Dentsu this week put in Takeshi Sano as its new president and international CEO whereas abandoning efforts to promote its struggling worldwide enterprise, marking a dramatic shift in technique following months of negotiations with potential patrons that finally collapsed.
The Japanese promoting big introduced the management change on February 13, 2026, naming Sano – at present CEO of Dentsu Japan and deputy international COO – to interchange Hiroshi Igarashi efficient March 27, 2026. The restructuring eliminates the worldwide COO and international president positions completely, making a flatter organizational construction with regional CEOs and observe leaders reporting on to Sano.
The announcement arrives as Dentsu faces extreme monetary strain. Earlier this month, the corporate reported a ¥327.6 billion ($2.18 billion) internet loss for fiscal 2025, pushed primarily by a ¥310.1 billion ($2.03 billion) goodwill impairment tied to its worldwide operations. The corporate additionally suspended its year-end dividend to protect money, marking the primary time Dentsu has eradicated dividend funds.
In accordance with a Marketing campaign Asia report, Dentsu had been in discussions to promote its worldwide enterprise – which incorporates operations throughout the Americas, EMEA, and APAC outdoors Japan – however potential patrons walked away from negotiations. The corporate is now centered on fixing the worldwide operations somewhat than divesting them.
Failed sale follows months of restructuring
The deserted sale represents a reversal of technique that emerged following Dentsu’s dismal second-quarter results in August 2025, when the corporate introduced 3,400 job cuts globally. By September, Dentsu had appointed Mitsubishi UFJ Morgan Stanley and Nomura Securities to explore strategic options for its international business, together with potential sale of a minority stake or full divestment.
The worldwide operations at stake have been constructed largely via Dentsu’s 2012 acquisition of Aegis Group for £3.2 billion, which expanded the corporate’s international footprint past its conventional Japanese market. The portfolio consists of US-based digital advertising consultancy Merkle and numerous inventive and media items throughout a number of areas.
These discussions have now collapsed completely. The corporate acknowledged in its announcement that it’s “eliminating the worldwide COO and international president roles” and implementing “a brand new construction designed to boost execution excellence and drive stronger progress outcomes for our purchasers.”
The choice to retain and repair the worldwide enterprise somewhat than promote it creates important challenges. Dentsu’s abroad operations have generated substantial income – over $4.5 billion in internet revenues throughout 2024 – however did not ship sustainable income, resulting in the excellent restructuring that included beforehand introduced job cuts.
Sano inherits deeply troubled worldwide portfolio
Sano takes on the duty of reviving operations which have struggled for a number of consecutive years. The worldwide enterprise posted natural income declines throughout all three main areas throughout fiscal 2025, contrasting sharply with Japan’s continued progress.
In accordance with Dentsu’s newest monetary outcomes, APAC excluding Japan posted the weakest efficiency with natural progress of destructive 6.8% for the 12 months, although the area confirmed tentative indicators of stabilization within the fourth quarter. The Americas delivered natural progress of destructive 3% regardless of improved margins via value management, whereas EMEA recorded an natural decline of 1.8%.
The monetary injury from worldwide underperformance manifested in large goodwill impairment expenses. The ¥310.1 billion impairment recorded within the fourth quarter alone adopted an earlier ¥86 billion impairment in the course of the second quarter, bringing whole goodwill expenses for fiscal 2025 to ¥396.1 billion ($2.64 billion). These write-downs acknowledge that acquired worldwide belongings are value considerably lower than their recorded guide values.
The corporate adopted what it termed an “extraordinarily conservative” view of its pipeline and medium-term progress prospects for worldwide markets when conducting the impairment checks. Underneath this revised framework, Dentsu slashed its whole goodwill steadiness to ¥320.1 billion ($2.13 billion) on the finish of 2025, lower than half the ¥697.1 billion held a 12 months earlier.
Regardless of the statutory loss, underlying profitability proved extra resilient than headline numbers prompt. Dentsu’s underlying working margin reached 14.4% for fiscal 2025, forward of November steering projecting roughly 13%. The corporate stripped out any unrealized advantages from ongoing cost-reduction applications when establishing this steering, creating what administration described as a extremely conservative baseline.
Management transition creates direct reporting construction
The brand new organizational construction eliminates a number of government layers. Yoshimasa Watahiki, at present COO of Dentsu Japan, will turn into consultant government officer and government vp with the title International Chief Company Affairs Officer. Shigeki Endo, at present international CFO, might be appointed to director standing along with his government officer function.
In accordance with Dentsu’s announcement, “Regional CEOs and observe leaders will now report on to Sano” beneath the simplified construction. The corporate additionally created new international transformation and company affairs roles whereas persevering with a cost-cutting plan that features beforehand introduced layoffs.
The adjustments eradicate positions beforehand held by Hiroshi Igarashi, who will resign as consultant government officer, president and international CEO, and Arinobu Soga, who will resign as consultant government officer, government vp and international chief governance officer.
Sano joined Dentsu in 1992 and has spent a lot of his profession centered on enterprise transformation. He beforehand led Dentsu Inc., the corporate’s core Japanese enterprise, via 11 consecutive quarters of income progress – a observe document that stands in sharp distinction to the worldwide operations’ persistent declines.
Japan accounts for roughly 40% of group internet income and greater than half of underlying working revenue, making it Dentsu’s monetary spine. The home enterprise posted internet income of ¥504.6 billion ($3.36 billion) for fiscal 2025 with natural progress of 0.5%, considerably outperforming worldwide areas.
“Dentsu will proceed to sharpen the distinctive worth that units us aside and place ourselves as a real progress associate, supporting purchasers constantly from technique via to execution,” Sano acknowledged in saying his appointment.
Continued funding in restructuring regardless of losses
Dentsu plans to speculate one other ¥26 billion ($173 million) in restructuring throughout fiscal 2026, focusing on whole annual value financial savings of ¥42 billion ($280 million). The corporate goals to appreciate roughly ¥50 billion ($333 million) of recurring financial savings by fiscal 2027.
The corporate diminished headcount by 2,100 roles throughout fiscal 2025 and acknowledged {that a} additional 1,300 cuts are deliberate. Administration described the dividend suspension as “regrettable” however essential to strengthen the steadiness sheet and protect monetary flexibility amid the worldwide enterprise turnaround effort.
On prices, Dentsu is consolidating and decreasing group firms whereas simplifying headquarters features via enterprise transformation constructed on synthetic intelligence and automation. By January 2026, the corporate had halved the variety of worldwide entities from greater than 1,000 in early 2021.
The corporate has additionally initiated processes to downsize, withdraw from, or divest sure underperforming companies. In accordance with its fiscal 2025 outcomes announcement, Dentsu reviewed markets with greater than ¥10 billion ($67 million) in cumulative funding losses. China and Australia, each loss-making since fiscal 2023, have been returned to revenue on an underlying working revenue foundation throughout fiscal 2025 via these intervention efforts.
For fiscal 2026, Dentsu is guiding for an additional 12 months of modest top-line growth. The corporate forecasts group natural progress of 0% to 1%, with income of ¥1,491.5 billion ($9.94 billion) and internet income of ¥1,230.2 billion ($8.2 billion), representing 2.7% year-over-year progress.
Broader context reveals sustained strain on worldwide operations
The management transition and strategic pivot happen towards a backdrop of sustained difficulties in Dentsu’s abroad markets. The corporate posted an natural income decline of 0.2% for the primary half of 2025, prompting a decreasing of its full-year progress forecast from 1% to broadly flat progress.
Artistic and buyer expertise administration (CXM) companies dragged on efficiency regardless of higher traits in media throughout worldwide areas. In accordance with fiscal 2025 outcomes, media exercise proved extra secure than inventive and CXM in all three worldwide areas, although none achieved sustained constructive natural progress for the total 12 months.
In EMEA, media accounts for greater than 60% of regional internet income and held regular throughout fiscal 2025, however CXM and inventive each remained in excessive single-digit destructive progress ranges. The UK continued to face CXM headwinds in the course of the fourth quarter, whereas Spain delivered constructive progress “in all enterprise domains,” signaling rising divergence inside the area.
The Americas noticed improved underlying working margin regardless of destructive natural progress, helped by strict value management measures. The area’s underlying working margin improved by 40 foundation factors year-over-year as administration carried out aggressive expense discount.
Throughout the second-quarter earnings name in August, outgoing CEO Igarashi acknowledged duty for the worldwide struggles. “In regard to the impairment on this event, we, the administration, take this critically,” Igarashi acknowledged. “The judgment relating to threat could not have been strict sufficient.”
Technique reset deliberate for early fiscal 2026
Dentsu has withdrawn among the fiscal 2027 monetary targets and capital insurance policies outlined in its February 2025 mid-term administration plan, reflecting the weaker worldwide outlook and the choice to reset goodwill carrying values. Nevertheless, the corporate is sustaining its ambition to achieve a 16% underlying working margin by fiscal 2027.
Administration acknowledged it plans to stipulate a refreshed technique “early” in fiscal 2026 to speed up the transformation envisioned beneath its “One Dentsu” plan. This strategic refresh might want to handle basic questions in regards to the viability of Dentsu’s worldwide enterprise mannequin and whether or not the corporate can generate sustainable income from operations outdoors Japan.
The corporate continues to keep up partnerships throughout its worldwide operations. Dentsu lately expanded its Magnite partnership for connected TV advertising throughout EMEA markets and introduced a comprehensive partnership with Criteointegrating commerce media platforms.
Dentsu executives might be nominated as candidates for director positions to be submitted to the corporate’s 177th Strange Normal Assembly of Shareholders on March 27, 2026, when the management transition might be formalized.
The appointment of Sano represents a wager that the manager who efficiently grew Dentsu’s worthwhile Japanese operations can replicate that efficiency in troubled worldwide markets. Whether or not that home success can translate to abroad operations – which face essentially totally different aggressive dynamics and shopper expectations – stays the central query for Dentsu’s future profitability.
Timeline
Abstract
Who: Dentsu Group Inc., a Tokyo-listed promoting and advertising companies firm, appointed Takeshi Sano as its new president and international CEO whereas outgoing CEO Hiroshi Igarashi will resign. Sano at present serves as CEO of Dentsu Japan and deputy international COO.
What: Dentsu restructured its management group, eliminating international COO and international president roles whereas abandoning efforts to promote its worldwide enterprise following failed negotiations with potential patrons. The corporate reported a ¥327.6 billion ($2.18 billion) internet loss for fiscal 2025, primarily pushed by a ¥310.1 billion goodwill impairment on worldwide operations, and suspended its year-end dividend for the primary time.
When: The announcement was made on February 13, 2026, with the management transition scheduled to take impact on March 27, 2026, following the corporate’s 177th Strange Normal Assembly of Shareholders.
The place: The restructuring impacts Dentsu’s international operations, with explicit deal with troubled worldwide companies throughout the Americas, EMEA, and APAC areas outdoors Japan. The corporate’s headquarters stay in Tokyo.
Why: The management change and strategic pivot reply to persistent underperformance in Dentsu’s worldwide operations, which posted natural income declines throughout all main areas throughout fiscal 2025 regardless of Japan attaining 11 consecutive quarters of progress. After months of discussions with potential patrons for the worldwide enterprise, negotiations collapsed, forcing administration to pivot towards fixing operations somewhat than divesting them. Sano’s observe document main worthwhile Japanese operations via sustained progress represents the corporate’s wager that home success can translate internationally.
Share this text
