Dentsu Aegis Network's quarterly profit slows to 5%

Profit growth at Dentsu Aegis Network, the owner of Carat and Mcgarrybowen, has slowed to single figures for the first time in two years.

Tadashi Ishii: Dentsu's CEO cited 'macroeconomic uncertainties in key regions'
Tadashi Ishii: Dentsu's CEO cited 'macroeconomic uncertainties in key regions'

In Europe, the Middle East and Africa, the international business for Dentsu delivered organic gross profit growth of 5% for the second quarter of 2016.

It had been two years since Dentsu Aegis’ quarterly gross profit last grew by less than 10%, since the 6.9% growth it posted in Q2 2014. Last quarter it recorded 10.7% growth, and 16.1% for Q2 2015.

The UK was singled out by Dentsu for performing particularly strongly in EMEA, alongside Italy, Spain, Russia and the Nordics.

Globally, Dentsu posted organic gross profit growth of 9.5% for the second quarter of the year, up on the 5.1% it posted last quarter.

On a constant currency basis, organic gross profit for the first six months of the year grew 9.6% to ‎¥368.62bn (£2.78bn).

Dentsu Aegis’ gross profit contribution from digital businesses reached 50.1%, halfway towards its strategy to become 100% digital by 2020.

This week Dentsu Aegis announced it is acquiring a majority stake in Merkle, the largest independent CRM, data analytics and performance marketing agency in the US.

Tadashi Ishii, president and chief executive of Dentsu, said the company had "performed very well" this year despite "macroeconomic uncertainties in key regions".

He added: "We have continued to outperform the peer group, in organic top-line growth and on an operating margin basis, and we have made further progress in delivering on our medium-term strategic objectives.

"Despite being at the epicentre of a marketing industry which is undergoing significant change, at an increasingly fast pace, the group has continued to build a track record of strong performance, mainly due to our strategic focus on the digital economy."

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