MIRA INFORM REPORT

 

 

Report No. :

328937

Report Date :

25.06.2015

 

IDENTIFICATION DETAILS

 

Name :

DENTSU INC

 

 

Registered Office :

1-8-1 Higashi-Shimbashi Minatoku Tokyo 105-0021

 

 

Country :

Japan

 

 

Financials (as on) :

31.03.2015

 

 

Date of Incorporation :

December 1906

 

 

Legal Form :

Limited Company

 

 

Line of Business :

Advertising agency

 

 

No of Employees :

7,425

 

 

RATING & COMMENTS

 

MIRA’s Rating :

A

 

RATING

STATUS

PROPOSED CREDIT LINE

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

Fairly Large

 

Maximum Credit Limit :

Yen 1,515.1 Million

 

 

Status :

Good

 

 

Payment Behaviour :

Regular

 

 

Litigation :

Clear

 

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

 

ECGC Country Risk Classification List – March 31, 2015

 

Country Name

Previous Rating

(31.12.2014)

Current Rating

(31.03.2015)

Japan

A1

A1

 

Risk Category

ECGC Classification

Insignificant

 

A1

Low Risk

 

A2

Moderate Low Risk

 

B1

Moderate Risk

B2

Moderate High Risk

 

C1

High Risk

C2

Very High Risk

D

 

 

JAPAN ECONOMIC OVERVIEW

 

In the years following World War II, government-industry cooperation, a strong work ethic, mastery of high technology, and a comparatively small defense allocation (1% of GDP) helped Japan develop an advanced economy. Two notable characteristics of the post-war economy were the close interlocking structures of manufacturers, suppliers, and distributors, known as keiretsu, and the guarantee of lifetime employment for a substantial portion of the urban labor force. Both features are now eroding under the dual pressures of global competition and domestic demographic change. Scarce in many natural resources, Japan has long been dependent on imported raw materials. Since the complete shutdown of Japan’s nuclear reactors after the earthquake and tsunami disaster in 2011, Japan's industrial sector has become even more dependent than it was previously on imported fossil fuels. A small agricultural sector is highly subsidized and protected, with crop yields among the highest in the world. While self-sufficient in rice production, Japan imports about 60% of its food on a caloric basis. For three decades, overall real economic growth had been impressive - a 10% average in the 1960s, a 5% average in the 1970s, and a 4% average in the 1980s. Growth slowed markedly in the 1990s, averaging just 1.7%, largely because of the aftereffects of inefficient investment and an asset price bubble in the late 1980s that required a protracted period of time for firms to reduce excess debt, capital, and labor. Modest economic growth continued after 2000, but the economy has fallen into recession four times since 2008. Government stimulus spending helped the economy recover in late 2009 and 2010, but the economy contracted again in 2011 as the massive 9.0 magnitude earthquake and the ensuing tsunami in March of that year disrupted manufacturing. The economy has largely recovered in the four years since the disaster, although reconstruction in the affected Tohoku region has lagged, in part due to a shortage of labor in the construction sector. Japan enjoyed a sharp uptick in growth in 2013 on the basis of Prime Minister Shinzo Abe’s “Three Arrows” economic revitalization agenda - dubbed “Abenomics” - of monetary easing, “flexible” fiscal policy, and structural reform. Abe’s government has replaced the preceding administration’s plan to phase out nuclear power with a new policy of seeking to restart nuclear power plants that meet strict new safety standards, and emphasizing nuclear energy’s importance as a base-load electricity source. Japan joined the Trans-Pacific Partnership (TPP) negotiations in 2013, a pact that would open Japan's economy to increased foreign competition and create new export opportunities for Japanese businesses. Measured on a purchasing power parity (PPP) basis that adjusts for price differences, Japan in 2014 stood as the fourth-largest economy in the world after second-place China, which surpassed Japan in 2001, and third-place India, which edged out Japan in 2012. While seeking to stimulate and reform the economy, the government must also devise a strategy for reining in Japan's huge government debt, which amounts to more than 230% of GDP. To help raise government revenue, Japan adopted legislation in 2012 to gradually raise the consumption tax rate to 10% by 2015, beginning with a hike from 5% to 8% implemented in April 2014. That increase had a contractionary effect on GDP, however, so PM Abe in late 2014 decided to postpone the final phase of the increase until April 2017 to give the economy more time to recover. Led by the Bank of Japan’s aggressive monetary easing, Japan is making progress in ending deflation, but demographics - low birthrate and an aging, shrinking population - pose major long-term challenges for the economy.

 

Source : CIA

 

Company name

 

DENTSU INC

 

 

REGD NAME 

 

KK Dentsu

 

 

MAIN OFFICE

 

1-8-1 Higashi-Shimbashi Minatoku Tokyo 105-0021 JAPAN

Tel: 6216-5111     Fax: 03-6217-5706     -

 

URL:                 http://www.dentsu.co.jp

E-Mail address: (thru the URL)

 

 

ACTIVITIES  

 

Advertising agency

 

 

BRANCHES   

 

Osaka, Kyoto, Nagoya, Gifu, Mie, other (Tot 8)

 

 

OVERSEAS

 

UK (Dentsu Aegis Network Ltd, covering 124 countries worldwide

 

 

CHIEF EXEC 

 

TADASHI ISHII, PRES

 

Yen Amount:     In million Yen, unless otherwise stated

 

 

SUMMARY    

 

FINANCES        FAIR                 A/SALES          Yen 728,626 M

PAYMENTS      REGULAR         CAPITAL           Yen 74,609 M

TREND             STEADY           WORTH            Yen 1,111,063 M

STARTED         1906                 EMPLOYES      7,425

 

COMMENT

 

ADVERTISING AGENCY

FINANCIAL SITUATION COSIDERED FAIR AND GOOD FOR ORDINARY BUSINESS ENGAGEMENTS.

                       

MAX CREDIT LIMIT: YEN 1,515.1 MILLION, 30 DAYS NORMAL TERMS

 

 

                        Unit: In Million Yen

Forecast figures for the 31/12/2015 fiscal term.

 

 

HIGHLIGHTS

 

This is the Japan’s largest advertising agency with over 20% market share.  Sales nearly doubles that of 2nd largest Hakuhodo Dy Holdings Inc.  Ranks 5th globally.  Strong in 4 mass media (TV, radio, newspaper, magazine).  Also highly competitive in sports events.  Acquired Aegis Group in UK in2013 and established Dentsu Aegis Networks Ltd, covering 124 countries worldwide. 

 

 

FINANCIAL INFORMATION

 

The sales volume for Mar/2015 fiscal term amounted to Yen 728,626 million, a 10.4% up from Yen 659,772 million in the previous term.  Domestic TV advertisements expanded thanks to the contribution by succor’s world cup, etc.  The recurring profit was posted at Yen 79,846 million and the net profit at Yen 206,383 million, respectively, compared with Yen 66,507 million recurring profit and Yen 237,575 million net profit, respectively, a year ago.

 

            For the current term ending Dec 2015 for irregular 9 months due to change in accounting term the recurring profit is projected at Yen 66,300, and the net profit at Yen 63,500 million, respectively, on a 21.6% rise as adjusted on a 12-months basis in turnover, to Yen 664 million.  Domestic TV advertisements will go steadily.  Overseas businesses will also favorably grow mainly in China & the US.

 

The financial situation is considered FAIR and good for ORDINARY business engagements.  Max credit limit is estimated at Yen 1,515.1 million, on 30 days normal terms.

 

 

REGISTRATION

           

Date Registered:　                   Dec 1906

Legal Status:                Limited Company (Kabushiki Kaisha

Authorized:                              1,100 million shares

Issued:                         288,410,000 shares

Sum:                            Yen 74,609 million

 

Major shareholders (%): Master Trust Bank of Japan T (8.7), Kyodo News (7.1), Jiji Press (5.9), Japan Trustee Services T (4.9), State Street Bank & Trust (4.2), Group Employees’ S/Holding Assn (2.3), Mizuho Bank (1.7), Yoshida Hideo Memorial Foundation (1.7), Recruit Holdings (1.7), Tokyo Broadcasting System TV (1.3); foreign owners (28.6)

 

No. of shareholders: 31,760

 

Listed on the S/Exchange (s) of: Tokyo

 

Managements: Tadashi Ishii, pres; Shoichi Nakamoto, v pres; Yuzuru Kato, s/mgn dir; Tim Andree, s/mgn dir; Kunihiro Matsumura, mgn dir; Yoshio Takada, mgn dir; Naoki Tani, mgn dir; Akira Tonouchi, dir Fuminari Kobayashi, dir; Toshihiro Yamamoto, dir

 

Nothing detrimental is known as to the commercial morality of executives.

 

Related companies: Dentsu Aegis Network, Dentsu Tec Inc, Dentsu Services Information                        International, other.

 

 

OPERATION

           

Activities: Advertising agency: advertising (97%), information services (2%), others (1%)

Overseas Sales Ratio (25%)

           

Clients: [Mfrs, wholesalers] Kao Corp, Toyota Marketing Japan, NTT Ad, SoftBank Mobile, Frontage Inc, other

No. of accounts: 800 - 1,000

Domestic areas of activities: Nationwide

 

Suppliers: [Mfrs, wholesalers] Fuji Television Network, Nippon Television Network Corp, Dentsu Tec, TV Asahi,  TBS TV, FM Tokyo, Hokkaido Cultural Broadcasting, other

 

Payment record: Regular

 

Location: Business area in Tokyo.  Office premises at the caption address are owned and maintained satisfactorily.

 

Bank References:

                        MUFG Trust Bank (H/O)

                        Mizuho Bank (H/O)

                        Relations: Satisfactory

 

FINANCES (In Million Yen)

 

FINANCES: (Consolidated in million yen)

　

　

　

Terms Ending:

31/12/2015

31/03/2015

INCOME STATEMENT

　

　

  Annual Sales

　

728,626

659,772

　

  Cost of Sales

51,701

45,117

　

      GROSS PROFIT

676,925

614,654

　

  Selling & Adm Costs

544,620

507,371

　

      OPERATING PROFIT

132,305

107,283

　

  Non-Operating P/L

1,990

3,514

　

      RECURRING PROFIT

134,295

110,797

　

      NET PROFIT

84,645

68,933

BALANCE SHEET

　

　

  Cash

　

365,379

253,354

　

  Receivables

1,224,190

1,054,225

　

  Inventory

25,982

14,253

　

  Securities, Marketable

　

　

　

  Other Current Assets

66,310

65,114

　

      TOTAL CURRENT ASSETS

1,681,861

1,386,946

　

  Property & Equipment

199,037

201,900

　

  Intangibles

274,745

259,506

　

  Investments, Other Fixed Assets

1,003,891

837,581

　

      TOTAL ASSETS

3,159,534

2,685,933

　

  Payables

1,231,220

1,047,796

　

  Short-Term Bank Loans

73,653

62,566

　

　

　

　

　

  Other Current Liabs

206,383

174,115

　

      TOTAL CURRENT LIABS

1,511,256

1,284,477

　

  Debentures

　

　

　

  Long-Term Bank Loans

335,965

302,399

　

  Reserve for Retirement Allw

43,674

53,185

　

  Other Debts

　

157,575

120,150

　

      TOTAL LIABILITIES

2,048,470

1,760,211

　

      MINORITY INTERESTS

　

　

Common stock

74,609

74,609

　

Additional paid-in capital

99,906

99,906

　

Retained earnings

613,327

563,889

　

Evaluation p/l on investments/securities

292,652

172,711

　

Others

30,700

14,711

　

Treasury stock, at cost

(131)

(104)

　

      TOTAL S/HOLDERS` EQUITY

1,111,063

925,722

　

      TOTAL EQUITIES

3,159,534

2,685,933

CONSOLIDATED CASH FLOWS

　

　

Terms ending:

31/12/2015

31/12/2014

　

Cash Flows from Operating Activities

　

112,388

91,986

　

Cash Flows from Investment Activities

-25,610

-311,248

　

Cash Flows from Financing Activities

8,391

217,536

　

Cash, Bank Deposits at the Term End

　

365,379

253,354

ANALYTICAL RATIOS            Terms ending:

31/12/2015

31/03/2015

　

Net Worth (S/Holders' Equity)

1,111,063

925,722

　

Current Ratio (%)

111.29

107.98

　

Net Worth Ratio (%)

35.17

34.47

　

Recurring Profit Ratio (%)

18.43

16.79

　

Net Profit Ratio (%)

11.62

10.45

　

　

Return On Equity (%)

7.62

7.45

 

 

 

 

 

FOREIGN EXCHANGE RATES

 

Currency
Unit

Indian Rupees

US Dollar

1

Rs. 63.66

UK Pound

1

Rs. 100.50

Euro

1

Rs. 71.31

 

INFORMATION DETAILS

 

Analysis Done by :

KRN

 

 

Report Prepared by :

DPT

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

--

NB

                                       New Business

 

--

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                  Payment record (10%)

Credit history (10%)                   Market trend (10%)                                Operational size (10%)

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.