OREANDA-NEWS. Dentsu Inc. convened a meeting of its Board of Directors at its Head Office in Tokyo at which it finalized its consolidated and non-consolidated financial results for the nine months ended December 31, 2013 (April 1-December 31, 2013).

During the nine-month period ended December 31, 2013, the Japanese economy slowly recovered against a backdrop of bold economic policies and monetary easing measures aimed at overcoming deflation, with signs of an upturn in capital investment and improved corporate performance, particularly in export-oriented enterprises. Meanwhile, although a gradual recovery is continuing in the United States and the European economy has finally started to show signs of bottoming out, the global economy remained uncertain due to concerns about the growth slowdown seen in China and other emerging economies.

The completion of the acquisition of Aegis Group plc (hereinafter "Aegis") and the establishment of Dentsu Aegis Network Ltd. on March 26, 2013 marked a new beginning for the expanded Dentsu Group as a truly global player operating in 110 countries around the world. Through its new medium-term management plan "Dentsu 2017 and Beyond" which starts from FY2013 and goes through to FY2017, the Group aims to become a next-generation agency network that provides unparalleled value through its unique capabilities, creating new marketing communications that go beyond the framework of existing advertising business. In addition to building a network that supports its clients' businesses worldwide, the Group will develop and provide integrated solutions that lead the digital age.

From the first quarter of the fiscal year ending March 31, 2014, Aegis's results have been included in the Dentsu Group's Consolidated Statements of Income. As a result, for the nine months ended December 31, 2013, the Group posted consolidated billings (net sales) of 1,662,485 million yen, an increase of 17.7% compared with the same period of the previous fiscal year, and gross profit of 414,373 million yen, an increase of 66.4%. Amortization of goodwill and other intangible assets incurred through acquisitions (including the acquisition of Aegis) was calculated as 19,845 million yen for goodwill and 11,737 million yen for other intangible assets.

As a result, the Group posted operating income of 34,739 million yen, a decrease of 8.9%. Due to factors including the absence of foreign exchange loss, ordinary income of 42,991 million yen, an increase of 10.0%, and net income of 20,694 million yen, an increase of 3.8%, were posted for the nine months ended December 31, 2013. Operating income before amortization of goodwill and other intangible assets came to 66,322 million yen, an increase of 60.4%. Operating income before amortization of goodwill and other intangible assets comprises the operating income figure to which has been added the amortization of goodwill and other intangible assets incurred through acquisitions (including the acquisition of Aegis).

Looking at the results by business segment, in the Advertising segment net sales of 1,619,414 million yen, an increase of 18.3% compared with the same period of the previous fiscal year; gross profit of 398,795 million yen, an increase of 71.2%; and segment income of 32,367 million yen, a decrease of 7.8%, were posted. In the Information Services segment, net sales of 49,090 million yen, an increase of 2.0%; gross profit of 14,673 million yen, a decrease of 1.3%; and segment income of 342 million yen, a decrease of 53.8%, were posted.

All of the companies in the group headed by Information Services International- Dentsu, Ltd. fall into this segment. In the Other Business segment, net sales of 11,792 million yen, a decrease of 4.6%; gross profit of 2,738 million yen, a decrease of 3.5%; and segment income of 717 million yen, a decrease of 12.9%, were posted.

By geographic area, gross profit of 221,534 million yen, an increase of 7.4% compared with the same period of the previous fiscal year, and operating income before amortization of goodwill and other intangible assets of 45,274 million yen, an increase of 27.9%, were posted in Japan. In other countries, gross profit of 194,079 million yen, an increase of 350.2%, and operating income before amortization of goodwill and other intangible assets of 21,164 million yen, an increase of 268.3%, were posted.

From the 2013 fiscal year onward, gross profit has been specified as one of the Group's business management indicators. Accordingly, gross profit figures have been used in its disclosures of results by business segment and geographic area from the first quarter onward.

Regarding Group companies with a December 31 closing date, including subsidiaries in countries other than Japan, their financial results for the nine months from January 1 to September 30, 2013 are, as a general rule, incorporated in the consolidated financial results for the nine months ended December 31, 2013.

Dentsu's non-consolidated financial results had a significant impact on the Group's consolidated financial results. For the nine months ended December 31, 2013, the Company posted non-consolidated billings (net sales) of 1,107,536 million yen, an increase of 6.7% compared with the same period of the previous fiscal year; gross profit of 156,152 million yen, an increase of 9.4%; operating income of 32,487 million yen, an increase of 31.5%; ordinary income of 49,681 million yen, an increase of 73.9%; and net income of 36,982 million yen, an increase of 133.0%.