Dentsu is making good progress with its plans to streamline its business and integrate its offering to better address the needs of its blue-chip client base, including 95 of the world’s top 100 advertisers. The balance sheet has been strengthened by the sale of most of the Recruit shareholding and Dentsu is considering a sale and leaseback of its Tokyo headquarters. A ¥30bn share buyback is intended for FY21. Restructuring inevitably means some short-term disruption, but this should drive revenue growth (targeted at 3–4% CAGR FY21–24) and improve margins. The valuation, while in line with peers, is yet to reflect the programme’s likely benefits.
