Publicis Groupe S.A.

Maurice Levy - Chairman and CEO Jean-Michel Etienne - EVP, CFO Jean-Michel Bonamy - VP, IR & Strategic Financial Planning

Tim Nollen - Macquarie Dan Salmon - BMO Capital Markets Charles Bédouelle - Exane Tom Singlehurst - Citi Annick Maas - Liberum Brian Wieser - Pivotal Research Adrien De Saint-Hilaire - Morgan Stanley Julien Roch - Barclays Bruno Hareng - Oddo Sarah Simon - Berenberg Matthew Walker - Credit Suisse Lisa Yang - Goldman Sachs Chris Collett - Deutsche Bank Conor O'shea - Kepler Cheuvreux

Thank you. Thank you for joining us today for our full-year 2016 earning call.

It is my pleasure to welcome you with Jean-Michel Etienne and Jean-Michel Bonamy. We will be happy to answer all your questions after the presentation.

I understand that you want to make it short. So we'll go as fast as we can.

One word on micro events, 2016 was an incredible journey. It was a year of surprises, the UK referendum which is now clear and hard Brexit, the Italian referendum resulting in another exit which is that of Renzi, so it is Reexit and the election of a Donald Trump for which we don't know exactly what will happen in term of policies and the various decisions that are going to be made as executive orders by the White House.

We have seen also the comeback of Vladimir Putin as well as that of China and this is just to name a few. And this event will result in geopolitical changes with economy consequences that no one today can yet measure or foresee.

So we can expect that 2017 will be a period of uncertainty particularly if we add to this the French and the German elections. If we move to the new world of technology we see that technology digital innovation have had some very strong disruption on society on the way consumers are behaving and also on business and we believe that we are just at the beginning of the fourth industrial revolution which would probably lead to the transformation of a lot of businesses if we rely on what CEOs are telling us.

Now closer to us. After Mediapalooza in 2015 and beginning of 2016, we have been confronted with ENR report the development of ad-blockers and digital fraud on ads.

These are very serious issues that dampened trust between agencies and advertisers. We are pleased to report that out of 23 audits which have been commissioned by our client, 22 have been already closed with the full satisfaction of our client and I want to make clear that we had no settlement with any of our client.

One topic which I believe is probably the most important for the future is the change in behavior of consumers and how marketing evolves under the influence of technology. Publicis has taken steps as soon as pre-2015 creating a whole new approach which we call the Power Of One, a client centric organization with solution hubs specialized by discipline, creative, media, digital, health and Publicis One for the small countries.

The group has transformed its way of working, shifting from an advertising holding company to a connecting company, one company with client as the core. This trend that most of our client has also which is to shift to one company.

Now 2016, 2016 was the year of the implementation of that new organization, hundreds of executive have changed roles, have changed the way they work, the responsibility they had and have participated in inventing a new form of collaboration with no silo and no solo. 2016 therefore been a year of great achievement, our organization is now in place, our teams are working hard and the concept of the Power Of One is well received.

In 2016, we delivered against our promises as we increased our financial indicators despite low growth, we will come back to this. Succession was announced as planned and as unbelievable as it can possibly be to some observers we have put in place a very good succession plan with a great leader and a great management team.

Now I'm going to give you the detail on our full 2016 numbers with Jean-Michel, who will cover the financial aspect. On page 2, so as you know and as usual our presentation is on our website and you can move on and click and you will see.

The disclaimer that I have been showing since a minute is something that you have to read, I leave it to you. So key highlights, we have as I said delivered against our commitment or announcement.

We announced in 2016 that we will increase all our financial indicators in absolute value. I am pleased to report that despite a weak organic growth and they will never insist enough on the fact that it is weak.

We increase revenue, operating margin both in value term and as a percentage of revenue. Headline diluted EPS and dividend, both in absolute value as well as in term of payout ratio.

If you see the numbers and you take a minute of thinking about what we are doing you can say that our business model is probably the most robust of the industry. And the numbers speak loud and clear, revenue 9.7 billion, up 3.3.

EBITDA 1.7 billion, which is 17% of revenue. Very solid operating margin, up by 10 basis point and the best year ever for free cash flow generation.

We will propose a dividend at the next AGM of EUR1.85 which means up by 15.6% year on year. And we have taken a non-cash goodwill impairment.

We will both Jean-Michel and myself come back in slightly more detail on this in a few minutes. Something which is extreme important is to see that the Power Of One is not only working but it is working extremely well, it's a successful new approach for new ear, new organization, end-to-end offering to meet clients new needs, positive account winning momentum you will see that and these are the proof that it is working.

And we believe that we have attractive perspectives. Regarding management succession, we’ll come back to this a little bit later.

If we spend one minute on the numbers, as indicated the only weakness that we have in all the numbers is our organic growth and this for the reason we know and we will come back to this as we move on the presentation. This is something which has hampered the whole numbers but when you look that with 0.7% organic growth we are able to deliver an operating margin of EUR1.5 billion, up 2% and that we are increasing our margin by our 10 basis points.

It shows that we have a very robust business model. I have given already most of the numbers.

I don't believe that it's worth insisting on the free cash flow 1.261 billion which is the highest number ever in our story, up by 14.9%. We have by the same token reduced our net debt to 1.2 billion.

On Page 9 we have the numbers regarding Q4 revenue as well as full-year revenue. Q4 was not a good quarter.

We have always said that volatility is high in Q4, this year not only we had the impact of account closes in 2015 and the first half of 2016 but on top we have very little one-offs and many budget cuts which happened. Additionally, comparison was unfavorable as we had a very strong Q4 in 2015.

And this has led to a low organic growth at 0.7% for the full year. And on Q4, we have a negative organic growth of 2.5%.

So it is unfavorable comp. We are Page 9; it is unusual negative Q4 volatility with a quarter which has been not as good as what we had.

And if we look now at the full year. When you add the account closes that we have already mentioned for 2015 and the first half of 2016, you look also at the weak performance of Razorfish, it does represent in total 320 basis points which have impacted negatively 2016.

So I'm not going to say okay, if we had not gotten these issues we would have delivered close to 400 basis point of growth, I'm just saying that we had to face those issues. And without dwelling on those numbers we can say at least one thing which I believe is very clear that our underlying business is extremely solid.

If we look now at the revenue by geography for 2016 versus 2015, what do we see in terms of organic growth? And this is something which I believe is probably the most important slide and if we had only one to look at we should concentrate on this one.

We have Europe delivering an organic growth of close to 6%, Asia Pac not great organic growth but positive 1.5%, LATAM 2.9%, Middle East Africa 1.1%. So when you look at those numbers, we’ll say okay, everything is fine, unfortunately we have North America which is where most of our issues are which has delivered a 2.2 negative growth for the full year and this has impacted our numbers as you see.

On Q4, the situation is even worse because North America is down by 6.9%. And I'm making now on Slide number 12 a focus on North America.

First of all, as it has been said by some of our competitors, market for Q4 has been lower than what we were expecting. So it was a market more difficult.

Second, when you look at the comparison and you have a graphic which is quite interesting, you see that Q4 2015 we had a growth of 6.3% and by the way most of the years we had very good Q4. And we see a big swing in Q4 2016 with a negative performance of6.9%.

We had a very strong comparable base which is not helping us. Most of the Mediapalooza and account closes where in the US.

Razorfish is mainly operating in the US. And again the impact was referring to previously is expected to be felt in the first half of 2017.

So to be clear we have been hurt big time in Q4 and more than we expected we told you that we were expecting a headwind quite strong. We were not expecting some of the issues particularly the fact that the market was going south and also the fact that we would have some difficulties with Razorfish.

And we believe that this impact will still be felt in Q1 and maybe in Q2. Q2 will be much slower.

When you look now at the countries, I think Page 13 is quite interesting because we have a few good news. If you look at the countries above 10% delivering growth between 10 and for one country 200% but this doesn’t mean a lot, it's a small country.

We see that we have some very good news coming from Argentina, Israel, the Netherland, Russia, Russia was back, turkey and some other smaller country. Between 5% and 10% this is something where we have some big markets.

Australia, it's important to us, it’s our tense market, France, Germany, Italy, South Korea, Mexico which is an important market for us, Singapore also, Thailand less important, and UK. So we see that we have some of our largest market doing well.

Between zero and 5% you have, interesting to note, India and also the coming back of Greece which is posting a good number. If you move now to the freezing zone below zero, you have Brazil which is slightly negative.

We could have expected a much worse situation due to the fact that the Brazilian market is facing a lot of difficulties and compared to our competitors we are doing extremely well in Brazil. Canada, China slightly negative.

Japan slightly negative and Spain and USA, USA I have been quite long on this. If we move now to digital.

Digital was affected by the Razorfish issue and delivered a full-year organic growth of 3.2%, not good. And in Q4, we had a negative growth of 1.1.

It is worth noting that Sapient delivered a 7% growth for the full year. We have seen a slowdown in the second half of the year in the US but it’s a very strong EMEA growth and 7% growth I would sign for that for the whole group if we could deliver this and I believe you would be with me.

If we move now to the following page which is an update on Publicis.Sapient, I think it's important that we clarify the situation and we give you a full picture in order that you share with us the confidence that we have in the future. As you know, Razorfish has faced a number of issues and the most important one is the high turnover of CEOs for reason which are not always under our control.

Razorfish has a very strong position with key client and very, very good product and they are extremely well appreciated when it comes to experience, when it comes to innovation. Growth has been historically fueled for more than 50% by one-time projects.

After the departure of Bob Lord we pointed Pete Stein for about a year and then gave the CEO job to Tom Adamski who unfortunately passed away a year later. Then we aligned Razorfish with Publicis.Sapient and found out that a full blown merger would be far better for our clients, for our people and for the growth.

When you look at SapientNitro and Razorfish it was clear that we had to combine them not only because they had an offer which was quite similar but this gave also the largest operation in the field of consumer experience, omnichannel and marketing transformation. This is something which will help us greatly for the future, it's a great solution that will help us also growing faster under one single management.

So this is something which is going in the right direction and you should feel as confident as we that the issues that we have been seeing are mostly behind us. They will not disappear overnight.

We will have to make the merger working and I believe it will. If we move now on Page 16 which will be in a minute, we see that it's important to have a clear view on what is the current situation on Publicis.Sapient.

When I started my presentation I mentioned that we had to take into account an impairment charge for Publicis.Sapient. Jean-Michel will come back and will give you all the details and therefore the calculation that the reason for the impairment.

What you have to know that digital business is not one business, it's many different businesses which are evolving permanently in multiple direction. I will take one example in order to make things clear for you.

When you look at Facebook, everyone was considering it was fantastic and suddenly they moved massively to mobile because the market was going to mobile and now they are shifting you have seen the decoration of Mark Zuckerberg, they are shifting massively to video because the market is going to video. What characterizes digital is that we need to be in constant dictation to a new world as a result of the innovations.

It's not the slow motion system that we have seen in the other industries and we need to evolve permanently. And I would like to take just 30 second to explain the situation at Razorfish.

Obviously the various management changes have penalized growth. But it is important, extremely important to underline that Razorfish has great and innovative teams who are delivering incredibly good work and services.

New business flow has been extremely solid but it's coming and that's the problem and that is explaining why we have this negative growth, it's coming late in the year and therefore it has been insufficient to compensate the end of the project base contract. It's not the current loss, it's not that we had some unseen or unforeseen difficulties, it's clearly that we have a kind of [indiscernible], a choreography which has not worked very well between the end of the contract and the new business flow and this is an issue that we are addressing.

On Sapient, in order that things are also very clear in your mind. Sapient had a very good year with 7% growth.

but despite a very strong positioning, the quality of our digital offering with the unique combination of assets and the strongest position in the market, we felt the need to invest further in what we believe will offer the most promising growth prospect namely digital business transformation. And as a result we came to the conclusion that we should review our business plan and we should therefore review our goodwill calculation.

Moving to Page 17, the reorganization of Publicis.Sapient is aimed at capturing good growth. We have an incredibly good operation.

We are best in class as regards to transformation. We are worldwide leader on omnichannel and consumer experience.

And Sapient Inside is currently used by Publicis Communication and tomorrow will be used by Publicis Media. The new management is in place, it’s the management who knows extremely well the operation because it is Chip Register who was already the head of for Sapient Consulting, it is Alan Wexler who is the head of SapientNitro.

And the merger of Razorfish and SapientNitro gives birth to the leading operator in consumer experience and omnichannel. We are investing in consulting to grow the discipline and to face the growth that we can get in this sector.

We believe we will get a fair share of transformation business that will provide significant growth for the future. And now I'm handing over to Jean-Michel, sorry for have being a bit long, I'm trying to move fast, Jean-Michel move as fast as we can.

Thank you.

Thank you Maurice and good morning everybody. As usual we’ll go now through a few slides detailing our 2016 numbers, results and 2016 is special year for us with some emotion in presenting these results with Maurice.

We will go on Page 19 right now looking at the P&L and due to the distortion created by the impairment charge we are highlighting the headline group net income first and I will come back to detail this impairment charge. But now let's see the year as based on our current operations.

Let's start with the revenue at 9.733 growing year-on-year by 1.4%. The EBITDA represent EUR1.682 billion and is stable in percentage of revenue versus last year at 17.3%.

The operating margin is growing in absolute value by 2% to reach EUR1.560 billion, we gave you more detail on this soon. On the line, other income expense, there is a small profit of EUR12 million mostly representing capital gains on small disposals.

We cover the interest expand and the income tax later on. The headline group net income as I said which is a focus this year of course is at $1.015 billion and is growing by 2.6%.

Looking at below that line, we have the amortization of intangibles at EUR51 million net of tax. The impairment charges net of tax represent EUR1.383 billion and the revaluation of earn-out, this year is also high at EUR108 million.

This is a positive sign which relates to the perspective of profit coming from the recent acquisitions indicating higher growth and higher profit than planned originally. We have two slides on operating margin details, first of all, personal cost; they are slightly improving by 10 basis points in term of ratio to revenue.

All the operating expenses represent 20.5% of revenues, 20 basis point above last year in terms of ratio despite a good job which has been done by the teams to squeeze the G&A, we’ll come back on this in a few second. Depreciation is at 1.7% of revenue, slightly lower than last year, percentage than last year but exactly in line with the amount of CapEx that we have incurred in 2016.

The operating margin rate is at 15.6% improving by 10 basis point versus last year. On Page 21, this is the change in our operating margins that we are presenting there.

The reported 2015 margin was at 15.5% if you remember. Had we translated the 2015 margin at 2016 exchange rates, the margin would have be 20 basis points lower at 15.3% due to mainly ForEx and also the dilution effect of acquisitions.

As mentioned in the previous slide, the personal cost are improving slightly in terms of ratio to revenue. However, this is mostly due to a reduction in restructuring cost from EUR118 [ph] million to EUR73 million.

The synergies on cost coming from the integration of Sapient have been delivered as planned and consequently this is improving the operating margin by 10 basis points. The selective control of our CapEx spending had a consequence on the depreciation charge which has contributed to an improvement of our operating margin by 10 basis points.

Then the new business cost, in a year where we had an intense activity in this area have lowered the margin by 10 basis point. And to finish, the ERP implementation as well as several IT initiatives have reduced the margin rate by also ten basis points.

As a result, the 2016 margin is at 15.6%, I said that before. And overall we are analyzing that as a good performance in a context of low organic growth that you noticed.

It demonstrate the robustness of our business model and our unique ability to deliver on margin. Now on Page 22.

I will explain now why we have this impairment charge this year, I would be not very long. Under IFRS rules, we have to conduct a new impairment test for all the cash generating units.

In our new organization, the Power Of One organization, goodwill have been regrouped at the level of the five solution hubs among which we have Publicis.Sapient. Publicis.Sapient concentrates almost 50% of the goodwill that we have in our books due to the significant acquisitions we made in the digital field.

We knew that an impairment risk was possible and this risk was rather well disclosed in our 2015 annual report. The test that we have conducted when we closed 2016 books revealed that we had to impair the value of Publicis.Sapient.

some triggering events were obvious such as the specific situation of Razorfish that Maurice has already described as well as the slowness in the Sapient integration Another triggering event came from a market analysis. The digital business is changing, Maurice mentioned that evolving permanently and implies the necessity to add up regularly our offer to capture the growth.

The consequences are two-fold. On one end, each adaptation necessitates investments which can reduce the short-term margin.

And on the other end, each cycle is followed by a higher gross and higher margin. The impairment was the right thing to do despite the fact that mid-and-long term perspectives are maintained.

So in total the impairment charge represent approximately EUR1.4 billion mostly on Publicis.Sapient out of 4.9 billion of goodwill and intangibles assets are delivered of Publicis.Sapient. It is a non-cash event and an accounting charge.

Therefore I don't think it is necessary to other this has no impact on the headline EPS, no impact on the cash generated and no impact on the proposed distribution of dividend. And more importantly we have also reflected the new financial assumption for Publicis.Sapient in the 2018 margin objective.

If we move now to the net financial expense on Page 23, you can see that this line is now very simple and we have the reduction of our financial cost by EUR3 million with a total interest charge at 74 million. On Page 24, the tax rate is at 29% showing a 90 basis point reduction which is mostly due to the reduction of profit of the US group entities.

On Page 25, the headline earnings per share fully diluted is growing versus last year by 1.6% and reached EUR4.46. We re-proposed to the next general meeting on the 31 of May a dividend at EUR1.85 increasing by 15.6%.

The payout ratio will be close to 42% based on the headline EPS. Shareholders will have also the option to receive cash or shares again this year.

On Page 27, we have delivered this year a very strong free cash flow before change in working capital at almost 1.3 billion growing by 14.9% versus last year. At constant exchange rate it is even higher.

All the lines are contributing to this improvement starting with the EBITDA at EUR1.682 billion. Tax paid are also reducing significantly due to less profitability in the US but also due to excess advanced payments in several countries.

CapEx are also reduced coming back to EUR160 million as last year we had some specific real estate project explaining the higher amount that we had. Regarding the use of cash, on Page 28, we have this year a change in working capital which is for once an outflow of EUR355 million and was expected.

Coming mostly from the 2015 Mediapalooza contract losses. For the acquisitions this year was a year where we didn’t have a lot of acquisition with the cash out at EUR65 million.

The earn-out and buy-out altogether represent a cash out of EUR226 million, slightly above last year. In terms of cash out, dividends paid to our shareholders and to our minority interest are at EUR230 million.

The non-cash impact on net debt at EUR202 million represents the exchange rate effect on the net debt as well as the change in valuation of earn-out and buy-out. On Page 29, we are moving to the balance sheet it.

First of all the reduction in the negative working capital by only EUR176 is due mostly to the Mediapalooza loss of contracts. The second comment which can be made is despite the impairment charge which has reduced goodwill and the total equality we have been able to improve the net debt on equity ratio at 0.21 showing again this year a very strong balance sheet.

On Page 30, the 2016 average net debt is at EUR2.4 billion not significantly lower than last year as a bulk of the improvement of our debt came mostly during the last part of the year. The net debt at the end of December is at EUR1.2 billion showing a significant reduction versus last year and indicating that we have digested an important piece of the debt coming from the acquisition of Sapient.

vNext Page, our financial ratios are better than our internal objectives. I have already commented our net debt on equity ratio improving from 0.28 to 0.21.

But we have also an improvement on the average net debt on EBITDA at 1.42. And then to finish my presentation on Page 32, you can see our liquidity which is at EUR4.9 billion.

And this is the last item of my presentation. You will have the opportunity of course to raise your question of further detail.

But before, Maurice will continue on the strategic update.

Thank you, Jean-Michel. I'm now going to give you a few information of our strategic update and when we look at 2016, we have a few achievement which I believe are interesting.

It was a very busy year, we decided to dramatically change our organization, we have created four solution hubs, a client centric organization and we created for the small countries Publicis One where we have all the operations under one roof. We implemented a new approach called the Power of One.

And we did all this while we were defending accounts or pitching for new business. You can imagine what this was in term of a commitment, engagement from the team and how busy it could be.

It was a little bit like if we changing the tire of a car while driving. Business and clients are changing under the influence of technology, digital, data.

We created the Power Of One simply because we believe it is the right thing for our clients. And when you look at the result we can say that it is working pretty well.

And after the Mediapalooza which was very tough for us, we started to regain momentum by regaining new account, winning new ones and retaining account which has been lost a year ago. Our new approach is getting good traction with the clients.

And it is allowing us to refill the pipeline. So I believe that we are in a pretty good position.

And last but not least, we continue to work on efficiencies and cash generation. So when you look at all this you look at the numbers despite a low organic growth and the fact that we have a very strong robust business model we can have a feeling of confidence for next year.

If we look at this new era, we are all talking about why that is going to happen in the future. In fact, in our business we have to think about what is making the landscape.

It's the starting with the consumer. There is a new consumer journey, which is leading to data, which is leading to omnichannel.

There is a digital transformation of our client, which is leading not only our client to change the way they work but also their approach to marketing and how they are dealing with consumers. And all this is leading to the change of the model.

There is also the issue that ENR report the fraud in digital have created. It is a situation of mistrust and we have absolutely to strengthen the partnership we have with our client and we have to insist even more than ever on transparency, on trust and obviously on transformation as it has been always the case as far as we are concerned.

Advertisers have also to shift from efficiency to value creation. We are as an advertising agency as a partner in transformation we are creating a lot of value for our client.

And it should be good and appropriate that they see the value created by our ideas by our work and out technology and that this value is recognized. When we move now to the next level, what do we see?

We have a as Publicis have already entered in the new era. It's not something which is a prospect and when you compare our position to that of many of our competitors I think that you should feel good about our position because we have done already all the work that is needed to transform ourselves, we are one company.

So we moved, we shifted from a holding company to a connecting company. This is what we wanted to do and we are acting as one.

We have created a solution hubs. We moved from 14 brands and many others to four solutions plus the Power Of One.

We have a really client centricity, client at the core is not something that you can easily impose in an organization of people, is not something that comes naturally because all our people in all of the organization of the world have been educated in working in discipline in silos and bringing them together and making them working together is not easy. We are doing it and we are moving fast.

And the digital transformation for which we have all the tools, all the capabilities and the right talent, and obviously the most important one for the future, data. On data, we will certainly come back to you and we will tell you and show you the steps that we are taking and how advanced we are in that journey.

On Page 37, you have the current organization Conseil de Surveillance chaired by Elisabeth Badinter, Le Directoire chaired by myself with Anne-Gabrielle Heilbronner, our Secretary General and Jean-Michel Etienne, CFO. And you have the Directoire+, which is combined with the Directoire and the journey that we went through it's something which is quite interesting because we have decided to create the Directoire+ in order that the members of the Directoire+ are confronted with all the issue that the Directoire+ is confronted with.

So you can be assured that the people who have participated are fully aware of the plans, fully aware of the issues, fully aware of what are the key leading factors in our organization and how we work. So you will not have any surprise.

In the succession plan and after a thorough process, the Nominating Committee made its recommendation to the Conseil de Surveillance. And as you know succession has been announced.

The future CEO is coming from within. Arthur Sadoun has been chosen.

So he is the chosen. And he will take over from me as of June 1.

I must tell you that I am extremely, extremely pleased with this choice and I’m sure he is the right choice for the group and for the future of the group. I am also extremely pleased to see that Steve King is joining the Directoire, it’s a good thing.

The two where the selected one, they were the ones who were in the finals and the good news that they are working very closely together and that there are a real team. And what you have to know is that these are people who are not only very good but they can tell you that they will make Publicis Groupe go back to growth pretty quickly and they will make it greater.

And as far as I'm concerned I have accepted the proposal of Mrs. Elisabeth Badinter and also that of the Board to join the Conseil de Surveillance and become the Chairman of the Conseil de Surveillance, obviously this will be submitted to the shareholders and we'll see what they will be deciding.

We move to the slide and I think that all the presentation should have been limited to that slide because it shows clearly that we moved from a moment of weakness to a new momentum and that the Power of One and the teams and the leading people are gating today a very good momentum. We are winning account.

I’ll let you look at the list. I will not insist on that list, I will just mention two things.

One is GMC. Everyone was considering that it was an account loss, as it is extremely difficult when you have a creative pitch and you are the incumbent to win it back.

It's much more difficult to win a creative pitch when you are the incumbent than a media pitch for lot of reasons. The other thing that I would like to mention is Special K from Kellogg.

Last year, at the beginning of the year exactly 12 months ago, we lost it. One year after they decided to give it back to us.

I think if you need one proof that we are back and one proof that we are winning back and winning well you have it with this. I could have told you about Molson Coors, 1 billion or some other account Fiat Chrysler but I'm not going to bother you with the wins.

I want to bother you next time, oh no, there will be probably no next time. There will be no next time simply because it’s my last time.

Oh yes Q1, Jean-Michel is telling me Q1. So in Q1 I will tell you goodbye.

If we look now on the focus on margin and free cash flow generation I would be very fast. We are simplifying our management structure, we moved from 14 brand to four solution hub plus Publicis One.

We are still improving and optimizing our shared service organization. The ERP is already representing more than 50% of group revenue.

The Sapient cost synergies are in line with our target and we are making sure that we control well our CapEx and there is a new cost saving opportunities which have been identified. In conclusion, keep in mind that and this is something I would like to insist again.

The strengths of our business model, it is unique in our industry. I'd like also to underline the robust balance sheet with a debt to equity ratio of 0.21 and a liquidity of approximately EUR 5 billion.

Our top priority is clear, it is known to everyone. It will be the top priority of the new management, it is about growth.

We have the capabilities, we have the talent, we need to simulate cross-selling, we need to have new client development and we need more new business. I am personally confident that when I’m looking at the win rate, when I'm looking at the pipeline that we will be back on growth.

I sincerely believe we have all engine in place and that we will fire on all cylinders to achieve our 2018 objective. I thank you, it’s my last annual presentation.

We’ll have a short presentation for the Q1. So I would like to say that during all this journey you have been fantastic with us.

Sometimes you have criticized us and it was fair. Sometime you have pushed us a little bit further and it was good because we proved, thanks to your pushes and sometime you supported us and it was good encouragement.

So thank you for all these years of being together. And now both Jean-Michel and myself we are ready to take all your questions.

We have been less long than usually. I hope that you will notice this as a good point.

Thank you.

First off, Maurice, congratulations on the decision and all the best as you move upward and onward. I have a few questions.

I'm not sure where to start because I've got several. Maybe first off, if you could please let us know about the account wins that you've had most recently.

I've seen a number, including even just this week. If you could let us know maybe over the last quarter or so.

I don't think you've a net business figure any more but if you've been on a net positive win basis, at least recently, I would guess you have been and it probably is going to be contributing to revenue growth going into the second half of 2017, if not earlier. So if you can give us a little bit of color around that, please.

Also, it seems like you are confirming your 2018 margin guidance, if you could remind us; 17.3% to 19.3%, perhaps lower end of that. Could you maybe give us a bit more color on that as well, please?

Looks like Sapient gave you 10 basis points of integration synergies. I think you were talking 30 basis points, if not 50 basis points, going into 2017/2018.

If you could let us know a bit more about what goes into that for the margins going into 2018. Also, any color on 2017 margins would be great, please.

And why don't I leave it there and maybe come back if there's more. Thanks a lot.

So pretty quickly we have a positive momentum and we had very few roses. We lost at the end of last year Toyota in Europe, we have been able to compensate most of the losses of Toyota with Fiat Chrysler, all the rest are net wins when you look at all the other accounts.

HSBC retail, this is a large piece of business. Molson Coors and they can go on.

So we have a - Merck, which is a client we didn't have. So we see that the net is positive, obviously as always when it comes to account wins there we certain time to have the things in motion, it start with spending more money in building teams and then the revenue comes in.

So there is maybe three to six months before we get the revenue. So that’s the reason why we still believe that Q1 will be tough.

Regarding the margin, we stick to the indication that we gave in our plan. We believe that we will be in the low end and not in the high end, so the expectations would be much more in the low end.

We believe that there is a few things which will work in our favor. First is growth.

And growth must generate an escalation in margin. So there will be an impact.

Second that there is a few things that we have put in place starting with ERP for which we already have the expenses we have not had the benefit, we’ll get the benefit. There is few other aspect, we have some operation which are not delivering the kind of margin that it should.

We have spoken about the issues on margin on the digital aspect. We need to bring that segment of our business in line with the rest of the group and this is something which will generate a nice complement to our current margins.

So I think that it’s not an easy objective and I would not tell you there is something that you will do just dreaming, it's something which will require a lot of efforts and lot of work, but it’s something which is still achievable and we can move to the next question.

Two questions. First, Maurice, could you spend a little bit more time explaining the details of how this business strategy is changing at Sapient?

Is it related to the digital agency portion, to the consulting portion, to both? Are there, maybe, certain services where you're seeing more demand, seeing less?

And then the second question for Jean-Michel. I think in your prepared remarks you mentioned that a portion of the impairment was related to Razorfish.

And so am I interpreting this correctly that a portion is attributable to Razorfish and a portion to Sapient? And, if so, can you quantify the two?

Great. Thank you.

Jean-Michel will start.

Dan you know that we are that we are testing at the level of CGU, this means this is a delever of Publicis.Sapient, so we don't know the precise amount regarding the different components which are leading to this impairment but as you can imagine Razorfish is accounting significantly but there is also what I said during my presentation on the impairment there was a little piece which is the change which are coming in the market which have an impact on the investments that the anti-business Publicis.Sapient will have to do which is also including Sapient of course to address the new dimension of the market.

Yes, and also the fact that we have decided because when you do the impairment calculation you have to base it on a business plan and we have decided to have ambitious objective that’s less aggressive that the objectives that they had. The business strategies are probably the most important issue that we are confronted with.

And this is something for which we are working very hard and we looked at the evolution of the market and it's quite interesting. In 15 years, the year 2000, you look at how things have shifted it was at the beginning all about display and website just to show some ads and a presence and shifted to search and some other media operation and then it shifted to some more robust website and then it shifted to transaction and commerce omnichannel.

And today it is a whole new era. There is maybe four different disciplines and I would try to explain this because it is extremely important.

The first one is about business transformation. When you look at our clients, they are all considering that the way they are operating is not right, is not adapted to the new world.

What they do for the time being is to hide a Chief Digital Officer. They don't know exactly where to put it.

And where this responsibility attached to the CIO. Some have the responsibility directly linked to the CEO and they are still questioning how this should be organized and how this should be addressing the new marketing and the new consumer.

And we see, and it's suffice to read the press every day. You see in the mouth of all the CEOs that they need to think about digital transformation.

It is something which is basic. And we are today a very good player on business transformation and how we can implement the tools, we’ll help the client to transform its own business model.

So we are not interested at all in the supply chain and all the ERPs, et cetera. Our platforms are digitated only to marketing and to addressing the consumer.

So digital transformation is something for which we need to invest and we believe that the growth is very important. When we look at the current operation, we are looking for and the contact we have with our client, these are big chunks of business.

The second aspect is experience linked to omnichannel. They are linked together.

So, the first one is, second consulting, the second is Sapient Razorfish, experience is the experience the consumer in his journey has with brand with the product through digital and also offline. But mainly through digital.

And this is something which requires a very good understanding of the consumer journey and the innovation in order to take the consumer to hand and to take he or she threw him or her, through the whole process until the transaction is completed. This requires a very good understanding of the brand, how consumers behave and advertising.

This area, this intersection is something in which we are probably the only one capable of understanding the technical aspect, technological aspect and the consumer aspect, the brand aspect. We are at the intersection of all these capabilities and there is no many people who can do it.

Then you have two other aspects. One which is CRM and everything which is linked to CRM, it is mostly in the field of digital and how to address the relationship with a consumer on a regular basis and making sure that we’re reaching the relationship and taking maximum advantage of that relationship and keeping the consumer with the brand.

And the final one is regarding data. On data, it is a whole new world.

Many people are speaking about data and many people are showing a lot of very interesting tools. No one today has found the right approach to the best use of data.

We believe that we have. We believe that we have really made huge strides in this area and we believe that we have the right solution.

We are showing it. We are presenting it to clients.

We are developing a new approach. We are building something, which is quite unique and we will show that at the appropriate time publicly and for the time being, we are working very hard and we believe that when we will get out in the market vocally with our new approach, this will have an impact in the market.

So this is roughly what we can say about the new world, the new era with maybe two other caveats. One is that transformation as well as data, these are heavy long term trends.

It is not something that we change overnight. It's not like a display and there is a new social network that will change the way people will be addressing a message that has nothing to do with search anything alike.

It is something heavy with strong potential and strong possibilities. And these are the areas where we are investing currently.

This is the reason why we believe that we have a clear advantage. So Dan, thank you for your question and we move to the next question.

Good morning, everyone and very pleased to speak the last time to you Maurice on the call after all these years. Few questions if I may.

The first one is, you've been able to quantify the impact of Razorfish and the budget losses for ‘16 and on a quarterly basis last year. So can you maybe help us to quantify this from maybe Q1, Q2, just to help us think about the shape of the quarters?

A second question is around data, which you've talked about. I mean where do you expect your new initiatives to really help regaining some of the media momentum.

Is it in other areas? I’d just be curious about this.

And my third question is a bit tedious. Sorry, but if I calculate well, you had not only an increase in terms cost, but you had a decrease in the bonuses paid.

So I was just wondering how you think about this and will you guys need to increase the bonus pool again to maybe keep the morale high and the client win high? Thanks.

Clearly, we are not happy to share the bonus pool going down and we would prefer much more to pay more bonuses to the people, so that’s clear and we hope that we will be able to do that as revenue and margins flow in. Regarding data, it is a whole new approach, based on the consumer journey and based on very strong partnerships and very important new approaches.

This changed in fact three aspects. It does change the targeting obviously because we can do a profiling, which is much stronger than any of our competitors.

It does change the communication approach and a creative approach because we can have insights, which are helping us to refine the communication and it can also help us to be much more in line with the entertainment, if I may use this word, on CRM in order that we can not only use our own data, but the data which are available in the market as well as the data of the client and combining all together and delivering something which is quite unique. And regarding Q1 and slightly for Q2, we prefer to be cautious.

You remember Charles because you are always with us in due course. So you remember that when I mentioned last call that we may have a 250 basis point against us in Q3.

No one did believe it. In fact, it has been for the full year 320 basis point.

So we are cautious in giving the information. We are confident on the fact that we have refilled quite nicely, not yet fully, otherwise, I would not have to caution you about Q1 and the fact that the losses will still be felt.

But I believe that it's better that you do your own estimation and I am sure that we will do everything we can in order to beat you estimation positively. Thank you Charles.

And we move to the next one.

Good morning, Maurice. Thanks for taking the question and I know technically we’ve got one more call to go, but thank you for all your work over the years.

The calls have been a lot of fun, if a little bit long. But I’m - to try and make this one a bit longer, I’ve got a couple more questions.

First one is on the phasing of growth through the year. I think early on in the call, you mentioned the second quarter was anticipated to be worse than the first quarter.

I don't know whether I missed on that. But can you just talk about the scale of pressure anticipated in the first half and then the moving parts do progress through the year, you’re explicitly saying sort of 1Q around the same rate as fourth quarter, second quarter slightly worse and then a sharp sudden improvement in the second half.

I’d say some detail on what we can expect when would be helpful. Second question is on the write-down.

I completely understand the point you make about being non-cash, but it does unfortunately suggest something's not working with M&A and what I’m keen to get to the bottom of is whether this was, although I know it’s difficult to quantify, is this a function of the fact that Sapient in retrospect wasn't as good a deal as you thought it was or is this really a sort of say about the deals that went before that, DigitasLBi and Razorfish. Just trying to work out whether Sapient amplified the problems or whether Sapient is part of the solution.

Thank you very much.

Thank you. Probably I have not expressed myself very well and please forgive me if I have not been clear.

I said that we were expecting a Q1 which will be negative and a Q2 which will be slightly negative. And the first half, we will feel the difficulties, but we are not expecting a Q2 worse than Q1.

On the contrary, we will see that we are regaining momentum. Hopefully with the wins and if things continue, we will have a denial of the current forecast, but for the time being, we are expecting a negative impact on Q1 and a less negative impact on Q2.

Regarding the acquisitions and we gun can discuss endlessly if it is good, it is bad, it is a good deal, bad deal. It is difficult.

For example, you see we have many operation for which we had to take loss for the earn-out simply because we are expecting better results that what we planned and it’s funny how it worked as we are expecting better results. We will have to pay more and this will not go to the goodwill, it will go to the P&L and that is what is going on.

So this is quite interesting, when you look at Digitas, Razorfish or Sapient, we are speaking like a picture. It's a picture at the moment.

It's not the film that we are seeing. Digitas has been delivering great results, fantastic results.

Razorfish has been extremely good from the time we acquired it until 2013. And we started to feel the difficulties of the changes in management.

And we changed the management. Unfortunately, Tom was doing a very good job and unfortunately, he died.

So we have the issue. So, if I look strategically, Razorfish is excellent acquisition and very good people, very good solutions, appropriate solutions for the client and advancing on innovation like probably no one else.

When you look at Sapient, Sapient, we had last year a very good integration and the cost savings and the synergies have been delivered. [indiscernible] we were expecting and we had a slow start and some difficulties in term of growth.

This year, we have for Sapient a very good growth, a slowdown in second half, but 7% growth. I'm sure that if we were to look at this, we would say, it's great.

And if we had it at the beginning of the negotiation that we will have 7%, 7.5%, 8% growth for the next five years, we would have made the same deal. We were expecting higher growth and that was the business plan and that is what is leading to the impairment.

Is the acquisition of Sapient right? Yes.

It is. Is the acquisition of Sapient helping us to be more competitive?

Yes, it does. Is this acquisition helping us to better serve our client?

Yes. So when I look at all the elements, I think we have a great acquisition, with great people and I’m extremely pleased with the acquisition.

Now, is the price right? Probably that we will know if the price is right in three or four years’ time.

You cannot judge after two years. Are we right to take an impairment?

First, it is mechanical. We have to revalue it and we have decided.

But you as analysts and recommending to investors, you should be happy that we have done it, because this will give a certain relief to the new management that they will not have to bother about this and you should be also relieved to see that the old guys are making the right decision for the future. And they are not trying to dress up the last presentation that we are making to you.

So I think that all in all, what we are doing is not only right for the company, it is right for the future. It is right for the investors and the shareholders.

So I think that strategically, we are really doing the right thing. So thank you, Tom and we move to the next question.

Good morning. Thanks for taking my questions.

My first one is looking into 2017, how shall we think of M&A versus integration maybe. And then one of your competitors seem to have suggested that in 2017, they will look at disposing non-performing assets.

So if you look at your portfolio, do you think there are some assets that you could dispose of or are you pretty happy with the way you are at this stage? And then just a quick one on restructuring cost, how shall we think about them in 2017?

Thank you.

Thank you. Jean-Michel, restructuring.

Regarding 2017, we will have some restructuring costs, because we have less in 2016 than expected, so we will have to do a little bit more than maybe we planned in 2017. But not much more.

So we will have roughly an envelope of EUR90 million, EUR100 million of restructuring costs in 2017 as very close to what we will have expected for 2016.

So regarding M&A, there is three aspects. Are we going to dispose?

I don't believe so. When we look at the assets we have, we are quite nimble despite the fact that we have 10 billion of revenue roughly and we have not operations that are dragging us down and the issue we have with strategic operation that we are fixing and I don't see any important disposal.

It may happen in some country, in some area. We have a small-ish operation that we close or dispose, but I don't see anything important that we might dispose.

If we look at large acquisition, I can say loud and clear that I would be extremely surprised if anything happened of the like in 2017. So we will see probably a few limited acquisition that we will be making in some areas, either for completing a position in one market or for completing a discipline in a specific area.

But we have no big plans and no big leads to acquire something important. We have been invited and we have seen some presentation of operations that were offered to the market and we passed.

And thank you for your question and we move to the next one.

Thanks for taking the questions. First, a couple of them related to Sapient.

When you mentioned Sapient was up by 7%, was that for all the acquired entities or is it for the entities that currently reported the Sapient. And maybe looking inside of Razorfish, is it correct to say that if we backed out Razorfish, given how US centric that is that the North America or the region would have been flat for the year?

And then a second question, can you talk about the revenue and financial impact of shifting to the Publicis 1 model in countries where you made the transition earliest, curious to hear any thoughts on that. Thank you.

Okay. Brian, I will start with Publicis 1.

Publicis 1, we are extremely happy and the solution that we have created is something which is really working very well. And we believe that this will be a small, but a nice engine for growth and the nice engine for generating good margin.

In areas where it is always difficult and struggling to find good revenue and good margin when you are dispersed with many operations. So it was the right thing to do.

And we are extremely pleased with the current result. You're right.

If Razorfish had not delivered a negative growth, we would have had a situation relatively steady in the US and we will not have seen a decline roughly and this is in rough numbers. I have not made the exact calculation, but that's right.

The second is 7% is roughly the same percentage from SapientNitro and Sapient Consulting roughly. This is what we call the legacy, what we acquired and this is what generating the growth.

So it's something which is working extremely well. We can always look into detail and there are some aspect, which are working better and moving faster than some others, but that is always the case in all operations, but we have the Sapient operation, generating 7%.

These are the occupations that we acquired at the end of 2014 and we integrated at the beginning of 2015. So the percentage applies to both and we are honestly pleased with that percentage, because it's a good one.

And as I say, that we’d have wished that the group delivered that level and I'm sure that if the group we’re delivering that level, the kind of question that we would have received from you and your colleagues would have been very different. Thank you.

And we move to the next question.

Yes. Good morning, Maurice, Jean-Michel and Jean-Michel.

Thanks for taking the questions. First of all, Maurice, I think in 2014 and 2015, I think you were also talking about a soft start to the year, which we didn't see acceleration in the back end and this didn't materialize back then.

So what gives you confidence that this will happen for 2017? Secondly, maybe for Jean-Michel, I’m not sure I understand how margins could grow in 2017 because you mentioned higher restructuring charges, organic growth going quite soft.

So why should we expect margins to go up, maybe excluding for the Sapient synergies. And then lastly, back to Maurice, I think Luke Taylor recently left the group.

So I'm just wondering if there's anything wrong going on at DigitasLBi. Thank you.

Thank you. Jean-Michel?

Okay. The question on margin 2017.

So we have some programs, which have been delivered in 2016, which will generate some saving in 2017, this is something that we should have in mind. We have a cost reduction program, which is extremely clear on which we're working right now and we expect to have these results already during the year 2017.

This is something which will explain what we are expecting, regarding the margin in 2017. This is the, the effort on cost reduction is very strong.

We have plenty of things, which are coming, amortization of processes, work on utilization rate and so on and I don't want to enter in this kind of detail. We have also the benefit of the structure, which has been put in place in the solutions for which many simplifications happen in 2016 and for which we didn't have the benefit in 2016.

Okay. Back to your questions, two questions that you put, one is regarding Luke Taylor, the other one is why should we be confident on the back end of the year.

So I want to dwell with 2014, 2015, regarding 2017, there is two reasons why we feel confident. The first one is that we are seeing the end of the consequences of the losses.

And so unless if we are really with bad luck and we have three or four losses which are big which happened in the weeks to come, I think that we will have the year, which will follow the pattern of a negative Q1, a less negative Q2, a better Q3 and a better Q4. And this pattern has all, including when you look at the comparison base, including when you look at how clients are expecting to spend and to distribute and they have their face there, marketing budget, this is something for which we have a good level of confidence.

Regarding Luke, it is a part of what's happening in companies where we have people who have been doing for a few years, a job and they look at their future and believe that they should be doing something else. And on top of that, we have Nigel Vaz, a great, great leader.

So I wish the best to Luke and I think it's a very good move for us and it's, and for him. So it's all positive.

And we move to the next question.

Yes. Good morning, Maurice.

[indiscernible] thank you for all the memories. On - my first question is on the Sapient impairment, you said the mid to long term prospects are maintained, but you lowered short term growth, can you give us some color on what is the level of short term growth you expect.

And what is the medium term growth you contemplate? That's my first question.

Second question is, what is Alan and Rick’s role in the new organization? I don't see them on slide 37, but if I search on Google, it still say that he is CEO of Publicis Sapient, so is the website not up to date.

That's my second question. And the third one would be another, I know he’s on the call, but what is after a certain view on the 2018 margin target, is he fully behind that or will you need to think about it once you stop as CEO on the 1st of June.

Actually, he was here till few last minutes. He had to leave to the airport, so he has participated in the meeting.

You will be able to put directly the question to him shortly, so I'm not going to answer for Arthur. What you have to know is that we are working transparently with all the members of Directoire, Directoire+ since years.

It's not something that we are doing in mini, Jean-Michel and myself in a small cabinet. No, no, it's something which is open and it is shared by all the people.

Alan Herrick, Alan Herrick is with us and Alan in last August decided that he would like to be less operational and to have a different kind of job. He wanted to concentrate on three aspects.

One, which is about strategy, one which is about the transformation of the group and the third one is on key important clients. And this is what he’s doing and he recommended a new management team based on the people he was working with since many years and we followed his advice and he’s playing a role of Non-Executive Chairman of Publicis.Sapient and he’s working on those strategic aspects.

Short term, when we have between 6% to 8% growth, that is short term growth that we expect. If we move to mid and longer term, we expect to be closer to double digit.

So that's how we plan for the future. So we expect 2017 2018 that Sapient will deliver about 6%, 7%.

Maybe more hopefully and we expect that 2020, it will be more 9%, 10%. So I hope that's clear and we move to the next question.

Yeah. Hi.

Good morning to everyone. My question has been mostly asked, but I’ve just one left concerning the tax rate, which is up 29% and one more question for Jean-Michel.

Can you tell us what the tax rate in the US is, which is the first question? And then to be honest, have got no clue on what the impact of the Trump administration could be on the tax rate.

When is it going to be, do you have an idea, is it something to expect like a decrease in the tax rate in the US more for H2 for 2018, an insight would be helpful. Thank you very much.

I thought that you will tell us what will be the tax rates in the US in the future, but Jean-Michel will answer.

First of all, to the second part of your question, there are a lot of speculation to be fair and nobody knows, nobody knows what will be the tax rate and people say that there is a - tax rate can be lower, but we will have a lot of non - the possibility of - we will have a non-item which will be non-deductible. So this is again a situation, which is in fact the reduction could be a little bit fake to be fair.

So the tax rate at 29% that we are posting, I say that it was - the reduction was mostly due to the impact on US entities. The effective tax rate, all in all combined that we have in the US is in the region of 37%, 37% is what we have in the US.

So the tax rate is extremely high.

We will move to the next question.

Yes. Hi.

Just a couple of questions. Firstly, obviously, you’ve talked about growth driving margin positively towards 2018.

Can you quantify how much the negative organic growth from 2016 impacted your margin overall. And then secondly on leverage, obviously, that's coming down pretty fast and you’ve said you're not going to do much in the way of large M&A, what do you think is the right level of leverage for the company on an average net debt to EBITDA basis?

Thanks.

Okay. On the negative growth in the US mainly and the impact on our margin, you have a calculation.

Yes, of course. In 2016, we have a posting in North America the margin rate which is at the same level than the one that we have in Europe.

Knowing that the margin in the US is structurally far higher. So you saw the good growth in Europe where the margin has improved in Europe and you saw the growth in North America, which is not great and an effect on the margin, which is a putting the margin off North America in exactly the same level than the one that we have in Europe.

Okay. So if you want to have the right calculation, we can put it.

I know.

This is something that is in the press release.

No. I know exactly, but the impact.

It's something for which we can make a precise calculation and put it on this website. Just to multiply - divide by two, the difference.

In fact it's that easy. Regarding now the balance sheet and the M&A, as I said, we have a very good balance sheet, very solid.

This has led us to anticipate the payout ratio at roughly 42% and to do it now. So we hope that the shareholder meeting will approve it.

And we are at 0.21. Our objective is first to reduce a little bit the debt and then we will have to revisit a little bit what we are going to do with the cash situation as we are a very good cash generator and this is something for which we will probably be in a position to answer more fully at the time of the AGM.

Thank you. And we move to the next one.

Thanks very much and thanks, Maurice. Just a couple of questions please.

The first is, can you be a bit more precise on the 2017 margin or at least walk us through the building blocks in terms of so much Sapient synergies, so much benefit from cost savings and give us an idea about what the contribution both on the revenue side and margin side will be from the new business wins since Q3? The second question is really on consulting, if you could give us a bit of an idea about how much revenue you anticipate or what percentage of revenue in Sapient you anticipate from business transformation that will be useful and whether you think that rather than pursuing this yourself, maybe a combination with a consulting group will be a good idea.

And whether you think in that combination, you might be more of a junior partner or a senior partner? Thank you.

We already collaborate with some partners. We are collaborating with BCG, with McKinsey on some areas and we are making some common offers.

So this is something, which is working already quite well. I can't give you any number, any precise number on what we are expecting.

We believe that this is going to grow and we have some objectives, some internal objectives, but as we are never detailing the objective by unit or by segment of business, we don't believe it would be right to do it. On the margin side, I'm handing over to Jean-Michel who was waiting for the hot potato.

The hot potato you said. So we are committed to do the best we can regarding the margin in 2017.

We have cost reduction program, we are not counting a lot on the effect on growth. Of course, we have the growth we are expecting, it would be easier.

It will be easier to deliver the improvement in margin, but we are putting the bulk of our effort on the cost reduction. The Sapient integration cost of synergies, synergy savings, sorry, has been delivered in 2016 as planned, helping a little bit margin for 2016.

We have another piece, which is coming in 2017. We are counting a little bit of course on the decision to merge Razorfish with SapientNitro in the US, which is something extremely important, building something absolutely new in the market.

This will help by definition. But we had also some delays in the integration plan of Sapient, which has been mentioned already and this delay should, we will deliver what has not been delivered in 2016 and this will be help also the 2017 margin.

Plenty of programs, cost reduction programs are in place each single solutions. There are some group initiatives also.

Shared services also, they are transforming themselves, delivering another layer of savings. This will help definitively the 2017 margin.

Okay. We move to the next question.

Hi. Good morning.

A couple of questions from me as well. So you mentioned in US that the underlying market was a bit weaker than expected.

How are you seeing the market as we go to ‘17? Do you think it's mainly cyclical or there are also some structural issues and maybe some cons going direct to the online giants?

Secondly is on your 2018 margin target. Let's say, the lower end of 17.3.

Consensus at the moment at 16.4, so what do you people are really missing, is it the additional cost savings that you’re doing. And the last one is on P&G’s comments recently about cleaning up digital media, et cetera.

I would say negative sentiment on the industry right now, what do you think can be done to address these issues and how do you think that could really take. Thank you.

Okay. I will start with the last question regarding the position of P&G.

It happens that I was speaking at CNBC. There was the day before Marc Pritchard made his comments and he was making exactly the same comments.

So we are fully aligned. It's not because it's our largest client that we are fully aligned.

It’s simply that we think alike. There are lot of issues for which we believe that we need to take some strong actions, which are very important for the industry.

Restoring trust. Doing everything we can to kill the frauds on Internet and you see these every day.

Finding solutions for transparency. As far as we are concerned, we have very little principal business and when we have principal business, our clients know exactly that it is principal and this is extremely clear and I would have wished that all our competitors do exactly the same.

So there is, if you choose and we know that measurement is at stake and that really issue that we need third-party in order to certify that the audiences that we are selling to the clients are the right ones. And this is something for which we really need a push from the big platforms and from the clients altogether, the industry together has to work in that direction.

There is no reason that we have for TV audiences, radio audiences, press audiences a third party measurement and for the big platform, we have no third-party measurement and we have to take for granted the numbers which are given to us. So this is quite simple and clear.

Regarding the 2018 margin, what people are missing? I don't know if they are missing anything.

I think that 16.4, they see something which is slow improvement. Jean-Michel has been quite detailed on the plan for the delivery of the margin and there is also a factor that has to be taken into account, which is the growth, which is always accelerating the margin today and that is the reason why I was insisting on the robustness of our business model because with such low growth, normally, we should have seen a deterioration of margin.

This is what you normally in any given industry. When you have no growth or very little growth, you see a decline in the margin and you see an improvement in our organization.

So this proof if need to be that we have a very strong and very robust business model. And we should see an acceleration of the growth and an improvement in the margin.

Now regarding the US market, there is a kind of separation between the geopolitical situation, the economic situation. We have a geopolitical situation which is uncertain with a lot of different forces, which are going in various direction.

We don't know exactly what will happen. And when you look at the economic situation, we see some positive trends.

Is it something that will resist in the future, will we have a very good 2017 year, it looks like the objective of Donald Trump as a President is really to give more jobs to the Americans and to make sure that there is better pay, that there is a stimulus in order to generate more jobs and this is something, which may, if it does happen, fuel the growth, not only in the US, but on a worldwide basis, because as we know, US is generating growth for the world. So that is the current situation and that we are seeing.

Okay. So I think that we are at almost the end.

I don't know if we have seen people in the line. Maybe we can take one more.

There is two. I understand the people are - two.

So we take the calls immediately and we stop right after the two calls.

Good morning. Yes.

It’s Chris Collett from Deutsche. Just in the interest of time, I’ll just ask one quick question and that is about a year ago, there was a reasonably high level of staff turnover at Publicis, just wondering what you’re seeing now in terms of turnover, anyone been put off by some of the reorganization and in an environment where you've been cutting costs and trimming bonuses, are you seeing more movement away to some of the competitors who are in the Internet space who are prepared to pay more and really luring people away from agencies?

Okay. On that front, I don't know where you are getting the information that you see more turnover at Publicis or all the operation.

Based on the information that we get from an industry standpoint, we are in line with the industry. No more, no less, maybe there are some, I think a higher turnover and some are having a lower one, but on average, we are with about the same rate of turnover.

So no more, no less. What happens is that there is a lot of communication about the people moving because particularly in the Internet field, we have more people than any of our competitors and therefore, the platforms are sometimes coming to us or the startups and they’re approaching.

But on average, we have no more than orders. So what we need to do is obviously to make sure that we can deliver and to make sure that we can make our compensation even more attractive and this is clearly a strong objective for us.

And I think we have now the last question and I would like to thank you. Last question.

Yes. Thank you.

Good morning. Just a couple of questions from my side.

Maurice, when we refer to the week underlying US market, are you - towards at the end of the year, are you referring to the advertising market in the US or to agency ecosystem as such and do you think that 15.5% margin in the US that we generated in 2016 is the low point. Second question just on BRIC.

I missed that number, at the back of your slides under the old disclosure, I think it was minus 5.5% organic in Q4, just wondering what was driving that. And the final question, just on the CapEx, I think in several times during the presentation, you referenced a need to step up investment and data management platforms and so on, yet your CapEx and depreciation both declined as a percentage of revenues in 2016.

So just wondering, looking forward on that, related to Publicis.Sapient where you'd expect increasing CapEx and potentially what should we expect directionally on that from 2017 onwards?

Okay. Maybe Jean-Michel will start and I will finish.

Okay. I will cover the question on the CapEx.

EUR166 million in 2016 is an amount which has been allowing us to do what we need to do. We did not push back request for spending and so on.

It appears that in 2016, in 2015, we had a lot of real estate projects, which has led to more spending in order to equip the new premises for our agencies. It is clear that we have to invest a little bit, because especially when we spoke about the need to go more on the business transformation, we will have some OpEx as we said in the P&L, but we will have also some CapEx.

It is possible that the amount will increase slightly in 2017 and onwards, but note hugely honestly. We can leave this kind of envelope, a little bit more, but not hugely.

Okay. On the BRIC, I don't know where you're getting this information and they don't want to be mistaken and Jean-Michel will have a look at this and he will be back to you.

Regarding the weak environment of Q4 2016, in the US, it is something that we have seen in many areas and it is not only the advertising ecosystem. It is also on the investment for the media.

And it is also in some numbers that you have already seen, because some have been published of some of our clients, where there have been a kind of smaller revenue in the, I am looking at Jean-Michel who is looking for the numbers. Here we are.

Yes. In fact, it’s BRIC and MISSAT, sorry.

Yes, yes. Okay.

So that's mainly the answer. So I don't believe that it is just the advertising ecosystem.

Now, this is a much broader question. Do we have the right ecosystem and can we expect to see a situation which will be improving.

That is a big question mark. On BRIC and MISSAT, one of the issues that we have seen is a problem of China where we had a reduction.

Brazil also, while Russia was better. Turkey, because it’s MISSAT was also better.

Mexico has been delivering a good positive growth. All the operations were negative.

And yes, it's Indonesia was a bit small. Singapore was small, I’d say, a small decline.

South Africa also. So, and this - on most of the issues that you have seen, it’s the market situation.

And not really a situation due to any of specific operation. On the contrary, when you look at Brazil, we have outperformed the market even if the numbers are negative.

We have won a lot of accounts and we have strengthen our position in an incredibly way. China is a slowdown of the market and the other markets also.

So this concludes the call. I would like to thank you all.

We will still be meeting for the last time for the numbers of Q1. I hope that when we will be showing the numbers, we will have a better presentation in term of growth that what we are currently expecting.

We are working hard on this and I want to assure you that we will do everything we can in order to deliver the numbers that you are expecting from us. Thank you.