Dentsu Group - Progressive quarterly improvements

Dentsu’s Q1 update shows a third successive quarter of improvement (a reducing decline in organic revenue), with Dentsu Japan down 0.9% on Q120 and Dentsu International 3.5% below prior year. Operating margins were considerably stronger in both segments as the transformation plan has kicked in. Q221 has started very strongly, and we leave our FY21 and FY22 revenue and margin estimates unchanged, but note that if trading continues to improve, there may be scope to move numbers later in the year, subject to the status of the planned Olympics. FY22 should be a stronger year of margin growth as permanent cost reductions contribute.