Dentsu : Q1 / 2022 Quarterly Financial Statements (January to March 2022)（418KB）

Excerpt from Quarterly Report

(Consolidated Financial Statements)

(January 1 to March 31, 2022)

Part 4. Financial Section

1. Preparation Method of Condensed Quarterly Consolidated Financial Statements

1. The condensed quarterly consolidated financial statements of Dentsu Group Inc. (hereinafter referred to as "the Company") are prepared in accordance with International Accounting Standards 34 "Interim Financial Reporting" (hereinafter referred to as "IAS 34") under the provisions of Article 93 of the "Ordinance on Terminology, Forms and Preparation Methods of Quarterly Consolidated Financial Statements" (Cabinet Office Ordinance No. 64, 2007; hereinafter referred to as "the Ordinance").
2. In the condensed quarterly consolidated financial statements, figures less than one million yen are rounded down to the nearest million yen.

2. Audit Certificate

Pursuant to Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Act, the Company's condensed quarterly consolidated financial statements for the first quarter ended March 31, 2022 (from January 1 to March 31, 2022) and the condensed consolidated financial statements for the first three months (from January 1 to March 31, 2022) of fiscal year 2022, which were compiled in Japanese, were subject to a quarterly review by KPMG AZSA LLC.

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1. Condensed Quarterly Consolidated Financial Statements

(1) Condensed Quarterly Consolidated Statement of Financial Position

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

Trade and other receivables

Inventories

Other financial assets

Other current assets

Subtotal

Non-current assets classified as held for sale

Total current assets

NON-CURRENT ASSETS:

Property, plant and equipment

Goodwill

Intangible assets

Investments accounted for using the equity method

Other financial assets

Other non-current assets

Deferred tax assets

Total non-current assets

			(Millions of Yen)
Notes	FY2021		The first quarter
(As of December 31, 2021)		(As of March 31, 2022)
	723,541	610,409
	1,500,020	1,429,788
	20,661	1,762
15	19,455	17,831
	66,376	60,115
	2,330,056	2,119,908
7	13,059	63,085
	2,343,115		2,182,993
	173,681	168,691
6	670,749	711,306
6	187,999	210,764
	56,423	51,505
15	205,956	192,183
	18,344	17,921
	64,266	60,205
	1,377,421	1,412,577

TOTAL ASSETS	5	3,720,536	3,595,571

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				(Millions of Yen)
	Notes	FY2021		The first quarter
	(As of December 31, 2021)		(As of March 31, 2022)
LIABILITIES AND EQUITY
LIABILITIES
CURRENT LIABILITIES:
Trade and other payables		1,465,110	1,355,003
Borrowings	15	93,067	113,479
Other financial liabilities	15	99,087	98,850
Income tax payables		60,960	31,677
Provisions		16,059	13,622
Other current liabilities		237,587	177,430
Subtotal		1,971,873	1,790,065
Liabilities directly associated with
non-current assets classified as	7	－	37,030
held for sale
Total current liabilities		1,971,873	1,827,096
NON-CURRENT
LIABILITIES:
Bonds and borrowings	15	486,122	460,231
Other financial liabilities	15	204,966	203,498
Liability for retirement benefits		30,201	30,885
Provisions		37,340	40,154
Other non-current liabilities		12,009	8,268
Deferred tax liabilities		68,547	69,824
Total non-current
	839,188	812,863
liabilities
Total liabilities
	2,811,062	2,639,959
EQUITY:
Share capital		74,609	74,609
Share premium account		77,864	78,407
Treasury shares	8	(64,603)	(71,405)
Other components of equity	7	81,423	96,342
Retained earnings		675,739	691,773
Total equity attributable to
	845,034	869,728
owners of the parent
Non-controlling interests	6	64,440	85,883
Total equity
	909,474	955,611
TOTAL LIABILITIES AND
	3,720,536	3,595,571
EQUITY

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(2) Condensed Quarterly Consolidated Statement of Income

				(Millions of Yen)
		Three months ended		Three months ended
	Notes	March 31, 2021		March 31, 2022
	(From January 1		(From January 1
		to March 31, 2021)		to March 31, 2022)
Revenue	5, 9	248,850	287,645
Cost of sales		(26,372)	(28,778)
Net revenue	5	222,478	258,867
Selling, general and administrative		(186,125)	(211,857)
expenses
Business transformation cost		(7,083)	(4,765)
Gain (loss) on sale and retirement of		(47)	11,658
non-current assets
Impairment loss	7	(706)	(14,294)
Other income	10	2,190	2,412
Other expenses	11	(1,894)	(1,299)
Operating profit		28,811	40,722
Share of results of associates		1,262	1,481
Revaluation gain on step acquisition	6	-	5,388
Profit before interest and tax		30,073	47,591
Finance income	12	974	4,313
Finance costs	12	(11,024)	(9,980)
Profit before tax		20,024	41,924
Income tax expense		(12,994)	(14,678)
Profit for the period		7,029	27,246
Profit attributable to:
Owners of the parent		4,885	23,903
Non-controlling interests		2,144	3,343
Earnings per share
Basic earnings per share (Yen)	13	17.37	87.48
Diluted earnings per share (Yen)	13	17.34	86.81

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Reconciliation from operating profit to underlying operating profit

				(Millions of Yen)
		Three months ended		Three months ended
	Notes	March 31, 2021		March 31, 2022
	(From January 1		(From January 1
		to March 31, 2021)		to March 31, 2022)
Operating profit		28,811	40,722
Amortization of intangible assets		7,428	6,748
incurred in acquisitions
Selling, general and administrative		495	478
expenses
Business transformation cost		7,083	4,765
(Gain) loss on sale and retirement of		47	(11,658)
non-current assets
Impairment loss	7	706	14,294
Other income		(10)	(449)
Other expenses		434	16
Underlying operating profit (Note 1)	5	44,996	54,917

The underlying operating profit is a KPI to measure recurring business performance which is calculated as operating profit added with gain/loss related to M&As and one-off items.

Gain/loss related to M&As: Amortization of M&A related intangible assets, acquisition costs, share-based compensation expenses related to acquired companies, and share-based compensation expenses following the acquisition of 100% ownership of a subsidiary

Examples of one-off items: Business transformation cost, impairment loss and gain/loss on sales of non-current assets

Underlying operating profit is not defined under IFRS; however, it is voluntarily disclosed in the Condensed Quarterly Consolidated Statement of Income since management has concluded that the information is useful for users of the financial statements.

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