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Dentsu is replacing its global chief executive and suspending its dividend for the first time after the Japanese advertising group posted its worst annual loss, driven by huge writedowns on its troubled overseas business.
Hiroshi Igarashi, who has struggled to sell Dentsu’s London-based international unit, will be replaced by Takeshi Sano, chief executive of the domestic arm, on March 27, the company said on Friday.
The announcement came after Dentsu reported a net loss of ¥328bn ($2bn) for 2025, widening from a ¥192bn loss a year earlier. The company said it would not pay a dividend for the first time since listing in 2001. Last year it paid investors ¥139.5 a share.
The historic loss was driven by ¥310bn of impairments from the Americas and Europe, Middle East and Africa regions in the fourth quarter. Over the full year, impairments totalled ¥396.1bn.
Sano will be tasked with turning around the international unit at a time of AI-driven upheaval in the sector. The FT reported last month that Dentsu’s attempt to sell the unit was close to collapse after trade buyers and private equity suitors walked away from talks.
Dentsu did not discuss the sales process in its disclosures on Friday.
Japan’s largest advertising agency had gone on an acquisition spree, starting with the £3.2bn purchase of UK-based media group Aegis in 2012.
It made dozens of other acquisitions to build up its international business, leading to a string of goodwill impairments in most years since 2019.
People close to Dentsu said executives in Tokyo had struggled to properly control and drive strategy at its international division and lacked sufficient global management capabilities.
The issues led to concerns that shareholders would mount a campaign to vote against Igarashi’s reappointment at the company’s annual investor meeting in March, said the people.
Sano, who has spent three decades at Dentsu, has helped drive consistent growth in its home market and diversify beyond traditional advertising to services such as consulting.
Dentsu said it expected to turn a corner in 2026, forecasting a net profit of ¥69.7bn and saying “the likelihood of recognising additional goodwill impairment losses is limited”.
The company said that it had already cut 2,100 of the 3,400 jobs it plans to cull at its international business, which represents 8 per cent of the workforce.
Dentsu has faced tougher competition from the combination of IPG and Omnicom last year and the growing dominance of Publicis. The adoption of AI to carry out marketing tasks has added to the challenges.
