Dentsu : Q1/ Summary of Financial Results for the Three Months Ended Mar 31, 2026（572KB）

About this update from Dentsu Group Inc.

This document has been translated from a Japanese original for reference purposes only. In the event of any discrepancy between this translated document and the Japanese original, the original shall prevail. The Company assumes no responsibility for this translation or any form of damage arising from the translation. Summary of Financial Results for the Three Months Ended March 31, 2026 － IFRS Consolidated Results － Name of Listed Company: Dentsu Group Inc. Code Number: 4324 Stock Exchange Listing: Prime Market of the Tokyo Stock Exchange URL: https://www.group.dentsu.com/en/ Name of Representative: Takeshi Sano, Representative Executive Officer, President & Global CEO Scheduled start date of dividend payment: - Supplementary briefing material on financial results: Available Financial results briefing for institutional investors and analysts: Scheduled Contact: Jumpei Kojima Deputy Global Chief Communications Officer Telephone: (813) 6217-6601 Summary of Consolidated Financial Results for the Three Months Ended March 31, 2026 [IFRS] Summary of Financial Results for the Three Months Ended March 31, 2026 (from January 1, 2026 to March 31, 2026) (Figures are rounded down to the nearest one million yen) Consolidated Financial Results (cumulative) (Percentages indicate the rate of increase or decrease compared with the previous corresponding period.) (Millions of yen, except as otherwise stated) Revenue Net revenue Underlying operating profit Operating margin Operating profit Three months ended March 31, 2026 357,129 3.5% 295,064 2.7% 37,812 11.5% 12.8% 64,958 155.5% Three months ended March 31, 2025 345,160 3.7% 287,287 (0.6%) 33,926 13.7% 11.8% 25,426 75.5% Profit before tax Profit for the period Underlying net profit attributable to owners of the parent Profit attributable to owners of the parent Total comprehensive income for the period Three months ended March 31, 2026 62,541 187.0% 43,206 378.3% 19,581 18.4% 40,153 540.5% 45,383 - Three months ended March 31, 2025 21,788 16.8% 9,033 (16.9%) 16,538 4.5% 6,269 12.9% (10,380) - (Yen) Underlying basic earnings per share Basic earnings per share Diluted earnings per share Three months ended March 31, 2026 75.43 154.68 154.05 Three months ended March 31, 2025 63.71 24.15 24.08 For the definition of "Underlying operating profit" and "Underlying net profit attributable to owners of the parent," please refer to "Qualitative Information on Financial Results" on page 6. Consolidated Financial Position (Millions of yen, except as otherwise stated) Total assets Total equity Total equity attributable to owners of the parent Ratio of equity attributable to owners of the parent to total assets Equity attributable to owners of the parent per share (Yen) As of March 31, 2026 3,044,735 477,850 417,230 13.7% 1,607.29 As of December 31, 2025 3,206,787 447,954 374,849 11.7% 1,444.02 Dividends (Yen, except as otherwise stated) Cash dividend per share First Quarter Second Quarter Third Quarter Year-end Total Fiscal year ended December 31, 2025 - 0.00 - 0.00 0.00 Fiscal year ending December 31, 2026 - Fiscal year ending December 31, 2026 (forecast) 0.00 - 0.00 0.00 Note: Revisions to the forecast of dividends most recently announced: None Forecast of Consolidated Financial Results for the Fiscal Year Ending December 31, 2026 (from January 1, 2026 to December 31, 2026) (Millions of yen, except as otherwise stated) Revenue Net revenue Underlying operating profit Operating margin Operating profit Fiscal year ending December 31, 2026 1,491,500 3.9% 1,230,200 2.7% 166,300 (3.6%) 13% range 152,600 - Profit for the year Underlying net profit attributable to owners of the parent Profit attributable to owners of the parent Underlying basic earnings per share (Yen) Basic earnings per share (Yen) Fiscal year ending December 31, 2026 78,700 - 85,200 (8.9%) 69,700 - 328.21 268.50 Note: Revisions to the forecast of consolidated financial results most recently announced: None Given the uncertain business environment, we set targets within a specific range for particularly important KPIs. For the definition of "Underlying operating profit" and "Underlying net profit attributable to owners of the parent," please refer to "Qualitative Information on Financial Results" on page 6. Notes Significant Changes in the Scope of Consolidation during the Period: None Changes in Accounting Policies and Changes in Accounting Estimates Changes in accounting policies required by IFRS: None Changes in accounting policies due to other reasons: None Changes in accounting estimates: None Number of Issued Shares (Ordinary Shares) Total number of issued shares at the end of the period (including treasury shares) As of March 31, 2026 265,800,000 shares As of December 31, 2025 265,800,000 shares Number of treasury shares at the end of the period As of March 31, 2026 6,213,645 shares As of December 31, 2025 6,213,175 shares Average number of shares during the period (cumulative from the beginning of the fiscal year) Three months ended March 31, 2026 259,586,540 shares Three months ended March 31, 2025 259,571,354 shares Notes Review of the Japanese-language originals of the attached quarterly consolidated financial statements by the Certified Public Accountants or the audit corporation: Yes (voluntary) Disclaimer regarding appropriate use of forecasts and related points of note Since the forecast of financial results and other forward-looking statements herein have been prepared based on certain conditions which Dentsu Group Inc. (hereinafter "the Company") believes to be reasonable at this time, actual financial results may be substantially different from the forecast due to various factors. For information relating to forecasts, please refer to "Qualitative Information on Financial Results Forecast" on page 8. Table of Contents - Attachments Qualitative Information on Quarterly Financial Results 6 Qualitative Information on Financial Results 6 Qualitative Information on Financial Results Forecast 8 Matters Pertaining to Summary Information (Notes) 9 Changes in Significant Consolidated Subsidiaries during the Period 9 Adoption of Accounting Treatment Specific to the Preparation of Quarterly Consolidated Financial Statements 9 Changes in Accounting Policies, Changes in Accounting Estimates, Restatement, and Changes in Presentation 9 Condensed Quarterly Consolidated Financial Statements and Primary Notes 10 Condensed Quarterly Consolidated Statement of Financial Position 10 Condensed Quarterly Consolidated Statement of Income 12 Condensed Quarterly Consolidated Statement of Comprehensive Income 14 Condensed Quarterly Consolidated Statement of Changes in Equity 15 Condensed Quarterly Consolidated Statement of Cash Flows 17 Notes on the Condensed Quarterly Consolidated Financial Statements 19 (Notes on Premise of Going Concern) 19 (Segment and Other Information) 19 (Significant Subsequent Events) 21 Independent Auditor's Report on Review of Quarterly Consolidated Financial Statements 22 Qualitative Information on Quarterly Financial Results Qualitative Information on Financial Results In the three months ended March 31, 2026, the outlook for the global economy remained uncertain due to factors such as the prolonged instability in the international situation, as well as rising prices. In this environment, the business results of the Group during the three months ended March 31, 2026, are as presented in the table below. Although the Group saw net revenue organic growth of 0.8%, net revenue increased by 2.7% year on year due to factors such as exchange rates. With measures such as SG&A expenses control, underlying operating profit increased by 11.5% resulting in operating margin increase of 100 bps while underlying net profit attributable to owners of the parent increased by 18.4%. Operating profit increased by 155.5% year on year, and profit attributable to owners of the parent increased by 540.5% year on year due to factors such as the recording of gains on the sale of the Dentsu Ginza Building. Underlying operating profit is a profit indicator to measure recurring business performance which is calculated as operating profit added with M&A related items and one-off items. M&A related items: amortization of purchased intangible assets, acquisition costs and share-based compensation expenses issued following the acquisition of 100% ownership of a subsidiary One-off items: items such as business transformation cost, impairment loss, gain/loss on sales of non-current assets and extra retirement payments Underlying net profit attributable to owners of the parent is an indicator to measure recurring profit attributable to owners of the parent which is calculated as profit (attributable to owners of the parent) added with adjustment items related to operating profit, change in fair value of contingent considerations (gain/loss on revaluation of earnout liabilities), remeasurements of share purchase liabilities (gain/loss on revaluation of M&A related put-option liabilities), tax-related, NCI profit-related and other one-off items. Business results for the three months ended March 31, 2026 (Monetary amounts are shown in millions of yen, with negative amounts shown in parentheses) Item Three months ended March 31, 2025 Three months ended March 31, 2026 YoY change Revenue 345,160 357,129 3.5％ Net revenue 287,287 295,064 2.7％ Operating profit 25,426 64,958 155.5% Profit for the period (attributable to owners of the parent) 6,269 40,153 540.5% Main profit indicators for the three months ended March 31, 2026 (Monetary amounts are shown in millions of yen, with negative amounts shown in parentheses) Item Three months ended March 31, 2025 Three months ended March 31, 2026 YoY change Underlying operating profit 33,926 37,812 11.5％ Operating margin 11.8％ 12.8% 100bps Underlying net profit (attributable to owners of the parent) 16,538 19,581 18.4％ Performance by reportable segment for the three months ended March 31, 2026, is as follows. Japan Japan saw organic growth of 4.7% with the growth in the Marketing business led by Internet and TV advertising, Digital Transformation (DX), and Business Transformation (BX). As the results of CARTA HOLDINGS, which was reclassified to an equity-method affiliate in January 2026, were included in the results for the previous corresponding period, net revenue was 128,873 million yen (0.6% decrease year on year). However, with SG&A expenses decrease, underlying operating profit was 39,754 million yen (5.6% increase year on year) and operating margin was 30.8% (29.0% for the previous corresponding period). Americas The Americas saw organic decline of 3.0%, with the United States, the primary market, posting organic decline. Although net revenue in the Americas was 76,443 million yen (0.2% increase year on year) due to a shift in the exchange rate toward a weaker yen against the United States Dollar, net revenue decrease on a constant currency basis led to underlying operating profit of 12,280 million yen (9.2% decrease year on year) and operating margin of 16.1% (17.7% for the previous corresponding period). EMEA (Europe, the Middle East, and Africa) EMEA saw organic growth of 0.8%. By major market, the United Kingdom, Spain, and Poland achieved organic growth, while Germany, Italy, and Switzerland posted organic decline. Due to a shift in the exchange rate toward a weaker yen against the Great Britain Pound and Euro, net revenue in EMEA was 65,501 million yen (15.0% increase year on year), underlying operating profit was 2,547 million yen (underlying operating loss of 1,554 million yen in the previous corresponding period), and operating margin was 3.9% (negative 2.7% for the previous corresponding period). APAC (Asia Pacific excluding Japan) APAC saw organic decline of 7.5%. By major market, India achieved organic growth, while Australia, China, and Singapore posted organic decline. Net revenue in APAC was 22,771 million yen (1.3% decrease year on year), underlying operating loss was 3,174 million yen (underlying operating loss of 3,224 million yen for the previous corresponding period), and operating margin was negative 13.9% (negative 14.0% for the previous corresponding period). Qualitative Information on Financial Results Forecast The forecast of the full-year consolidated financial results for the fiscal year ending December 31, 2026, which was disclosed on February 13, 2026, is reiterated. Meanwhile, uncertainty surrounding the global economy is increasing due to geopolitical risks such as the situation in the Middle East and the prolonged conflict in Ukraine, as well as soaring resource and energy prices. Caution is warranted as these factors may have an impact on our consolidated financial results. Matters Pertaining to Summary Information (Notes) Changes in Significant Consolidated Subsidiaries during the Period No items to report Adoption of Accounting Treatment Specific to the Preparation of Quarterly Consolidated Financial Statements No items to report Changes in Accounting Policies, Changes in Accounting Estimates, Restatement, and Changes in Presentation (Changes in Presentation) (Condensed Quarterly Consolidated Statement of Income) "Gain (loss) on sale and retirement of non-current assets," which had been presented under "Other expenses" in the three months ended March 31, 2025, is presented separately in the three months ended March 31, 2026, because of its increased quantitative materiality. The Company has reorganized the Condensed Quarterly Consolidated Statement of Income for the three months ended March 31, 2025, to reflect this change in presentation. As a result, 49 million yen presented under "Other expenses" in the Condensed Quarterly Consolidated Statement of Income for the three months ended March 31, 2025, has been reclassified as "Gain (loss) on sale and retirement of non-current assets" of (49) million yen. (Condensed Quarterly Consolidated Statement of Cash Flows) "(Gain) loss on sale and retirement of non-current assets," which had been presented under "Other-net" in "Cash flows from operating activities" in the three months ended March 31, 2025, is presented separately in the three months ended March 31, 2026, because of its increased quantitative materiality. The Company has reorganized the Condensed Quarterly Consolidated Statement of Cash Flows for the three months ended March 31, 2025, to reflect this change in presentation. As a result, 49 million yen presented under "Other-net" in "Cash flows from operating activities" in the Condensed Quarterly Consolidated Statement of Cash Flows for the three months ended March 31, 2025, has been reclassified as "(Gain) loss on sale and retirement of non-current assets" of 49 million yen. Condensed Quarterly Consolidated Financial Statements and Primary Notes Condensed Quarterly Consolidated Statement of Financial Position FY2025 (As of December 31, 2025) (Millions of yen) The first quarter (As of March 31, 2026) ASSETS CURRENT ASSETS: Cash and cash equivalents 295,183 255,893 Trade and other receivables 1,818,316 1,696,182 Inventories 9,492 24,345 Income tax receivables 41,514 43,386 Other financial assets 22,289 23,832 Other current assets 60,899 71,487 Subtotal 2,247,696 2,115,128 Non-current assets classified as held for sale 53,707 3,733 Total current assets 2,301,403 2,118,862 NON-CURRENT ASSETS: Property, plant and equipment 22,967 22,083 Goodwill 320,102 322,815 Intangible assets 178,219 170,167 Right-of-use assets 104,511 120,601 Investments accounted for using the equity method 53,164 70,769 Other financial assets 107,661 109,087 Other non-current assets 65,690 65,191 Deferred tax assets 53,066 45,157 Total non-current assets 905,383 925,873 TOTAL ASSETS 3,206,787 3,044,735 FY2025 (As of December 31, 2025) (Millions of yen) The first quarter (As of March 31, 2026) LIABILITIES AND EQUITY LIABILITIES CURRENT LIABILITIES: Trade and other payables 1,655,434 1,547,350 Bonds and borrowings 122,067 105,695 Other financial liabilities 71,037 76,970 Income tax payables 37,271 25,415 Provisions 18,864 17,054 Other current liabilities 210,390 182,311 Subtotal Liabilities directly associated with non-current assets classified as held for sale 2,115,065 30,176 1,954,798 760 Total current liabilities 2,145,241 1,955,558 NON-CURRENT LIABILITIES: Bonds and borrowings 346,174 346,207 Other financial liabilities 198,914 201,810 Liability for retirement benefits 15,868 16,135 Provisions 13,048 10,906 Other non-current liabilities 6,259 5,843 Deferred tax liabilities 33,325 30,422 Total non-current liabilities 613,590 611,326 Total liabilities 2,758,832 2,566,885 EQUITY: Share capital 74,609 74,609 Share premium account 75,862 75,735 Treasury shares (26,494) (26,496) Other components of equity 201,359 202,258 Retained earnings 49,511 91,122 Total equity attributable to owners of the parent 374,849 417,230 Non-controlling interests 73,105 60,619 Total equity 447,954 477,850 TOTAL LIABILITIES AND EQUITY 3,206,787 3,044,735 Condensed Quarterly Consolidated Statement of Income For the three months ended March 31, 2025 and March 31, 2026 Three months ended March 31, 2025 (From January 1 to March 31, 2025) (Millions of yen) Three months ended March 31, 2026 (From January 1 to March 31, 2026) Revenue 345,160 357,129 Cost of sales (57,872) (62,064) Net revenue 287,287 295,064 Selling, general and administrative expenses (259,210) (263,760) Business transformation cost (2,264) (3,581) Gain (loss) on sale and retirement of non-current assets (49) 29,678 Other income 523 7,708 Other expenses (861) (151) Operating profit 25,426 64,958 Share of results of associates 1,570 2,145 Gain on sales of shares of associates 12 - Profit before interest and tax 27,009 67,104 Finance income 1,804 1,888 Finance costs (7,025) (6,450) Profit before tax 21,788 62,541 Income tax expense (12,755) (19,335) Profit for the period 9,033 43,206 Profit attributable to: Owners of the parent 6,269 40,153 Non-controlling interests 2,763 3,052 Earnings per share Basic earnings per share (Yen) 24.15 154.68 Diluted earnings per share (Yen) 24.08 154.05 Reconciliation from operating profit to underlying operating profit (Millions of yen) Three months ended March 31, 2025 (From January 1 to March 31, 2025) Three months ended March 31, 2026 (From January 1 to March 31, 2026) Operating profit 25,426 64,958 Amortization of intangible assets incurred in acquisitions 6,216 6,098 Selling, general and administrative expenses 335 33 Business transformation cost 2,264 3,581 (Gain) loss on sale and retirement of non-current assets 49 (29,678) Other income (366) (7,184) Other expenses - 1 Underlying operating profit (Note) 33,926 37,812 (Note) The underlying operating profit is a KPI to measure recurring business performance which is calculated by eliminating gain/loss related to M&As and one-off items from operating profit. Gain/loss related to M&As: Amortization of M&A related intangible assets, acquisition costs and share-based compensation expenses following the acquisition of 100% ownership of a subsidiary Examples of one-off items: Business transformation cost, impairment loss, gain/loss on sales of non-current assets and extra retirement payments Underlying operating profit is not defined under IFRS; however, it is voluntarily disclosed in the Condensed Quarterly Consolidated Statement of Income since management has concluded that the information is useful for users of the financial statements. Condensed Quarterly Consolidated Statement of Comprehensive Income Three months ended March 31, 2025 (From January 1 to March 31, 2025) (Millions of yen) Three months ended March 31, 2026 (From January 1 to March 31, 2026) PROFIT FOR THE PERIOD 9,033 43,206 OTHER COMPREHENSIVE INCOME ITEMS THAT WILL NOT BE RECLASSIFIED TO PROFIT OR LOSS: Net change in financial assets measured at fair value through other comprehensive income (649) 866 Remeasurements of defined benefit plans (47) (48) Share of other comprehensive income of investments accounted for using the equity method (62) (145) ITEMS THAT MAY BE RECLASSIFIED TO PROFIT OR LOSS: Exchange differences on translation of value of cash flow hedges (3,874) 2,618 Hedge cost 117 154 Share of other comprehensive income of investments accounted for using the equity method (12) (4) Other comprehensive income, net of tax (19,414) 2,177 foreign operations (14,884) (1,262) Effective portion of the change in the fair COMPREHENSIVE INCOME FOR THE PERIOD (10,380) 45,383 COMPREHENSIVE INCOME FOR THE PERIOD ATTRIBUTABLE TO: Owners of the parent (12,970) 42,261 Non-controlling interests 2,589 3,122 Condensed Quarterly Consolidated Statement of Changes in Equity For the three months ended March 31, 2025 (From January 1 to March 31, 2025) Total equity attributable to owners of the parent Other components of equity (Millions of yen) Share capital Share premium account Treasury shares Exchange differences on translation of foreign operations Effective portion of the change in the fair value of cash flow hedges Hedge cost As of January 1, 2025 74,609 75,373 (26,559) 151,599 18,190 (1,131) Profit for the period Other comprehensive income (14,708) (3,874) 117 Comprehensive income for the period - - - (14,708) (3,874) 117 Repurchase of treasury shares (0) Dividends Transactions with non-controlling interests Loss of control of subsidiaries Transfer from other components of equity to retained earnings Transfer to non-financial assets (73) Other changes 37 Transactions with owners － total - 37 (0) - (73) - As of March 31, 2025 74,609 75,410 (26,560) 136,891 14,242 (1,014) (Millions of yen) Total equity attributable to owners of the parent Other components of equity Net change in financial assets measured at fair value through other comprehensive income Remeasurements of defined benefit plans Total Retained Total earnings Non-controlling interests Total equity As of January 1, 2025 47,822 - 216,481 356,933 696,838 72,197 769,035 Profit for the period - 6,269 6,269 2,763 9,033 Other comprehensive income (726) (47) (19,239) (19,239) (174) (19,414) Comprehensive income for the period (726) (47) (19,239) 6,269 (12,970) 2,589 (10,380) Repurchase of treasury shares - (0) (0) Dividends - (18,105) (18,105) (5,138) (23,243) Transactions with non-controlling interests - 4 4 (41) (37) Loss of control of subsidiaries - - - Transfer from other components of equity to retained earnings (11,871) 47 (11,823) 11,823 - - Transfer to non-financial assets (73) (73) (73) Other changes - (445) (408) (408) Transactions with owners － total (11,871) 47 (11,897) (6,722) (18,583) (5,179) (23,763) As of March 31, 2025 35,225 - 185,343 356,480 665,284 69,607 734,891 For the three months ended March 31, 2026 (From January 1 to March 31, 2026) Total equity attributable to owners of the parent Other components of equity (Millions of yen) Share capital Share premium account Treasury shares Exchange differences on translation of foreign operations Effective portion of the change in the fair value of cash flow hedges Hedge cost As of January 1, 2026 74,609 75,862 (26,494) 159,993 10,879 (890) Profit for the period Other comprehensive income (1,311) 2,618 154 Comprehensive income for the period - - - (1,311) 2,618 154 Repurchase of treasury shares (1) Dividends Transactions with non-controlling interests Loss of control of subsidiaries Transfer from other components of equity to retained earnings Transfer to non-financial assets (256) Other changes (127) Transactions with owners － total - (127) (1) - (256) - As of March 31, 2026 74,609 75,735 (26,496) 158,681 13,241 (736) (Millions of yen) Total equity attributable to owners of the parent Other components of equity Net change in financial assets measured at fair value through other comprehensive income Remeasurements of defined benefit plans Total Retained Total earnings Non-controlling interests Total equity As of January 1, 2026 31,377 - 201,359 49,511 374,849 73,105 447,954 Profit for the period - 40,153 40,153 3,052 43,206 Other comprehensive income 695 (48) 2,107 2,107 70 2,177 Comprehensive income for the period 695 (48) 2,107 40,153 42,261 3,122 45,383 Repurchase of treasury shares - (1) (1) Dividends - - (3,635) (3,635) Transactions with non-controlling interests - (52) (52) 165 113 Loss of control of subsidiaries - - (12,137) (12,137) Transfer from other components of equity to retained earnings (1,002) 48 (953) 953 - - Transfer to non-financial assets (256) (256) (256) Other changes - 557 429 429 Transactions with owners － total (1,002) 48 (1,209) 1,458 119 (15,608) (15,488) As of March 31, 2026 31,071 - 202,258 91,122 417,230 60,619 477,850 Condensed Quarterly Consolidated Statement of Cash Flows Three months ended March 31, 2025 (From January 1 to March 31, 2025) (Millions of yen) Three months ended March 31, 2026 (From January 1 to March 31, 2026) CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax 21,788 62,541 ADJUSTMENTS FOR: Depreciation and amortization 18,767 18,202 Interest and dividend income (1,080) (1,031) Interest expense 5,217 6,237 Share of results of associates (1,570) (2,145) Revaluation (gain) loss on contingent consideration and put option liability (41) 66 (Gain) loss on sale and retirement of non- current assets 49 (29,678) (Gain) loss on valuation of securities 1,470 (546) Increase (decrease) in liability for retirement benefits (97) 226 Increase (decrease) in provision of business transformation cost (89) (4,081) Other-net (4,620) (10,920) Cash flows from operating activities before adjusting changes in working capital and others 39,792 38,870 CHANGES IN WORKING CAPITAL: (Increase) decrease in trade and other receivables 118,346 120,399 (Increase) decrease in inventories (10,075) (14,774) (Increase) decrease in other current assets (8,790) (10,263) Increase (decrease) in trade and other payables (144,073) (114,027) Increase (decrease) in other current liabilities (16,919) (23,064) Change in working capital (61,511) (41,729) Subtotal (21,719) (2,859) Interest received 1,081 1,098 Dividends received 203 1,974 Interest paid (6,042) (7,241) Income taxes paid (24,457) (25,433) Net cash flow from operating activities (50,933) (32,461) Three months ended March 31, 2025 (From January 1 to March 31, 2025) (Millions of yen) Three months ended March 31, 2026 (From January 1 to March 31, 2026) CASH FLOWS FROM INVESTING ACTIVITIES Payment for purchase of property, plant and equipment, intangible assets (3,726) (3,332) Proceeds from sale of property, plant and equipment, intangible assets 0 30,998 Net cash (paid) received on acquisition of subsidiaries ― (110) Net cash (paid) received on sale of subsidiaries - (13,846) Payments for purchases of securities (2,344) (1,230) Proceeds from sales of securities 17,047 1,100 Other-net (148) 333 Net cash flow from investing activities 10,827 13,913 CASH FLOWS FROM FINANCING ACTIVITIES Net increase (decrease) in short-term borrowings 18,829 (2,173) Proceeds from long-term borrowings 10,000 78 Repayment of long-term borrowings (9,606) (15,185) Repayments of lease obligations (9,566) (9,090) Payment for acquisition of interest in a subsidiary from non-controlling interests (13) (61) Repurchase of treasury shares (0) (1) Dividends paid (18,105) - Dividends paid to non-controlling interests (5,138) (3,635) Payments for settlement of derivatives - (8,077) Other-net 183 50 Net cash flow from financing activities (13,417) (38,096) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (3,293) (195) NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (56,816) (56,839) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 371,989 295,183 NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS INCLUDED IN ASSETS CLASSIFIED AS HELD FOR SALE - 17,549 CASH AND CASH EQUIVALENTS AT END OF PERIOD 315,172 255,893 Notes on the Condensed Quarterly Consolidated Financial Statements (Notes on Premise of Going Concern) No items to report (Segment and Other Information) Description of reportable segments The Group's reportable segments are those for which discrete financial information is available, and for which the Board of Directors conducts regular reviews to make decisions about resources to be allocated and to assess performance. The Group is mainly engaged in providing communications-related services focusing on advertising, and manages its business in the categories of "Japan," "Americas," "EMEA," and "APAC." Accordingly, the Group has four reportable segments: "Japan," "Americas," "EMEA," and "APAC." Information on reportable segments Segment profit is based on operating profit net of adjusting items such as M&A related items and one-off items. Intersegment revenues are based on the prevailing market price. Three months ended March 31, 2025 (From January 1 to March 31, 2025) (Millions of yen) Japan Americas EMEA APAC Total Eliminations/ Central costs Consolidated Revenue (Note 1) 158,556 129,695 37,638 - - - - - - 93,586 76,291 13,523 - - - - - - 68,170 56,952 (1,554) - - - - - - 23,676 23,068 (3,224) - - - - - - 343,989 286,008 46,382 - - - - - - 1,170 1,279 (12,456) - - - - - - 345,160 287,287 33,926 (6,216) (335) (2,264) (49) 366 - Net revenue (Note 2) Segment profit (loss) (underlying operating profit (loss)) (Note 3) (Adjusting items) Amortization of intangible assets incurred in acquisitions Selling, general and administrative expenses Business transformation cost Loss on sale and retirement of non- current assets Other income Other expenses Operating profit - - - - - - 25,426 Share of results of associates - - - - - - 1,570 Gain on sales of shares of associates - - - - - - 12 Finance income - - - - - - 1,804 Finance costs - - - - - - (7,025) Profit before tax - - - - - - 21,788 Segment assets (Note 4) 1,130,612 1,263,638 629,455 290,721 3,314,427 (55,485) 3,258,942 Three months ended March 31, 2026 (From January 1 to March 31, 2026) (Millions of yen) Japan Americas EMEA APAC Total Eliminations/ Central costs Consolidated Revenue (Note 1) 158,848 128,873 39,754 - - - - - - 91,213 76,443 12,280 - - - - - - 81,298 65,501 2,547 - - - - - - 24,436 22,771 (3,174) - - - - - - 355,797 293,590 51,408 - - - - - - 1,332 1,474 (13,596) - - - - - - 357,129 295,064 37,812 (6,098) (33) (3,581) 29,678 7,184 (1) Net revenue (Note 2) Segment profit (loss) (underlying operating profit (loss)) (Note 3) (Adjusting items) Amortization of intangible assets incurred in acquisitions Selling, general and administrative expenses Business transformation cost Gain on sale and retirement of non- current assets Other income Other expenses Operating profit - - - - - - 64,958 Share of results of associates - - - - - - 2,145 Finance income - - - - - - 1,888 Finance costs - - - - - - (6,450) Profit before tax - - - - - - 62,541 Segment assets (Note 4) 1,151,599 1,073,860 633,494 317,249 3,176,203 (131,467) 3,044,735 (Notes) 1. Eliminations/central costs for revenue are due to eliminations of revenue associated with central functions and intersegment transactions. Revenue from central functions was 1,793 million yen in the three months ended March 31, 2025, and 1,720 million yen in the three months ended March 31, 2026. Eliminations/central costs for net revenue are due to eliminations of net revenue associated with central functions and intersegment transactions. Net revenue from central functions was 1,732 million yen in the three months ended March 31, 2025, and 1,720 million yen in the three months ended March 31, 2026. Eliminations/central costs for segment profit (underlying operating profit) are primarily expenses associated with central functions. Eliminations/central costs for segment assets are due primarily to central assets and eliminations of intersegment transactions. (Significant Subsequent Events) No items to report Independent Auditor's Report on Review of Quarterly Consolidated Financial Statements May 15, 2026 To the Board of Directors of Dentsu Group Inc.: KPMG AZSA LLC Tokyo Office, Japan Isao Kamizuka Designated Limited Liability Partner Engagement Partner Certified Public Accountant Shuji Ezawa Designated Limited Liability Partner Engagement Partner Certified Public Accountant Kentaro Hayashi Designated Limited Liability Partner Engagement Partner Certified Public Accountant Conclusion We have reviewed the accompanying condensed quarterly consolidated financial statements of Dentsu Group Inc. ("the Company") and its consolidated subsidiaries (collectively referred to as "the Group") provided in the "Attached Documents" in the Quarterly Earning Reports, which comprise the condensed quarterly consolidated statement of financial position as at March 31, 2026, the condensed quarterly consolidated statements of income, comprehensive income, changes in equity and cash flows for the three-month period then ended, and notes on the condensed quarterly consolidated financial statements. Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed quarterly consolidated financial statements are not prepared, in all material respects, in accordance with Article 5(2) of Standard for Preparation of Quarterly Financial Statements of Tokyo Stock Exchange, Inc. ("the Standard") (applying the omissions prescribed in Article 5(5) of the Standard). Basis for Conclusion We conducted our review in accordance with interim review standards generally accepted in Japan. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Review of the Condensed Quarterly Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements in Japan (including those that are relevant to audits of the financial statements of public interest entities), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion. Responsibilities of Management and the Audit Committee for the Condensed Quarterly Consolidated Financial Statements Management is responsible for the preparation and presentation of the condensed quarterly consolidated financial statements in accordance with Article 5(2) of Standard for Preparation of Quarterly Financial Statements of Tokyo Stock Exchange, Inc. (applying the omissions prescribed in Article 5(5) of the Standard), and for such internal control as management determines is necessary to enable the preparation of the condensed quarterly consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the condensed quarterly consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern in accordance with Article 5(2) of Standard for Preparation of Quarterly Financial Statements of Tokyo Stock Exchange, Inc. (applying the omissions prescribed in Article 5(5) of the Standard) and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. The Audit Committee is responsible for overseeing the Executive Officers' and Directors' performance of their duties with regard to the design, implementation and maintenance of the Group's financial reporting process. Auditor's Responsibilities for the Review of the Condensed Quarterly Consolidated Financial Statements Our responsibility is to express a conclusion on these condensed quarterly consolidated financial statements based on our review in our report on the review of interim consolidated financial statements. As part of our review in accordance with interim review standards generally accepted in Japan, we exercise professional judgment and maintain professional skepticism throughout the review. We also: Make inquiries, primarily of management and persons responsible for financial and accounting matters, and apply analytical and other review procedures. An interim review is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in Japan. Conclude, based on the evidence obtained, that nothing has come to our attention that causes us to believe that the condensed quarterly consolidated financial statements are not prepared in accordance with Article 5(2) of Standard for Preparation of Quarterly Financial Statements of Tokyo Stock Exchange, Inc. (applying the omissions prescribed in Article 5(5) of the Standard), if a material uncertainty relating to events or conditions comes to our attention that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report on the review of condensed quarterly consolidated financial statements to the related disclosures in the condensed quarterly consolidated financial statements or, if such disclosures are inadequate, to express a qualified conclusion or an adverse conclusion. Our conclusions are based on the evidence obtained up to the date of our report on the review of condensed quarterly consolidated financial statements; however, future events or conditions may cause the Group to cease to continue as a going concern. Evaluate that nothing has come to our attention that causes us to believe that the presentation and disclosures in the condensed quarterly consolidated financial statements are not prepared in accordance with Article 5(2) of Standard for Preparation of Quarterly Financial Statements of Tokyo Stock Exchange, Inc. (applying the omissions prescribed in Article 5(5) of the Standard). Obtain sufficient appropriate evidence regarding the financial information of the entities or business activities within the Group as a basis for forming a conclusion on the condensed quarterly consolidated financial statements. We are responsible for the direction, supervision and review of the interim review on the condensed quarterly consolidated financial statements. We remain solely responsible for our review conclusion. We communicate with the Audit Committee regarding, the planned scope and timing of the review, significant review findings that we identify during our review. We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. Interest required to be disclosed by the Certified Public Accountants Act of Japan Our firm and its designated engagement partners do not have any interest in the Group which is required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan. Notes to the Reader of Review Report : The Independent Auditor's Report herein is the English translation of the Independent Auditor's Report on Review of Quarterly Consolidated Financial Statements originally issued in the Japanese language for the conveniences of the reader. /24

View stock analysis, news, and events for Dentsu Group Inc.