Mr. who and have close hand, thank are are ending to people

QX Group Earnings attending Year Fiscal conclude So Dentsu to with like XXXX you Thank for today's earnings would we Call. this, call. again

you up. We your click Those appreciative conclude and using we of few telephone busy. We conference. And most meeting. are the you lines, joining Thank the thank you of are button participation. hang us. Please know please for the exit will Zoom moments, who you're the a joining in Again, leave of for us.

This you, again. you. Thank is Thank Yamamoto.

This Thank very you Igarashi. is much.