Publicis Group Sa S/Adr

Good morning. This is the conference operator. Welcome, and thank you for joining the Publicist Group Full Year 2024 Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions by pressing star and 1 at any time. Should anyone need assistance during the conference call, they may signal an operator by pressing star and 0. At this time, I would like to turn the conference over to Mr. Arthur Saloon, Chairman and CEO of the Publicis Group. Please go ahead, sir.

Thank you, Sherry. Bonjour and welcome to Publicis Group 2024 Full Year Result Call. I am Arthur Sadoun and I'm here in Paris with our CFO, Laurie Snould. Jean-Michel Bonamy is also here and will be available to take your questions offline after this call. I will start this presentation by sharing the main highlights of 2024, which was again a record year for the group. Loris will provide the full detail of our numbers. I will then conclude with the outlook for 2025 and our main priorities. As usual, we will take your questions together after the presentation. But before we start, please take the time to read the disclaimer, which is an important legal matter. Let's dive into the presentation with three key highlights. First, we ended 2024 on a high note, with full-year organic growth at plus 5.8%, allowing us to outperform the industry on organic growth for the fifth year in a row, growing twice as fast as our peers averaged over that period. Second, once again, we maintain industry-leading financial KPIs and at the same time, increased our investment base in both people and AI. Last but not least, we are ending 2024 as the largest advertising group by net revenue. Each of these three highlights made us stand out from the pack again this year. Let me take you through them, starting with our organic growth performance. In a climate of uncertainty, we posted a stronger-than-expected Q4 at plus 6.3% organic growth, leading to plus 5.8% for the full year. This means that we accelerated from our four-year 2023 CAGR of 4.7% by more than 100 basis points. It also means we grew more than three times faster than our holding company peers based on consensus and more than five times faster than the average of our IT consulting peers. Getting into the detail of organic growth by pillar. Connected media, encompassing our data, media, CRM, social, and commerce activities, representing 60% of our net revenue, delivered high single-digit, fully organic growth, driven by market share gains in personalization at scale. Intelligent creativity, regrouping our creative agencies and production capabilities, representing 25% of net revenue at a solid year at mid-single-digit organic growth, supported by production, new business win, scope expansions, and fewer cuts than anticipated in classic advertising in Q4, which is usually a quarter of adjustments. Finally, business transformation through Publicis Sapiens, representing 15% of our net revenue, was flat in Q4, with the US being positive. This represents a sequential improvement versus Q3, leading to a slight full-year decline as expected. Like all leading IT consulting firms, we continue to see client cautiousness towards capex spend due to continued challenging microenvironment. Move on to organic growth by region. All of our geographies perform well, supported by the strength of our platform organization. The U.S., Our largest market, representing 60% of our net revenue, posted a strong Q4 organic growth at plus 5.2%, accelerating after Q3 despite tougher comparables. This led to a solid plus 4.9% for the year, cementing our number one position in this market. Europe delivered plus 5.4% full-year organic growth on top of double-digit in 2021, 22, and 23. In Q4, the region accelerated to plus 6.5%, driven by double-digit organic growth for connected media. Asia-Pacific delivered plus 5% organic growth in Q4, fueled by continued new business win, leading to plus 6.3% for the full year. In one remains a very volatile market, China had a strong year at plus 6.4%. Second highlight, in 2024, we both maintain our leadership on financial KPIs and significantly increase our investment in talent and AI. We delivered a record high operating margin at 18%, the highest of the industry by 250 basis points, fully absorbing our accelerated investments of circa 100 million euros in our AI plan and 136 million euros in restructuring above 2023 levels to drive upgrade in our tenant bench. When adjusting this, we actually outperform our peers by close to 350 BCH points when it comes to margin. It is important to note that the current pricing environment makes this achievement even more significant. LIEPS came ahead of analyst estimates at €7.30, 4.9% versus 2023 and compare with flat EPS growth expected for our peers on average according to consensus. Regarding free cash flow, we deliver 1.84 billion euros in line with our guidance and above 2023 record level. When it comes to M&A, we also accelerated our Bolton investment, spending circa 1.2 billion euros, including the acquisition of two major assets in influencer marketing and commerce. This allows us to propose a dividend of 3 euros and 60 cents per share, up 5.9% versus 2023, representing the highest payout ratio of the industry at 49.3%. Last but not least, we also continue to be an industry leader on ESG. Our efforts in sustainable business practices around D&I, responsible marketing, and the fight against climate change mean we continue to be ranked number one in the industry by far by leading rating agencies. Third highlight, after being number one on organic growth for the last three years, in community new business win for the last five years, on margin for more than 15, and number one in market cap since early 2023, we finished 2024 as number one in size, becoming the largest advertising group with net revenue of circa 14 billion euros. We leapfrogged from the third position to the first in just three years through a combination of four unique factors. First, we are winning more and at the same time losing less than our competition. We want significant market share through net new business, as confirmed by J.P. Morgan's ranking since 2019. Actually, over this period, our net new business billing are close to four times larger than those of the second-best performers. Factor two, our strategic acquisition of Epsilon and Sapien, as well as complementary Bolton investments, have been strong contributors to our group organic growth for the last five years, generating close to 35% growth since 2019. Factor three, our country model has boosted all of our regions, allowing us to outperform across geographies. In the last five years, our organic basis in the U.S. grew almost three times as fast as the industry average. Europe was up 25% versus 15% for our industry average. And we grew by 20% in China when the largest player in the market is expected to be down by 25% for the period. Factor four, our people first approach. We have always made our people our number one priority. We did it in tough times, like COVID, using Marcel to save thousands of jobs. In better times, when we reimbursed the salary sacrifice made by our teams at the beginning of the pandemic. And in good times, for example, when we saw two years of double-digit growth, we gave bonuses twice to everyone at PBCs. Our investments in learning and development and our policies around salary increases have built a growth mindset in our teams. Today, our people now know that when Publicis grows, everyone at Publicis grows. But it's not being number one that really matters. It is actually the journey we went on to get there. Since 2019, we have increased our net revenue by 43% or 4.2 billion euros, our operating margin by 52%, our headline EPS by 45%, our free cash flow by 47%. As you can see in this chart, we have outperformed the industry on each of those financial KPIs over the period. These performance have led to a 27% total shareholder return in 2024 and 185% since 2019, which is four times as high as the second best performer in the industry. I will now leave the floor to Loris. We'll take you through the detail of our numbers. I will then come back to share our guidance and priorities for 2025.

Thank you, Arthur, and good morning, everyone. Let me begin with the key highlights of our full year results. Full year revenue was 16 billion and 30 million euros, up 8.3% versus 2023. Full year net revenue was 13 billion and 965 million euros, up 6.6% versus 2023, and up 5.8% on an organic basis. Operating margin was 2,519,000,000 euros, up 6.6% versus 2023, representing an 18% operating margin rate at the same record level as last year. Headline net income was 1,851,000,000 euros, up 4.8%. And free cash flow before change in working capital was 1,838,000,000 euros, up 18.8%. I will now get into the details of the P&L, the free cash flow and the balance sheet, starting with the net revenue. In Q4 2024, net revenue was 3,854,000,000 euros, up 8.9% on a reported basis. This includes plus 6.3% organic growth, which comes on top of plus 5.8% organic growth in Q3 2024. A net positive impact of currency of 40 basis points due to the increase of the USD and the pound sterling, partially mitigated by the depreciation of the Argentinian peso versus euro. And last, a contribution from acquisitions, net of disposals of 210 basis points, mostly reflecting the impact of Mars and influential, but also of other smaller acquisitions completed in 2024. Let's move to the next slide, which shows our Q4 net revenue by region. North America posted another strong quarter, up 9.6%, including plus 5.6% organic growths. There was a positive impact of the USD versus Euro, contributing 70 basis points in Q4, and a 330 basis points impact from acquisitions, notably from Mars and Influential. Europe was up 8.5%, including plus 6.5% in organic growth. There was also a positive impact of the pound sterling versus Euro, that contributed 150 basis points in Q4. Asia Pacific posted a robust plus 5% organic growth, notably led by India and Australia. Middle East and Africa and Latin America reported plus 3.4% and plus 30.3% organic growth, respectively. Let's get into more details for each region, starting with North America. In the US, the group's largest geography All activities continue to perform well, delivering plus 5.2% organic growth, driven by the strong contribution of connected media and intelligent creativity, both benefiting from new business wins and scope expansions. Publicis Sapient showed sequential improvement, returning to positive territory, with plus 0.9% organic growth in Q4. Let's turn to the performance in Europe on the next slide. The UK, which represents 9% of our net revenues, posted a strong plus 7.2% organic growth. Connected media was up double digits in Q4. Intelligent creativity posted a strong high single-digit growth, while publicity sapience remained soft, still impacted by delayed EBITDA capex. France posted a slight organic decline of 2.1% on top of double-digit growth in Q4 last year and after a very strong Q3. Germany was broadly stable in Q4 with a high single-digit connected media offset by a negative publicity sapient. Lastly, our operations in Central and Eastern Europe continued to grow strongly, posting a plus 17.9% organic growth on top of plus 20.3% last year, fueled by Poland, Hungary, and Serbia. Moving to the next slide, our performance in the rest of the world. Asia-Pacific, which represents 9% of our net revenues, delivered plus 5% organic growth, driven by intelligent creativity, which was up high single-digit. This performance was achieved despite a softer China at minus 1.9% organic, impacted by some phasing effects after a very strong Q3 at plus 12.4%. For the full year, China was up 6.4%. Middle Eastern Africa posted plus 3.4% organic growth, mostly driven by intelligent creativity. Latin America posted a plus 30.3% organic growth, driven by both connected media and intelligent creativity, in particular in Brazil, Mexico, and Colombia, as well as Argentina, partly due to inflation. For your reference, you will find on the next slide the full year performance by region. As you can see, all regions posted strong organic performance for the full year 2024, leading to plus 5.8% in total for the group, on top of plus 6.3 organic growth in 2023 on the next slide you will find our performance by client industry for the full year for the full year like for the first nine months of the year we saw most of our client industries record positive growth the tmt sector which represents 11 of our net revenues continues to perform very well, posting 8% in Q4, leading to double-digit organic growth in the full year of 2024. Healthcare posted plus 25% organic growth in 2024, on top of double-digit growth in 2023, thanks to new business wins and scope expansions across several clients. Food and beverage delivered mid single digit growth in 2024 after double digit growth in 2023. Automotive ended the year up 4% despite the challenging environment. Financial and retail were both slightly down in 2024 due to a tough comparable, particularly in the UK. Moving to the next slide and our simplified P&L down to the operating margin. Operating margin was at 2 billion 519 million euros, representing a margin rate of 18%, in line with the record level of last year, and demonstrating our ability to continue investing in talent and AI to support our growth. This includes circa 100 million euros for our AI plan and a 25 million increase in restructuring charges. Personal expenses, including restructuring, increased by 8.2% as anticipated. Other operating expenses were down 0.7%. Depreciation was up 2.7% due to increased real estate footprint. I will not detail the different parts. Moving to our operating margin bridge on the next slide. Personal cost as a percentage of net revenue and excluding restructuring costs were up 95 basis points, mostly attributable to our AI plan to accelerated investments in talents, as well as staffing requirements to ramp up our new business wins. Restructuring charges were up 25 million or 15 basis points, reflecting the investment to continue upgrading our talent bench. Other operating expenses, as a percentage of net revenue, were down 95 basis points, demonstrating a strong cost management and notably low discretionary costs, including professional services and research costs. Moving now to our headline income statements below operating margin and focusing only on the main items. Headline net financial expenses were a 39 million euro charge versus 20 million euros in 2023 attributable to a lower interest rate for U.S. denominated cash balance. Headline net income tax was 619 million euros with an effective tax rate of 24.9% fully in line with our forecasts. Headline and income was 1,851,000,000 euros up 4.8% versus 2023. On the next slide, our headline EPS fully diluted grew by plus 4.9% year on year to reach seven euros and 30 cents. Overall, our EPS has increased by 71% since 2020. moving to the next slide free cash flow our free cash flow before change in working capital reached 1 billion 838 million euros up 291 million euros compared to the full year 2023 note that in 2023 free cash flow included the 148 million euros negative impact of the rosetta settlement this increase is mainly driven by an additional 169 euros inhibitor partly mitigated by, first, a €30 million increase in lease repayments, consistent with our return-to-the-office policy. Second, a €57 million increase in CAPEX, reflecting the increased investment in our platform and cloud infrastructures, our continued ERP deployment, as well as additional refurbishment expenses related to new leases. Moving to the next slide, use of cash. In 2024, change in working capital represented an outflow of €161 million, fully in line with our guidance. Acquisitions, including paid earnouts, amounted to €889 million. It includes the upfront cash payments for our two major acquisitions in 2024, Mars United Commerce and Influential, but also AKA Asia and Spinnaker, amongst others. As planned, our dividend was paid in July, resulting in a net cash out of 865 million euros. On share buybacks, we spent 148 million euros in 2024 to cover our long-term incentive plans. Other non-cash items represented a positive 91 million euros. It includes 115 million euros negative impact due to the change in earn-outs and buy-outs, mostly due to the earn-out component of acquisitions, and offset by the positive impact of currency translation for 202 million euros. Overall, as a result of these variations, we decreased our end-of-year net cash position by €134 million. We closed 2024 with a net cash of €775 million. The average net debt on the last 12 months was €585 million, an increase of €153 million compared to last year due to the acquisition completed in 2024. and the financial leverage remains stable at one time as expected. Moving to the next slide, a dividend of €3.60 per share will be proposed at our next AGM in May. This represents a payout of 49.3% in line with the group financial policy, an increase of 5.9% versus 23%, and an increase of 80% since 2020. This dividend will be fully paid in cash. Moving to my last slide, cash allocation for 2025. Our outlook for 2025 is a free cash flow before change in working capital of 1.9 to 2 billion euros. Our capital allocation will continue to be comprised of the same three pillars. First, a cash dividend of 900 to 950 million euros, representing roughly 50% of our free cash flow. Second, share buybacks for an estimated 150 million euros to cancel the potential dilution resulting from our long-term incentive plans and to keep the share count stable. Last, we anticipate investing 800 to 900 million euros in selected bolt-on acquisitions. So this concludes my financial presentation, and I now give the floor back to you, Artur.

Thank you, Loris. To sum up, we had a very strong 2024. We are ending the year as number one in organic growth, new business, financial and extra-financial KPIs, and for the first time ever as the largest advertising group worldwide in net revenue. It is important to note that we reached this position not by merging more of the same legacy business, but by building a category of one with four unique and now intertwined competitive advantages. First, we are leading in proprietary and first-party data. Thanks to Epsilon, we have the most robust, most durable, and most connected identity graph, Barnum. Don't take our word for it. Just look at Epsilon Performance versus competitors over the years. And if you have a minute, read Adwick's article on this topic to know more. Second, as we explained in detail in Q3, thanks to AI, we connect these data to our entire media ecosystem and intelligent creativity at an individual level. To do that, we have built capabilities such as Lyft for advanced TV that makes 90% of our U.S. publisher addressable, or PXP, our cutting-edge production platform. We have also made strategic acquisitions, like Mars, which was the largest independent commerce platform, or Influential, the leading player in creator economy. Third, we have 25,000 engineers and consultants led by Publicis Sapiens to make sure our clients can integrate those capabilities into their own environments and transform their business model. Last but not least, we operate as an efficient and flexible single platform organization thanks to the power of one, Marcel, and our country model to make all of this data and technology seamlessly accessible to all of our clients and teams. What truly makes Publicis a category of one is that only we, thanks to core AI agentic application, can connect all four of those competitive advantages at scale to deliver identity-led marketing and business transformation. This puts us in a unique position to really answer our client needs, including making marketing a measurable business lever, driving project advantage, and future-proofing their model. We now have three priorities for 2025. First and foremost, we plan to continue outperforming our industry on organic growth and margin for the sixth consecutive year. For net revenue, we are expecting to deliver between 4% and 5% organic growth despite high multi-year comparables and a still challenging environment. A key reason for our confidence is is our new business track record in 2024. Once again, we made significant market share gains as you can see on this JP Morgan chart. We believe the 4% to be very solid and intend to achieve it in current market condition thanks to the strength of our connecting media operation. At the top end, we could deliver 5%, especially if the microeconomic context improves, resulting in fewer cuts to classic advertising and clients resuming capex spend in DBT projects. Looking at our 4% to 5% organic growth guidance through the lens of our practices, connected media should deliver need to high single-digit growth this year. We are expecting our intelligent creativity operation to grow at low to mid-single digits thanks to the repositioning of our creative brand portfolio, most recently with the launch of Leo, combined with the acceleration of our production backbone. Finally, when it comes to business transformation, as we are still seeing a wait-and-see attitude from many clients, also relayed by other IT consultants, we are entering 2025 as we ended 2024 with a cautious view. Having said that, we expect this practice to deliver cyclical upside should micro-condition improve. Turn into operating margin. In 2025, as announced at our Core AI launch a year ago, we will slightly improve our historically high margin of 18%. We will do this while maintaining the pace of investment in AI and reinforcing our talent bench in an environment of increased pricing pressure. Finally, we expect free cash flow to reach a new record level of between 1.9 to 2 billion euros in 2025. When it comes to the start of the year, we anticipate continuing to significantly outperform the industry with Q1 organic growth within our full year guidance. Our second priority is to seize the opportunity created by Omnicom's takeover on IPG. If the deal goes through, it will feel a bit like back to the future. In terms of industry dynamic, the new Omnicom will roughly match Martin Sorrell WPP in terms of size and value, meaning an industry leader with over $20 billion in revenue and in market cap. It will also put publicists back into the challenger position, which is where we like to be. The key difference is that today we are stronger than ever. Thanks to our transformation, we now have a totally different revenue mix and assets than the new Omnicom to keep outperforming, a go-to market that has proven its uniqueness and competitiveness, and a platform organization with a growth mindset shared by all of our people. This will open many opportunities for us in the future. with two eminent ones in new business and in talent. First, new business. To give you some perspective, today, more than 9 out of 10 global pitches are won by the top four players in our industry, as disclosed in the Convergence Report. It is actually 10 out of 10 in Q4. By moving from four to three big players, the competitive landscape will mechanically shrink by 25%, as the new Omnicom will only have one seat instead of two at the global new business table, creating a landslide of opportunities for us to capture thanks to our unique model. Second, talent. There is no doubt that this takeover will create uncertainties for both Omnicom and IPG's team. Everyone there will see a choice between two radically different companies. On one hand, a company with three years of hardware structuring leading to thousands of job cuts, particularly in the U.S. On the other, a business on the journey of growth and innovation that has repeatedly shown it will put its people first in good times and in bad with a clear ambition to stand for a category of one in an industry that we are inventing. Last but not least, our third priority in 2025 will be reinforcing our category of one position through our Bolton acquisition strategies. On M&A, for the past 10 years, we have been focusing on acquiring truly innovative products and services that increase our addressable market, help our clients differentiate, and drive growth for them and for us. This is why, over this period, we have spent more than $12 billion in data, tech, and AI. When it comes to 2025, we will continue to do exactly the same. We plan to invest between 800 and 900 million euros in very specific areas. First-party data to nourish our core AI, production to deliver intelligent creativity, digital media to reinforce personalization at scale, and technology to substantiate sapient engineering capabilities, notably through selected geographies. Despite the persistent challenging context, Publicis delivered another strong performance in 2024. And while it may not last past 2025 due to Omnicom takeover on IPG, our capabilities, our model, and our teams mean we have taken the number one spot at the largest advertising group worldwide. Being in the challenger seats pushed us to be bold and disrupt our industry. So getting back would actually suit us extremely well. In 2025, in what remains a challenging environment, we will maintain our momentum by delivering plus 4% to plus 5% organic growth, despite high comparables, while improving slightly on our already industry-high margin and increasing our free cash flow. While a number of our competitors will go through uncertain times, we will remain focused on executing our strategy to make sure every one of our clients can benefit from the value of our unique model at the moment where they need to transform. We will be even more proactive by leveraging the opportunity of the reduced competitive landscape to double down on new business while attracting and retaining the best talent. And we will continue to sustain our M&A efforts to differentiate with new products and services. In other words, we will enhance our status as a category of one to get next century ready and help our clients navigate an ever-changing environment. Let me end by thanking our clients for their trust in all of this period and our people for their outstanding efforts. Thank you all for listening, and now with Loris, we are ready to take your questions.

Thank you, sir. This is a conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. To remove yourself from the question queue, please press star and 2. Please pick up the receiver when asking questions. The first question comes from Laura Metayer of Morgan Stanley.

Hi, Arthur and Maurice. Three questions for me, please. The first one is on the 25 guidance. So you delivered strong growth of 5.8% in 24. You finished the year very strongly as well in Q4. Can you talk about why you expect a slowdown in growth in 25 versus 24 as the market environment should improve and headwinds also from sapience weakness should ease? The second question is on pitch activity. I'm under the impression that Q4 and the beginning of the year has been relatively slow across the industry with the lower number of business wins announcements than in previous years in Q4. Any color you can give us here on what you're seeing in the market? And the last question is on trends in advertising for 25. What do you expect will be the key drivers of growth in the industry? Any difference from 2024? Thank you.

Thank you very much, Laura. I guess I'm going to have to take the three questions. Maybe I'll pass on you for the guidance later and pitch activity and trends. Okay. Let's start with the guidance and your remark about the dynamic of 2025 versus 2024. I mean, we believe our performance in 2025 will actually be very strong, particularly if you take into account You know, a challenging microeconomic context. The least that we can say looking at the last days is that there is a bit of uncertainty. A very high multi-year comparable. I guess you have seen the journey we went through for the last six, seven years now, so comparable are adding every year. And even more importantly, peers that are expected at the moment, if you look at the visible SFA consensus, to deliver 1.7%, knowing that the 1.7 doesn't count the minus 3.7 that IPG has disclosed in the filing with Omnicom. So we should actually deliver, again, two to three times better than our peers. And, Laura, you will remember that. I have been in a couple of investor conferences in the last year. Not that many, by the way, but some of them. Every time I'm going somewhere for the last three years or the last four years, the only question I'm having is, is that sustainable? Is this overperformance sustainable? We did it for five years. We're going to do it in the condition I just said for six years. So, honestly, I think this is the biggest news of those results is that one year again, we're going to outperform our industry by far. Now, if I come back to the guidance, just a couple of points. We said it, the 4% is very solid. When you look at the dynamic we're having with our connected media ecosystem, the momentum is real. And I think this is why we wanted to present it like this. Never forget that this is 60% of our business today, which when I'm talking about a revenue mix that is different from our competitors, we're talking about data, digital media, influencer, CRM, 60% of our business growing high single digits. We could deliver the five, and I think you made a good point. If the macro improves, Of course, we will see a couple of less cuts in traditional advertising that will help us, as it helped in Q4, by the way. But where we have the biggest leverage is definitely with Sapient. If the industry overall of IT consulting starts to build again around CapEx investments and the Accenture, Deloitte, and Capgemini of the world start to accelerate, we will accelerate, and there will definitely be a leverage. I think that it's important to understand that this number means that when you are adding FX and 2024 M&A, actually our net revenue for 2025 should grow by 9% to 10% on a reported basis, which actually will, of course, have an impact on EPS. When you look at the margin, as you have seen, and we said that last year, so we are delivering on what we promised, we will drive some margin improvements. We are expecting the margin to be slightly above our historical high of 18%, while, and this is a very important point because I have seen some notes already, maintaining a very high investment in our core AI, 100 million, plus continuing to upgrade our talent bench at a moment where we have a unique opportunity, as you have seen in the presentation, to bring together the best talent. It will represent, again, the highest margin of the industry, even if you take the restructuring cost into our margin as we do compared to our competition. When it comes to the beginning of this year, when it comes to Q1, as we said, we anticipate to outperform the industry again significantly in Q1 with an organic growth that is going to be within our fuller guidance. But maybe, Laurie, if you want to give a bit of color on that? Sure. Hi, Laura.

Just maybe to give you a bit more color on the beginning of the year. I mean, first, as you saw, we had a very strong Q4 above expectations, primarily due to the year-end positive adjustment that we had with, one, less cuts in traditional advertising, leading to stronger growth of our intelligent creativity practice, and, two, a better-than-expected Q4 for publicity sapience, notably in the U.S., which delivered positive growth. Now, when it comes to Q1, we remain cautious on publicity sapience as the macro context should remain tough in Q1 with continued wait-and-see attitude on clients for DBT CapEx deployments. Second, when you look at Q1 guidance, you also have to take into account the fact that the two-year comp was at plus 6.2% on organic growth. Now, let's be clear that delivering 4-5% in Q1 means that we would still be significantly outperforming the industry on organic growth in Q1 based on consensus.

Moving to the pitch activities. First, as you know, we have taken the decision not to disclose any win anytime. You won't see us in the press. We believe, sorry for my French, but there is a lot of BS in the press when it comes to new business because it's really about having a real win that can profoundly transform our clients. And I think that our track record is actually reflected into our numbers. And in some new business tables, but the best is organic growth versus the others. This is why you see the competitiveness of our offer. It's true that Q4 has been a bit slower for the industry, but the year has been very strong overall. And actually, there is a lot of activities at the moment. That means that I believe 2025 is going to be another busy year when it comes to the new business front. At least I can tell you that we are very busy. I'm not going to talk about AI again. If I've got a question, I'll take it. But more importantly, I think what we are seeing as the biggest trend is that we don't have one client in any category, including CPG, by the way, that has been a bit slower to react, that do not understand that they need to profoundly transform their marketing model. They understand that the future of marketing lies on identity, first-party data, and not cookies. They understand the absolute necessity to connect their paid and their own media, i.e. what you do with publisher and other, with CRM, with influencer, with commerce. They know that if they want the money to invest, they need to justify any marketing investment by business outcome. And they also understand that it's time for them to build their model into their own ecosystem as it is part of their own future. On all of those points, hopefully, as we demonstrated in the presentation, as you can see in our number, we have a massive competitive advantage, which is the reason why, again, we are winning more and way more, but also, and I'm touching wood, because we never know, losing way less. And hopefully taking that out of our presentation is what really matters is the net wins. Is, of course, how much you win, showing that your model is truly competitive and can bring competitive advantage to your client, but also how much you retain. Because you want to make sure that you build long-term relationship with client through the value that you're bringing and the shift we have operated that is at the heart of everything we've been doing through the vision of Moïse, which is to say let's go from a communication partner to truly a transformation partner, is what is making the difference today. Thank you, Laura. I think we're going to move to the next question.

The next question is from Nicola Langley of the NP Paribas.

Hello, good morning. I've got three questions, please. So, first of all, on JAI, we are now a year after your presentation. What has been the latest update you can share in terms of deployment of tools, adoption among your employees, and discussion with clients? Do you still think that the 300 million investments over three years is still the optimal investment going forward? So margin, so you expect a slight margin improvement in 25. Can you be a bit more specific? Is 10-20 basis point the right way of looking at it? And looking ahead, is the aspiration to see further slight margin improvement going ahead? It's too soon to say. And finally, you recently announced the merger of Leo Burnett and UBCS Worldwide to form LEO. What are the main benefits you expect from that initiative, and do you see further simplification process in the organization in the near term? Thank you.

Thank you very much. I'm going to take the Gen AI and the Leo Burnett, and I will give you the margin in the middle, okay, Loïs? So let's start with Gen AI. First, I think the deep-seek news is very interesting. It is a demonstration in itself. that AI is a commodity and it could be actually a great equalizer. And I think it's important for you guys because you have seen a lot of things and a lot of people talking. But the truth is AI for us is a tool. It's not necessarily the solution to everything. But it's a great tool if you use it well and if you have the capabilities to use it well. And, again, coming back to your question, we believe that for us AI is a great opportunity because we are in the best possible condition to leverage it and basically for three reasons that are directly linked to our investments. The first is, and I insisted on that in the presentation, is we have by far the most robust, accurate, and persistent data. And what is AI? AI is data talking to data. And a strong foundation of proprietary data is definitely a critical advantage that we're experiencing every day. The second thing, and we talked a lot about, for the moment, a market that is difficult for Sapiens because some of our clients are having wait-and-see attitude. But let's be clear. We have within our wall 25,000 engineers that can work on any AI technology, whether it's OpenAI, it's Gemini, it's DeepSeq, and can actually even develop kind of DeepSeq-like innovation for our clients. This is a second massive competitive advantage. And last but not least, which comes back to your question again, is AI is nothing if it can't flow within the organization. And the fact that we have a single infrastructure makes a big difference. Now, if I come back to our 300 million investments. First, it's important to compare what is comparable, right? The reason why we are leading in AI and we will lead in AI is not because of the surrounding million investment. It's because we have invested so far $12 billion in data, technology, and AI. And we are capable today, thanks to Core AI, to add a layer on the top of all of those capabilities to actually create the Core AI and differentiate even further from our competitors. And the 300 million that we are spending is just on building this layer on the top of the 12 billion investments. This is what we're doing. And if you look at what we have done in the last 12 months, First, we have invested those 100 million. They are done, and Laurie's told it. Basically, building the AI applications that will make the difference and recruiting and upskilling the talent to actually make it work internally with our clients. The second thing we did, and some of you were there in Cannes when we started, is we shared it with roughly 50 to 60 clients over the summer. And we had fantastic feedback, but also we've been challenged on a couple of areas that we have improved since then. And now we are using it with some clients and definitely in new business. We are planning to maintain for a second year in a row the 100 million investment, and we will do that for the next two years to continue to further develop what we have built. Maybe I'll let you take the margin question.

Yes. Hi, Nicolas. So on margin improvement, let me first take a bit of a step back. As Arthur shared earlier, We have been delivering and by far the very best margin in our industry for more than 15 years. If you look at our more recent history, it means that we are 250 basis points ahead of the peer group in the past four years or 350 basis points when you exclude restructuring charges and growing in absolute terms by 52% since 2019. Now, there are two things that are very important for you to understand. First, the performance is even more remarkable given the pricing pressure and when including the significant investments we made in 2024. In AI, so that's the circa 100 million of which 70% was in people cost. In upgrading our talent pool, that is the 136 million we spent in restructuring charges and in ramping up many more large scale new business wins than our competition. Second, we will not stand still and as indicated a year ago, we will deliver a slight margin improvement in 2025 thanks to our AI implementation It's a bit too early to be precise on the magnitude of these improvements, nor the breakdown between personal cost and non-personal cost, given the many factors that are at play here. But all this while sustaining our investments through more operating leverage, thanks to our platform organization, our continued cost management discipline, and the relentless efforts that we have been deploying over the years to drive efficiencies in our fixed cost base, including offshoring, automation, procurement optimization, and better utilization across the markets.

Let me end with your Leo question, and thank you for asking, by the way. I mean, we always say it, and it's not only because I'm coming from this world. This is the DNA of PVCs, and I guess the DNA of our industry is we believe that creativity is still very important for us and at the heart of our business model for two main reasons. First, it is a differentiator. Because when you start to connect data with creativity, with media and technology, you have a unique go-to market that, of course, the system integrator or the platform can't have. So creativity is part of that. And it's most of the time a very big argument in a new business pitch, even if it's not a creative pitch. And second, we see a lot of potential for growth when you start to bring together – which is a creative agency with production and bringing that together to deliver personalization at scale, particularly when you have the data, can make a big difference. Now, coming back to your Leo question, we have always believed in the power of the brands for a very simple reason, is that brands build culture and culture attracts talent. And in the creative business, it's not about scale. It's not about capabilities. It's about the talent. And if you want to bring the best talent, you need to have strong brands that drive strong culture. It's as simple as that. The beauty of what we have created with the country model is that we have been able to kill the P&L silos and find some real efficiencies in finance, in communication, in new business, in many areas, while keeping our brand very strong with very strong talent. And that's exactly what we want to do with Leo. We are doing Leo roughly for three reasons. The first is that it allows us to clarify and strengthen our brand portfolio of agencies. We have Leo Burnett on one side and Publicis Worldwide on the other. I've been running for a couple of years Publicis Worldwide, which is a brand that I know well. And already at that time, there was a kind of collusion between the creative network and the group. That went actually even further now that the group, thanks to the power of one, is in every client's mind and every talent's mind. So it gave us the opportunity to clarify our portfolio. Second, which is honestly the biggest reason, is that we are bringing together two very complementary creative communities. by geographies, by talents, you will see the team that we have assembled through that. It makes us very confident for the future. And third, it's a way for us to reaffirm our commitment to creativity with a strong player, maybe a leading player. This is a decision we took over summer, honestly, so it took six months to get there. But today, we feel very confident about what is coming. And yes, we are expecting organic growth and new business, thanks to Leo, for sure.

Perfect. Thank you.

The next question is from Connor O'Shea of Kepler Shivel.

Yes, thank you. Good morning, everybody. Three questions from my side as well. Firstly, Arturo, you mentioned the pricing environment, and I think Laurie also mentioned pricing power. Has this stepped up over the last 12 months? Is there any kind of AI effect in terms of increasing the pricing power from the client side, or is this what we've seen before, just ongoing pressure? Secondly, in terms of the organic growth for 2025, can you give us a sense? Obviously, 24, again, a very good number, but to some extent, reliant on the big growth from the pharma sector uh do you see the kind of tailwind of net new business wins in 25 significantly different from 24 and um just a small side question on that in terms of eastern europe it's not a big part of the business but a significant part of the uh european business uh this growth in the high teens from poland can you just explain what's driving that and and uh how sustainable that is. And then the final question, just in terms of restructuring costs for 25 with the merger of Leo Burnett and Publicis Worldwide, would you expect at this stage a higher restructuring cost number than in 2024? Thank you.

Thank you. I'm going to go fast on the pricing environment. There is I would say business as usual in the sense that this is a very competitive market where price, of course, has to be very competitive to win. I would say that this year, 2024, we have seen a couple of silly behavior on a couple of pitches that hopefully are going to disappear with the coming quarter with the simplification of the competitive landscape. I think the fact that we are moving to three solid players will actually avoid some of the silly behavior we have seen this year, which, by the way, is translated into the organic growth. You see some of our peers winning a lot of new business and not having really an impact on the organic growth. So you can ask the question why. On restructuring that I'm going to pass on you, I just want to make the point on LEO and then I'm going to pass on you. There is no real efficiencies expected from LEO. I want to be very clear on that. We are not doing that for cost reasons. Thanks again to our country model, we have already removed the cost. I think that this is a big advantage versus our competitors is that when we are doing this kind of move, it's only positive. It's bringing talent with talent for a better service for our clients. So, of course, there will be a couple of efficiencies here and there. But this is not a financial play. This is a growth play. But you want to say more on restructuring?

Yeah, just to give you some clarity and guidance for 25, Conor. We expect to maintain a consistent level in 2025 than we had in 2024, which was roughly 1% of our revenues when it comes to restructuring charges.

Okay. And then on new business and the central European growth, just for the outlook for 2025?

So again, if you look at the tailwind on new business, we expect 2025 to be roughly like 2024, which is 200 basis points, roughly. This is what we see. When it comes to your question about pharma, pharma has been very dynamic last year. To be clear, it's not a single client. It's a couple of clients. And it's a sector that is moving very fast today when it comes to transformation overall. And this is why you see the positive momentum we're having is that, again, imagine what data can do when you start bringing together patients and doctors. We are the only one in the industry that can do that individually and at scale. So it gives you an idea why we have been growing and winning so much in this sector. Now, to be clear, when you look at 2025, we see a more balanced revenue mix within different industries. But again, you see it's a great example because you see where there is opportunities for us to truly bring marketing transformation to clients that are facing some challenges, but also a very big opportunity. When it comes to Europe, I'm going to let Loris answer the Eastern region question.

Yeah, specifically on Central Eastern Europe, you're right, the growth rate this year was close to 18%. After 16% last year and again double-digit two years ago, there are really two reasons behind this. The first is new business. This region has been performing really well when it comes to connected media. The second, it is a global delivery region. You might remember that Sapient made an acquisition a few years ago of Tremend. And we are rolling out a lot of those global wins when it comes to technology and production. And so this region is really benefiting from those wins.

I think that the chart we showed with the three regions, will it be on a six-year basis or will it be only for last year, is very telling about our ability to win in every region. I think this is something that should be important for investors, is that the model we have developed is not only working in the U.S., where we grew three times our peers in the last five years, But also in Europe, where we are outperforming by far, and in Asia, and particularly in China, where we're making a big difference. So let's be clear, China is not a very big market for us in terms of revenue, but it's a very important market for our clients. Sometimes, and most of the time, it's a second market. And our ability to truly win there is having an impact beyond what is happening in China.

Very clear. Thank you.

The next question is from Julian Rock of Barclays.

Yes, good morning, Arthur. Good morning, Loïc. Good morning, Jean-Michel. First question is on sapient, slight decline in 2024. Is it minus one? Is it minus two? And I was hoping we could get the organic epsilon the old way. I understand that you've changed the way you report from the three-third to media, creating the sapient, but having the old way at least for 2024. would help us build a track record and also compare all the new. That's my first question. The second question is rebounding on Nicolas' question on AI. I get your answer, but, I mean, where are we in terms of AI impacting financials, either net sales or margin? It seems to me that everybody talks a lot about AI, but so far, you haven't really seen any true impact on the industry in terms of a large client in housing thanks to AI or a client accepting that your margin go up. So it seems that it's just another tool in your toolbox and it hasn't really changed anything for the time being. So more of a really on is there a financial impact for AI or is it still too early? And then last, on AI again, now that you have Core AI, which is kind of a dashboard platform you can install to clients, what do you think of launching a SaaS model for smaller clients? Because agencies are servicing large, complicated clients with a lot of people, and you probably have, I don't know, 1,000 clients, which are 90% of revenue, and therefore you're not servicing clients you know, smaller clients to the extent you could. So is there a new business model for publicists which would be a SaaS model based on your AI platform? Thank you.

Wow, that's a lot of strategic questions. So I'll start with the last one, which is the SaaS model. This is a model that we already have, boosted by AI on some of the products that Epsilon is selling. So it's part of our growth, and I'll come back on Epsilon now. Can we go further? For sure. But let's be clear. Our priority is our big clients that need big transformation, and we want to make sure that we have no distraction on this. So yes, we are doing it. Yes, we could do more. But again, we are focusing, and I'll come back to that, on what we could do with our big clients. If I go first on the Sapient question, is that minus one, is that minus two? It's minus 1.5, okay? So we are roughly at the middle. I think it's important, and again, because the big question is how can we sustain even more growth? How can we grow more? I think you guys should not forget that PPC Sapient has been growing and has been a growth driver for us. growing roughly 30% over five years. before we saw this industry slow down. And the job that Nigel Valls and the team has done to transform Sapient has been paying off significantly. We are actually outperforming most of our peers today, but in a market that is way more complicated that, again, and you hear that every day, IT consulting firms are still experiencing delay in digital business transformation projects, and that's particularly due, of course, to macroeconomic cycle. I think the good news here is that when you look at this, despite this context, PBC Sapien has posted a sequentially improved growth in Q4, by the way, being positive in the U.S. And so, you know, if I wanted to... tell you what will happen. It's difficult to predict because of the micro, but the two things I can tell you that hopefully will be reassuring for you is, first, we have taken a cautious stance for PBC Sapiens in our 2025 Organic Growth Guidance. which means that we will deliver our guidance, and if things get way better, that's, of course, something that we will benefit to. And second, if there is one thing that I'm absolutely certain, spending 90% of my time with talent and clients, is that Publicis Sapiens will be a strong growth engine for the future when you look at what is happening with CMOs talking to CIOs in the name of AI transformation. So we feel very good about that. When you take Epsilon, as you said, Julien, Epsilon is now totally intertwined with our media, our commerce, and our influential operation, and it's at the core of this connected media ecosystem that is 60% of our revenue and driving very accretive growth. Now, again, if you look at Q4, or actually the full year, Epsilon delivered mid-single-digit growth. We have really reached a point, and this is why we are not disclosing it in this way, where neither the epsilon growth nor the publicist media growth matters alone. Publicis Media is not growing without Epsilon, and Epsilon needs Publicis Media to put the system in place. So it's really important to put it together exactly as CRM or commerce. This is how our clients are thinking. This is our structure. This is how our people are incentivized. And by the way, we don't care if there is some growth at Epsilon, if we can win a big new business for Publicis Media. We don't care if we have to drive revenue from paid media, publicist media, to CRM at Epsilon as long as this is right for our clients. We don't make the difference. I love your question about AI because I kind of agree with you. There is a lot of fuzz around it, and it seems that it could be the solution to many, many things. Some are actually giving a new mission to be an AI company. We're not there. We are, as we said, an identity-led marketing and business transformation company. What matters for us is the transformation of our clients. And so coming back to AI, it is a tool that can help us go further. And I'm going to give you a couple of examples to answer precisely your question. Yes. It's having a slight impact on our margin now, and it's one of the reasons why we can do a bit more than 18. But today it is not significant for two reasons. First, we are investing. Second, we are implementing. And so it will take time before you see something that is really revolutionary. By the way, if you talk to Sam Ackman, tell him on my behalf that at the end of the day, when he said AI will kill people in marketing, I think he's wrong. When we started to use AI with Marcel in 2017, we were 70,000 people. Since then, we have put AI everywhere and made some big acquisitions around that. We are more than 100,000 and thriving. So I think AI is a tool that will make our people better. Now, And again, I don't want to go too much into detail, first of all, because this is a financial call, and second, because this is part of our secret sauce. But AI is helping us today with our most strategic clients, not only to grow them, but to grow ourselves. And I'm going to give you two concrete examples on where AI is really making a difference. Do you really think, although we have the data, that we can connect a patient with a doctor today? at scale, meaning millions of them, without AI. This, we could not do it a couple of years ago. We could not, with the level of AI we were having, we could refresh our data, we could know more than our competitors, we could connect this data with media, but connect it to doctors to know which prescriptions should be addressed. Who are the doctors that know the product that you want to sell? It was impossible before. AI allows us to do that at scale. A second example that I like even more, because I said that in this call already, I think that the latest in the party when it comes to marketing transformation is CPG. Why? Because they go through retailers and they can still use mass media to sell a product that generally is pretty not expensive. Today, thanks to AI, we're able to identify which kind of candies Loris is going to eat. what kind of influencer is actually following, and in which shop is going to go to buy these candies. And we can connect this into a single consumer experience, again, at scales on millions of lorries. We could have never been able to do that a couple of years ago without AI. But again, this is why we don't like to talk too much about that. We are not about the fuzz here. We are about doing very serious things that are only possible... Because we have the data, because we have these new media capabilities, and because we have sapience to build the architecture.

Thank you very much for that. Quite interesting that your two concrete examples have nothing to do with Gen AI, but are like a database traditional AI that existed before Gen AI. Just a very quick follow-up question. You said that you already have a SAS model. Would it be possible to have an idea of how much of a revenue it is? I assume it's small, but broadly. Thank you.

I can see your provocative thoughts here on Gen AI. So if you give me a bit more of time, I'm going to answer that. Obviously, there is no way you're going to be effective with your clients if the content you send is not personalized either. And this is where Gen AI makes a big difference, is on how you produce the content. But if you don't have the data... and the AI to actually do it for the right person at the right time with the right price, it just doesn't work. And even more importantly, you can't measure. So I think making the distinction between what you call traditional AI and AI is part of the past. It's data talking to data with every kind of AI, with different models, with different partners, making sure that you can give a seamless experience to every one of our customers, of our client customers at scale. I don't have the SaaS business, but I would say like this, it should be 5% to 10% of external revenue, but we'll have to check. No more than that.

The next question is from Silvia Cuno of Deutsche Bank.

Thanks. Good morning, everyone. Just a couple of questions left. The first one is on the organic growth guidances. You talked about the potential upside from macro that could bring you to the higher end while the low end is more secure. So the question is just to really try and understand, I mean, if you factored in potentially any downside risks from the current macro environment, and if not, what makes you confident that the status quo would prevail in 2025? And then secondly, on the two large acquisitions you completed in 2024, Influential and Mars United Commerce, you already talked about the rationale last quarter, but I wanted to check, given they are a bit more sizable than other recent deals, Can you perhaps talk about how the integration is progressing? What steps have you taken since completion? And if there is any client overlap or client additions particularly remarkable? And when thinking about the 2025 potential use of cash flow on M&A, do you envisage similar size deals or more progressive? like it was more common before these last two acquisitions. Thank you.

Thank you very much. I hope I got everything. The sound was not great, but I think I've got everything. So first of all, on the guidance, it has been since Q4 2019 that we have been delivering on our guidance. And so to be clear, the four is rock solid and actually anticipate any kind of micro difficulty. I mean, within a certain range. If COVID comes back, then maybe things change. But you see my point. So we feel very confident about the four. And there is big upside on the five. If we see the macro improving, which we are not counting on today when we look at our model, we are, again, making sure that we deliver what we promised. and then pushing for higher as much as we can. By the way, as we do every year with, I would say, a good success. Influential, which is, so what is influential? For those who don't know, it is the leading platform for influencers. We have roughly 4 million influencers. We see 80% of all the influencers, I think it's 90% actually, of all the influencers that have more than 1 million followers. This was a big strategic move for us. And the echo, the feedback, and the leverage we had since we made the acquisition has just been outstanding. And we realize how much the creator economy and influencer, when you can again link it to our first-party data at Epsilon to do exactly what I just discussed on CPG, which is to link an individual to the influencer that is following it and to follow and then go to commerce. is a breakthrough in terms of growth and profitability for our clients. And by the way, it is something that you can measure very easily. So we have built definitely the biggest global influencer media network in the industry. We continue to invest in that, whether it be in terms of data or in terms of talent, and we see a huge potential. It is a source of growth for us, but even more importantly, it is a huge source of competitiveness because there is no equivalent on the market today. Finally, on the Bolton, you want to take this one? Do you want to start, Florian?

Sure. I mean, and Silvia, to start with the conclusion, we will not change our M&A strategy in 2025. We will continue doing what we've done before, and we plan to invest... roughly 800 to 900 million euros in areas like first-party data to nourish our core AI, in production to deliver intelligent creativity, in digital media to reinforce personalization at scale, and in technology to continue to substantiate sapient engineering capabilities, in particular through selected geographies. In fact, as you saw since the beginning of the year, we announced two acquisitions in January, two digital media companies, one in Australia, Atomic 212, and the second in the U.S., Disrupt. So we stayed, of course, very much with this strategy.

Thank you very much. The next question is from Adrian de Saint-Lalaire of Bank of America.

Yes, thank you. Good morning, everyone. So I've got a few topics, please. Maybe doubling down on AI. So we heard from Meta in their last earnings call that there were 4 million advertisers that were using one of their AI creative tools. We heard about Google launching Meridian, which seems to be a marketing mixed model. How do you see these products competing against your own offering? Do you think Google and Meta are more around the SMEs and you're more around the big enterprises? Coming back to M&A, Loris, this 8 to 900, so it's quite a bit higher than the usual envelope of 4 to 600. Is that a new normal, or is 25 a bit of a one-off? And if that money doesn't get spent in 25, should we see it being rolled over in 26, or could we see maybe some of that money being returned to shareholders? And then I've got a last one, if that's okay. As you said, Arthur, the environment is uncertain. I mean, we've heard some CEOs say, expressing optimism after the U.S. elections. Now we've got maybe tariffs coming. So generally your thoughts around the mood of your clients based on these developments. Thank you.

Maybe I'll start with the first one on Meta, Google, and AI. I'm going to try to be short. First of all, it's important to understand that before anything else, the Meta and Google of the world are partners. And they are media partners. So every media product that they develop for our clients is a good news for our clients, and we are taking it like this. So us, we are just making the arbitrage about with our clients where they should invest and where they should not, depending on efficiencies, brand safety, and medicine like that. I think where we have a difference with our competitors is that thanks to our first-party data, thanks to our media ecosystem as we developed it in Q3, we and our clients are not dependent on those platforms. Because at the end of the day, the risk, which has been the one that has been chosen by many clients, particularly in CPG, is to be too dependent and actually to have your data in those walled gardens instead of owning it. Which means that not only you're not building your data goodwill, but also I will have a different Adrian in Meta, in Google, and so you just can't connect everything. And coming back to AI, because I think this is a big question that is beyond that, and I don't want to develop too much what we are working on at the moment, but, you know, when I told you, AI is data talking to AI. The truth is what everyone is realizing today is that for many years, the mantra has been innovate or die. I'm sure you have read many articles on that. The big question today... actually, where there is a big opportunity with AI, is connect-or-buy. It's how can you connect your data with the entire media ecosystem. And so those wall gardens could be a great use for our clients if we are able to have a connected ecosystem where they are part of it, They are a danger if you're only reliant on them. And the difference between some of us and the other is our ability, again, to have this first-party data and identity connected not only to those platforms but to publishers, to CRM, of everything we just discussed before. And this is, again, where AI will make a big difference. And, again, this is what generally is making a big difference because you can deliver content in the right way on the right platform. I will let you take the second question. I'll take the U.S. question now.

Yeah, Adrien, hi. On M&A, so you remember that in 2023, we invested roughly 170 million in 24, 1.2 billion. So if you look at the 24-month horizon, that is an average of 700 million. Last year, we guided 700 to 800 million. So on the 24-month period, we're right on track with the envelope guidance that we gave you. You're right that 800 to 900 million is a slight increase. But it's a reflection of the acceleration that we saw in 2024. And quite frankly, what is a very good pipe at the moment. So that's why we want to be slightly more aggressive in 2025.

Your last question about the mood of our clients and the general context, I mean, a couple of points. First, honestly, it's too early to say what will happen, and I think that every of our clients is very clear on that. Just look at the last 24 hours. The least we can say is that for some of our clients in North America, it has been a roller coaster. But I think the good news is everyone is taking this with a lot of calm for a very simple reason, is that Look at what we went through together with our clients in the last six to eight years. We are more than used to navigating to uncertain times. And I think that, again, what makes the strength of our model is that we have everything we need to help them in good time and in bad times. And, by the way, we are not distracted by anything else than taking care of them, which makes a big difference in a moment that is pretty uncertain.

Thank you.

The final question is from Christophe Chablanc of Bernstein.

Yes, good morning. So three quick questions on my side. The first one is on the competitive landscape. Artur, you're not being shy about the Omnicom opportunity. If we take the $55 billion of total revenues for the top four, to how much revenue do you believe the four seats to three seats analogy will apply just so that we can – the opportunity? That's the first question. The second one is for, I guess, for Loris on the GNI cost. You know, we know the step-up was 100 million in 24. I had in mind the step-up would be much lesser in 25. So can you give us just a sense of what will be the increase in 25 versus 24? And last one is also for Loris. What is the share of your tax footprint, which is located in the U.S.? ? so that we can see what would be the impact of the U.S. corporate tax rate going from 21% to 15%, which I think would be a big boost for publicists. Thank you.

Thank you very much. The price of the opportunity, or the size of the opportunity, Again, as you know, I'm not shy about talking about our competitors in some circumstances. It's an earning call. I don't want to spend too much time on that, but I guess the question will come, so I'm still going to share with you a couple of observations. First of all, honestly, it's too early to know exactly what is going to be the size of the opportunity because it's going to take five years to know if Omnicom made the right move. They said it. They have in front of them three years of restructuring that is going to lead to thousands of job cuts. And, by the way, it has been said also, there is a CEO succession that will follow, and we know that it's always challenging, and particularly in our industry. And the reason why I say it's going to take time is because we went exactly through the same. This is why five years is not that of a long period. If you take at PVCs, it took us five to six years to create the power of one, to build a new model, to actually execute the succession plan, and start to have some material results. So until we know that, it's going to be very difficult to know exactly what is the size of price. If you look at IPG, honestly, it's a big difference. It's no secret that Philippe has been looking for a future for IPG for a couple of years now. He has knocked on many doors, including ours, by the way, and he eventually did a very good deal, which means that now things are very clear. If you are a shareholder of IPG, or by the way, if you are part of the corporate team, it's a great deal, particularly when you look at the S4 filing of Omnicom saying that they should decline pretty steeply this year. So, Again, this will create opportunity, but it will take a bit of time. Now, coming back to your question, and this is why I call being back to the future, is that we are going to have a new Omnicom that is going to be 20-plus billion market cap and revenue roughly. And we're going to be back in the challenger seat, which is something that we like. And if you take into account the fact that more than 90% of the pitches are won by the top four mechanically, there's going to be an increase of 25% of opportunity in new business. This is where we see at the moment and currently the biggest opportunity. At the moment, we are going to have to integrate more of the same in the name of cost efficiencies. We have a unique opportunity to continue to invest in our innovation. This is why we talked about Bolton, to attract the best talent through our culture and continue to, fight hard in new business against some of our competitors that may be a bit more distracted and that it will represent definitely an opportunity for us. I don't want to size it for the moment. I just know that there is definitely a leverage for us that we're going to play very hard as we did in the last eight years because definitely this is what we did. We went onto the market. In 2019, following what Maurice already did with Sapient, and we said we are very different. We are about transformation. It's not about communication anymore. And it's about bringing to our clients something that is very different. And during that period, not only we won more than the other, but we lost way less. And we account to do that with a new leader, a very large one, that will have a single seat at the new business table that will create definitely opportunities.

On your other two questions, and maybe I'll start with the one on the U.S., I mean, as you know, the share of our U.S., the contribution of the U.S. is roughly 60% of revenue, and it's the same when it comes to profit. On taxes specifically, I mean, we can't comment at this stage, I mean, given the uncertainty on timing and terms. On Gen AI costs, so as we said, we invested roughly $100 million in 2024. 70% of that was in personal costs spread across recruiting, training, and upskilling. And 30% in SG&A, mainly in cloud infrastructure and licenses. We expect roughly the same amount in 2025. As you remember what we said in the beginning, it's 300 million over a three-year horizon. So expect the same cadence. Okay. Thank you.

Thank you very much. I think we have no more questions, right? So I'm going to thank you again. Thank you for listening. Again, what I hope you will take out of this call is that 2024 has been a very important year for us. We have outperformed the market for the fifth year in a row on every KPIs. We are becoming the largest holding company in terms of revenue. Again, hopefully what you have understood from this presentation is that it is not the number one position that really matters. It's a journey that goes ahead and the trajectory that it represents for the future that is definitely expressed in our 2025 guidance, where despite all the challenges in terms of microeconomy, comparable, or the lower number from our competitor, we feel very good about the 425s. And as we said in conclusion, we're going to seize every opportunity that are created in new business, that are created in bringing talent on board, that are created through acquiring capabilities like influential that can make a difference, and, of course, what is happening on the market with the Omnicom takeover. Thank you very much. Have a good day and talk very soon, I guess. Merci.

Ladies and gentlemen, thank you for joining. The conference is now over and you may disconnect your telephones.