Ladies and gentlemen, good day and welcome to Q1 revenue presentation of Publicis Groupe. For your information, this conference is being recorded. At this time, I'd like to turn the call over to Mr. Arthur Sadoun, Chairman and CEO of Publicis Groupe.
Thank you, Emma. Bonjour[Foreign language], and welcome to Publicis Groupe Q1 2022 revenue call. I am Arthur Sadoun, and I'm here in Paris with our CFO, Michel-Alain Proch, our Secretary General, Anne-Gabrielle Heilbronner, and our COO, Steve King. As usual, we will take all of your questions together after the presentation. Alessandra Girolami is also here and will be available to take all of your questions offline after this call. I will start by sharing our Q1 highlights, then Michel-Alain will provide you with more details on our metrics. I will then conclude with our outlook for the rest of the year. Before we start, please take the time to read the disclaimer, which is an important legal matter. I would like to start this presentation by touching on the main event that marked the beginning of the year, the war in Ukraine.
Our first priority as a group in the past months has been the safety, the well-being of our 350 people in the country and of course, their families. We took immediate action, including security alerts, mental health support, relocation, and financial aid, like guaranteeing salaries for everyone for the entire year. Those efforts are being reinforced through Marcel, where thousands of our people have offered a safe place to stay, a job, and made donations that the group is matching like for like. I would like to thank everyone at Publicis for their solidarity and their compassion. They are demonstrating the true power of one, the one that goes beyond business and beyond borders. When it comes to Russia, we continue to fully condemn the Russian state's unilateral aggression against Ukraine.
We of course immediately applied the full range of sanctions led by the international community to respond to the gravity of the situation. We also took the necessary steps to disengage from our operation there by ceding control of our agencies to local management. This allowed us to stop our engagement and operations in Russia while fulfilling our responsibilities to our international clients and taking care of our 1,200 people there. Some of them have been with us for decades, and it was our responsibility to secure a future path for all of them. We don't know how long this crisis will last, but we will continue to lead with strong actions and a people first approach. We stand for everyone who is suffering from the consequences of these conflicts. Let me now turn to our Q1 performance. We actually had a very good start to the year.
Q1 organic growth came well above expectation at +10.5%. This comes after 2.8% growth we posted in Q1 2021. Once again, we are proving our ability to capture the shift in client spend toward first party data management, digital media, and commerce. This is particularly true in business transformation, where Publicis Sapient saw strong acceleration this quarter at +18.5%, confirming our client imperative to build their own direct to consumer experiences. All of our regions performed well. The U.S. posted strong organic growth at +8%. This comes after a Q1 2021 that was up 5%, confirming the country dynamic. All of our operations in the U.S. performed strongly with a remarkable +16.3% for Publicis Sapient after 11.2% for the same period last year.
Following +4.7% in Q1 2021, Epsilon delivered a solid +6.3% organic growth, absorbing the impact of the anticipated supply chain issues on its auto division and with double-digit growth in digital media and data activities. Europe continued to improve with 14.9% organic growth. This was notably fueled by the recovery in France across all operations, including outdoor media activities, but also in the U.K., where we saw concrete signs of turnaround at Publicis Sapient, as we mentioned in our last call. It is important to note that Europe rebounded nicely even without the contribution of our outdoor media activities at +9.4% organic growth. APAC also delivered strong numbers, growing by 14.4% after 6% in Q1 of last year. China posted double-digit growth, driven by the ramp up of its new business wins.
In 2022, we had a strong start to the year financially, but also commercially. Our new business momentum, placing us first in most of the ranking last year, has been further confirmed in the past weeks by several reports. In Q1, we continued to see a number of significant wins across our capabilities and geographies. This started with the win of McDonald's in the U.S., quickly followed by Singapore Tourism Board, Siemens Global, Etisalat, LVMH in the U.K. and in France, and Pepsi in China, to name just a few. We also won the largest pitch of the year so far, with 95% of AB InBev global media business building on our partnership through Epsilon, which became their data agency of record a year ago. These wins show how our integrated model, combining data, creative, media and technology, continues to visibly make a difference.
Another recognition of this came from Ad Age, which named Publicis its first-ever Holding Company of the Year. I will now leave the floor to Michel-Alain Proch, who will give you further detail on our numbers and come back later to talk about our prospects for the year.
Thank you, Arthur, and good morning to all of you. Pleasure to be with you today. I will begin on slide eight with the evolution of our net revenue for Q1 2022. The group posted a net revenue of EUR 2,800 million in Q1, which represent an organic growth of 10.5%. Reported growth in Q1 was at 17.1%. We recorded a EUR 19 million positive impact from acquisition and disposal. This includes the revenue of our 2021 acquisition of CitrusAd and Boomerang. It also accounts for the first contribution of our recent acquisition of BBK and Tremend, the latter having been closed early March.
This quarter, the positive impact from foreign exchange rates was +EUR 125 million, which is a circa 5% positive impact, out of which EUR 100 million are related to the evolution of the USD to euro exchange rate. Assuming the USD to euro exchange rate remains at this current level, it would mean a EUR 400 million positive impact on the group reported full-year top line. Let's move to slide number 9, which gives the dynamics of our Q1 organic growth by geography. North America posted another very solid quarter with 8.1% organic growth. The impact of the USD to euro was a positive 660 basis points on growth this quarter, leading to 16.1% reported growth overall in the region.
With 14.9% growth, Europe showed both a significant sequential improvement versus last quarter and a steep recovery versus Q1 2021. This recovery was mostly fueled by France with a rebound of outdoor media activities in the U.K., where, as anticipated, we successfully executed the turnaround of Sapient. APAC delivered very strong numbers with 14.4% organic growth and a solid performance in most countries in the region. Middle East and Africa and Latin America both posted very strong organic growth too at 13.4% and 13.1% respectively. I will detail the performance of each region in the following slide. Let's begin with North America on slide 10. As I've just said, our operation in the region posted an 8.1% organic growth in Q1.
Both the U.S. and Canada were strong, with Canada being double-digit at 11.7% this quarter. Let's focus now on the U.S., where our operation grew 8% organically with solid momentum for all our activities in the country. This is all the more remarkable that it comes on top of a 5.1% organic growth in the same period last year. This is demonstrating again the strength of our offer in this geography, where our model is the most advanced. Media posted double-digit growth this quarter, supported by both positive underlying trends of organic clients in the food, retail, and hospitality sectors, and a significant contribution from the new business won in 2021, particularly in TMT, retail, and health.
Creative was up mid-single-digit this quarter with a strong performance, notably in production in the automotive sector and in digital experience with the ramp-up of new business won in 2021, particularly in CPG. Publicis Sapient posted a 16.3% organic growth in Q1. This is particularly strong as it come on top of an 11% growth in Q1 2021. It confirms a rising demand for digital business transformation that Publicis Sapient is capturing both through extension of services, as in the financial and food retail sector, as well as ramp-up of contracts we won in 2021 in non-food retail. Epsilon posted a 6.3% organic growth in Q1. This is actually a very solid performance for two main reasons.
First, it comes after a mid-single-digit growth in Q1 last year, and it implies double-digit growth on a two-year basis. Second, this performance was achieved despite a mid-single-digit decline in Epsilon Automotive, reflecting lower activity in U.S. car dealership, which is due to the supply chain shortages, just as we anticipated. Epsilon data and digital media activities both grew double-digit in the quarter. Finally, Publicis Health continued to grow, albeit at a low single-digit rate this quarter, as anticipated after running, as you may remember, double-digit every quarter for the last two years. Let's turn to the performance of Europe on slide 11. As I mentioned earlier, Europe recorded an organic growth of 14.9%, including our outdoor media activities and the drugstores, and 9.4% excluding those activities.
The U.K., which represents 9% of group net revenue in Q1, recorded 12% organic growth, improving sequentially. Media activities grew double-digit, driven by new business wins signed in 2021 in the automotive and TMT sectors. Creative activities were stable this quarter. The activity at Publicis Sapient showed concrete sign of turnaround, as we anticipated, and we mentioned it, as Arthur just remind us, in the full year earnings call, with the strong growth in both the financial and retail sector. Epsilon continued to grow from a small base. France, which represents 6% of group net revenue in Q1, posted organic growth of 12.3%. Including our outdoor media activities and the drugstore, organic growth reached 39.2% this quarter, as those operations benefited from a return to normal after months of partial lockdowns.
All the activities in the country were positive this quarter, with media growing double-digit, particularly in the automotive and hospitality sector. Publicis Sapient also continued to grow at a strong pace in France. Creative activities were up mid-single-digit, mostly driven by production. Germany, representing 3% of Group net revenue, posted 1.2% organic growth despite a high comparable base of 6% in Q1 last year. Media grew double-digit, while Publicis Sapient was slightly down, facing strong growth in the same quarter in 2021. Let's finish with a few words on Central and Eastern Europe. Some countries there are obviously facing extremely difficult human situations linked to the crisis in Ukraine. On this matter, I can only share our deepest solidarity with our Ukrainian employees and thank our people in neighboring countries that have shown incredible support and dedication.
Our operations in Ukraine were obviously stopped from the last week of February when the invasion started. The performance in the region was nonetheless very strong at 14.9% organic, with Poland, Romania and Hungary largely driving growth. The last point on Russia. As you know, we made the decision to disengage from the country by ceding the control of our operations to local management. In terms of accounting, Russia has been deconsolidated from April first, and I remind you that it represented 0.4% of our net revenue in 2021. This deconsolidation has led to an exceptional disposal loss of EUR 87 million in our Q1 financial statement, of which EUR 40 million non-cash. Turning to slide 12, where I will detail our performance in the rest of the world.
In Asia Pac, which represent 9% of group net revenue in Q1, we delivered a strong 14.4% organic growth. Overall in the region, media grew strongly on the back of the automotive, CPG and TMT sectors mostly. Creative was stable. Almost all countries in the region saw solid growth this quarter. China was one of them, as it posted a 10.6% organic growth this quarter, benefiting from strong commercial momentum, particularly with the ramp up of new business win in the CPG and automotive segments. The performance was also double digit in India and in Singapore. Australia and New Zealand posted very solid growth above mid-single digits. It's worth noting that Thailand grew strongly, largely driven by Publicis Sapient and its works alongside Siam Commercial Bank in the TechX joint venture.
In Middle East and Africa, we posted a 13.4% organic growth in Q1, benefiting from strong media across the board and Publicis Sapient in the Middle East, and finally creative in Africa. Latin America posted a 13.1% organic growth, with most countries recording positive activity this quarter, largely driven by creative. I move on to slide 13, where you will find the group performance by industry verticals for the quarter. This is based on an analysis of our main clients representing 91% of our net revenue. It also excludes Media Transport and the drugstore. This quarter, all our client industries were positive, with six of them growing double-digit. Among those, I would like to highlight the following ones. First, the financial sector, that was up 11%, notably reflecting the momentum I mentioned at Publicis Sapient.
We saw a similar momentum in retail, which grew 15% in the quarter on the back of Publicis Sapient and media. TMT vertical grew 13% with the contribution for both existing clients and 2021 wins ramping up. Health decelerated this quarter as we anticipated, but is still posting a strong growth at 12% thanks to both U.S. and international operations. It's worth noting that leisure and travel recorded the strongest growth at 24%, rebounding as lockdown measures mostly ended globally. Consumer products, both food and non-food, grew high single digits this quarter. Finally, automotive, despite supply shortages that I mentioned affecting the industry, was up +5%. Moving to slide 14, net debt.
The group closing net debt at the end of March is EUR 780 million, representing a negative net debt variation of EUR 642 million over the quarter, versus a negative variation of circa EUR 1 billion last year. Showing here the normalization of the working capital at the end of last year, which I mentioned in the full year call last February. Our net debt at the end of March takes into account the cash outflow related to the Tremend acquisition, which closed on March eighth, as well as the cash impact of our exit from Russia. The twelve-month average net debt was EUR 1,277 million in Q1. We are fully on track to meet our average net debt objective for full year 2022 at EUR 1 billion.
Finally, on slide 15, you can look at our traditional presentation of the group liquidity position, which remains very strong at EUR 5 billion, in line with Q1 last year. Liquidity comprised EUR 2 billion of available credit facility and EUR 3 billion of cash and marketable securities. This concludes my financial presentation, and I now give the floor back to you, Arthur.
Thank you, Michel. Let's now focus on our outlook. As you have seen, we had a very strong start to the year, both financially and commercially. This should have led us to upgrade our expectations for 2022 organic growth. The global health situation, the evolution of the conflict in Ukraine, and the consequences of inflation for our clients create too much uncertainty to do so at this stage. Having said that, the strength of our model make us very confident to deliver on all of the 2022 targets that we set in February. When it comes to organic growth, our strong Q1 and our expectation for a very solid Q2 at around 5% after 17% in Q2 last year, should definitely drive us to the upper end of the 4%-5% range for the full year. There are actually three main reasons for our confidence.
First, our capabilities. Epsilon and Publicis Sapient are at the core of our model. Now that they are fully integrated with our creative and media operations, we're able to bring our data and tech capabilities to all of our clients to help them transform, grow, and optimize their spend. This is particularly important in this changing environment. As these assets have been scaled to reach a third of our business, they have become clear drivers of our growth. Epsilon, with its privacy-first identity solution, continues to be a main differentiator in a soon-to-be cookieless world. This is definitely proven by our new business track record. In 2022, not only will Epsilon be accretive to Publicis Groupe growth, but it will also contribute to the expansion of our media business. Publicis Sapient is also performing strongly.
As the shift from paid to owned media accelerates, we are able to respond to the urgency for our clients to transform their business model. Here again, Publicis Sapient will be very accretive to Publicis growth this year and is on track to deliver double-digit growth globally. The second reason why we are confident is our new business track record. As you know, 2021 was a particularly intense year in term of pitch activities, and we topped net new business ranking by far for the third time in four years. As mentioned before, this momentum continued into Q1 . Over the past year, we secured the vast majority of our defensive reviews. At the same time, we also converted many of our offensive opportunities with a significant number of large-scale wins that will continue to ramp up through the year and contribute to our goals.
In 2022, our focus is on integrating the business we want with new clients, continuing to provide the best services to our existing ones, while being very selective with upcoming pitches. Third, our platform organization. Our country model, shared services, and global delivery centers, together with Marcel, provide us with the adaptability and the flexibility we need in this evolving situation. This means we are able to accelerate recruits in high-demand activities like digital business transformation, where we deploy more offshoring while managing and actually controlling tightly hiring in Europe. Our flexibility and cash management will allow us to continue to invest in our talent and maintain our price competitiveness while mitigating current salary inflation.
Well, our capabilities, our new business wins, and our platform model make us very confident in our ability to deliver organic growth at the upper end of the 4%-5% range, a 17.5% operating margin, and circa EUR 1.4 billion in free cash flow for the year. Over the past two years, thanks to our model and the exceptional dedication of our people, we have been able to confront the COVID crisis and emerge as a stronger company. The same robust foundations will continue to help us navigate in a global context that remains uncertain while delivering on our commitments, investing in our people, and helping our client transform to unlock growth. Thank you very much for listening. Now with the director, we will take all of your questions.
Thank you. Ladies and gentlemen, to ask a question, please signal by pressing star one on your telephone keypad. Please ensure that the mute function on your telephone is switched off to allow your signal to reach our equipment. Again, to ask a question today, please signal by pressing star one on your telephone keypad. We will pause for just a moment to allow everyone an opportunity to signal for questions. Our first question comes from Lina Gaillot from BNP Paribas. Please go ahead.
Hi. Good morning, Arthur, Michel, and the team. Lina here. Congratulations on the excellent numbers. I have three questions on my side, if that's okay. The first one being, if we take your Q1 performance and what you said on Q2, we should land at roughly 8% in organic and around 2% for H2, while the comps are actually very similar from H1 to H2. Are you just being a bit conservative on your guidance, or are you indeed factoring a deceleration? If yes, could you please elaborate a bit on the moving parts of the deceleration onto H2? Question number two, can you just share what your clients are saying around inflation and a potential decrease in consumer disposable income on their budget?
Have some lowered their budget already for the year, and have we seen an impact on the media side, particularly in March, for example? My third question is on Epsilon. Could you explain just a bit the building blocks of the performance? You gave the performance of the auto practice, which is incredibly helpful. Excluding that, what has driven the performance and the sequential improvement? Is it bundling with media, an uptick in client demand, while we approach the end of third-party cookies? Any color would be appreciated. Thank you very much.
I'm gonna take one and two, then Michel-Alain Proch will give you a color about the number on Epsilon in more detail, and then maybe we can come back on the cookie as well with Steve, as we have Steve in the room. No? Okay, that's good. Let's start with the moving part of H2. Overall, when you look at the rest of the year, first of all, let me reiterate that we are very confident in delivering a strong Q2 at +5%. This is, of course, a very good performance because you have to put it in comparison with the +17% we did last year at the same period. That was, of course, the highest quarter.
At the moment, to be clear, it comes back to question two, we are not seeing any material impact from the current macro situation for Q2. Okay. Now, when we look at H2, we have, we believe, three factors to take into account. The first is, of course, the uncertainty of the current microenvironment. I mean, honestly, we don't know how long the crisis will last in Ukraine and what will be the impact on the business. Same thing for the health situation. When it comes to inflation, I will come back later, but as I said, there are many microenvironment reasons to be careful. The second one is very important, and you know it, is that we have, of course, way higher comparables in H2.
If you look at the group versus 2020, we were at +10%. I think more interestingly, when you look versus 2019, we were at +5%. We had a very strong two-year stack in H2 starting last year and the year before, and the comparables are very high. By the way, with the second that, as you have seen, is hugely accretive to our growth. That was already growing starting in Q2 last year with high teens over the year. It's of course higher comparables. Then there is the last sector, which, as you know, Q4 is always an adjustment quarter, and even more so in such a volatile year. To be clear, and to answer concretely your question, there are three moving parts.
What is important is to understand that they are included in the confirmation of our full year guidance. Of course, we will update you in H1. For the H1 results, of course. I can go on and on inflation, and by the way, on supply shortage. Maybe I'll start with supply shortage because it's more predictable in the sense that, as you have seen, supply shortage had an impact, on our business, mainly in the automotive business of Epsilon, where honestly, we had a very good performance overall despite this point. We have anticipated that. We don't know exactly how long this will last, but again, it is factoring in our number. When it comes to inflation, the truth is that the implications are more complex to assess.
So far, we have not seen, as I say, any evidence of our brands cutting back spend in response to inflation. Now, I think it's important not to be naive. If inflation ends up being significantly impacting our client profitability, and it's why we need to stay cautious on what could happen, we should, on one side, paradoxically, see our revenue increase, which has happened in the past with inflation, because you might have some clients that decide to pass an increase of their price to consumer, and will need to invest more to make sure that they can justify the premium. Another that will decide to take the cost for them, though reducing, of course, their cost, and we might be impacted.
I think what you should take out of that, which is honestly what we have seen in Q1, is I won't say that we anticipated inflation. Of course, we did not. We did anticipate it that we are living in a world where our client will have an imperative to grow while spending less. The investment we have made in data and technology to make our creativity more efficient and make sure that our media spend and the way we invest for our clients is really balanced in a world that is dominated by platform, will make a difference. I think you see it in new business. The reason why we are winning in new business is because we are able to demonstrate to our client that with us, they will grow faster while reducing their cost.
Again, I think we are ready for any eventuality. Again, all of those factors are in the guidance we gave you. Michel-Alain, a word on Epsilon number and maybe, Steve, a word on Epsilon and cookie-less world.
Yeah. On Epsilon numbers, Loris Nold, the performance of Epsilon for Q1 was very strong. We're very satisfied with it at 6.7% for two reason. First, it's an acceleration versus Q4 2021. You remember that sequentially, we went from 5.9% to 6.7%. On top of that, as Arthur mentioned, it has a comparison base of Q1 2021 at 5.4%. I would say beyond the numbers, we are particularly satisfied by the performance of Epsilon taking into consideration that as anticipated, we had a decline at mid-single digit in the automotive sector, fully anticipated that it landed exactly where we thought it would.
Despite this, Epsilon is posting this 6.7%.
Okay. Hi, Lina. This is Steve. First of all, it's nice to be here in person for the first time in two years with my colleagues, Michel-Alain and Anne-Gabrielle, and maybe even Arthur. Your question about Epsilon and the need to adapt to the deprecation of third-party cookies is obviously something which is increasingly important. As you will know, it is increasing the complexity of digital media, but it also is really giving us a critical role in helping our clients manage the transition, not only at Epsilon, but also at a group level. As you've heard us say before, one of the reasons that we made the decision to acquire and partner with Epsilon because it had a competitive advantage in this environment.
It's what we call its CORE ID is not reliant on third-party cookies, as it's built on access to advertisers' first-party data and activating directly on publisher websites. On this front, Epsilon has long been building a direct publishers network with today something like 8,000+ publisher partnerships, and that's obviously growing. It's partly this competitive strength is why we actually expect to increase Epsilon's market share in a cookieless world, and given Epsilon's superiority in actionable data and access to inventory, which will help us drive higher performance for our clients relative to others. Arthur mentioned about our business, new business track records. One of the things we saw notable during 2021 and Q1 of 2022 is the increasing expansion of Epsilon's capabilities outside of the U.S.
It's really that growing geographical spread which has allowed us to put Epsilon at the center of our proposition, our model to clients, where we're getting this aggregation of data, media, creative, combined through technology, which is really giving us this unique ability to help our clients partner through this increasing complexity.
Thanks, Steve. Actually, today is the third year anniversary of the announcement of the acquisition of Epsilon. Most of them are sleeping, as you know, a big part of the business is in the U.S., but I will send them a note later. I think that maybe you remember, people had doubt at that time, we said when we made the acquisition on a business that was flattish, that we will be growing it by 3%-4% at that time, on the long term. The truth is that we are beyond that. We are doing better than this.
The thing that we did not anticipate, I wish we were visionary, but we were not, is the disappearance of the third-party cookies will put us in a unique situation to really help our client build their marketing on identity, which is gonna be the only way to respect privacy and make sure that we deliver the efficiency that our client needs. Steve gave you a feel of what we are doing. It's a huge job because it doesn't come overnight, but we are very advanced. We have a very clear roadmap. We have a weekly point on that. It's true that beyond delivering personalization at scale and lead personalization at scale, that was the objective of Epsilon, and you see it in new business track record.
This is an opportunity with the third-party cookies disappearing that we will definitely catch.
Very clear. Thank you.
Thank you. We will now go to our next question today from Lisa Yang from Goldman Sachs. Please go ahead.
Good morning, and thanks for taking my questions as well. The first question is on the outlook. You gave us obviously a lot of reasons why you still feel confident about, you know, reaching the upper end of your guidance range. Could you maybe share with us how much of that full year revenue is already secure? And maybe any sort of the building blocks of that between, I guess, new business or the pipeline of products at Sapient, and your performance expected at Epsilon. So any color on that would be really helpful, and I'm sure you appreciate the market is very nervous about the visibility you have in your businesses. Second, a question on Sapient.
Clearly, the growth has been extremely strong. Can you talk about, give us a bit of color in terms of the performance by practices, by verticals? And also talk about like, you know, the pipeline of projects, especially in international. Should we expect that to sort of ramp up from here? And the average length of the projects as well, that would be really helpful. The third question is related to, again, Sapient. Given the strength of the growth there, how should we think about the margins? I think historically the margin of Sapient was, probably lagging the rest of the group. I'm just wondering, are we now in line with the group?
Should we expect a lot of, you know, further tailwind from that? These are my questions. Thank you.
Thank you very much. I will take one and two, and I will leave you the third one with margin, and maybe you can elaborate on the point I'm making on Sapient, Michel-Alain Proch. So first of all, on the outlook, what I can tell you is that the upper range of the 4%-5% is secured. We know exactly how to deliver that, taking into consideration the macroeconomics, okay? What is interesting to see is that we are planning at the moment is definitely to see double-digit growth for Publicis Sapient. Let me only remind you that last year we already grew by 14%.
We're gonna deliver double-digit growth on the 14%, which, again, I think, is showing that the change of leadership, the new model we put in place around business transformation, and the fact that we are going on the industry vertical is really paying off. As you will remember, by the end of 2019, we were negative with Sapient in the U.S. We have grown by, I mean, in Q1 last year, 11%. This year, 17% or 16%. You can see the difference. First assumption is Publicis Sapient growing double digits. Second assumption is Epsilon to be accretive to our growth, definitely. With a point that is very important is Epsilon contributing also to the growth of Publicis Media.
This is why, by the way, we see our media activity to be strong, thanks to the new business wins we had last year. Finally, what we are seeing on creative is to be positive also. I'm not gonna come back on the outlook as I did it on the last question, but hopefully it give you a bit of color. When you look at Sapient, a few points. First, you mentioned it, maybe Michelle can give you more detail on the numbers, but there are two good news in our number when it comes to Sapient. I mean, I won't say good news because it was anticipated, but I think there are two things to take into consideration. First is the outstanding momentum we're having in the U.S. Again, tough comps and already great number.
Don't forget that, starting in Q2, Sapient is gonna face some high teens versus last year, and we're still gonna deliver double digits. Second, international is coming back strongly. Honestly, I shouldn't say international because it's not fair for the rest of the world except for the U.K. because they are performing very well. The topic, as you remember, was the U.K., which is a big part of our international business that, again, did not lose any client, did not need to be reorganized because they were performing very well and actually we copycat the model we are having in the U.K. in the U.S., but had some very big client cuts that are over now and investments are coming, and on the top of that, got a great new business momentum.
On the categories, I mean, this is the beauty of Sapient is that they are part of the market where there is a growing demand in every category for a very simple reason, which is all of our clients in every category need to transform if they want to continue to grow. Having said that, we are seeing a very good performance in financial services. We are actually seeing a very good performance in auto. Not that much because we are increasing our revenue with our existing client, but we have new clients that are considering that Sapient offer could be better than the other system integrator. So overall, a very good dynamic. Michel, you wanna add a point on the margin?
Yeah, and just adding up to, you're right, financial services, auto, and retail, in which we have posted a strong performance too, both in the U.S. and in the U.K. As far as margin is concerned, the Sapient margin has been improving quarter after quarter, and I expect it to carry on improving and contribute to the group margin, which, as you know, will be for the full year at 17.5%. Right now, Sapient is in a very high recruitment phase on its platform.
It's true in India, as we have already mentioned, which was the major platform of Sapient. Plus on top of that, you've seen the acquisition of Tremend in Central Europe in order to give another delivery center. It's clearly what is our priority right now to service our client. Just to finish up with a very strong pipe and a very good visibility, Lisa.
That's very clear. Thank you very much.
Thank you. We'll go to our next question now from Omar Sheikh from Morgan Stanley. Please go ahead.
Morning everyone. I have three questions as well, a couple on the outlook first, if I may. Arthur, could you maybe just talk a little bit about what you're assuming in your full year guidance of 4%-5% growth, maybe in terms of you know, how long you anticipate Ukraine conflict to go on, you know, how long you expect commodity price inflation to remain elevated? Or maybe put another way, you know, you mentioned that you should have upgraded your guidance for the year had it not been for these uncertainties. Maybe you could say if you didn't have those uncertainties, what would the full year guidance have been raised to? That's the first question.
Secondly, on new business, it's been a big tailwind last year and this year you've done a, you know, tremendous work with your pitch activity. Could you maybe quantify what the sort of new business impact is gonna be this year? Maybe you could comment on kind of pitch activity during 2022. Do you expect it to be, you know, offensive or defensive for Publicis in this year? Finally, if you could perhaps for Michel-Alain, could you just quantify what the drugstore and French outdoor impact will be for full year 2022, just in either in percentage terms or sort of absolute euro revenues? Thank you very much.
Thank you, Omar, and really sorry to contradict your prediction. Look, it's a very, very big question, so I don't know exactly where to start. I'm gonna come back on the outlook first. First of all, hopefully, you will understand that we're not gonna draw any speculation with regard to the evolution of the current crisis. We have gave you the factor that we have taken into consideration that make us absolutely certain to deliver the higher bracket of the 4-5. I think that if we have learned something from the past year is that we shouldn't make too much prediction, we need to be agile.
Now, trying to give you a bit of color, and if I take our biggest region, taking into consideration the challenge we can encounter on the macro level. First, we definitely expect the U.S. to remain very solid. For a simple reason is that we have a very good commercial momentum. But as I said, we should not forget that in H2 in the U.S., not only we grew by 10% in 2021, but we actually grew by 8% on a two-year basis, which means that the comparables are very high. We are very pleased to see how Europe is recovering, and Michel-Alain will give you more detail about media and transport and the drugstore in a second.
I mean, it's good to see that the underlying trends remain very solid and there are concrete signs of turnaround in general and in Sapient in particular, which is a good thing, and we see new business ramping up when you look at the big win we had. Again, we feel that the recovery is there. We need to remain vigilant because there could be a potential deceleration in several countries due to the conflict, due to inflation. What you need to take into account is that our exposure in Europe, again, make us very confident to deliver whatever the scenario. Asia. Asia is smaller. It's, you know, around 10% of our revenue, but it's growing very fast. It's a place, and I'll come back to that maybe in new business, it's a place that is very important for our clients.
You know, when you win a L'Oréal in China that is such a growth engine for them, it says a lot about our overall business, for example. As you have seen, we have a very good start of the year after a very strong Q4. Maybe you remember at the same time last year, I told you the results were not great, but I said, Don't worry, it's coming along. It came actually very nicely. Here again, a bit like the U.S., these are two places, U.S. and Asia, where we have outperformed the market for the last two years. The comparables are tougher, and we still need to have an eye on the different lockdowns, particularly in China. We don't see any consequences at the moment.
New business, you know, I'm not gonna come back again and again on the fact that we topped the new business ranking last year. As I like to say, maybe the thing that I'm the proudest of when it come to new business last year is not what we have won, but is what we have not lost. Because at the end of the day, I think that when you look at the new business track record for everyone, winning is very important because it shows that you have a model for the future, but keeping your clients means that you have a model that is not only for the future, but working in the present. At this game, if you look back, you will see that we have a very strong track record.
I would say that the new business impact on our growth is between 100 and 200 basis points. Again, it's very difficult to put a number onto that, a number can say a lot of things. What matters the most for us, honestly, is our ability to have new clients with new expertise that are trusting us every day, and that we can of course grow in the future. We were surprised by the level of activities in terms of new business in Q1, and very pleased by the track record we had. I don't see at the moment the same level of activities for Q2 and Q3. I think we're gonna see more activities in Q4.
Having said that, this is what I said in my speech, is we are also very conscious that what matter at this stage is of course to deliver on the promise we have made to new clients. This is where we're spending most of our time in terms of new business team, making sure that we deliver. We have to make sure that our existing clients are very well armed for all the challenging situation they can face at the moment. As I said, we're gonna be very, very selective in the pitch we will take on in the coming quarter. Maybe Michel-Alain, I gave you enough time to find the number that Omar was looking for. If not, I can talk about new business even more if you want.
No, it's okay.
Yeah, no problem.
I have the number. The impact of Media Transport on the year, Omar, is very different from one semester to another. We had a comparison base that was extremely low in Q1 2021. The impact, which is relatively important for this quarter, looking at the year, should not be beyond 0.3% for the year, so 0.3-0.4% max.
Brilliant. That's very kind. By the way, Arthur, you're always proving me wrong. Thanks.
Thank you very much, Omar.
Thank you.
Next question. We still have 6, 7 minutes. We wanted to do that in an hour. There are more questions coming in?
We have a question now from Silvia Cuneo from Deutsche Bank. Please go ahead.
Thanks for taking my questions. Good morning, everyone. My first question is on the outlook regarding the uncertainty that you see on the impact of the evolution of the conflict and consequences of inflation. Can you please just remind us about how much visibility you have on budgets and how short notice can clients adjust their budgets throughout the year? If you have any thoughts on how 2023 could look like based on new wins, although I appreciate it's early now. Second question is on the sector performance. Can you talk through how you expect the sector performance to evolve in the upcoming quarters? For example, can automotive still remain in positive territory? Also just set some context about how the marketing budgets by sectors evolved during prior recessions. Thank you.
Thank you very much. What I propose, as time is flying, is we're gonna take the sectors and maybe I'll take the outlook question after, in order to wrap up, if it's good for you.
Yeah, sure. I think in terms of sectors, you saw the performance in our Q1 numbers, which all sectors are contributing to growth. If I have some that I'd like to underline is clearly financial sector, retail and TMT. That were the three of them above double-digit, which I think is reflecting not only the sector, but our own specificities of capturing growth, particularly in digital transformation.
It's a bit early to tell you the truth, to give you more details, and assess broader trends, particularly in this current fluid situation. Clearly, I think the main message we have is that despite these uncertainties, we are very well equipped to continue to capture the shift of our client spend to our data, digital media and obviously business transformation. Look, on the outlook, again, I think it's a bit early to give you a visibility for 2023. What I can tell you again on 2022, and hopefully we've been clear, is that there are a lot of things we don't know, the length of the conflict and of course the consequence on the global economy.
The magnitude of the impact on the supply chain shortage and the inflation that can come from that. We have discussed about that also, and of course, any major resurgence on COVID-19. Again, sorry for saying that, but we have tried to give you all the factors that we have put in place in order to secure the number that we are giving you. We feel very confident in our ability to deliver an organic growth that is gonna be at the upper end of a 4%-5%. With again, visibility on Q2, which is something that matters when you know that we're coming from a +17, and we feel very confident about the +5. As it is something that we did not discuss in your question so far, making sure that we continue to deliver industry high financial ratios.
We are in position to confirm, despite all the uncertainty, that we will deliver the 17.5% operating margin and the EUR 1.4 billion free cash flow. Again, three reasons for that, and I think it's important to be very clear on that, is what we have been able to do in the last year that is really paying off today, is to integrate into our creative and media operation, Epsilon and Sapient. We have been able to tackle what are the two biggest disruption in our industry. The shift from third party cookies to identities with Epsilon, and the shift from paid media to owned media with Sapient.
For all of those reasons, and coming back to your question, Silvia, despite the challenges that our client can face in the future, we believe that we are better armed to help them turn those challenges into opportunities. No doubt we have tailwinds with new business. Strong momentum last year that show the strength of our model continuing this year, making us very optimistic again in our ability to find the necessary growth we need to deliver on our targets and this platform organization. I mean, the fact that we have put in place now for more than two decades, thanks to the vision of Maurice Lévy, those shared services.
The fact that now Marcel is at the heart of everything we do, help us allocate resource, be flexible, train our people, recruit when necessary, and of course we have big activities on that in a way that is very different from our competition. When I talk about competition, it's on the broad scale, not only at the advertising industry. For all of those reason, we entering the rest of the year very confident in delivering on what we said in February before the world get into maybe a more challenging shape. We still have a lot to do to execute.
We are of course very, very focused on our client and that the point you made, which is, there never be a better time to be a transformation partner for our client, which we are and which is reflected in our number, notably with Sapient. I'm gonna end up, if I may, by thanking all of our teams that are on this call for their support, making sure that we have a thought for our friends and colleague in Ukraine, thanking our clients, and thanking you all for your attention. Thank you very much. Take care of you. Have a good day and talk soon. Merci beaucoup. [Foreign language]
Thank you. That will conclude today's conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.