Note:
- IFRS 15 "Revenue from Contracts with Customers" is applied from January 1, 2018. In this material, past results are also presented on a pro-forma basis to facilitate the year-on-year comparison.
- The term "Gross profit" is changed to "Revenue less cost of sales" from Q1 FY2018.

Executive Summary
In FY2018, the Dentsu Group delivered total growth of revenue less cost of sales of 6.8% (constant currency basis) and organic growth of 3.4%. The Japan business delivered 2.0% and 2.1% respectively, in part, due to an increase in digital-related services and favorable results in subsidiaries. The international business, Dentsu Aegis Network, delivered 10.2% (constant currency basis) and 4.3% organic growth, driven by a strong client proposition and lack of exposure to legacy businesses.
Dentsu in Japan achieved the working environment reform targets at the end of FY2018; ongoing transformation of the business will continue to support further growth.
Underlying operating profit beat the revised forecasts by 2.2% mainly due to lower than expected costs in Japan, but declined 6.0% (constant currency basis) year on year. In Japan, profit declined due to planned investments in the working environment reforms. At Dentsu Aegis Network, profit was lower due to planned investments in global platforms and systems.
In FY2019, the Dentsu Group forecasts 7.9% increase in revenue less cost of sales (constant currency basis) and 4.3% increase in underlying operating profit, driven by digital business in Japan and in the international business.

Financial Results for FY2018

* IFRS 15 "Revenue from Contracts with Customers" is applied on the previous-year results and their figures are adjusted.
**Revenue less cost of sales is the metric by which the Group's organic growth is measured. Organic growth represents the constant currency year-on-year growth after adjusting for the effect of businesses acquired or disposed of since the beginning of the previous year.
*** See page 7 in the enclosed PDF for definition of "underlying."
**** See page 7 in the enclosed PDF for definition of "EBITDA."

Highlights of FY2018 results
The Dentsu Group delivered growth of revenue less cost of sales of 6.8% (constant currency basis) in FY2018:
o 2.0% in Japan, and 10.2% (constant currency basis) at Dentsu Aegis Network driven by acquisitions and organic growth.
o Contribution amount to the increase: +30.6 billion yen by organic growth, +28.6 billion yen from M&As, and (4.2) billion yen from foreign exchange rates.

The Group produced organic growth of 3.4% in FY2018:
o 2.1% in Japan, and 4.3% at Dentsu Aegis Network. The international business benefited from strong organic growth in EMEA and the Americas
o Digital business contribution to total revenue less cost of sales reached 46.1% (FY2017: 43.2%), including 23.9% in Japan (FY2017: 22.2%), and 60.6% at Dentsu Aegis Network (FY2017: 57.9%).
o International business contribution to total revenue less cost of sales reached 60.4% (FY2017: 58.8%).

Group underlying operating profit was 153.2 billion yen (FY2017: 163.9 billion yen).
o 80.2 billion yen in Japan (FY2017: 88.8 billion yen), and 72.9 billion yen at Dentsu Aegis Network (FY2017: 75.1 billion yen).

Group underlying operating margin was 16.4% (FY2017: 18.7%).
o 21.7% in Japan (FY2017: 24.5%), and 12.9% at Dentsu Aegis Network (FY2017: 14.6%).
o The decline in Japan was mainly due to planned SG&A costs related to the working environment reforms. At Dentsu Aegis Network, the operating margin was lower year on year due to planned investments in global platforms and systems.
o The Dentsu Group margin for FY2018 beat the revised forecasts announced on August 9, 2018, mainly due to lower than expected costs in the Japan business.

Underlying net profit (attributable to owners of the parent) and underlying basic EPS decreased by 9.7% and 9.4% respectively, mainly due to the decline of underlying operating income.

Toshihiro Yamamoto, President and CEO, Dentsu Inc., said:
"In FY2018, Dentsu Group recorded 3.4% organic growth, with 2.1% in Japan and 4.3% at Dentsu Aegis Network. The market circumstances we face have been challenging, but we have achieved our organic growth targets both in Japan and the international business, driven by growth in digital activities.

2019 heralds a new stage for the Dentsu Group. The achievement of the working environment reform targets in Japan allows the business to focus on both transformation and growth in 2019 and beyond.
At the end of 2018 I was pleased to announce that Tim Andree, Member of the Board and Executive Vice President of Dentsu Inc. and Executive Chairman of Dentsu Aegis Network would be taking on additional responsibilities as CEO of Dentsu Aegis Network. Tim will lead the Dentsu Aegis Network management team going forward ensuring the evolution of the strategy. Tim's deep understanding of the Dentsu Group's market propositions, culture and values position him as the right Executive to lead the business into the next stage of growth.

Our continued focus on people driven marketing and the differentiation of our client offer through innovation, technology, data and analytics will drive our success. We win with our clients through our integrated approach, focused on delivering solutions. Clients want to work with our teams who deliver shared best practices, grounded in a flexible and agile approach, tailored to address their business challenges. Our new business wins in early 2019 are testament to this.

Through our strong client offering and the extraordinary talent throughout the organization, I remain convinced we are well positioned to remain leaders in our industry and will conquer any and all possible disruptions going forward. I will make every effort to ensure that we remain unwavering in our commitment to deliver best-in-class services to all our stakeholders."

For further details, please see the attached PDF file.