Dentsu Group Integrated Report 2020
1-8-1, Higashi-shimbashi, Minato-ku, Tokyo 105-7050, Japan Printed in Japan Introduction
Contents Editorial Policy
Editorial policy Organizations covered s ntegrated report e p a ns t e Dentsu Group s operat ng per or an e or t e report ng Dentsu Group In and Dentsu Group per od and ntrodu es t e Group s strateg es and n t at es to reate a ue o er t e ed u o pan es to ong ter In or at on re ated to e orts to en an e susta na t s a so arranged t n an G ra e or ta ng n reased d s osure re u re ents nto a ount arget aud en e Publication date sta e o ders n ud ng s are o ders and n estors u 2020 e t ed t on s edu ed or pu at on n Reference guidelines ugust 202 Internat ona Integrated Report ng oun IIR e Internat ona Integrated Report ng ra e or Contact info 3 Gu dan e or o a orat e a ue reat on n str o ono rade and Industr Group IR Office GRI usta na t Report ng tandards GRI tandards Dentsu Group In Period covered by the report ttps onta t group dentsu o en r entered on a t t es dur ng 20 anuar 20 t roug De e er 20 ut a so des r es so e a t t es ro pre ed ng or ore re ent per ods
Forward-looking Statements
s ntegrated report onta ns state ents t at onst tute or ard oo ng state ents regard ng t e ntent e e or urrent e pe tat ons o Dentsu Group Inc. or its management with respect to the results of operations and the financial condition of the Dentsu Group. Such or ard oo ng state ents are not guarantees o uture per or an e and n o e r s s and un erta nt es tua resu ts a d er ro t ose n the forward-looking statements as a result of various factors. The information contained in this integrated report identifies important factors that ou d ause su d eren es ese or ard oo ng state ents spea on as o t e date ereo Dentsu Group d s a s an o gat on to Strategy Business Foundation update or publicly announce any revisions to these forward-looking statements to reflect future events, conditions, or circumstances. 07 27 37
s essage 09 eaders n on ersat on 29 essage ro t e a r 39 ead ng rans or at on o t e R o ttee a ue reat on ode 13 n t e e or a Website Introduction usta na t 41 Integrat ng D erse 15 apan us ness 31 Resour es orporate Go ernan e 45 Internat ona us ness 34 onne t ng D erse 19 Corporate Website ttps group dentsu o en ta e o ders In add t on to o pan n or at on t e e s te ntrodu es s essage 23 a t t es ondu ted Group o pan es or d de
Data nan a Data u ar 53 G Data u ar 55 IR Website ttps group dentsu o en r orporate Data 59 ro des t e atest IR n or at on n ud ng IR ne s and earn ngs ater a s
Financial Report2020 (Can be viewed as a PDF file.) https://www.group.dentsu.com/en/sustainability/reports/2020/pdf/2020_finance.pdf Integrated Report 2020 HTML Version ttps group dentsu o en susta na t reports 2020 ro des t e onso dated nan a tate ents and otes or t e s a ear nded De e er 20 I R onso dated Resu ts e ers on ena es readers to ro se t e ntegrated report 2020 ased on e ord sear es
1 Dentsu Group Integrated Report 2020 Introduction
Contents Editorial Policy
Editorial policy Organizations covered s ntegrated report e p a ns t e Dentsu Group s operat ng per or an e or t e report ng Dentsu Group In and Dentsu Group per od and ntrodu es t e Group s strateg es and n t at es to reate a ue o er t e ed u o pan es to ong ter In or at on re ated to e orts to en an e susta na t s a so arranged t n an G ra e or ta ng n reased d s osure re u re ents nto a ount arget aud en e Publication date sta e o ders n ud ng s are o ders and n estors u 2020 e t ed t on s edu ed or pu at on n Reference guidelines ugust 202 Internat ona Integrated Report ng oun IIR e Internat ona Integrated Report ng ra e or Contact info 3 Gu dan e or o a orat e a ue reat on n str o ono rade and Industr Group IR Office GRI usta na t Report ng tandards GRI tandards Dentsu Group In Period covered by the report ttps onta t group dentsu o en r entered on a t t es dur ng 20 anuar 20 t roug De e er 20 ut a so des r es so e a t t es ro pre ed ng or ore re ent per ods
Forward-looking Statements
s ntegrated report onta ns state ents t at onst tute or ard oo ng state ents regard ng t e ntent e e or urrent e pe tat ons o Dentsu Group Inc. or its management with respect to the results of operations and the financial condition of the Dentsu Group. Such or ard oo ng state ents are not guarantees o uture per or an e and n o e r s s and un erta nt es tua resu ts a d er ro t ose n the forward-looking statements as a result of various factors. The information contained in this integrated report identifies important factors that ou d ause su d eren es ese or ard oo ng state ents spea on as o t e date ereo Dentsu Group d s a s an o gat on to Strategy Business Foundation update or publicly announce any revisions to these forward-looking statements to reflect future events, conditions, or circumstances. 07 27 37
s essage 09 eaders n on ersat on 29 essage ro t e a r 39 ead ng rans or at on o t e R o ttee a ue reat on ode 13 n t e e or a Website Introduction usta na t 41 Integrat ng D erse 15 apan us ness 31 Resour es orporate Go ernan e 45 Internat ona us ness 34 onne t ng D erse 19 Corporate Website ttps group dentsu o en ta e o ders In add t on to o pan n or at on t e e s te ntrodu es s essage 23 a t t es ondu ted Group o pan es or d de
Data nan a Data u ar 53 G Data u ar 55 IR Website ttps group dentsu o en r orporate Data 59 ro des t e atest IR n or at on n ud ng IR ne s and earn ngs ater a s
Financial Report2020 (Can be viewed as a PDF file.) https://www.group.dentsu.com/en/sustainability/reports/2020/pdf/2020_finance.pdf Integrated Report 2020 HTML Version ttps group dentsu o en susta na t reports 2020 ro des t e onso dated nan a tate ents and otes or t e s a ear nded De e er 20 I R onso dated Resu ts e ers on ena es readers to ro se t e ntegrated report 2020 ased on e ord sear es
2 Dentsu Group Integrated Report 2020 Diversity One Platform: Innovation from 66,000 Staff e Dentsu Group a orporate group en o passes o er 000 group o pan es n ore t an ountr es and reg ons e p o s o er 000 peop e t spe a ed knowledge and experience in their field of business. They all are connected in our open, flat, cross-border organization. As we accelerate the creation of a diverse and open-minded culture, we are creating new value for our clients and society.
On January 1, 2020, we embarked on a new start as Dentsu Group Inc. The ability to connect human resources in countries and organizations across the globe, and to a ess d erse perspe t es ead to innovations from everyone, everywhere. e ne dentsu or as one tea to create a wealth of new value for our clients.
3 Dentsu Group Integrated Report 2020 Diversity One Platform: Innovation from 66,000 Staff e Dentsu Group a orporate group en o passes o er 000 group o pan es n ore t an ountr es and reg ons e p o s o er 000 peop e t spe a ed knowledge and experience in their field of business. They all are connected in our open, flat, cross-border organization. As we accelerate the creation of a diverse and open-minded culture, we are creating new value for our clients and society.
On January 1, 2020, we embarked on a new start as Dentsu Group Inc. The ability to connect human resources in countries and organizations across the globe, and to a ess d erse perspe t es ead to innovations from everyone, everywhere. e ne dentsu or as one tea to create a wealth of new value for our clients.
4 Dentsu Group Integrated Report 2020 Sustainability Linking Consumers to Corporates for a Sustainable Society Climate change, sustainable production and consumption, diversity, and other social issues are impacting society globally. Utilizing our resources to connect consumers, corporates, and society, the Dentsu Group provides solutions that drive society-wide innovation.
Art installation created by an NGO and Dentsu that serves as a wake-up call to end plastic pollution
The screen display of a smartphone equipped The “ONE DAY FOR CHANGE” community activity globally organized by the Dentsu Group with the AI-based app TUNA SCOPE, which can instantly determine tuna quality from the cross-sectional scan of a tuna tail.
“Project Revoice,” a voice cloning initiative from the ALS Association that promotes Collaboration cutting-edge digital speech synthesis technology to benefit people living with ALS (amyotrophic lateral sclerosis) and their families One Platform: Integrating All Our Capabilities Reflecting the idea of “Open Teaming,” we form flexible teams with external partners to develop integrated solutions for our clients. As an open organization, we generate borderless creativity, innovation, and collaboration.
5 Dentsu Group Integrated Report 2020 Sustainability Linking Consumers to Corporates for a Sustainable Society Climate change, sustainable production and consumption, diversity, and other social issues are impacting society globally. Utilizing our resources to connect consumers, corporates, and society, the Dentsu Group provides solutions that drive society-wide innovation.
Art installation created by an NGO and Dentsu that serves as a wake-up call to end plastic pollution
The screen display of a smartphone equipped The “ONE DAY FOR CHANGE” community activity globally organized by the Dentsu Group with the AI-based app TUNA SCOPE, which can instantly determine tuna quality from the cross-sectional scan of a tuna tail.
“Project Revoice,” a voice cloning initiative from the ALS Association that promotes Collaboration cutting-edge digital speech synthesis technology to benefit people living with ALS (amyotrophic lateral sclerosis) and their families One Platform: Integrating All Our Capabilities Reflecting the idea of “Open Teaming,” we form flexible teams with external partners to develop integrated solutions for our clients. As an open organization, we generate borderless creativity, innovation, and collaboration.
6 Dentsu Group Integrated Report 2020 Contents
CEO’s Message p. 09
Value Creation Model p. 13
Integrating Diverse Resources p. 15 Strategy Connecting Diverse Stakeholders p. 19
CFO’s Message p. 23
7 Dentsu Group Integrated Report 2020 Contents
CEO’s Message p. 09
Value Creation Model p. 13
Integrating Diverse Resources p. 15 Strategy Connecting Diverse Stakeholders p. 19
CFO’s Message p. 23
8 Dentsu Group Integrated Report 2020 Our Strategy CEO’s message
Value Creation Meets New Group Structure
as een re u red n t e past s s an e ne stru ture ena es us to s u taneous e n ted at ons as stated t at ts Accelerating business transformation opportun t or us to rea e ne a s o reat ng increase efficiencies and direct business usta na e De e op ent Goa s an on e e ID pande and t e u t tude o a ue and g g t t e true a ue o t e Dentsu trans or at on t t e sa e t e e rea ed t roug g o a partners ps and ensu ng r ses a e or ed orporates so et Group t t s ear as t e start ng po nt e ont nue de e op ng our R go ernan e and ooperat on In re ogn t on o t s t e Dentsu and onsu ers to ret n on ent ona nor s essen e o t e Group s a ue reat on s ts a t r s anage ent oundat ons to support Group reates a ue onne t ng and ntegrat ng an o our ents and us ness partners are to ntegrate d erse apa t es and ent t es so as susta ned gro t our ents t d erse sta e o ders su as e per en ng a gro ng need to nno ate to rea e d st n t e so ut ons ed a sports organ at ons and ontent o ders produ ts and ser es ent e per en es and In anuar e reorgan ed t e Group under a e e e e t at t s approa to a ue reat on tou po nts t onsu ers n ID and pure o d ng o pan stru ture n order to ore an r ng our ents added ort e at t e post ID so et rap d de e op our a t to reate ne a ue sa e t e ontr ut ng to so et In order to achieve our goals in these difficult Transitioning to a flat group structure has o trans or o e do us ness e are and un erta n t es e are a e erat ng our ena ed us to e erage t e d ers t o our Group d ers ng our n ouse apa t es and e terna us ness trans or at on t e p ar o s t e o pan es t roug pen ea ng des gned resour es ntegrat ng t e to dr e our e o ut on o our a ue reat on ode to oster o a orat on reat t and nno at on ents gro t e nno at on s a read a e ssue or an a ross orders o go e ond t e on ent ona s ope o e Dentsu Group de e op our a ue reat on us nesses t no needs to go ar e ond at ar et ng o un at ons so ut ons e are ode under a ne Group anage ent stru ture ntegrat ng our d erse o peten es a ross to app t e strateg o ross oundar pen ed a reat e data ana t s s ste s ntegrat on ea ng to e tend our d ers t and o a orat on Value Creation Model Toshihiro Yamamoto sports and enterta n ent s ena es us to and onne t our ents to a un erse o Growth of Representat e D re tor Society See p. 13 for details support trans or at on a ross t e o e spe tru sta e o ders and to reate and de er a ue n a res dent o our ents ar et ng and us ness needs a t at on t e Dentsu Group an o do t s t s e Group s de e op ng a ea ng at or essent a t at e e o e our G oundat on t at d re t our R to t at end ne a ue or our ents and so et Growth of Clients t at produ e nterna s nerg to po er t e supports t s trans or at on ast as t e ea ng at or a o s ntegrat on e Dentsu Group or t our ents to flow of talent, capabilities, knowledge, and e ontr ut ng to t e en ron ent and a ross t e Group and ena es us to onne t r ng susta na e gro t to so et o do so e ser es s reates a ue n nd dua pro e ts so et t roug t e ser es e pro de our sta e o ders Group go ernan e e o e dr e t ree t ngs t e us ness trans or at on Connecting Integrating ne no edge and o peten e a ong peop e usto ers e are a so re n or ng our R n reas ng portant us e set up a t at de e ops around our ne a ue reat on Diverse Diverse Stakeholders Resources t roug out t e Group a t t es nder t e ste ards p o a ne R go ernan e stru ture t at earn t e trust o our ode t e e o ut on o our Group R and e se ond e o ut on o our a ue reat on o ttee o pr s ng e ers ro ar ous ents as e as o onsu ers and so et go ernan e e as t e Group s sta e o ders or ode s n o e onne t and ntegrate ents Group o pan es e oord nate R a t t es s a g o a Group operat ng n ore t an t e r ont nued understand ng and support Value Creation and t e r d erse sta e o ders to reate so ut ons t roug out t e Group under a o on strateg ountr es t n e ess o 000 orporate ent t es orporate Go ernan e t at support t e susta ned gro t o our ents e Dentsu Group as u to ontr ute to a and 000 e p o ees e see to s are a ss on s t e need or ents to ontr ute to so et ne so et t at a es d erse g o a r s s t o on u ture and open and transparent s on a ues e o es an n reas ng portant anage ent our reat t nno at on and a t to produ e connect with our stakeholders to earn their firm ssue t e Group de er so ut ons t at ntegrate so ut ons e e e e t e Group s R an add trust e asp re to e a Group ere ea and
Mega- t e gro t o our ents t t at o so et significant value at this very difficult time. We will e er one o us ee s t e o o e ng a e to reate trends / Social Change
9 Dentsu Group Integrated Report 2020 Our Strategy CEO’s message
Value Creation Meets New Group Structure
as een re u red n t e past s s an e ne stru ture ena es us to s u taneous e n ted at ons as stated t at ts Accelerating business transformation opportun t or us to rea e ne a s o reat ng increase efficiencies and direct business usta na e De e op ent Goa s an on e e ID pande and t e u t tude o a ue and g g t t e true a ue o t e Dentsu trans or at on t t e sa e t e e rea ed t roug g o a partners ps and ensu ng r ses a e or ed orporates so et Group t t s ear as t e start ng po nt e ont nue de e op ng our R go ernan e and ooperat on In re ogn t on o t s t e Dentsu and onsu ers to ret n on ent ona nor s essen e o t e Group s a ue reat on s ts a t r s anage ent oundat ons to support Group reates a ue onne t ng and ntegrat ng an o our ents and us ness partners are to ntegrate d erse apa t es and ent t es so as susta ned gro t our ents t d erse sta e o ders su as e per en ng a gro ng need to nno ate to rea e d st n t e so ut ons ed a sports organ at ons and ontent o ders produ ts and ser es ent e per en es and In anuar e reorgan ed t e Group under a e e e e t at t s approa to a ue reat on tou po nts t onsu ers n ID and pure o d ng o pan stru ture n order to ore an r ng our ents added ort e at t e post ID so et rap d de e op our a t to reate ne a ue sa e t e ontr ut ng to so et In order to achieve our goals in these difficult Transitioning to a flat group structure has o trans or o e do us ness e are and un erta n t es e are a e erat ng our ena ed us to e erage t e d ers t o our Group d ers ng our n ouse apa t es and e terna us ness trans or at on t e p ar o s t e o pan es t roug pen ea ng des gned resour es ntegrat ng t e to dr e our e o ut on o our a ue reat on ode to oster o a orat on reat t and nno at on ents gro t e nno at on s a read a e ssue or an a ross orders o go e ond t e on ent ona s ope o e Dentsu Group de e op our a ue reat on us nesses t no needs to go ar e ond at ar et ng o un at ons so ut ons e are ode under a ne Group anage ent stru ture ntegrat ng our d erse o peten es a ross to app t e strateg o ross oundar pen ed a reat e data ana t s s ste s ntegrat on ea ng to e tend our d ers t and o a orat on Value Creation Model Toshihiro Yamamoto sports and enterta n ent s ena es us to and onne t our ents to a un erse o Growth of Representat e D re tor Society See p. 13 for details support trans or at on a ross t e o e spe tru sta e o ders and to reate and de er a ue n a res dent o our ents ar et ng and us ness needs a t at on t e Dentsu Group an o do t s t s e Group s de e op ng a ea ng at or essent a t at e e o e our G oundat on t at d re t our R to t at end ne a ue or our ents and so et Growth of Clients t at produ e nterna s nerg to po er t e supports t s trans or at on ast as t e ea ng at or a o s ntegrat on e Dentsu Group or t our ents to flow of talent, capabilities, knowledge, and e ontr ut ng to t e en ron ent and a ross t e Group and ena es us to onne t r ng susta na e gro t to so et o do so e ser es s reates a ue n nd dua pro e ts so et t roug t e ser es e pro de our sta e o ders Group go ernan e e o e dr e t ree t ngs t e us ness trans or at on Connecting Integrating ne no edge and o peten e a ong peop e usto ers e are a so re n or ng our R n reas ng portant us e set up a t at de e ops around our ne a ue reat on Diverse Diverse Stakeholders Resources t roug out t e Group a t t es nder t e ste ards p o a ne R go ernan e stru ture t at earn t e trust o our ode t e e o ut on o our Group R and e se ond e o ut on o our a ue reat on o ttee o pr s ng e ers ro ar ous ents as e as o onsu ers and so et go ernan e e as t e Group s sta e o ders or ode s n o e onne t and ntegrate ents Group o pan es e oord nate R a t t es s a g o a Group operat ng n ore t an t e r ont nued understand ng and support Value Creation and t e r d erse sta e o ders to reate so ut ons t roug out t e Group under a o on strateg ountr es t n e ess o 000 orporate ent t es orporate Go ernan e t at support t e susta ned gro t o our ents e Dentsu Group as u to ontr ute to a and 000 e p o ees e see to s are a ss on s t e need or ents to ontr ute to so et ne so et t at a es d erse g o a r s s t o on u ture and open and transparent s on a ues e o es an n reas ng portant anage ent our reat t nno at on and a t to produ e connect with our stakeholders to earn their firm ssue t e Group de er so ut ons t at ntegrate so ut ons e e e e t e Group s R an add trust e asp re to e a Group ere ea and
Mega- t e gro t o our ents t t at o so et significant value at this very difficult time. We will e er one o us ee s t e o o e ng a e to reate trends / Social Change
10 Dentsu Group Integrated Report 2020 Our Strategy CEO’s message
as een re u red n t e past s s an e ne stru ture ena es us to s u taneous e n ted at ons as stated t at ts Truly Global Scale opportun t or us to rea e ne a s o reat ng increase efficiencies and direct business usta na e De e op ent Goa s an on e e ID pande and t e u t tude o a ue and g g t t e true a ue o t e Dentsu trans or at on t t e sa e t e e rea ed t roug g o a partners ps and ensu ng r ses a e or ed orporates so et Group t t s ear as t e start ng po nt e ont nue de e op ng our R go ernan e and ooperat on In re ogn t on o t s t e Dentsu and onsu ers to ret n on ent ona nor s essen e o t e Group s a ue reat on s ts a t r s anage ent oundat ons to support Group reates a ue onne t ng and ntegrat ng an o our ents and us ness partners are to ntegrate d erse apa t es and ent t es so as susta ned gro t our ents t d erse sta e o ders su as e per en ng a gro ng need to nno ate to rea e d st n t e so ut ons ed a sports organ at ons and ontent o ders produ ts and ser es ent e per en es and In anuar e reorgan ed t e Group under a e e e e t at t s approa to a ue reat on Diversifying resources, connecting tou po nts t onsu ers n ID and pure o d ng o pan stru ture n order to ore an r ng our ents added ort e at t e stakeholders 145+ 66,000+ post ID so et rap d de e op our a t to reate ne a ue sa e t e ontr ut ng to so et In order to achieve our goals in these difficult Transitioning to a flat group structure has o trans or o e do us ness e are Number of Number of countries and regions Group employees and un erta n t es e are a e erat ng our ena ed us to e erage t e d ers t o our Group d ers ng our n ouse apa t es and e terna Environmental, social, and governance (End of December 2019) (End of December 2019) us ness trans or at on t e p ar o s t e o pan es t roug pen ea ng des gned resour es ntegrat ng t e to dr e our (ESG) criteria e o ut on o our a ue reat on ode to oster o a orat on reat t and nno at on ents gro t e nno at on s a read a e ssue or an a ross orders o go e ond t e on ent ona s ope o e Dentsu Group de e op our a ue reat on us nesses t no needs to go ar e ond at ar et ng o un at ons so ut ons e are ode under a ne Group anage ent stru ture ntegrat ng our d erse o peten es a ross to app t e strateg o ross oundar pen ed a reat e data ana t s s ste s ntegrat on ea ng to e tend our d ers t and o a orat on sports and enterta n ent s ena es us to and onne t our ents to a un erse o support trans or at on a ross t e o e spe tru sta e o ders and to reate and de er a ue n a o our ents ar et ng and us ness needs a t at on t e Dentsu Group an o do t s t s e Group s de e op ng a ea ng at or essent a t at e e o e our G oundat on t at d re t our R to t at end ne a ue or our ents and so et t at produ e nterna s nerg to po er t e supports t s trans or at on ast as t e ea ng at or a o s ntegrat on e Dentsu Group or t our ents to flow of talent, capabilities, knowledge, and e ontr ut ng to t e en ron ent and a ross t e Group and ena es us to onne t r ng susta na e gro t to so et o do so e ser es s reates a ue n nd dua pro e ts so et t roug t e ser es e pro de our sta e o ders Group go ernan e e o e dr e t ree t ngs t e us ness trans or at on ne no edge and o peten e a ong peop e usto ers e are a so re n or ng our R n reas ng portant us e set up a t at de e ops around our ne a ue reat on t roug out t e Group a t t es nder t e ste ards p o a ne R go ernan e stru ture t at earn t e trust o our ode t e e o ut on o our Group R and e se ond e o ut on o our a ue reat on o ttee o pr s ng e ers ro ar ous ents as e as o onsu ers and so et go ernan e e as t e Group s sta e o ders or ode s n o e onne t and ntegrate ents Group o pan es e oord nate R a t t es s a g o a Group operat ng n ore t an t e r ont nued understand ng and support and t e r d erse sta e o ders to reate so ut ons t roug out t e Group under a o on strateg ountr es t n e ess o 000 orporate ent t es t at support t e susta ned gro t o our ents e Dentsu Group as u to ontr ute to a and 000 e p o ees e see to s are a s t e need or ents to ontr ute to so et ne so et t at a es d erse g o a r s s t o on u ture and open and transparent e o es an n reas ng portant anage ent our reat t nno at on and a t to produ e connect with our stakeholders to earn their firm os ro a a oto ssue t e Group de er so ut ons t at ntegrate so ut ons e e e e t e Group s R an add trust e asp re to e a Group ere ea and Representat e D re tor t e gro t o our ents t t at o so et significant value at this very difficult time. We will e er one o us ee s t e o o e ng a e to reate res dent
11 Dentsu Group Integrated Report 2020 Our Strategy CEO’s message
as een re u red n t e past s s an e ne stru ture ena es us to s u taneous e n ted at ons as stated t at ts Truly Global Scale opportun t or us to rea e ne a s o reat ng increase efficiencies and direct business usta na e De e op ent Goa s an on e e ID pande and t e u t tude o a ue and g g t t e true a ue o t e Dentsu trans or at on t t e sa e t e e rea ed t roug g o a partners ps and ensu ng r ses a e or ed orporates so et Group t t s ear as t e start ng po nt e ont nue de e op ng our R go ernan e and ooperat on In re ogn t on o t s t e Dentsu and onsu ers to ret n on ent ona nor s essen e o t e Group s a ue reat on s ts a t r s anage ent oundat ons to support Group reates a ue onne t ng and ntegrat ng an o our ents and us ness partners are to ntegrate d erse apa t es and ent t es so as susta ned gro t our ents t d erse sta e o ders su as e per en ng a gro ng need to nno ate to rea e d st n t e so ut ons ed a sports organ at ons and ontent o ders produ ts and ser es ent e per en es and In anuar e reorgan ed t e Group under a e e e e t at t s approa to a ue reat on Diversifying resources, connecting tou po nts t onsu ers n ID and pure o d ng o pan stru ture n order to ore an r ng our ents added ort e at t e stakeholders 145+ 66,000+ post ID so et rap d de e op our a t to reate ne a ue sa e t e ontr ut ng to so et In order to achieve our goals in these difficult Transitioning to a flat group structure has o trans or o e do us ness e are Number of Number of countries and regions Group employees and un erta n t es e are a e erat ng our ena ed us to e erage t e d ers t o our Group d ers ng our n ouse apa t es and e terna Environmental, social, and governance (End of December 2019) (End of December 2019) us ness trans or at on t e p ar o s t e o pan es t roug pen ea ng des gned resour es ntegrat ng t e to dr e our (ESG) criteria e o ut on o our a ue reat on ode to oster o a orat on reat t and nno at on ents gro t e nno at on s a read a e ssue or an a ross orders o go e ond t e on ent ona s ope o e Dentsu Group de e op our a ue reat on us nesses t no needs to go ar e ond at ar et ng o un at ons so ut ons e are ode under a ne Group anage ent stru ture ntegrat ng our d erse o peten es a ross to app t e strateg o ross oundar pen ed a reat e data ana t s s ste s ntegrat on ea ng to e tend our d ers t and o a orat on sports and enterta n ent s ena es us to and onne t our ents to a un erse o support trans or at on a ross t e o e spe tru sta e o ders and to reate and de er a ue n a o our ents ar et ng and us ness needs a t at on t e Dentsu Group an o do t s t s e Group s de e op ng a ea ng at or essent a t at e e o e our G oundat on t at d re t our R to t at end ne a ue or our ents and so et t at produ e nterna s nerg to po er t e supports t s trans or at on ast as t e ea ng at or a o s ntegrat on e Dentsu Group or t our ents to flow of talent, capabilities, knowledge, and e ontr ut ng to t e en ron ent and a ross t e Group and ena es us to onne t r ng susta na e gro t to so et o do so e ser es s reates a ue n nd dua pro e ts so et t roug t e ser es e pro de our sta e o ders Group go ernan e e o e dr e t ree t ngs t e us ness trans or at on ne no edge and o peten e a ong peop e usto ers e are a so re n or ng our R n reas ng portant us e set up a t at de e ops around our ne a ue reat on t roug out t e Group a t t es nder t e ste ards p o a ne R go ernan e stru ture t at earn t e trust o our ode t e e o ut on o our Group R and e se ond e o ut on o our a ue reat on o ttee o pr s ng e ers ro ar ous ents as e as o onsu ers and so et go ernan e e as t e Group s sta e o ders or ode s n o e onne t and ntegrate ents Group o pan es e oord nate R a t t es s a g o a Group operat ng n ore t an t e r ont nued understand ng and support and t e r d erse sta e o ders to reate so ut ons t roug out t e Group under a o on strateg ountr es t n e ess o 000 orporate ent t es t at support t e susta ned gro t o our ents e Dentsu Group as u to ontr ute to a and 000 e p o ees e see to s are a s t e need or ents to ontr ute to so et ne so et t at a es d erse g o a r s s t o on u ture and open and transparent e o es an n reas ng portant anage ent our reat t nno at on and a t to produ e connect with our stakeholders to earn their firm os ro a a oto ssue t e Group de er so ut ons t at ntegrate so ut ons e e e e t e Group s R an add trust e asp re to e a Group ere ea and Representat e D re tor t e gro t o our ents t t at o so et significant value at this very difficult time. We will e er one o us ee s t e o o e ng a e to reate res dent
12 Dentsu Group Integrated Report 2020 Our Strategy Value Creation Model
Diversity and Integration Driving value creation for our clients and society
o re a n onne ted to ents and so et t s portant to a e a g er sense o purpose as e or to reso e us ness ssues and urgent so eta pro e s e Dentsu Group as onstru ted a a a ue creation process, by means of which we make a difference to society and find deeper meaning in what we do ensur ng susta na e gro t and s u taneous en an ng orporate a ue
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13 Dentsu Group Integrated Report 2020 Our Strategy Value Creation Model
Diversity and Integration Driving value creation for our clients and society
o re a n onne ted to ents and so et t s portant to a e a g er sense o purpose as e or to reso e us ness ssues and urgent so eta pro e s e Dentsu Group as onstru ted a a a ue creation process, by means of which we make a difference to society and find deeper meaning in what we do ensur ng susta na e gro t and s u taneous en an ng orporate a ue
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14 Dentsu Group Integrated Report 2020 Our Strategy Integrating Diverse Resources
Driving client value by integrating diverse resources
In recent years, corporates have sought sustainable growth by applying transformative digital principles to marketing and business activities. Marketing partners thus must solve a wide range of issues beyond traditional marketing, involving strategy to execution. In response to these needs, the Dentsu Group provides Integrated Gro t o ut ons
d ert s ng gen es onsu tants e endors
Transformation and Growth Strategy
D g ta rans or at on
Systems Integration
CRM (Data and Analytics) Dentsu Group Marketing Technology
Creative (Brand Experience / CX / Commerce)
ed a Data dr en ed a
ontent and ports ar et ng
Beyond Marketing Communications Creating New Value, Integrating Resources
As markets mature, corporates increasingly are finding it o uttress t e susta na e gro t o ent In an era o rap d o od t at on onstant nno at on s t at ou d not e addressed on an nd dua as s a a enge to atta n susta na e gro t t a t e en t o pan es t e Group pro de ents t e tens e a so re u red n ter s o easures a ed at orporate o rea e t ese ne ntegrated so ut ons t e Dentsu is essential to engage in a variety of activities and support or t e r gro t strateg es t e de e op ent o growth. We believe we cannot contribute sufficiently to Group de e op ts trad t ona ntegrat e apa t es constantly innovate, the Dentsu Group is going beyond data ases and ar et ng p at or s t at support t e r the sustainable growth of our clients by simply providing to reate pen ea ng s e t e oundat on or ad ert s ng and ot er on ent ona ser es n t e areas gro t as e as t e e e ut on o ar et ng high quality services in a wide range of areas. pro ot ng o a orat on t n t e Group a ross o ar et ng and o un at ons to o er a der range communications. These areas have always been among us t e Dentsu Group a so o ers ntegrated o pan es and nat ona orders o ser es and ontr ute to t e susta na e gro t o t e Group s strengt s ar et ng so ut ons ased on our outstand ng e e ut on By realizing Integrated Growth Solutions that only the ent o pan es Traditionally, we have provided information systems, and creativity. We plan to advance our capabilities to Dentsu Group an pro de o er ng ne a ue to ents o e a e o us on e pand ng and upgrad ng a ong ot er ser es o e p an to e pand our integrate resources in a wide range of areas beyond and ontr ut ng to susta na e gro t t e Group ser es to r ng a out d g ta trans or at ons n o er ngs so as to e tend and de e op our R and d g ta marketing communications, thereby creating ne a ue a s to e o e an nd spensa e partner to a ar et ng e de e op ent o d g ta strateg es s trans or at on apa t es t roug t e er e rand and Not only can optimization be achieved by integrating our ents expected to accelerate, as society adapts to post ot er outstand ng g o a net or resour es n order to resources but, by creating solutions that combine ID e a e erat ng d g ta at on ont nue to pro de ntegrated so ut ons to our ents different fields of business, it is possible to resolve issues
15 Dentsu Group Integrated Report 2020 Our Strategy Integrating Diverse Resources
Driving client value by integrating diverse resources
In recent years, corporates have sought sustainable growth by applying transformative digital principles to marketing and business activities. Marketing partners thus must solve a wide range of issues beyond traditional marketing, involving strategy to execution. In response to these needs, the Dentsu Group provides Integrated Gro t o ut ons
d ert s ng gen es onsu tants e endors
Transformation and Growth Strategy
D g ta rans or at on
Systems Integration
CRM (Data and Analytics) Dentsu Group Marketing Technology
Creative (Brand Experience / CX / Commerce)
ed a Data dr en ed a
ontent and ports ar et ng
Beyond Marketing Communications Creating New Value, Integrating Resources
As markets mature, corporates increasingly are finding it o uttress t e susta na e gro t o ent In an era o rap d o od t at on onstant nno at on s t at ou d not e addressed on an nd dua as s a a enge to atta n susta na e gro t t a t e en t o pan es t e Group pro de ents t e tens e a so re u red n ter s o easures a ed at orporate o rea e t ese ne ntegrated so ut ons t e Dentsu is essential to engage in a variety of activities and support or t e r gro t strateg es t e de e op ent o growth. We believe we cannot contribute sufficiently to Group de e op ts trad t ona ntegrat e apa t es constantly innovate, the Dentsu Group is going beyond data ases and ar et ng p at or s t at support t e r the sustainable growth of our clients by simply providing to reate pen ea ng s e t e oundat on or ad ert s ng and ot er on ent ona ser es n t e areas gro t as e as t e e e ut on o ar et ng high quality services in a wide range of areas. pro ot ng o a orat on t n t e Group a ross o ar et ng and o un at ons to o er a der range communications. These areas have always been among us t e Dentsu Group a so o ers ntegrated o pan es and nat ona orders o ser es and ontr ute to t e susta na e gro t o t e Group s strengt s ar et ng so ut ons ased on our outstand ng e e ut on By realizing Integrated Growth Solutions that only the ent o pan es Traditionally, we have provided information systems, and creativity. We plan to advance our capabilities to Dentsu Group an pro de o er ng ne a ue to ents o e a e o us on e pand ng and upgrad ng a ong ot er ser es o e p an to e pand our integrate resources in a wide range of areas beyond and ontr ut ng to susta na e gro t t e Group ser es to r ng a out d g ta trans or at ons n o er ngs so as to e tend and de e op our R and d g ta marketing communications, thereby creating ne a ue a s to e o e an nd spensa e partner to a ar et ng e de e op ent o d g ta strateg es s trans or at on apa t es t roug t e er e rand and Not only can optimization be achieved by integrating our ents expected to accelerate, as society adapts to post ot er outstand ng g o a net or resour es n order to resources but, by creating solutions that combine ID e a e erat ng d g ta at on ont nue to pro de ntegrated so ut ons to our ents different fields of business, it is possible to resolve issues
16 Dentsu Group Integrated Report 2020 Our Strategy Integrating Diverse Resources
Driving client value by integrating CASE 2 diverse resources Jins Holdings Business Design
Dentsu In as tea ed up t t e ns o d ngs In as Chief Strategy Office to promote the formulation and e e ut on o strateg es address ng ar ous anage ent ssues o t s end Dentsu s n est ng n t e ns or p a e CASE 1 us ness n a u t on t e dea o on entrat on or ose enta attent on and t e o nt pro ot on o us ness de e op ent t t e sa e t e t s support ng gro t n tos ana a e t o ns o d ngs In ta s t Health Project for All ngo a a ara o Dentsu us ness Des gn uare t e ore ns e e ear us ness and t e re ta at on o e apan ro ess ona oot a eague eague ae as t n t e anto area ns tos ana a as a ng a a enge o to e o e n o ed n Dentsu s partners p t ns ana a spans ore reg ona re ta at on eague sponsor e t an 0 ears dur ng t e Dentsu as ent ts support asuda e Insuran e o pan ean e soug t n t e area o o un at ons des gn or t e rand ng o to e o e a partner n ea t pro ot on or ea t t e I rena ed I R ur ro e s t at o a a t t es e at t e sa e t e e o ng n o ed us ness des gn partner e e p deter ne o to reate n t e re ta at on o reg ona o un t es roug ne a ue and rea e nterna trans or at ons to a e e ts e orts t e nsurer p anned to de e op and t at end e pand sa es opportun t es nat on de e ea t t t es ro e t addresses ot ro ot ng ea t n o un t es a enges or ng t t e eague to pro ote a ea t e n so et ttra t e sports opportun t es are pro ded allowing participants to benefit from J.League assets su ta e or peop e o a ages to use n pro ng t e r ea t In add t on e ents are organ ed and apps ade a a a e t at n rease peop e s nterest n eague a t t es e asuda e ean e pro des ts CASE 3 usto ers t nsuran e produ ts t at o er as Holistic customer management trans or at on ourne ad t e o e t e to u d a re unds on a port on o t e r nsuran e pre u s no r t on e os ste t at dr es engage ent t t e depend ng on t e resu ts o ea t e s e program with Swiss luxury watch brand d g ta sa usto er an t e an ere It a ed to g e Dentsu Group s ontr ut ng to t e reat on o t e usto er a un ue e per en e t e sa es asso ate t e Iso ar e ped a ss u ur at rand to reate a o st t ese ongo ng re at ons ps a t to attra t engage and on ert and t e sa es usto er anage ent progra t at onne ted ot representat e t e assuran e to a e t e r g t produ t n online and offline shoppers with the brand. The digital Integrating Dentsu Group Resources t e r g t p a e at t e r g t t e
e s te ntrodu ng eas e er ses or e er one Iso ar set an open and ne er end ng o un at on and engage ent anne et een t e usto er and Dentsu CRM t e rand t pro ed operat ona apa t es n an o n anne rea t e rea t In add t on t u t t e Overall planning and producing progra t a n u a e produ t approa to onne t too s and to auto ate tas s and on ne ntera t ons s a resu t e produ ed a R or reta e e ut on and Information ente ng ntegrated t a ne sa es app so ut ons Dentsu Sports Services and a ne e arrant R ode so ut on ased on Partners International-Dentsu o a n te no og Activation J.League RETAIL e progra a so e po ered out ue sta t a management walking app CLIENTELING development EXECUTION user r end and d g ta ed a to apture ent data t o n anne ntera t ons and pro ded rea t e n or at on or a sta e o ders n oud and persona ed I Dentsu Digital ontent as e as ser es t roug ar et ng auto at on Dentsu Tec J.League official app Campaign execution planning, management ente ng e sa es te n ue o or ng persona re at ons ps and management and sales reform promotion t ents ased on t e r a ts and pre eren es RR
17 Dentsu Group Integrated Report 2020 Our Strategy Integrating Diverse Resources
Driving client value by integrating CASE 2 diverse resources Jins Holdings Business Design
Dentsu In as tea ed up t t e ns o d ngs In as Chief Strategy Office to promote the formulation and e e ut on o strateg es address ng ar ous anage ent ssues o t s end Dentsu s n est ng n t e ns or p a e CASE 1 us ness n a u t on t e dea o on entrat on or ose enta attent on and t e o nt pro ot on o us ness de e op ent t t e sa e t e t s support ng gro t n tos ana a e t o ns o d ngs In ta s t Health Project for All ngo a a ara o Dentsu us ness Des gn uare t e ore ns e e ear us ness and t e re ta at on o e apan ro ess ona oot a eague eague ae as t n t e anto area ns tos ana a as a ng a a enge o to e o e n o ed n Dentsu s partners p t ns ana a spans ore reg ona re ta at on eague sponsor e t an 0 ears dur ng t e Dentsu as ent ts support asuda e Insuran e o pan ean e soug t n t e area o o un at ons des gn or t e rand ng o to e o e a partner n ea t pro ot on or ea t t e I rena ed I R ur ro e s t at o a a t t es e at t e sa e t e e o ng n o ed us ness des gn partner e e p deter ne o to reate n t e re ta at on o reg ona o un t es roug ne a ue and rea e nterna trans or at ons to a e e ts e orts t e nsurer p anned to de e op and t at end e pand sa es opportun t es nat on de e ea t t t es ro e t addresses ot ro ot ng ea t n o un t es a enges or ng t t e eague to pro ote a ea t e n so et ttra t e sports opportun t es are pro ded allowing participants to benefit from J.League assets su ta e or peop e o a ages to use n pro ng t e r ea t In add t on e ents are organ ed and apps ade a a a e t at n rease peop e s nterest n eague a t t es e asuda e ean e pro des ts CASE 3 usto ers t nsuran e produ ts t at o er as Holistic customer management trans or at on ourne ad t e o e t e to u d a re unds on a port on o t e r nsuran e pre u s no r t on e os ste t at dr es engage ent t t e depend ng on t e resu ts o ea t e s e program with Swiss luxury watch brand d g ta sa usto er an t e an ere It a ed to g e Dentsu Group s ontr ut ng to t e reat on o t e usto er a un ue e per en e t e sa es asso ate t e Iso ar e ped a ss u ur at rand to reate a o st t ese ongo ng re at ons ps a t to attra t engage and on ert and t e sa es usto er anage ent progra t at onne ted ot representat e t e assuran e to a e t e r g t produ t n online and offline shoppers with the brand. The digital Integrating Dentsu Group Resources t e r g t p a e at t e r g t t e
e s te ntrodu ng eas e er ses or e er one Iso ar set an open and ne er end ng o un at on and engage ent anne et een t e usto er and Dentsu CRM t e rand t pro ed operat ona apa t es n an o n anne rea t e rea t In add t on t u t t e Overall planning and producing progra t a n u a e produ t approa to onne t too s and to auto ate tas s and on ne ntera t ons s a resu t e produ ed a R or reta e e ut on and Information ente ng ntegrated t a ne sa es app so ut ons Dentsu Sports Services and a ne e arrant R ode so ut on ased on Partners International-Dentsu o a n te no og Activation J.League RETAIL e progra a so e po ered out ue sta t a management walking app CLIENTELING development EXECUTION user r end and d g ta ed a to apture ent data t o n anne ntera t ons and pro ded rea t e n or at on or a sta e o ders n oud and persona ed I Dentsu Digital ontent as e as ser es t roug ar et ng auto at on Dentsu Tec J.League official app Campaign execution planning, management ente ng e sa es te n ue o or ng persona re at ons ps and management and sales reform promotion t ents ased on t e r a ts and pre eren es RR
18 Dentsu Group Integrated Report 2020 Our Strategy Connecting Diverse Stakeholders
Creating New Value for Society by Connecting Diverse Stakeholders
roug out ts stor dates a so e 20 ears t e Dentsu Group as pr ded tse n ts a t to onne t sta e o ders and o ne e e ents to generate ne a ue s e s a ont nue to do and as a o pan engaged n o pre ens e o un at ons e p to rea e an a undant so et AI to Determine Quality Dentsu Group o used on t e a t t at s ed tuna ro ers Brokers deter ne t e ua t o a tuna e a n ng ross se t ons World Expo o t e ta o address t e d nd ng nu er o aster tuna t t e apan or d pos t on e d n er ants and t e r su essors t as de ded t at t e r s s General trading Various national and te n ues ou d e e ser ed passed on us ng I companies sa a n 0 Dentsu arr ed out governments Advertising Media or under ontra t to t e apanese roug deep earn ng a e ed o ser ng t e o pos t on o tuna ta ross se t ons I deter nes t e t t e t e o our ound ng e go ern enta agen organ ng t e Corporations ua t o a g en tuna ased on a ross se t ona ta s an esta s ed o un at ons and e ent t t e sa e t e e ere ad ert s ng depart ents o nt t e tens e n o ed n t e e ent t roug or t d d on e a o ne spaper pu s ers e dea as to Organization render t e support o sett ng ne s do est and ore gn e t ng committee At the Summit d str ut on ees and ad ert se ent orporat ons as e as or part pat ng o erseas go ern ents t t e 20 G20 su t eet ng e d p a e ent ees Modern Art er t e ears ne spaper n sa a Dentsu supported apanese te no og es n t e e t on spa e pu s ers a e gro n as ad ert s ng o n ng t e trad t ona apanese o t e trans ss on o deas and ed a and a e ontr uted to t e t eater t e ent spa e des gn a ng u hospitality for government officials and esta s ent o an e os ste use o t e atest te no og es Dentsu reated ore gn ed a s a ontr uted to o pr s ng ne s agen es ne spaper a ne or d t out os ng t e d st n t e t e su t s su ess pu s ers ad ert sers and onsu ers pa t o e t er t e t eater or te no og s resu ted n an pa t ar greater t an genera ou d a e een e pe ted Local governments News distribution
Traditional artisans Facility owners Newspaper publishers
Advanced engineers National government officials Advertisers
1901 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020
New Spectator Experience In order to a e t eas er to understand en ng matches where it is difficult to clearly see decisive Sports groups Sponsored Sports o ents t t e na ed e e te no og es su as a ne earn ng a e een used s e ps Creative technologists e o o p s ere o ered Sports e o or te e s on road asts and on oo ers sua e t e tra e tor o ea s ord newspaper stories that electrified the and t e p a ers o etr data ean e t e o u e o app ause and eer ng are s o n on a ent re nat on s ena ed Dentsu to Broadcasting de onstrate to t e apanese ad ert s ng s reen aptur ng t e e te ent at t e enue ndustr t e us ness potent a o s as resu ted n a ne spe tator e per en e t at a o s one to e per en e t e strateg es o ot sport ng e ents Marketers en ng o ense and de ense en ng tra ng and sua at on s ste R o at s Regional Revitalization Commercial Broadcast Dentsu ad o ated a turn Local governments Television po et s Go a to no to address on erns a out t e a ng are u resear ed te no og a Television d nd ng popu at on o no t Local students ad an es n t e n ted tates Dentsu as broadcasting u u re e ture ord ng t e confident that the age of television technologies stor a ast e to n s stor and road ast ng ou d o e to apan e ar ere dep ted us ng Town revitalization or ed t ne spaper pu s ers to posters and p oto a u s reated leaders Newspaper reate pr ate road ast ng stat ons and publishers n ooperat on t to n contributed significantly to the re ta at on eaders and o a esta s ent o a us ness ode g s oo students e e ped ased on ad ert s ng re enue or Advertisers Dentsu produ e ater a s to o er a road ast ng stat ons s o ase t e area s potent a
19 Dentsu Group Integrated Report 2020 Our Strategy Connecting Diverse Stakeholders
Creating New Value for Society by Connecting Diverse Stakeholders
roug out ts stor dates a so e 20 ears t e Dentsu Group as pr ded tse n ts a t to onne t sta e o ders and o ne e e ents to generate ne a ue s e s a ont nue to do and as a o pan engaged n o pre ens e o un at ons e p to rea e an a undant so et AI to Determine Quality Dentsu Group o used on t e a t t at s ed tuna ro ers Brokers deter ne t e ua t o a tuna e a n ng ross se t ons World Expo o t e ta o address t e d nd ng nu er o aster tuna t t e apan or d pos t on e d n er ants and t e r su essors t as de ded t at t e r s s General trading Various national and te n ues ou d e e ser ed passed on us ng I companies sa a n 0 Dentsu arr ed out governments Advertising Media or under ontra t to t e apanese roug deep earn ng a e ed o ser ng t e o pos t on o tuna ta ross se t ons I deter nes t e t t e t e o our ound ng e go ern enta agen organ ng t e Corporations ua t o a g en tuna ased on a ross se t ona ta s an esta s ed o un at ons and e ent t t e sa e t e e ere ad ert s ng depart ents o nt t e tens e n o ed n t e e ent t roug or t d d on e a o ne spaper pu s ers e dea as to Organization At the Summit render t e support o sett ng ne s do est and ore gn e t ng committee d str ut on ees and ad ert se ent orporat ons as e as or t t e 20 G20 su t eet ng e d n sa a part pat ng o erseas go ern ents p a e ent ees Modern Art Dentsu supported on eren e a t onstru t on er t e ears ne spaper nternat ona ed a enter operat ons and pu s ers a e gro n as ad ert s ng o n ng t e trad t ona apanese o apanese te no og es n t e e t on spa e ed a and a e ontr uted to t e t eater t e ent spa e des gn a ng u on e ng sa a s attra t eness and pro d ng esta s ent o an e os ste use o t e atest te no og es Dentsu reated osp ta t n ud ng d nner part es or go ern ent o pr s ng ne s agen es ne spaper a ne or d t out os ng t e d st n t e officials and foreign media, all of which contributed pu s ers ad ert sers and onsu ers pa t o e t er t e t eater or te no og s to t e su t s su ess resu ted n an pa t ar greater t an genera ou d a e een e pe ted Japanese government News distribution
Traditional artisans Local governments Newspaper publishers
Advanced engineers Private sector partner companies Advertisers
1901 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2020
New Spectator Experience In order to a e t eas er to understand en ng matches where it is difficult to clearly see decisive Sports groups Sponsored Sports o ents t t e na ed e e te no og es su as a ne earn ng a e een used s e ps Creative technologists e o o p s ere o ered Sports e o or te e s on road asts and on oo ers sua e t e tra e tor o ea s ord newspaper stories that electrified the and t e p a ers o etr data ean e t e o u e o app ause and eer ng are s o n on a ent re nat on s ena ed Dentsu to Broadcasting de onstrate to t e apanese ad ert s ng s reen aptur ng t e e te ent at t e enue ndustr t e us ness potent a o s as resu ted n a ne spe tator e per en e t at a o s one to e per en e t e strateg es o ot sport ng e ents Marketers en ng o ense and de ense en ng tra ng and sua at on s ste R o at s Regional Revitalization Commercial Broadcast Dentsu ad o ated a turn Local governments Television po et s Go a to no to address on erns a out t e a ng are u resear ed te no og a Television d nd ng popu at on o no t Local students ad an es n t e n ted tates Dentsu as broadcasting u u re e ture ord ng t e confident that the age of television technologies stor a ast e to n s stor and road ast ng ou d o e to apan e ar ere dep ted us ng Town revitalization or ed t ne spaper pu s ers to posters and p oto a u s reated leaders Newspaper reate pr ate road ast ng stat ons and publishers n ooperat on t to n contributed significantly to the re ta at on eaders and o a esta s ent o a us ness ode g s oo students e e ped ased on ad ert s ng re enue or Advertisers Dentsu produ e ater a s to o er a road ast ng stat ons s o ase t e area s potent a
20 Dentsu Group Integrated Report 2020 Our Strategy Connecting Diverse Stakeholders
Creating New Value for Society by Connecting Diverse Stakeholders FOCUS 2 Hokkaido Ballpark
In 20 Dentsu In n on un t on t o a do ppon a g ters ase a u o td and oods td esta s ed t e ne o pan FOCUS 1 g ters ports nterta n ent o td o ns and operates a ne ase a stad u or t e
TM Photo by Francois Nel - World Rugby via Getty Images o a do ppon a g ters s o pan Rugby World Cup 2019 e od es t e ne ase a stad u and o a do Connecting Dentsu Group Diverse Stakeholders for Regional Revitalization a par age onstru t on p an s edu ed Dur ng t e Rug or d up 20 n apan e supported to open n 202 e s te e t e s o a su ess u tourna ent onne t ng not on rug o o a do ans around t e or d ut a so ar ous sta e o ders Hokkaido residents e pro e t ore t an s p e ng anot er n ud ng or d Rug t e apan Rug oot a n on r an ase a us ness represents a ne or o ur an o reat on and t e Rug or d up 20 rgan ng o ttee as de e op ent de e op ent des gned to enr peop e s es o a ue Local government e as orporate sponsors road asters ne spaper entered around en e n add t on to t e stad u tse t ere t ar ous pu s ers and o a go ern ents t e o a do e o er a a t es e ent s tes a par partners Regional communities e tourna ent reated tre endous e te ent and a par and ot er a en t es n t e o a do a par attra ted attent on around t e g o e attra t ng ro ds t e s te reate ne a ue or Dentsu s e ent anage ent tea rea ed t e dea Hokkaido Nippon-Ham Fighters t e o a o un t approa to e ent anage ent or t e uture pro ot ng e t generat on t et sa es us ng R and d g ta easures ta ored to e enterta n ent Fans attra t ans and potent a spe tators reat ng an e t ng e ent enue r ng ng spe tators toget er e a ng Media e tens e use o so a ed a and ass ed a ad ert s ng Dentsu Group o pan es n apan and o erseas e eraged their respective fields of expertise and combined their ntegrated apa t es to a o a road range o peop e n various areas to benefit from significant value.
Connecting Dentsu Group Diverse Stakeholders through FOCUS 3 the Rugby World Cup Budweiser and Jackie Robinson’s 100th birthday
Rugby World Cup 2019 Organizing Committee In 20 Dentsu Group e ped ud e ser onor a e Ro nson n t e on t e o as on o s 00t rt da as a a o World Rugby re n or ng t e portan e o d ers t and n us on n sports reated e te ent e e ped s are a e Ro nson s stor to a o e ne Japan Rugby audience and generation. We created a powerful film directed Football Union surround ng rug p e ee t at dra s a para e et een t e ate ort es and o nt a t at on t e present t es de er ng an pa t u essage a out Corporate sponsors t ent d ers t and n us on dd t ona a ted ed t on ud e ser o pan es ott e posters and a pro ot ona ase a a e od ed t e Government sp r t o t e a pa gn ntegrat ng se era un ue des gn ourna ent e e ents su as t e un t o a and te re nd ng us o Mass media operat ons support t e rea o t e o or arr er t e red st t es t e o or o use o utt ng edge ud e ser t at un te t e t o parts a e Ro nson s s gnature te no og es Fans and s egendar nu er ort t o ents ro e er ted ed t on a e Ro nson ud e ser so d dur ng t e season as
Social media donated to t e a e Ro nson oundat on to support ts e orts a ross t e ountr e a pa gn ad a uge pa t e ng o ented on n a or ed a anne s and onne t ng our rand to t e ase a do a n and at t e sa e t e re ed an portant part o stor to appea t e portan e o d ers t and n us on
21 Dentsu Group Integrated Report 2020 Our Strategy Connecting Diverse Stakeholders
Creating New Value for Society by Connecting Diverse Stakeholders FOCUS 2 Hokkaido Ballpark
In 20 Dentsu In n on un t on t o a do ppon a g ters ase a u o td and oods td esta s ed t e ne o pan FOCUS 1 g ters ports nterta n ent o td o ns and operates a ne ase a stad u or t e
TM Photo by Francois Nel - World Rugby via Getty Images o a do ppon a g ters s o pan Rugby World Cup 2019 e od es t e ne ase a stad u and o a do Connecting Dentsu Group Diverse Stakeholders for Regional Revitalization a par age onstru t on p an s edu ed Dur ng t e Rug or d up 20 n apan e supported to open n 202 e s te e t e s o a su ess u tourna ent onne t ng not on rug o o a do ans around t e or d ut a so ar ous sta e o ders Hokkaido residents e pro e t ore t an s p e ng anot er n ud ng or d Rug t e apan Rug oot a n on r an ase a us ness represents a ne or o ur an o reat on and t e Rug or d up 20 rgan ng o ttee as de e op ent de e op ent des gned to enr peop e s es o a ue Local government e as orporate sponsors road asters ne spaper entered around en e n add t on to t e stad u tse t ere t ar ous pu s ers and o a go ern ents t e o a do e o er a a t es e ent s tes a par partners Regional communities e tourna ent reated tre endous e te ent and a par and ot er a en t es n t e o a do a par attra ted attent on around t e g o e attra t ng ro ds t e s te reate ne a ue or Dentsu s e ent anage ent tea rea ed t e dea Hokkaido Nippon-Ham Fighters t e o a o un t approa to e ent anage ent or t e uture pro ot ng e t generat on t et sa es us ng R and d g ta easures ta ored to e enterta n ent Fans attra t ans and potent a spe tators reat ng an e t ng e ent enue r ng ng spe tators toget er e a ng Media e tens e use o so a ed a and ass ed a ad ert s ng Dentsu Group o pan es n apan and o erseas e eraged their respective fields of expertise and combined their ntegrated apa t es to a o a road range o peop e n various areas to benefit from significant value.
Connecting Dentsu Group Diverse Stakeholders through FOCUS 3 the Rugby World Cup Budweiser and Jackie Robinson’s 100th birthday
Rugby World Cup 2019 Organizing Committee In 20 Dentsu Group e ped ud e ser onor a e Ro nson n t e on t e o as on o s 00t rt da as a a o World Rugby re n or ng t e portan e o d ers t and n us on n sports reated e te ent e e ped s are a e Ro nson s stor to a o e ne Japan Rugby audience and generation. We created a powerful film directed Football Union surround ng rug p e ee t at dra s a para e et een t e ate ort es and o nt a t at on t e present t es de er ng an pa t u essage a out Corporate sponsors t ent d ers t and n us on dd t ona a ted ed t on ud e ser o pan es ott e posters and a pro ot ona ase a a e od ed t e Government sp r t o t e a pa gn ntegrat ng se era un ue des gn ourna ent e e ents su as t e un t o a and te re nd ng us o Mass media operat ons support t e rea o t e o or arr er t e red st t es t e o or o use o utt ng edge ud e ser t at un te t e t o parts a e Ro nson s s gnature te no og es Fans and s egendar nu er ort t o ents ro e er ted ed t on a e Ro nson ud e ser so d dur ng t e season as
Social media donated to t e a e Ro nson oundat on to support ts e orts a ross t e ountr e a pa gn ad a uge pa t e ng o ented on n a or ed a anne s and onne t ng our rand to t e ase a do a n and at t e sa e t e re ed an portant part o stor to appea t e portan e o d ers t and n us on
22 Dentsu Group Integrated Report 2020 Our Strategy CFO’s Message
Strengthening Digital Capabilities
t e apan net or to or d na tea s a e to p e entat on o t e Integrated Gro t o ut ons t ese ost a t ons to ont nue n 2020 pro ng as trans or ed D s ent propos t on a o ng ts strong a an e s eet e are n an e e ent Continued transition to digital New business model so e our ents ssues at speed s a resu t o strateg urope t e dd e ast and r a arg ns o er t e us to o er u ntegrated ser es and so ut ons pos t on n ter s o our a t to pro ure und ng D g ta at on as een a o us or t e Dentsu Group pro d ng our ents t nno at e and ntegrated e Group s Internat ona us ness no generates reported 0 organ gro t t se en ar ets a ross t e ar et ng a ongs de our reat e and e Group re a ns e ap ta ed t a strong or t e past de ade and d g ta ad ert s ng data so ut ons t e Group as esta s ed a g degree 0 o t e Group s re enue ess ost o sa es t n t e reg on de er ng pos t e gro t e ed a o er ngs a an e s eet and a red t rat ng ro apan s R and d g ta so ut ons re a n t e astest o trust t an ents e e e e e an de er gross profit almost doubling within seven years Asia-Pacific (APAC) region reported -12.3% organic In ar 2020 e announ ed t e a e erated Rat ng and In est ent In or at on In R I gro t areas or t e Dentsu Group e ont nue to susta na e re enue gro t support ng d g ta o o ng t e a u s t on o eg s Group gro t dr en underper or an e n t e nese e Dentsu Group ont nues to use as an u out o t e re a n ng s ares o er e e su ess u trans t on our us ness n reas ng our trans or at on or our ents n apan In 20 o e er Dentsu eg s et or D and ustra an ar ets a e erant o our strateg ere a u s t ons pur ase o t ese s ares as roug t t e Group t o e posure n t ese areas and so ng gger pro e s In 20 t e organ gro t rate o re enue ess de ered organ gro t o ese resu ts ere e sa su ess t ne us ness ns n 20 a o our Group to ga n s a e apa t es and major benefits. Firstly the deal will deliver single-digit or our ents t at go e ond ar et ng ost o sa es n apan as 0 ear on ear e adversely affected by underperformance in five key D de ered an ndustr ead ng per or an e or geographical infill in areas of high growth. a ret on or 2020 and se ond t a o Group anage ent re ogn es n est ent as an Arinobu Soga e Internat ona us ness as ong een o used gro t n d g ta re ated ser es ont nues to o set ar ets ustra a ra na ran e and t e ed a net ne us ness t n o ngs added e ont nue to n est n g ua t gro t DAN to accelerate the final stages of the integration portant eans o a e ng gro t and t re a ns D re tor and e ut e Officer on t e g gro t d g ta do a n and no generates t e trans t on o t e trad t ona ed a us ness nto e underper or an e o t ese ar ets resu ted n a us nesses and n 20 a tota o ne a u s t ons o er e nto t e der group a pr or t or ap ta a o at on e e susta na e 0 o ts re enue ess ost o sa es ro d g ta or digital. The Group saw a significant increase in sales de s on to p e ent a restru tur ng progra to ere s gned o o t e argest dea s ere ga orporate a ue gro t as t e greatest return e an e apan us ness rea ed 2 o ts re enue ro n t e d g ta ar et ng and pro ot on do a ns return t e us ness to gro t and a o arg n and ute ga a data and ana t s o pan pro de s are o ders and a ot er sta e o ders d g ta or n 20 ean ng t at as a Group a ost Within the digital domain, we saw significant de er or 2020 and e ond redu ng osts onso dated operat ng arg n n 20 as 0 providing offshore services in data analytics fields, e e e e t at e orts re ated to s are o der 0 o our re enue ess ost o sa es s d g ta on a us ness e pans on t roug a ap ta and us ness 0 on per annu e restru tur ng do n 0 as s po nts ear on ear due to p anned o ned er e e ute a d re t to onsu er d n reas ng un erta nt es surround ng t e post returns are n ed to sta e o der trust n and onso dated as s a an e t t e G GR resu t ng n a a e erated t e trans or at on to our ne us ness n est ents n t e de e op ent o u an resour es ar et ng agen o ned rospe t d g ta or d t e age o I and ng t ID e pe tat ons or t e Group In 20 e arr ed out 2 gro t n d g ta do a n ode to de er ntegrated so ut ons to our ents en an e ent o I n rastru ture n apan and e e e e t e Group an p a a r t a ro e s are u a s o appro ate 0 0 on In na n t e ourt uarter o 20 t e Rug and ensure our ser es are eas er to na gate up ront n est ent n t e d g ta do a n In t e a tat ng d g ta trans or at on a ong our ents uture e ont nue to a e e er e ort to Japan: evolving our business as a or d up ourna ent n apan as a uge su ess e ne us ness ode strea nes t e us ness Internat ona us ness t e arg n e due to re enue and their customers. Our solid financial foundation pro de o pre ens e s are o der returns t at growth partner for our clients start ng a ne sports o e ent t roug out apan nto t ree nes o us ness o s reat e ed a pressure n t e reg on ar et ng t at ana es and ut es arge a ounts o ena es us to a e de s ons aster t an e er and o ne ont nuous and sta e d dends t t e roug out t e Dentsu Group s 20 ear stor s de onstrates o t e Dentsu Group an r ng a and CRM. This simplification ensures the business is arg n pro e ent s a e pr or t a ross t e diverse data to dramatically improve the efficacy of a e e nno at on t out ear ng ange In est ents flexible acquisition of treasury stock. our us ness n apan as a nta ned a arge s are pos t e pa t on our so et t roug a deep set up around our ents needs to n eep and Group go ng or ard In t e Internat ona us ness a ad ert s ng as t e potent a to unda enta en an e o pet t eness n turn I a een a are t at a ng a an e s eet o t e do est ar et s a ead ng apanese understand ng o our ents t e r usto ers and gro t e r est usto ers e ng dea ed newly appointed Cheif Operating Officer will continue ange t e ndustr s us ness ode generate as and e p t e Group a nta n a ea t profits and exceeding the level of returns expected o pan t a so d do est us ness n t e or d s so et tse dra ng on our d erse apa t es data dr en and te ena ed to trans or our nterna operat ons to dr e e Dentsu Group a u red a a or t sta e n financial position. If this virtuous circle is maintained, I s are o ders are portant ss ons o t e t rd argest ad ert s ng ar et Dentsu Group s sa d a ross t e Group e are a e to de onstrate our Reg ona t e er as s o ed a strong profitable growth in 2020 and beyond. In Japan a Merkle in 2016. Merkle has flourished under Dentsu’s e e e e an a e e susta na e gro t us e str e to ensure t at anage ent to e un e an ot er g o a agen group a t to de er ange at s a e per or an e t 2 organ gro t nu er nu er o n t at es started n t e ourt uarter o o ners p and no ontr utes a ost a uarter o t present t e Dentsu Group as a so d reputat on responds to sta e o der e pe tat ons e ont nue to dra on our e pert se ro a ross rgan gro t rate Interna gro t rate e ud ng t e e e ts o o e ents ere on n t e ar et t roug t e 20 de ered so e arg n pro e ent I e pe t re enues t n t e Internat ona us ness er e for its ability to generate positive cash flows and for e ange rates and
Percentage of Consolidated Revenue Less Cost of Share in Japanese Advertising Market Three Lines of Business Sales Generated by Digital Domain Internat ona us ness onso dated apan us ness 0 0 0 2 ased on ad ert s ng spend ng 0 n apan n 20 er entages are 27.7% a u ated on t e as s o t e CREATIVE MEDIA CRM 0 2 No. 1 Share Dentsu Group s apan us ness sa es ategor 0 22 2 20 20
0
0 20 20 20 20 20 20
23 Dentsu Group Integrated Report 2020 Our Strategy CFO’s Message
Strengthening Digital Capabilities
t e apan net or to or d na tea s a e to p e entat on o t e Integrated Gro t o ut ons t ese ost a t ons to ont nue n 2020 pro ng as trans or ed D s ent propos t on a o ng ts strong a an e s eet e are n an e e ent Continued transition to digital New business model so e our ents ssues at speed s a resu t o strateg urope t e dd e ast and r a arg ns o er t e us to o er u ntegrated ser es and so ut ons pos t on n ter s o our a t to pro ure und ng D g ta at on as een a o us or t e Dentsu Group pro d ng our ents t nno at e and ntegrated e Group s Internat ona us ness no generates reported 0 organ gro t t se en ar ets a ross t e ar et ng a ongs de our reat e and e Group re a ns e ap ta ed t a strong or t e past de ade and d g ta ad ert s ng data so ut ons t e Group as esta s ed a g degree 0 o t e Group s re enue ess ost o sa es t n t e reg on de er ng pos t e gro t e ed a o er ngs a an e s eet and a red t rat ng ro apan s R and d g ta so ut ons re a n t e astest o trust t an ents e e e e e an de er gross profit almost doubling within seven years Asia-Pacific (APAC) region reported -12.3% organic In ar 2020 e announ ed t e a e erated Rat ng and In est ent In or at on In R I gro t areas or t e Dentsu Group e ont nue to susta na e re enue gro t support ng d g ta o o ng t e a u s t on o eg s Group gro t dr en underper or an e n t e nese e Dentsu Group ont nues to use as an u out o t e re a n ng s ares o er e e su ess u trans t on our us ness n reas ng our trans or at on or our ents n apan In 20 o e er Dentsu eg s et or D and ustra an ar ets a e erant o our strateg ere a u s t ons pur ase o t ese s ares as roug t t e Group t o e posure n t ese areas and so ng gger pro e s In 20 t e organ gro t rate o re enue ess de ered organ gro t o ese resu ts ere e sa su ess t ne us ness ns n 20 a o our Group to ga n s a e apa t es and major benefits. Firstly the deal will deliver single-digit or our ents t at go e ond ar et ng ost o sa es n apan as 0 ear on ear e adversely affected by underperformance in five key D de ered an ndustr ead ng per or an e or geographical infill in areas of high growth. a ret on or 2020 and se ond t a o Group anage ent re ogn es n est ent as an Arinobu Soga e Internat ona us ness as ong een o used gro t n d g ta re ated ser es ont nues to o set ar ets ustra a ra na ran e and t e ed a net ne us ness t n o ngs added e ont nue to n est n g ua t gro t DAN to accelerate the final stages of the integration portant eans o a e ng gro t and t re a ns D re tor and e ut e Officer on t e g gro t d g ta do a n and no generates t e trans t on o t e trad t ona ed a us ness nto e underper or an e o t ese ar ets resu ted n a us nesses and n 20 a tota o ne a u s t ons o er e nto t e der group a pr or t or ap ta a o at on e e susta na e 0 o ts re enue ess ost o sa es ro d g ta or digital. The Group saw a significant increase in sales de s on to p e ent a restru tur ng progra to ere s gned o o t e argest dea s ere ga orporate a ue gro t as t e greatest return e an e apan us ness rea ed 2 o ts re enue ro n t e d g ta ar et ng and pro ot on do a ns return t e us ness to gro t and a o arg n and ute ga a data and ana t s o pan pro de s are o ders and a ot er sta e o ders d g ta or n 20 ean ng t at as a Group a ost Within the digital domain, we saw significant de er or 2020 and e ond redu ng osts onso dated operat ng arg n n 20 as 0 providing offshore services in data analytics fields, e e e e t at e orts re ated to s are o der 0 o our re enue ess ost o sa es s d g ta on a us ness e pans on t roug a ap ta and us ness 0 on per annu e restru tur ng do n 0 as s po nts ear on ear due to p anned o ned er e e ute a d re t to onsu er d n reas ng un erta nt es surround ng t e post returns are n ed to sta e o der trust n and onso dated as s a an e t t e G GR resu t ng n a a e erated t e trans or at on to our ne us ness n est ents n t e de e op ent o u an resour es ar et ng agen o ned rospe t d g ta or d t e age o I and ng t ID e pe tat ons or t e Group In 20 e arr ed out 2 gro t n d g ta do a n ode to de er ntegrated so ut ons to our ents en an e ent o I n rastru ture n apan and e e e e t e Group an p a a r t a ro e s are u a s o appro ate 0 0 on In na n t e ourt uarter o 20 t e Rug and ensure our ser es are eas er to na gate up ront n est ent n t e d g ta do a n In t e a tat ng d g ta trans or at on a ong our ents uture e ont nue to a e e er e ort to Japan: evolving our business as a or d up ourna ent n apan as a uge su ess e ne us ness ode strea nes t e us ness Internat ona us ness t e arg n e due to re enue and their customers. Our solid financial foundation pro de o pre ens e s are o der returns t at growth partner for our clients start ng a ne sports o e ent t roug out apan nto t ree nes o us ness o s reat e ed a pressure n t e reg on ar et ng t at ana es and ut es arge a ounts o ena es us to a e de s ons aster t an e er and o ne ont nuous and sta e d dends t t e roug out t e Dentsu Group s 20 ear stor s de onstrates o t e Dentsu Group an r ng a and CRM. This simplification ensures the business is arg n pro e ent s a e pr or t a ross t e diverse data to dramatically improve the efficacy of a e e nno at on t out ear ng ange In est ents flexible acquisition of treasury stock. our us ness n apan as a nta ned a arge s are pos t e pa t on our so et t roug a deep set up around our ents needs to n eep and Group go ng or ard In t e Internat ona us ness a ad ert s ng as t e potent a to unda enta en an e o pet t eness n turn I a een a are t at a ng a an e s eet o t e do est ar et s a ead ng apanese understand ng o our ents t e r usto ers and gro t e r est usto ers e ng dea ed newly appointed Cheif Operating Officer will continue ange t e ndustr s us ness ode generate as and e p t e Group a nta n a ea t profits and exceeding the level of returns expected o pan t a so d do est us ness n t e or d s so et tse dra ng on our d erse apa t es data dr en and te ena ed to trans or our nterna operat ons to dr e e Dentsu Group a u red a a or t sta e n financial position. If this virtuous circle is maintained, I s are o ders are portant ss ons o t e t rd argest ad ert s ng ar et Dentsu Group s sa d a ross t e Group e are a e to de onstrate our Reg ona t e er as s o ed a strong profitable growth in 2020 and beyond. In Japan a Merkle in 2016. Merkle has flourished under Dentsu’s e e e e an a e e susta na e gro t us e str e to ensure t at anage ent to e un e an ot er g o a agen group a t to de er ange at s a e per or an e t 2 organ gro t nu er nu er o n t at es started n t e ourt uarter o o ners p and no ontr utes a ost a uarter o t present t e Dentsu Group as a so d reputat on responds to sta e o der e pe tat ons e ont nue to dra on our e pert se ro a ross rgan gro t rate Interna gro t rate e ud ng t e e e ts o o e ents ere on n t e ar et t roug t e 20 de ered so e arg n pro e ent I e pe t re enues t n t e Internat ona us ness er e for its ability to generate positive cash flows and for e ange rates and
Percentage of Consolidated Revenue Less Cost of Share in Japanese Advertising Market Three Lines of Business Sales Generated by Digital Domain Internat ona us ness onso dated apan us ness 0 0 0 2 ased on ad ert s ng spend ng 0 n apan n 20 er entages are 27.7% a u ated on t e as s o t e CREATIVE MEDIA CRM 0 2 No. 1 Share Dentsu Group s apan us ness sa es ategor 0 22 2 20 20
0
0 20 20 20 20 20 20
24 Dentsu Group Integrated Report 2020 Our Strategy CFO’s Message
t e apan net or to or d na tea s a e to p e entat on o t e Integrated Gro t o ut ons t ese ost a t ons to ont nue n 2020 pro ng as trans or ed D s ent propos t on a o ng ts strong a an e s eet e are n an e e ent so e our ents ssues at speed s a resu t o strateg urope t e dd e ast and r a arg ns o er t e us to o er u ntegrated ser es and so ut ons pos t on n ter s o our a t to pro ure und ng D g ta at on as een a o us or t e Dentsu Group pro d ng our ents t nno at e and ntegrated e Group s Internat ona us ness no generates reported 0 organ gro t t se en ar ets a ross t e ar et ng a ongs de our reat e and e Group re a ns e ap ta ed t a strong or t e past de ade and d g ta ad ert s ng data so ut ons t e Group as esta s ed a g degree 0 o t e Group s re enue ess ost o sa es t n t e reg on de er ng pos t e gro t e ed a o er ngs a an e s eet and a red t rat ng ro apan s M&A accelerating strategy R and d g ta so ut ons re a n t e astest o trust t an ents e e e e e an de er gross profit almost doubling within seven years Asia-Pacific (APAC) region reported -12.3% organic In ar 2020 e announ ed t e a e erated Rat ng and In est ent In or at on In R I gro t areas or t e Dentsu Group e ont nue to susta na e re enue gro t support ng d g ta o o ng t e a u s t on o eg s Group gro t dr en underper or an e n t e nese e Dentsu Group ont nues to use as an u out o t e re a n ng s ares o er e e su ess u trans t on our us ness n reas ng our trans or at on or our ents n apan In 20 o e er Dentsu eg s et or D and ustra an ar ets a e erant o our strateg ere a u s t ons pur ase o t ese s ares as roug t t e Group t o Delivering strong shareholder returns e posure n t ese areas and so ng gger pro e s In 20 t e organ gro t rate o re enue ess de ered organ gro t o ese resu ts ere e sa su ess t ne us ness ns n 20 a o our Group to ga n s a e apa t es and major benefits. Firstly the deal will deliver single-digit or our ents t at go e ond ar et ng ost o sa es n apan as 0 ear on ear e adversely affected by underperformance in five key D de ered an ndustr ead ng per or an e or geographical infill in areas of high growth. a ret on or 2020 and se ond t a o Group anage ent re ogn es n est ent as an e Internat ona us ness as ong een o used gro t n d g ta re ated ser es ont nues to o set ar ets ustra a ra na ran e and t e ed a net ne us ness t n o ngs added e ont nue to n est n g ua t gro t DAN to accelerate the final stages of the integration portant eans o a e ng gro t and t re a ns on t e g gro t d g ta do a n and no generates t e trans t on o t e trad t ona ed a us ness nto e underper or an e o t ese ar ets resu ted n a us nesses and n 20 a tota o ne a u s t ons o er e nto t e der group a pr or t or ap ta a o at on e e susta na e 0 o ts re enue ess ost o sa es ro d g ta or digital. The Group saw a significant increase in sales de s on to p e ent a restru tur ng progra to ere s gned o o t e argest dea s ere ga orporate a ue gro t as t e greatest return e an Improving operating margin e apan us ness rea ed 2 o ts re enue ro n t e d g ta ar et ng and pro ot on do a ns return t e us ness to gro t and a o arg n and ute ga a data and ana t s o pan pro de s are o ders and a ot er sta e o ders Solid financial foundation critical d g ta or n 20 ean ng t at as a Group a ost Within the digital domain, we saw significant de er or 2020 and e ond redu ng osts onso dated operat ng arg n n 20 as 0 providing offshore services in data analytics fields, e e e e t at e orts re ated to s are o der 0 o our re enue ess ost o sa es s d g ta on a us ness e pans on t roug a ap ta and us ness 0 on per annu e restru tur ng do n 0 as s po nts ear on ear due to p anned o ned er e e ute a d re t to onsu er d n reas ng un erta nt es surround ng t e post returns are n ed to sta e o der trust n and onso dated as s a an e t t e G GR resu t ng n a a e erated t e trans or at on to our ne us ness n est ents n t e de e op ent o u an resour es ar et ng agen o ned rospe t d g ta or d t e age o I and ng t ID e pe tat ons or t e Group In 20 e arr ed out 2 gro t n d g ta do a n ode to de er ntegrated so ut ons to our ents en an e ent o I n rastru ture n apan and e e e e t e Group an p a a r t a ro e s are u a s o appro ate 0 0 on In na n t e ourt uarter o 20 t e Rug and ensure our ser es are eas er to na gate up ront n est ent n t e d g ta do a n In t e a tat ng d g ta trans or at on a ong our ents uture e ont nue to a e e er e ort to Paradigm shift provided by data or d up ourna ent n apan as a uge su ess e ne us ness ode strea nes t e us ness Internat ona us ness t e arg n e due to re enue and their customers. Our solid financial foundation pro de o pre ens e s are o der returns t at start ng a ne sports o e ent t roug out apan nto t ree nes o us ness o s reat e ed a pressure n t e reg on ar et ng t at ana es and ut es arge a ounts o ena es us to a e de s ons aster t an e er and o ne ont nuous and sta e d dends t t e roug out t e Dentsu Group s 20 ear stor s de onstrates o t e Dentsu Group an r ng a and CRM. This simplification ensures the business is arg n pro e ent s a e pr or t a ross t e diverse data to dramatically improve the efficacy of a e e nno at on t out ear ng ange In est ents flexible acquisition of treasury stock. our us ness n apan as a nta ned a arge s are pos t e pa t on our so et t roug a deep set up around our ents needs to n eep and Group go ng or ard In t e Internat ona us ness a ad ert s ng as t e potent a to unda enta en an e o pet t eness n turn I a een a are t at a ng a an e s eet o t e do est ar et s a ead ng apanese understand ng o our ents t e r usto ers and gro t e r est usto ers e ng dea ed newly appointed Cheif Operating Officer will continue ange t e ndustr s us ness ode generate as and e p t e Group a nta n a ea t profits and exceeding the level of returns expected o pan t a so d do est us ness n t e or d s so et tse dra ng on our d erse apa t es data dr en and te ena ed to trans or our nterna operat ons to dr e e Dentsu Group a u red a a or t sta e n financial position. If this virtuous circle is maintained, I s are o ders are portant ss ons o t e t rd argest ad ert s ng ar et Dentsu Group s sa d a ross t e Group e are a e to de onstrate our Reg ona t e er as s o ed a strong profitable growth in 2020 and beyond. In Japan a Merkle in 2016. Merkle has flourished under Dentsu’s e e e e an a e e susta na e gro t us e str e to ensure t at anage ent to e un e an ot er g o a agen group a t to de er ange at s a e per or an e t 2 organ gro t nu er nu er o n t at es started n t e ourt uarter o o ners p and no ontr utes a ost a uarter o t present t e Dentsu Group as a so d reputat on responds to sta e o der e pe tat ons e ont nue to dra on our e pert se ro a ross o e ents ere on n t e ar et t roug t e 20 de ered so e arg n pro e ent I e pe t re enues t n t e Internat ona us ness er e for its ability to generate positive cash flows and for
Compound Annual Growth Rate of Revenue Total Mergers and Acquisitions in International Business Ratings Information Cash Dividend per Share Less Cost of Sales over Three Years; Comparison with the Peers Dentsu Group as re e ed g rat ngs ro t e o o ng red t 0 rat ng agen en 00 0 0 9.5% ong ter ort ter 0 de t de t 0 Rat ng and In est ent In or at on a 5.0% In R I 0 Competitors’ 2.9% average 2.0% 0 2 or urt er n or at on p ease s t t e agen s e s te Rat ng and In est ent In or at on In R I 1.0% -1.0% 20 20 20 20 20 20 20 ttps r o p en nde t Dentsu Aegis A B C D 0 Network De 20 20 20 20 20 2020 (International business) ore ast
25 Dentsu Group Integrated Report 2020 Our Strategy CFO’s Message
t e apan net or to or d na tea s a e to p e entat on o t e Integrated Gro t o ut ons t ese ost a t ons to ont nue n 2020 pro ng as trans or ed D s ent propos t on a o ng ts strong a an e s eet e are n an e e ent so e our ents ssues at speed s a resu t o strateg urope t e dd e ast and r a arg ns o er t e us to o er u ntegrated ser es and so ut ons pos t on n ter s o our a t to pro ure und ng D g ta at on as een a o us or t e Dentsu Group pro d ng our ents t nno at e and ntegrated e Group s Internat ona us ness no generates reported 0 organ gro t t se en ar ets a ross t e ar et ng a ongs de our reat e and e Group re a ns e ap ta ed t a strong or t e past de ade and d g ta ad ert s ng data so ut ons t e Group as esta s ed a g degree 0 o t e Group s re enue ess ost o sa es t n t e reg on de er ng pos t e gro t e ed a o er ngs a an e s eet and a red t rat ng ro apan s M&A accelerating strategy R and d g ta so ut ons re a n t e astest o trust t an ents e e e e e an de er gross profit almost doubling within seven years Asia-Pacific (APAC) region reported -12.3% organic In ar 2020 e announ ed t e a e erated Rat ng and In est ent In or at on In R I gro t areas or t e Dentsu Group e ont nue to susta na e re enue gro t support ng d g ta o o ng t e a u s t on o eg s Group gro t dr en underper or an e n t e nese e Dentsu Group ont nues to use as an u out o t e re a n ng s ares o er e e su ess u trans t on our us ness n reas ng our trans or at on or our ents n apan In 20 o e er Dentsu eg s et or D and ustra an ar ets a e erant o our strateg ere a u s t ons pur ase o t ese s ares as roug t t e Group t o Delivering strong shareholder returns e posure n t ese areas and so ng gger pro e s In 20 t e organ gro t rate o re enue ess de ered organ gro t o ese resu ts ere e sa su ess t ne us ness ns n 20 a o our Group to ga n s a e apa t es and major benefits. Firstly the deal will deliver single-digit or our ents t at go e ond ar et ng ost o sa es n apan as 0 ear on ear e adversely affected by underperformance in five key D de ered an ndustr ead ng per or an e or geographical infill in areas of high growth. a ret on or 2020 and se ond t a o Group anage ent re ogn es n est ent as an e Internat ona us ness as ong een o used gro t n d g ta re ated ser es ont nues to o set ar ets ustra a ra na ran e and t e ed a net ne us ness t n o ngs added e ont nue to n est n g ua t gro t DAN to accelerate the final stages of the integration portant eans o a e ng gro t and t re a ns on t e g gro t d g ta do a n and no generates t e trans t on o t e trad t ona ed a us ness nto e underper or an e o t ese ar ets resu ted n a us nesses and n 20 a tota o ne a u s t ons o er e nto t e der group a pr or t or ap ta a o at on e e susta na e 0 o ts re enue ess ost o sa es ro d g ta or digital. The Group saw a significant increase in sales de s on to p e ent a restru tur ng progra to ere s gned o o t e argest dea s ere ga orporate a ue gro t as t e greatest return e an Improving operating margin e apan us ness rea ed 2 o ts re enue ro n t e d g ta ar et ng and pro ot on do a ns return t e us ness to gro t and a o arg n and ute ga a data and ana t s o pan pro de s are o ders and a ot er sta e o ders Solid financial foundation critical d g ta or n 20 ean ng t at as a Group a ost Within the digital domain, we saw significant de er or 2020 and e ond redu ng osts onso dated operat ng arg n n 20 as 0 providing offshore services in data analytics fields, e e e e t at e orts re ated to s are o der 0 o our re enue ess ost o sa es s d g ta on a us ness e pans on t roug a ap ta and us ness 0 on per annu e restru tur ng do n 0 as s po nts ear on ear due to p anned o ned er e e ute a d re t to onsu er d n reas ng un erta nt es surround ng t e post returns are n ed to sta e o der trust n and onso dated as s a an e t t e G GR resu t ng n a a e erated t e trans or at on to our ne us ness n est ents n t e de e op ent o u an resour es ar et ng agen o ned rospe t d g ta or d t e age o I and ng t ID e pe tat ons or t e Group In 20 e arr ed out 2 gro t n d g ta do a n ode to de er ntegrated so ut ons to our ents en an e ent o I n rastru ture n apan and e e e e t e Group an p a a r t a ro e s are u a s o appro ate 0 0 on In na n t e ourt uarter o 20 t e Rug and ensure our ser es are eas er to na gate up ront n est ent n t e d g ta do a n In t e a tat ng d g ta trans or at on a ong our ents uture e ont nue to a e e er e ort to Paradigm shift provided by data or d up ourna ent n apan as a uge su ess e ne us ness ode strea nes t e us ness Internat ona us ness t e arg n e due to re enue and their customers. Our solid financial foundation pro de o pre ens e s are o der returns t at start ng a ne sports o e ent t roug out apan nto t ree nes o us ness o s reat e ed a pressure n t e reg on ar et ng t at ana es and ut es arge a ounts o ena es us to a e de s ons aster t an e er and o ne ont nuous and sta e d dends t t e roug out t e Dentsu Group s 20 ear stor s de onstrates o t e Dentsu Group an r ng a and CRM. This simplification ensures the business is arg n pro e ent s a e pr or t a ross t e diverse data to dramatically improve the efficacy of a e e nno at on t out ear ng ange In est ents flexible acquisition of treasury stock. our us ness n apan as a nta ned a arge s are pos t e pa t on our so et t roug a deep set up around our ents needs to n eep and Group go ng or ard In t e Internat ona us ness a ad ert s ng as t e potent a to unda enta en an e o pet t eness n turn I a een a are t at a ng a an e s eet o t e do est ar et s a ead ng apanese understand ng o our ents t e r usto ers and gro t e r est usto ers e ng dea ed newly appointed Cheif Operating Officer will continue ange t e ndustr s us ness ode generate as and e p t e Group a nta n a ea t profits and exceeding the level of returns expected o pan t a so d do est us ness n t e or d s so et tse dra ng on our d erse apa t es data dr en and te ena ed to trans or our nterna operat ons to dr e e Dentsu Group a u red a a or t sta e n financial position. If this virtuous circle is maintained, I s are o ders are portant ss ons o t e t rd argest ad ert s ng ar et Dentsu Group s sa d a ross t e Group e are a e to de onstrate our Reg ona t e er as s o ed a strong profitable growth in 2020 and beyond. In Japan a Merkle in 2016. Merkle has flourished under Dentsu’s e e e e an a e e susta na e gro t us e str e to ensure t at anage ent to e un e an ot er g o a agen group a t to de er ange at s a e per or an e t 2 organ gro t nu er nu er o n t at es started n t e ourt uarter o o ners p and no ontr utes a ost a uarter o t present t e Dentsu Group as a so d reputat on responds to sta e o der e pe tat ons e ont nue to dra on our e pert se ro a ross o e ents ere on n t e ar et t roug t e 20 de ered so e arg n pro e ent I e pe t re enues t n t e Internat ona us ness er e for its ability to generate positive cash flows and for
Compound Annual Growth Rate of Revenue Total Mergers and Acquisitions in International Business Ratings Information Cash Dividend per Share Less Cost of Sales over Three Years; Comparison with the Peers Dentsu Group as re e ed g rat ngs ro t e o o ng red t 0 rat ng agen en 00 0 0 9.5% ong ter ort ter 0 de t de t 0 Rat ng and In est ent In or at on a 5.0% In R I 0 Competitors’ 2.9% average 2.0% 0 2 or urt er n or at on p ease s t t e agen s e s te Rat ng and In est ent In or at on In R I 1.0% -1.0% 20 20 20 20 20 20 20 ttps r o p en nde t Dentsu Aegis A B C D 0 Network De 20 20 20 20 20 2020 (International business) ore ast
26 Dentsu Group Integrated Report 2020 Contents
Leaders in Conversation Leading Transformation in the New Normal p. 29
Japan Business Business p. 31 International Business p. 34
27 Dentsu Group Integrated Report 2020 Contents
Leaders in Conversation Leading Transformation in the New Normal p. 29
Japan Business Business p. 31 International Business p. 34
28 Dentsu Group Integrated Report 2020 Our Business Leaders in Conversation
Leading Transformation in the New Normal
Jacki Kelley, CEO, Dentsu Aegis Network Americas and Yoshihisa Suzuki, Executive Officer, Dentsu Inc. discuss the Dentsu Group’s challenges, opportunities, vision and commitment in this never-before environment.
o t e or d e a e een a e to r se a o e t s e e ur ro e as an agen group s t ore and a enge as a tru g o a o pan e Dentsu ore to ard e p ng our ents us ness susta na Group o es ro a neage o d ers t and n us on t r e or t e ong ter us nesses not e a e to n our or or e and our ggest strengt es n se gro n so at on ut rat er an su eed as part o a reflection and continuous, relentless improvement, onne ted so et o n us e partners ps ndustr Jacki Kelley Yoshihisa Suzuki t a en e ng a e part o our er tage a an es and o nt entures t t e pu se tor e CEO, Executive Officer, e are dou ng do n our o t ent to our ust o ster our urrent andate o de er ng gro t Dentsu Aegis Network, Dentsu Inc. e p o ees ents and so et to e ore transparent so ut ons ntrodu ng ntegrated so ut ons t at Americas o der and ra er n u d ng a or d ass or p a e address un et needs n so et e s u taneous that reflects our values and the communities we serve; reat ng enterpr se a ue putt ng so et and t e driving sustainable growth through innovation; and o un t es n our ent s us nesses operate at de er ng dea ed te ena ed and data ue ed t e enter o our or e an e p rands nterse t t a as een a re ogn ed and auded eader n t e ad ert s ng and Yoshihisa Suzuki initially joined Dentsu Inc. in 1990. He spearheaded and rand trans or at on at a g o a s a e u ture n a ar ore ean ng u a t an ost do toda ed a ndustr or o er 2 ears a o ned Dentsu eg s et or n ed nu erous us ness areas su as t e ar et ng D s on t e 2019 as President, Chief Client Officer DAN US and was appointed to Business Creation Division, and the Promotion Division. Under his Dentsu eg s et or er as n anuar 2020 a ser es on eaders p eop e Dr en ar et ng t e ntegrated ra e or or Leading the transformation of marketing The power of global collaboration the boards of Ad Council, FreshPet and Comic Relief USA and has been aggregat ng and ad an ng t e Dentsu Group s ar et ng et ods as honored with the United Way of New York City’s Power of Women to been deployed. He was the former President of Dentsu Digital Inc. from a e a D eren e ard as e as nu er one on us ness Ins der s 2017 to 2019, and was newly appointed as an Executive Officer of Dentsu e e e an o t e greatest eaps n us ness and e e e t e g o a r s s s unden a trag and 0 ost o er u o en n d ert s ng st In n 2020 energ ng t e strateg o Dentsu s d g ta trans or at on te no og a or trans or at ons ta e p a e n ursts t e er as ta e a ea t n an a s e are dur ng a s ort per od o t e dr en p ota e ents ortunate to a e t e a t to e erage our g o a In t s t e o ange e e p our ents to ast tra presen e and to earn ro our reg ona ar ets t at us ness r t a trans or at ons t roug o st are a ead o us su as and s as Envisioning the new normal post COVID-19 do ng so e reate a ue not on or ents ut a so strateg es end to end o er e so ut ons a ross our pro en n a ua e n t s unpre edented en ron ent or so et as a o e a ne nor a n a ue reat on ed a reat e and R o s r dg ng on ne and ere trad t ona ar et ng p a oo s are o ten e e e past e ont s a e roug t our us ness offline customer experience; identity platforms built nade uate e e ng sens t e to our ents and peop e to test as t e pande e ono and Diversity and integration: The strengths of for the cookie-less world; powerful alliances to deliver confidentiality, we are a so a e to poo our o e t e so eta stor pa ted our pro ess ona and the Dentsu Group true integration in marketing; as well as purpose- and e per en e or ng t ents g o a so t at our persona es n a a e o us ad ant pated or data dr en reat t t at o un ates at t e ents an o e out o t s a ead o t e ga e e are e per en ed n odern stor ut I a e a a s een u u I e e e t e urrent s tuat on r ng out t e nd dua e e e dr ng resu ts at s a e espe a e ted a out t e o a orat on around an optimist. While it may seem difficult to speak of est n t e Dentsu Group e ause e are a partner u u Dentsu sees ar et ng as ounded n peop e sports and enterta n ent ere Dentsu s ega opt s n t e a e o so an de astat ng and t at an so e un oreseen a enges t a reputat on e de e op data dr en ar et ng t at an de er us ness pro des ean ng u d erent at on or t e eart rea ng o ents I e e e e e erge o e ng a e to a e t e poss e poss e e opt u so ut ons or a e ng ent goa s t roug rest o t e or d stronger as an organ at on ore res ent and have exceptional expertise both online and offline, e erag ng ns g ts nto peop e reat t t at spar s u u e sa e ssues are onstant e ng s ared o pass onate as eaders and nd dua s sop st ated ana t s outstand ng reat t and anges n peop e s ee ngs and e a or and a gor t s so e ere e se n t e or d and s n e t e ID u u I agree e ust oo e ond t e d stress and t e un ue o peten e as a so ut ons produ er t at opt e ar et ng n est ents no ng our r s s t s as e o e e en ore e dent o a e see t ese ssues as opportun t es or a unda enta ntegrat ng d erse o peten es and e e ut ng t ents usto ers and potent a usto ers ead to t e or d a etter p a e ents e restart ng ro stru tura trans or at on e are e e u pped to a o t ent to resu ts In o ng to ard a ne dea g er R I on t e part o our ents and en an e t e r ero and re u re speed ar et ng n t e e p our ents o e to ard a or d ere us ness post ID t s a e a su stant a ontr ut on usto ers engage ent as ar et ng pro de onne ted age e a out t e speed o e ng t e gro t re es on t e a t to rea e a us ness to our ents su ess n or at on t at t e need and s ore re e ant to first to establish a de facto standard, with more clients structure that integrates online and offline, and to e e e a enges n t e er as ar ets ere t e en e are a e to o pre end usto ers us ng t e no edge ga ned to pro e e Dentsu rea e ne or onsu pt on and e per en es t at intensified by the social and political events in addition e en urt er t data a a a e n t e G era e Group e a orerunner n s ar ng o on ssues offer a new level of efficiency and satisfaction. By to the public health and financial crisis felt by the rest e a e to u t ate ne re at ons ps t t e around t e or d n ud ng so ut ons and no edge
29 Dentsu Group Integrated Report 2020 Our Business Leaders in Conversation
Leading Transformation in the New Normal
Jacki Kelley, CEO, Dentsu Aegis Network Americas and Yoshihisa Suzuki, Executive Officer, Dentsu Inc. discuss the Dentsu Group’s challenges, opportunities, vision and commitment in this never-before environment.
o t e or d e a e een a e to r se a o e t s e e ur ro e as an agen group s t ore and a enge as a tru g o a o pan e Dentsu ore to ard e p ng our ents us ness susta na Group o es ro a neage o d ers t and n us on t r e or t e ong ter us nesses not e a e to n our or or e and our ggest strengt es n se gro n so at on ut rat er an su eed as part o a reflection and continuous, relentless improvement, onne ted so et o n us e partners ps ndustr Jacki Kelley Yoshihisa Suzuki t a en e ng a e part o our er tage a an es and o nt entures t t e pu se tor e CEO, Executive Officer, e are dou ng do n our o t ent to our ust o ster our urrent andate o de er ng gro t Dentsu Aegis Network, Dentsu Inc. e p o ees ents and so et to e ore transparent so ut ons ntrodu ng ntegrated so ut ons t at Americas o der and ra er n u d ng a or d ass or p a e address un et needs n so et e s u taneous that reflects our values and the communities we serve; reat ng enterpr se a ue putt ng so et and t e driving sustainable growth through innovation; and o un t es n our ent s us nesses operate at de er ng dea ed te ena ed and data ue ed t e enter o our or e an e p rands nterse t t a as een a re ogn ed and auded eader n t e ad ert s ng and Yoshihisa Suzuki initially joined Dentsu Inc. in 1990. He spearheaded and rand trans or at on at a g o a s a e u ture n a ar ore ean ng u a t an ost do toda ed a ndustr or o er 2 ears a o ned Dentsu eg s et or n ed nu erous us ness areas su as t e ar et ng D s on t e 2019 as President, Chief Client Officer DAN US and was appointed to Business Creation Division, and the Promotion Division. Under his Dentsu eg s et or er as n anuar 2020 a ser es on eaders p eop e Dr en ar et ng t e ntegrated ra e or or Leading the transformation of marketing The power of global collaboration the boards of Ad Council, FreshPet and Comic Relief USA and has been aggregat ng and ad an ng t e Dentsu Group s ar et ng et ods as honored with the United Way of New York City’s Power of Women to been deployed. He was the former President of Dentsu Digital Inc. from a e a D eren e ard as e as nu er one on us ness Ins der s 2017 to 2019, and was newly appointed as an Executive Officer of Dentsu e e e an o t e greatest eaps n us ness and e e e t e g o a r s s s unden a trag and 0 ost o er u o en n d ert s ng st In n 2020 energ ng t e strateg o Dentsu s d g ta trans or at on te no og a or trans or at ons ta e p a e n ursts t e er as ta e a ea t n an a s e are dur ng a s ort per od o t e dr en p ota e ents ortunate to a e t e a t to e erage our g o a In t s t e o ange e e p our ents to ast tra presen e and to earn ro our reg ona ar ets t at us ness r t a trans or at ons t roug o st are a ead o us su as and s as Envisioning the new normal post COVID-19 do ng so e reate a ue not on or ents ut a so strateg es end to end o er e so ut ons a ross our pro en n a ua e n t s unpre edented en ron ent or so et as a o e a ne nor a n a ue reat on ed a reat e and R o s r dg ng on ne and ere trad t ona ar et ng p a oo s are o ten e e e past e ont s a e roug t our us ness offline customer experience; identity platforms built nade uate e e ng sens t e to our ents and peop e to test as t e pande e ono and Diversity and integration: The strengths of for the cookie-less world; powerful alliances to deliver confidentiality, we are a so a e to poo our o e t e so eta stor pa ted our pro ess ona and the Dentsu Group true integration in marketing; as well as purpose- and e per en e or ng t ents g o a so t at our persona es n a a e o us ad ant pated or data dr en reat t t at o un ates at t e ents an o e out o t s a ead o t e ga e e are e per en ed n odern stor ut I a e a a s een u u I e e e t e urrent s tuat on r ng out t e nd dua e e e dr ng resu ts at s a e espe a e ted a out t e o a orat on around an optimist. While it may seem difficult to speak of est n t e Dentsu Group e ause e are a partner u u Dentsu sees ar et ng as ounded n peop e sports and enterta n ent ere Dentsu s ega opt s n t e a e o so an de astat ng and t at an so e un oreseen a enges t a reputat on e de e op data dr en ar et ng t at an de er us ness pro des ean ng u d erent at on or t e eart rea ng o ents I e e e e e erge o e ng a e to a e t e poss e poss e e opt u so ut ons or a e ng ent goa s t roug rest o t e or d stronger as an organ at on ore res ent and have exceptional expertise both online and offline, e erag ng ns g ts nto peop e reat t t at spar s u u e sa e ssues are onstant e ng s ared o pass onate as eaders and nd dua s sop st ated ana t s outstand ng reat t and anges n peop e s ee ngs and e a or and a gor t s so e ere e se n t e or d and s n e t e ID u u I agree e ust oo e ond t e d stress and t e un ue o peten e as a so ut ons produ er t at opt e ar et ng n est ents no ng our r s s t s as e o e e en ore e dent o a e see t ese ssues as opportun t es or a unda enta ntegrat ng d erse o peten es and e e ut ng t ents usto ers and potent a usto ers ead to t e or d a etter p a e ents e restart ng ro stru tura trans or at on e are e e u pped to a o t ent to resu ts In o ng to ard a ne dea g er R I on t e part o our ents and en an e t e r ero and re u re speed ar et ng n t e e p our ents o e to ard a or d ere us ness post ID t s a e a su stant a ontr ut on usto ers engage ent as ar et ng pro de onne ted age e a out t e speed o e ng t e gro t re es on t e a t to rea e a us ness to our ents su ess n or at on t at t e need and s ore re e ant to first to establish a de facto standard, with more clients structure that integrates online and offline, and to e e e a enges n t e er as ar ets ere t e en e are a e to o pre end usto ers us ng t e no edge ga ned to pro e e Dentsu rea e ne or onsu pt on and e per en es t at intensified by the social and political events in addition e en urt er t data a a a e n t e G era e Group e a orerunner n s ar ng o on ssues offer a new level of efficiency and satisfaction. By to the public health and financial crisis felt by the rest e a e to u t ate ne re at ons ps t t e around t e or d n ud ng so ut ons and no edge
30 Dentsu Group Integrated Report 2020 Our Business
er e o ore operat ng o pan es Japan Business Dentsu apan et or
Dentsu Inc.
sports and ontent de e op ent Key Person Dentsu pro des t e est ntegrated so ut ons to a urate grasp g o a anges e ontr ut ng to ent Our Vision gro t t t e d g ta at on o te e s on or ro uretan In re ent ears a d ongo ng en ron enta anges In add t on e p an to de e op a de range o d g ta D re tor e ut e e resu t ng ro d g ta at on and g o a at on t as e o e res dent so ut ons e ond t ose o t e o un at ons do a n so increasingly difficult for client companies to solve the complex ros Igaras t at e g t etter understand ent ar et ng ssues and a enges t e a e res dent support t e as t e or to d g ta e a ar et ng anne s ur e p o ees a e a r arra o reat t and o o a Dentsu apan et or ur e orts ere n ude ass ad ert s ng to n rease Aiming to Become the Leading Marketing ode o ondu t t at ensures a or s t oroug and nterest e pand ng e o er e apa t es on ent Company o p ete e reate and p e ent g sop st ated e s tes and de e op ng et ods or t e on ne retent on o so ut ons ased on t e ost ad an ed data and te no og users o pur ase ents produ ts t ar et ng o un at ons at t e ore o ts a t t es p at or s e o a orat ng t po er u partners n and urt er e pro de so ut ons re ated to d g ta Dentsu In s t e argest un t t n t e Dentsu Group n e outs de t e Group Developing integrated solutions utilizing trans or at ons us ng te no og n ed to ad an ed ana s s ts ound ng t as e ped u d t e apanese ad ert s ng ur ed u ter o e t e s to e o e t e or d s o o Dentsu s propr etar user e a or data as e as ar et toget er t ed a and partner o pan es and ar et ng o pan s de and gro s or t e or u at on o the allocation of diverse assets ad an ed ana s s and ssue reso ut on apa t es o used supported t e gro t o ents us nesses p ans and p e entat on o easures to en an e t e Business Overview on ent produ t produ t on and d str ut on pro esses t present Dentsu onsu ts t and supports ad ert sers e per en es pro ded a ong t e usto er ourne and n Japan represents the Dentsu Group’s largest market. In fiscal ur ourt area o o us e t e ad an ng o so ut ons and ed a ontent o pan es o are tr ng to a e e order to rea e t e reat on and e pans on o ents 20 t a ounted or 0 o t e Group s re enue ess ost us ng e st ng and ne p at or s as e as pro ot ng us ness re or at on and d g ta trans or at on a ong t us nesses Dentsu pro de and ntegrate e o er e of sales, and 51.5% of its underlying operating profit. With ser es t at ntegrate a road range o resour es ot er ents e o pan a so pr or t es t e p ann ng and R us ness des gns and d g ta trans or at on n add t on ad ert s ng as our ore us ness our ser es go e ond e ta e on t e a enge o esta s ng our pos t on p e entat on o su ar et ng o un at on e orts as to on ent ona ad ert s ng o un at ons ar et ng o un at ons to pro de ntegrated ent support as a partner n t e trans or at on o ent us ness nd n d g ta ar et ng reat e ed a R pro ot ons e ents s ear n ne t our trans t on to a o d ng o pan add t on to ent produ t ad ert s ng and pu t e stru ture t e Dentsu Group under ent restru tur ng and pro de ass stan e n a nu er o a s In tande t or ed an n ouse o pan Dentsu apan et or e produ t de e op ent n ud ng us ness des gn and ar et net or represents ore t an 0 Group o pan es and creation—reflecting the global environment, regional communities, appro ate 20 000 e p o ees and ot er sta e o ders e o t e en ore deep to e a o t e restru tur ng as to de e op ntegrated t e su ess o ent produ ts and ser es e pro de so ut ons t at reso e a enges organ a n ng and us ness de e op ent no o to support ne anage ent ntegrat ng our Group o pan es and e p o ees a enges and anges a ng ents as e as so d support Information Services International-Dentsu, Ltd. or trans or at ons n orporate u ture and t e reorgan at on I ID s strengt s are deep ns g t nto orporate and so a o organ at ona and us ness pro esses Expanding Digital Capabilities ssues and t e a t to propose and p e ent so ut ons D g ta n rastru ture as assu ed greater portan e In t e ne nor a so et t e es t at re a n Key Person t at a e use o ad an ed te no og es p to no I ID as re ent due to ts support or so a ser es a d t e portant n ude t e ont nued ea t o ea e p o ee o worked with Japanese financial institutions and blue-chip ID pande s so et s e ng trans or ed anges Dentsu apan et or t e pro ot on o or st es t at a e o pan es n t e anu a tur ng ndustr pro d ng ad an ed n u an e a or are a e erat ng and so et s o ng a us ness pro esses e e t e and t e esta s ent o a R o a a IT solutions to reflect the changing business environment. to ard t e ne t stage orporate oundat on ere nd dua s an ont nue to gro res dent I ID pro des ents t tota support or I re ated e e e e t at support ng ent us ness gro t s n ne roug t e e pans on o apa t es t at ontr ute ot anage ent ssues ro onsu t ng ser es to s ste t our e orts to reso e so a ssues and so e ont nue to t e gro t o so et and ents as e as to t e reat on o p ann ng des gn de e op ent a ntenan e and operat ons to o us our e orts on e pand ng our d g ta apa t es opportun t es or nd dua gro t e do our ut ost to as e as g a ue added and un ue I so ut ons n areas ased on ad an es n t e trad t ona ad ert s ng do a n rea e t e susta na e gro t o Dentsu apan et or Creating New Business Models Based on including financial services, HR, accounting, manufacturing, e propose ne a s o us ng trad t ona ed a start ng the Vision of Humanology for the Future and d g ta ar et ng In or at on er es Internat ona Dentsu td I ID as u ans and te no og are at I ID a ues ost and esta s ed n as a o nt enture et een Dentsu and t e at dr e ts o pet t eness In ne t t e o pan Performance Genera e tr o pan n t e In o e er 2000 I ID s on u ano og or t e uture r ng ng peop e and Japan/International Revenue Ratio Revenue Less Cost of Sales of Japan Underlying Operating Profit of Japan as sted on t e rst e t on o t e o o to ange te no og toget er to s ape t e uture I ID de e ops Business Business / OPM* and s t e on s ste s ntegrator n t e Dentsu Group I ID so ut ons e erag ng I Io and ot er utt ng edge Underlying operating profit develops business at six offices in Japan and four offices te no og es e support ng d g ta trans or at on t n Japan ons o en ons o en o erseas ort er a urope na and out east s a o pan es and so et reat ng ne us ness ode s 00 000 0 0 000 0 30 and o a orates t nu erous g o a partners to support a ong t partner o pan es and ents 02 2 0 2 2 ent us nesses n apan and a road 0 00 000 2 000 24.5 20 000 21.7 200 000 19.1 000 10 00 000 000
International 0 0 0 20 20 20 20 20 20 59.5% an De an De an De an De an De an De perat ng arg n
31 Dentsu Group Integrated Report 2020 Our Business
er e o ore operat ng o pan es Japan Business Dentsu apan et or
Dentsu Inc.
sports and ontent de e op ent Key Person Dentsu pro des t e est ntegrated so ut ons to a urate grasp g o a anges e ontr ut ng to ent Our Vision gro t t t e d g ta at on o te e s on or ro uretan In re ent ears a d ongo ng en ron enta anges In add t on e p an to de e op a de range o d g ta D re tor e ut e e resu t ng ro d g ta at on and g o a at on t as e o e res dent so ut ons e ond t ose o t e o un at ons do a n so increasingly difficult for client companies to solve the complex ros Igaras t at e g t etter understand ent ar et ng ssues and a enges t e a e res dent support t e as t e or to d g ta e a ar et ng anne s ur e p o ees a e a r arra o reat t and o o a Dentsu apan et or ur e orts ere n ude ass ad ert s ng to n rease Aiming to Become the Leading Marketing ode o ondu t t at ensures a or s t oroug and nterest e pand ng e o er e apa t es on ent Company o p ete e reate and p e ent g sop st ated e s tes and de e op ng et ods or t e on ne retent on o so ut ons ased on t e ost ad an ed data and te no og users o pur ase ents produ ts t ar et ng o un at ons at t e ore o ts a t t es p at or s e o a orat ng t po er u partners n and urt er e pro de so ut ons re ated to d g ta Dentsu In s t e argest un t t n t e Dentsu Group n e outs de t e Group Developing integrated solutions utilizing trans or at ons us ng te no og n ed to ad an ed ana s s ts ound ng t as e ped u d t e apanese ad ert s ng ur ed u ter o e t e s to e o e t e or d s o o Dentsu s propr etar user e a or data as e as ar et toget er t ed a and partner o pan es and ar et ng o pan s de and gro s or t e or u at on o the allocation of diverse assets ad an ed ana s s and ssue reso ut on apa t es o used supported t e gro t o ents us nesses p ans and p e entat on o easures to en an e t e Business Overview on ent produ t produ t on and d str ut on pro esses t present Dentsu onsu ts t and supports ad ert sers e per en es pro ded a ong t e usto er ourne and n Japan represents the Dentsu Group’s largest market. In fiscal ur ourt area o o us e t e ad an ng o so ut ons and ed a ontent o pan es o are tr ng to a e e order to rea e t e reat on and e pans on o ents 20 t a ounted or 0 o t e Group s re enue ess ost us ng e st ng and ne p at or s as e as pro ot ng us ness re or at on and d g ta trans or at on a ong t us nesses Dentsu pro de and ntegrate e o er e of sales, and 51.5% of its underlying operating profit. With ser es t at ntegrate a road range o resour es ot er ents e o pan a so pr or t es t e p ann ng and R us ness des gns and d g ta trans or at on n add t on ad ert s ng as our ore us ness our ser es go e ond e ta e on t e a enge o esta s ng our pos t on p e entat on o su ar et ng o un at on e orts as to on ent ona ad ert s ng o un at ons ar et ng o un at ons to pro de ntegrated ent support as a partner n t e trans or at on o ent us ness nd n d g ta ar et ng reat e ed a R pro ot ons e ents s ear n ne t our trans t on to a o d ng o pan add t on to ent produ t ad ert s ng and pu t e stru ture t e Dentsu Group under ent restru tur ng and pro de ass stan e n a nu er o a s In tande t or ed an n ouse o pan Dentsu apan et or e produ t de e op ent n ud ng us ness des gn and ar et net or represents ore t an 0 Group o pan es and creation—reflecting the global environment, regional communities, appro ate 20 000 e p o ees and ot er sta e o ders e o t e en ore deep to e a o t e restru tur ng as to de e op ntegrated t e su ess o ent produ ts and ser es e pro de so ut ons t at reso e a enges organ a n ng and us ness de e op ent no o to support ne anage ent ntegrat ng our Group o pan es and e p o ees a enges and anges a ng ents as e as so d support Information Services International-Dentsu, Ltd. or trans or at ons n orporate u ture and t e reorgan at on I ID s strengt s are deep ns g t nto orporate and so a o organ at ona and us ness pro esses Expanding Digital Capabilities ssues and t e a t to propose and p e ent so ut ons D g ta n rastru ture as assu ed greater portan e In t e ne nor a so et t e es t at re a n Key Person t at a e use o ad an ed te no og es p to no I ID as re ent due to ts support or so a ser es a d t e portant n ude t e ont nued ea t o ea e p o ee o worked with Japanese financial institutions and blue-chip ID pande s so et s e ng trans or ed anges Dentsu apan et or t e pro ot on o or st es t at a e o pan es n t e anu a tur ng ndustr pro d ng ad an ed n u an e a or are a e erat ng and so et s o ng a us ness pro esses e e t e and t e esta s ent o a R o a a IT solutions to reflect the changing business environment. to ard t e ne t stage orporate oundat on ere nd dua s an ont nue to gro res dent I ID pro des ents t tota support or I re ated e e e e t at support ng ent us ness gro t s n ne roug t e e pans on o apa t es t at ontr ute ot anage ent ssues ro onsu t ng ser es to s ste t our e orts to reso e so a ssues and so e ont nue to t e gro t o so et and ents as e as to t e reat on o p ann ng des gn de e op ent a ntenan e and operat ons to o us our e orts on e pand ng our d g ta apa t es opportun t es or nd dua gro t e do our ut ost to as e as g a ue added and un ue I so ut ons n areas ased on ad an es n t e trad t ona ad ert s ng do a n rea e t e susta na e gro t o Dentsu apan et or Creating New Business Models Based on including financial services, HR, accounting, manufacturing, e propose ne a s o us ng trad t ona ed a start ng the Vision of Humanology for the Future and d g ta ar et ng In or at on er es Internat ona Dentsu td I ID as u ans and te no og are at I ID a ues ost and esta s ed n as a o nt enture et een Dentsu and t e at dr e ts o pet t eness In ne t t e o pan Performance Genera e tr o pan n t e In o e er 2000 I ID s on u ano og or t e uture r ng ng peop e and Japan/International Revenue Ratio Revenue Less Cost of Sales of Japan Underlying Operating Profit of Japan as sted on t e rst e t on o t e o o to ange te no og toget er to s ape t e uture I ID de e ops Business Business / OPM* and s t e on s ste s ntegrator n t e Dentsu Group I ID so ut ons e erag ng I Io and ot er utt ng edge Underlying operating profit develops business at six offices in Japan and four offices te no og es e support ng d g ta trans or at on t n Japan ons o en ons o en o erseas ort er a urope na and out east s a o pan es and so et reat ng ne us ness ode s 00 000 0 0 000 0 30 and o a orates t nu erous g o a partners to support a ong t partner o pan es and ents 02 2 0 2 2 ent us nesses n apan and a road 0 00 000 2 000 24.5 20 000 21.7 200 000 19.1 000 10 00 000 000
International 0 0 0 20 20 20 20 20 20 59.5% an De an De an De an De an De an De perat ng arg n
32 Dentsu Group Integrated Report 2020 Our Business
Dentsu Digital Inc. International Business Dentsu eg s et or produ es t e est e per en es at a usto er onta t po nts Key Person and s ont nuous e pand ng t e an ase o orporat ons and rands e ond t e ntrodu t on o I p at or s ese ser e as t e ase or pro ot ons and t e de e op ent o appropr ate o a a a data en ron ents res dent rd d g ta trans or at on onsu t ng s trans or s Our Vision t e us ness and organ at on o ent o pan es Expanding our capabilities Dentsu D g ta reates a ose g o a o a orat e e a so n ested n areas t at reated t e est stru ture and A Growth Partner in the Coming Age of stru ture t ega p at or and te no og o pan es to ndree environment, supported by efficient and globally consistent Digital Marketing u d us ness oundat ons t at generate nno at ons D re tor and e ut e e pro esses n ud ng est n ass te no og to redu e a d so eta anges res dent Dentsu Group In dup at ons o p e t and ost d dra at up ea a s n t e g o a e ono as a so n roug o reat ons t t e Dentsu Group s 0 e ut e a r an ont nued to e an a e erant to our strateg and e so et and peop e s es t e d g ta trans or at on o o pan es n apan 0 o erseas o pan es and 000 Dentsu eg s et or e o ed ne o pan es n ud ng ga a g o a o pan es s e o ng essent a o eagues Dentsu D g ta r ngs ne opportun t es or ent eader n data and ana t s e e a e u ore o used ga nst t s a ground Dentsu D g ta as esta s ed o pan us ness e pans on It a a s str es to pro de t e pr or t ng g gro t ar ets and seg ents su as d g ta n u 20 upport ng t e d g ta ar et ng e orts o o er est d g ta so ut ons reat e data R and o a t t at a e great s nerg 00 o pan es t s one o apan s argest d g ta ar et ng Dentsu D g ta e erages ts e p o ees ad an ed 2019: A year of transformation opportun t es and strong u tura a gn ent o pan es t 00 e p o ees ose a erage age s e pert se and pass on to dr e t e reat on o s nerg es e ear 20 as one o trans or at on In anuar 20 I 2 ears et een g o a ta ent no edge and te no og es on one too on respons t as t e n add t on to ro e as Making it real for our people and their communities In t e rap d e o ng d g ta or d t e o pan s and and urt er us ness e pans on on t e ot er e ut e a r an o Dentsu eg s et or and e ut e nsur ng t at our ost r t a asset our peop e re a n at t e o used on strengt s n t ree us ness areas t at are at t e s e ont nue to asp re to d g ta ar et ng nno at on Vice President of Dentsu Inc. This afforded me two benefits: to eart o our us ness s a e pr or t onne t ng t one ore o ts u t a eted support or orporate gro t and e o e to eet uture a enges e a to e o e t e get e en oser to our ents and our peop e anot er and a ng a o on purpose s portant to our rst t e pro ot on o ne t generat on ar et ng a ng est us ness gro t partner or our ent o pan es e trans or at on agenda as esta s ed to dr e su ess espe a en dr ng trans or at on u use o t e atest te no og es and data Dentsu D g ta sustainable, profitable growth and combine the breadth and edd ng a o on so a purpose s e ua portant dept o D s apa t es to de er or d ass ent ngag ng t our o un t es and de er ng aga nst our entr so ut ons so a pa t goa s a o s us to reate a deeper onne t on to It as a ear o a ng t rea re assess ng ourse es and our ro e n so et p ann ng or ange e supported our g o a ar t a ar a o ore to ra se n and aun ed Iso ar Good e erages our s s Making it real for our clients and e pert se to dr e easura e so a pa t or In order to de er etter ser es or our ents and us nesses e o a orated t ents to reate e per en e or our peop e trans or at on as re u red e rands orGood to e p trans or t e ro e o ar et ng n order Dentsu Live Inc. strea ned our o er ngs around t ree nes o us ness to a e susta na e ng ore asp rat ona or onsu ers reat e ed a and R s pro ded our peop e t na e reported our strongest en ron enta de e op ent and operat ons t at support est e anges s arper o us on de er ng or d ass ser es and per or an e et and are no po ered rene a e energ ondu t ng enterta n ent and arena operat ons and s Key Person ntegrated so ut ons or our ents in 90% of our offices globally. n o ed n ot spa e de e op ent enterpr ses and e ne stru ture as des gned around our ent needs ne t generat on t rand ng us nesses ensur ng our ser es are eas er to na gate g o a Journey to one dentsu e o pan reta ns a arge nu er o e ent spa e ons stent and t ere ore set up to e p our ents n e ear 20 as a g step n our ourne to e o e a ore e o on spe a sts o o a orate t nu erous partner o pan es eep and gro t e r est usto ers e ng data dr en ntegrated g o a organ at on t at de ers or d ass res dent t at a e noted e pert se ena ng us to e a ong t ose te ena ed and dea ed ser es to our ents or ng toget er and e erag ng t e organ at ons t t e ost no o e per en e and strengt e a e n apan our goa s to de er susta na e no edge n apan gro t or a o our sta e o ders n t e ears to o e Advanced Event Space Know-how e o er g ad an ed one stop produ t on ser es ro p ann ng to p e entat on onstru t on des gn Resolving Client Issues e a ora data ana s s and d g ta ar et ng ntegrat on o a e erate our gro t strateg n t e pro ot on do a n an o our e p o ees a e t e sa et anage ent tra n ng Dentsu s or er ent and pa e Des gn D s on as out ned n t e onstru t on us ness t ena ng us to ntegrated t t e Dentsu e e ent and spa e re ated en an e pro e t ua t and sa et Performance depart ents to reate Dentsu e In o en ed Go ng e ond t e ore us ness do a ns o e ents Japan/International Revenue Ratio Revenue Less Cost of Sales of Underlying Operating Profit of operat ons n anuar 20 spa es and e t on deo ontent e reate greater International Business International Business / OPM* t present Dentsu e s reso ng ent ssues e per en e a ue e see ng to de e op us ness t roug Underlying operating profit pro d ng a one stop ser e n us e o e ent and spa e t e opt a o nat on o enterta n ent sports ontent Japan ons o en ons o en de e op ent p ann ng des gn produ t on onstru t on and I us nesses to engage n e ents onstru t on and 00 000 2 2 0 000 20 40.5% 0 2 2 and operat ons operat ona e e ut on e a so o us on en an ng 0 000 15 In add t on to on ent ona e ent and spa e de e op ent o pet t eness t roug t e reat on o us ness entered on 00 000 14.6 a t t es t e o pan s de e op ng e ar et ng ead ng t e rea t e use o utt ng edge te no og es and ne 0 000 12.9 12.2 10 to t e u t at on o o a usto ers us ng utt ng edge te no og a resear 200 000 te no og es to pro e e per en e a ue underta ng store 20 000 5
International 0 0 0 20 20 20 20 20 20 an De an De an De an De an De an De perat ng arg n
33 Dentsu Group Integrated Report 2020 Our Business
Dentsu Digital Inc. International Business Dentsu eg s et or produ es t e est e per en es at a usto er onta t po nts Key Person and s ont nuous e pand ng t e an ase o orporat ons and rands e ond t e ntrodu t on o I p at or s ese ser e as t e ase or pro ot ons and t e de e op ent o appropr ate o a a a data en ron ents res dent rd d g ta trans or at on onsu t ng s trans or s Our Vision t e us ness and organ at on o ent o pan es Expanding our capabilities Dentsu D g ta reates a ose g o a o a orat e e a so n ested n areas t at reated t e est stru ture and A Growth Partner in the Coming Age of stru ture t ega p at or and te no og o pan es to ndree environment, supported by efficient and globally consistent Digital Marketing u d us ness oundat ons t at generate nno at ons D re tor and e ut e e pro esses n ud ng est n ass te no og to redu e a d so eta anges res dent Dentsu Group In dup at ons o p e t and ost d dra at up ea a s n t e g o a e ono as a so n roug o reat ons t t e Dentsu Group s 0 e ut e a r an ont nued to e an a e erant to our strateg and e so et and peop e s es t e d g ta trans or at on o o pan es n apan 0 o erseas o pan es and 000 Dentsu eg s et or e o ed ne o pan es n ud ng ga a g o a o pan es s e o ng essent a o eagues Dentsu D g ta r ngs ne opportun t es or ent eader n data and ana t s e e a e u ore o used ga nst t s a ground Dentsu D g ta as esta s ed o pan us ness e pans on It a a s str es to pro de t e pr or t ng g gro t ar ets and seg ents su as d g ta n u 20 upport ng t e d g ta ar et ng e orts o o er est d g ta so ut ons reat e data R and o a t t at a e great s nerg 00 o pan es t s one o apan s argest d g ta ar et ng Dentsu D g ta e erages ts e p o ees ad an ed 2019: A year of transformation opportun t es and strong u tura a gn ent o pan es t 00 e p o ees ose a erage age s e pert se and pass on to dr e t e reat on o s nerg es e ear 20 as one o trans or at on In anuar 20 I 2 ears et een g o a ta ent no edge and te no og es on one too on respons t as t e n add t on to ro e as Making it real for our people and their communities In t e rap d e o ng d g ta or d t e o pan s and and urt er us ness e pans on on t e ot er e ut e a r an o Dentsu eg s et or and e ut e nsur ng t at our ost r t a asset our peop e re a n at t e o used on strengt s n t ree us ness areas t at are at t e s e ont nue to asp re to d g ta ar et ng nno at on Vice President of Dentsu Inc. This afforded me two benefits: to eart o our us ness s a e pr or t onne t ng t one ore o ts u t a eted support or orporate gro t and e o e to eet uture a enges e a to e o e t e get e en oser to our ents and our peop e anot er and a ng a o on purpose s portant to our rst t e pro ot on o ne t generat on ar et ng a ng est us ness gro t partner or our ent o pan es e trans or at on agenda as esta s ed to dr e su ess espe a en dr ng trans or at on u use o t e atest te no og es and data Dentsu D g ta sustainable, profitable growth and combine the breadth and edd ng a o on so a purpose s e ua portant dept o D s apa t es to de er or d ass ent ngag ng t our o un t es and de er ng aga nst our entr so ut ons so a pa t goa s a o s us to reate a deeper onne t on to It as a ear o a ng t rea re assess ng ourse es and our ro e n so et p ann ng or ange e supported our g o a ar t a ar a o ore to ra se n and aun ed Iso ar Good e erages our s s Making it real for our clients and e pert se to dr e easura e so a pa t or In order to de er etter ser es or our ents and us nesses e o a orated t ents to reate e per en e or our peop e trans or at on as re u red e rands orGood to e p trans or t e ro e o ar et ng n order Dentsu Live Inc. strea ned our o er ngs around t ree nes o us ness to a e susta na e ng ore asp rat ona or onsu ers reat e ed a and R s pro ded our peop e t na e reported our strongest en ron enta de e op ent and operat ons t at support est e anges s arper o us on de er ng or d ass ser es and per or an e et and are no po ered rene a e energ ondu t ng enterta n ent and arena operat ons and s Key Person ntegrated so ut ons or our ents in 90% of our offices globally. n o ed n ot spa e de e op ent enterpr ses and e ne stru ture as des gned around our ent needs ne t generat on t rand ng us nesses ensur ng our ser es are eas er to na gate g o a Journey to one dentsu e o pan reta ns a arge nu er o e ent spa e ons stent and t ere ore set up to e p our ents n e ear 20 as a g step n our ourne to e o e a ore e o on spe a sts o o a orate t nu erous partner o pan es eep and gro t e r est usto ers e ng data dr en ntegrated g o a organ at on t at de ers or d ass res dent t at a e noted e pert se ena ng us to e a ong t ose te ena ed and dea ed ser es to our ents or ng toget er and e erag ng t e organ at ons t t e ost no o e per en e and strengt e a e n apan our goa s to de er susta na e no edge n apan gro t or a o our sta e o ders n t e ears to o e Advanced Event Space Know-how e o er g ad an ed one stop produ t on ser es ro p ann ng to p e entat on onstru t on des gn Resolving Client Issues e a ora data ana s s and d g ta ar et ng ntegrat on o a e erate our gro t strateg n t e pro ot on do a n an o our e p o ees a e t e sa et anage ent tra n ng Dentsu s or er ent and pa e Des gn D s on as out ned n t e onstru t on us ness t ena ng us to ntegrated t t e Dentsu e e ent and spa e re ated en an e pro e t ua t and sa et Performance depart ents to reate Dentsu e In o en ed Go ng e ond t e ore us ness do a ns o e ents Japan/International Revenue Ratio Revenue Less Cost of Sales of Underlying Operating Profit of operat ons n anuar 20 spa es and e t on deo ontent e reate greater International Business International Business / OPM* t present Dentsu e s reso ng ent ssues e per en e a ue e see ng to de e op us ness t roug Underlying operating profit pro d ng a one stop ser e n us e o e ent and spa e t e opt a o nat on o enterta n ent sports ontent Japan ons o en ons o en de e op ent p ann ng des gn produ t on onstru t on and I us nesses to engage n e ents onstru t on and 00 000 2 2 0 000 20 40.5% 0 2 2 and operat ons operat ona e e ut on e a so o us on en an ng 0 000 15 In add t on to on ent ona e ent and spa e de e op ent o pet t eness t roug t e reat on o us ness entered on 00 000 14.6 a t t es t e o pan s de e op ng e ar et ng ead ng t e rea t e use o utt ng edge te no og es and ne 0 000 12.9 12.2 10 to t e u t at on o o a usto ers us ng utt ng edge te no og a resear 200 000 te no og es to pro e e per en e a ue underta ng store 20 000 5
International 0 0 0 20 20 20 20 20 20 an De an De an De an De an De an De perat ng arg n
34 Dentsu Group Integrated Report 2020 Our Business
p ng our us ness Creative Line of Business
s part o our ong ter strateg e re ogn e t at t e Simplified Lines of Business Model ons stent a ross a us ness tou po nts traditional agency model is no longer fit for purpose as client Key Person reat t s a out onne t ng t e dots to ena e de ands are ang ng ur us ness ode ust e o e to Sales, Solutions and Client Management ean ng u ntegrated so ut ons a ross tou po nts and de er ntegrated so ut ons and or d ass ser es nd e ean n trans or at on n t at es un ted t e sa e ort tar CREATIVE MEDIA CRM G o a reat e Dentsu and e e ust s t gears to ard ed u ter arg n pro e ent ENTERTAINMENT & SPORTS and ong ter susta na e gro t eg s et or and G o a e ut e reat t toda goes e ond ad ert s ng and o un at on a r an Iso ar It s a out de er ng Idea ed per en es deas t at atter ur ne us ness ode s des gned around our ents Americas re ogn ng a e e ents o t e usto er e e to n Markets t at reate o pet t e ad antage t at prope us nesses to eep and gro our ents est usto ers e ng t e uture e per en es t at ange u ture and e a ors t at ena e engage ents and transa t ons t at en an e dea ed data dr en and te ena ed s a e erate APAC our a t to de er g o a ons stent ntegrated so ut ons Markets ur ss on s to u d a or d ass g o a reat e and trust trateg Ideas are t e g ue t at onne ts t e e e or ents ensur ng our ser es are eas er to na gate s e per en e o er ng t nno at on and te no og at ts s ste o a us ness t e a ors en ou no at ou eart an o er ng t at an d erent ate our ents us nesses e e e ou no o to e a e n turn dr e ong ter susta na e gro t and EMEA ed u ter arg n pro e ent Markets t o pet t e ad antage and dr e susta na e gro t e ra t o pe ng dea ed e per en es ade or t e e no organ e our ser es nto t ree nes o us ness e ond e e t e ad ert s ng e ne or ed reat e ne d g ta age and de ered at g o a s a e o reat e ed a and R a ross t e er as o us ness r ngs toget er a rand ng ontent des gn and e reate an e e t e tea t strateg rand ng and e per en e apa t es outs de o apan n ud ng our t o e perts ro dentsu garr o en and d g ta ar et ng g o a agen es dentsu garr o en and Iso ar s and e per en e e pert se ro Iso ar to de er reat e ro ust dea ed pra t e un tes o er 2 000 e nded e per en es at s a e a ross t e onsu er ourne peop e to de er rand and e per en e trans or at on or I e e e t at at Dentsu eg s e a e t e ost reat e our ents at a g o a s a e a ross ore t an 0 ar ets t n ers a ers nno ators and te no og sts t n us on or d de and respe t or our tea s ro an d erent u tures and CRM Line of Business e ro e o ar et ng and o rands are u t as een ar ets It s t s d ers t o peop e and d s p nes t at consistent double-digit growth, even amid significant market unda enta s ted ne te no og adopt on peop e s reates ore nno at e t n ng and t e a t to so e a d srupt on prope ed t e o apse o t rd part oo es ang ng e a or and re res ed e pe tat ons In t s ne roader set o pro e s n a ore reat e a or ng n Key Person and n reas ng pr a on erns s e o e to ard or d us nesses need to d erent ate t aut ent t ore partners p to e p ents a o er t e or d to n n t e Da d a s o pet ng t toda s d g ta trans or at on po er ouses t an e er and onsu ers ant to see aut ent t o e a or e per en e e ono G o a R Dentsu eg s we will define a new equation, where data transformation + et or and a r an d g ta trans or at on usto er e per en e trans or at on er e Group In dd ng strengt to our a ue propos t on are our a an es t partners su as Goog e do e a es or e ra e and ot ers roug t ese re at ons ps e are tapp ng nto t e gro t o enterpr se e per en e te no og and oud Media Line of Business oda s ost su ess u rands are u t pro d ng super or ser es to ena e t e tota usto er e per en e or t e usto er e per en es a ross sa es ser e and ar et ng rands e ser e ntegrate rand and per or an e ar et ng ed a and R e uture o t s onne ted usto er e per en e s g e R o s go to ar et strateg s entered around Key Person and u tura re e ant ontent r ng ng our ed a and persona ed n or ed data and po ered te no og our road ategor es per or an e agen es nto an ntegrated us ness e a e e ar et opportun t or R ne o us ness s n t e Customer Experience Enablement: trong te no og eter u oo removed artificial barriers, allowing clients to quickly de e op ent o data dr en strateg es t at e p t e est apa t es grounded n data anage ent and dent t and G o a Dentsu ed a rea o ate spend to generate ot ong ter rand a ue and rands n t e or d de er t ese per persona ed underp nned deep e pert se n ena e ent te no og es G o a ents ore ed ate us ness per or an e e per en es to a e usto er a ue so d usto er Customer Experience Activation: er or an e ed a and Dentsu eg s et or e esta s ent o t e ed a ne o us ness a so o a t and u t ate de er o pet t e ad antage s s reat e so ut ons n or ed data and de ered t roug a o s us to adopt a ore s ste approa to s ar ng Dentsu s astest gro ng o a ng dou ed n re enue o er a o e t on o rands t at a e or d ass apa t es n apa t and e erag ng est pra t es a ross our agen es t e past our ears n ored er e t e net or s argest the field. reat ng a ra e or or our agen es to o n or es and agen rand t e R o s a atr ed stru ture t at Analytics: ugged nto ot t e ena e ent and a t at on ur ed a ne o us ness pro des ents t a d erse e erage est pra t es and ta ent ore u a o s us to operates at t e nterse t on o our ser e nes and t e d st n t s des o t e ra e or e de er ana t s t roug t ose range o ser es to e p rands a e t e e e t eness a e ore pa t u ed a n est ents ar e are ndustr es e ser e ur s ed peop e ased ar et ng te no og p at or s and use t to der e targeted ns g ts re e an e and per or an e o t e r argest ar et ng ut ng our ed a partner re at ons ps to generate gger e perts understand t e un ue needs o our ents t e and easure ents n est ent ed a e de er t ese apa t es t roug our ore nno at e so ut ons ar et a enges t e a e and t e so ut ons needed to ga n Consulting and Strategy rans or at on and te no og a ard nn ng ed a agen es arat eu and s e o e or ard n 2020 e are e p ng our ents to o pet t e ad antage onsu t ng e p rands understand o t e s ou d dentsu our g o a re ogn ed d g ta per or an e agen na gate t e ost a eng ng ear n a generat on t ed a er e s organ ed reg ona spann ng t e er as organ e or su ess and de e op progra e e strateg es rospe t and our ded ated out o o e agen and ar et ng udgets under pressure ro t e pande and t near ter er as e pans on p ans to ena e t e tota usto er e per en e osters ope In 20 our agen es topped se era o t e ost o e er e re a n o tted to de er ng or our ents on t at n ude anada and at n er a ur g o a ents re Go ng or ard t s o ont nue to de e op ne trusted g o a ed a agen ran ngs as e ont nued to our o nt trans or at on ourne In an a s ID s on our deep no edge o t e d st n t ar et needs and apa t es re at ng to usto er e per en e trans or at on e pand our re at ons ps t g o a ar eters t t e eart o a e erat ng an o t e d g ta trends around e a e regu ator re u re ents o e er o a t n e operate onsu t ng and us ness ase ode ng e a e our s g ts our su ess s our o t ent to e p ng ents anage t e een u d ng our strateg or o er a a de ade arness ng Our strengths in first-party data, combined with identity set on e o ng t e ar et eader ena ng and a t at ng e er n reas ng o p e t es o ed a data usto er un ue data ue ed ns g ts to u d ore re e ant and reso ut on data anage ent ar et ng te no og data t e tota usto er e per en e ur uture usto ers e ad o a and pr a e a ng us ness out o es a ounta e ed a e per en es na e e e e ed a as s en es o a t R persona at on and per or an e s and e ers o t e roader su te o are oo ng t n our o n us ness e are e o ng t e a our a real opportunity to redefine its value and impact, binding ed a reat e ser es a e reated d erent at on aga nst or ean ng u us ness out o es t at reate re enue ost agen es operate entra ng e te no og and o un t es u tures and peop e toget er t roug s ared an e o ng o pet t e ands ape s a resu t e a e seen sa ngs and u t ate s are o der a ue n est ent un t ons u d ng an ntegrated rand port o o e per en es s s e a t t e nd o ss on t at as een strateg and e erag ng auto at on to anage osts ese t e oundat on o t e Dentsu Group or o er 00 ears e orts are a a gned to e o ng ent needs or so ut ons t at
35 Dentsu Group Integrated Report 2020 Our Business
p ng our us ness Creative Line of Business
s part o our ong ter strateg e re ogn e t at t e Simplified Lines of Business Model ons stent a ross a us ness tou po nts traditional agency model is no longer fit for purpose as client Key Person reat t s a out onne t ng t e dots to ena e de ands are ang ng ur us ness ode ust e o e to Sales, Solutions and Client Management ean ng u ntegrated so ut ons a ross tou po nts and de er ntegrated so ut ons and or d ass ser es nd e ean n trans or at on n t at es un ted t e sa e ort tar CREATIVE MEDIA CRM G o a reat e Dentsu and e e ust s t gears to ard ed u ter arg n pro e ent ENTERTAINMENT & SPORTS and ong ter susta na e gro t eg s et or and G o a e ut e reat t toda goes e ond ad ert s ng and o un at on a r an Iso ar It s a out de er ng Idea ed per en es deas t at atter ur ne us ness ode s des gned around our ents Americas re ogn ng a e e ents o t e usto er e e to n Markets t at reate o pet t e ad antage t at prope us nesses to eep and gro our ents est usto ers e ng t e uture e per en es t at ange u ture and e a ors t at ena e engage ents and transa t ons t at en an e dea ed data dr en and te ena ed s a e erate APAC our a t to de er g o a ons stent ntegrated so ut ons Markets ur ss on s to u d a or d ass g o a reat e and trust trateg Ideas are t e g ue t at onne ts t e e e or ents ensur ng our ser es are eas er to na gate s e per en e o er ng t nno at on and te no og at ts s ste o a us ness t e a ors en ou no at ou eart an o er ng t at an d erent ate our ents us nesses e e e ou no o to e a e n turn dr e ong ter susta na e gro t and EMEA ed u ter arg n pro e ent Markets t o pet t e ad antage and dr e susta na e gro t e ra t o pe ng dea ed e per en es ade or t e e no organ e our ser es nto t ree nes o us ness e ond e e t e ad ert s ng e ne or ed reat e ne d g ta age and de ered at g o a s a e o reat e ed a and R a ross t e er as o us ness r ngs toget er a rand ng ontent des gn and e reate an e e t e tea t strateg rand ng and e per en e apa t es outs de o apan n ud ng our t o e perts ro dentsu garr o en and d g ta ar et ng g o a agen es dentsu garr o en and Iso ar s and e per en e e pert se ro Iso ar to de er reat e ro ust dea ed pra t e un tes o er 2 000 e nded e per en es at s a e a ross t e onsu er ourne peop e to de er rand and e per en e trans or at on or I e e e t at at Dentsu eg s e a e t e ost reat e our ents at a g o a s a e a ross ore t an 0 ar ets t n ers a ers nno ators and te no og sts t n us on or d de and respe t or our tea s ro an d erent u tures and CRM Line of Business e ro e o ar et ng and o rands are u t as een ar ets It s t s d ers t o peop e and d s p nes t at consistent double-digit growth, even amid significant market unda enta s ted ne te no og adopt on peop e s reates ore nno at e t n ng and t e a t to so e a d srupt on prope ed t e o apse o t rd part oo es ang ng e a or and re res ed e pe tat ons In t s ne roader set o pro e s n a ore reat e a or ng n Key Person and n reas ng pr a on erns s e o e to ard or d us nesses need to d erent ate t aut ent t ore partners p to e p ents a o er t e or d to n n t e Da d a s o pet ng t toda s d g ta trans or at on po er ouses t an e er and onsu ers ant to see aut ent t o e a or e per en e e ono G o a R Dentsu eg s we will define a new equation, where data transformation + et or and a r an d g ta trans or at on usto er e per en e trans or at on er e Group In dd ng strengt to our a ue propos t on are our a an es t partners su as Goog e do e a es or e ra e and ot ers roug t ese re at ons ps e are tapp ng nto t e gro t o enterpr se e per en e te no og and oud Media Line of Business oda s ost su ess u rands are u t pro d ng super or ser es to ena e t e tota usto er e per en e or t e usto er e per en es a ross sa es ser e and ar et ng rands e ser e ntegrate rand and per or an e ar et ng ed a and R e uture o t s onne ted usto er e per en e s g e R o s go to ar et strateg s entered around Key Person and u tura re e ant ontent r ng ng our ed a and persona ed n or ed data and po ered te no og our road ategor es per or an e agen es nto an ntegrated us ness e a e e ar et opportun t or R ne o us ness s n t e Customer Experience Enablement: trong te no og eter u oo removed artificial barriers, allowing clients to quickly de e op ent o data dr en strateg es t at e p t e est apa t es grounded n data anage ent and dent t and G o a Dentsu ed a rea o ate spend to generate ot ong ter rand a ue and rands n t e or d de er t ese per persona ed underp nned deep e pert se n ena e ent te no og es G o a ents ore ed ate us ness per or an e e per en es to a e usto er a ue so d usto er Customer Experience Activation: er or an e ed a and Dentsu eg s et or e esta s ent o t e ed a ne o us ness a so o a t and u t ate de er o pet t e ad antage s s reat e so ut ons n or ed data and de ered t roug a o s us to adopt a ore s ste approa to s ar ng Dentsu s astest gro ng o a ng dou ed n re enue o er a o e t on o rands t at a e or d ass apa t es n apa t and e erag ng est pra t es a ross our agen es t e past our ears n ored er e t e net or s argest the field. reat ng a ra e or or our agen es to o n or es and agen rand t e R o s a atr ed stru ture t at Analytics: ugged nto ot t e ena e ent and a t at on ur ed a ne o us ness pro des ents t a d erse e erage est pra t es and ta ent ore u a o s us to operates at t e nterse t on o our ser e nes and t e d st n t s des o t e ra e or e de er ana t s t roug t ose range o ser es to e p rands a e t e e e t eness a e ore pa t u ed a n est ents ar e are ndustr es e ser e ur s ed peop e ased ar et ng te no og p at or s and use t to der e targeted ns g ts re e an e and per or an e o t e r argest ar et ng ut ng our ed a partner re at ons ps to generate gger e perts understand t e un ue needs o our ents t e and easure ents n est ent ed a e de er t ese apa t es t roug our ore nno at e so ut ons ar et a enges t e a e and t e so ut ons needed to ga n Consulting and Strategy rans or at on and te no og a ard nn ng ed a agen es arat eu and s e o e or ard n 2020 e are e p ng our ents to o pet t e ad antage onsu t ng e p rands understand o t e s ou d dentsu our g o a re ogn ed d g ta per or an e agen na gate t e ost a eng ng ear n a generat on t ed a er e s organ ed reg ona spann ng t e er as organ e or su ess and de e op progra e e strateg es rospe t and our ded ated out o o e agen and ar et ng udgets under pressure ro t e pande and t near ter er as e pans on p ans to ena e t e tota usto er e per en e osters ope In 20 our agen es topped se era o t e ost o e er e re a n o tted to de er ng or our ents on t at n ude anada and at n er a ur g o a ents re Go ng or ard t s o ont nue to de e op ne trusted g o a ed a agen ran ngs as e ont nued to our o nt trans or at on ourne In an a s ID s on our deep no edge o t e d st n t ar et needs and apa t es re at ng to usto er e per en e trans or at on e pand our re at ons ps t g o a ar eters t t e eart o a e erat ng an o t e d g ta trends around e a e regu ator re u re ents o e er o a t n e operate onsu t ng and us ness ase ode ng e a e our s g ts our su ess s our o t ent to e p ng ents anage t e een u d ng our strateg or o er a a de ade arness ng Our strengths in first-party data, combined with identity set on e o ng t e ar et eader ena ng and a t at ng e er n reas ng o p e t es o ed a data usto er un ue data ue ed ns g ts to u d ore re e ant and reso ut on data anage ent ar et ng te no og data t e tota usto er e per en e ur uture usto ers e ad o a and pr a e a ng us ness out o es a ounta e ed a e per en es na e e e e ed a as s en es o a t R persona at on and per or an e s and e ers o t e roader su te o are oo ng t n our o n us ness e are e o ng t e a our a real opportunity to redefine its value and impact, binding ed a reat e ser es a e reated d erent at on aga nst or ean ng u us ness out o es t at reate re enue ost agen es operate entra ng e te no og and o un t es u tures and peop e toget er t roug s ared an e o ng o pet t e ands ape s a resu t e a e seen sa ngs and u t ate s are o der a ue n est ent un t ons u d ng an ntegrated rand port o o e per en es s s e a t t e nd o ss on t at as een strateg and e erag ng auto at on to anage osts ese t e oundat on o t e Dentsu Group or o er 00 ears e orts are a a gned to e o ng ent needs or so ut ons t at
36 Dentsu Group Integrated Report 2020 Contents
Message from the Chair of the CSR Committee p. 39
Sustainability Foundation p. 41 Corporate Governance p. 45
37 Dentsu Group Integrated Report 2020 Contents
Message from the Chair of the CSR Committee p. 39
Sustainability Foundation p. 41 Corporate Governance p. 45
38 Dentsu Group Integrated Report 2020 Our Foundation Message from the Chair of the CSR Committee
Sustainability of Dentsu and Society e a e set ta ng so a ssues as one o t e a es t at e p us rea e our ne ed u ter anage ent p an us ness ode t at pursues both the resolution of social issues and the generation of profits is essential to our growth strategy, and we plan to develop multiple profit ode s t at an e s ared t n t e Group n t e uture Overcoming challenges by leveraging our creative power and Developing a Group-wide sustainability strategy ong t e so a ssues e are a ng toda are t ose t at are ose engaging with society re ated to t e us ness a t t es o t e Group su as ate ange d ers t as e as susta na e produ t on and onsu pt on o us ng Shun Sakurai on t ese areas e a e Group resour es and reate so ut ons Representat e D re tor and t roug o a orat on t ar ous sta e o ders e ut e e res dent o o ng t e adopt on o a ne o d ng o pan stru ture n anuar 2020 t e R o ttee as reorgan ed to or a on eren e stru ture ons st ng o e ers ro Group o pan es n ud ng Dentsu apan et or Dentsu eg s et or Dentsu In I ID and arta o d ngs In o ntegrate t e R a t t es o t e r respe t e o pan es to or u ate a Group de susta na t strateg or t e ear 20 0 e ont nue to e p ore g o a a ro e ono Facing the emergence of global risks trends t roug t e ens o our ost ater a pa ts and t e opportun t e or d s a ng a a or a enge n 2020 e da age aused t e e a e to reso e t ese ssues ID pande s ar ore ser ous t an e ag ned not on n ter s o ea t ut a so n ter s o t e pa t on t e e ono e Overcoming global issues along with our stakeholders need to re u d and n do ng so u d a res ent n us e and susta na e e ono g o a susta na t eader a s to so e g o a ssues t roug In t e 2020 ed t on o t e G o a R s Report pu s ed annua a an es t at trans end e st ng ra e or s t a ong ter t e or d ono oru t e spread o n e t ous d seases su perspe t e ur Group as set green ouse gas e ss on redu t on as t s one s g g ted as a a or r s o e er en ron ent re ated targets or 20 0 and 20 0 are a red ted t e en e ased te s su as a nor a eat er and a ure o ate ange argets n t at e and e a e ade a o t ent to pro ure rene a e n ted at ons G o a o pa t ounter easures re a n a ong t e ost e to o ur n t e uture I energ a ross our g o a ar ets e are s gnator es to t e n ted a on n ed t at t ese r s s are not unre ated to our da e under t e at ons G o a o pa t and R 00 and are o ounders o rands orGood urrent e ono ode e p ng us to pro ote susta na t n t at es not on t n t e Group ut a so t o pan es n ot er ndustr es In add t on o on Ground or s t t e n ted at ons and a or ad ert s ng Pursuing business models that generate societal and o d ng groups ont nues to support a ar a o ore a Science Based Targets certificate economic value non go ern enta organ at on ded ated to a ar a ontro Social and economic performance have often been seen as difficult s e pursue t ese a t t es t s essent a t at a o our 000 Group on epts to re on e o e er n o ng a de range o e p o ees ons der t e ro e e p a n so et de onstrate t e r
sta e o ders and o a orat ng to address t ese ssues e e e e t at reat t t roug t e r us nesses and reate nno at on to de er so a R 00 t s poss e to reate ne nno at ons e ond t e trad t ona ra e or pa t It s on or ng toget er t our e p o ees and our o R easures sta e o ders t at e o er o e t s a enge
39 Dentsu Group Integrated Report 2020 Our Foundation Message from the Chair of the CSR Committee
Sustainability of Dentsu and Society e a e set ta ng so a ssues as one o t e a es t at e p us rea e our ne ed u ter anage ent p an us ness ode t at pursues both the resolution of social issues and the generation of profits is essential to our growth strategy, and we plan to develop multiple profit ode s t at an e s ared t n t e Group n t e uture Overcoming challenges by leveraging our creative power and Developing a Group-wide sustainability strategy ong t e so a ssues e are a ng toda are t ose t at are ose engaging with society re ated to t e us ness a t t es o t e Group su as ate ange d ers t as e as susta na e produ t on and onsu pt on o us ng Shun Sakurai on t ese areas e a e Group resour es and reate so ut ons Representat e D re tor and t roug o a orat on t ar ous sta e o ders e ut e e res dent o o ng t e adopt on o a ne o d ng o pan stru ture n anuar 2020 t e R o ttee as reorgan ed to or a on eren e stru ture ons st ng o e ers ro Group o pan es n ud ng Dentsu apan et or Dentsu eg s et or Dentsu In I ID and arta o d ngs In o ntegrate t e R a t t es o t e r respe t e o pan es to or u ate a Group de susta na t strateg or t e ear 20 0 e ont nue to e p ore g o a a ro e ono Facing the emergence of global risks trends t roug t e ens o our ost ater a pa ts and t e opportun t e or d s a ng a a or a enge n 2020 e da age aused t e e a e to reso e t ese ssues ID pande s ar ore ser ous t an e ag ned not on n ter s o ea t ut a so n ter s o t e pa t on t e e ono e Overcoming global issues along with our stakeholders need to re u d and n do ng so u d a res ent n us e and susta na e e ono g o a susta na t eader a s to so e g o a ssues t roug In t e 2020 ed t on o t e G o a R s Report pu s ed annua a an es t at trans end e st ng ra e or s t a ong ter t e or d ono oru t e spread o n e t ous d seases su perspe t e ur Group as set green ouse gas e ss on redu t on as t s one s g g ted as a a or r s o e er en ron ent re ated targets or 20 0 and 20 0 are a red ted t e en e ased te s su as a nor a eat er and a ure o ate ange argets n t at e and e a e ade a o t ent to pro ure rene a e n ted at ons G o a o pa t ounter easures re a n a ong t e ost e to o ur n t e uture I energ a ross our g o a ar ets e are s gnator es to t e n ted a on n ed t at t ese r s s are not unre ated to our da e under t e at ons G o a o pa t and R 00 and are o ounders o rands orGood urrent e ono ode e p ng us to pro ote susta na t n t at es not on t n t e Group ut a so t o pan es n ot er ndustr es In add t on o on Ground or s t t e n ted at ons and a or ad ert s ng Pursuing business models that generate societal and o d ng groups ont nues to support a ar a o ore a Science Based Targets certificate economic value non go ern enta organ at on ded ated to a ar a ontro Social and economic performance have often been seen as difficult s e pursue t ese a t t es t s essent a t at a o our 000 Group on epts to re on e o e er n o ng a de range o e p o ees ons der t e ro e e p a n so et de onstrate t e r sta e o ders and o a orat ng to address t ese ssues e e e e t at reat t t roug t e r us nesses and reate nno at on to de er so a R 00 t s poss e to reate ne nno at ons e ond t e trad t ona ra e or pa t It s on or ng toget er t our e p o ees and our o R easures sta e o ders t at e o er o e t s a enge
40 Dentsu Group Integrated Report 2020 Our Foundation Sustainability
Sustainability Initiatives
Helping create an economy that works for all Climate Change
ate ange od ers t oss and ne ua t are g o a en ron ent n e er one an t r e ut e a e a In 20 e a e ed our strongest en ron enta e u a ent as a I on a e e ut e s ore ards d re t egatrends res ap ng our or d In 20 e sa a po er u ro e to p a t at goes e ond our o n operat ons per or an e redu ng our o era ope and 2 ar on pa t ng t e r re unerat on o urt er de ar on e our significant increase in both awareness and activity across all and p s a pa ts er da a o er t e or d our e ss ons s n e 20 putt ng us on tra to a ue a n e o ned or es t r sto n ers t sta e o der groups t e p o ees n estors ents and work influences t e a t at peop e t n ee and a t ur de er our 20 0 s en e ased target s as dr en and t e to aun DI a ground rea ng onsu ers a a ng or ange us ness and rands a e a s to use our deas and data to g g t opportun t es pr ar s t ng o our nternat ona operat ons o a orat on to ap t e ar on pa ts o d g ta a ue no o e ut to respond ur ndustr s no e ept on e ne ua t es nno at ons and so ut ons to so et s greatest to rene a e e e tr t re n or ng our o t ent to a ns In 2020 e e u d ng on t s or to etter are o tted to de ar on ng our us ness operat ons a enges s a apanese o pan e p an or t e R 00 and e p ng to dr e ar et de and or rene a e understand and redu e our e ss ons a ross our a ue and supp a n nd as an e p o er o 000 peop e e ong ter eans reat ng regenerat e so ut ons energ ur goa s to s t a t e Dentsu Group to a n era e ut t e tota ope and 2 e ss ons n est n t e ea t and e e ng o our peop e and t at de er pos t e pa t or our us ness so et and renewable electricity by 2030. Office consolidation and 2 0 t s ear to 2 tons o 2 e t e ope are pass onate a out reat ng a d erse and n us e t e en ron ent t e ntrodu t on o ne o a orat on te no og a so resu ts ere tons contributed, while we delivered a significant decrease in or ore deta ed en ron ent per or an e data t e use o paper ater and aste us ness tra e o e er p ease re er to t e G Data u ar p as n reased a ross t e Group In response D as n uded a target to redu e a r tra e easured n 2 Our priorities
In De e er 20 e esta s ed a ne oard o ttee Group n assess ent o our ater a r s s and Environment Performance Indices FY2019 or t e Dentsu Group o used on R and susta na t opportun t es as g g ted e strateg o us areas s o ttee s a red un a ura and s ade up ere e an a e t e ggest pa t e resu ts n ude o sen or e e ut es ro a ross t e Group n ud ng ate ange susta na e onsu pt on and produ t on Dentsu apan et or Dentsu eg s et or Dentsu In d ers t and n us on and u an and d g ta r g ts I ID and arta o d ngs In e o ttee eets n ud ng et s data pr a and se ur t e e e e uarter n 2020 t t e pr ar o e t e o sett ng a ID a e erate nterest n t ese areas as CO2 emissions / FTE CO2 emissions Ratio of renewable electricity ong ter ntegrated susta na t strateg or t e Dentsu sta e o ders oo to re re t e e ono (Scopes 1 and 2) Compared with FY2014 Scopes 1 and 2 in international operations 0.53t-CO2e 46.3% less 89% CSR Promotion Structure
Dentsu Group Inc. Sustainable consumption and production
Group Executive Management Committee e re ogn e t e ro e t at e p a n dr ng onsu pt on ange t e r e a or s s unda enta re ag n ng In 20 e o a orated t usta na e rands and so e t e a rands reate a ue and engage t usto ers o our ggest ents to aun rands orGood a ne around susta na e ng CSR Committee g o a o e ent to trans or t e ro e o ar et ng and ad ert s ng and a e susta na e ng ore asp rat ona or onsu ers roug rands orGood e a to un te ar eters In or at on er es and rands to en ourage onsu ers to adopt n ne Dentsu apan Dentsu eg s R Dentsu In Internat ona Dentsu susta na e e a ors ese e a ors o ne ot et or et or DI G I td I ID so eta and p anetar needs t onsu er resear t at nd ates essages e ers o t e pu are ost e to respond to pos t e u t ate a ng t e
41 Dentsu Group Integrated Report 2020 Our Foundation Sustainability
Sustainability Initiatives
Helping create an economy that works for all Climate Change
ate ange od ers t oss and ne ua t are g o a en ron ent n e er one an t r e ut e a e a In 20 e a e ed our strongest en ron enta e u a ent as a I on a e e ut e s ore ards d re t egatrends res ap ng our or d In 20 e sa a po er u ro e to p a t at goes e ond our o n operat ons per or an e redu ng our o era ope and 2 ar on pa t ng t e r re unerat on o urt er de ar on e our significant increase in both awareness and activity across all and p s a pa ts er da a o er t e or d our e ss ons s n e 20 putt ng us on tra to a ue a n e o ned or es t r sto n ers t sta e o der groups t e p o ees n estors ents and work influences t e a t at peop e t n ee and a t ur de er our 20 0 s en e ased target s as dr en and t e to aun DI a ground rea ng onsu ers a a ng or ange us ness and rands a e a s to use our deas and data to g g t opportun t es pr ar s t ng o our nternat ona operat ons o a orat on to ap t e ar on pa ts o d g ta a ue no o e ut to respond ur ndustr s no e ept on e ne ua t es nno at ons and so ut ons to so et s greatest to rene a e e e tr t re n or ng our o t ent to a ns In 2020 e e u d ng on t s or to etter are o tted to de ar on ng our us ness operat ons a enges s a apanese o pan e p an or t e R 00 and e p ng to dr e ar et de and or rene a e understand and redu e our e ss ons a ross our a ue and supp a n nd as an e p o er o 000 peop e e ong ter eans reat ng regenerat e so ut ons energ ur goa s to s t a t e Dentsu Group to a n era e ut t e tota ope and 2 e ss ons n est n t e ea t and e e ng o our peop e and t at de er pos t e pa t or our us ness so et and renewable electricity by 2030. Office consolidation and 2 0 t s ear to 2 tons o 2 e t e ope are pass onate a out reat ng a d erse and n us e t e en ron ent t e ntrodu t on o ne o a orat on te no og a so resu ts ere tons contributed, while we delivered a significant decrease in or ore deta ed en ron ent per or an e data t e use o paper ater and aste us ness tra e o e er p ease re er to t e G Data u ar p as n reased a ross t e Group In response D as n uded a target to redu e a r tra e easured n 2 Our priorities
In De e er 20 e esta s ed a ne oard o ttee Group n assess ent o our ater a r s s and Environment Performance Indices FY2019 or t e Dentsu Group o used on R and susta na t opportun t es as g g ted e strateg o us areas s o ttee s a red un a ura and s ade up ere e an a e t e ggest pa t e resu ts n ude o sen or e e ut es ro a ross t e Group n ud ng ate ange susta na e onsu pt on and produ t on Dentsu apan et or Dentsu eg s et or Dentsu In d ers t and n us on and u an and d g ta r g ts I ID and arta o d ngs In e o ttee eets n ud ng et s data pr a and se ur t e e e e uarter n 2020 t t e pr ar o e t e o sett ng a ID a e erate nterest n t ese areas as CO2 emissions / FTE CO2 emissions Ratio of renewable electricity ong ter ntegrated susta na t strateg or t e Dentsu sta e o ders oo to re re t e e ono (Scopes 1 and 2) Compared with FY2014 Scopes 1 and 2 in international operations 0.53t-CO2e 46.3% less 89% CSR Promotion Structure
Dentsu Group Inc. Sustainable consumption and production
Group Executive Management Committee e re ogn e t e ro e t at e p a n dr ng onsu pt on ange t e r e a or s s unda enta re ag n ng In 20 e o a orated t usta na e rands and so e t e a rands reate a ue and engage t usto ers o our ggest ents to aun rands orGood a ne around susta na e ng CSR Committee g o a o e ent to trans or t e ro e o ar et ng and ad ert s ng and a e susta na e ng ore asp rat ona or onsu ers roug rands orGood e a to un te ar eters In or at on er es and rands to en ourage onsu ers to adopt n ne Dentsu apan Dentsu eg s R Dentsu In Internat ona Dentsu susta na e e a ors ese e a ors o ne ot et or et or DI G I td I ID so eta and p anetar needs t onsu er resear t at nd ates essages e ers o t e pu are ost e to respond to pos t e u t ate a ng t e
42 Dentsu Group Integrated Report 2020 Our Foundation Sustainability
Promoting diversity and empowering women Common Ground
rue reat t and nno at on appen en tea s o resear nd n o a orat on t t e sso at on o In 20 e e ped aun o on Ground to dr e to a e e t e DGs e ont nue to dr e a areness d erse nd dua s o e toget er e a p on nd dua t at ona d ert sers e e ped ound ee er t e goa o de er o t e n ted at ons usta na e De e op ent t roug our resear tea DGs a ross Dentsu apan and t e un ue perspe t es and re ar a e ta ent t at s to n rease t e per entage o a urate portra a s Goa s DGs oda e a e rea ed o er on et or nto onsu er trends and att tudes to t e o e t t In 20 e sa an n rease n e a es n sen or o o en and g r s n ad ert s ng e a ues o respe t peop e t roug re ated a pa gns s n udes our DGs n ud ng our re ent pu s ed sur e o t e eaders p pos t ons a ross our g o a ar ets s e ua t n us on and d ers t ne essar or ea t and partners p t a ar a o ore t o n 20 e apanese ar et n udes t e appo nt ent o nna ou ton G o a R pea e u o un t es are t e sa e a ues e u t ate e ped ra se an add t ona on or a ar a resear Director, to the role of Executive Officer, Dentsu Group Inc. a ong our e p o ees n ountr es e e as e as a pa gns or our ents t at a gn to t e DGs e a so pro oted a e e to t e ro e o pr or t ng t s area o our strateg o ng or ard n part u ar n areas re at ng to ea t and e e ng er as and ean n to t e ro e o reat e ne o ne ua t and e po er ng o en In 20 e aun ed us ness ne t rd o our ost sen or ro es n our Iso ar Good an n t at e t at uses Iso ar s s s e pert se Internat ona us ness are e d o en e are and et odo og es to dr e easura e so a pa t and o tted to e tend ng t s gender a an e to our apan operat ons ut re ogn e t ere s ore to do oda o sen or eaders a ross t e Dentsu Group are o en ur Key findings of SDGs survey anuar 2020 o us on d ers t e tends e ond our organ at on In 20 e aun ed e a e oundr our g o a entors p progra or e a e ounded start ups n Ind a out SDGs awareness rate among Recognition rate of lifestyle behaviors related to realizing the SDGs Japanese consumers r a e o and e reat ng po er u progra s u t Moving away Sharing Circular on ns g ts generated t roug rospe t s ear er o e from plastic Minimalism economy economy 29.1% 70.3% 54.0% 40.7% 33.9% https://www.dentsu.co.jp/en/news/release/2020/0427-010046.html
Respect for Human and Digital Rights
Comment on the results of the SDGs survey Data pr a and prote t on a ong t respons e ed a Message ont nue to re a n a top pr or t or our us ness and our ents In 20 e e a e a strateg partner to t e ese are er en ourag ng sur e resu ts e a ts o ng a a ro p ast s us ng reusa e G o a an e or Respons e ed a G R a g o a a t t at ore t an 0 o students are a are o e o ags and do ng ore te e or ng o a orat on o agen es ed a p at or s and ndustr t e usta na e De e op ent Goa s spea s to t e a ontr ute to redu ng t e pressure on asso at ons to rap d pro e d g ta sa et and dr e e e ent or done ntegrat ng t e DGs n t e t e en ron ent t t e sa e t e t e so a a ounta t a ross t e ndustr e are a so a ounder o s oo urr u a n apan oung peop e are a o ponents o t e DGs e gender e ua t t e ons ous d ert s ng et or ose ss on s to stop ad ert s ng a use g g t ng t e ons ous ru a target aud en e and t ou d e great to or support ng arg na ed o un t es su o es ad ert sers an a e to ensure good pra t es see ore s oo s around t e or d o o apan s as grants deser e e ua attent on and art na Don on e a p e and tea students a out t e DGs urgen e a e ten ears e t to a e e t ng e usta na e It s a so pro s ng to see t at a a or t t e DGs t e 20 0 target date er one De e op ent e t on Depart ent o G o a artners n t e G o a an e or Respons e ed a o respondents are read to put t e DGs e er ere an do t e r part to e p u d a a rer o un at ons nto pra t e t roug anges n t e r da ore susta na e or d n ted at ons
External Evaluation
or t e ourt onse ut e ear s n e 20 e a e een se e ted or n us on n t e Do ones usta na t s a Pacific Index. We have also been highly evaluated by CDP s ored n 20 and o ad s as e as e ng n uded n nde es su as Good
43 Dentsu Group Integrated Report 2020 Our Foundation Sustainability
Promoting diversity and empowering women Common Ground
rue reat t and nno at on appen en tea s o resear nd n o a orat on t t e sso at on o In 20 e e ped aun o on Ground to dr e to a e e t e DGs e ont nue to dr e a areness d erse nd dua s o e toget er e a p on nd dua t at ona d ert sers e e ped ound ee er t e goa o de er o t e n ted at ons usta na e De e op ent t roug our resear tea DGs a ross Dentsu apan and t e un ue perspe t es and re ar a e ta ent t at s to n rease t e per entage o a urate portra a s Goa s DGs oda e a e rea ed o er on et or nto onsu er trends and att tudes to t e o e t t In 20 e sa an n rease n e a es n sen or o o en and g r s n ad ert s ng e a ues o respe t peop e t roug re ated a pa gns s n udes our DGs n ud ng our re ent pu s ed sur e o t e eaders p pos t ons a ross our g o a ar ets s e ua t n us on and d ers t ne essar or ea t and partners p t a ar a o ore t o n 20 e apanese ar et n udes t e appo nt ent o nna ou ton G o a R pea e u o un t es are t e sa e a ues e u t ate e ped ra se an add t ona on or a ar a resear Director, to the role of Executive Officer, Dentsu Group Inc. a ong our e p o ees n ountr es e e as e as a pa gns or our ents t at a gn to t e DGs e a so pro oted a e e to t e ro e o pr or t ng t s area o our strateg o ng or ard n part u ar n areas re at ng to ea t and e e ng er as and ean n to t e ro e o reat e ne o ne ua t and e po er ng o en In 20 e aun ed us ness ne t rd o our ost sen or ro es n our Iso ar Good an n t at e t at uses Iso ar s s s e pert se Internat ona us ness are e d o en e are and et odo og es to dr e easura e so a pa t and o tted to e tend ng t s gender a an e to our apan operat ons ut re ogn e t ere s ore to do oda o sen or eaders a ross t e Dentsu Group are o en ur Key findings of SDGs survey anuar 2020 o us on d ers t e tends e ond our organ at on In 20 e aun ed e a e oundr our g o a entors p progra or e a e ounded start ups n Ind a out SDGs awareness rate among Recognition rate of lifestyle behaviors related to realizing the SDGs Japanese consumers r a e o and e reat ng po er u progra s u t Moving away Sharing Circular on ns g ts generated t roug rospe t s ear er o e from plastic Minimalism economy economy 29.1% 70.3% 54.0% 40.7% 33.9% https://www.dentsu.co.jp/en/news/release/2020/0427-010046.html
Respect for Human and Digital Rights
Comment on the results of the SDGs survey Data pr a and prote t on a ong t respons e ed a Message ont nue to re a n a top pr or t or our us ness and our ents In 20 e e a e a strateg partner to t e ese are er en ourag ng sur e resu ts e a ts o ng a a ro p ast s us ng reusa e G o a an e or Respons e ed a G R a g o a a t t at ore t an 0 o students are a are o e o ags and do ng ore te e or ng o a orat on o agen es ed a p at or s and ndustr t e usta na e De e op ent Goa s spea s to t e a ontr ute to redu ng t e pressure on asso at ons to rap d pro e d g ta sa et and dr e e e ent or done ntegrat ng t e DGs n t e t e en ron ent t t e sa e t e t e so a a ounta t a ross t e ndustr e are a so a ounder o s oo urr u a n apan oung peop e are a o ponents o t e DGs e gender e ua t t e ons ous d ert s ng et or ose ss on s to stop ad ert s ng a use g g t ng t e ons ous ru a target aud en e and t ou d e great to or support ng arg na ed o un t es su o es ad ert sers an a e to ensure good pra t es see ore s oo s around t e or d o o apan s as grants deser e e ua attent on and art na Don on e a p e and tea students a out t e DGs urgen e a e ten ears e t to a e e t ng e usta na e It s a so pro s ng to see t at a a or t t e DGs t e 20 0 target date er one De e op ent e t on Depart ent o G o a artners n t e G o a an e or Respons e ed a o respondents are read to put t e DGs e er ere an do t e r part to e p u d a a rer o un at ons nto pra t e t roug anges n t e r da ore susta na e or d n ted at ons
External Evaluation
or t e ourt onse ut e ear s n e 20 e a e een se e ted or n us on n t e Do ones usta na t s a Pacific Index. We have also been highly evaluated by CDP s ored n 20 and o ad s as e as e ng n uded n nde es su as Good
44 Dentsu Group Integrated Report 2020 Our Foundation Corporate Governance
Dentsu Group Corporate Governance For details, please see the Corporate Governance Report on our website. As of March 27, 2020 https://www.group.dentsu.com/en/about-us/common/pdf/governance_202001_en.pdf
Basic Perspective
Director Skills Matrix Respons t es and ttr utes a n s Secondary skill The pursuit of optimal corporate governance is critical for 2. Considering the interests of stakeholders, including achieving Dentsu’s goal of creating new social values and shareholders, and cooperate with them appropriately. D re tor pe a at on and eatures us ness Supervisory orporate us ness anage ent rgan at on sustainable societies. We aim to achieve sustainable growth 3. Appropriately disclosing company information and e e ut on un t on strategy strategy resour es nan e ount ng ega a a rs u an resour es and enhance corporate value by ensuring transparent, fair, ensuring transparency. rapid, and decisive decision-making, as well as the effective 4. Enhancing the effectiveness of the supervisory function allocation of management resources. To this end, we will of the Board of Directors concerning business execution. Toshihiro Yamamoto continue to improve corporate governance by: 5. Engaging in constructive dialogue with shareholders Representat e D re tor 1. Respecting shareholders’ rights and ensure their e ua who have an investment policy that conforms to the mid- treat ent to long-term interests of shareholders. 2 Shun Sakurai Representat e D re tor Corporate Governance Structure Dentsu Group In Dentsu Japan Network (In-house company in Dentsu Group Inc.)
General Meeting of Shareholders ppo nt ent D s ssa Tim Andree Appointment/Dismissal ppo nt ent D s ssa Report D re tor ooperat on ud ts Nomination Advisory Committee Audit and Supervisory Committee Board of Directors d se Compensation Advisory Committee Report p anat on ud ts Re uests e e t on uper s on De egates De egates ooperat on Internal Control and Risk Committee p anat on Hiroshi Igarashi De egates Representative Director D re tor Group internal auditors, etc. Group Executive Management Committee CSR Committee e e t on uper s on ud ts ud ts De egates Executive Officers Arinobu Soga Audits Dentsu Japan Network Dentsu Aegis Network D re tor Dentsu Japan Network Board Audit Committee Dentsu Aegis Network Board Audit Committee
Independent Auditors Dentsu Japan Network Dentsu Aegis Network Internal Control and Risk Committee Risk Committee Dentsu Japan Network Dentsu Aegis Network Nick Priday Investment Committee M&A Committee D re tor Dentsu Japan Network Dentsu Aegis Network Nomination Committee Nomination Committee
Dentsu Japan Network Dentsu Aegis Network Transaction Committee Compensation Committee Gan Matsui Outside D re tor Group Companies in Japan Overseas Group Companies
Izumi Okoshi Corporate Governance-related Information Committee Chairperson (Chair) D re tor ud t and Supervisory Committee Independent outs de d re tors 4 members r n p e e er e t e use o ndependent outs de d re tors Board of Directors Toshiaki Hasegawa Outside 2 e ers 8 11 9 10 12 3 6 1 2 4 5 7 r n p e D re tor ud t and Independent Re u re ents or ensur ng Supervisory Committee e er e a e d re tors 2 members on apanese d re tors 3 members 2 0 director efficacy) 0 Outside Audit and Supervisory 9 10 11 12 8 r n p e Kentaro Koga Committee e t e use o ndependent D re tor ud t and Independent e ers outs de d re tors Supervisory Committee Independent outs de d re tors 4 members 0 0 e er Nomination Advisory 7 9 10 11 1 Etsuko Katsu Outside Committee D re tor ud t and e ers r n p e Supervisory Committee Independent uts de d re tors 4 members: 0 0 e t e use o ndependent e er outs de d re tors r n p e 0 2 Compensation 9 10 11 1 2 (Use of arbitrary mechanisms) Simon Laffin Outside Advisory Committee D re tor ud t and e ers Supervisory Committee Independent Independent outs de d re tors 3 members 0 0 e er
45 Dentsu Group Integrated Report 2020 Our Foundation Corporate Governance
Dentsu Group Corporate Governance For details, please see the Corporate Governance Report on our website. As of March 27, 2020 https://www.group.dentsu.com/en/about-us/common/pdf/governance_202001_en.pdf
Basic Perspective
Director Skills Matrix Respons t es and ttr utes a n s Secondary skill The pursuit of optimal corporate governance is critical for 2. Considering the interests of stakeholders, including achieving Dentsu’s goal of creating new social values and shareholders, and cooperate with them appropriately. D re tor pe a at on and eatures us ness Supervisory orporate us ness anage ent rgan at on sustainable societies. We aim to achieve sustainable growth 3. Appropriately disclosing company information and e e ut on un t on strategy strategy resour es nan e ount ng ega a a rs u an resour es and enhance corporate value by ensuring transparent, fair, ensuring transparency. rapid, and decisive decision-making, as well as the effective 4. Enhancing the effectiveness of the supervisory function allocation of management resources. To this end, we will of the Board of Directors concerning business execution. Toshihiro Yamamoto continue to improve corporate governance by: 5. Engaging in constructive dialogue with shareholders Representat e D re tor 1. Respecting shareholders’ rights and ensure their e ua who have an investment policy that conforms to the mid- treat ent to long-term interests of shareholders. 2 Shun Sakurai Representat e D re tor Corporate Governance Structure Dentsu Group In Dentsu Japan Network (In-house company in Dentsu Group Inc.)
General Meeting of Shareholders ppo nt ent D s ssa Tim Andree Appointment/Dismissal ppo nt ent D s ssa Report D re tor ooperat on ud ts Nomination Advisory Committee Audit and Supervisory Committee Board of Directors d se Compensation Advisory Committee Report p anat on ud ts Re uests e e t on uper s on De egates De egates ooperat on Internal Control and Risk Committee p anat on Hiroshi Igarashi De egates Representative Director D re tor Group internal auditors, etc. Group Executive Management Committee CSR Committee e e t on uper s on ud ts ud ts De egates Executive Officers Arinobu Soga Audits Dentsu Japan Network Dentsu Aegis Network D re tor Dentsu Japan Network Board Audit Committee Dentsu Aegis Network Board Audit Committee
Independent Auditors Dentsu Japan Network Dentsu Aegis Network Internal Control and Risk Committee Risk Committee Dentsu Japan Network Dentsu Aegis Network Nick Priday Investment Committee M&A Committee D re tor Dentsu Japan Network Dentsu Aegis Network Nomination Committee Nomination Committee
Dentsu Japan Network Dentsu Aegis Network Transaction Committee Compensation Committee Gan Matsui Outside D re tor Group Companies in Japan Overseas Group Companies
Izumi Okoshi Corporate Governance-related Information Committee Chairperson (Chair) D re tor ud t and Supervisory Committee Independent outs de d re tors 4 members r n p e e er e t e use o ndependent outs de d re tors Board of Directors Toshiaki Hasegawa Outside 2 e ers 8 11 9 10 12 3 6 1 2 4 5 7 r n p e D re tor ud t and Independent Re u re ents or ensur ng Supervisory Committee e er e a e d re tors 2 members on apanese d re tors 3 members 2 0 director efficacy) 0 Outside Audit and Supervisory 9 10 11 12 8 r n p e Kentaro Koga Committee e t e use o ndependent D re tor ud t and Independent e ers outs de d re tors Supervisory Committee Independent outs de d re tors 4 members 0 0 e er Nomination Advisory 7 9 10 11 1 Etsuko Katsu Outside Committee D re tor ud t and e ers r n p e Supervisory Committee Independent uts de d re tors 4 members: 0 0 e t e use o ndependent e er outs de d re tors r n p e 0 2 Compensation 9 10 11 1 2 (Use of arbitrary mechanisms) Simon Laffin Outside Advisory Committee D re tor ud t and e ers Supervisory Committee Independent Independent outs de d re tors 3 members 0 0 e er
46 Dentsu Group Integrated Report 2020 Our Foundation Corporate Governance
Initiatives Aimed at Enhancing Efficacy of Governance For details, please see the Corporate Governance Report on our website. As of March 27, 2020 https://www.group.dentsu.com/en/about-us/common/pdf/governance_202001_en.pdf
Board of Directors’ Effectiveness and Self-Evaluations Messages from Newly Appointed Directors
To ensure the ongoing effectiveness of the Board of The analysis and evaluation for FY2019 indicate that the D re tors, a questionnaire was submitted to all Board composition, operation, and items deliberated by the members pertaining to the efficacy and appropriateness of Board of Directors were generally appropriate. It is noted In January 2020, Dentsu Inc. transitioned to the pure holding company the Board’s supervision of management. Responses to this that sufficient deliberation had been conducted through Dentsu Group Inc., which serves as a “Teaming Company” and questionnaire were analyzed and evaluated by a third party. the exchange of opinions, confirming that the Board the foundation on which resources and assets are managed, with a view The Board of Directors received a report from the Board of maintained efficacy and appropriateness in its supervision to rea ng us ness ode nno at on strateg es at a g o a e e to Directors Secretariat regarding these results, which were of operations. In the future, the Group will strive to make accelerate growth. used to analyze and evaluate the overall effectiveness of improvements on the issues identified in these areas, in The Board of Directors and the Audit and Supervisory Committee aim the Board order to further improve the Board of Directors. to further improve corporate governance by establishing a system or aud t ng and supervising business execution by the Dentsu Group, Main Issues and Improvement Measures in FY2019 Dentsu Japan Network, and Dentsu Aegis Network. In my position, I am e pe ted to engage n aud ts and pro de ad e ro a anage ent CEO Successor Development Plan Formulated polices and specific plans for the Nomination and Compensation Advisory Committee perspective, based on my role in areas such as the devising of strategies for ne us nesses Group Company Management Izumi Okoshi Continued to implement monitoring system revisions The worldwide spread of COVID-19 has caused those of us in Director/Audit and Supervisory Supervision management to face a crisis of which we have no prior experience. However, o ttee e er Providing Information Necessary Held meetings comprising mainly outside directors who were provided with information on having the resilience to withstand all manner of challenges, we view this for Strategy Deliberations markets, industry trends, and other topics crisis as an opportunity for change and advancement. We intend to engage in bold, proactive management amid renewed demand for sustainable growth that benefits society. In this increasingly uncertain environment, we will audit and supervise Training for Directors and Executive Officers from multiple perspectives, including compliance, risk management, and capital soundness. This will allow us to ensure agile management and quick Directors and executive officers are provided with training and continuous opportunities to acquire the knowledge essential for decision-making, based on our principles of corporate governance. executing their duties in order to properly fulfill their given roles.
Specific Examples of Training
Position When appointed After appointment
Directors and Training on Dentsu Group Inc. management, business and Regular study seminars as opportunities to acquire the Executive Officers financial strategies, related important matters and laws atest n or at on regard ng est pra t es and Discussion related to identifying and formulating egatrend re ated ssues so ut ons to Dentsu Group ssues Having now been part of the Dentsu Group for seven years, it is a privilege to join the Group Board at a time of such rapid transformation for the industry Explanation of Dentsu Group Inc. business, Regu ar pro s on o n or at on re ated to us ness Outside Directors and our company. organizational structure, etc. issues, etc. As the Group looks to further integrate its diverse capabilities, the breadth of my experience across the Group will provide a clear lens through which to contribute to the future direction of the Group. I have been CFO of the Internal Control System International business, Dentsu Aegis Network, for seven years and was CFO of Aegis Group plc for four years prior to the acquisition. I am currently a member of the Dentsu Group Executive Management Committee and CSR The Dentsu Group Internal Control System encourages policies, Dentsu Group Inc. and other Group companies Committee, as well as a member of the Executive Committee, M&A Committee compliance among directors, executive officers, and or u ate ru es and de e op anua s to n u ate a and a number of other management forums at Dentsu eg s et or employees, while at the same time supporting continuous thorough awareness of proper business execution among all Nick Priday I am passionate about creating an organization that allows our people to orporate de e op ent as Dentsu eets ts so a employees through training and other activities. thrive and deliver the highest quality services and solutions to our clients. responsibilities. The Dentsu Group Code of Conduct s There are business-related check items for risk management D re tor Driving ever closer alignment between the Japan and International positioned as a shared behavioral code to ensure that and compliance, while a broad range of inspections are businesses, through the concept of one dentsu, will bring long-term, directors, executive officers, and employees of Dentsu and conducted. The items checked include the appropriateness sustainable success over time, centered around both our clients and our its subsidiaries carry out their duties in compliance with the of rules; whether business is conducted in accordance with people. I have a clear understanding of the importance of delivering value for law, regulations, and the Company’s Articles of Incorporation. the rules; and if reporting of, and responses to, problems are all of our stakeholders, including our shareholders. I look forward to serving The code also ensures that business is conducted prompt, in order that issues might be identified and issues the Group and those shareholders going forward. appropriately, while the Internal Control and Compliance improved. We also establish internal control mechanisms at o ttee or s to a nta n and pro e nterna ontro s Group companies to maintain and enhance corporate value In accordance with Internal Control and Risk Committee throughout the entire Dentsu Group. Dentsu Group Code of Conduct https://www.group.dentsu.com/en/about-us/governance/codeofconduct.html
47 Dentsu Group Integrated Report 2020 Our Foundation Corporate Governance
Initiatives Aimed at Enhancing Efficacy of Governance For details, please see the Corporate Governance Report on our website. As of March 27, 2020 https://www.group.dentsu.com/en/about-us/common/pdf/governance_202001_en.pdf
Board of Directors’ Effectiveness and Self-Evaluations Messages from Newly Appointed Directors
To ensure the ongoing effectiveness of the Board of The analysis and evaluation for FY2019 indicate that the D re tors, a questionnaire was submitted to all Board composition, operation, and items deliberated by the members pertaining to the efficacy and appropriateness of Board of Directors were generally appropriate. It is noted In January 2020, Dentsu Inc. transitioned to the pure holding company the Board’s supervision of management. Responses to this that sufficient deliberation had been conducted through Dentsu Group Inc., which serves as a “Teaming Company” and questionnaire were analyzed and evaluated by a third party. the exchange of opinions, confirming that the Board the foundation on which resources and assets are managed, with a view The Board of Directors received a report from the Board of maintained efficacy and appropriateness in its supervision to rea ng us ness ode nno at on strateg es at a g o a e e to Directors Secretariat regarding these results, which were of operations. In the future, the Group will strive to make accelerate growth. used to analyze and evaluate the overall effectiveness of improvements on the issues identified in these areas, in The Board of Directors and the Audit and Supervisory Committee aim the Board order to further improve the Board of Directors. to further improve corporate governance by establishing a system or aud t ng and supervising business execution by the Dentsu Group, Main Issues and Improvement Measures in FY2019 Dentsu Japan Network, and Dentsu Aegis Network. In my position, I am e pe ted to engage n aud ts and pro de ad e ro a anage ent CEO Successor Development Plan Formulated polices and specific plans for the Nomination and Compensation Advisory Committee perspective, based on my role in areas such as the devising of strategies for ne us nesses Group Company Management Izumi Okoshi Continued to implement monitoring system revisions The worldwide spread of COVID-19 has caused those of us in Director/Audit and Supervisory Supervision management to face a crisis of which we have no prior experience. However, o ttee e er Providing Information Necessary Held meetings comprising mainly outside directors who were provided with information on having the resilience to withstand all manner of challenges, we view this for Strategy Deliberations markets, industry trends, and other topics crisis as an opportunity for change and advancement. We intend to engage in bold, proactive management amid renewed demand for sustainable growth that benefits society. In this increasingly uncertain environment, we will audit and supervise Training for Directors and Executive Officers from multiple perspectives, including compliance, risk management, and capital soundness. This will allow us to ensure agile management and quick Directors and executive officers are provided with training and continuous opportunities to acquire the knowledge essential for decision-making, based on our principles of corporate governance. executing their duties in order to properly fulfill their given roles.
Specific Examples of Training
Position When appointed After appointment
Directors and Training on Dentsu Group Inc. management, business and Regular study seminars as opportunities to acquire the Executive Officers financial strategies, related important matters and laws atest n or at on regard ng est pra t es and Discussion related to identifying and formulating egatrend re ated ssues so ut ons to Dentsu Group ssues Having now been part of the Dentsu Group for seven years, it is a privilege to join the Group Board at a time of such rapid transformation for the industry Explanation of Dentsu Group Inc. business, Regu ar pro s on o n or at on re ated to us ness Outside Directors and our company. organizational structure, etc. issues, etc. As the Group looks to further integrate its diverse capabilities, the breadth of my experience across the Group will provide a clear lens through which to contribute to the future direction of the Group. I have been CFO of the Internal Control System International business, Dentsu Aegis Network, for seven years and was CFO of Aegis Group plc for four years prior to the acquisition. I am currently a member of the Dentsu Group Executive Management Committee and CSR The Dentsu Group Internal Control System encourages policies, Dentsu Group Inc. and other Group companies Committee, as well as a member of the Executive Committee, M&A Committee compliance among directors, executive officers, and or u ate ru es and de e op anua s to n u ate a and a number of other management forums at Dentsu eg s et or employees, while at the same time supporting continuous thorough awareness of proper business execution among all Nick Priday I am passionate about creating an organization that allows our people to orporate de e op ent as Dentsu eets ts so a employees through training and other activities. thrive and deliver the highest quality services and solutions to our clients. responsibilities. The Dentsu Group Code of Conduct s There are business-related check items for risk management D re tor Driving ever closer alignment between the Japan and International positioned as a shared behavioral code to ensure that and compliance, while a broad range of inspections are businesses, through the concept of one dentsu, will bring long-term, directors, executive officers, and employees of Dentsu and conducted. The items checked include the appropriateness sustainable success over time, centered around both our clients and our its subsidiaries carry out their duties in compliance with the of rules; whether business is conducted in accordance with people. I have a clear understanding of the importance of delivering value for law, regulations, and the Company’s Articles of Incorporation. the rules; and if reporting of, and responses to, problems are all of our stakeholders, including our shareholders. I look forward to serving The code also ensures that business is conducted prompt, in order that issues might be identified and issues the Group and those shareholders going forward. appropriately, while the Internal Control and Compliance improved. We also establish internal control mechanisms at o ttee or s to a nta n and pro e nterna ontro s Group companies to maintain and enhance corporate value In accordance with Internal Control and Risk Committee throughout the entire Dentsu Group. Dentsu Group Code of Conduct https://www.group.dentsu.com/en/about-us/governance/codeofconduct.html
48 Dentsu Group Integrated Report 2020 Our Foundation Corporate Governance
Initiatives Aimed at Enhancing Board of Director Transparency For details, please see the Corporate Governance Report on our website. As of March 27, 2020 https://www.group.dentsu.com/en/about-us/common/pdf/governance_202001_en.pdf
Director Appointment and Dismissal Messages from Outside Directors
When nominating directors who are not members of the Directors shall be nominated by the Board of Directors, Audit and Supervisory Committee, the representative which will take into consideration the opinions of the directors—the individual in a Japanese company who has outside directors. When nominating directors who are On January 1, 2020, Dentsu Inc. adopted a pure holding company structure the company seal and represents it in transactions—will members of the Audit and Supervisory Committee, the and became Dentsu Group Inc. We have welcomed two new International submit the proposed names and, to ensure transparency, representat e d re tors su t a st o proposed members to the Board of Directors, increasing our diversity. explain to the independent outside director members of names and, after they have been approved by the Audit The creation of a Group governance system and the realization of effective the Audit and Supervisory Committee the reasons for and Supervisory Committee, the Board of Directors shall governance are seen as among the most important issues facing the Dentsu having selected the nominees, and their suitability. decide on the new board members. Group, which now has 66,000 employees in 145 countries and regions around the world. Viewing itself as a “Teaming Company,” Dentsu Group Inc. aims to maximize Corporate Officer Compensation System and optimize Group company business and financial synergies, while contributing to the resolution of global issues by collaborating with a variety The Dentsu Group Inc. determines the appropriate for Audit and Supervisory Committee members and of stakeholders. o pensat on for Directors as well as Audit and Supervisory Directors on one hand, and the Group’s performance and tsu o atsu To maximize Group corporate value, achieve sustainable growth, and o ttee members based on corporate value, scale, and corporate value on the other. optimize the allocation of an abundant array of diverse internal resources, Independent uts de D re tor o pensat on levels, referencing compensation market The plan is designed to promote shared interests with outside directors must strengthen their independent monitoring of business survey data from external specialized institutions. stakeholders, while raising awareness among Audit and Audit and Supervisory o ttee e er execution. As an Audit and Supervisory Committee member, and leveraging The Company introduced a new policy stipulating a Supervisory Committee members and Directors. The latter my knowledge of finance, the global economy, and management at per or an e ased sto o pensat on p an as a ed u Company members contribute to the sustainable growth, companies and universities, I will collaborate and cooperate with the to long-term bonus that was approved at the 170th Ordinary and enhance the medium- to long-term corporate value, of Company’s Internal Audit Office and its auditors, in an effort to enhance the General Meeting of Shareholders, held in March 2019. the Group. a ue reat on pro ess The plan clarifies the relationship between compensation Even given that the post COVID-19 world is seeing significant changes, I Corporate Officer Compensation Items Applicable by Director Position have high expectations that the Dentsu Group will continue to drive global a ue reat on Medium- to Director type Base salary Annual bonus long-term bonus Internal directors who are not Audit and Supervisory Committee members Outside directors who are not Audit and Supervisory Committee members × × Internal directors who are Audit and Supervisory Committee members × × Outside directors who are Audit and Supervisory Committee members × × Indicates members who concurrently serve as executive officers. I am delighted to have joined the Dentsu Group Board, which has become more diverse, with three non-Japanese members. This is very important as the Compensation Ratios Group grows its international operations, which make up 60% of Group I per or an e nd ators eet standard a ues revenue. Although many issues are the same throughout the Group, there are Medium- to significant differences in how markets and businesses work in different Base salary Annual bonus Fixed compensation: 60% long-term bonus continents and countries. This means that a diverse board is better able to 100% 5% Variable compensation: 40% 60% guide a business as globally spread as Dentsu Group. (2) If performance indicators are below the lower limit: The role of the Audit and Supervisory Committee (ASC) is crucial in our corporate governance. It reviews financial reporting, control and risk Fixed compensation: 100% Base salary management. This is an area in which I have had relevant experience with many 100% Variable compensation: 0% companies. I am a qualified accountant, have served as a CFO in a FTSE-100 (3) If performance indicators are above the upper limit: Simon Laffin company, chaired several UK-listed and private companies, and chaired the audit committee for a number of public companies. The ASC of course has Medium- to Base salary Annual bonus Fixed compensation: 40% Independent uts de D re tor long-term bonus wider responsibilities than a Western-style audit committee, in auditing the 100% 5% Variable compensation: 60% Audit and Supervisory 145% o ttee e er performance of the duties of the representative and other executive directors. Note: In principle, non-Japanese director compensation is remitted by overseas subsidiaries, and thus is not applicable to the above. We need to ensure that the board promotes the company’s sustainable growth and improves corporate value, profitability, and cash efficiency with appropriate risk-taking. I can assure shareholders that the ASC is very active in Cross-shareholding Ownership Policy fulfilling this role! Dentsu Group is in very interesting, and at times challenging, markets across With regard to Dentsu Group cross-shareholdings, the basic which the Dentsu Group is invested. the world. We face many different and changing challenges, not least in the policy is to sell or otherwise decrease holdings of shares In line with this basic policy, every year the Board of current year of the COVID-19 pandemic. It is the role of the Board to keep up to determined to be of minor significance from the Directors examines the individual company shares of all date with these challenges and to enhance the Group as markets change. Dentsu perspectives of whether dividends and other related profits cross-shareholdings held by the Group from a medium- to Group continues to develop its corporate governance to respond to these are in excess of the target cost of capital for the acquisition long-term perspective, carefully examining the objective, challenges. I look forward to contributing fully to the board in fulfilling its duties. price, as well as whether holding the shares contributes to economic rationale, and other factors to verify the maintaining or strengthening transactional relationships or appropriateness of said shareholdings. promoting joint business ventures with the companies in 49 Dentsu Group Integrated Report 2020 Our Foundation Corporate Governance
Initiatives Aimed at Enhancing Board of Director Transparency For details, please see the Corporate Governance Report on our website. As of March 27, 2020 https://www.group.dentsu.com/en/about-us/common/pdf/governance_202001_en.pdf
Director Appointment and Dismissal Messages from Outside Directors
When nominating directors who are not members of the Directors shall be nominated by the Board of Directors, Audit and Supervisory Committee, the representative which will take into consideration the opinions of the directors—the individual in a Japanese company who has outside directors. When nominating directors who are On January 1, 2020, Dentsu Inc. adopted a pure holding company structure the company seal and represents it in transactions—will members of the Audit and Supervisory Committee, the and became Dentsu Group Inc. We have welcomed two new International submit the proposed names and, to ensure transparency, representat e d re tors su t a st o proposed members to the Board of Directors, increasing our diversity. explain to the independent outside director members of names and, after they have been approved by the Audit The creation of a Group governance system and the realization of effective the Audit and Supervisory Committee the reasons for and Supervisory Committee, the Board of Directors shall governance are seen as among the most important issues facing the Dentsu having selected the nominees, and their suitability. decide on the new board members. Group, which now has 66,000 employees in 145 countries and regions around the world. Viewing itself as a “Teaming Company,” Dentsu Group Inc. aims to maximize Corporate Officer Compensation System and optimize Group company business and financial synergies, while contributing to the resolution of global issues by collaborating with a variety The Dentsu Group Inc. determines the appropriate for Audit and Supervisory Committee members and of stakeholders. o pensat on for Directors as well as Audit and Supervisory Directors on one hand, and the Group’s performance and tsu o atsu To maximize Group corporate value, achieve sustainable growth, and o ttee members based on corporate value, scale, and corporate value on the other. optimize the allocation of an abundant array of diverse internal resources, Independent uts de D re tor o pensat on levels, referencing compensation market The plan is designed to promote shared interests with outside directors must strengthen their independent monitoring of business survey data from external specialized institutions. stakeholders, while raising awareness among Audit and Audit and Supervisory o ttee e er execution. As an Audit and Supervisory Committee member, and leveraging The Company introduced a new policy stipulating a Supervisory Committee members and Directors. The latter my knowledge of finance, the global economy, and management at per or an e ased sto o pensat on p an as a ed u Company members contribute to the sustainable growth, companies and universities, I will collaborate and cooperate with the to long-term bonus that was approved at the 170th Ordinary and enhance the medium- to long-term corporate value, of Company’s Internal Audit Office and its auditors, in an effort to enhance the General Meeting of Shareholders, held in March 2019. the Group. a ue reat on pro ess The plan clarifies the relationship between compensation Even given that the post COVID-19 world is seeing significant changes, I Corporate Officer Compensation Items Applicable by Director Position have high expectations that the Dentsu Group will continue to drive global a ue reat on Medium- to Director type Base salary Annual bonus long-term bonus Internal directors who are not Audit and Supervisory Committee members Outside directors who are not Audit and Supervisory Committee members × × Internal directors who are Audit and Supervisory Committee members × × Outside directors who are Audit and Supervisory Committee members × × Indicates members who concurrently serve as executive officers. I am delighted to have joined the Dentsu Group Board, which has become more diverse, with three non-Japanese members. This is very important as the Compensation Ratios Group grows its international operations, which make up 60% of Group I per or an e nd ators eet standard a ues revenue. Although many issues are the same throughout the Group, there are Medium- to significant differences in how markets and businesses work in different Base salary Annual bonus Fixed compensation: 60% long-term bonus continents and countries. This means that a diverse board is better able to 100% 5% Variable compensation: 40% 60% guide a business as globally spread as Dentsu Group. (2) If performance indicators are below the lower limit: The role of the Audit and Supervisory Committee (ASC) is crucial in our corporate governance. It reviews financial reporting, control and risk Fixed compensation: 100% Base salary management. This is an area in which I have had relevant experience with many 100% Variable compensation: 0% companies. I am a qualified accountant, have served as a CFO in a FTSE-100 (3) If performance indicators are above the upper limit: Simon Laffin company, chaired several UK-listed and private companies, and chaired the audit committee for a number of public companies. The ASC of course has Medium- to Base salary Annual bonus Fixed compensation: 40% Independent uts de D re tor long-term bonus wider responsibilities than a Western-style audit committee, in auditing the 100% 5% Variable compensation: 60% Audit and Supervisory 145% o ttee e er performance of the duties of the representative and other executive directors. Note: In principle, non-Japanese director compensation is remitted by overseas subsidiaries, and thus is not applicable to the above. We need to ensure that the board promotes the company’s sustainable growth and improves corporate value, profitability, and cash efficiency with appropriate risk-taking. I can assure shareholders that the ASC is very active in Cross-shareholding Ownership Policy fulfilling this role! Dentsu Group is in very interesting, and at times challenging, markets across With regard to Dentsu Group cross-shareholdings, the basic which the Dentsu Group is invested. the world. We face many different and changing challenges, not least in the policy is to sell or otherwise decrease holdings of shares In line with this basic policy, every year the Board of current year of the COVID-19 pandemic. It is the role of the Board to keep up to determined to be of minor significance from the Directors examines the individual company shares of all date with these challenges and to enhance the Group as markets change. Dentsu perspectives of whether dividends and other related profits cross-shareholdings held by the Group from a medium- to Group continues to develop its corporate governance to respond to these are in excess of the target cost of capital for the acquisition long-term perspective, carefully examining the objective, challenges. I look forward to contributing fully to the board in fulfilling its duties. price, as well as whether holding the shares contributes to economic rationale, and other factors to verify the maintaining or strengthening transactional relationships or appropriateness of said shareholdings. promoting joint business ventures with the companies in 50 Dentsu Group Integrated Report 2020 Our Foundation Corporate Governance
Establishment of Speak Up! Rejection of Antisocial Forces Compliance and Internal Control Promotion Dentsu eg s et or D esta s ed an nterna e o pan and a Group enterpr ses set up a as report ng progra a ed pea p or report ng an o on t e Re e t on o rgan ed r e Groups and Compliance Promotion System Establishment of Compliance Line n dent o on ern or t at ra ses susp ons o rongdo ng t er nt so a or es t ere art u at ng t e r Dentsu or u ated t e Dentsu Group ode o ondu t In add t on Dentsu apan et or D set up a n t e or p a e p o ees an a e a report to ne determination to take a firm stand against antisocial forces, according to which directors and executive officers who o p an e ne or t e report ng o nterna o at ons n t e anagers R sta or sen or anagers or t e an o o as groups and individuals seeking economic profit through d s o er o at ons o pre a ng a s or o en ounter ot er pu nterest and an e terna onta t po nt and ed an nterna gr e an e pro edures ppropr ate ega and or o en e are no n n apan us ness partners a e een ser ous o p an e re ated ssues are re u red to report outside law office was established to ensure that those d s p nar a t on e ta en aga nst perpetrators o as ed to ta e t e sa e a t on raud and ot er rongdo ng their findings immediately to the Executive Committee, see ng onsu tat on or report ng o at ons are n no a For details regarding this policy, please refer to: D a so e p o s a e a ted an ndependent Interna ontro and R s o ttee as e as t e ud t and pena ed oreo er t e oo et Compliance Digest as ttps dentsu o p en sr o p an e o p an e t uper sor o ttee o a nta n and pro e t e e e d str uted to a D o pan es and tra n ng as spe a st t at e p o ees an onta t anon ous on t e o e p o ee o p an e and ensure e p o ee a areness ondu ted to pro ote an understand ng o o p an e p one e a and t roug a e s te 2 ours a da o o p an e re ated ssues ru es and anua s are da s a ear and n a nu er o anguages Tax Behavior Principle de e oped and tra n ng progra s ondu ted e Dentsu Group or u ated ts a ss on tate ent and a trateg to a nta n ons sten t Dentsu Incident of concern or suspicion of wrongdoing Group us ness strateg es and a t t es orporate a ues within the workplace and so a respons t es as e as to a nta n and pro e Group a ue ta ng appropr ate ta pos t ons u ng or arass ent Internal Control Promotion Structure and pa ng ta es as appropr ate e t or raud For details regarding tax behavior principles, please refer to: r er and orrupt on ttps dentsu o p en sr o p an e respe t or a s t In or at on se ur t rea es Dentsu Group Inc. e g oss or t e t o persona sens t e data
Audits Audit and Supervisory Board of Directors Abuse or inflation of expenses Committee on o p an e t ontra tua o gat ons ount ng and ta a pra t e
Group Executive Report Report Internal Control and Management Committee Risk Committee Corruption Prevention Response e Dentsu Group nst tuted ant orrupt on po es to ensure t at e ondu t us ness n an onest a r and transparent anner In o p an e t r er regu at ons
Dentsu Aegis Network Board Dentsu Japan Network Board n t e ountr es and o un t es around t e or d ere e do us ness Dentsu Group s pros r ed ro n o e ent Report ng o Report ng o n orrupt a ts des gned to ena e t e o pan to o ta n portant portant Dentsu Japan Network Dentsu Aegis Network te s Dentsu Aegis Network Dentsu Japan Network te s Internal Control and unfair profits. Risk Committee Audit Committee Audit Committee Risk Committee In order to eet our so a respons t es and ondu t sound us ness a t t es e s a str e a a s to u t ate
Company Company Company ud ts Dentsu Aegis Network Dentsu Japan Network ud ts Company Company Company o p an e a areness t roug n ouse tra n ng C B A Risk and Audit Team Internal Audit Office A B C Bid to End Bribery by Group Companies Abroad D pro des o p an e tra n ng on t e ntranet or Group o pan es outs de o apan t e part pat on rate ote Gra nes and arro s nd ate report ng nes or ud t and uper sor o ttee e ers o s 0％ and ore s a o o up ea o pan a so o ds ts o n tra n ng sess ons and str es to ra se e p o ee a areness regard ng r er
51 Dentsu Group Integrated Report 2020 Our Foundation Corporate Governance
Establishment of Speak Up! Rejection of Antisocial Forces Compliance and Internal Control Promotion Dentsu eg s et or D esta s ed an nterna e o pan and a Group enterpr ses set up a as report ng progra a ed pea p or report ng an o on t e Re e t on o rgan ed r e Groups and Compliance Promotion System Establishment of Compliance Line n dent o on ern or t at ra ses susp ons o rongdo ng t er nt so a or es t ere art u at ng t e r Dentsu or u ated t e Dentsu Group ode o ondu t In add t on Dentsu apan et or D set up a n t e or p a e p o ees an a e a report to ne determination to take a firm stand against antisocial forces, according to which directors and executive officers who o p an e ne or t e report ng o nterna o at ons n t e anagers R sta or sen or anagers or t e an o o as groups and individuals seeking economic profit through d s o er o at ons o pre a ng a s or o en ounter ot er pu nterest and an e terna onta t po nt and ed an nterna gr e an e pro edures ppropr ate ega and or o en e are no n n apan us ness partners a e een ser ous o p an e re ated ssues are re u red to report outside law office was established to ensure that those d s p nar a t on e ta en aga nst perpetrators o as ed to ta e t e sa e a t on raud and ot er rongdo ng their findings immediately to the Executive Committee, see ng onsu tat on or report ng o at ons are n no a For details regarding this policy, please refer to: D a so e p o s a e a ted an ndependent Interna ontro and R s o ttee as e as t e ud t and pena ed oreo er t e oo et Compliance Digest as ttps dentsu o p en sr o p an e o p an e t uper sor o ttee o a nta n and pro e t e e e d str uted to a D o pan es and tra n ng as spe a st t at e p o ees an onta t anon ous on t e o e p o ee o p an e and ensure e p o ee a areness ondu ted to pro ote an understand ng o o p an e p one e a and t roug a e s te 2 ours a da o o p an e re ated ssues ru es and anua s are da s a ear and n a nu er o anguages Tax Behavior Principle de e oped and tra n ng progra s ondu ted e Dentsu Group or u ated ts a ss on tate ent and a trateg to a nta n ons sten t Dentsu Incident of concern or suspicion of wrongdoing Group us ness strateg es and a t t es orporate a ues within the workplace and so a respons t es as e as to a nta n and pro e Group a ue ta ng appropr ate ta pos t ons u ng or arass ent Internal Control Promotion Structure and pa ng ta es as appropr ate e t or raud For details regarding tax behavior principles, please refer to: r er and orrupt on ttps dentsu o p en sr o p an e respe t or a s t In or at on se ur t rea es Dentsu Group Inc. e g oss or t e t o persona sens t e data
Audits Audit and Supervisory Board of Directors Abuse or inflation of expenses Committee on o p an e t ontra tua o gat ons ount ng and ta a pra t e
Group Executive Report Report Internal Control and Management Committee Risk Committee Corruption Prevention Response e Dentsu Group nst tuted ant orrupt on po es to ensure t at e ondu t us ness n an onest a r and transparent anner In o p an e t r er regu at ons
Dentsu Aegis Network Board Dentsu Japan Network Board n t e ountr es and o un t es around t e or d ere e do us ness Dentsu Group s pros r ed ro n o e ent Report ng o Report ng o n orrupt a ts des gned to ena e t e o pan to o ta n portant portant Dentsu Japan Network Dentsu Aegis Network te s Dentsu Aegis Network Dentsu Japan Network te s Internal Control and unfair profits. Risk Committee Audit Committee Audit Committee Risk Committee In order to eet our so a respons t es and ondu t sound us ness a t t es e s a str e a a s to u t ate
Company Company Company ud ts Dentsu Aegis Network Dentsu Japan Network ud ts Company Company Company o p an e a areness t roug n ouse tra n ng C B A Risk and Audit Team Internal Audit Office A B C Bid to End Bribery by Group Companies Abroad D pro des o p an e tra n ng on t e ntranet or Group o pan es outs de o apan t e part pat on rate ote Gra nes and arro s nd ate report ng nes or ud t and uper sor o ttee e ers o s 0％ and ore s a o o up ea o pan a so o ds ts o n tra n ng sess ons and str es to ra se e p o ee a areness regard ng r er
52 Dentsu Group Integrated Report 2020 Data Financial Data Summary
Consolidated Financial Data
(Millions of Yen) (%) 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019
Profit and loss statement Organic growth rate 2 0 0 (1.0)
urno er 2 0 0 2 00 2 02 apan (0.3) 2 0
Re enue 2 2 0 2 0 Internat ona 0 0 (1.9) Re enue ess ost o sa es 2 0 22 2 0 perat ng arg n 2 2 0
Operating profit (loss) 2 2 2 2 (3,358) apan 2 2 2 0 2 2 2
Profit (loss) before tax 00 2 2 2 (42,769) Internat ona 2 2 2 2 Profit (loss) for the year attributable to owners of the parent 0 0 0 0 0 0 (80,893) Return on equity (ROE) 2 0 (8.0) I D 0 0 0 0 2 0 Underlying ROE 0 0 0 Return on assets (ROA) (1.2) Underlying operating profit 2 02 0 22 0 Ratio of equity attributable to owners of the parent (Equity ratio) 2 0 2 2 Underlying net profit 2 2 0 20 Basic earnings per share (yen) 2 2 2 2 2 20 (287.92) Basic underlying profit per share (yen) 0 2 20 2 0 Cash dividend per share (yen) 0 0 Balance sheet Dividend payout ratio 2 2 0 2 2 ota assets 0 0 2 0 2 2 Underlying dividend payout ratio 0 2 2 2 0 Total equity attributable to owners of the parent 0 2 2 2 0 2 0 *1 2014 and 2015 are reported on a pro forma basis. *2 Organic growth rate represents the constant currency year-on-year growth after adjusting for the effect of business acquired or disposed of since the beginning of the Cash flow previous year. *3 Operating margin = Underlying operating profit ÷ Revenue less cost of sales x 100 Net cash flow from operating activities 0 *4 ROE (IFRS) = Profit for the year attributable to owners of the parent ÷ Average equity attributable to owners of the parent based on equity at the beginning and end of the fiscal year x 100 Net cash flow from investing activities (156,161) (85,531) (61,382) (76,051) (Fiscal year-end before alignment across the Group means March) Net cash flow from financing activities 2 22 22 (7,803) *5 Underlying ROE = Underlying net profit (attributable to owners of the parent) ÷ Average equity attributable to owners of the parent based on equity at the beginning and end of the fiscal year x 100 Cash and cash equivalents at end of period 2 2 0 0 0 0 (Fiscal year-end before alignment across the Group means March) *6 ROA (IFRS) = Profit before tax ÷ Average total assets based on total assets at the beginning and end of the fiscal year x 100 *7 Ratio of equity attributable to owners of the parent = Equity attributable to owners of the parent ÷ Total assets Number of employees 2 0 0 2 0 00 *8 Dividend payout ratio = Cash dividend per share ÷ Basic earnings per share x 100 Number of consolidated subsidiaries 0 00 *9 Underlying dividend payout ratio = Cash dividend per share ÷ Basic underlying profit per share x 100
*1 2014 and 2015 are reported on a pro forma basis. *2 Underlying operating profit: KPI to measure recurring business performance which is calculated as operating profit added with amortization of M&A related intangible Organic Growth Rate Operating Margin 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 onso dated apan Internat ona onso dated apan Internat ona non urrent assets (%) (%) *3 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 0 (attributable to owners of the parent) added with adjustment items related to operating profit, revaluation of earnout liabilities/M&A related put-option liabilities, gain/loss on sales of shares of associates, tax-related and NCI profit-related and other one-off items. 0 20 Note: The Group has adopted IFRS 15 “Revenue from Contracts with Customers” from the fiscal year ended December 31, 2018, and IFRS 16 “Leases” from the fiscal year ended December 31, 2019. The figures for prior years are not restated and based on the former standards. 0 0
0 20 20 20 20 20 20 20 20 20 20 20 20
Return on Equity (ROE) / Underlying ROE Cash Dividend per Share / Dividend Payout Ratio / R Underlying ROE Underlying Dividend Payout Ratio (%) Cash dividend per share Dividend payout ratio (Yen) Underlying dividend payout ratio (%) 00 0 0 0 0 0 0 0 0 20 20 0 0 0 0 20 20 20 20 20 20 20 20 20 20 20 20
53 Dentsu Group Integrated Report 2020 Data Financial Data Summary
Consolidated Financial Data
(Millions of Yen) (%) 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019
Profit and loss statement Organic growth rate 2 0 0 (1.0)
urno er 2 0 0 2 00 2 02 apan (0.3) 2 0
Re enue 2 2 0 2 0 Internat ona 0 0 (1.9) Re enue ess ost o sa es 2 0 22 2 0 perat ng arg n 2 2 0
Operating profit (loss) 2 2 2 2 (3,358) apan 2 2 2 0 2 2 2
Profit (loss) before tax 00 2 2 2 (42,769) Internat ona 2 2 2 2 Profit (loss) for the year attributable to owners of the parent 0 0 0 0 0 0 (80,893) Return on equity (ROE) 2 0 (8.0) I D 0 0 0 0 2 0 Underlying ROE 0 0 0 Return on assets (ROA) (1.2) Underlying operating profit 2 02 0 22 0 Ratio of equity attributable to owners of the parent (Equity ratio) 2 0 2 2 Underlying net profit 2 2 0 20 Basic earnings per share (yen) 2 2 2 2 2 20 (287.92) Basic underlying profit per share (yen) 0 2 20 2 0 Cash dividend per share (yen) 0 0 Balance sheet Dividend payout ratio 2 2 0 2 2 ota assets 0 0 2 0 2 2 Underlying dividend payout ratio 0 2 2 2 0 Total equity attributable to owners of the parent 0 2 2 2 0 2 0 *1 2014 and 2015 are reported on a pro forma basis. *2 Organic growth rate represents the constant currency year-on-year growth after adjusting for the effect of business acquired or disposed of since the beginning of the Cash flow previous year. *3 Operating margin = Underlying operating profit ÷ Revenue less cost of sales x 100 Net cash flow from operating activities 0 *4 ROE (IFRS) = Profit for the year attributable to owners of the parent ÷ Average equity attributable to owners of the parent based on equity at the beginning and end of the fiscal year x 100 Net cash flow from investing activities (156,161) (85,531) (61,382) (76,051) (Fiscal year-end before alignment across the Group means March) Net cash flow from financing activities 2 22 22 (7,803) *5 Underlying ROE = Underlying net profit (attributable to owners of the parent) ÷ Average equity attributable to owners of the parent based on equity at the beginning and end of the fiscal year x 100 Cash and cash equivalents at end of period 2 2 0 0 0 0 (Fiscal year-end before alignment across the Group means March) *6 ROA (IFRS) = Profit before tax ÷ Average total assets based on total assets at the beginning and end of the fiscal year x 100 *7 Ratio of equity attributable to owners of the parent = Equity attributable to owners of the parent ÷ Total assets Number of employees 2 0 0 2 0 00 *8 Dividend payout ratio = Cash dividend per share ÷ Basic earnings per share x 100 Number of consolidated subsidiaries 0 00 *9 Underlying dividend payout ratio = Cash dividend per share ÷ Basic underlying profit per share x 100
*1 2014 and 2015 are reported on a pro forma basis. *2 Underlying operating profit: KPI to measure recurring business performance which is calculated as operating profit added with amortization of M&A related intangible Organic Growth Rate Operating Margin 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 onso dated apan Internat ona onso dated apan Internat ona non urrent assets (%) (%) *3 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 0 (attributable to owners of the parent) added with adjustment items related to operating profit, revaluation of earnout liabilities/M&A related put-option liabilities, gain/loss on sales of shares of associates, tax-related and NCI profit-related and other one-off items. 0 20 Note: The Group has adopted IFRS 15 “Revenue from Contracts with Customers” from the fiscal year ended December 31, 2018, and IFRS 16 “Leases” from the fiscal year ended December 31, 2019. The figures for prior years are not restated and based on the former standards. 0 0
0 20 20 20 20 20 20 20 20 20 20 20 20
Return on Equity (ROE) / Underlying ROE Cash Dividend per Share / Dividend Payout Ratio / R Underlying ROE Underlying Dividend Payout Ratio (%) Cash dividend per share Dividend payout ratio (Yen) Underlying dividend payout ratio (%) 00 0 0 0 0 0 0 0 0 20 20 0 0 0 0 20 20 20 20 20 20 20 20 20 20 20 20
54 Dentsu Group Integrated Report 2020 Data ESG Data Summary
Consolidated Data Environmental Performance Data 2017 2018 2019
2 emissions (tons) 2 Governance Data Dentsu In 2 2 2 0 2015 2016 2017 2018 2019 As of March 2020 Dentsu Japan Network except for Dentsu Inc. 22 D re tors 2 2 2 2 2 Dentsu Aegis Network 00 0 0 00 Outside directors (independent outside directors) 3(3) 3(3) 4(4) 4(4) 4(4) 5(4) 2 emission intensity (tons per FTE) 2 Ratio of independent outside directors (%) 2 0 Scope 1 (tons) Female directors 2 2 2 2 Dentsu In 2 0 Ratio of female directors (%) Dentsu Japan Network except for Dentsu Inc. 22 2 Board of Director meeting attendance rate (%) 0 Dentsu Aegis Network 2 ttendan e rate o ndependent outs de d re tors at Board of Director meetings (%) Scope 2 (market-based, tons) 0 2 0
ot a u ated as 2020 s n progress Dentsu In 20 2 2 Dentsu Japan Network except for Dentsu Inc. 2
Dentsu Aegis Network Social Data 20 02 2 Scope 3 (tons) Number of Employees (Each year-end) December December December December December 1. Purchased goods and services 2 2 0 2015 2016 2017 2018 2019 aste generated n operat ons 0 2 2 Consolidated employees 2 0 0 2 0 00 us ness tra e 2 0 2 2 7. Employee commuting 2 0 Employees and Managers* As of December 2019 Amount of waste (kg) Grand total Male Female Female Component Dentsu In 2 2 0 Employees 00 0 0 48.1% Dentsu Japan Network except for Dentsu Inc. 0 Dentsu In 0 2 0 32.6% Dentsu Aegis Network 2 2 0 0 2 0 000 Dentsu Japan Network except for Dentsu Inc. 2 2 2 35.4% Water consumption (m³) 0 0 0 2 Dentsu Aegis Network 2 2 53.9% Dentsu In 0 2 2 Managers 2 2 14.5% Dentsu Japan Network except for Dentsu Inc. 2 0 Dentsu In 0 7.6% Dentsu Aegis Network 2 2 0 Dentsu Japan Network except for Dentsu Inc. 2 2 12.7% Scope and Method of Calculation Dentsu Aegis Network 2 31.9% • Excluding some Dentsu Group companies • Based on the calculation standards of WRI (World Resources Institute) GHG Protocol * Calculated as Managers within Dentsu and domestic Group companies and Officer class within DAN. • For CO2 emissions, Categories 1, 5, 6, and 7 were calculated for Scope 3 • The volume of waste generated (in kg) is the sum of general waste and industrial waste (including waste oil, waste plastic) • The volume of water resources used is the sum of municipal water and gray water at the Tokyo Head Office, and the municipal water used at the Kansai Branch Office and Chubu Branch Office Community Activities • For improved accuracy, the values of the previous fiscal years have been revised Dentsu Japan Dentsu Aegis Consolidated Network Network Third-Party Assurance Donations (Yen) 0 0 2 art pants n o unteer a t t es 2
The opinion expressed is formed on the basis of a limited level of assurance and at the materiality of the LR Independent Assurance Statement professional judgement of the verifier. Relating to GHG and Social Data of Dentsu Group within Dentsu Note: The extent of evidence-gathering for a limited assurance engagement is less than for a reasonable assurance engagement. Limited Integrated Report 2020 for the Calendar Year 2019 assurance engagements focus on aggregated data rather than physically checking source data at sites. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed. This Assurance Statement has been prepared for Dentsu Corporation in accordance with our contract but is intended for the readers of this Report. LR’s approach ours spent part pat ng n o unteer a t t es LR’s assurance engagements are carried out in accordance with ISAE 30000 and ISO 14064-3 for GHG emissions 2 Terms of engagement 2 2 data. The following tasks though were undertaken as part of the evidence gathering process for this assurance Lloyd’s Register Quality Assurance Limited (LR) was commissioned by Dentsu Corporation (“the Company”) to engagement: provide independent assurance on its greenhouse gas (“GHG”) emissions data and social data within its Dentsu x Auditing the Company’s data management systems to confirm that there were no significant errors, Integrated Report 2020 (“the report”) for the calendar year 2019, that is, from 1 January 2019 to 31 December omissions or mis-statements in the report. We did this by reviewing the effectiveness of data handling 2019, against the assurance criteria below to a limited level of assurance and at the materiality of the procedures, instructions and systems, including those for internal verification; professional judgement of the verifier using ISAE3000 and ISO14064-3:2006 for GHG emissions data. x Interviewing with key people responsible for compiling the data and drafting the report; x Sampling datasets and tracing activity data back to aggregated levels; Our assurance engagement covered the operations and activities of the Company and its consolidated x Verifying the historical GHG emissions data and records for the calendar year 2019; subsidiaries in Japan and overseas and specifically the following requirements: x Teleconferencing with key peoples in Dentsu Aegis Network Ltd. in London to assess whether the data x Verifying conformance with the Company’s reporting methodologies for the selected dataset: management systems have been effectively implemented; and
x Evaluating the accuracy and reliability of data listed below: x By implementing a “No Visitor” Policy due to the global infection spread of COVID-19, the interview and the verification for Dentsu Creative X Inc. and Dentsu Digital Inc. were conducted remotely via Microsoft 1 2 GHG emissions data Teams.
x Scope 1 GHG emissions (tonnes CO2e) x Scope 2 GHG emissions (Market-based and Location-based) (tonnes CO2e) Observations x Scope 3 GHG emissions (Category 1, 5, 6, 7, and 8) (tonnes CO2e) The Company should further demonstrate the completeness, accuracy and reliability of its future environmental and social data reporting. Regarding Scope 3 GHG emissions, This is particular to establish Social data The rate of women in leadership, the amount of donations, robust internal data control systems at consolidated subsidiary levels. 3 x The rate of women in leadership (%) x The amount of donation (Japanese kYen) LR’s standards, competence and independence x The number of volunteers LR implements and maintains a comprehensive management system that meets accreditation requirements x The total hours of attendance of the volunteers (hours) for ISO 14065 Greenhouse gases – Requirements for greenhouse gas validation and verification bodies for use in accreditation or other forms of recognition and ISO/IEC 17021-1 Conformity assessment – Requirements for Our assurance engagement excluded the data and information of the Company’s suppliers, contractors and the number of participants in volunteer activities, the bodies providing audit and certification of management systems – Part 1: Requirements that are at least as any third-parties mentioned in the report. demanding as the requirements of the International Standard on Quality Control 1 and comply with the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants. LR’s responsibility is only to the Company. LR disclaims any liability or responsibility to others as explained in the end footnote. The Company’s responsibility is for collecting, aggregating, analysing and presenting all the LR ensures the selection of appropriately qualified individuals based on their qualifications, training and data and information within the report and for maintaining effective internal controls over the systems from experience. The outcome of all verification and certification assessments is then internally reviewed by senior 2 which the report is derived. Ultimately, the report has been approved by, and remains the responsibility of the hours spent participating in volunteer activities, and CO management to ensure that the approach applied is rigorous and transparent. Company. This is the only work undertaken by LR for the Company and as such does not compromise our independence LR’s Opinion or impartiality. Based on LR’s approach nothing has come to our attention that would cause us to believe that the Company has not, in all material respects: Signed Dated: 15 June 2020 x Met the requirements above emissions (greenhouse gas emissions) from the Dentsu x Disclosed accurate and reliable environmental and social data which is disclosed in the report and as summarised in Table 1 and 2 below. Norihiko Kinoshita LR Lead Verifier
On behalf of Lloyd’s Register Quality Assurance Limited 1 GHG quantification is subject to inherent uncertainty. 10th Floor, Queen's Tower A, 2-3-1 Minatomirai, Nishi-ku, Yokohama, JAPAN 2 Environmental data for 6 subsidiaries that were directly invested in CY2019 are not covered in the scope. Group are verified, and certification is provided (left), by LR reference: YKA4005213 3 The number of women in management positions at Dentsu Aegis Network is calculated based on the number of officers and above.
Page 1 of 3 Page 2 of 3 Lloyd’s Register Quality Assurance Ltd (LRQA).
55 Dentsu Group Integrated Report 2020 Data ESG Data Summary
Consolidated Data Environmental Performance Data 2017 2018 2019
2 emissions (tons) 2 Governance Data Dentsu In 2 2 2 0 2015 2016 2017 2018 2019 As of March 2020 Dentsu Japan Network except for Dentsu Inc. 22 D re tors 2 2 2 2 2 Dentsu Aegis Network 00 0 0 00 Outside directors (independent outside directors) 3(3) 3(3) 4(4) 4(4) 4(4) 5(4) 2 emission intensity (tons per FTE) 2 Ratio of independent outside directors (%) 2 0 Scope 1 (tons) Female directors 2 2 2 2 Dentsu In 2 0 Ratio of female directors (%) Dentsu Japan Network except for Dentsu Inc. 22 2 Board of Director meeting attendance rate (%) 0 Dentsu Aegis Network 2 ttendan e rate o ndependent outs de d re tors at Board of Director meetings (%) Scope 2 (market-based, tons) 0 2 0
ot a u ated as 2020 s n progress Dentsu In 20 2 2 Dentsu Japan Network except for Dentsu Inc. 2
Dentsu Aegis Network Social Data 20 02 2 Scope 3 (tons) Number of Employees (Each year-end) December December December December December 1. Purchased goods and services 2 2 0 2015 2016 2017 2018 2019 aste generated n operat ons 0 2 2 Consolidated employees 2 0 0 2 0 00 us ness tra e 2 0 2 2 7. Employee commuting 2 0 Employees and Managers* As of December 2019 Amount of waste (kg) Grand total Male Female Female Component Dentsu In 2 2 0 Employees 00 0 0 48.1% Dentsu Japan Network except for Dentsu Inc. 0 Dentsu In 0 2 0 32.6% Dentsu Aegis Network 2 2 0 0 2 0 000 Dentsu Japan Network except for Dentsu Inc. 2 2 2 35.4% Water consumption (m³) 0 0 0 2 Dentsu Aegis Network 2 2 53.9% Dentsu In 0 2 2 Managers 2 2 14.5% Dentsu Japan Network except for Dentsu Inc. 2 0 Dentsu In 0 7.6% Dentsu Aegis Network 2 2 0 Dentsu Japan Network except for Dentsu Inc. 2 2 12.7% Scope and Method of Calculation Dentsu Aegis Network 2 31.9% • Excluding some Dentsu Group companies • Based on the calculation standards of WRI (World Resources Institute) GHG Protocol * Calculated as Managers within Dentsu and domestic Group companies and Officer class within DAN. • For CO2 emissions, Categories 1, 5, 6, and 7 were calculated for Scope 3 • The volume of waste generated (in kg) is the sum of general waste and industrial waste (including waste oil, waste plastic) • The volume of water resources used is the sum of municipal water and gray water at the Tokyo Head Office, and the municipal water used at the Kansai Branch Office and Chubu Branch Office Community Activities • For improved accuracy, the values of the previous fiscal years have been revised Dentsu Japan Dentsu Aegis Consolidated Network Network Third-Party Assurance Donations (Yen) 0 0 2 art pants n o unteer a t t es 2
The opinion expressed is formed on the basis of a limited level of assurance and at the materiality of the LR Independent Assurance Statement professional judgement of the verifier. Relating to GHG and Social Data of Dentsu Group within Dentsu Note: The extent of evidence-gathering for a limited assurance engagement is less than for a reasonable assurance engagement. Limited Integrated Report 2020 for the Calendar Year 2019 assurance engagements focus on aggregated data rather than physically checking source data at sites. Consequently, the level of assurance obtained in a limited assurance engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance engagement been performed. This Assurance Statement has been prepared for Dentsu Corporation in accordance with our contract but is intended for the readers of this Report. LR’s approach ours spent part pat ng n o unteer a t t es LR’s assurance engagements are carried out in accordance with ISAE 30000 and ISO 14064-3 for GHG emissions 2 Terms of engagement 2 2 data. The following tasks though were undertaken as part of the evidence gathering process for this assurance Lloyd’s Register Quality Assurance Limited (LR) was commissioned by Dentsu Corporation (“the Company”) to engagement: provide independent assurance on its greenhouse gas (“GHG”) emissions data and social data within its Dentsu x Auditing the Company’s data management systems to confirm that there were no significant errors, Integrated Report 2020 (“the report”) for the calendar year 2019, that is, from 1 January 2019 to 31 December omissions or mis-statements in the report. We did this by reviewing the effectiveness of data handling 2019, against the assurance criteria below to a limited level of assurance and at the materiality of the procedures, instructions and systems, including those for internal verification; professional judgement of the verifier using ISAE3000 and ISO14064-3:2006 for GHG emissions data. x Interviewing with key people responsible for compiling the data and drafting the report; x Sampling datasets and tracing activity data back to aggregated levels; Our assurance engagement covered the operations and activities of the Company and its consolidated x Verifying the historical GHG emissions data and records for the calendar year 2019; subsidiaries in Japan and overseas and specifically the following requirements: x Teleconferencing with key peoples in Dentsu Aegis Network Ltd. in London to assess whether the data x Verifying conformance with the Company’s reporting methodologies for the selected dataset: management systems have been effectively implemented; and
x Evaluating the accuracy and reliability of data listed below: x By implementing a “No Visitor” Policy due to the global infection spread of COVID-19, the interview and the verification for Dentsu Creative X Inc. and Dentsu Digital Inc. were conducted remotely via Microsoft 1 2 GHG emissions data Teams.
x Scope 1 GHG emissions (tonnes CO2e) x Scope 2 GHG emissions (Market-based and Location-based) (tonnes CO2e) Observations x Scope 3 GHG emissions (Category 1, 5, 6, 7, and 8) (tonnes CO2e) The Company should further demonstrate the completeness, accuracy and reliability of its future environmental and social data reporting. Regarding Scope 3 GHG emissions, This is particular to establish Social data The rate of women in leadership, the amount of donations, robust internal data control systems at consolidated subsidiary levels. 3 x The rate of women in leadership (%) x The amount of donation (Japanese kYen) LR’s standards, competence and independence x The number of volunteers LR implements and maintains a comprehensive management system that meets accreditation requirements x The total hours of attendance of the volunteers (hours) for ISO 14065 Greenhouse gases – Requirements for greenhouse gas validation and verification bodies for use in accreditation or other forms of recognition and ISO/IEC 17021-1 Conformity assessment – Requirements for Our assurance engagement excluded the data and information of the Company’s suppliers, contractors and the number of participants in volunteer activities, the bodies providing audit and certification of management systems – Part 1: Requirements that are at least as any third-parties mentioned in the report. demanding as the requirements of the International Standard on Quality Control 1 and comply with the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants. LR’s responsibility is only to the Company. LR disclaims any liability or responsibility to others as explained in the end footnote. The Company’s responsibility is for collecting, aggregating, analysing and presenting all the LR ensures the selection of appropriately qualified individuals based on their qualifications, training and data and information within the report and for maintaining effective internal controls over the systems from experience. The outcome of all verification and certification assessments is then internally reviewed by senior 2 which the report is derived. Ultimately, the report has been approved by, and remains the responsibility of the hours spent participating in volunteer activities, and CO management to ensure that the approach applied is rigorous and transparent. Company. This is the only work undertaken by LR for the Company and as such does not compromise our independence LR’s Opinion or impartiality. Based on LR’s approach nothing has come to our attention that would cause us to believe that the Company has not, in all material respects: Signed Dated: 15 June 2020 x Met the requirements above emissions (greenhouse gas emissions) from the Dentsu x Disclosed accurate and reliable environmental and social data which is disclosed in the report and as summarised in Table 1 and 2 below. Norihiko Kinoshita LR Lead Verifier
On behalf of Lloyd’s Register Quality Assurance Limited 1 GHG quantification is subject to inherent uncertainty. 10th Floor, Queen's Tower A, 2-3-1 Minatomirai, Nishi-ku, Yokohama, JAPAN 2 Environmental data for 6 subsidiaries that were directly invested in CY2019 are not covered in the scope. Group are verified, and certification is provided (left), by LR reference: YKA4005213 3 The number of women in management positions at Dentsu Aegis Network is calculated based on the number of officers and above.
Page 1 of 3 Page 2 of 3 Lloyd’s Register Quality Assurance Ltd (LRQA).
56 Dentsu Group Integrated Report 2020 Data ESG Data Summary
Individual Data Work–Life Balance Average Number of Paid Vacation Days Taken Dentsu Inc. 2015 2016 2017 2018 2019 ota 2 2 2 2 Employee-related Data Male 0 2 2 2 2 2 As of December Number of Employees (Each year-end) Average Age of Employees 20 Female 0 0 December 2015 December 2016 December 2017 December 2018 December 2019 ota 0 Leave Taken (%) 2 0 0 0 0 2 Note: Period of data collection: Nine months spanning April–December 2015 Dentsu Employees 2 2 2 0 Male 2 Female 0 New Graduates Hired Employees Taking Childcare Leave, Reinstatement Ratio Average Number of April 2016 April 2017 April 2018 April 2019 April 2020 As of December 2015 2016 2017 2018 2019 Consecutive Years Served 20 ota 2 ota 0 2 2 ota Male 2 Male 02 Male Female Female 0 Female Female Component (%) 2 0 2 Reinstatement ratio (%) 00 00 00 00 00 Number of Employees by As of December 20 1 Number of New Graduates and Mid-career Personnel Hired Generation* Total Hours Worked per Year (Per Non-manager Employees)*
2015 2016 2017 2018 2019 Under 30 years of age 2015 2016 2017 2018 2019 2 ota 2 2 2 0 30–39 years of age 2 0 ota 2 2 2 0 2 0 Male 0 0 40–49 years of age *1 Following the change in management of working hours, the number of actual working hours was revised in FY2017. *2 Including management positions from FY2017. Female 2 50–59 years of age Female Component (%) 2 2 2 2 Over 60 years of age 2 ota 0 Leveraging Diverse Human Resources * Includes employees on temporary assignment but does not include accepted temporary assignees. Employment Rate of People with Disabilities (%)* Employee Composition*1 June 2016 June 2017 June 2018 June 2019 June 2020 As of December 2019 As of March 2020 ota 2 0 2 0 2 2 2 Male Female Total Male Female Total 2 * As of June of each year, total of four companies under the special subsidiary system (Dentsu Group, Dentsu Solari, Dentsu, Dentsu Works), until 2019, three companies Executive officers, others* 0 2 2 combined (Dentsu, Dentsu Solari, Dentsu Works) Managers 0 on anagers 2 0 0 2 2 2 0 Number of Post-retirement Rehires 2015 2016 2017 2018 2019 Contract employees 0 ota er a sta 0 0 0 0 2 2 Male Partners / senior staff 2 0 2 Female 0 2 Part-timers, others* Seconded from other entities 20 2 2 2 ota 2 0 0 2 2 2 Compliance *1 Employees on temporary assignments are excluded. *2 Includes senior corporate advisors, special advisors, and executive officers (excluding Director and Corporate Auditor). Compliance Line Reports (Cases)* *3 Indicates permanent part-timers, nonpermanent part-timers, and employees of overseas branches. 2015 2016 2017 2018 2019 Dentsu ota Employee Engagement Survey 2 * Total from Dentsu and Group companies in Japan. Survey of the Company and Work (%) January 2016 January 2017 January 2018 January 2019 Q. Have you gained experience and knowledge made Dentsu Aegis Network possible only by working at Dentsu? 2 2 2 Q. Are you proud to work at Dentsu? 0 2 0 0 As of December Average Number of As of December As of December Average Age of Employees 20 Consecutive Years Served 20 Employees by Age (%)* 20 Q. Going forward, do you want to continue working at Dentsu? 2 2 ota 0 ota 0 Under 30 years of age 30–39 years of age 2 Health and Safety 40–49 years of age Health Checkup Rate 50–59 years of age 2015 2016 2017 2018 2019 Over 60 years of age 0 ota 2 * Excludes certain employees. Note: Period of data collection: Nine months spanning April–December 2015 57 Dentsu Group Integrated Report 2020 Data ESG Data Summary
Individual Data Work–Life Balance Average Number of Paid Vacation Days Taken Dentsu Inc. 2015 2016 2017 2018 2019 ota 2 2 2 2 Employee-related Data Male 0 2 2 2 2 2 As of December Number of Employees (Each year-end) Average Age of Employees 20 Female 0 0 December 2015 December 2016 December 2017 December 2018 December 2019 ota 0 Leave Taken (%) 2 0 0 0 0 2 Note: Period of data collection: Nine months spanning April–December 2015 Dentsu Employees 2 2 2 0 Male 2 Female 0 New Graduates Hired Employees Taking Childcare Leave, Reinstatement Ratio Average Number of April 2016 April 2017 April 2018 April 2019 April 2020 As of December 2015 2016 2017 2018 2019 Consecutive Years Served 20 ota 2 ota 0 2 2 ota Male 2 Male 02 Male Female Female 0 Female Female Component (%) 2 0 2 Reinstatement ratio (%) 00 00 00 00 00 Number of Employees by As of December 20 1 Number of New Graduates and Mid-career Personnel Hired Generation* Total Hours Worked per Year (Per Non-manager Employees)*
2015 2016 2017 2018 2019 Under 30 years of age 2015 2016 2017 2018 2019 2 ota 2 2 2 0 30–39 years of age 2 0 ota 2 2 2 0 2 0 Male 0 0 40–49 years of age *1 Following the change in management of working hours, the number of actual working hours was revised in FY2017. *2 Including management positions from FY2017. Female 2 50–59 years of age Female Component (%) 2 2 2 2 Over 60 years of age 2 ota 0 Leveraging Diverse Human Resources * Includes employees on temporary assignment but does not include accepted temporary assignees. Employment Rate of People with Disabilities (%)* Employee Composition*1 June 2016 June 2017 June 2018 June 2019 June 2020 As of December 2019 As of March 2020 ota 2 0 2 0 2 2 2 Male Female Total Male Female Total 2 * As of June of each year, total of four companies under the special subsidiary system (Dentsu Group, Dentsu Solari, Dentsu, Dentsu Works), until 2019, three companies Executive officers, others* 0 2 2 combined (Dentsu, Dentsu Solari, Dentsu Works) Managers 0 on anagers 2 0 0 2 2 2 0 Number of Post-retirement Rehires 2015 2016 2017 2018 2019 Contract employees 0 ota er a sta 0 0 0 0 2 2 Male Partners / senior staff 2 0 2 Female 0 2 Part-timers, others* Seconded from other entities 20 2 2 2 ota 2 0 0 2 2 2 Compliance *1 Employees on temporary assignments are excluded. *2 Includes senior corporate advisors, special advisors, and executive officers (excluding Director and Corporate Auditor). Compliance Line Reports (Cases)* *3 Indicates permanent part-timers, nonpermanent part-timers, and employees of overseas branches. 2015 2016 2017 2018 2019 Dentsu ota Employee Engagement Survey 2 * Total from Dentsu and Group companies in Japan. Survey of the Company and Work (%) January 2016 January 2017 January 2018 January 2019 Q. Have you gained experience and knowledge made Dentsu Aegis Network possible only by working at Dentsu? 2 2 2 Q. Are you proud to work at Dentsu? 0 2 0 0 As of December Average Number of As of December As of December Average Age of Employees 20 Consecutive Years Served 20 Employees by Age (%)* 20 Q. Going forward, do you want to continue working at Dentsu? 2 2 ota 0 ota 0 Under 30 years of age 30–39 years of age 2 Health and Safety 40–49 years of age Health Checkup Rate 50–59 years of age 2015 2016 2017 2018 2019 Over 60 years of age 0 ota 2 * Excludes certain employees. Note: Period of data collection: Nine months spanning April–December 2015 58 Dentsu Group Integrated Report 2020 Data Corporate Data
Subsidiaries and Affiliates Affiliated Companies Accounted for by the Equity Method
As of December 31, 2019, the Dentsu Group includes 1,004 consolidated subsidiaries and 96 affiliated Video Research Ltd. D2C Inc. Septeni Holdings Co., Ltd.* Geographic Area: Japan Geographic Area: Japan Geographic Area: Japan companies accounted for by the equity method. Equity Held by Dentsu: 34.2% Equity Held by Dentsu: 46.0% Equity Held by Dentsu: 21.0% Description of Business: TV audience rating Description of Business: Specializes in digital Description of Business: Integrated Group surveys, radio audience rating surveys, advertising and marketing for NTT Docomo company management through shareholdings Consolidated Subsidiaries and other research and other advertising products and other means and 93 additional companies
Dentsu East Japan Inc. Carta Holdings, Inc.*² Equity Held by Dentsu: 100.0% * Company that submits an annual securities report Geographic Area: Japan Geographic Area: Japan Equity Held Indirectly: 100.0% Equity Held by Dentsu: 100.0% Equity Held by Dentsu: 52.8% Dentsu Aegis Network Central Europe Description of Business: Advertising in the Description of Business: Group management GmbH Kanto and Tohoku regions as well as Shizuoka strategy policy formulation and general Geographic Area: Germany Information for Shareholders (As of December 31, 2019) and Niigata prefectures corporate operations Equity Held by Dentsu: 100.0% Dentsu West Japan Inc. Information Services International-Dentsu, Equity Held Indirectly: 100.0% Dentsu Group Inc. Stock Exchange Listing Transfer Agent Geographic Area: Japan Ltd.*² *³ (Launched on January 1, 2020) Tokyo Stock Exchange, First Section The Mitsubishi UFJ Trust and Banking Corporation Dentsu Aegis Network France SAS*³ Equity Held by Dentsu: 100.0% Geographic Area: Japan Securities code: 4324 4-5, Marunouchi 1-Chome, Chiyoda-ku, Tokyo Geographic Area: France Corporate Headquarters Description of Business: Advertising in the Equity Held by Dentsu: 61.8% 100-8212, Japan Equity Held by Dentsu: 100.0% Chugoku region and Shikoku as well as Equity Held Indirectly: 0.0% 1-8-1, Higashi-shimbashi, Minato-ku, Capital Equity Held Indirectly: 100.0% Hyogo, Ishikawa, Fukui and Toyama Description of Business: Information systems Tokyo 105-7050, Japan 74,609.81 million yen Internet Address Phone: +81-3-6217-6600 https://www.group.dentsu.com/en/ prefectures building; software sales and support for Aegis International Holding Company BV*³ Total Number of Shares Issued various business areas Geographic Area: Netherlands Dentsu Kyushu Inc. Contact Info 2 0 000 Equity Held by Dentsu: 100.0% Investor Relations Department, Geographic Area: Japan Dentsu Works Inc. General Meeting of Shareholders Equity Held Indirectly: 100.0% Group IR Office, Equity Held by Dentsu: 100.0% Geographic Area: Japan The Ordinary General Meeting of Shareholders 1-8-1, Higashi-shimbashi, Minato-ku, Description of Business: Advertising in Kyushu Equity Held by Dentsu: 100.0% Dentsu McGarry Bowen, LLC*³ is held in Tokyo in March each year. Tokyo 105-7050, Japan Description of Business: Environment-related Geographic Area: USA Dentsu Hokkaido Inc. https://contact.group.dentsu.com/m/en_ir consulting, building management, real estate Equity Held by Dentsu: 100.0% Geographic Area: Japan services and business consulting services Equity Held Indirectly: 100.0% Equity Held by Dentsu: 100.0% Description of Business: Advertising in Dentsu Aegis Network Ltd.*³ 360i LLC*³ Hokkaido Geographic Area: United Kingdom Geographic Area: USA Share Information (As of December 31, 2019) Equity Held by Dentsu: 100.0% Equity Held by Dentsu: 100.0% Dentsu Meitetsu Communications Inc.*¹ Description of Business: Headquarters of the Equity Held Indirectly: 100.0% Geographic Area: Japan Dentsu Group’s global business, which Breakdown of Shareholders by Type Major Shareholders (Top 10) Equity Held by Dentsu: 50.0% Dentsu Aegis Network US Holdings, Inc.*³ oversees operations outside of Japan Percentage of Percentage of Description of Business: Total advertising Geographic Area: USA Number of Number of Number of Total Number of Major Shareholders Total Number of services, specializing in promotion and out-of- Dentsu Aegis London Ltd. Shareholders Shares Held Shares Held Equity Held by Dentsu: 100.0% Shares Issued Shares Issued home media Geographic Area: United Kingdom Equity Held Indirectly: 100.0% Equity Held by Dentsu: 100.0% Japanese financial institutions 2 2 00 The Master Trust Bank of The Goal Inc. Merkle Group Inc. 00 2 Equity Held Indirectly: 100.0% Japan, Ltd. (Trust accounts) Geographic Area: Japan Geographic Area: USA Equity Held by Dentsu: 100.0% Aegis International Ltd.*³ Equity Held by Dentsu: 74.6% Japanese securities firms 2 Description of Business: Fashion and Geographic Area: United Kingdom Equity Held Indirectly: 74.6% Kyodo News 00 accessories industry advertising Equity Held by Dentsu: 100.0% Other Japanese corporations 2 2 Equity Held Indirectly: 100.0% Agenciaclic - Midia Interativa S.A.*³ Japan Trustee Services Bank, Ltd. Dentsu Ad-Gear Inc. Geographic Area: Brazil Japanese individuals (Trust accounts) 2 0 00 Geographic Area: Japan Portman Square US Holdings Ltd.*³ Equity Held by Dentsu: 100.0% and others 2 0 2 Equity Held by Dentsu: 66.7% Geographic Area: United Kingdom Equity Held Indirectly: 100.0% (Including treasury stock) Jiji Press, Ltd. 0 Description of Business: Advertising Equity Held by Dentsu: 100.0% Dentsu Aegis (Shanghai) Investment Co., Ltd. Foreign institutions and company specializing in out-of-home media Equity Held Indirectly: 100.0% 2 0 and store promotions Geographic Area: China individuals Japan Trustee Services Bank, Ltd. Aegis Group Participations Ltd.*³ Equity Held by Dentsu: 100.0% (Trust account 9) 0 000 22 Dentsu Digital Inc. Geographic Area: United Kingdom Equity Held Indirectly: 100.0% Total 0 0 2 0 000 00 00 Geographic Area: Japan Equity Held by Dentsu: 100.0% Group Employees’ Stockholding Beijing Dentsu Advertising Co., Ltd. 0 2 Equity Held by Dentsu: 100.0% Equity Held Indirectly: 100.0% Association Description of business: Consulting, Geographic Area: China Aegis Toriton Ltd. development and implementation, management Equity Held by Dentsu: 100.0% Geographic Area: United Kingdom Yoshida Hideo Memorial and operation in all digital marketing domains 0 0 Equity Held by Dentsu: 100.0% Aegis Media Asia Pacific Pte Ltd.*³ Foundation Dentsu Live Inc. Equity Held Indirectly: 100.0% Geographic Area: Singapore Geographic Area: Japan Equity Held by Dentsu: 100.0% Aegis GPS Holdings Ltd.*³ Recruit Holdings Co., Ltd. Equity Held by Dentsu: 100.0% Equity Held Indirectly: 100.0% 2 00 Geographic Area: United Kingdom Description of Business: Planning and Equity Held by Dentsu: 100.0% Dentsu Aegis Network Australia Holdings Pty. production of events, support of operations Ltd.*³ Northern Trust Co. (AVFC) Sub A/C Equity Held Indirectly: 100.0% 0 related to event spaces, etc. Geographic Area: Australia American Clients Aegis Finance Ltd. Dentsu Tec Inc. Equity Held by Dentsu: 100.0% Geographic Area: United Kingdom Geographic Area: Japan Equity Held Indirectly: 100.0% TBS Television 000 000 Equity Held by Dentsu: 100.0% Equity Held by Dentsu: 100.0% Equity Held Indirectly: 100.0% Dentsu Aegis Network Australia Pty. Ltd.*³ Description of Business: Planning and Geographic Area: Australia Notes: production for sales promotions, events, DAN Regents Place Finance Limited*³ Equity Held by Dentsu: 100.0% 1. The number of shares held by each trust bank includes shares related to trust commercials, print, etc. Geographic Area: United Kingdom Equity Held Indirectly: 100.0% services. Equity Held by Dentsu: 100.0% 2. The Company holds 11,522,056 treasury shares but is excluded from the Dentsu Direct Marketing Inc. and 967 other companies Equity Held Indirectly: 100.0% major shareholders listed above. Geographic Area: Japan *1 Although Dentsu’s ownership is 50% or less, the company is considered a subsidiary because 3. The Percentage of Total Shares Issued is calculated excluding treasury shares. Equity Held by Dentsu: 100.0% Dentsu Aegis Network Central Europe Dentsu exerts effective control. Description of Business: Provision of solutions Holding GmbH *2 Company that submits an annual securities related to direct and digital marketing Geographic Area: Germany report *3 Specified subsidiary 59 Dentsu Group Integrated Report 2020 Data Corporate Data
Subsidiaries and Affiliates Affiliated Companies Accounted for by the Equity Method
As of December 31, 2019, the Dentsu Group includes 1,004 consolidated subsidiaries and 96 affiliated Video Research Ltd. D2C Inc. Septeni Holdings Co., Ltd.* Geographic Area: Japan Geographic Area: Japan Geographic Area: Japan companies accounted for by the equity method. Equity Held by Dentsu: 34.2% Equity Held by Dentsu: 46.0% Equity Held by Dentsu: 21.0% Description of Business: TV audience rating Description of Business: Specializes in digital Description of Business: Integrated Group surveys, radio audience rating surveys, advertising and marketing for NTT Docomo company management through shareholdings Consolidated Subsidiaries and other research and other advertising products and other means and 93 additional companies
Dentsu East Japan Inc. Carta Holdings, Inc.*² Equity Held by Dentsu: 100.0% * Company that submits an annual securities report Geographic Area: Japan Geographic Area: Japan Equity Held Indirectly: 100.0% Equity Held by Dentsu: 100.0% Equity Held by Dentsu: 52.8% Dentsu Aegis Network Central Europe Description of Business: Advertising in the Description of Business: Group management GmbH Kanto and Tohoku regions as well as Shizuoka strategy policy formulation and general Geographic Area: Germany Information for Shareholders (As of December 31, 2019) and Niigata prefectures corporate operations Equity Held by Dentsu: 100.0% Dentsu West Japan Inc. Information Services International-Dentsu, Equity Held Indirectly: 100.0% Dentsu Group Inc. Stock Exchange Listing Transfer Agent Geographic Area: Japan Ltd.*² *³ (Launched on January 1, 2020) Tokyo Stock Exchange, First Section The Mitsubishi UFJ Trust and Banking Corporation Dentsu Aegis Network France SAS*³ Equity Held by Dentsu: 100.0% Geographic Area: Japan Securities code: 4324 4-5, Marunouchi 1-Chome, Chiyoda-ku, Tokyo Geographic Area: France Corporate Headquarters Description of Business: Advertising in the Equity Held by Dentsu: 61.8% 100-8212, Japan Equity Held by Dentsu: 100.0% Chugoku region and Shikoku as well as Equity Held Indirectly: 0.0% 1-8-1, Higashi-shimbashi, Minato-ku, Capital Equity Held Indirectly: 100.0% Hyogo, Ishikawa, Fukui and Toyama Description of Business: Information systems Tokyo 105-7050, Japan 74,609.81 million yen Internet Address Phone: +81-3-6217-6600 https://www.group.dentsu.com/en/ prefectures building; software sales and support for Aegis International Holding Company BV*³ Total Number of Shares Issued various business areas Geographic Area: Netherlands Dentsu Kyushu Inc. Contact Info 2 0 000 Equity Held by Dentsu: 100.0% Investor Relations Department, Geographic Area: Japan Dentsu Works Inc. General Meeting of Shareholders Equity Held Indirectly: 100.0% Group IR Office, Equity Held by Dentsu: 100.0% Geographic Area: Japan The Ordinary General Meeting of Shareholders 1-8-1, Higashi-shimbashi, Minato-ku, Description of Business: Advertising in Kyushu Equity Held by Dentsu: 100.0% Dentsu McGarry Bowen, LLC*³ is held in Tokyo in March each year. Tokyo 105-7050, Japan Description of Business: Environment-related Geographic Area: USA Dentsu Hokkaido Inc. https://contact.group.dentsu.com/m/en_ir consulting, building management, real estate Equity Held by Dentsu: 100.0% Geographic Area: Japan services and business consulting services Equity Held Indirectly: 100.0% Equity Held by Dentsu: 100.0% Description of Business: Advertising in Dentsu Aegis Network Ltd.*³ 360i LLC*³ Hokkaido Geographic Area: United Kingdom Geographic Area: USA Share Information (As of December 31, 2019) Equity Held by Dentsu: 100.0% Equity Held by Dentsu: 100.0% Dentsu Meitetsu Communications Inc.*¹ Description of Business: Headquarters of the Equity Held Indirectly: 100.0% Geographic Area: Japan Dentsu Group’s global business, which Breakdown of Shareholders by Type Major Shareholders (Top 10) Equity Held by Dentsu: 50.0% Dentsu Aegis Network US Holdings, Inc.*³ oversees operations outside of Japan Percentage of Percentage of Description of Business: Total advertising Geographic Area: USA Number of Number of Number of Total Number of Major Shareholders Total Number of services, specializing in promotion and out-of- Dentsu Aegis London Ltd. Shareholders Shares Held Shares Held Equity Held by Dentsu: 100.0% Shares Issued Shares Issued home media Geographic Area: United Kingdom Equity Held Indirectly: 100.0% Equity Held by Dentsu: 100.0% Japanese financial institutions 2 2 00 The Master Trust Bank of The Goal Inc. Merkle Group Inc. 00 2 Equity Held Indirectly: 100.0% Japan, Ltd. (Trust accounts) Geographic Area: Japan Geographic Area: USA Equity Held by Dentsu: 100.0% Aegis International Ltd.*³ Equity Held by Dentsu: 74.6% Japanese securities firms 2 Description of Business: Fashion and Geographic Area: United Kingdom Equity Held Indirectly: 74.6% Kyodo News 00 accessories industry advertising Equity Held by Dentsu: 100.0% Other Japanese corporations 2 2 Equity Held Indirectly: 100.0% Agenciaclic - Midia Interativa S.A.*³ Japan Trustee Services Bank, Ltd. Dentsu Ad-Gear Inc. Geographic Area: Brazil Japanese individuals (Trust accounts) 2 0 00 Geographic Area: Japan Portman Square US Holdings Ltd.*³ Equity Held by Dentsu: 100.0% and others 2 0 2 Equity Held by Dentsu: 66.7% Geographic Area: United Kingdom Equity Held Indirectly: 100.0% (Including treasury stock) Jiji Press, Ltd. 0 Description of Business: Advertising Equity Held by Dentsu: 100.0% Dentsu Aegis (Shanghai) Investment Co., Ltd. Foreign institutions and company specializing in out-of-home media Equity Held Indirectly: 100.0% 2 0 and store promotions Geographic Area: China individuals Japan Trustee Services Bank, Ltd. Aegis Group Participations Ltd.*³ Equity Held by Dentsu: 100.0% (Trust account 9) 0 000 22 Dentsu Digital Inc. Geographic Area: United Kingdom Equity Held Indirectly: 100.0% Total 0 0 2 0 000 00 00 Geographic Area: Japan Equity Held by Dentsu: 100.0% Group Employees’ Stockholding Beijing Dentsu Advertising Co., Ltd. 0 2 Equity Held by Dentsu: 100.0% Equity Held Indirectly: 100.0% Association Description of business: Consulting, Geographic Area: China Aegis Toriton Ltd. development and implementation, management Equity Held by Dentsu: 100.0% Geographic Area: United Kingdom Yoshida Hideo Memorial and operation in all digital marketing domains 0 0 Equity Held by Dentsu: 100.0% Aegis Media Asia Pacific Pte Ltd.*³ Foundation Dentsu Live Inc. Equity Held Indirectly: 100.0% Geographic Area: Singapore Geographic Area: Japan Equity Held by Dentsu: 100.0% Aegis GPS Holdings Ltd.*³ Recruit Holdings Co., Ltd. Equity Held by Dentsu: 100.0% Equity Held Indirectly: 100.0% 2 00 Geographic Area: United Kingdom Description of Business: Planning and Equity Held by Dentsu: 100.0% Dentsu Aegis Network Australia Holdings Pty. production of events, support of operations Ltd.*³ Northern Trust Co. (AVFC) Sub A/C Equity Held Indirectly: 100.0% 0 related to event spaces, etc. Geographic Area: Australia American Clients Aegis Finance Ltd. Dentsu Tec Inc. Equity Held by Dentsu: 100.0% Geographic Area: United Kingdom Geographic Area: Japan Equity Held Indirectly: 100.0% TBS Television 000 000 Equity Held by Dentsu: 100.0% Equity Held by Dentsu: 100.0% Equity Held Indirectly: 100.0% Dentsu Aegis Network Australia Pty. Ltd.*³ Description of Business: Planning and Geographic Area: Australia Notes: production for sales promotions, events, DAN Regents Place Finance Limited*³ Equity Held by Dentsu: 100.0% 1. The number of shares held by each trust bank includes shares related to trust commercials, print, etc. Geographic Area: United Kingdom Equity Held Indirectly: 100.0% services. Equity Held by Dentsu: 100.0% 2. The Company holds 11,522,056 treasury shares but is excluded from the Dentsu Direct Marketing Inc. and 967 other companies Equity Held Indirectly: 100.0% major shareholders listed above. Geographic Area: Japan *1 Although Dentsu’s ownership is 50% or less, the company is considered a subsidiary because 3. The Percentage of Total Shares Issued is calculated excluding treasury shares. Equity Held by Dentsu: 100.0% Dentsu Aegis Network Central Europe Dentsu exerts effective control. Description of Business: Provision of solutions Holding GmbH *2 Company that submits an annual securities related to direct and digital marketing Geographic Area: Germany report *3 Specified subsidiary 60 Dentsu Group Integrated Report 2020 Dentsu Group Integrated Report 2020
1-8-1, Higashi-shimbashi, Minato-ku, Tokyo 105-7050, Japan Printed in Japan