Publicis Groupe S.A. (PUB) Earnings Call Transcript & Summary

Good morning. This is the conference operator. Welcome, and thank you for joining the Publicis Groupe Third Quarter 2023 Revenue Conference Call. [Operator Instructions] At this time, I would like to turn the conference over to Mr. Arthur Sadoun, Chairman and CEO. Please go ahead, sir.

Thank you, Sherry. Bonjour, and welcome to Publicis Groupe Third Quarter 2023 Revenue Call. I am Arthur Sadoun. I'm here in Paris, with our CFO, Michel-Alain Proch. Alessandra Girolami is also here and will be available to take all of your questions offline after this session. I will start this call by sharing the main highlights of our Q3. Michel-Alain will then take you through the detail of our numbers. After that, I will conclude with outlook for the year. Finally, we will take all of your questions together. But before we start, please take the time to read the disclaimer, which is an important legal matter. Okay, let's dive into our presentation. There are 3 key highlights to take out of our numbers this quarter. Thanks to the strength of our model, we over delivered in Q3 with plus 5.3% organic growth. We are outperforming the industry on growth with plus 22% in Q3 versus '19. We are upgrading our 2023 guidance once again this year on all KPIs. Let's get into the details of our Q3 performance. First, ahead of expectations, we posted plus 5.3% organic growth this quarter. This comes after 2 years at double-digit growth and despite a macroeconomic context, which became more difficult over the quarter. We have been able to achieve this mainly thanks to our unique go-to-market in Media and our balanced revenue mix. Media, which represents 1/3 of our revenue, continued to experience strong new business momentum. Fueled by market share gains, Media was strongly accretive in Q3 with high single-digit growth on top of double-digit last year. When it comes to our Data and Tech activities, another 1/3 of our revenue, we have seen different client dynamics this quarter resulting in very solid growth overall. On the 1 hand, as anticipated, clients took a more conservative approach to CapEx, choosing to delay some business transformation work as experienced by all comparable consulting firms. In this tough business environment, Publicis Sapient, nonetheless, achieved a plus 1.2% organic growth despite a very strong comparable base at plus 18% in Q3 2022. On the other hand, we saw increased client demand for first-party data management in a soon-to-be cookieless world. This was visible in Epsilon's strong performance, which further accelerated to double digits with plus 10.5% organic growth in the quarter after double digits also last year. Finally, Creative posted a resilient performance with organic growth in the low single digits for the quarter. The strength of our model was once again visible across all regions this quarter. In a more challenging macroeconomic environment, as anticipated, the U.S. posted a very solid plus 3.2% organic growth on the top of 2 years of double-digit growth. Europe came above expectations, growing double digits this quarter with a plus 10.7% organic after 11% last year. This includes another outstanding performance from the U.K. at plus 10% after a plus 23% growth in Q3 2022. Asia Pac improved again this quarter with plus 3.8% despite China facing slow economic recovery. Second highlight. We continue to outperform the industry on growth. This is particularly visible compared to 2019 level with plus 22% in Q3. You can actually see the acceleration despite the macroeconomic context, coming after plus 20% in Q2 and plus 18% in Q1. It is worth noting the contribution of our 2 main geographies in Q3, the U.S. and Europe, which together represent about 85% of our net revenue. The U.S. grew at plus 24%, and Europe is clearly closing the gap at plus 23% since '19. Looking more broadly at the first 9 months of 2023, we have delivered plus 20% organic growth since 2019, led by rapid growth in Epsilon and Publicis Sapient at circa 30%. Finally, on a reported basis, including ForEx and acquisition, our first 9 months net revenue is EUR 9.6 billion, which is 38% higher than in 2019. Third highlight. We are raising our 2023 guidance once again this year on all KPIs. We are doing this despite ongoing macroeconomic uncertainties leading to a slowdown in digital business transformation market and some budget cuts in classic advertising. Thanks to the strength of our model and a better-than-expected Q3, we are now aiming at plus 5.5% to 6% organic growth for 2023. We are also upgrading our operating margin to 18% and our free cash flow to close to EUR 1.7 billion. I will now leave the floor to Michel-Alain, who will give you the details of our Q3 numbers before coming back on outlook.

Thank you, Arthur, and good morning to all of you. Glad to be with you today. I will begin with a slide showing the evolution of the net revenue for the third quarter and first 9 months of 2023. In Q3, the group posted net revenue of EUR 3.241 billion, representing an organic growth of 5.3%. This very strong performance comes actually on top of 2 years at double digit. Reported net revenue was broadly stable in the quarter due to the following elements: first, a negative ForEx impact of EUR 189 million, out of which EUR 138 million linked to the USD to euro rate. Second, acquisitions, net of disposal, contributed EUR 32 million to the group revenue, mostly reflecting the contributions of Practia, Corra and Tquila. On the first 9 months, our [ net revenue ] reported growth was 4.9% and organic growth was 6.5%. Let's move to the next slide, which captures the dynamics of our Q3 organic and reported growth by region. North America posted a very solid 3% organic growth. It's worth noting that this follows 2 years at double-digit and leads to a 23% organic growth versus 2019. Additionally, the negative impact of ForEx was obviously significant due to the USD to euro rate, bringing the region reported growth to circa minus 3.7%. Europe also recorded a stronger-than-expected performance with double-digit organic growth this quarter after 11% last year. Europe has grown 23% versus 2019 on an organic basis, clearly closing the performance gap with the U.S. Asia Pacific posted a 3.8% organic growth, notably led by India and Singapore, more than compensating a softer China. Middle East and Africa accelerated this quarter, posting organic growth of 18.2%, bringing the performance versus 2019 to 32%. Latin America posted 6.9% organic growth this quarter, leading to a 27% progression versus 2019. So let's dive now into more detail starting with North America on the next slide. As I have just mentioned, the region posted a very solid performance at 3% organic growth this quarter. In the U.S., representing 60% of the group revenue, organic growth was 3.2%. Media posted once again this quarter a strong performance, up mid-single digit on top of double-digit last year. Growth was fueled by new business won in the last 18 months, notably in the pharma and food and beverage sectors. When it comes to Creative, the performance was slightly negative. This came on top of a high single-digit growth last year and mostly reflected some anticipated cuts in classical advertising. Publicis Sapient's performance was stable, reflecting 2 main elements: first, a very strong base of plus 21% last year. Second, a slowdown in DBT projects as experienced by other comparable consulting firms as clients adopted a more cautious approach to CapEx. Epsilon accelerated to over 10% organically on top of 14% last year. All its division recorded growth this quarter with a notably strong contribution from digital media and data, driven by strong demand for data-driven marketing and advertising solutions. Let's now turn to the performance in Europe. As I mentioned earlier, Europe posted a standout performance with double-digit growth this quarter after 11% in Q3 last year. Excluding outdoor media activities in the Drugstore, our activities in the region grew by 10.2%. The U.K., which represents 10% of our net revenue, was again very strong at 10% on a particularly high base of plus 23% organic last year. This performance was equally led by strong media, benefiting from global wins and by Creative with local wins. Publicis Sapient grew mid-single digit after a record Q3 last year that saw a strong ramp-up of major contracts. France, which represents 5% of our net revenue, posted a 6.5% organic growth, excluding outdoor media activities and the Drugstore. This was led by another solid performance in Media. Publicis Sapient also contributed well with double-digit organic growth. Germany, which represents 3% of our net revenue, posted 4% organic growth including mid-single digit growth in Media and low single digit in Creative. Publicis Sapient was broadly stable on a high comparable base last year. Lastly, our operation in Central and Eastern Europe posted another very solid 15.9% growth on an organic basis. Poland, Hungary and Turkey, were all in double digit again, while the activity in Ukraine continued to build up. Turning to the next slide, I will detail now our performance in the Rest of the World. Asia Pac, which represents 9% of group net revenue in Q3, improved sequentially to 3.8% organic growth on the back of a strong Media performance. This performance was achieved despite a softer China at minus 2.5% organic due to delays in spend in Q3 following the real estate downturn and lower consumer spending since summer. Thanks to our solid business momentum, we anticipate our operation there to return to positive territory in Q4. Southeast Asia grew double digits this quarter, led by growth in India and Singapore, benefiting from new business wins, while Thailand returned to positive territory as anticipated. Australia and New Zealand together posted a broadly stable performance. In Middle East and Africa, we posted 18.2% organic growth, driven by strong dynamics at Publicis Sapient in the Middle East, while both Creative and Media posted very solid performances. Latin America grew 6.9% organically, led by Argentina, while Brazil was slightly down and Mexico broadly stable. The integration of Practia in Argentina, aiming to support the expansion of Publicis Sapient in the Americas is well underway. On the following slide, you will find the group performance by client industry for the first 9 months. This is based on an analysis of our main clients representing 92% of our net revenue, and it excludes outdoor Media activities and the Drugstore. On the first 9 months of the year, I would like to highlight that all of our client industries were positive with the exception of TMT that was only marginally down and financial stable on the period. Let me give you some color about all the other growing sectors. Food and beverage, health care and leisure and travel, among others, continue to post double-digit growth. The retail sector posted 9% on top of more than 20% growth last year, thanks to new business across different activities. Automotive continued to grow at low single digit in Q3. Moving to the next slide, net financial debt. The group closing net debt reached EUR 714 million at the end of September 2023. This is an increase of about EUR 500 million compared to the end of June, mainly due to, first, the dividend that we paid in July for EUR 740 million; second, an increase in the tax paid in the U.S. linked to higher profits before tax on the one hand and to the payment of the R&D-related TCGA tax for 2023 on the other; and lastly, partly offset by the generation of free cash flow on the period. The average net debt in the last 12 months is EUR 451 million, decreasing by circa EUR 40 million compared to end of June 2023. When we include the average lease, this represents a leverage of 1.1x EBITDA, improving versus 1.3x a year ago. This concludes my financial presentation. And now I give the floor back to you, Arthur.

Thank you, Michel-Alain. As you have seen, we delivered a strong [indiscernible] ahead of expectation in a global context that has become increasingly challenging throughout the quarter. More broadly, looking at our performance over the years, it is clear that we have become a bigger and stronger company that is more resilient to business cycle. When it comes to the rest of the year, we are confident in upgrading our 2023 guidance once again on all KPIs. Let me break down the 3 reasons why we are confident. First, we continue to gain market share by seamlessly integrating real-time data and technology into Media, Creative and Production, we have built a go-to-market which set us apart from competition. As a result, we have topped the new business rankings 4 times in the last 5 years and won over $10 billion in new media billings. This is 2.5x the level reached by our closest competitor over the period. It has had a material impact on our organic growth when compared to peers over the years. This was actually demonstrated in H1, when we delivered organic growth at plus 7.1%, outperforming the industry average by 500 basis points. Our strong Q3 makes us confident that we will continue to outperform the market on growth. Second, we are more resilient to business cycle, thanks to our revenue mix. It is what allows us once again to post strong growth this quarter at plus 5.3% ahead of expectations and above our 4-year CAGR despite macroeconomic conditions. In Q3, the strength of our revenue mix materialized through the power of our Data and Media offer, which represent 50% of our revenue on the back of market share gains and increased client spend on third-party data. This very strong dynamic helped us outperform the market despite anticipated slower growth at Publicis Sapient, which represents roughly 16% of our revenue, and that is currently seeing some projects being delayed like all comparable consulting firms. However, there is no doubt that the demand from clients for digital business transformation will bounce back again even more in the world through AI. Third, we have an agile platform organization, which allows us to deliver sustainable industrial financial ratios. Thanks to our country model and our global delivery centers, combined with our shared services and Marcel, we are able to optimize and allocate resources real time to areas of growth, while building expertise across scaled talent pools around the world. These drive real efficiencies that not only allow us to mitigate wage inflation, but also support growth by giving us the means to invest in talent and technology. All this while delivering the best financial KPIs as demonstrated in H1, when we outperform the average industry operating margin by 500 basis points. Thanks to our go-to-market, revenue mix and platform organization, we are confident for the rest of 2023, even in the face of macroeconomic uncertainties. When it comes to organic growth, we are now in a position to upgrade our guidance from circa 5% to within the range of plus 5.5% to 6% for the full year. Actually, our plus 5.5% is solid and factors in economic and social tensions that affect client spend, further delays in digital business transformation and negative end-of-year adjustment of advertiser budgets. We could move closer to the higher end of our guidance if we see fewer cuts in classic advertising, a faster ramp-up in new business and some positive impact from increased client budget in Q4. For Q4, the full year guidance means 3% as a floor, which could reach 5% as a stretch. This is an upgrade from the circa plus 3% we previously anticipated. At the same time, we will continue to deliver our industry high financial ratios with an upgrade of our operating margin guidance to 18% and free cash flow close to EUR 1.7 billion. Well, as you have seen, we posted a strong Q3, overdelivering on organic growth once again this quarter. We also continue to outperform the industry on all KPIs for the last [Audio Gap] years, and we are upgrading our guidance for the year despite ongoing macroeconomic challenges. Hopefully, this makes a demonstration that our model is truly differentiating and sets us apart from our peers. Before we finish, let me thank our clients for their continued trust and our talents for their incredible efforts. I can't end this presentation without a special thought for our Publicis team and family in Israel. Thank you very much for listening. Now with Michel-Alain, we are ready to take all of your questions.

[Operator Instructions] The first question comes from Nicolas Langlet of BNP Paribas.

Good morning, everyone, and well done for the [indiscernible] Q3. So I've got 3 questions, please. The first one and second, can you tell us a bit more about the growth slowdown you have seen in Q3? Are you starting to see any cancellation of projects? Or it's still very much delays on executing the contracts? And looking ahead, when do you expect the momentum to turn around and return to a normative growth rate going ahead? Secondly, on your Media business, which continues to do very well in Europe, you mentioned the benefits of the global wins on Media. Is there anything else driving this notable outperformance in the region? And how sustainable do you think it is in the next few quarters? And finally, on M&A, so it was a quiet Q3. What are the reasons behind this? Are there any advance projects in the pipeline to close by the end of the year? And how should we think about next year? Are you still targeting EUR 500 million to EUR 600 million investment on that?

Thank you, Nicolas. I'm going to start with Sapient, and I will pass on Michel-Alain for M&A, and I will close with Media, if you're fine. So there are several questions into your question on Sapient. I'm going to try to summarize everything. First, I think it's important to answer your question to put things back into perspective. I don't know if you were there at the time, but since we repositioned our operation in the U.S. with Sapient in 2019, a long time ago, 4 years ago, Publicis Sapient has grown by 30% over 4 years, with actually 18% in 2022. It is important to remark that on a 4-year stack, Q3 of this year shows an acceleration with 30% after 28% in H1. Now to come back to your question, as you know, the DBT market is definitely experiencing what we call a slowdown, mostly due to delayed CapEx projects. Clearly, clients are in a wait and see attitude. This is the case, and I'm sure you have heard other system integrators and IT consulting presenting their results. This is the case for roughly every consulting firm, actually all consulting firms that could be comparable to us, including the market leader. And so when it comes to Publicis, although our pipeline remains robust, and I'll come back to that as you asked the question, we are seeing the same kind of delays, particularly in the U.S. when you talk about region, and particularly in financial services and retail for the vertical. Now despite this tough environment, we are pleased to see that Publicis Sapient in Q3, which is not the case of most of their competitors, has been successful in growing by plus 1.2%, okay? And again, if you want -- to come back to your question about the model and what can we expect, what I can tell you is 2 things that are very important for us and that we are closely monitoring with Nigel Vaz as CEO. First, there is no change in the underlying business of Publicis [Audio Gap]. To date, the pipe did not decrease, and there is no large opportunities that have been lost, okay? What we see, as I said, is really a kind of client cautious net of spend, leading to projects that are actually progressing slower than usual from 1 stage to another. And again, I think that this kind of extended sales cycle is something that you are seeing everywhere at the moment. But honestly, when you look ahead, there is absolutely no doubt that the Publicis Sapient growth will rebound. At the second our client will start to regain confidence and resume spend, they will put money in their transformation because this is an imperative that they can't miss. And if I can add the buzzword of the moment, although the moment has been very long now, AI will actually accelerate the need for our clients to bring business transformation, not only on their entire operation, but particularly in marketing. So we feel very confident that when CapEx investment will come back, we will be the first to actually see the benefit of that, which in a way we are seeing at the moment as we are outperforming a bit also there despite the slowdown that is significant, of course.

Maybe I take the question, Nicolas, about M&A. You're right, we haven't closed anything significant during the Q3, but we do have the pipe to reach our EUR 500 million to EUR 600 million envelope target that we have indicated to in our previous call. But obviously, you know that timing of an M&A depends on availability and target and negotiation processes. And all this, obviously, while respecting the very strong group financial discipline. Arthur, do you want to take the last question on Media?

Yes. I kept Media for the end because this deserves a very long answer about the model and the sustainability. So I'm going to start by saying, this is sustainable, okay? I don't know at this level, but the fact that we're going to continue to gain market share is sustainable for a very simple reason is that we have a unique model. We are combining 2 things that no one else is combining at our scale. On 1 side, we are the leader in Media, particularly in the U.S. We have the most scale, and scale matters in this business. Second, media operations have been transformed by Dave Penski and his team in such a way that today we are able to connect them with the first-party data of Epsilon that is again leading the market in third parties. What does it mean? It means that every time we get into a pitch, we are leading what clients are looking for, which is personalization at scale. Scale, thanks to Publicis Media; personalization, thanks to Epsilon; all of this connected, thanks to our business model. The second reason why we are confident in the growth of Publicis Media is not only that we are gaining market share with new clients or with existing clients that we are extending, is that we are leading the 2 major areas of growth for Media in the future that are retail media and connected TV. And the reason why we are leading in those 2 areas are the same, which is we have the first-party data -- even Google is starting to do first-party data. We have the -party data, and we have the scale in Media that allows us to actually lead in an area like retail media, where we see that our client will spend more money there than in linear TV very soon. So a source of growth for us, but also in everything that has to do with connected TV because the future of advertising when it comes to TV is personalized. It's our ability through a single identity to deliver a message that can be scaled on TV, okay? And we have, of course, a favorite place with the media owner on the other and the technology on the other. I can go on and on that. But as I want to make sure we take all the questions, I guess, I'm going to stop here. Thank you, Nicolas.

The next question is from Silvia Cuneo of Deutsche Bank.

Congratulations on the results. I would like to ask a couple of questions. The first is on the implied guidance for Q4. Thanks for sharing some color about the expectations for the low end versus the high end. The question is if you could please talk a bit more about what made you more comfortable compared to the H1 stage? And if you could please remind us of the comparatives and share some color about the visibility that you have at this stage on client budgets for the rest of the year? And then second question on your expectations on the macro environment, which you mentioned has become more difficult over the quarter. Can you please share some color by region or by sector perhaps? And how this shapes up your view for growth in 2024? Perhaps you can also talk about your thoughts about how much the new business to date can contribute to 2024 growth?

Wow, that's a lot of questions. So first of all, new business. What is very interesting to see, as we are always publishing the first, it's always an exercise that is complicated to do in the quarter, but it's something that you can look back with a bit of perspective. And if you look at the contribution of new business into our overall mix and how it plays against competitors, you see that in H1, we grew 500 basis points more than the average of the industry. So it tells you a lot about our ability to gain market share, which we think is very important. So we can't quantify exactly the impact of new business into our growth, because what is new business in a way is that when you win more scope into an existing client, is that new business organic? But what we can tell you is now, hopefully, we're starting to see the difference between us and our peers, not only in H1 2023, but also when you take the 4-year stack, and I invite you to look at the 4-year stack for us and our competitors to see how quarter after quarter, we are actually making the gap bigger, thanks to our ability to win market share, particularly with new business. On the guidance thing, what can I tell you about that? Again, we have tried -- and this was very important for us to give you as much color as possible. We know the level of uncertainty that is in the market at the moment. And we have a model today that not only allows us to outperform, but also to be very confident in what we are telling you. This is why we are giving this level of granularity between what we believe could be 5.5% and how we can go closer to 6%. I can come back on the reason why if you're interested. But to answer more broadly your question, I would say that there are 3 reasons, which I tried to explain in my presentation that are fundamental to our model. The first, I'm not going to come back on that, is we are winning market share. And it's a market share game at the moment, and we are leading on that. Second, which gave us a kind of confidence in the future is the fact that our revenue mix is so well balanced. And that's very interesting because you see that even when digital business transformation is slowing down for the entire IT consulting industry and, of course, having an impact on us, not only we continue to outperform our own market, but we actually outperformed the system integrator market. And so our ability to have this revenue mix, again, makes us confident that we will deliver. And third, although we are not talking that much about margin on this call, the platform organization that we have put in place gives us the necessary flexibility not only to deliver the highest ratio of the market, but continue to pay a level of bonus and increase that get us the best talent and the necessary money to invest into our technology. When it comes to 2024, it's, of course, way too early to give you any guidance at this stage. And hopefully, you will agree, even more with the recent events. What I can tell you is everything that we said so far, we play. And of course, our objective is continue to outperform the market. We did that for the last 4 years, and this will be our objective for next year.

The next question is from Lisa Yang of Goldman Sachs.

Congratulations on the results. I also have 3 questions. Firstly, could you maybe explain the acceleration you've seen at Epsilon. I mean, to me, that was the biggest surprise. Obviously, demand for first-party data has been there. I don't think it's necessarily new. So yes, what drove that acceleration? And basically, is that sustainable into Q4, into next year, that basically the double-digit growth? Second question, if you could just come back to the Q4 guidance and maybe share, especially for Sapient, what are you baking in at the low end of the upper end of the guidance range, like is it like slightly negative, slightly positive for Sapient as an example? And third question, could you maybe give us a bit of color in terms of the headcount? How has that evolved in Q3? What are you expecting for the rest of the year and planning for next year, especially given the level of new business ramps and how much basically people you need to hire?

Thank you very much, Lisa. We're going to take the questions in the inverse order. So we're going to start with headcount and then go up. So I'll let you start.

So we hired 1,200 net recruits in Q3, with half of them strengthening our global delivery center, so mostly in Central Europe and in India. So in total, it represents a total of 2,500 since the beginning of the year. So it means, if you do the rough calculation, it's a 2.5% increase in headcount. Actually, we are crossing the line of the 100,000 headcount, which is demonstrating our very efficient control of resources when we delivered 6.5% organic growth on the 9 months. And basically, we have our net hires who are mostly allocated to the ramp-up of new business in Media, Data, and Production. Arthur?

I'm going to try to put Sapient and Epsilon a bit in the same boat to anchor both, because again, it's interesting to look at our Data and Tech capabilities overall. So if I start with the assumption for the fourth quarter, I think, as you know, we are actually not giving assumption by practice for the quarter, but only thing what I can tell you is that you should expect, for Q4, roughly the same trend as the 1 you have experienced and we have experienced in Q3, which is Creative will continue to experience some classic marketing cuts, we know that. Media and Epsilon will continue to outperform, and I will come back on Epsilon. And when it comes to Publicis Sapient, again, we are expecting the same kind of trend. We are going to see, again, some delays in digital business transformation project. This has been clearly said by the leader of IT Consulting a couple of weeks ago. And so you should expect the same for us, which is roughly -- this means that for Publicis Sapient, particularly in Q4, what I can tell you is that we expect this to be broadly stable, like in Q3, to maybe slightly negative. As you know, we have to take into consideration that this is an adjustment quarter. But roughly take the same trend. I think what is very important there, and this is why we wanted to give you some color, is that all of this is baked in our guidance for Q4 that goes from 3% to 5%. And the strength of our model makes us very confident to deliver and you have seen the assumption we have made. By the way, it's interesting to see in the assumption that to get closer to the 6%, we are not assuming that digital business transformation will take off again. You can't have a market leader saying that they would be negative in the next quarter and not anticipate that it won't take. This is not what we're expecting. We're expecting the same trends. But we are being, at the same time, very confident, but also cautious, because we know the market fact. And it gives even more credit to our revenue mix balance, which is, of course, what makes our strength. Sorry, I need a bit of water because I still lack a bit of saliva after everything I went through. On Epsilon, look, as you said, it's a great story. We are growing by plus 10.5%, after last year, growing by 14%. It came above our expectation. And I have to admit that when we decided with Maurice Lévy to make this acquisition 5 years ago now, we knew it was absolutely critical to have a leading position in data, and this is why we made this big investment at the time that has been, of course, a disruption that we had to integrate. But I can tell you that we were anticipating how strategic will be first-party data for the entire market and how much client will realize that not having direct contact with their customers will be a strategic issue. And again, when you see Google that now is trying to appeal to clients through first-party data, you understand, hopefully, why this is so core and important to our model. So what I can tell you is that, again, if you put Sapient in perspective, they have been growing by 31% since '19, okay? It is largely better than what we expected when we made the acquisition. As you would remember, it was a flattish operation. We were aiming for 3% or 5%, and we did way better than that. And what I can tell you is that it will continue to outperform in Q4, for sure. What I can tell you also, which was 1 of your questions, which, to be fair to the entire ecosystem, there is 2 reasons why we are growing like that. First is interest for first-party. The second is a connection with Publicis Media, because part of Epsilon growth is also the new business win we have in Media. As Publicis Media is winning, also thanks to Epsilon, Epsilon is benefiting from the win of Publicis Media with new clients. So you can see the ecosystem that we have created there that truly makes a difference.

Also, can I just ask a very quick follow-up? How do you basically allocate the revenue between the Media business and Epsilon? It just feels like the frontier is becoming increasingly broad. So like when you win a new contract, like how much you allocate to Epsilon versus Publicis Media?

I think that in 2015, Maurice Lévy said something that stays very true at Publicis. At Publicis, we have no silos, no solos and no bozos. And we have killed the P&L frontier a long time ago per country, which means that when 1 wins, everyone wins at the end. So of course, for reporting reason, we are giving you this numbers as they are, but what matters to everyone is how we win together more than how they win in their own line.