Advertising Agencies: Read-across from Dentsu's 1Q26 results

Research evidence excerpt

Advertising Agencies: Read-across from Dentsu's 1Q26 results

Barclays | Advertising Agencies

in FY26. In 1Q26, management reiterated their guidance by market of -2% for Americas, c. 1% for

EMEA and c. 1% for APAC ex Japan.

EMEA restructuring: Dentsu CEO Takeshi Sano highlighted during the call: "Effective July, with

the aim of optimizing our operating structure, we will review the role of EMEA headquarters and

transition to a simpler and more efficient organization. Seven clusters previously operating

under EMEA will be consolidated into three, improving the efficiency of regional headquarters

function and accelerating decision making. An additional annual cost reduction of

approximately JPY1.7 billion is anticipated through these initiatives. Under the new structure,

each cluster CEO will report directly to myself as global CEO. This will strengthen alignment

with our global strategy while also enabling faster decision making across markets and

clusters."

Media priorities: Management highlighted four priorities in Media: "To further enhance our

media services, we are particularly focused on four key areas. First, we are advancing AI-

powered media planning. Second, we are strengthening our proprietary digital solutions. Third,

we are enhancing our capabilities in retail media. And fourth, we are strengthening our

capabilities in social media."

Iran war impact: When asked about the impact of the Iran war, the management responded: "

there is certain impact. But in the overall business, the Middle East region is small so it does not

have any significant impact. And as far as other regions including Japan is concerned, there is

moderate rise of concern and we are sensing some signs of risk rising. More specifically, oil