Post on 28-Nov-2014
description
transcript
2013 The Third Quarter’s Results
February 13, 2014Please 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
Disclaimer
1
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. Summary
2*Adjusted operating income and adjusted EPS: Amortization of goodwill and M&A related intangible asset needs to be added back
JPY mn2013
Q3 YTD
2012
Q3 YTDyoy %
2012
Q3 YTDProforma
yoy
Proforma
%
Current Previous Proforma
Turnover 2,945,048 1,412,195 + 108.5 2,514,945 + 17.1
Net sales 1,662,485 1,412,195 + 17.7 1,519,630 + 9.4
Gross profit 414,373 248,963 + 66.4 352,882 + 17.4
Gross profit margin 24.9% 17.6% + 7.3 23.2% + 1.7
Operating income 34,739 38,116 (8.9) 25,895 + 34.2
Non-operating income/loss 8,251 981 + 740.8 ▲ 656 -
Net income 20,694 19,939 + 3.8 4,452 + 364.8
EBITDA 78,311 50,146 + 56.2 61,598 + 27.1
Adjusted operating income 66,322 41,355 + 60.4 50,546 + 31.2
Operating margin 16.0% 16.6% (0.6) 14.3% + 1.7
Adjusted EPS 192.8yen 93.0yen + 107.2 116.8yen + 65.0
Currency
JPY/US$ (Jan-June average) 96.7yen 79.4yen + 21.8
JPY/GBP (Jan-June average) 149.4yen 125.2yen + 19.3
2012
Q3 YTD
Currency
Acquisitions
Organic
2013
Q3 YTD
2012
Q3 YTD
Currency
Acquisitions
Organic
2013
Q3 YTD
2. Gross profit growth
3
year on year year on year (Proforma)
Organic growth+5.8%Gross profit after currency
&acquisitions adjustment391.5bn
248.9bn
+9.7bn
+132.7bn
+22.8bn
414.3bn
352.8bn
+31.4bn
+7.2bn
+22.8bn
414.3bn
(JPY) (JPY)
3. Gross profit by region
4*Organic growth in regional segments and total of dentsu aegis network is based on local accounting standard*yoy% is compared with dentsu network result
2013 Q3 YTD
JPY mn
Gross
profityoy%
v.sproforma
%
Adjusted
operating
income
yoy%v.s
proforma
%
Organic
growth
%
Japan 221,534 + 7.4 + 7.4 45,274 + 27.9 + 27.9 + 7.5
operating margin 20.4% + 3.3 + 3.3
EMEA 71,763 + 2,795.0 + 29.3 - - - + 3.2
Americas 67,672 + 178.4 + 34.6 - - - + 6.7
APAC 54,160 + 237.2 + 32.2 - - - + 7.1
internal transaction (non Japan related) ▲ 120 - - - - - -
Dentsu Aegis Network total 193,476 + 352.0 + 31.9 21,103 + 273.6 + 42.2 + 5.5
operating margin 10.9% (2.3) + 0.8
Consolidated adjustment & others ▲ 637 - - ▲ 55 - - -
Dentsu consolidated gross profit 414,373 + 66.4 + 17.4 66,322 + 60.4 + 31.2 + 5.8
operating margin 16.0% (0.6) + 1.7
13.3%
17.1%
10.9%
16.6% 14.9%
18.2%
14.9%16.0%
18.6%
13.4%
17.7%
11.1%
17.4%
15.1%
19.0%
18.4%
20.4%
13.0% 13.4%
8.3%
11.9%
13.3%13.8%
10.9% 10.9%
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
31
2010 2011 2012 2013
Dentsu consolidated Japan DAN
4. Operating margin (adjusted operating income base)
5*DAN: From 2013, DAN includes Aegis
2013 forecast (annual)
5. Operating income to Net income
6
JPY mn2013
Q3 YTD
2012
Q3 YTDyoy %
Operating income 34,739 38,116 (8.9)
Net non-operating income 8,251 981 + 740.8
Non-operating income 17,432 7,414 + 135.1
Non-operating expenses 9,180 6,433 + 42.7
Ordinary income 42,991 39,098 + 10.0
Net extraordinary income (loss) 1,455 ▲ 2,576 -
Extraordinary income 5,034 233 + 2,054.8
Extraordinary loss 3,579 2,810 + 27.4
Income before income taxes and
minority interests44,446 36,521 + 21.7
Income taxes 22,592 15,464 + 46.1
Minority interests in income 1,159 1,117 + 3.8
Net income 20,694 19,939 + 3.8
6. Balance sheet
7*Currency: B/S (end of Dec): Sept 30, 2013, B/S (End of March): Dec 31, 2012
JPY mn2013
End of Dec
2013
End of Marchyoy %
Current assets 1,116,429 1,122,602 (0.5)
Fixed assets 1,212,323 1,082,966 + 11.9
Total assets 2,328,752 2,205,569 + 5.6
Current Liabilities 1,017,625 1,317,554 (22.8)
Fixed liabilities 466,351 279,377 + 66.9
Total liabilities 1,483,977 1,596,931 (7.1)
Shareholders' equity 698,258 570,419 + 22.4
Other comprehensive income accumulated 121,848 14,076 + 765.6
Minority interests 24,668 24,141 + 2.2
Net assets 844,775 608,637 + 38.8
Total liabilities and net assets total 2,328,752 2,205,569 + 5.6
JPY/GBP 158.1 yen 139.5 yen + 13.3
JPY/US$ 97.8 yen 86.6 yen + 12.9
7. Net Debt
8*LTM: Last twelve month, (Aegis Group Figure: 9 months from Jan-Sept, 2013)
JPY mn2013
End of Dec
2013
End of March
Total debt 360,157 215,852
Cash and marketable securities 134,506 208,473
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
8. Dentsu Aegis Network Jan-Dec gross profit growth (unaudited)
9*Based on local accounting standard (unaudited)
Organic growth %
(Jan-Dec)
Organic growth %
(Oct-Dec)
EMEA + 2.3 + 0.4
Americas + 7.6 + 10.2
APAC + 9.1 + 14.1
DAN total + 5.9 + 6.8
9. Fiscal year 2013 (Apr to March) forecast
10
JPY mn
2013
forecast
(annual)
2013 H2
Oct-Mar
forecast
2013 H1
Apr-Sept
actual
Net sales 2,292,000 1,209,639 1,082,360
yoy % + 18.1 + 18.6 + 17.5
Gross profit 578,500 309,306 269,193
yoy % + 67.2 + 68.8 + 65.5
Operating income befor amortization 107,800 67,688 40,111
yoy % + 71.5 + 75.3 + 65.5
Operating income 65,600 46,315 19,284
yoy % + 12.2 + 27.4 (12.8)
Ordinary income 72,400 48,350 24,049
yoy % + 22.7 + 22.7 + 21.6
Net income 33,100 22,965 10,134
yoy % (8.9) (14.9) + 8.4
Appendix
1. Definition
12
Proforma: Aegis 2012 Jan-June result consolidated into Dentsu FY2012 Apr-Sept result based on J-GAAP assuming Dentsu acquired Aegis in Jan 1, 2012. 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
Turnover: Aegis turnover(like dentsu’s sales) + Dentsu group sales (unaudited)
EBITDA: Operating profit before amortization of goodwill and depreciation
Adjusted operating income: Operating profit before amortization of goodwill and M&A related intangible asset
Operating margin: Adjusted operating income divided by gross profit
Adjusted EPS Net income before amortization of goodwill and M&A related intangible asset * divided by average share outstanding (ignore impact on income tax ) adjustment
Currency: Currency movements comparing prior period reported gross profit at reported currency to prior period gross profit at constant currency
Acquisitions: The effect of business acquired or disposal since the beginning of the prior year
Organic: 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
2. Result for Q3 2013
13
JPY mn2013
Q3 YTD
2012
Q3 YTDyoy %
Current Previous
Net sales 1,662,485 1,412,195 +17.7
Gross profit 414,373 248,963 +66.4
Gross profit margin 24.9% 17.6% +7.3
SG&A 379,634 210,846 +80.1
Operating income 34,739 38,116 (8.9)
v.s. Gross profit 8.4% 15.3% (6.9)
Ordinary income 42,991 39,098 +10.0
Income before income taxes and
minority interests44,446 36,521 +21.7
Net income 20,694 19,939 +3.8
Operating income before amortization
of goodwill and other intangible assets66,322 41,355 +60.4
3. Amortization for goodwill and intangible asset
14
JPY mnB/S JPY
amount
end of Dec
2013 Q3 YTDamortization
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 158.1 yen 149.4 yen
4. Quarterly Result
15
JPY mn2013
Q3yoy %
2013
Q2yoy %
2013
Q1yoy %
Net sales 580,125 +18.1 568,130 +20.0 514,229 +14.9
Gross profit 145,180 +68.2 146,311 +69.8 122,882 +60.7
Gross profit margin 25.0% +7.5 25.8% +7.6 23.9% +6.8
SG&A 129,725 +84.5 126,309 +71.5 123,599 +84.7
Operating income 15,455 (3.4) 20,001 +59.5 ▲ 717 -
v.s. Gross profit 10.6% (7.9) 13.7% (0.9) -0.6% -
Ordinary income 18,942 (2.8) 22,599 +172.7 1,450 (87.4)
Income before income taxes and
minority interests20,498 +9.1 24,360 +226.1 ▲ 412 -
Net income 10,560 (0.3) 13,833 +299.5 ▲ 3,698 -
Operating income before amortization
of goodwill and other intangible assets26,210 +53.1 30,079 +119.9 10,032 (4.9)
5. Result for Q3 2013 (non-consolidated)
16
JPY mn2013
Q3 YTD
2012
Q3 YTDyoy %
Current Previous
Net sales 1,107,536 1,037,789 + 6.7
Gross profit 156,152 142,699 + 9.4
gross profit margin 14.1% 13.8% + 0.3
SG&A 123,664 117,993 + 4.8
Operating income 32,487 24,705 + 31.5
v.s. gross profit 20.8% 17.3% + 3.5
Ordinary income 49,681 28,565 + 73.9
Income before income taxes 49,369 25,286 + 95.2
Net income 36,982 15,869 + 133.0
6. Quarterly Result (non-consolidated)
17
JPY mn2013
Q3yoy %
2013
Q2yoy %
2013
Q1yoy %
Net sales 389,952 +7.8 367,336 +7.8 350,246 +4.4
Gross profit 55,498 +12.6 52,764 +8.3 47,889 +7.2
gross profit margin 14.2% +0.6 14.4% +0.1 13.7% +0.4
SG&A 41,401 +7.1 42,434 +0.0 39,829 +8.0
Operating income 14,097 +32.7 10,330 +64.5 8,060 +3.3
v.s. gross profit 25.4% +3.8 19.6% +6.7 16.8% (0.7)
Ordinary income 19,486 +39.0 14,155 +704.5 15,578 +20.1
Income before income taxes 18,696 +42.1 15,912 +2753.7 14,760 +27.6
Net income 13,845 +78.4 12,517 +38523.0 10,619 +31.5
7. Net Sales by Business Category (Non-Consolidated)
18
JPY mn2013
Q3 YTDyoy % % of total
2012
Q3 YTDyoy % % of total
Newspapers 80,497 +4.1 7.3 77,294 (5.1) 7.4
Magazines 25,594 (6.4) 2.3 27,330 +1.6 2.6
Radio 11,256 (6.6) 1.0 12,049 (8.3) 1.2
Television 523,982 +4.6 47.3 501,096 +1.4 48.3
Time 225,182 (1.3) 20.3 228,107 +5.6 22.0
Spot 298,799 +9.5 27.0 272,988 (1.9) 26.3
Interactive Media 47,365 +21.2 4.3 39,085 +10.4 3.8
OOH Media 38,908 +8.2 3.5 35,949 +4.6 3.5
Creative 143,265 +7.6 12.9 133,118 +1.2 12.8
Marketing/Promotion 142,285 +15.3 12.8 123,385 (4.5) 11.9
Content Services 64,276 +4.2 5.8 61,682 +1.1 5.9
Others 30,104 +12.3 2.7 26,796 +28.0 2.6
Total 1,107,536 +6.7 100.0 1,037,789 +0.9 100.0
8. Net Sales by Industry (Non-Consolidated)
19
JPY mn2013
Q3 YTDyoy % % of total
2012
Q3 YTDyoy % % of total
Information/Communications 146,294 +4.3 13.2 140,285 +4.7 13.5
Beverages/Cigarettes 123,672 +7.0 11.2 115,602 (0.2) 11.1
Cosmetics/Toiletries 89,141 (2.3) 8.0 91,208 (2.0) 8.8
Finance/Insurance 86,607 +25.5 7.8 69,020 +1.0 6.7
Automobiles/Related Products 77,571 +28.1 7.0 60,567 +23.7 5.8
Distribution/Retailing 74,393 (0.4) 6.7 74,725 +9.8 7.2
Foodstuffs 66,892 +4.4 6.0 64,069 +5.5 6.2
Food Services/Other Services 59,413 +14.1 5.4 52,086 +3.9 5.0
Pharmaceuticals/Medical Supplies 52,228 (0.4) 4.7 52,414 (2.2) 5.1
Hobbies/Sporting Goods 49,552 +19.1 4.5 41,590 (4.9) 4.0
Transportation/Leisure 45,696 +3.8 4.1 44,008 +4.8 4.2
Home Electric Appliances/AV Equipment 41,296 (7.7) 3.7 44,735 (19.5) 4.3
Government/Organizations 39,503 +0.7 3.6 39,212 (16.0) 3.8
Real Estate/Housing Facilities 32,679 +11.4 3.0 29,338 (4.7) 2.8
Apparel/Fashion, Accessories/Personal Items 31,768 (6.8) 2.9 34,101 +10.0 3.3
Others 90,823 +7.1 8.2 84,822 (1.0) 8.2
Total 1,107,536 +6.7 100.0 1,037,789 +0.9 100.0