WPP plc

Good morning. Q1 2013.

We couldn't afford a visual web link today. We are only doing it by sound.

This is all on sound on the web, is it?

Correct, yes.

Okay, fine. Okay.

So good morning, ladies and gentlemen. I first want to give you a quick 2-minute overview of the information in the slides, which I'll get into in detail in a second.

So for the first quarter 2013 trading update, WPP saw organic growth of 2.1%, acquisition growth of 3%. Currency having a positive 0.8% impact, leading to reported revenue growth of almost 6%.

First quarter revenues and profit were ahead of budget and last year and in line with achieving our goal of a 0.5% margin improvement for the year. Kantar, our consumer insights business, had a positive overall organic revenue growth of plus 1% and returned to the growth in U.S.A.

in what has been a tough quarter for the industry. Our digital businesses were growing at 7.5% organically, and now represent 34% of the group, up from 31% a year ago.

The faster growing markets remain strong, with revenues up almost 8% organically, with the BRIC countries growing at over 10%. Early indications from the preliminary quarter 1 revised forecast for the year have like-for-like revenues better than budget with a stronger second half.

And the full year guidance of 2013 remains at 3% organic revenue growth for the year, whilst targeting a 0.5% margin improvement and a 15.3% margin overall for the year.

Asia Pacific, Latin America, Africa, Middle East and Central Eastern Europe, with organic revenue growth of 7.8%. The United Kingdom bucking the trend with still strong 3.7% organic growth, and Western Continental Europe still difficult, but only down 0.8% on a like-for-like basis.

Improving performance in the consumer insight business with particularly strong growth in Asia Pacific and Latin America and modest growth in the United States. Headcount falling 0.4% like-for-like since the beginning of the year, 1st of January, and by 0.5% on average in the first quarter compared to last first quarter, whilst revenues rose 2.1% in the same period.

So on a reported basis from Slide 3, revenues were up 5.9% and constant currency revenue growth is up 5.1%. Like-for-like revenues are up 2.1% with gross margin up slightly less at 1.9% organically.

First quarter profits and margins ahead of budget and well ahead of last year, as I mentioned before. Our net new business wins in the first quarter of $1.5 billion, compared to very strong quarter last year of $1.8 billion, but was in line with the 2012 quarterly average of $1.5 billion and there are still a significant number of new business decisions awaited shortly.

So turning now on Slide 4. A couple of comments by geography then by discipline.

As I mentioned before, Asia Pacific, Latin America, Africa, Middle East, Central Eastern Europe continue to be the fastest-growing regions, with like-for-like growth of 7.8%. As I mentioned, the BRICs were up over 10% and Latin America was still growing at over 12% organically.

The U.K. was strong with like-for-like growth of 3.7%.

And Western Continental Europe remains challenging, with like-for-like growth of minus 0.8%, showing relative stability in the first quarter.

By discipline, advertising and media investment management is the group's strongest sector, with like-for-like growth of just under 4% at 3.9%. And the consumer insight like-for-like growth of 1% driven by growth in Asia Pacific, Latin America, Africa, Middle East and Central Eastern Europe.

U.S.A. improving with growth in the first quarter, but U.K.

still remained difficult. The branding identity, health care and specialist communications like-for-like growth of 2.4%, with all parts except branding identity performing strongly.

On Slide 5, we break out the makeup of the reported revenue growth, so you can see there the like-for-like of 2.1% added to the acquisition growth of 3%, making constant currency growth of 5.1% and currency adding 0.8%, making reportable growth of 5.9%. If we were a dollar-reporting company, the reported growth would have been 4.1%.

And if we were a euro-reporting company, the reported growth would have been 3.6%, so currency would have been adverse in both cases.

Turning now to revenues for the first quarter by discipline. And you can see here on Slide 6, the composition of the revenues of GBP 2.5 billion for the group, with just over GBP 1 billion in Advertising and Media Investment Management.

And then we also record both the reported rate of growth of 6% with constant currency, which is basically the like-for-like plus acquisitions of 5.4%, and the like-for-like growth against each discipline. So you can see here, and I'm going to focus on the like-for-like.

Overall, for the group growing at 2.1% for the quarter. This was against a strong quarter last year.

So just to remind you how last year went, it was 4% in quarter 1. The growth in the first half of '12 was 3.5%, and the growth in the second half of '12 was 2.2%.

So the trend of 2.1% in the first quarter of this year is very consistent with the second half growth of 2012.

So in terms of growth by discipline, advertising, media investment management is up 3.9%. Consumer insights is up 1% organically or 0.9% on a gross margin basis.

Public relations still remains challenged at down 4% organically. And branding & identity, health care and specialist communications was up 2.4% organically, the strong, obviously, acquisitions coming through and growing 10% on a constant-currency basis.

Turning now to several comments by each discipline. So the strongest performing sector was in the advertising media investment management business, up almost 4% in the first quarter.

We saw strong growth in Young & Rubicam and Grey, particularly in the United States, following several major new business successes in 2012 and still awaiting some new business decisions shortly. The media and investment management business was up 7.4% worldwide on a like-for-like basis in the first quarter, with double-digit growth in all regions, except North America where it was very strong quarter 1, 2012, and Continental Europe.

Now turning briefly to consumer insights on revenues on Slide #8. There was significant improvement in the -- over the final quarter of 2012, where like-for-like revenue is up 1% and gross margin up 0.9%.

The like-for-like growth in North America returned for the first time in a considerable period to the Kantar businesses. The like-for-like growth in Asia Pacific, Latin America, Africa and Middle East was well above the average, but the United Kingdom and Western Continental Europe remained slower.

The syndicated services like Kantar Media, Kantar Worldpanel and Lightspeed, including GMI, performed strongly with high-single-digit organic growth in those businesses. In the public relations, public affairs business, the constant-currency revenues were down 2.7% and the organic revenues were down 4%, with all of the group's brands affected.

Geographically, North America, Western Continental Europe and Asia Pacific were particularly difficult, where the U.K. and Latin America were stronger.

Again, this is the project business in mature markets where it's most difficult for us in 2013 in the first quarter.

In terms of the branding & identity, health care and specialist communications business, continuing good performance with constant-currency revenues up 10% and like-for-like revenues up 2.4%. The group's specialist businesses showed the strong growth in the sector followed by direct, digital and interactive and health care.

However, the branding & identity businesses came under pressure in most markets around the globe.

So turning now to digital -- sorry, direct digital and interactive sector by itself. At the end of March, the revenues were $1.3 billion or almost 34% of total revenues for the group, up from $1.1 billion or 31% a year ago, up 15.8% in constant currency and up 7.5% on a like-for-like basis.

The group, which represents 34% of revenue, now has a number of people working in this practice of over 32,000 or representing around 28% of headcount.

In terms of 8 recent acquisitions in this category, there has been 1 in Marketing Technology and Consulting in South Africa, Acceleration; 1 in Technology Development in Latin America, where we took a 20% stake in Globant; 1 in the U.K. that specialized on the market leader in e-commerce, Salmon; and then 5 digital agencies acquired around the globe, the most significant or largest being AKQA middle of last year in acquisition.

Turning now to revenue by region. Again, on the same basis, the revenues are broken out both on a reported constant currency and like-for-like basis.

The true underlying performance is obviously the like-for-like. The North America still remaining difficult at minus 1%.

The U.K. remaining strong at 3.7% on a revenue basis or 4.9% on a gross margin basis.

Western Continental Europe, which I'll come to in a second, remains relatively stable at minus 0.8%, having been down 0.7% in the quarter 4 of last year, so roughly consistent. And Asia Pacific, Latin America, Africa, Middle East and Central and Eastern Europe remained strong at just under 8% organically or 7.8%.

So overall for the quarter, revenues grew at 2.1% organically.

So in terms of some comments by region. In the Asia Pacific, Latin America, Africa, Middle East and Central Eastern European region, it was the strongest.

The like-for-like revenue was up just under 8%. Double-digit growth in Latin America as I mentioned at just over 12% at 12.5%, and the BRICs up over 10% and the next 11 countries up over 11%.

In Asia Pacific, greater China continues the strong growth seen in 2012, with like-for-like growth of almost 10%. The United Kingdom showed continued strong like-for-like revenue growth of almost 4% against the market trends, with strong growth in advertising and media investment management, direct, digital and interactive.

In Western Continental Europe, it is more challenging, but relatively stable with like-for-like revenues down 0.8% despite the Eurozone crisis, with several countries well above average. So if I go through a little bit of detail of some of the major markets.

Our major markets include countries such as Germany, where we were growing at just under 2% for the quarter; Italy, where we have a very strong market share, we were growing at 2.6% in the quarter; and other smaller countries in Europe still growing with Switzerland and Finland. And even those markets which are difficult, such as Spain or France, we were down less than 4%.

And in Portugal, which helped obviously it's been since crisis almost 24 months ago, we were down less than 2%. So some of the major markets where we have good market share, we're still growing.

And some of those other major markets where some of our competition has seen significant declines, our reductions are fairly modest.

Turning now to a chart by country. There's a slight change in how we presented this.

So these are organic rates of growth for our top 20 or 25 countries. Again, the top tier, very strong, Argentina at 23% organic growth, And I'll include in that Turkey where we saw growth of 22% coming through.

Tier 2, where growth organically is between 15% and 20%, you see Brazil, South Africa and Thailand. In the 10% to 15% category, you see mainland China.

In the 5% to 10% organic growth, you include greater China. And then in the average, and that's the average of the group, so that's growth between 2.1% and 5%, i.e., faster than the group average, which would include Australia, India, Italy, Mexico, Russia, South Korea and the U.K.

And then below average, which is less than 2.1% growth, includes a number of other markets, including one market in Asia Pacific which is Singapore, which I think you will just see a nice win locally, but a major local account, Singapore Tourist Board by JWT, which again just helped that particular marketplace.

In terms of clients on the same basis, we've done the same categorization. This obviously is affected by new business wins.

Not all the categories are as large as each other. But oil been a significant category and we've done well in terms of increased client spending.

Government has come to quite a strong category overall, they're growing at 5% to 10% this year. The next category in the above average to 5% organic growth includes automotive and drinks.

And then the balance of categories are in the below average rate for growth, which include the majority. If I took the top 30 clients overall, 22% are growing -- sorry, 22 of them are growing and 8 are flat or down compared to last year.

And that's a pretty healthy number, to have 22 out of the top 30 clients growing with us.

In terms of effects of currency, this accounted for 0.8% increase in revenue, largely reflecting the weakness of the pound against the euro and the dollar. You can see here the specific rates, although it has strengthened against the yen, the real, the rupee and the South African rand.

If you were to roll forward, the current pound exchange rates against last year, we are still looking at around a 2.5% to 3% revenue gain from currency expected during 2013, as I mentioned in -- for the December results.

So now, we're turning some trade estimates of major net new business wins. This is Slide 17.

There was consolidation of the Lionsgate/Summit businesses, which we managed to win, having been the incumbent and part of it. Some other agency wins quite pleasingly coming through in the U.S.A.

And globally, the retention of the Pringles business when it was acquired by Kellogg's by Grey, a new piece of business Mengniu in China, which is actually China's largest dairy company by Grey, quite recently, and again a number of media wins coming through in the first quarter. Most of these were covered off actually in the December results when we spoke in February as were the 2 losses that were shown there, and 1, the spin-off of the Abbott labs business, AbbVie.

And in terms of the HSC -- HSBC business, we retained about 90% of the business, but again, 10% did go to Publicis on the HSBC Wealth area.

In terms of internal estimates as I said mentioned before, it's $1.5 billion for the quarter, which is in line with our quarterly average for last year. We were particularly strong last year with a big win in the first quarter and tracked about $1.8 billion, but again, it's nothing to be concerned about, nothing.

It's been a nice trend in terms of the new businesses won since the 1st of April, a significant account being the Nestlé business in the U.S.A. for GroupM.

I think yesterday, there was an announcement by Y&R the winner of the JCPenney business in the U.S.A., which will obviously be helpful to our U.S.A. businesses.

And as previously mentioned, JWT picking up the Singapore Tourist Board in Singapore, a significant local piece of business.

So average net debt, a few comments on cash flow and net debt on acquisitions coming forward. So the average net debt in the first 3 months is up GBP 331 million at just over GBP 3 billion compared to GBP 2.7 billion in 2012 at constant exchange rates.

Acquisitions in the quarter, including share buyback, total just over GBP 100 million, at GBP 114 million. And net debt at the 31st of March was GBP 469 million higher, compared to GBP 2.86 billion a year ago, reflecting an increased spend of acquisitions, which in the last 12 months totaled GBP 500 million, chiefly being AKQA worth GBP 350 million, Globant and Salmon, the 2 other I think significant acquisitions we made in the last 12 months.

And the high-dividend payout is obviously coming through in terms of the cash flow and the net debt number, and partly offset by the relative improvement in working capital in the first quarter. And the average net debt to EBITDA remains comfortably inside our ratio of 1.5x to 2x net debt to EBITDA, which we're targeting.

In terms of acquisitions, again, you have the Venn diagram with the faster growing markets in the left. Some we have talked about, note that 2 more recent acquisitions in the Myanmar country and a number of other markets, both the digital and nondigital acquisitions made in the first quarter or investments in businesses.

In terms of the uses of free cash flow compared to '12 and the first quarter last year, acquisitions a little stronger in the quarter, spending GBP 65 million compared to GBP 27 million a year ago in the first quarter, although we did spend GBP 500 million during full year 2012. Share buybacks are reasonably consistent, 0.4% purchased in the first quarter, in total last year, 1.3%.

And dividends obviously up 16% overall in 2012 and obviously with declared dividend at the half year period, nothing to report currently.

So in terms of summary, the last 2 points [indiscernible] I want to go through. The year has started satisfactorily, with like-for-like revenues up 2.1% and a 3% contribution from acquisitions, ahead of budget.

Most geographies, or most sectors, are growing revenues. Better revenue performance from the consumer insight business and growth in the U.S.A.

encouragingly. First quarter profits from margins ahead of budget and well ahead of last year, in line with the full year margin target of 0.5 margin points improvement.

The strong free cash flow from operations and average net debt remains in our target range of 1.5x to 2x.

In terms of outlook, trading in the first quarter was above budget, in line with the target margin improvement goal for 2013. And the preliminary quarter 1 revised forecast shows like-for-like revenue growth better than budget, with target improvements in margin as forecast or as budgeted.

The growth in the faster growing markets remains strong. And in the reforecast, all regions see improvements in organic performance.

The forecast for revenues are above budget as I mentioned, and they showed a stronger third and fourth quarter than had originally been budgeted during the year. The revenue and headcount remain appropriately balanced.

And our guidance for the year remains at 3% organic growth, a margin target of 0.5 margin points to a PBIT margin at 15.3% for the year. And with that, I'll happily take questions.

Okay. So we'll start at the front.

Patrick, yes.

It's Patrick Kirby at Deutsche Bank. I had 2 questions.

Firstly, just looking at the sequence of monthly growth, do we read anything into fact that March was a slower month? Or that is that just the usual moderation of growth that we've seen in earlier quarters?

Let's take it one by one. I think we saw a little bit slower growth in Asia Pacific, Latin America, Africa and Middle East in March, but I don't think you'd want to read any great significance into it.

January was the smallest month obviously of the quarter. January and February were stronger, but I think March was respectable.

I think the whole quarter was respectable. It was actually better than budget.

But as you know, as far as looking forward to the 9 months of the year, our preliminary Q1 RF, we're going to spend the next 2 weeks in New York going through it in exhaustive and exhausting detail. We're looking at revenue forecast for the year above the 3%.

So I think -- I don't think you want to read anything into it. I have no indications.

One journalist asked me about April. I have no indications about April as yet.

Sorry, Patrick, the pattern -- half 1 is not as strong as half 2. That was in the budget.

And the increase that we're seeing above 3% is more -- is coming more in the second half of the year than in the first half. Sorry I just -- and if you think about the logic of it, the sequester clearly has had impacts in the U.S, okay.

The sequester, just to remind everybody, was a phenomenon that nobody ever thought would be used in the middle of 2011 when it was put into place. And that's had a little bit of a drag effect, I think on the GNP in the U.S, but beyond that, I think that's fine.

And this year, I mean, I don't think the pattern in 2013 is going to be materially different from 2012. I think it's the same again.

I don't see any great changes in client behavior. They continue to be cautious.

There are still the gray swans, won't bother you with going through those, but they're still there. The balancing effect this year, is I think those gray swans have got slightly whiter on balance this year.

Last year, we had the positive effect of the Olympics and the [indiscernible] and the presidential elections. So it sort of balances out this year, and I think it's pretty much a rerun of last year.

And just to make the point, which I made on the -- with the media this morning, if we fulfill, and this is not a forecast, if we fulfill our budgets in Q1, our efforts will be another record year. So we would have gone '11, '12, '13 with record years.

Hard, hard. It's hand-to-hand combat, it's in the trenches.

It's tough. Clients are not easy.

It's very transactional, but we can get there. And the other thing I think is just to emphasize is the headcount management is far better than it was last year.

And the headcount is down a smidgen, whichever way you look at in the first quarter this year. It's now well-balanced and I think we feel good about how we balanced it.

This time last year, we were looking at 4% in the first quarter, so the sequential is at 6%. And we've looked at the sequentials in the first, beginning of last year and this year, and it's pretty much balanced for the year, with Q3 being a bit stronger if you look at the 2.

But it's around 6% for the sequential quarters and for the 2 -- for the 2 years. So we -- for cumulative year.

So we feel pretty good about the forecast and we feel pretty good about the balance in the business, much better. The comment we got there, ugly, I think we'll get there a little bit more beautiful, a little bit less ugly this year.

And then just thinking about the U.S., Martin, is there a sense that client mix is a factor behind your...

Listen, I wish I could say yes to that question, and we've been talking to a group of you before. And if you look at our performance, the good news is Asia Pacific, Latin America, Africa and the Middle East, the good news is the U.K., the good news is Western Europe.

The bad news from our -- and digital is good news. The bad news from our point of view is the new -- is the U.S.

and public relations and public affairs. Now I wish I could say it's client mix.

I don't think it is. I mean, I think we just got to up our performance.

I'm pleased by JCPenney yesterday. I'm pleased by Nestlé, and it was just $750 million of mid year in the U.S.

JCPenney is about $420 million, both a good win. There's some more stuff coming down with decisions.

We don't know which way they go, but we'll see how they go, but -- which are significant, so I think -- which will impact North America. Our budgets for Q1 RFs for the rest of the year show an improvement in North America.

Paul did say that every region will show growth, so that includes North America, so we do see an improvement. But I wish I could point to client mix, client x, y and z being the problems, but I think it would be ducking the issue to say that.

We'll come forward and then go back.

Filippo Franco of JPMorgan. I have 3 questions.

But before I ask you the 3 question, just to come back to what you said about the full year guidance, you say that you expect above 3% you feel at the moment.

Yes, I know. The guidance we're giving you is ...

Around.

We're saying stick to 3%, okay? We don't want to get caught in the same position we got caught last year, which we said it was going to be better.

We did 4% in the first quarter. We got a little bit overoptimistic -- well, not overoptimistic.

We just told you what the numbers were. We're telling you stick to 3%.

You're independently minded men and women. You'll make your own decision.

That's right.

And so the 3 questions now. The first is on consumer insight, yes, I'm pleased to see the improvement.

A little bit of improvement.

A little bit of improvement. But in particular, can you explain us, please what's going on on the custom research?

Because you mentioned that improvement is coming from the syndication, but ...

Well no. We said that performance in syndication was good.

I mean there's an improvement in custom too. I mean, if you look at 2 comparatives that we see in Ipsos, I thought was a very defensive release in relation.

And actually, I think analysts got confused because they started talking about their order book, right? And we could give you an order book figure which will make you feel even more enthusiastic, but I won't give it to you.

That was one thing. Other thing was that the new up is minus 4%, according to Nielsen.

So custom was only minus 4% in Q4 of last year as opposed to -- Q1 this year, as opposed to 7% or 8% or 9% for last year. So what we are seeing actually is I think that in custom, it's not a pretty picture.

Let's be quite frank about it. But relatively, Kantar, even in custom in mature markets, which is where the pressure is, we said this many times before is doing relatively better and I think gaining share.

And Ipsos is wrestling with Synovate inside Nielsen, which is a heavily syndicated business. Custom I think gets less prominence in their business.

But I think people fail to really comprehend that Nielsen saw that minus 7% and minus 8% last year. And they were, in the result that came out a day or so ago, they said that in their first quarter gone down to minus 4%.

So the syndicated business remains stronger. And we highlighted things like Worldpanel and Lightspeed, they're the syndicated that do well.

But by and large, again, the pressure remains -- relatively, pressure remains in mature in custom -- mature markets in custom.

Market share gain, good. And the second question is on PR, you just touched that you are disappointed about the PR performance, so -- but you said, I mean, you know what's going on there or ...

Well, I think a bit of it, if we went back in time, we said to you that Washington and public affairs was pressured last year around the election. If you think about it from a macro point of view, PR should be stronger.

The Huntsworth [ph] result last year, I think -- yesterday was minus 0.3 or something like that, like-for-like growth, if I remember correctly. And if you looked at the constituent parts of that, I'm going to mention that because it's probably about the only comparison on the comer-up, actually in public relations and public affairs, having had a weak year, a year or so ago when we were strong.

So I don't feel -- I think both H&K and Durson [ph] have had pressure, particularly in the U.S. Cohn and Wolfe had some pressure in the first quarter, having had a spectacular year last year.

And Ogilvy PR also had some pressure. So it's not -- you can't discriminate between the 4 major brands.

And I know they are all under pressure. I think from a macro point of view, it should be better.

If Twitter is a PR medium, then it should be better. And social as a whole is helping it.

So I think we will see an improvement from public relations and public affairs.

And then just final question -- a bit more generally is about the potential really for advertising agencies to start tapping into the budget of the CIOs compared to the CMOs. I don't think that I've seen you very vocal on this point or maybe I missed it.

I think you missed it.

Yes, I missed it.

Mad men and math men, remember that.

Please could you please remind us what are your thoughts at [indiscernible]?

This is very boring. No, it's not.

So our view very strongly, and I think more so than anybody else actually, so I'm quite -- that's why I'm remarkably surprised by your comment. More so than anybody else is that this is no longer Don Draper land.

It's much more than that in terms of our client mix is no longer confined to -- we like to think it's CEOs and then definitely CMOs. Post-Lehman, it has become more and more Chief Financial Officers and Chief Procurement Officers.

And increasingly, it's CIOs, Chief Information Officers, not Chief Investment Officers, and Chief Technology Officers. And there is this debate that's going on as to who in 4 or 5 years' time will control marketing budgets or IT budgets will be -- will it be CMOs or will it be CIOs or will it be a committee?

I think we've been in the forerunner, again expressing surprise at your comment, in the forerunner of saying that it is going to be mad men plus math men. And that increasingly, and if you look at the platforms, those Xaxis platforms, if you look at our investment in Globant.

So we've taken a 20% stake in a Latin American, originally Argentina, but increasingly Uruguay and Brazil and Latin America and into North America and in fact into Europe, Globant specializes, its client is the CIO. Its client is a CIO who is concerned about having one platform inside the company.

So traditionally, what happened was that the CMOs would build their websites. They wouldn't worry too much about the IT platform, to be honest, because they didn't really know about it or really weren't bothered about it, and providers provided them with a platform than they played on the front end.

And the reason that I'm surprised with the comment is we've been talking for about -- probably about 2 or 3 years about spaghetti in the back of the TV set. And the spaghetti at the back of TV set were all these different systems.

What's now happened is, with the pressure of finance and procurement, CIOs and CTOs have been instructed or have decided to have one platform. So you have one platform at the back end.

And at the front end, the CMOs can play to their hearts' content. They can have all the different approaches, but it's done on one information platform.

It's very interesting question. So one of our clients I was talking to here in London, a multinational client, put out an announcement internally about personnel changes, significant personnel changes.

They didn't have a system. They had 140,000 people.

They didn't have a system, one system that they could put that announcement down. And it was just an example that happened in the last 24 or 48 hours where they were saying, "We don't have one system.

We got to have one system." Now if you've grown by acquisition, quite apart from the fact that you even if you haven't grown by acquisition, everybody being -- commissioning these different platforms, it becomes important.

Now Salmon is a good example of it in the e-commerce area. And increasingly -- what we've done with Hogarth -- and what we've done historically is actually link with technology partners.

So that we go in as the marketing partner with a technology partner -- an IBM for example. What we are increasingly doing is doing that, but we're increasingly getting the knowledge on the technology side, so we're becoming a more powerful I think technology partner or partner for a technology company and in our own right, understanding these things more.

Xaxis is a more product orientated. So we gave you some more information on Xaxis in the presentation and the growth in Xaxis.

And Xaxis is a very good example on the media planning and buying side online. So I think it's very much where the business is going.

So we are moving more and more into being a technology -- our strategy, new markets, new media, consumer insight, application and technology and big data. I mean, it's all.

My question was more about the result, whether you're...

I missed the question.

No, the question was more [indiscernible] in terms the results that you have been achieving in terms of organic growth about it. That's my point.

I think it's starting to bite. I mean, yes.

Oh yes, absolutely. I mean our fourth-largest client who just commissioned us to put a complete platform in.

So it really is starting to bite. Oh, yes.

Absolutely. And clients -- because clients are so focused on costs, rightly or wrongly, it's really an important point I think.

Julien Roch with Barclays. The usual 3 questions.

Your usual 3 questions? Just post them on a slide, then I'll...

Yes, and on Twitter, and Facebook. On the budget, I know it's 3% because you want to be conservative and not have a repeat of last year.

Well, we actually are saying that the Q1 was above 3%. So what you see is...

Yes. But when you say it's above budget, are we talking going from like 2.9% to 3.1%?

Or is it more meaningful. That's my first question.

I'll answer it. It is more meaningful than 2.9% to 3.1%.

It wasn't 2.9% to start with, it's 3% to start with. But it's more meaningful than 3% to 3.1% or 3.2%.

The second question is you've done $55 million of M&A in Q1. How much do you think you're going to do for the full year?

Well, let's just keep -- just if we can segment them. It's difficult to tell.

The pipeline is very strong. We have a significant thing coming up in China.

Not significant in terms of your figures but significant to us in the context of China but not in terms of amount money spent. But it's really in the -- it's not in the -- whether if I put in the AKQA category, but it's solid small to medium.

I would just add that if you take Brazil, Russia, India and China, now we're approaching $1.5 billion of revenue in China, including associates. Just to put it on focus, Blue Focus is supposed to have $325 million of revenues.

That is including -- that includes billings, if you look at the numbers. Blue Focus is -- revenues are $125 million, just to get it because it was reported, it was the largest communications company in China yesterday, by Numis.

And I didn't quite understand that. Okay?

So if you're $1.25 billion in China and you're $800 million in Brazil and you're $500 million in India and you're $275 million in Russia, which is where we are in the BRICs in terms of revenues, acquisitions in the first 3, if we're growing at 10% in those markets, which broadly we are, it's very difficult to find acquisitions of that size, either $150 million or $80 million or $50 million. In Russia, it's a little bit different.

Now to your question, we are looking at 1 or 2 things in Russia, $20 million, $25 million, $30 million of revenue. And again, so it's going to be more of that sort of stuff.

And then the last question is on digital, $1.3 billion of revenue in direct, digital, interactive in Q1. Are the margins above group average, which I...

In digital?

Yes.

To be honest with you, I don't know. My guess would be that it will be either the same or better.

The same or better.

Yes.

And if you...

I mean, do you want to check on all our digital business?

I mean we kind of know. It's pretty much a little bit similar to advertising.

I mean, it's consultancy business and -- but it's better than the -- slightly better than the group average.

I mean, again, it's the -- it's this old -- in a way, behind the question is the old question about as you go into fast-growth markets -- so take the first 2 legs of our strategy. As you go into fast-growth markets, do you -- do your margin improve?

Yes, because you get the break on that and you've seen that consistently over the years. On digital, we don't give you the break on the margins, but I think basically, the answer would be it is margin neutral or margin enhancing.

I mean, that's the answer we've given, and I don't think there's anything over the years, and I don't think there's anything that has happened that would negate that. On consumer insight, as -- clearly, if you look at the returns on revenues, they're below the average.

If you look at the returns on gross margin, they're above the average. So I think you have to be a little bit discriminatory.

I mean, the margin issue is more of an issue in the consumer insight, particularly on custom, right? But if you look at gross margin then position improves.

And of course, our gross margin last year was 16.1%, which was a record. The previous record year was actually 2008 at 16%, and we broke that last year on the gross margin.

Working back here.

Working back, working back. Okay.

We've missed.

It's Will Mairs from Nomura, just 2 questions. First one, your media investment management business has done quite well, 7.4% in the first quarter.

Yes.

I'm just wondering about the drivers behind that. And perhaps also, if you can comment on how the traditional and digital businesses within that are performing.

Now I would say we did better. Obviously, if you look at the geographic breaks, we would do better in media outside the U.S.

than inside the U.S., although we hope with things like Nestlé, it will continue to strengthen in the U.S., although we did well in the U.S. What's driving it?

I mean, certainly, the procurement and finance. I mean, in many clients' P&L, media is -- if you take the total media cost, which doesn't play to us, but -- because commissions and fees tend to be 2.5%, 3%, 3.5% of the gross billings number, clients look at that billings number.

They look at the stresses and strains that are taking place in the media landscape and they say, "Can we get more savings?" Quite rightly, nobody's arguing against that.

So I think that's one of the primary drivers. I think another driver is from a -- so that's more a tactical thing, a buying thing.

There's also a more macro sort of strategic thing. If you are confronted with all these options, Pinterest and Instagram and Twitter and Facebook and Google or Bing and everything else, how do you manage your portfolio in a more so -- more effective way?

So there's a strategy piece to it as well. So I think the primary driver is the first.

The secondary driver -- so it all comes down to efficiency and effectiveness. Efficiency is lower cost, and effectiveness is better optimization, right?

And I'll be spending the right amount, and I'll be spending in the right way. And of course, the media get very focused on Google or Twitter or Facebook.

It doesn't matter where the -- what type of medium they are. Even if they're all exactly the same and doing exactly the same, which I don't think they are but let's put that to one side, you have to decide where you're going to put your money.

And there's lots of tweets about -- like yesterday, after the [indiscernible] conference about -- we've been saying what we said yesterday about newspapers and Internet and mobile for 2 years. The Mary Meeker data has been in the market for 2 years.

And the other thing I would add is look at the New York Times results yesterday. It tells you everything.

All right. And the second question, just in terms of Europe, I guess having a look at Southern Europe, countries like Italy, 2% there, and Spain as well not looking too bad.

I guess what I'm wondering is do you think perhaps we're moving on in terms of Southern Europe and perhaps they -- we're seeing an improvement there, and perhaps what are you hearing when you talk to [indiscernible]?

I think I was just saying that I sat next to somebody last night, I won't say who it was, at the dinner, who knows far more about this than me and probably most of the people in this room. And he said, Northern Europe has to adjourn the banks.

They've got to take it on the nose for Southern Europe. I mean, he said they were told of these others -- some of the major South European countries or -- and the minor ones like Cyprus, et cetera, get out.

He thinks that's unachievable now. So they have to stay in, and there has to be a rebalancing between the north of Europe and the south of Europe.

And he thinks slow growth is with us for a long period of time. Now I don't know whether that's right or wrong.

And it's a gloomy scenario, but I think you have to plan your business. And I think the reason why clients are behaving in the way they are is that they -- when you're faced with those sort of uncertainties, whatever the strength of your balance sheet is, you don't want to make a mistake.

So I think this is going to continue. Now Rajoy today is going to introduce some more reforms.

We did see -- I think I said to you last quarter we did see in the fourth quarter last year some very interesting things happening in Spain partly because tax rates are going to rise and severance payments packages would yield more after-tax fourth quarter of last year than they would the first quarter of this year. And we saw some accelerated restructurings.

And then the Calascione thing, which I thought was quite extraordinary was that -- that ran amiss was that he was going to restructure France. 12.5% of the workforce was going to be reduced, 7,500 people.

He's going to take on 1,000 people in Spain. So you were starting to see some structural things happening, particularly in Spain.

Italy, under the Monti regime, made some structural changes, but we've now got Letta sort of hinting there'll be political changes with the structure of Parliament. Whether we'll get further structural changes in Italy or not, I don't know.

France, with Hollande where he is until 2017, it doesn't look like we'll get too much in the way of the structural changes. So I think you have to plan whatever comes.

There'll be a nice upside surprise if it does get better. But I think clients are planning on the basis of squeezing capacity in Western Europe, Continental Europe, and not increasing it.

Either keeping it stable or squeezing it, taking it down, not investing. And EU referenda decisions adds to the uncertainty as well.

So I think it's -- if you look ahead, I mean, we feel more optimistic about 2014. Brazil, Sochi, the World Cup, the Winter Olympics.

We have the mid-term Congressionals, which will be important in the political context in America. So all of that should help.

And I think by '15, maybe Western Europe, so -- there must be some sort of cyclical bounce in Europe at some point in time. Whether there's a structural change or not depends on the sort of things that I just touched on.

So I think you plan on the basis of very little improvement. I mean, I have to say that if competitors are dropping by 7% or 8% in a quarter in Western Europe, and that's an average, that means that some agencies must be dropping at 15%, 20% to 25%, which doesn't, on the basis of what we see in the markets, make sense.

I mean, we don't see -- in Brazil, we see an agency gets acquired and it loses its 2 biggest accounts. All right?

So we can see that. But I wouldn't say that in Western Europe, that I could really conceive the dropping, famous last words because it might be -- it might happen, that I can conceive they're dropping 7% to 8% in -- it doesn't make statistical sense if you think about it because that's an average.

So some of them must be going at double that average. Some of them must be flat.

And we don't see it. I mean, we do see gloom, and we do see people holding back but not to that statistical degree.

Patrick, yes?

It's okay. I've only got one.

It's Patrick Wellington at Morgan Stanley.

Only one from Patrick Wellington. This must be a record.

The severance costs are the same as they were in the first quarter of last year, and yet you took a 93 million restructuring cost at the end of last year presumably to accelerate severance. So when will that acceleration of severance come?

And where will it hit?

Well, I think we started off at pretty much the same level as last year. So we've not implemented the restructuring program rapidly.

But that will come because a lot of it is in consumer insight. I mean, if the behind the question is did we get a benefit, a margin benefit, in terms of the restructuring program in Q1, the answer is no, we did not get a significant benefit.

And the 50 basis points of operating margin that we're saying for the year is not being flattened in the first quarter. Is that fair, Chris?

So we can roll that forward to say that actually, your margin in 2014 should be relatively good because you'll get a full year benefit...

Relax. Relax.

Relax. I'm glad it's only one question.

It's Richard Jones at Goldman. Two things.

Firstly, I just wondered if you'd give us your latest thoughts on what you're up to with your back office cost-saving plans.

I'm getting increasingly frustrated but go on, yes.

And secondly, you have a specific comment about discussions around increasing the dividend payout ratio now to 45% to 50%. Just wondering if you'd give us your thoughts on time scale on that.

Okay. Okay.

The -- let's leave the dividend payout first. The board hasn't sat down and talked about that.

We'd probably in -- probably at the next board meeting, we will have a discussion about -- which is around the AGM time, we will have a discussion about whether we should take -- we're at 39%. We'll take it up to -- whether we take it up to 45% or 50%.

I mean, there are merits on it and there are demerits on it. The board will discuss it.

From a personal point of view, I think as a shareholder I would -- and a significant shareholder -- not significant, not in some people's minds but certainly in mine. I would welcome a further increase.

Now -- in the payout ratio. And the reason for that is that we continuously hear from institutions that they feel that an increased payout ratio -- we have differentiated in the FTSE 100 of 40%, and we're about the median.

And yield is not materially different. I think we're in the median as well for yield.

So the brokers, our advisors, which are not a million miles away from you, do say that if you want to differentiate yourself, it does make sense to take it further. I think in the media sector I think Reed Elsevier is stronger than us.

I think Pearson is stronger than us. So there are some precedents.

I mean, I know -- so Omnicom actually went over, and it's their weakest quarter, but they went to 60% distribution in the first quarter. So -- and they had -- historically, after the big bang that they did in '85, they always had a high dividend level.

The reason why their dividend level was constrained, quite apart from the other things they were doing on buybacks, was because they've already had a very high level. So we'll discuss it.

And we have an independently minded board. And what was the first question?

Sorry, so just on the second one, so you're thinking that you could do that for this year?

No. We would set a target.

So then it would be over a long period of time. It wouldn't be a sudden bump.

It would be -- if we did it, if we said it was 45% or 50%, whatever, it would be a long-term target.

The first question was back-office cost savings.

Yes, I said I'm increasingly frustrated. I mean, I -- we haven't done enough.

We should do more. We have 2 -- the helicopter analogy, if you were looking down from a helicopter or a balloon on our businesses and you looked at where they were located and who is located where the opportunity is.

But let me give Chris the opportunity to -- and Paul. Okay, Chris and Paul.

All right, go ahead.

Well, I think it's 2 things combined. It is the back office and it's the consolidation of IT.

I think the progress is slow and steady but frustrating at times. And I think we're doing everything in pieces in the sense of we're putting in an enterprise-wide system to the whole of Asia Pacific.

So that takes 3 years to roll out, and we're sort of just starting now with the first country going live this quarter. We've got some good case studies of centralizing back office and actually seeing a considerable benefit coming through in working capital, which we're trying to roll out and make some improvements in other marketplaces.

We are -- we have got our first 4 of 8 areas of the IT consolidation, what we call soft track, ready to go, but there is investment to get this right. And I think our challenge -- or Chris and I's challenge to the team is that the scale investment and the speed to payback is something we want to feel very comfortable about standing here in front of you talking about it.

The good news is our businesses aren't broken. And therefore, sometimes it's a little hard, as they get agreement, to make it happen across the brand.

So I think across all issues, the businesses understand the need to be uniform in communication systems and financial systems to get better data quicker is absolutely compelling. And so we fully support that.

It is at times frustratingly slow, but we are on a journey.

Yes. And your [indiscernible], Chris?

Yes, I mean, we've said the IT program maybe can go a little quicker because you can do things more at once. But the back office consolidation is series of a lot of projects, which are all a lot of hard work.

I mean, Martin approved one to save $3 million in the U.S., but it's a massive amount of work to get it done, and to get the number that we're looking for, you've got to do 10, 15 of these things, and that's a massive strain on the system.

It's analogous to the IT platform question that you asked in relation to clients. I mean, we have -- because you're going from acquisition over time, we have multiple platforms.

Having said that, I think the differences -- the 2 big differences to what others may do, one is we're not going to put a big target out there, right, because you're certainly hostage to fortune. The second thing is that we're not spending massive amounts on ERP programs or whatever it is.

We're going to do it in a -- and that's why I'm not frustrated about it, because I do think that's the right way to do it -- to do that. And in fact, actually, if we do the 50 basis points of margin improvement each year, if you look at it -- we're taking the margins up, if you put a heavy amount into an ERP program, you have a massive investment, these investments always have doubled the cost that you anticipate, and they take twice the -- you talk -- look to anybody in the IT area, they always say it's double the cost and double the time.

And what you end up with is if you do get that margin improvement at the end of the time, it takes a long time to ramp up. In the meantime, if we achieve what we are achieving, we'd be pulling along at 50 basis points a year.

So you'd pay -- it pays you money and it takes your choice. And I think what we're doing, whilst I do find it frustrating, and even Paul finds it frustrating, I think it's probably, at the end of the day, erring on the side of caution is probably the best way to go.

But there is -- there -- believe me, there are significant benefits to flow-through. If we were a private equity company out of the market, I think probably, we'd go bigger and splashier.

But we're doing it within the constraints of quarterly reporting, half-year reporting and annually reporting. So I think the honest answer is that part of the reason we're cautious about it, and I think quite rightly so, is we have to come bare our souls to you every quarter.

There is one -- let's go in the front there and just...

So it's Adrien from Exane. I've got a few questions.

First is about your target of 3% organic growth, starting with 2%. If I understand correctly, you're saying clients are not changing behavior.

So is the acceleration you're expecting, organic growth, just coming from easier comps? That's the...

Well, that's part of it. I mean, we went 4%, 3%, 2%, 2.5% or whatever it was last year.

So actually, it's what we said. We're looking -- if you look at 2-year sequentials, I mean, there is a bump in the third quarter.

But essentially, it's about 6% between the 2 years. So it does get easier because we had lower comps last year.

And speaking of easier comps, are you seeing any sort of improvement coming from health care clients, which I think have been a big drag in the last...

We've had a tremendous -- slapping ourselves on the back or slapping our colleagues on the back. We've had a tremendous run in -- it hasn't been publicized, and neither will I mention the clients.

Although if you look at -- there have been 2 major consolidations in the health care sector, we've had a tremendous run. And particularly in one of those, we've had 6 pitches, which we won sequentially.

All 6. Quite remarkable.

I can't remember anything like it in the health care sector. So that should come through, and it'll come through in the -- well, the balance of this year and next year.

And that's all U.S., by the way. The major part is U.S.

So health care has, I think, gone a little bit better for us this quarter that we're reporting, certainly better than last year and should improve. And it is because health care companies, they have the drugs going off patent, they have the consolidation of their sales forces.

They're looking for efficiency. And I think -- we've broken through.

The team concept is really breaking through in the health care sector.

Okay. And a bit -- discussion around the headcount growth.

Can you give us some more color, maybe either by region, where you've cut or where you increased? And also, if you can split between client-facing people and non-client-facing people?

Because traditionally, if you reduce headcount, that would indicate that those, going forward, is continuing...

Yes. I mean, the -- on the first, it's what you would expect.

Where are we getting the growth? So it would be in Asia or in Latin America.

And you can't -- if a business is growing at 10%, you can't resist -- in the BRICs and the MITSKs and whatever, you can't resist the increases in terms of headcount. Even if the overall company is doing 3% and they're doing 10%, it has to -- and if you've got -- I think -- I mean, our headcount in the Q1 revised forecast, they're in balance.

I mean, people are being, I think, restrained in terms of hiring where they should. Okay?

Now the turnovers in the business, the turnover is -- it ranges between -- broadly between 15% and 20%. So when business is tough and labor -- and turnover is lower, it'll be 15%.

When business is very good and turnover is higher, it's 20%. But in those high-growth markets, you can get up to 1/3.

I mean, it's -- and it's very difficult for our people to manage it, and we have to shift the emphasis from quantitative because you can't hold people on a quantitative basis. You have to move to a qualitative basis at some point in time.

So the advertising school in Shanghai, et cetera, is very -- so on the geography, and that would apply to digital, too, if digital's growing at 7.5% and the thing is growing at 2.1%, I mean, you're obviously going to have to hire more. On the client-facing versus the back office, obviously if we're doing more on the back office, there's more opportunity.

But we're still in the early stages of that, so I don't think you can say that. I think it's pretty much across the board where we're holding it.

But you've got to remember that this time last year, we were going over the top. This time last year, it was 4% in the first quarter.

We were saying we thought the forecast for the year would be better or was better, and we were adding headcount. And that had happened also in the back end of '11.

I mean, the back end of '11, of course we were -- yes, we were hiring heavily. So we redressed the balance.

And going back in time, '10 -- we thought in '09 that we had taken the headcount down too fast, so we started to invest in '10. We did it very well in '11, balanced it.

And then in '12, particularly with that first quarter and the back end of '11 looking good into '12, we went too far. So I think that's where the ugly comment and the more beautiful or the less ugly comment becomes more relevant, because I think our businesses are in -- balanced better than they were before.

It's Tom from Citigroup. I had 2 questions.

The first was on that divergence you talked about in terms of Europe. I guess you're alluding to Publicis being down...

Western Europe.

Western Europe.

Yes.

Being down almost 7%. And the one area where you're in complete agreement with Publicis is on the media side.

Your business growing 7.5%, they're saying sort of high-single digit, 10-plus. Should we therefore infer that the reason they're weak in Europe and -- but are stronger in the U.S.

is because their media business is more skewed to the U.S.? Or is it -- is media the explanatory variable for driving those divergences in geographic growth?

Or is that a red herring?

It could be a contributory. But the point I'm making is it's not minus 7% or minus 8%.

That doesn't compute. And it could be a bit.

I mean, yes, I think that's right, probably right. It could be a bit.

But it doesn't explain it all.

Okay. The second is...

Yes, sorry.

The second question I have was, if -- I mean, listening to Unilever and listening to Procter & Gamble, one of the things they've highlighted as a way of driving efficiency is to just do the same amount of media spend but fewer campaigns as a way of essentially putting pressure on nonworking dollars, which, for them, is you guys. And the point being, if you have the same amount to spend and fewer campaigns, will we -- should we continue to expect this bifurcation between media being quite robust and indeed quite strong and everything else being quite weak?

And is that something that potentially could accelerate, as what's happening in FMCGs, so it spreads out to the rest of the year?

In a way. I mean, the campaigns might be simpler, but the optimization is much more complicated.

All right? So the fragmentation is, I think, much more -- makes it much more difficult.

So whilst fewer campaigns would indicate sort of less labor, less fees on one hand, I think on the other, the fact that it's more complicated puts a premium on knowledge. I mean, going back to the question, there is the simple procurement-finance thing.

We're spending all this money on media. How can we do it better?

How can we get the costs down? But the second part of it really, which I think should be the first part of it, which is the strategic piece is, I have all these alternatives, and I'm getting more data, particularly on the new alternatives, I'm getting more big data on the new alternatives, how can I do it better?

How can I optimize? Should I knock out one of the channels?

Should I enhance another one of the channels? So I think it's become more complex.

But this comes back -- it's an interesting -- I think a very interesting question. It comes back to what drives our business.

And again, it's a bit like this -- the mad men, math men thing. We've been saying for many years that the medium has -- was becoming relatively more important in relation to the message, and the medium might even be more important than the message.

And I did -- this obviously irritates the Don Drapers of the world, but I do think it's becoming more powerful. So I think your point is a really good one, is that the media, particularly as it gets more fragmented, must know if you had more alternatives.

And you create messages -- creative messages which are tailored to the individual media. I mean, in the old days, you had a television commercial that was, whatever it was, percentage of the market and that was it.

Today, it can be done in a myriad of ways. So I think the -- and the creative idea, it might be essentially the same, but its implementation is different across the various media.

So I think it's -- sure. But, I mean, we've argued for a long time that media is a driver, and it is a big driver of our business.

So I think Omnicom's strength, Publicis's strength, our own strength, does come, to a significant degree and an increasing degree, to your point, from that. And Dentsu-Aegis merger, I mean, apart from the Dentsu, the Japanese haven't got their timing brilliantly, if you think about it, because their board, it was -- the yen was strong, and they're consolidating it when the yen is weak.

Apart from that, if you think about Dentsu in Japan and you think about strategically -- execution might be very different, but, strategically, it's very interesting.

One question. Just in terms of sports marketing, any view on the new [indiscernible] in terms of IMG?

Well, what's your view about that?

Well, I used to work there. I used to carry a bag for Jackie Stewart.

I think the answer is it's very highly priced, or will be very highly priced. It traded at -- Teddy Forstmann bought it for $750 million before [indiscernible].

We were not allowed to look at it because the trustees -- we did look at -- we did try, but because the trustees said we were a competitive business. If we had got a look at it then, I don't think we would've gone higher than, say 500.

It's now, I think, I don't know, but I'm guessing around 1 2 50, maybe 1 5 of revenue. And $170 million of EBITDA, I think, and they're talking about doing $200 million this year or $210 million this year.

And people are talking about it trading at $2.5 billion. So that would knock us out.

There's a possibility that we would partner with somebody as a minority, a small minority partner. But the pricing would have to be good.

And the biggest business there now is the collegiate business, which, ironically, Teddy Forstmann bought after he bought. And that's, I think, their strongest business.

Then there was a court case going on in America about whether colleges can continue to use the likenesses -- if you had a college athlete, it is very well that -- it's not Notre Dame because Notre Dame still controls their licensing, but I don't know Alabama or something like that -- and whether you can continue to use that for the college after they've graduated and gone on to professional football. So -- and I think that's a case that still has to be decided.

So there's some question about -- but that collegiate businesses is virtually a monopoly in the U.S. I think it's a very interesting business.

But CAA, WME, Terry Samuel was meant to have made a bid of $2 billion a year or so ago, 2 years ago, on behalf of Middle Eastern interests. Sovereign wealth funds would be interested.

So I think it's going to be too much of dog fight. Our sports business, interestingly -- to your question, is really interesting.

Ronaldo is not my apprentice, but Ronaldo is alive and well and going to live in Europe. And we have a very successful business with him, 9ine, which has done very well in Brazil, excellently in Brazil, and which we're spanning out of Brazil.

We're doing a lot of work for the IOC. We're doing a lot of work in football, Premier League, FIFA stuff, lots of stuff.

And there's another thing, I think, called the Sports Navigator, which I think is on our website, which you can have a look at, which catalogs all of our sporting capabilities, which are very considerable. We've signed a contract with Istanbul to represent them for the Olympics 2020 against Madrid and Tokyo.

So we're in -- we're heavily into that. We're doing a lot of work in Brazil on the World Cup, a lot of work in Brazil on the Olympics.

We'll be doing a lot of work in Sochi on the Winter Olympics. So the sports stuff that we have is very, very strong.

I think IMG is an interesting company, but I think it's over-sexy. But we shall see.

[Indiscernible], [indiscernible]. Just a few questions.

First of all, just on the media buying business, just in Q1 in the U.S. I mean, from your comments, it sounds like there's a comps issue.

You maybe need to pull up your socks a little bit. But you would expect it to get stronger from Q2 to Q4?

The media buying business?

The media buying business in the U.S.

Yes. Yes, I think that's fair.

Okay. The second thing is can you give us an idea for your budgets at the moment where they stand, and like-for-like staff numbers, sort of what you're thinking about that for the full year?

Well, first of all, you have to remember that our people are always forecasting hiring too many people. But if you assume that the headcount was flat or up or -- flat against the previous year or up a smidgen, you'd be okay.

But it's not going to increase significantly. So I think where we'll come out for the year is that the headcount probably will be flat for the year against the previous year.

I think that's where it will come out.

And just the final question.

We have said -- just to the point, we've said the 50 basis points remains the target, irrespective of the fact that revenue is above 3%. Okay?

Thank you very much.