Publicis Groupe S.A.

Arthur Sadoun - Chairman and CEO Jean-Michel Etienne - CFO Anne-Gabrielle Heilbronner - Secretary General Steve King - CEO, Publicis Media Jean-Michel Bonamy - VP, IR and & Strategic Financial Planning

Brian Wieser - Pivotal Research William Packer - Exane BNP Paribas Adrien De Saint Hilaire - Bank of America Julien Roch - Barclays Omar Sheikh - Morgan Stanley Tom Singlehurst - Citi Conor O’Shea - Kepler Cheuvreux Matthew Walker - Credit Suisse Chris Collett - Deutsche Bank

Thank you, Bubba and bonjour and welcome to PublicisGroupe First Half 2018 Earnings Call. I am Arthur Sadoun, and I’m here in Paris with our CFO, Jean-Michel Etienne.

The two other members of the director are also in the room; our Secretary General, Anne-Gabrielle Heilbronner; and Steve King, CEO of Publicis Media. As usual, we will take your questions together just after the presentation.

Jean-Michel Bonamy is also here and will be ready to take your question offline after this session. During this call we will actually do 3 things.

First we’ll go through the H1 highlights and results. Then as we committed, we will review where we stand on our strategic, operational and financial KPIs of our 3-year plan, Sprint To The Future, that we presented to you at the Investor Day in March.

Finally, we will take your question. Now if I may let’s dive into the presentation.

Please have a look at the disclaimer on Page 2, as it is an important legal matter. Okay.

Let’s begin with the highlights of the first half of 2018. I guess there is no need to come back on how much our industry has been disrupted.

No doubts, agency must transform, and we better do it fast. We started early, we invested seriously and we are firmly accelerating the 3-year plan we shared with you at the Investor Day to radically transform Publicis and turn the challenges our industry is facing into opportunities for our clients and for ourselves.

That plan Sprint To The Future focus on 3 priorities. First, deliver organic growth and margin expansion year-after-year.

Second, accelerate our transformation and our organic growth by scaling up our new model, connecting data, creativity and technology. And third, progressively increase shareholder value.

Building on those foundation, there are 4 key highlights from H1 performance that I would like to share with you today. But before diving into them, it is important to mention upfront that our members are all affected by currency exchange rates.

Jean-Michel will give you additional details in a second, but to illustrate the shortfall, if we were providing our result in U.S. dollar, where you know that we are doing more than half of our operation, net revenue will be up 2.6% for H1 and operating margin will be up 7.1%.

Now let’s start with the key highlights of H1. We are on track to improve organic growth and margin in 2018 compared to 2017.

Despite the hiccup of Q2, I want to confirm upfront that we are confident to deliver better growth and margin in ‘18 versus ‘17. Organic growth was at minus 0.4% during the semester.

This is roughly the same level as H1 2017, but there is actually 2 major differences. Number one, North America is moving from a minus 2.4% in H1 2017 to plus 0.1% this year.

North America is where our model is most advanced and we are actually starting to see a real progress with those 250 basis point improvement. Number 2, we have an impressive amount of new business wins that we have won in first half and will start ramping up in H2.

It is consequent budget that takes time to ramp up as we will see the benefit in H2. Moving from the top-line to the profitability.

In the first half of the year, operating margin reached €611 million, up 5.6% at constant currencies. H1 operating margin rate grew to 14.3%.

This represents a 60 basis point margin improvement and 40 basis point at comparable basis at constant restructuring charges. Our goal is to build long-term shareholder value and we will not run our business for market share at any price.

And we don’t need to, as we have enough of our own, which is both unique and superior, which I hope we demonstrated during the Investor Day. So overall, in H1 we have set up the foundations to deliver our objectives, to increase growth and margin on a full year basis.

Second highlight, we experience a slowdown from a good Q1, as you might remember at plus 1.6%, to a negative Q2 at minus 2.1%. This was due to two main contractual issues and one operational band that are not changing our forecast for the year, but of course, these are the detailed explanation.

The first contractual issues was anticipated in our internal forecast. We had tougher comps during this quarter for 200 basis points and the positive impact of our new business win in H1 will only start ramping up in H2.

You might have heard or read by the way about the second issue we faced. The uncertainty surrounding the implementation of GDPR drove a slowdown for the all industry in programmatic and digital media.

This has had an impact on our revenue in our media activities in Europe in Q2. Of course, and this is extremely important, our policy, the Publicis policy are fully compliant with GDPR, but more importantly we want to make sure that the publisher with whom we are working are also compliant in the interest of our clients.

We are committed and this is very important for growth notably in the U.S. to provide to our clients with a safe and compliant digital environment and even if then if it creates some headwind in the short term, we are committed to do it.

So the good news is that the situation has stabilized and it’s recovering now. Finally, we are in a projectional bump from the activity of sales representatives in our U.S.

health operation that represent actually the biggest share of our negative growths. This business which is non-core, highly volatile, and low margin has created material revenue decrease amounting to more than €30 million in H1 year-on-year.

We actually experienced the first effect of this slowdown in Q1 and it has accelerated during Q2. As detailed in our press release, this is a very specific activity that has more to do with outsourcing companies in term of competition than with communication network.

This operational bump had an important impact on our gross number at group level. Let me give you 2 example.

Absent this factor, our H1 growth would have been positive and it significantly impacted our performance in North America in the first half, although you know it is positive. As you know, the health sector is going through serious restructuring and transformation, although we are very confident that we have the right offer for our client, we will need to adapt.

We are currently ending the situation to leverage all the opportunities of this sector. One example that you may have seen two days ago is the acquisition of Payer Sciences that we announced, yes, beginning of the week.

It is a bolt-on acquisition that fits within our strategic emphasis on data and analytics to help our clients to make a difference in this new environment. The third key highlights, and maybe we’ll come back in the question, is a very encouraging sign for three year transformation plan.

Our strategy game changer in data, dynamic creativity and digital business transformation are growing at 27% over the last six months. They now represent 18% of our total revenue with our top 100 clients.

On the top of delivering exponential roles, those game changer are reshaping our relation with our top client and are making us win new business in a new way. There is not one pitch where we don’t go with this affair, and this has created an unprecedented track record when it comes to win such as Daimler, Campbell, Marriott, all local win with McDonald’s, Macy’s and Nestlé.

This momentum is actually continuing in Q3 and in the last day, we announced the win of Lenovo media globally; P&G Shopper in the UK; Samsung visual display business globally and Nestlé in the U.S. Last but not least, our fourth key highlights is our stronger margin increase in H1 allow us both to invest in our transformation and to grow headline EPS by 13% at constant currencies.

As I told you, our margin rate increased by 60 basis point and 40 basis point on a comparable basis at constant restructuring charges. We actually deliver 70 basis point of cost savings.

We invested 30 basis point in our game-changer, just have to look at the rules to understand why we are doing this, and we expand our margin by 40 basis points. This improvement reflects actually two important points.

First, we are making progress in delivering on our efficiency plan that we have presented to you demonstrating our ability to reduce cost while providing more high-value product and services to our client. Second, we are investing in our game-changer to build the growth of the future.

Thanks to this performance on margin, the headline EPS growth at constant currency reached plus 13%. The reported EPS growth is plus 3%.

Overall thanks to everything we have achieved in H1, we are on track with our 3-year plan and we are very confident in our ability to meet our short-term and long-term objective. Now I will leave the floor to Jean-Michel who will present the details of our number and I will come back later to give some strategic update and comment on the outlook.

Thank you Arthur. So good morning everybody and as usual I will go now through a few slides detailing our first half 2018 results.

On Page 11, I will start with the impact of currency movements. As you can see our H1 2018 revenue was significantly impacted by adverse currency movements.

Given our non-euro exposure, our revenue were directly impacted by the sharp decline of the dollar, but also LatAm and Asia currencies versus the euro. The impact on H1 2018 net revenue was minus €362 million representing a 7.8% negative impact.

For the full year and this is not a guidance, but more a sensitivity analysis, if current spot exchange rates were to be applied to H2, the negative impact of currencies would be slightly above €400 million for the full year. On Page 12.

If we had reported our net revenue and operating margin in U.S. dollars, net revenue would have been up 2.6% and operating margin would have been up 7.1%.

On Page 13, I will continue with net revenue. Net revenue was €2,198,000,000 in Q2 2018, down 8.3% versus last year.

Currencies had a 5.9% negative impact. As a result at constant currency growth was minus 2.4%.

Acquisition impact was slightly negative because of the contribution of acquisitions being more than offset by disposals and the deconsolidation at the beginning of the year of Genedigi, a subsidiary in China. All in all, organic growth for net revenue was minus 2.1% in Q2.

Arthur already provided explanation for the slowdown of Q2 versus Q1. For the first 6 months of 2018 net revenue was €4,280,000,000, down 8.2% versus last year.

Currencies had a 7.8% negative impact at constant currency. Growth was minus 0.5% as acquisition impact was almost neutral for the reason I mentioned previously.

Organic growth was -- net revenue was minus 0.4% in H1. On Page 14 regarding Q2 net revenue by geography now.

Europe was down 3.6% in Q2. We were still impacted by few account loses and as we mentioned earlier we had the impact of GDP on implementation.

The latter is affecting most of our countries as growth was negative in France, Germany, Switzerland and Spain. Growth remains solid in the U.K.

and we saw a good improvement in Italy. North America was down 2.3% in the quarter.

We had the impact of comps getting much tougher compared with Q1 on top of the headwinds we experienced in the healthcare sector representing a reduction of approximately €30 million in H1. In the meantime, we did not benefit of Q1’s accounts wins and we still saw the benefit from last year accounts wins including McDonald’s, Southwest Airlines and Molson Coors partly offset by the loss of Sprint last year.

Asia-Pacific was down 2.1% in the quarter. This is mainly due to the -- mainly the result of the discontinuation of the Qantas call center contract.

This is reflected in the 10% decline we post for Australia. China confirmed a positive growth of Q1.

Latin America was up 7.2% driven by the strong growth in Brazil and Mexico. Middle East and Africa are up 4.5% mainly due to the good performance of our operation in South Africa.

Overall Q2 organic growth for the whole group was minus 2.1%. On Page 15 regarding H1 net revenue by geography, I will only go through the numbers.

Europe is down 1.7%; North America is slightly up at plus 0.1%; Asia-Pacific down 3.3%; Latin America up 9.1%; Middle East, Africa up 4.6%; and minus 0.4% for the entire group. On Page 16 we highlight organic growth rate for the main countries for the first half of 2018.

I will only mention a few of them. Above 10% for instance we have Columbia at plus 14%; South Africa at plus 11%; and Turkey at plus 13%.

Between 5% and plus 10%, Brazil was up plus 8%; Mexico was plus 10%; Singapore was plus 6%; and United Arab Emirates was plus 6%. Between 0% and 5%, China was slightly above 0%; France plus 1%; the UK plus 2%.

Several countries reported negative organic growth rate for the first 6 months of the year among which several European countries, we said that already, and Australia that I just mentioned, the U.S. are just below 0% at minus 0.2%.

Let’s move now on the detail of the result and I will start here a very short presentation on, of IFRS 16 that we have implemented in advance. As we already implemented IFRS 15 on revenue, we have decided to apply the IFRS 16 accounting standard on leases in advance as of Jan 2018, Jan 1, 2018.

In doing so we will have as soon as 2018 implemented all major accounting principle changes expected over the next 3 years for the Sprint To The Future strategic plan and we will have numbers on a comparable basis for the plan. This would provide a better understanding of the numbers of the strategic plan presented at the Investor Day in March and which cover 2018, 2019 and 2020.

The most important piece is that organic growth and operating margin rate objectives communicated at that time remain unchanged. IFRS 16 aims to recognize in the balance sheet all the lease contracts.

The main impact of this new standard for Publicis is on the real estate leases as Publicis is a tenant of the offices in most cities where the group operates. The right to use the underlying leased asset is recorded as an asset and the future lease payments are recorded as a liability for its discounted value.

The impact is lower OpEx, higher depreciation charge and higher net financial expenses. For H1 2018, the impact on EPS is less than 3% and it is non-cash.

IFRS 16 has been applied using the prospective method with no restatement of previous period. We will provide details before and after IFRS 16.

Consequently you will have all the details to make the comparison for the 2018 numbers before and after implementation of IFRS 16. Let’s continue now with the results.

On page 20 starting with the P&L before impact of IFRS 16, H1 net revenue was €4,280,000,000. Adding pass-through revenue of €445 million that are also in our operating expenses, revenue was €4,725,000,000.

EBITDA was 683 million, down 5% year-on-year. Operating margin was €611 million, down 4.2% and up at, up 5.6% at constant currencies.

Operating margin rate was 14.3%, 60 basis points higher than H1 2017. I will come back to this in the next slide.

I will cover also separately interest expense and income tax. Headline group net income was €450 million, up 4.2% versus last year.

After amortization of intangible of €28 million net of tax, the real estate consolidation charge due to vacant location of €81 million net of tax, the capital loss of €70 million and the reevaluation of earn-out by €11 million, group net income is at €313 million. We also presented P&L with the impact of IFRS 16.

EBITDA is €882 million; operating margin is €617 million; headline group net income is €438 million and group net income is €301 million. On Page 21 we are showing H1 2018 versus H1 2017 at constant currency to illustrate how material were the adverse currency movements.

At constant currency net revenue was down 0.5%; operating margin was up 5.6%; headline group net income was up 14.2%; and headline EPS was up 12.8% on a fully diluted basis. Let me come back now to the operating margin detail.

We have two slides on this. First of all, personnel cost represented 65.4% of net revenue compared with 65.2% last year.

This is a result of the negative impact of lower foreign exchange. At constant currency, personnel cost went down by 10 basis point as a percentage of net revenue.

This would be illustrated on the next page when I will present the source of change. Bonuses are also flat year-on-year.

Restructuring costs were €36 million versus €52 million last year. This reduction is due to phasing in the implementation of the program.

For the full year we expect restructuring charge to be close to €110 million. As indicated by Arthur, we are growing faster than expected on our own reorganization leading to a bit more restructuring charge in the first year of the three year strategic plan.

Other operating expenses represent 17.8% of net revenue versus 18.2% last year. This is mostly the result of our real estate consolidation plan as well as some other savings on G&A.

We’ll cover that in the next slide. Overall, the operating margin rate is at 14.3%, improving by 60 basis point versus last year.

The improvement we are seeing there with the modest growth rate is confirming that our transformation program delivers on the cost side. Our restructuring activity continues and we are on track to deliver our multi-year program on efficiencies.

It allow us to invest in our game-changers and we will see that later on. With IFRS 16, operating margin rate is at 14.4%.

If we move now to Page 23, we are presenting the change in operating margin as a percentage of revenue. Foreign exchange and M&A altogether as 10 basis point negative impact on operating margin rate.

FX was minus 20 basis point and M&A was plus 10 basis point. Lower restructuring charge had a 30 basis point positive impact on margin.

Excluding those two items, operating margin rate went up 40 basis point, including 40 basis points savings for personnel cost; 20 basis point for occupancy cost; and 10 basis point for other G&A, partly offset by investment in our game-changers representing 30 basis point. We generate cost savings representing 70 basis point and we have reinvested 30 basis point to build our future growth.

All in all operating margin rates reached 14.3%, IFRS 16 has a 10 basis-point impact on operating margin rate leading to 14.4%. Regarding now the net financial expense on Page 24.

You can see that this is now very simple. We have a reduction of interest on financial debt of €70 million resulting from the reduction of the net debt over the last 12 months.

Net interest on financial debt was €50 million versus €32 million -- a charge of €32 million in H1 2017. When we include the impact of net exchange gain, total net financial expense were €30 million versus a €38 million charge last year.

With IFRS 16, we include an interest charge on leases of €23 million and the financial expenses is at €36 million. Regarding tax on Page 25, the H1 tax rate is at 25.9%, showing a 80 basis point reduction versus H1 2017.

This improvement is mostly due to the first benefit of the U.S. tax reform.

For the full year, we expect the tax rate to be around the same we were as in H1 as 2018 is still transition year on this tax matter due to the U.S. tax reform.

We will expect tax rate to continue to go down slightly beyond this year. On Page 26, the headline earnings per share fully diluted is growing year-on-year by 2.6% and reach €1.94 in H1 2018.

At constant currency the increase is 12.8%. After implementation of IFRS 16, H1 2018 headline diluted EPS is €1.89.

Obviously the figure is not comparable with H1 2017 which is pre-IFRS 16. On Page 27, free cash flow before change in working capital is €499 million.

Excluding negative impact of currency amounting to €47 million it was down 8%. This is due to higher level of CapEx and a higher cash tax charge.

As you can remember, CapEx was particularly low in H1 2017 and as announced in the full year earnings we are deploying more CapEx due to our real estate reorganization plan. We also add a higher cash tax charge as we had tax reimbursement last year and this year we have also the first installment for the new toll charge in the U.S.

for €80 million. IFRS 16 has a little impact of free cash flow as it is presented here.

It leads to higher EBITDA as we remove the lease payment charge, but the actual payment now is classified as repayment of lease liabilities and lease interest. On Page 28, the change in working capital shows a good improvement as the outflow is €889 million in H1 compared with more than €1 billion a year ago.

This resulted directly from a strong cash management in our operation both in media, but Intermedia also. Acquisition net of disposal was €3 million in H1, but it is actually made of acquisition for €33 million and disposal for €30 million.

All this led to a modest increase in the debt in H1 versus end of December of €409 million compared with almost €850 million debt increase in H1 2017. Let’s move now on Page 29 on the balance sheet.

There is not much to say here. Working capital requirement improved by €180 million over the last 12 months.

The biggest impact is actually due to the IFRS 16 as we see an increase of total balance sheet of €1,868,000,000 with the accounting of write of use for €1,777,000,000 on the asset side and the lease liability for $2,031,000,000 on the liability side. On page 30, H1 2018 average net debt was €1,405,000,000, down almost 30% year-on-year.

Net debt at the end of June is slightly above €1.1 billion, down almost €1 million versus end of June 2017. On page 31 our financial ratios are very solid with an average net debt to EBITDA ratio of 1 time.

We will update you later on with revised objectives taking into account the impact of IFRS 16 on our financial ratios. And to finish my presentation on page 32, our liquidity stands at €4.5 billion.

Sorry for having been a little bit longer than usual. And now Arthur will continue with a strategic update and as always I will be available for question at the end of the presentation.

Merci, Jean-Michel. Now let’s go through our strategic update.

In March we presented our 3-year strategy and execution plan Sprint To The Future. As promised during the Investor Day, we committed to share 3 sets of KPIs with you every 6 months; strategic KPIs on our strategic game-changer; operational KPIs on our organization; and financial KPIs of growth on our financial performances.

So where do we stand today? Well, we are rigorously following our plan and we are on track.

I will now go through the status of each of those KPI. Through strategic KPI, we are tracking the performance of our strategic game-changer in data, dynamic creativity and digital business transformation that we presented to you during all morning at the Investor Day.

In H1 2018, revenue for those 3 game-changer reached roughly €450 million. One can think it is a moderate number, but for our new activity it is already representing 10% of the group revenue and it is growing at 27% in H1.

This is a noticeable achievement for this period and it does demonstrate our offer is spot on where our clients needs, we are delivering the values they need to grow and in the same time reduce their cost. Our mission now is to scale the game-changer very fast so that we can reinvent our relationship with them and overcome the consequences of budget cuts and other marketing reengineering allowing us to accelerate on organic growth with the assets we will make sense for the future of our industry.

This is why it is interesting to look at the contribution of our game-changer within the revenue from our top 100 clients. They now represent 18% of this revenue.

This is to compare with the number we presented in March that was at 16% at the end of ‘17. Beyond the direct impact on those revenue, those game-changer are actually having an halo effect on the entire relationship and it is helping us winning new business in new ways.

This is why in H1 we have won an, in an unprecedented matter. We are glad to report that the Q1 momentum that we have had with notable success such as Daimler, Campbell or Marriot, continue in Q2 at a local level with important wins such as Macy’s and Dunkin’ Donuts in the U.S., P&G in Australia, P&O Ferries in the UK, and McDonald’s in France.

And we also mentioned that we have retained after L’Oreal last year, Nestle in France which was one of the most important competition in France. This success will fuel our growth for H2 and the following years.

Actually the momentum is continuing in Q3 and in the last few day, we announced the win of Lenovo media global, P&G Shopper in the UK, Samsung visual display business that is actually being communicated today and Nestlé in the U.S. Operational KPIs allow us to measure the progress we are making in shifting from an holding company to a platform.

We have put the power of one in place three years ago, we are way in advance in the way we put our structure and we provide the silos and we think that it is extremely important if we want to transform ourself, of course to transform our relationship with our clients and to bring it to [indiscernible]. To succeed the power of one requires an appropriate organization [indiscernible] backed by empowered group client leader, we call them GCL to properly deliver the full scope of our platform to our clients.

At the beginning of the year, we had 35 GCL with a target to reach 100 in 2020. We have already appointed 11 client leaders to reach 46.

We have also identified the next 15 clients to benefit from our GCL organization before the end of the year. We should get to our objective of 100 GCL ahead of our plan.

We have also extended our country model to cover all of our market and clarify our reporting line. This is the only way to bring an end-to-end model to life by breaking the P&L silos at country level and also accelerate on our cost-saving plan by simplifying our support function.

Our geographical footprint is now divided in eight key markets where our clear leadership team has been appointed. Once again, this is a key endeavor to integrate our capabilities, win as a team in new business and optimize our resources.

Publicis Group has implemented the best-in-class delivery model by gathering execution and production capabilities in India, in Colombia, Costa Rica and Mauritius. We committed to develop this organization further by reaching 13,000 people in those center by 2020.

At the end of H1, the headcount on our platform reached 9,100 people compared to 8,700 at the end of 2017. We continue to invest in our talent and capabilities to strengthen our expertise.

Several initiative have followed the launch of AI platform Marcel. We have presented a new program of learning and development; restructure of GCL organization; and of course extending our team regarding our game-changers.

On the acquisition side, we are following our plan and we have several very interesting bolt-on acquisition in the pipeline as Payer Sciences that we just acquired. We are constantly reviewing opportunities.

We said at the Investor Day that we would be very disciplined when it come to using our resources for external growth and we will stick to it as we have the model. This is why for example we have passed on Acxiom considering it was not the best option to strengthen our data capabilities.

Overall, we are running ahead of our operational transformation. We had the opportunity to gather our top 450 manager at the end of May, instead of going to Cannes to inspire them with our vision of course, but even more importantly to assure everyone is aligned with next execution steps of our transformation.

We are committed to execute our plan as we see now. Finally, regarding our financial KPIs everything has already been said by Jean-Michel regarding our H1 number.

I would have just a few additional observation on conclusion. Regarding growth, we are confident to deliver our 2018 objective.

We expect H2 organic growth to accelerate compared with H1 thanks to the contribution of the account wins, mainly what we have won in H1 and thanks also to the performance of our strategic game-changer that are delivering exponential growth as you have seen. So we confirm our objective to accelerate organic growth compared to 2017.

We demonstrated in H1 our ability to deliver on margin expansion even in low growth environments. It was a very important point for us.

All the cost reduction initiative has been launched. Efficiencies and cost-savings; capacity and planning; shared services; country support functions; real estate and external spend.

With 60 basis point implement and 40 basis point on a comparable basis at constant restructuring charges, we are clearly on track to expand our operating margin rate by 30 basis points to 50 basis points in 2018. We don’t want to run for growth at any price, but rather build long-term sustainable value for our shareholders through the right combination of organic growth and margin expansion.

Finally on EPS, our H1 results are encouraging with a plus 13% growth at constant currency and we confirm our objective to grow EPS by 5% to 10% this year at constant currency. Well, as you may have seen it has been a very 6-months period.

After our good Q1 and an impressive new business momentum, Q2 growth was confirmed throughout as thus for it does not change our forecast for the year. Overall, during H1 we have started to show good progress in implementing the 3 priorities of our 3-year plan.

First, we created the condition to deliver our combination of organic growth and margin expansion year-after-year and it will be the case in 2018. Second, we have accelerated our transformation by scaling up our new model in an impressive way 27%.

And third, we are increasing shareholder value to reward the trust you are putting in our journey. So we are on track and sometime ahead in the execution of our 3-year plan and we can confirm our 2018 objective namely better growth and margin than in 2017.

For sure and we say it, it remain a lot to be done on this ambitious path. We are committed to execute our plan and this where it’s so important for us to get through our KPIs to see exactly what we are doing and we are already seeing very encouraging signs.

We thank you very much for your attention. We have been doing this in 40 minute and we are now available with entire director to take all of your question.

Mercy?

A mantra we’re hearing from Procter & Gamble and others and seeing actions from [indiscernible] with the idea that marketers are getting hands on keyboards and in-sourcing more work on creative and media of course, can you talk about the degree to which that had any impact at all on the current quarter trends or was it the main thing 3 things that you pointed out that really that was it, and otherwise nothing out of the normal? Ultimate GDPR, curious if you could talk a little bit more about how it impacted you and if you think there might be ways that it impacted you uniquely, obviously Omnicom had their unusually strong numbers which I don’t think they have a reason why, but, to Europe, but to a degree is there something that might be unique about you for GDPR, would love to hear any thoughts on that.

I will take the P&G question and then I will pass it over to Steve King to tell you more about GDPR. I don’t know, I mean first of all it’s important to see that our clients generally speaking are very conscious of the need to change.

And this is we think an opportunity for us. It is a challenge because it means that we have to shift the way we operate, but it is also a huge opportunity and you can see it is the growth 27% we are having in our strategic game-changer.

I don’t know if you were at the Investor Day, but actually we had 4 clients; we had L’Oreal; we had Nestlé; we had Samsung; and we had P&G; and actually Marc Pritchard that said a word about Publicis. And those 4 clients did us a very big favor.

At least this is what we think that day because actually acknowledge 3 things that you can see in the Marc Pritchard’s speech that I guess is still online. First they said, if there is one group that is transforming fast and in an impressive way, it is Publicis.

Second, because they are changing fast they are increasing their market share with us and this is what I was saying when I was talking about the halo effect of our game-changer because of course our revenue on the game changer is still 18% of our top 100. But it’s having an impact on the way we work with our client and the way we, they perceive us and by the way the way they give us more business through new business.

So, second thing, gaining market share. And not, but not least, which is for me the most important point they were all making by the way, is our new model not only is delivering growth fast, but more importantly is delivering growth for them.

And so when you have this kind of customer like Marc acknowledging that, but here again I can say the same thing on Samsung and on L’Oreal, on Nestlé, it’s completely changed and make us confident and this is why even though we have some, as we said during the Investor Day, we feel confident that we have the right model to grow and increase our margin bringing the kind of value. And by the way, every time there is a client that needs that there is a need for change, it makes our day because we believe in challenge, we are committed to do it, we have been investing into that for the last 3 years.

As you know, it has been painful, it is still painful, but we know that we have the recipe. So maybe now we moved on to GDPR with Steve.

So you can, we’re going to switch from the French accent to a real good accent, the good news.

Okay. Good morning, Brian, this is Steve.

Yes, so I certainly would concur with Arthur on the factor in terms of in-housing by clients and as you have seen this is not, certainly in the media area, this is not having a material impact and in fact we see some, as you’ve heard previously, we actually see some reversal where clients have previously looked at taking some part of their media execution like programmatic in-house and they found this is very difficult to sustain and get the talent and deliver the same measurable results. So we actually do not -- as we said to you and I answered you previously in the Investor Day, we don’t think that’s having a material impact and in fact we actually see a sort of a slight decline in the number of clients using that area.

On the issue of GDPR, this has obviously been a huge initiative, one that we welcome. Obviously it came in on the 25th of May and as Arthur has said, it had a short-term negative impact particularly on programmatic spend as advertisers and obviously some agency caused or called activity as we waited to see the impact of the new regulation.

It should be said as you know and you heard from Anne-Gabrielle in our investing day, we had spent a lot of time working internally to making sure we had entirely the right degree of compliance. We are focusing very much on how we can help our clients with their data needs.

So luckily we’d made a very strong strategic plan of how we could prepare ourselves best for the introduction of GDPR six weeks ago. There were two main causes I think for the reduced spend.

Some publishers lack the technology to secure the required consent for targeted advertising which then limited the number of sites that we could buy from. And advertisers were cautious about spending money in supply-chains that they weren’t absolutely sure they could target their -- safely or legally and obviously there was a heightened concern because of the issues raised on issues like brand safety for example.

So there was perhaps more collateral uncertainty about this by our advertisers. You will know that many of the external publications noted a significant drop in European ad demand.

Immediately external sources quoted that as much as 25% to 40%. There is an implication possibly this may have helped Google and Facebook, and I wouldn’t differ from that.

The good news is that we now believe that that bump has come to an end and we believe that the DPA requirements we have with the publishers are now being fully satisfied and that decline that we saw particularly at the end of May and beginning of June has now come to an end.

Just to add one point, the biggest challenge we are having in our industry today is trust; trust with our client; trust with the financial markets; and with our client trust will come from transparency. And so this is something that we are extremely cautious about as you might remember the NAA asked for a lot of audits on what’s bothering with our media.

We are already going through 48 of these that were positive. We didn’t have one claim anywhere.

By the way we made it public and so we believe that transparency is absolutely critical. And by the way we want to believe that transparency is helping us at the moment winning business thanks to our reputation.

Yes, we have been tough on one there, then we thought that it was important for us to really have a strong point of view and make sure that we take in the interest of our client. You might have seen some articles like the one Digitas saying that.

Actually we took it as a good thing because we have great relationship with our vendors. We are just going through a period where we can’t afford the minimus risk to lose them, their trust.

So we have to do everything. And maybe one more thing compared to Omnicom, first the goal of growth, we have GDPR fully compliant at Publicis.

The question is how do we do with our vendors. And being European, we have to make sure that we are the one leading the way.

I will insist on one thing that just happened, I won’t give you more details in that, but it has happened very recently that actually GDPR will also be deployed in Japan. And so it is something that will come around and we want to make sure that we are the one, I think the best approach and making sure that we gain the trust and we actually increase our trust with our clients.

Hi there. It’s Will Packer from Exane BNP Paribas.

Thanks a lot for taking my questions. Three from me please.

Firstly, could you provide some color on the varying organic revenue growth trends across media creative and Publicis Sapient? Secondly, in terms of the healthcare impact in Q2, what exactly happened there and should we expect it to be repeated in the second half of the year?

And then finally, you have reduced staff costs by 40 bps, bonuses are up a little bit. Where did the savings come from?

Is it more off-shoring, is it back office, just some color there would be helpful? Thank you.

So I guess we’re going to start with the savings, because I see Jean-Michel getting on to the phone and then I’ll take the organic growth for media creative and Sapient and healthcare.

At some point of time when we were restructuring, you have seen the 2017 restructuring cost which were rather high. We need to have some benefit of these -- on these costs.

So this is partly the benefit of what we did in 2017. We’d have still in 2018 more benefit is coming.

This is something that is just natural see if we are taking care also to adapt delivery of recruitments to deliver of activity, which is just normal work, no more.

Maybe I’ll add a word on this area. When we presented our plan Sprint To The Future, we said clearly that we wanted to save €450 million out of 3 years and reinvest €300 million.

As you have seen this is exactly what we are doing. We are finding 70 basis point of improvement on the cost and we are reinvesting 30 basis points and putting 40 basis points in the margin and this is what we want to stick to.

Second point is we believe that we have a real plan when it comes to cost-saving. It’s not just about saying we want to do cost saving.

As you might remember again Veronique Weill presented a very tight plan with work stream. We have been through some today, but it’s not just about trying to find the money, it’s about simplifying our structure; it’s about making sure that we take the best talent where they are, i.e., the offshore; it’s about making sure that we sell the right product at the right price, i.e.

not going for growth whatever happen. It is a series of things that we’re tracking in detail and that by the way Veronique Weill and Jean-Michel are doing on the regularly basis and that we see with the entire management committee once a month.

Here again, why it is so important first because we want to stay competitive. Second, because we want to make sure that we invest of the growth of tomorrow and of course as we committed because we want to increase our margin in the next 3 years.

I’ll go maybe a minute on the ad scale because it deserve a longer explanation. By the way, you have it on the press release, but I’m happy to do it.

So Publicis Health is actually done with 2 operation. You have one operation which is Publicis Health Communication that is competing against all European companies that you do that are doing very well and by the way as you have seen we have done an acquisition in data that looks very promising.

And then we have Publicis Health Services which is what we do with the sales representative in the medical area. This is first a very highly volatile business and also we have seen some volatility we did not expect to have this one now.

It is a low margin and of course we are at the moment thinking on how we can do better on that, but this is a subject that is addressed, that we are addressing at the moment and of course we’ll come back to you when we have more news. Last but not least, organic media creation in Sapient [indiscernible], let’s be clear, we don’t disclose by category.

The point that we make there which is something that is extremely important for us, one of the reason it works is because we have scale mainly thanks to Publicis Media in data. We have of course a huge scale in creativity with Publicis Communication though as you have seen this creativity has to change to become more dynamic and we have Sapient which was a couple of year later for sure visionary decision because we are the only one to have scaled technology in order to make sure that we can bring not only marketing transformation, but business transformation.

By the way, no secrets. If we are growing by 27%, it’s because we are arriving with a combine effort and the kind of right you are seeing today at 27% on this business is something that is comparable with a system integrator of the back part of the business, i.e., transformation and consulting.

So there is something there that is very strong. And so why am I telling you that is, actually what is interesting to look is when you mix data, creativity and technology, thanks to Publicis Media, thanks to Publicis Communication and thanks to Publicis and Sapient, around them that we have created and that we show you, you found exponential growth.

The question then is how can we scale it fast enough to avoid and to reduce fee cuts we can see on the other side and make sure that you deliver the kind of growth we should, you should actually expect from us.

And any kind of indication of which bits are growing above or below the group organic revenue growth rate in the quarter of those 3 segments? [indiscernible] about the trends?

We don’t disclose the detail. I think that there is one thing that is very interesting to see is the shift driving in North America moving from very negative to positive.

Actually it would have been more without the sales representative, but it is obviously in the market where we are the most advanced that you can start to see the growth. Jean-Michel?

Obviously the healthcare has been hit during the quarter, the Q2, it is something which is very clear, sharp decrease in Q2.

So I’ve got a few questions for you please. First of all, to come back on the numbers, can you tell us what the impact of healthcare weakness and GDPR will be on a full year basis and also what should be the impact of new business in the second half versus the first half.

The second question is about the implication of GDPR kind of regulations in California or Japan as you mentioned. I mean should we expect weakness at some points as those regulations are being implemented?

And the last question, very sorry to ask you to comment on press articles, but there was an article recently in the press about some potential weakness at SapientRazorfish in the second half and about potentially missing revenue targets. I’m just wondering if you could comment whether SapientRazorfish is performing in line with your original budget plan?

Thank you very much.

I’ll keep SapientRazorfish for the end, we will first go to the impact on you and then GDPR with Anne-Gabrielle and if you want to add something, Steve, and then I take Sapient.

So regarding the healthcare, the growth of healthcare will be low for the full year is something which is clear and we are seeing a slight recovery during the second part of the year, but only a slight recovery, so we should not be dreaming to something which will not happen, so this is clear.

Anne-Gabrielle?

Actually, you addressed a different topic. One is the new California privacy law, but as you probably know, this law will go into effect in 2020 and can likely change between now and its implementation.

So it’s really too early to know the impact. What we think is that we are well-positioned because of all the work that we’ve done on GDPR to [indiscernible] new law.

As with Japan, it’s a mutual recognition agreement, so all the work that is done and that is being done to get ready and to comply with GDPR will be used, so no negative impact. On the contrary, we view this as a very positive development.

Steve, you want to add something?

Only that the -- what we’ve reported on GDPR is one of the factors that impacted and has created a bump in our performance in Q2. I think going forward, as we’ve already said, it’s important our policies are fully GDPR-compliant and as I said that impact of GDPR is now behind us.

I think it’s just worth reiterating at this point that this management team is fully aligned behind this new strategy. We had this gathering of 450 managers in May and we shared this plan and I think I’ve been with this group for 15 years and I think there is now a sense of shared purpose and energy behind the plan, the new leadership and just like to reiterate out to a point at this point that we are on track to improve our organic growth and margin in 2018 compared to 2017.

That’s the view of the entire management team.

Maybe before taking the SapientRazorfish, I would like to come back once again on the impact on H2. First of all, just to be very clear GDPR has been conjectural issues that won’t repeat in the second semester.

We will believe, by the way actually, that in term of reputation, in term of relationship with our client it will help us in what we are doing at the moment. As you may know there is huge pitches in the U.S.

and globally when it comes to media and so it’s everything about reputation. By the way, it’s a lot about transparency in the way we presented and we want to believe that the negative impact we had on money today will have a positive impact on reputation tomorrow.

The only bump we had is with our sales rep in the U.S. As you know we had anticipated a tough comp of 200 basis points for this quarter.

So this is something that we were expecting a softer Q2. We had a real bump with the sale rep and for those who were there on the Investor Day, I said it as clearly I said there will be some bumps in the road, this is definitely one, we were not expecting it, but it arrive and believe me, we’re going to address it and we’re going to make sure that first of all it doesn’t have the strong impact in H2, and we know exactly how and we’ll come back with you with more detail as here again we decided to be totally transparent.

So coming back on the SapientRazorfish article, first, as you know we don’t comment press article, but it give me an opportunity to explain you why what bit is happening there. The reason why we are starting to get so much traction into our strategy game-changer is that we are really shifting from being a communication partner in communication to be at the core of the transformation of our client.

And to do that we have beautiful asset in marketing which is Publicis Media and Publicis Communication. But thanks to Sapient, we have an incredible expertise on our client should transform from within, thanks to technology.

And it is a combination of both that work the best. So what we are doing with Pirolexat the moment, again we explain, is make sure that they start working in industry practices, that we bring around one leader at global level every expertise we have in one category.

This is where we’re operating in the rest of the world I would say. We are accelerating this model also in the U.S.

Believe me, it is having a huge traction, but in the same time it means that we have to adapt and this is why we have this 3-year plan and not a 6 months, it takes time to build. And so in the case of the 100 people you are talking about, it is because we are shifting this model and making sure that we move onto industry practice, but just to give you an idea of what we are talking, we have 5,000 people in the U.S.

and we are talking about 100 in a specific place and as you know, things are moving from -- one from another. And finally, just to make a long story short, there are lots of great reason to keep the SapientRazorfish brand along the way.

Thanks very much Arthur. Very clear.

Next question.

Sorry. Off to you.

No, no. Thank you for the question because actually it’s -- we don’t want to comment the press, but when you look at the way we are building our first with Pirolex, as you all know it has been difficult at the beginning, but once again it was the right vision integrating creative with engineer it’s extremely complicated, but when you do it well, you grow by 27%.

Very, very clear. I don’t think you’ve answered the question around the impact of net new business for H2 against H1.

It’s true I did not. So first of all, we won’t give you a guidance on that.

I mean, I have been hearing that the win we had at the beginning of the year will have an impact in Q2. We knew it wouldn’t be the case.

The reason why we are so happy about the win we have is they are significant. I’m not going to mention every small thing that we’re opening.

I’m talking about things where we are shifting several countries at the global level and of course the transition period is long because to get you in the kitchen just for you to understand what has happened is that when you win the global business with 47%, slight definition there is a lack of time between the moments they decide to give you the business and the moment you start working because there are people, there are hundreds of people working on both side. So there are people that needs to relocate and people that needs to be hired.

So of course it’s ramping up slowly. But again, this is why we’re confident in H2.

We have already in our forecast the benefits, the first benefit of those wins and by the way we’re continuing to win as I just mentioned. And so it would be impossible to give you a precise number, but it’s actually very possible to be extremely confident despite of the hiccup we had in Q2 on delivering our number for the full year.

Next

Hi, good morning everybody. My first question is on healthcare in the U.S.

So you told us that the impact was €30 million, but could we get an impact in either percentage or knowing what the total net revenue of this business was in either full year ‘17 and full year ‘18 so we can assess the scope of the problem? That’s my first question.

My second question is fascinating on IFRS 16, the move from least cost above EBITDA to depreciation and interest, the interest is usually frontloaded, so it would boost your EPS growth in the coming years, so can we have an idea of the €29 million in interest for full year ‘18, ‘19 and ‘20 please? That’s my second question.

And then coming back on GDPR, can we have a broad impact on Q2 revenues? Is 20 basis point about the right number, Matthew?

So I don’t know why, but I guess Jean-Michel is going to take 1, 2, 3 or at least 1, 2 and then we’ll see in 3. If you want?

Okay. Let’s start with the impact of Publicis Health service business which represent roughly €250 million on the full year basis, full year basis.

And it is a low margin business as you know. Okay.

So you, this is the size of this business. This business has been close to €300 million recently in fact.

There are more of IFRS 16, we did not made the calculation yet because it’s very recent implementation IFRS 16 as, I’m happy to, first of all I’m very happy to fascinate you with IFRS 16 Julien. But you are [indiscernible] in advance to raise that question or an impact on EPS and so on, this is something we did on H1 numbers, but on the full year basis and so on, it’s a little bit premature to provide you with a full answer.

On GDPR, you take the question too.

On GDPR, on GDPR this is, it is very complex to have a precise number, but roughly we had, we evaluate at €10 million impact on Q2 and as Steve said, no impact on H2 obviously. It represent 50 basis point in Q2, on Q2 growth, 50 basis point on Q2 growth roughly.

But here again the good news there is that we go vendor by vendor and now we feel that we are on track, so it should have an impact on the rest of the year. Just one thing on the healthcare business in the U.S.

We don’t want to spend our time showing you the number with or without an operation and telling you how good it would have been if we didn’t have this bumped. We had this bump, but here again as I said earlier, without this bump that is, as I said, volatile and not [indiscernible] we would have had an H1 where we had the positive and more importantly we would have the growth in the U.S.

that we had to [indiscernible] on the semester. So of course it has an impact and as I said, we are under it at the moment.

When you agreed….

Next question. Mercy, I don’t know, Mercy [indiscernible].

A couple from me. I just wanted to ask first on the healthcare business.

Jean-Michel, you just mentioned that I think Publicis Health Solutions is the €250 million in a low-margin business. Just wanted to clarify, I think Arthur said it was non-core.

If that’s the case, could you just confirm the, if it’s the sale, when you receive proceeds from the sale, will you reinvest that in the business in M&A in acquisitions or will that just come into or we’re going -- should we anticipate that will go to buying back shares? That’s the first thing first question.

Second question is on pitch activity. Obviously we all know there’s a lot of pitch activity out there, I think the numbers are sort of in billings somewhere between $20 billion $25 billion.

I wondered in general whether you could talk about what proportion of that business or pitch activity you are involved in and how confident you are that you are positioned to pick up some wins, given obviously in the context of all the transformation that you’re going through?

Okay. I’m going to make a short answer on the first one.

I would like to be very clear on what I meant by non-core. Medical sales represented here in the U.S.

which are as I said competing with outsourced companies, are not competing with communication company as we are with the sales communication is non-core in the sense that it’s not part of the model we are building up. As I said, we have our data creativity and technology.

This is where we are adding the most value in term of growth and in term of profit. And by the way I won’t answer your question [indiscernible] the use of the cash, but what I can tell you is that will definitely impact in assets that deliver either on data dynamic creativity and technology.

We see a growth and the profit that’s definitely the best way for our shareholder to create value. Having said that, we will be very transparent in how we are handling the situation and we’ll come back to you when we have more detail, but please take the non-core for what it is, it is an activity that is not central to the core of our new model.

On the pitch activity, I’m going to let Steve start I guess.

Okay.

And I’ll add maybe a few words.

So what you’re absolutely correct about is that there is an unprecedented amount of pitch activity. This Media Publicis was first created in 2015 and at that time to be fair, we were being incumbent in many of those pitches.

We’re in a very different situation now than three or four years ago. Our business has been reorganized and we frankly have a much more competitive offering today than we had in 2015 with a very different structure and organization and some unique capabilities.

So the good news is that the opportunities in front of us and they are considerable and more than was the case over the last two or three years have some considerable upside for us. We obviously have not included those in our growth forecast or growth objectives.

You will have noted that in Q1 in media we were the number one holding company and Arthur has already reflected on some of the successes we’ve had as recently as yesterday and I think one of them we’re going to announce today. So the Media Palooza II is a correct summation of what we’re seeing now.

Our teams are extremely busy. The good news for us is that most of those, the majority are not defensive, they’re offensive opportunities.

So clearly we have a very different sense of optimism about the opportunity from those clients.

I think there is a very important point. If you look at Media Palooza I, clearly it was about price, how can I get a better price?

And by the way the incumbent has not been winning in most of the cases although maybe every cases. So we have won business, we have lost business, but it was a difficult one.

This one is about 2 things. First, as we said transparency, and so far, and I am touching wood, we have much more opportunities than risks and we are transforming sometime, sometime we don’t, but we have an impressive track record when it comes to winning and our reputation of transparency, i.e., what we just discussed about GDPR is one of our precious assets in term of reputation today.

But beyond transparency what’s interesting to see and this is something -- and Steve and myself are spending times in meetings. We actually make sure that there is always someone from the management committee that is in charge of the big pitches to make sure that we have a global effort and a group effort; is that they’re not looking only for communication solution, once again they are looking to see how they can transform their model.

And what is extremely interesting there is that you don’t have a media pitch that doesn’t need to bring some creative ideas. You don’t have a creative pitch that doesn’t need to use data to actually maximize the investment.

And in every cases you have to bring technology. And so it’s converging, as we said, between marketing and business transformation in the way that is very close to what we are trying and actually building at the moment with the early result you have seen with the growth of our game-changer.

So the landscape is completely changing and this is where you can see a few other trying to get in from different business, because at the end what they want is transparency and transformation and in both cases we’re extremely strong. Next question, Mercy, who?

Tom here from Citigroup. A couple of questions if it’s okay.

First one on the sort of growth guidance, obviously implicitly you’re committing to 2% organic growth in the second half, so I was just wondering whether this is anticipated to kick in direct from the third quarter or whether there is a phasing sort of 3Q versus 4Q in terms of anticipated growth? Second question was linked to that is -- and it’s asking question asked earlier on, but should we just assume that that uptick in growth is just the new business effect or is there a -- are you budgeting an improvement in underlying spend from existing clients?

And then final question, you mentioned that you’d passed an Acxiom. Is that a view that you don’t need a data asset like Acxiom, or was it that you need one and the Acxiom is not the right asset?

That’s it. Thank you.

Thank you very much. I propose we start with Acxiom.

And I will let Steve answer this one.

Well, as you’ve heard and those of you -- I think a lot of you were there in Investor Day, you know that data is extremely important to us. It’s the heart of one of 3 game-changers and as you just -- whether it’s new business opportunities, new client opportunities, data and creative, creativity and technology are all coming together.

Data is invaluable because you own it. Data becomes truly valuable when you apply intelligently to business issues and fuel a technology platform like we have, like we have shared with you with Publicis People Cloud.

We continue to believe in our strategy of being data agnostic and leveraging the best data sources available around the world including obviously new ones and model even exist today along with client-first party data. And alongside that we continue to believe and this perhaps differentiates us from some of our competitors and they need to build robust data strategies building and enhancing their own first-party data sources.

So our data strategy is embedded in our broader strategy to become the partner of our clients in their transformation as Arthur was saying. Some players are trying to enhance programmatic and performance media, very tactical and basic use of data, while our goal of driving client growth and identifying new sources of growth and leveraging the understand of people to convert that growth, it’s a very important strategic direction for us.

So overall when we review all of our opportunities, Acxiom did not seem to be the most strategic acquisition to scale our game-changers and deliver the growth in line with our ambition. I hope that’s clear.

I don’t know if it’s clear. I’ll ask them, is that clear?

Yeah? Good?

That’s very clear.

So a growth, so growth guidance, we are not giving you guidance quarter-by-quarter for a simple reason is that if you only look at what has happened in H1 we are a good surprise in Q1. We are not expecting this bump in Q2, but by the way, overall we are on track to what we were expecting.

We were expecting a softer Q2. What is important there is that we actually feel very confident to deliver a better growth and margin in ‘18 and that’s your second question for roughly 2 reason, new business; we discussed a lot about that; and the strategy game-changer, because you have seen the pace at which they’re growing.

Now we shouldn’t hide the fact that of course there are some budget cuts, that there is some restructuring in term of marketing and obviously this will have a negative impact, but this is why we stay cautious with everything that we have won and with the new, the game-changer we feel extremely confident to actually do better growth this year than last year, but we don’t want to oversell it at the moment as we don’t know on the other side the difficulties we can get although we are, at this time of the year we just have 6 months to come; pretty confident also on what could be the cuts on that. So once again, and this is what we tried to say very clearly when we present our plan Sprint To The Future, we want to grow on organic growth and on our margin year after year.

We want to accelerate our transformation through our game-changer because this is where the real exponential growth will come in the future and something that we did not discuss here, but which is obviously extremely important for us which is EPS. We want to make sure that the one that follow our plan are well-rewarded and better rewarded year after year.

Next question.

Just first questions again, sorry to come back on the second-half guidance. Obviously that implies about 400 basis points more growth than the second quarter and you’ve highlighted GDPR and the healthcare drag for about, I think about 180 basis points, but maybe some of that healthcare drag will be there in the second half as well.

Just wondering what makes you so confident at this stage obviously you had 2 main period that has reported already Omnicom to 2% they have some issues with some of their CRM businesses as well, but still managed to deliver substantially more growth than you did in the second quarter. So just wondering is there anything else that might be a risk factor for the second half against your guidance?

Second question on the Qantas contract that you mentioned as a drag on Asia-Pac, just wondering when does that cycle out from the comparison? And I think from memory on the healthcare side there was also a discontinued contract with Astrazeneca I think if I’m not mistaken last year, I was just wondering when does that cycle out from the comparisons as well?

And then just a last question just a follow up on Tom’s question on the Acxiom, do you put into public maybe for Steve, I mean obviously I understand your answer in terms of your strategic differences versus the strategy of some of your peers, but I think for Interpublic that’s the biggest acquisition in the last 15 years or so and they were quite clear that e-privacy and GDPR trends meant that the game had changed for agencies in order to track consumers. There obviously when you’re making a tactical decision is there a chance that this creates waves in the short term with an advantage for them versus some of the peers like yourselves in media buying?

I’ll start again with the second half and then Jean-Michel, you want to [indiscernible]?

No, no, just regarding the Qantas contract, we would have seen some effect during second part of the year but progressively less and it will be done in Q1 2019. [indiscernible].

And regarding Astrazeneca, this is finished, this is something which is behind us.

Here again I’m coming back on H2, the reason why we are so confident to actually deliver a better growth and margin in ‘18 versus ‘17 is definitely the two points that I mentioned. Actually I would say three points.

The first is new business and just look at the brand we have been winning and you can understand that. The second and this is why it’s so important for us to disclose our KPIs is when you look at the strategic game-changer we have fantastic trend and this will help a lot.

And the sale which is on margin is we have a plan and we are making sure that we will deliver on expansion of our margin through this plan that once again we will review it every six months. So once again we feel confident.

Actually I send a few this morning to every manager in this group because every forecast make us very confident and now we just have to deliver and we win. I have no doubt that we will.

On Acxiom I will let Steve answer.

So a couple of points on this. I mean firstly I think implied maybe in your question is the Acxiom data which IPG is acquiring via AMS is not a contributing factor to the creation of the IDs that we use in Publicis People Cloud and we have several other data providers that require similar demographic offline data, that’s one point.

Second point, it’s obviously a very bold, strategic acquisition by IPG. Obviously I’m not going to comment on the view on that.

It’s obviously good for our sector, the company has the confidence long-term view to make a very large acquisition in this space. As I’ve already said our strategic approach is different, so the one that was particularly on data that’s being followed by IPG for us just to say again why this would not [indiscernible] with us because we believe very much in the power of choice, we are a service organization that works with hundreds, probably thousands of clients and lots of number of data partners locally and multi-nationally and regionally and it’s really important to us that we’re data agnostic, that gives us the power to be the agnostic, strategic direct support that our clients demand.

We need to be -- we can work with data partners and solve specific problems, but we are not beholden to what we are. And so that’s why I think clear, but that and I hope in the previous answer I gave about Acxiom, this is why we decided not to pursue that acquisition.

As I said again we decided not to own that data. We believe that’s the best interest in our clients and our focus is on helping our clients grow, but for our sector I think it’s probably a positive thing that IPG has the confidence to make this bold acquisition.

I mean we said very clearly that we’ll be extremely disciplined when it comes to acquisition. And we passed on this one for another reason, but maybe more importantly there is we want to be an agent, we want to be the partner of our client in their transformation.

Data is extremely important that because you need to have a data-led approach if you want to increase your sales and reduce your costs. And to do that you need a proper IT tool which we have with the people cloud that you have seen, you need the team and we’ve got thousands of data analyst already in the group.

That we are putting under one roof and this is the power of one. Our ability to say we have this -- operation that can come together and create what is today maybe the best offer that you can have in the market and then use the external partner depending on what is right for our client and we want to stick to that.

By the way, it leads to another question that we’re going to -- not going to touch to that, but maybe one day because it’s increasing is the kind of conflict of interest we are starting to see coming from the system integrator, that are this time the consultant of the new partner and part of the list of the new partner. So this is not a topic for today, but I’ll be happy to come back to that in September.

I think there is a lot to say about integrity and transparency.

Matthew?

Yes, hello. Sorry, apologies.

Good morning everyone. Apologies for slight delay.

Few questions please. The first one was, I just going back to your full year guidance; obviously you described Q2 as a hiccup, but you said you are very confident in meeting your original goals.

Does that mean to say that we shouldn’t all jump off this call and reduce the growth we are expecting for the year because the new business in the second half is going to be so good that despite the hiccup in Q2 we can all stick with our original organic growth forecast that we were putting in for the full year. And the second question was really around Amazon actually.

So maybe for Steve, so we’ve seen various projections saying they’re going to massively increase their advertising revenue and they’re starting to charge their clients a lot more and force them into doing a lot more advertising to come higher up the rankings et cetera. How is that going to impact the agency’s response to media buying and the client’s response to how much money they put into digital versus non-digital or go through agencies or not go through agencies?

Some perspective on that would be helpful.

Okay, thank you very much. So of course I won’t comment from -- make any comments on the number of consensus and I guess we’re going to shift immediately to the second question because we did that some time and we don’t have a lot, so maybe on Amazon which is a great question.

Okay, thank you Arthur. Thank you, Matthew.

Yes, so I think it’s fair to say as you’ve seen ecosystem we’re working in is changing very rapidly. We now have an organization where we have data dynamic creativity, business transformation at the heart of our organization.

And part of that is obviously the partners we’re dealing with is changing dramatically and certainly Amazon I think there’s no question that it’s clearly a very strong challenger to the duopoly of Google and Facebook in digital advertising. At one level it’s making the digital environment a lot more complex and for us that’s a good business opportunity.

Our clients need support to help to navigate through. It’s in fact a lot more complex to handle, it’s not something that can be just handled with a simple executional resource like maybe you could do with Google and Facebook, we work on an auction base, it’s a much more integrated solution and I won’t need to repeat because I’m sure you’ve all understood the way our business is being transformed, but you can see how the Amazon is making the customer journey much more complex.

When you want to sell a product on Amazon of course you have to compete on the price, but you also have to ensure that you’ve got already strong rating by the consumer, you have to make sure the pickup details are clearer on the timing to deliver. It’s a much, much more complex relationship and how to use that platform and you need to have a deep understanding of the consumer to understand it, so that comes from data.

We need to make sure that we’ve got the right dynamic creative to serve those ads in a reversion way just depending upon how they’ve navigated their entry point into Amazon and also how the Amazon component fits into the strategic investments. And I would say the vast majority of our clients now, particularly the packaged goods, but many other branded goods advertisers are now asking us to look at how we should inculcate Amazon into their strategic plan.

So definitely a third player in that digital advertising landscape and one that is actually quite an interesting opportunity and place as you can tell well to the way that we’re building our capabilities around data dynamic creativity and business transformation.

Okay. We’re going to take a last question because we are committing to finish at 11:30, but I guess there is a last question on the line.

Is there one?

Just one was you talked about the sales representative business that you’ve got has been causing the issues in the quarter, but just wondering if you could broaden that out to include some of the other services like call center contracts that you’ve got, businesses which you would say don’t fit in with your strategic vision for where publishers should be going, in total how much would that represent? And why wouldn’t you just take a revenue hit and exit from those businesses?

Otherwise we’re going to be stuck in a situation where as fast as you grow from your strategic game-changes and winning new accounts, you’re losing from low margin non-core activities. And then the second question was just on GDPR, just wanted to clarify, you’d said that its implementation had caused some campaigns to be temporarily suspended, just wondering does that mean should we think about some of that business coming back in the third quarter or effectively is it gone forever?

Steve, I’ll let you take GDPR.

Yes. On the, yes, so the impact of GDPR which of course wasn’t just in the media sector, it was across all of the categories of the various solution hubs.

And as I said that was a temporary impact, the initial one was obviously quite significant, quite marked. And yes, so we do think there is some longer term shifts in the way people are looking at their investments like in programmatic, it may well change the profile of the different partners that we have, but you can assume that the business returns to normality and definitely, we’re not going to see the same impact of GDPR going into H2.

Regarding the question on the sales rep business and the call center in fact we don’t have a lot of businesses like that to be fair, we don’t have a lot. So see something of course we’re being -- after you asked us to review these kind of entities, we have a very good vision of what are the entities will fall in that category, but to be fair we don’t have a lot.

Of course, there is some strategic reviews which are currently handled on this business which are volatile. This means there are things that we cannot control which is to be painful to be fair.

And in addition, when we have a low margin, this creates some concern for the group. So we will look at that seeing that which is currently handled and we will see what will be the outcome and you will be taken in the loop in due time.

That’s a great question on what you said at the end, which is how can we see your model is really working if you still have activities that are creating [indiscernible]. I had this question I remember it was on my Q3 I guess had this great question about what are your KPIs and I gave a very bad answer at that time, so it’s not clear enough and this is what we have done so far and this is the plan into the future and this is why, by the way we took time to go through your KPIs is we are not presenting that we are there yet, we just want to try to show you that first of all, we have the right offer to make our client wins and if our client wins, we will win with them.

And this is what you can see through the growth of the strategic game-changer, 27% on what is 10% of our business, it is something already and this will help of course. And so I think that we need to be even more detailed in our KPI to show you that and this doesn’t excuse the fact that we have to do some strategic review and we are, but more importantly in this moment, where there is so much transformation in this industry and in our industry, our ability to give you very clear KPI on how we transform and how we perform thanks to this transformation is critical for us.

And once again this 27% is a good thing. The second thing and we talked a lot about H2 and it’s right, because we have to deliver what we have committed and we are very confident that we will increase our growth and expand our margin in ‘18 versus ‘17.

And here again we try to show you why we are confident thanks to new business; how the game-changer will contribute; you have seen the exercise on margin and the 70 basis point that we found, 30 basis points going to be reinvested to accelerate our growth and 40 basis points to make sure that we increase shareholder value. And here again, and I will finish by that, at the end of the day what we want is to make sure that we make the demonstration of the attractiveness of our model by winning.

It’s when you win that you make the difference with your competitor. We want to make sure that we increase our growth and we increase margin to come back to the level where you should expect us.

And of course we want to make sure that we deliver the shareholder values through our EPS year after year. So, I guess I want to thank you now.

Thank you for your time. Sorry to be a bit long.

And as I said, Jean-Michel Bonamy will now be there to take your question offline. Thank you very much.

Have a good day.