Dentsu Soken (4812) Q4 2024 earnings summary

Executive summary

• Net sales reached ¥152,642 million, up 7.0% year-over-year, marking the ninth consecutive period of growth and a record high.

• Operating profit and profit attributable to owners of parent reached record highs for the seventh consecutive period, despite higher personnel expenses from aggressive hiring and compensation revisions.

• The annual dividend increased for the 12th consecutive period, with a payout ratio of 46.5%.

• All initial plans or targets were achieved, though revised targets were not met.

• A new medium-term management plan (2025-2027) was formulated, targeting 2030 goals.

Financial highlights

• FY2024 net sales: ¥152,642 million (+7.0% YoY); gross profit: ¥56,123 million (+8.4% YoY); gross profit margin: 36.8% (+0.5p YoY).

• Operating profit: ¥21,039 million (+0.1% YoY); operating margin: 13.8% (-0.9p YoY).

• Profit attributable to owners of parent: ¥15,117 million (+3.1% YoY); EPS: ¥232.32.

• 4Q net sales: ¥40,411 million (+8.2% YoY); operating profit: ¥6,576 million (+20.1% YoY); profit attributable to owners of parent: ¥5,042 million (+31.8% YoY).

• Orders received for FY2024: ¥158,602 million (+9.5% YoY); order backlog: ¥59,859 million (+11.1% YoY).

Outlook and guidance

• FY2025 net sales forecast: ¥170,000 million (+11.4% YoY); operating profit: ¥23,000 million (+9.3% YoY); profit attributable to owners of parent: ¥16,000 million (+5.8% YoY).

• Annual dividend forecast: ¥116 per share (payout ratio 47.2%), aiming for the 13th consecutive year of increases.

• H1 FY2025 net sales forecast: ¥83,000 million (+11.8% YoY); operating profit: ¥11,500 million (+11.0% YoY).

• Focus on expanding consulting and in-house software sales, suppressing unprofitable projects, and continued investment in personnel and R&D.