FY2018 Earnings Presentation 3

Appendices
 1. Definition
n Turnover: The gross amounts billable to clients handled by the Group on behalf of clients, with net of discounts, VAT
and other sales-related taxes

n Underlying operating profit: KPI to measure recurring business performance which is calculated as operating profit added with amortization of
M&A related intangible assets, acquisition costs, share-based compensation expenses related to acquired
companies and one-off items such as impairment loss and gain/loss on sales of non-current assets

n Operating margin: Underlying operating profit divided by Revenue less cost of sales

n Underlying net profit (attributable to owners of the parent):
KPI to measure recurring net profit attributable to owners of the parent which is calculated as net profit (attributable to
owners of the parent) added with adjustment items related to operating profit, gain/loss on sales of shares of
associates, revaluation of earnout liabilities / M&A related put-option liabilities, tax-related, NCI profit-related and
other one-off items

n Underlying basic EPS: EPS based on underlying net profit (attributable to owners of the parent)

n EBITDA: Operating profit before depreciation, amortization and impairment losses

n Underlying ROE: Underlying net profit (attributable to owners of the parent) divided by the average of owners’ interests as of the
beginning and end of the fiscal year

n Constant currency basis: Comparison with the current period where the previous year’s numbers are recalculated using the currency exchange
rate which is used for the current year’s numbers

n Currency: Currency movements comparing prior period reported revenue less cost of sales at reported currency to prior period
revenue less cost of sales at constant currency (reported currency of the current year)
n Acquisitions: The effect of business acquired or disposed of since the beginning of the prior year

n Organic growth: Organic growth represents the constant currency year-on-year growth after adjusting for the effect of business
acquired or disposed of since the beginning of the prior year. This is calculated by comparing current period reported
revenue less cost of sales to prior period revenue less cost of sales, adjusted for the pre-acquisition or pre-disposal
revenue less cost of sales as applicable, and stated at constant exchange rate, in order to derive like-for-like growth 23
 Detail of Pro Forma information by IFRS 15
The changes implemented in line with the application of IFRS 15 are as follows.

1. For certain revenue, revenue is presented on gross basis.
Pro Forma Financial (JPY mn)
reporting

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difference
Jan–Dec Jan–Dec

Revenue

2. The timing related to revenue recognition is changed for certain transactions.

The difference occurs only from Q1 to Q3, and there is no difference in full year basis as follows.
Please refer to quarterly disclosures for the detail of impacts from Q1 to Q3.

Transition of difference (pro forma – financial reporting) (JPY mn)

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Jan–Dec Jan–Sep Jan–Jun Jan–Mar

89 3 (, ))

-3 38 3 , (
-3 38 3 7

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3 , (

---

85 85 946 , (

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 Quarterly Results
(JPY mn)

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YoY % YoY % YoY % YoY %
Oct–Dec Jul–Sep Apr–Jun Jan–Mar


Turnover 1,520,690 (1.8) 1,248,410 +3.9 1,337,338 +9.8 1,250,838 +2.6

Revenue 293,343 +3.5 243,514 +9.4 239,546 +11.6 242,107 +5.7
Revenue less cost of sales 264,378 +2.3 222,562 +7.5 219,073 +10.4 226,665 +6.1
Japan 96,581 (3.4) 86,276 +2.7 84,059 +8.4 102,340 +1.9
International 168,041 +5.9 136,326 +10.8 135,099 +11.6 124,385 +9.8
Underlying operating profit 63,718 (9.4) 28,647 (9.6) 28,118 +16.1 32,744 (13.3)
Japan 18,773 (29.0) 15,954 (7.0) 15,100 +24.5 30,439 (7.9)
International 44,947 +2.5 12,691 (12.5) 13,014 +7.5 2,309 (50.8)
Operating margin 24.1% (3.1) 12.9% (2.4) 12.8% +0.6 14.4% (3.3)
Underlying net profit 49,413 +0.9 16,414 (16.0) 13,619 (13.9) 17,972 (23.7)

Operating profit 53,645 (28.3) 17,459 (11.2) 18,139 +26.5 22,393 (21.7)
Net profit 32,115 (48.0) 47,414 +224.5 (1) - 10,788 (30.9)
EBITDA 69,203 (21.7) 32,314 (6.3) 32,865 +15.0 37,022 (13.1)




Note: 25
Net profit, underlying net profit… Excluding attribution to non-controlling interests
 Quarterly Organic Growth
(%) (%) (%)
Dentsu consolidated total Japan International total

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Jan–Mar +2.1 +3.7 +4.1 +1.9 +4.3 +3.6 +2.2 +3.1 +4.5
Apr–Jun +5.9 (4.6) +10.0 +8.4 (7.6) +13.4 +4.5 (2.7) +7.2
Jul–Sep +5.4 (2.1) +3.0 +2.7 (4.8) +0.9 +7.0 (0.2) +5.2
Oct–Dec +0.9 +2.8 +4.1 (3.0) +5.5 +1.4 +3.4 +1.2 +5.8



International – EMEA International – Americas International – APAC

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Jan–Mar +2.7 +5.8 +10.7 +4.6 +0.6 (2.0) (2.9) +4.5 +5.2
Apr–Jun +4.8 (0.3) +5.0 +6.5 (4.1) +2.4 +0.8 (3.8) +16.8
Jul–Sep +8.2 +5.9 +5.0 +5.3 (2.0) +5.4 +8.2 (5.5) +5.3
Oct–Dec +12.0 +1.3 +7.5 +3.5 (0.0) +4.4 (9.6) +2.6 +5.6

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 Organic Growth of major countries

2018 Jan-Dec Organic Growth % Country

“10% or more” to “less than 20%” Brazil, Denmark, India, Italy, Norway, Russia, Spain, Sweden, Switzerland

“5% or more” to “less than 10%” Thailand, UK

“0% or more” to “less than 5%” Canada, Germany, Japan, Netherlands, Taiwan, USA

“Less than 0%” Australia, China, France

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 Analysis of Underlying Operating Profit
(JPY)



2017 Jan–Dec 163.9 bn


Japan
+7.3 bn
Revenue less cost of sales


Japan
Operating expenses
-15.8 bn

International
Revenue less cost of sales +47.8 bn

International
Operating expenses
-49.9 bn

Consolidation
-0.0 bn
adjustments



2018 Jan–Dec 153.2 bn



Notes:

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Operating expenses: selling, general & administrative expenses, other income and other expenses
 Reconciliation from Underlying NP to Statutory NP
(JPY mn)

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YoY # YoY %
Jan–Dec Jan–Dec


Underlying net profit 97,419 107,874 (10,454) (9.7)

Adjustment items (7,103) (2,396) (4,707)
Operating profit adjustments (41,590) (26,554) (15,035)
Gain(Loss) on revaluation of earnout liabilities
(10,744) + 13,686 (24,430)
and M&A related put-option liabilities
Gain on sales of shares of associates + 52,127 - + 52,127
Related income tax expense (9,612) + 3,427 (13,039)
Change in income tax rate and others - + 5,811 (5,811)
Adjustments attributable to non-controlling interests + 2,716 + 1,232 + 1,484

Net profit 90,316 105,478 (15,161) (14.4)


Underlying Effective Tax Rate 28.0% 28.2% -0.2% -
Effective Tax Rate 34.5% 24.4% 10.1% -

Note: Operating profit adjustments…Please refer to “Reconciliation from Underlying OP to Statutory OP”
Underlying net profit and net profit… Excluding attribution to non-controlling interests 29
 Cash Flow
(JPY mn)

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YoY # YoY %
Jan–Dec Jan–Dec

Profit before tax 148,751 149,662 (910) (0.6)

Share of results of associates (2,699) (4,222) + 1,523
Depreciation and amortization 59,739 55,587 + 4,151
Impairment loss 27 1,093 (1,065)
Gain and loss on sales and retirement of non-current assets - (13,168) + 13,168
Gain and loss on sales of shares of subsidiaries and affiliates (52,133) - (52,133)
Others 17,465 (1,631) + 19,096
Income taxes paid (45,968) (61,058) + 15,089

Cash flow from operations before change in WC　ⅰ 125,183 126,263 (1,079) (0.9)

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 Use of Cash
(JPY mn)

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YoY # YoY %
Jan–Dec Jan–Dec

Change in WC　ⅱ 7,865 15,293 (7,428)

Payments for PPE, intangible assets and investment property (net) (31,322) (9,347) (21,974)
Payments for investing activities (net) (39,785) (82,502) + 42,716
Dividends paid to shareholders (25,370) (25,516) + 145
Dividends paid to non-controlling shareholders (6,685) (2,983) (3,702)
Payments for share repurchase (12) (20,014) + 20,001
Use of cash ⅲ (103,176) (140,363) + 37,187 (26.5)

Effect of exchange rate changes and others 　ⅳ 2,687 5,242 (2,554)

Change in net cash　ⅰ+ⅱ+ⅲ+ⅳ 32,560 6,435 + 26,124 -

(Acquisition payments)
Initial payments (28,338) (46,662) + 18,323
Earn-out payments / Additional acquisition payments (43,970) (26,033) (17,937)
Proceeds from sales 249 86 + 163


Notes: “Payments for PPE (property, plant and equipment), intangible assets and investment property (net)” and “Payments
for investing activities (net)” are shown as net figures of payments and proceeds by disposal of PPE/intangible
assets/investment property and businesses/subsidiaries.
“Effect of exchange rate changes and others”… Including effect of exchange rate changes from debt and net cash 31
that acquired companies had held.
 Financial Position
(JPY mn)

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Var. # Var. %
End of Dec End of Dec

Current assets 1,935,586 1,836,584 + 99,001 +5.4
Non-current assets 1,702,902 1,726,272 (23,370) (1.4)
Goodwill 786,851 798,177 (11,326) (1.4)
Intangible assets 249,921 274,502 (24,580) (9.0)
Total assets 3,638,488 3,562,857 + 75,631 +2.1

Current liabilities 1,785,608 1,742,215 + 43,392 +2.5
Non-current liabilities 742,130 670,507 + 71,622 +10.7
Total liabilities 2,527,738 2,412,722 + 115,015 +4.8

Owners' interests 1,047,619 1,093,211 (45,591) (4.2)
Non-controlling interests 63,129 56,923 + 6,206 +10.9
Total equity 1,110,749 1,150,134 (39,384) (3.4)

Total liabilities and equity 3,638,488 3,562,857 + 75,631 +2.1


JPY/USD 111.0 yen 113.0 yen - (1.8)
JPY/GBP 140.5 yen 152.0 yen - (7.6)

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 Repayment Schedule of Debt
(JPY mn)
2018 FY2022
FY2019 FY2020 FY2021 Total
End of Dec onwards

Japan 4,909 32,720 32,720 141,216 211,566
Short-term debt 2,189 - - - 2,189
Long-term debt 2,720 32,720 32,720 141,216 209,376

International 99,969 44,059 111 183,152 327,293
Short-term debt 51,153 - - - 51,153
Long-term debt 48,816 44,059 111 183,152 276,139

Dentsu consolidated total 104,879 76,779 32,831 324,369 538,859


*reference
M&A related debt 37,261 16,770 90,921 45,128 190,083
Deferred consideration 22,694 11,105 17,443 18,001 69,244
M&A related put-option liabilities 14,567 5,665 73,478 27,127 120,839

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 Net Debt
(JPY mn)

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Var. #
End of Dec End of Dec

Total debt 538,859 460,512 + 78,346
Cash and cash equivalents 416,668 305,760 + 110,907
Net debt 122,191 154,752 (32,560)

Total debt (LTM average) 472,460 452,798 + 19,662
Cash and cash equivalents (LTM average) 282,648 237,976 + 44,671
Net debt (LTM average) 189,812 214,821 (25,009)

EBITDA (LTM) 171,406 194,073 (22,667)

Net debt / EBITDA (LTM) 0.71 0.80
Net debt (LTM average) / EBITDA (LTM) 1.11 1.11




Notes: LTM average… Average of last twelve months
LTM… Last twelve months 34
 Turnover of Japan business by Business Category(IFRS basis)
(JPY mn)

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YoY % Oct–Dec YoY % July–Sep YoY % Apr–June YoY % Jan–Mar YoY %
Jan–Dec

Newspapers 77,345 (15.1) 20,403 (19.0) 14,997 (14.7) 16,548 (8.0) 25,396 (16.3)

Magazines 23,344 (7.6) 6,626 (1.8) 5,228 (13.3) 5,185 (11.2) 6,303 (5.2)

Radio 15,768 (8.4) 4,076 (9.8) 4,025 (4.6) 3,534 (12.0) 4,132 (7.3)

Television 698,487 (0.6) 180,540 (3.7) 162,986 (2.5) 174,037 +2.9 180,923 +0.9

Internet*1 191,862 - 55,916 - 42,084 - 44,334 - 49,527 -

OOH Media 54,080 (3.4) 14,088 +2.6 11,393 (10.4) 13,138 +3.3 15,460 (8.2)

Creative 209,644 (1.3) 53,424 (3.5) 50,387 (2.3) 46,604 +3.7 59,228 (2.0)

Marketing/Promotion 259,088 (7.5) 72,480 (13.4) 59,028 (3.7) 56,003 (4.9) 71,575 (6.1)

Content Services (Japan GAAP)*2 207,614 +16.0 33,860 +1.6 54,593 +81.8 29,199 +12.2 89,961 +0.3

Others 143,070 +4.3 38,668 +7.5 34,181 +3.5 34,174 (6.8) 36,046 +14.5

Consolidation adjustments and others*3 6,413 - 16,392 - 5,753 - 27,531 - (43,263) -

Internet included in mass media*4 (5,952) - (1,662) - (1,318) - (1,358) - (1,614) -

Total 1,880,768 +0.8 494,817 (2.7) 443,341 +2.5 448,933 +5.2 493,677 (0.7)


Reference:
Internet (previous calculation)*5 185,909 +18.9 54,254 +21.6 40,766 +22.6 42,976 +18.0 47,912 +13.8


*1 The aggregate of Internet (previous calculation) and internet turnover which is included in mass media (2018 Jan to Dec: JPY 5,952 mn)
*2 There is a difference in revenue recognition timing between IFRS and Japan GAAP. In the left table, Japan GAAP, applied by Parent Company,
is used for this section. The difference between IFRS and Japan GAAP is recorded in “Consolidation adjustments and others.”
*3 Turnover to group companies in International business, GAAP difference and others are included.
*4 Amounts included in both “Internet” and mass media. 35
*5 Based on the calculation used in “Interactive Media” which was previously disclosed as part of Parent Company disclosure.
 Japan Business Digital Domain (IFRS basis)
(JPY mn)

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YoY %
Jan–Dec

Digital domain turnover 352,046 +16.2 *1 From Q1 2018, Internet revenue less cost
of sales included in mass media of Parent
Digital domain revenue less cost of sales 88,095 +9.6 Company and digital revenue less cost of
sales in OOH Media are added to
Digital domain ratio in Japan business*1 23.9% +1.7 previously used digital domain revenue less
cost of sales ratio.

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 Results of Parent Company (J-GAAP)
(JPY mn)

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YoY % Oct–Dec YoY % Jul–Sep YoY % Apr–Jun YoY % Jan–Mar YoY %
Jan–Dec


Net sales (Turnover) 1,539,962 (1.4) 382,414 (5.4) 362,675 +2.7 344,507 +0.1 450,365 (2.1)
Revenue less cost of sales 231,520 +1.3 55,903 (6.2) 57,762 +7.0 46,918 +2.1 70,935 +2.8
Revenue less cost of sales margin 15.0% +0.4 14.6% (0.1) 15.9% +0.6 13.6% +0.3 15.8% +0.8

SG&A 182,915 +5.0 48,698 +6.2 44,829 +0.7 41,877 +4.7 47,511 +8.4
Operating income 48,604 (10.5) 7,205 (47.5) 12,932 +36.7 5,041 (15.6) 23,424 (6.8)
vs. Revenue less cost of sales 21.0% (2.8) 12.9% (10.1) 22.4% +4.9 10.7% (2.3) 33.0% (3.4)

Ordinary income 75,414 (1.9) 14,936 (1.2) 15,519 +33.2 8,233 (39.8) 36,725 +0.9
Income before income taxes 130,640 +52.7 11,319 (52.2) 73,893 +533.7 8,766 (35.9) 36,660 +0.3
Net income 94,841 +49.2 9,050 (43.9) 51,630 +536.9 6,775 (39.5) 27,385 (2.6)

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Note: SG&A… Selling, general & administrative expenses
 Net Sales(Turnover) of Parent Company by Business Category
(J-GAAP) (JPY mn)

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YoY % Oct–Dec YoY % Jul–Sep YoY % Apr–Jun YoY % Jan–Mar YoY %
Jan–Dec


Newspapers 68,462 (15.5) 18,114 (18.4) 13,123 (14.9) 14,802 (7.8) 22,421 (18.0)

Magazines 21,562 (7.7) 6,108 (3.2) 4,748 (15.0) 4,819 (10.6) 5,886 (3.1)

Radio 13,195 (4.6) 3,394 (10.0) 3,390 +0.8 2,977 (7.6) 3,433 (1.3)

Television 656,560 (1.0) 170,505 (3.7) 152,684 (3.2) 163,909 +2.5 169,460 +0.5

Internet*1 122,564 - 34,626 - 27,159 - 28,059 - 32,718 -

OOH Media 51,508 (6.7) 13,229 (4.8) 10,866 (13.0) 12,650 +0.9 14,761 (9.4)

Creative 189,434 (1.1) 47,012 (2.7) 46,170 (2.4) 42,098 +2.5 54,152 (1.4)

Marketing/Promotion 183,251 (14.5) 48,072 (18.1) 43,076 (10.6) 40,398 (18.2) 51,704 (10.8)

Content Services 200,126 +15.9 33,118 +0.7 53,114 +82.5 26,497 +12.2 87,396 +0.3

Others 39,248 (4.6) 9,893 (4.7) 9,656 (4.3) 9,652 (4.2) 10,045 (5.1)

Internet included in mass media*2 (5,952) - (1,662) - (1,318) - (1,358) - (1,614) -

Total 1,539,962 (1.4) 382,414 (5.4) 362,675 +2.7 344,507 +0.1 450,365 (2.1)


Reference
Internet (previous calculation)*3 116,611 +10.8 32,964 +7.1 25,841 +8.1 26,701 +15.6 31,103 +13.2

*1 The aggregate of Internet (previous calculation) and internet turnover which is included in mass media (JPY 5,952mn)
*2 Amounts included in both “Internet” and mass media.
*3 Based on the calculation used in “Interactive Media” which was previously disclosed.
Note: Please refer to the Appendices “Turnover of Japan business by Business Category(IFRS basis)” slide for the turnover of Japan business which 38
includes subsidiaries in Japan.
 Net Sales(Turnover) of Parent Company by Industry
(J-GAAP)
(JPY mn)

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YoY % Oct–Dec YoY % Jul–Sep YoY % Apr–Jun YoY % Jan–Mar YoY %
Jan–Dec

Information/Communications 237,278 +7.4 54,756 (0.1) 75,552 +39.7 41,291 +1.7 65,679 (8.2)
Finance/Insurance 148,582 +6.6 37,507 +15.5 31,821 +13.1 30,956 +6.5 48,296 (2.8)
Beverages/Cigarettes 141,728 (7.4) 30,746 (24.7) 32,372 (14.0) 41,941 +3.5 36,668 +7.5
Cosmetics/Toiletries 141,472 (2.8) 38,748 (8.9) 34,059 (0.8) 39,113 +3.7 29,551 (4.4)
Foodstuffs 108,229 (7.0) 25,733 (3.4) 23,939 (8.7) 28,478 +5.7 30,077 (17.7)
Food Services/Other Services 92,984 +14.5 26,821 +4.7 18,751 +6.2 19,363 +26.6 28,048 +23.9
Automobiles/Related Products 88,234 (10.6) 20,213 (26.4) 18,733 (23.6) 17,291 (17.6) 31,995 +24.5
Distribution/Retailing 77,719 (7.7) 19,906 (12.1) 17,851 (6.8) 21,363 (0.6) 18,598 (11.0)
Transportation/Leisure 64,799 (2.9) 13,807 +4.2 14,379 +1.1 13,188 (9.0) 23,424 (5.5)

Pharmaceuticals/Medical Supplies 64,742 +3.8 18,775 +0.6 15,940 +13.0 14,474 (10.1) 15,551 +15.3
Real Estate/Housing Facilities 60,623 +0.3 11,569 (12.6) 12,778 (1.7) 12,142 +4.8 24,132 +6.7

Government/Organizations 59,859 (5.5) 17,727 (2.6) 12,208 +9.1 11,124 (7.5) 18,800 (14.3)

Hobbies/Sporting Goods 49,983 (10.5) 13,145 (8.5) 11,548 (14.5) 10,480 (14.2) 14,808 (5.9)
Energy/Materials/Machinery 36,405 (6.3) 9,980 +4.3 7,655 (15.3) 5,920 +2.6 12,848 (11.2)
Home Electric Appliances/AV Equipment 34,320 (20.7) 9,408 (25.3) 6,263 (32.6) 7,953 (12.6) 10,694 (12.9)
Others 132,997 +1.2 33,566 +7.1 28,818 +6.7 29,424 (3.3) 41,187 (3.3)

Total 1,539,962 (1.4) 382,414 (5.4) 362,675 +2.7 344,507 +0.1 450,365 (2.1)

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 Effects of Currency Exchange Rates
Average rate Period end rate

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Var. % Var. %
Jan–Dec Jan–Dec End of Dec End of Dec

JPY/USD 110.4 yen 112.2 yen (1.6) 111.0 yen 113.0 yen (1.8)

JPY/EUR 130.4 yen 126.7 yen +3.0 127.0 yen 134.9 yen (5.9)

JPY/CNY 16.7 yen 16.6 yen +0.6 16.2 yen 17.3 yen (6.5)

JPY/GBP 147.5 yen 144.5 yen +2.1 140.5 yen 152.0 yen (7.6)

JPY/AUD 82.6 yen 86.0 yen (4.0) 78.2 yen 88.2 yen (11.3)




Revenue less cost of sales ratio by currency (%)

JPY USD EUR GBP CNY AUD Others Total


2018 Jan–Dec 39.6 21.2 9.8 6.7 4.4 2.8 15.5 100.0 2018 Jan–Dec

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 Summary of Dentsu Aegis Network Ad Spend
(％)
2019 Jan to Dec 2018 Jan to Dec
Market growth forecast Market growth forecast


Japan 0.6 0.2

EMEA 3.0 3.3
UK 6.1 6.5
Germany 0.5 1.0
France 3.1 3.6
Spain 1.2 1.8

Americas 3.6 4.0
USA 3.0 3.4
Canada 5.2 3.7
Brazil 3.6 7.1

APAC (excluding Japan) 6.0 6.3
China 7.0 7.8
Australia 2.4 3.7
India 10.6 9.6

Global 3.8 4.1

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Source: “Dentsu Aegis Network - Ad Spend Forecasts January 2019”