Earnings Call: H2 2017

Feb 8, 2018

Today, and welcome to the full year 2017 results of Publicis Groupe. Today's conference is being recorded. At this time, I would like to turn the conference over to Arthur Sadoun, Chairman and CEO of Publicis Groupe. Please go ahead. Thank you, Roman. Bonjour, and welcome to Publicis Groupe 2017 earnings call. I am Arthur Sadoun, and I am here with Jean-Michel Etienne, our CFO. We are in Paris where you can actually do ice skating today in the street. It has been difficult to be all together in the room, but here we are. On the last calls we did, actually, the four members of the director were present. Our Secretary General, Anne-Gabrielle Heilbronner, is with us today. As Steve King, the CEO of Publicis Media. Bonjour a vous deux. Jean-Michel Bonamy is also with us and will be ready to take your question offline after this session. Today, we won't do a deep strategic update as we did in the two previous calls. As you know, we will hold a full investor day at the end of March to tell you why Publicis is better armed to turn the different challenges the industry is facing into opportunities for our group. During this call, we would like to do three things. First, of course, go through the 2017 number. Then review briefly what was achieved last year in terms of transformation and share with you the first encouraging results that we are seeing. Finally, take your questions. Now, if I may, let's dive into the presentation. I won't read the disclaimer, but please have a look as it is an important legal matter. Let's begin with the highlights of the year. No doubt, 2017 has been a challenging year for our industry. At Publicis, and in this context, we have actually been focusing on two things, delivering and transforming. Actually delivering while transforming, and we are going to spend time on that today. First, let's look at our financial performance. We deliver in 2017 what we expected in term of financials with solid results. When it comes to growth, we have succeeded in showing a sequential improvement during the course of the year. After -1.2% in Q1, +0.8% in Q2, +1.2% in Q3, we delivered +2.2% in Q4. It actually confirm our forecast of a better H2, which is at +1.7%, versus H1 at -0.2% with a satisfactory Q4. There are also some encouraging signs in our performance by geography. Jean-Michel will come back more in detail, but it's important to note that the U.S. showed a very strong recovery with +3.5% in Q3, and +4.5% in Q4. Here again, a sequential improvement from 3.5% in Q3 to +4.5% in Q4. Our offer and our organization are getting traction in the U.S., and I guess I will come back to that in the question. This is making half of our revenue, as you know, and it is where our transformation is the most advanced. It is for us a very good sign to see those first result there. When it come to margin, we always made it clear that controlling our cost base was among our top priorities. We were able to show a 40 basis point increase in our operating margin at constant restructuring costs. Operating margin rates reached 15.5%, including EUR 120 million of restructuring charges. At constant currency, we were even able to increase our operating income in value by 0.7%, even though restructuring charges were much higher than last year. Against the backdrop that you all know very well, I did not come back to that in detail, Publicis Groupe have foundation that are truly robust. Year-end net debt is at the lowest since 2014, amounting to EUR 727 million, with a reduction of more than EUR 500 million in 2017. Even after more than half a billion euros spent in cash dividends and share buybacks. This was driven by a strong free cash flow of almost EUR 1.3 billion. No doubt, if you take a step back and look at the global picture, Publicis Groupe is now stronger than one year ago. As an evidence of our confidence, the dividend for 2017 that we will propose to the general shareholder meeting in May amount to EUR 2 per share, up 8.1% compared to last year, reaching nearly 45% of payout ratio. We do not want to think that we are satisfied with those results. We take them for what they are, and this is what we are going to try to demonstrate. They are an additional proof that Publicis Groupe is resilient and that the model we are building is already showing some encouraging results. Despite market and, of course, our own challenges. We know that there is no other alternative than to profoundly transform ourselves to really bring to our clients what they need and to take the leadership of the market. It is the only way to deliver on the financial results you are expecting from us. I will now leave the floor to Jean-Michel for more detail on our performance. I will then quickly come back on our transformation during the last 12 months before, of course, taking all of your questions. Jean-Michel. Thank you, Arthur. Good morning, everybody. As usual, I will go through a few slides detailing our revenue for the first quarter of 2017, then revenue and results for the full year of 2017. As usual, you will see more detail which have been provided in the appendices that you will find in the presentation. Starting with the revenue, you will see in detail in the appendix on page 40 the impact of currency and acquisition revenue contribution. Revenue for the fourth quarter of 2017 was EUR 2.583 billion, down 3.1% versus last year. At constant currencies, the growth was +2.7% in Q4. Currencies added 5.7% negative impact, and acquisition impact was very small at +0.5%. As already covered by Arthur, the most important is the organic growth. At +2.2% for the quarter, we are delivering another sequential improvement after a -1.2% in Q1, +0.8% in Q2, and +1.2% in Q3. Revenue for the 12 months of 2017 was EUR 9.690 billion, down 0.4% versus last year. At constant currencies, however, growth was +1.3% for the full year of 2017. The impact of currencies was a negative 1.7%, and acquisition contribution was +0.5%. Hence, organic growth for the full year was +0.8%. When we look at our Q4 revenue by geography now, Europe was -1.8% after +2.4% at the end of September. There is the combination of several factors, including tough comps, as Q4 2016 was up more than 5%, and a weaker advertising market in some countries, including Germany and Spain. We are really pleased to see North America accelerating in Q4 at +4.4% after +3% in Q3, and in particular, as already detailed by Arthur Sadoun, the U.S. went up 4.5% in Q4 with the benefit from last year's accounts wins. By client sector, FMCG showed a slight improvement over Q4 compared with the performance at end of September. APAC was down 0.4% in the quarter, mostly due to China, where one of our agencies has been under strategic review, and we are expecting to close this disposal of this entity shortly. We hope to see that by currently in Q1 2018. Excluding this agency, APAC was up 3.4%, very important. Latin America was up 8.7%, driven by the strong growth in Brazil, the latter going up more than 20% over the last three months of the year, benefiting from the wins of Petrobras and Bradesco earlier in 2017. Middle East and Africa were up 6.4%, mainly due to some phasing in United Arab Emirates, +25% in Q4 after +1% at end of September. Overall, the Q4 organic growth for the entire group was +2.2%. If we analyze now the organic growth by geography for the full year of 2017 on page 10. I will just read the slide because the details are more important for the quarter. Europe is +1.3% overall, during the year 2017. North America, +0.5%. APAC, -1.5%. Latin America, +4.8%, and Middle East and Africa, +4.4%. This is leading to an organic growth rate of the group at +0.8%. On page 11, we are highlighting the main countries in terms of growth for the full year 2017. Above 10% growth, we had Argentina at +23%, Russia at +13%, and Turkey at +19%. Vietnam is also at +19%. Between 5% and 10%, Australia was +7%, India at +6%, Mexico at +8%, U.K. at +6%, and United Arab Emirates at +8%. Between 0% and 5%, you will find Brazil at +5% for the full year, France at +1%, Italy at +4%, South Africa just above flat. U.S., as already mentioned, was at +1% for the full year, but a very strong second half of the year with Q3 at +3.5% and Q4 at +4.5%. Some countries are in a negative territory for the entire year, such as Canada, China, Germany, and Spain. Now, I will cover a very specific subject on slide 12. There are several points which have to be mentioned. Our auditors and few financial analysts received an anonymous letter accusing Publicis Groupe for anticipating the implementation of IFRS 15, and this should have been done in order to boost organic growth. This is, of course, totally wrong. We never did it. There was clearly an attempt of destabilization. We formally denied those allegations on January 23rd, first by immediately informing the AMF, the French stock market authority, and then by immediately issuing a press release to inform the markets. As per the rules, the implementation of IFRS 15 is happening from January 1st, 2018, and the impact will be more than EUR 600 million of revenues to be added to the EUR 9 billion 690 million revenue. There will be other small impacts, and we will disclose these impacts obviously at the investor day. As this letter created some concerns, we decided to conduct a full analysis of our methodologies, which confirms that we are fully compliant with IFRS and our organic growth calculation methodology. Totally consistent with what we did in the past. We want to be fully transparent, and as you know, revenue recognition is made contract by contract and is partially judgmental. It is recorded gross when the group acts as principal and net when the group is acting as an agent. The finance team spent a significant amount of time to ensure that the classification of each contract is correctly done. We talk about the review in that case of thousands of contracts. Our auditors spent time in reviewing this matter, and it has been concluded that our organic growth has been calculated under the rules and on a consistent basis. Certain type of contracts were treated on a growth basis in 2017, when they were treated on net basis previously. The activities involved were production and events. To make it clear, no media or advertising activities were involved in that reclassification. The table on slide 12 indicates the impact of reclassification on organic growth we reported. As you can see, the impact was EUR 33 million for the full year 2017, representing 40 basis points. It is absolutely not material, but it has been stated by our auditors. For Q4 2017, organic growth actually included a negative 90 basis points impact due to this reclassification. I guess we have covered this matter, and you get here all the details, possible details. Moving to page 13 now, starting with the detailed P&L. 2017 revenue was at EUR 9 billion 690 million, down 0.4% year-on-year. EBITDA at EUR 1 billion 666 million, decreased by 1%, and the operating margin reached EUR 1 billion 505 million, which represents minus 0.7% versus last year. As Arthur Sadoun said, going up 0.7% at constant currency. Operating margin rate was 15.5%, 10 basis points below 2016, and I will come back to this obviously on the next slide. As a result of lower interest and tax that I will cover separately, the headline group net income was EUR 1 billion 37 million, up by 2.2%. Amortization of intangible was EUR 55 million net of tax. There was an impairment charge this year of EUR 150 million, which relates mainly to Genedigi, this agency that we have in China that we are currently disposing, and also Proximedia. The U.S. tax reform had a EUR 61 million positive impact in 2017. I will provide more color on this a bit later on. The revaluation of earn-out was an additional charge of EUR 66 million, which is always seen as a positive as it implies improved earnings prospects coming from the related acquisition. All in all, group net income for the full year of 2017 was EUR 862 million. Let me come back to the operating margin details with two slides. First of all, personnel costs went down 2.2% and represent 60.4% of revenue versus 61.5% last year. With these improvements, we are seeing the benefits of the simplification of our structure launched early 2016. Restructuring costs were EUR 120 million versus EUR 73 million last year. For 2018, we are expecting restructuring costs to be close to EUR 100 million as more transformation measures are being implemented and as we are accelerating the integration of our operation. Country led organization is a clear example of this reorganization. Other operating expenses represent 21.1% of revenue, an increase of 60 basis points versus last year. I will comment on this at time of the source of change to operating income on the next slide. Depreciation represent 1.7% of revenue, in line with last year. Overall, the operating margin rate was 15.5%, decreasing by 10 basis points versus last year. At constant restructuring charge, operating margin rate went up 40 basis points, which is a satisfactory performance given the low organic growth rate we achieved in 2017. It is confirmed that our transformation program starts to deliver on the cost side, and we expect more to come in the future. If we move now to the next page, where we are presenting the change in operating margin as a percentage of revenue. There are a few items which deserve to be explained. This is a year-on-year change. First of all, as you can see, exchange rates and acquisitions had no impact on the margin rate year-on-year. As already said, we incurred a significant amount of restructuring charge in 2017, representing an increase of EUR 47 million year-on-year. If we eliminate this increase from the 2016 margin rate, the 2016 margin on a comparable basis would have been 15.1%. This heavy restructuring charge, of course, had an impact on the overall personal cost improvement that we have in 2017, which generate an overall improvement of 100 basis points, among which 70 basis points were due to a reduction in freelance cost, which indicates a better use of our permanent employees. This is totally in line with our expectation from the integration that we expect coming from the Power of One organization. As part of our transformation, we spent some money on key strategic IT projects. This represents 20 basis points in the change in operating margin. We also incurred some new business costs to sustain the effort to restore our growth rate. As I already indicated, at the end of June, we had an increase in training and seminar costs linked to the need to train our people in the context of our transformation. All in all, our 2017 margin rate at 15.5% is a clear improvement versus 2016 at constant restructuring charge. Moving now to the net financial expense on page 16. You can see that this chapter is now very simple. We had a reduction of our financial cost by EUR 13 million, with a total interest charge of EUR 61 million directly resulting from the net debt reduction. Regarding tax on page 17, reported income tax charge was EUR 312 million in 2017. It included a non-recurring EUR 61 million profit resulting from the recently voted tax reform in the U.S. This EUR 61 million profit was actually the net result of a EUR 139 million charge coming from the total charge on accumulated reserves by entities partially owned by U.S. subsidiaries, and also a EUR 200 million profit on the revaluation of our net deferred tax liabilities due to the benefit of the lower income tax rate in the U.S. This one-time EUR 61 million profit was excluded from our headline earnings and headline EPS, and also from the calculation of the effective tax rate, which reached 27.2% in 2017 versus 29.0% in 2016. Adding back some income tax on amortization of intangible arising from acquisition, headline income tax is EUR 391 million. For 2018, we estimate the effective tax rate could be improved on a sustainable basis by 100 to 200 basis points, thanks to the U.S. tax reform. On page 18, the headline earnings per share fully diluted grew by 0.9% versus 2016 to EUR 4.50. The increase was slightly below the 2% increase in headline net profit due to the issuance of 4 million shares to shareholders opting for the scrip dividend. On page 19, we are proposing a EUR 2 dividend for 2017, up by 8.1% compared to 2016, leading to a dividend payout of 44.4%, up almost 300 basis points versus 2016. This dividend will be proposed to the AGM of May 30, 2018. As it has been the case for several years, we will offer our shareholders the option for a cash or a scrip dividend. On page 20, this is to show that we have been able to increase our dividend and dividend payout for several years. We should be able to distribute almost 45% of our earnings to our shareholders after approval from the AGM in May 2018. On page 21, we delivered once again a very solid free cash flow before change in working capital at EUR 1.287 billion. Interest paid went down as reflected in the P&L. CapEx were EUR 131 million, as some real estate CapEx projects have been postponed to 2018. With the ongoing transformation that we are implementing, CapEx are likely to be roughly EUR 250 million in 2018, including a non-recurring EUR 70 million relating to a real estate optimization plan that we will detail at time of our next investor day. Regarding the use of cash on page 22, the good news is that we are improving our working capital requirement, change working capital, in 2017, with a cash inflow of EUR 69 million. This is better than expected as we have been able to mitigate in 2017 the impact of a few media account losses. For acquisitions, we only spent EUR 57 million for the full year 2017, in line with our focus on organic growth. The earn-out and buyout altogether represent a cash outflow of EUR 264 million. We bought our own shares to fund our share incentive plan for a total amount of EUR 337 million. As a result, the net debt decreased by EUR 517 million versus the end of December 2016. Let's move now to the balance sheet on page 23. Few comments. To start, all the lines were impacted by the change in exchange rate as the U.S. dollar was weaker versus the euro on a year-on-year basis. Our negative working capital showed a decrease, which was due exclusively to the foreign exchange impact as the U.S. dollar spot rate was lower. The line net assets held for sales represent the deconsolidation in the balance sheet of the Chinese agencies that we mentioned before. Coming back on the net debt on page 24, average net debt in 2017 was EUR 1,980 million, down 17% year-on-year. Net debt at end of December 2017 was EUR 727 million, down EUR 517 million over the last 12 months, including EUR 517 million in cash dividends and share buybacks over the period. You will see more detail in our net debt in the appendix on page 45 to 47. On page 25, our financial ratios improved as a result of the deleveraging of the group. Our net debt to equity ratio improved from 0.21 times to 0.12 times, showing a very strong balance sheet. Average net debt to EBITDA was 1.2 times in 2017, below our 1.5 times objective. To finish my presentation on page 26, our liquidity is slightly above EUR 5 billion at the end of December 2017. Now, Arthur will continue the presentation, and afterward, of course, I will be available to take your questions. Thank you, Jean-Michel. As I was saying during the introduction, 2017 was not only a year where we delivered financially against our expectation, but we also accelerate our transformation to lead the change in our industry. This attitude towards a disrupted environment has been the trademark of Publicis since ever. It is in the DNA of our company. Because we are continuously listening to our clients, we have not waited through the leadership of Maurice Lévy for a strategic change. Although this will be the core of our Investor Day in March, let me give you some highlights of what has happened last year. In 2017, we have set a vision that I presented to you in Q2: become the market leader in marketing and business transformation. We have reorganized the way we go to market to offer to our clients what they really need, transformation to win in the digital age. Our end-to-end offer is unique, as we are the only company in the world that is credible at scale with CMOs on one side, CIOs on the other, that we can connect. Our clients want to reinvent the consumer journey to create new engagement. It is about making sure that you take the leadership in terms of consumer engagement. They know that to do so, they need to transform their business model thanks to technology. We can do both in a connected way, putting data at the core to always take the right marketing and business decision in this ever-changing world. This new model calls for a new organization, and we are implementing it. We are shifting our organization from a holding company to a platform. First, by putting our clients at the center. We have appointed 35 global client leaders for our top clients with a single P&L, representing one-third of our revenue. Second, by breaking the P&L silos at country level in order to make sure that we truly integrate discipline. This is absolutely critical. We have implemented our country model in France, in the U.K., in Italy, in Germany. We expanded it in APAC last week, and we have created a unified Comex in the U.S. Third, by unifying and scaling our expertise in data, content, and technology. We have a huge advantage there, and we will spend a lot of time on this point during the Investor Day, showing you concrete example through our clients and the kind of value we are delivering. Last but not least, and I hope it will come back in the question, we are putting our people first. We have appointed a Chief Talent Officer and refined the training and development program. We are also building Marcel, our platform that will connect our 80,000 employees, giving them the opportunity to share, learn, and create more. As you may have noticed, Microsoft has decided to partner with us in this ambitious journey to redefine the way we work. Satya Nadella, CEO of Microsoft, has personally committed to make Marcel a success. As you can see, we are building the right organization to serve our client best, to be focused on delivery, and be efficient on resource management. This is also a point where we will spend a lot of time in London in a month. Finally, in 2017, the supervisory board completed the succession with a renewed directorate. We have also reinforced our decision-making committees. We have appointed, during the summer, an executive committee and management committees. The management committees, on a totally flat organization, is responsible for 100% of the P&L of the group. This is how you integrate. You will be able to meet them during the Investor Day and to understand how they are driving the change at Publicis. This is extremely important for the directorate. You need to meet those people. You need to understand the project we have got and why we are leading the change in the transformation of our industries. More than ever, all the energy of the group is mobilized in executing our strategies. We know that execution is key. This is where this group is spending 100% of its time. I will actually use this opportunity to thank them for the outstanding work they have done this year, obviously with their team. I will also take the occasion to thank Maurice Lévy, the Chairman of the Board, not because he is listening, because I know he is listening, but because he is a strong support to deliver those results and the collective dynamic we are creating together is an incredible strength for the present and for the future of Publicis. As I said, although it is too early to draw conclusion on the positive effect of our transformation at this early stage of our journey, it is already leading to encouraging first results. At the moment where our industry is being challenged, we are seeing some very reassuring signs for the new model we are building at Publicis, with much proof of our attractiveness. First, on talents. At Publicis, we have an amazing team, and here again, you will meet some of them during the Investor Day, and I can't wait for that. But at the moment of transformation, it is critical to invest in order to retain, train, and also attract the best talent of our industries. On attracting the best talents, 2017 was very impactful. We have appointed two major industry leaders as head of our top countries. Agathe Bousquet joined from Havas and is driving all the group activities in France. Annette King, coming from WPP, will lead the group in the U.K. We are driving the change in our organization thanks to our new Chief Talent Officer, Emmanuel André, who joined from Omnicom. Last but not least, we have appointed a General Manager, Véronique Weill, former CEO of AXA, who is pivotal in making our transformation operational. As you can see, 2017 was a very important year for our attractiveness when it comes to talents. I am very happy to see that the momentum is actually continuing in 2018 with some of the most breakthrough news of our industries. Nick Law, one of the most inspiring creative, with a unique ability to shape the alchemy between technology and creativity, which is exactly where we want to be, will join Publicis Groupe. He is coming from R/GA, an IPG agency, and will be our Group Chief Creative Officer. The second criteria for attractiveness is obviously new business. I won't expand too much on it, but I will give you a few example that illustrate the dynamic we have created with our new offer. On the marketing side, we won new media accounts with Lionsgate or Southwest Airlines in the U.S., and what was the Pitch of the Year in the U.K. with P&G. We have also good momentum with L'Oréal by winning and expanding our relationship in France, as you can imagine, France matters for us, but also winning from competition in Germany. Creativity remain at the core of Publicis' offers, and we have proved it by winning one of the most iconic brands globally, Diesel. But 2017 also shows some great success for our digital business transformation activities. You already know that with Capgemini, we have been appointed by McDonald's to refine all the digital experience of their restaurants. There are also additional success. I won't come back on all of them, like Lloyds or Nationwide. But if I may, I will take some time to go through one of our recent wins, Carrefour. As you know, Carrefour has engaged in an ambitious transformation to strengthen its e-commerce and become truly omni-channel. Carrefour is an historical client of Publicis in marketing and communication. Thanks to the knowledge acquired by our team on consumer and on brand, and thanks to the technology and consulting expertise from Publicis Sapient, we have been chosen by Carrefour not only to change their marketing but also to transform their business model and implement their omni-channel strategy through the creation of a unique platform. This is a concrete example of the convergence between marketing transformation and digital business transformation, where Publicis Groupe has a unique role to play for their clients. Voilà. That is it for 2017 in 35 minutes. We will now meet very soon for the Investor Day. At this occasion, we will present our growth and margin objectives revisited in the light of the new context of our industry, but also in the light of our transformation, and this is why we will need a full day. We will do the same for our strategy and the tools we are implementing to achieve our goal. We will try to be very precise. If you take a step back and look at these last years, many events have affected our industry. The Mediapalooza, the ANA report, have both undermined the confidence in our sector, maybe Steve King will come back on that. Digital disruption and new consumer behaviors have caused considerable pressure from advertisers. Of course, the profound changes brought by technology and data have radically transformed the way we operate, and by the way we will operate. To deal with this relationship and economic turmoil, we have undertaken a restructuring, and even more importantly, strengthen our position in technology, in data, and talent, to put us in a good position for the future. We are now accelerating and developing our model, and we will explain it during the Investor Day. While the objective set in 2013 need to be revisited, as you all anticipated, I showed you the consensus, we have two pieces of good news that I want to share with you today. The first good news is about growth. We will elaborate on this during the Investor Day, but the reason why we are investing in digital data and talent is to break away from this sub-growth cycle. As early as 2018, we will be able to post a higher growth than 2017. It is an achievement in the current context, in particular, compared to what some of our competitors have been announcing. Also, we expect a positive Q1, with a noticeable swing compared to the previous year, where we reported -1.2%. The same applies for Q2. The second piece of good news is about margin. We have been making significant effort on costs, and I want to thank the team for that. Some of the saving made are reinvested and will be reinvested in IT, data, and talent. But on the top of those investments, we expect multi-year improvement of our margin, starting as early as 2018. We will obviously give you much more detail during the Investor Day. Once again, we are giving you rendez-vous in London on March 20, and now, I guess, Anne-Gabrielle Heilbronner, Steve King, Jean-Michel Etienne, and myself are going to take all of your questions. Thank you very much. Thank you. If you would like to ask a question at this time, please press the star or asterisk key, followed by the digit 1 on your telephone. Please ensure that the mute function on your telephone is switched off to allow your signal to reach our equipment. If you find that your question has already been answered, you may remove yourself from the queue by pressing star 2. Again, please press star 1 to ask a question, and we will pause for just a moment to allow everyone to signal. We will now take our first question from Annick Maas from Liberum. Please go ahead. Good morning. I have three questions today. My first one is, P&G suggested that 2017 was a transformative year, given they cut the number of agencies they work with. I was wondering, what were the main learnings for you navigating through this, and how could you apply these potentially if 2018 ends up being another tricky year? My second one would be, on Sapient, if you can just elaborate on who you compete against for the McDonald's and Carrefour accounts, and also maybe comment on the pipeline for Sapient. The last one is on a potential larger buyback. I think in summer you mentioned that the focus would be on deleveraging, but now, given the current share price, that might offer an opportunity here for potential buyback. If you could comment on that, please. Thank you very much, Annick. If I understand, there are three questions, P&G, Sapient, and buyback. I was about to distribute the question, but I guess the first three ones are going to be for me. Steve King is looking at me smiling. You will wait for next. You will have one. Don't expect anything. Let's start with P&G. First, I want to be very clear. I will not make any specific comments on a specific client, in this kind of call, and never, by the way, because these are confidential information. I will make a few remark anyway. The first is, as I always say, I think that blaming our client for our own difficulty is a serious mistake. The difficulties that our client have been facing have been for years, and they are actually going through it, some in a very radical way, some a bit slower. Whatever they do, I think it is important to acknowledge that there is nothing new there. By the way, I think it is becoming very difficult to treat FMCG as one category in term of success or failure. You have some FMCG companies that are moving fast and having extraordinary result already. Some that have taken the things very courageously and are making the right change, and some that are having difficulties. We should not put them all in the same bag. What I will say about P&G, because you give me the opportunity, is actually what I think is a nice story, but more importantly, because we want to give you concrete sign of the benefit of our transformation. What has happened in the last 3 years with the media pitch that has happened at P&G, here again for efficiency and transformation reason. As you might remember, we had a difficult news 2 years and a half ago now, where we lost the media pitch of P&G in the U.S. This was a blow, because it was important for us, and as you know, P&G is an important client. We took it as a base for our transformation. It shows to our organization and to the market that if we want to be the most competitive group in the industry, it was time to change. This is what we did, and this is what I just explained. Here again, don't judge me on words, judge us on results. What happened this year is this kind of result that we are looking for. Two years after losing the account in the U.S., we won it in the U.K. in what was the biggest pitch of the year when it comes to media there. Why did we win it? Because we came with the Power of One. You would have not been able to say who was from the media, who was from the digital, who was from the creative. We were working in the interest of the client, building consumer journey, and making sure that we transform media into a tool for growth. Here again, when it comes to this point, I won't do any specific comment. I will tell you only one thing, we believe that our model is fit for the challenges of our clients. Sapient, the problem, Annick, is that I can do 3 hours on your question about Sapient because you are touching the core of what we are trying to build, which is a model where we can, at the same time, bring marketing transformation and digital business transformation, i.e., making sure that we reinvent the consumer journey while getting deep into the business model of our client to actually make it more efficient, thanks to technology. With this, for McDonald's or Carrefour, we are roughly doing the 2 same things. We are a partner in communication, so we help them with their brand, we help them with their data, with their consumer journey. By the way, I will take one example, which is delivery. We want the creative part of the global delivery of McDonald's, and this is what has been our historical business. Where it gets interesting, now that we are in charge of the digital experience with Capgemini, we are also able to link it on an operational level. We are able not only to address to the consumer what he should know about delivery, but also to help McDonald's reinvent the experience to make sure that they can deliver. The difference between Carrefour and McDonald's is that in the case of McDonald's, we went with Sapient for a very simple reason, is that there was a very heavy tech part in the business that was properly done by Capgemini. We came there to build the architecture, the consumer experience, and being a high-end partner into the journey. When it comes to the pipe, there is actually a lot of opportunities for Sapient for a very simple reason. We are working with most of the important clients in the industry, and our ability to go to them and explain them that not only we can help them on the marketing side, but we can help them to transform and actually accelerate growth while extracting costs thanks to technology, is something that they like. On the last question, I want to be clear on the way we use cash. Our focus has been to return cash to shareholder through dividends. The proposed dividend, as you have seen in Jean-Michel presentation, is EUR 2 per share, which represent an increase of 8.1% versus last year, with a payout ratio that is increasing at 44.4%, to be precise. We have continuously increased dividend over the last six years, and our dividend paid as a multiple has been over a period of 1.7. When it comes to share buyback, because it was your question, it will be obviously a subject for the supervisory board. Thank you very much. Thank you very much. Thank you. We will now move on to our next question from Markus Diebel from J.P. Morgan. Please go ahead. Yeah. Hi, everyone. Three questions also from my side. The first question is on your account momentum. Clearly, ongoing acceleration, organic revenue growth. Could you tell us what the role of account wins actually played in this context? Clearly, in Q1, you were quite strong with the account wins of KFC, Molson Coors, and then Elyris. But then in Q2, Q3, you lost Sprint and Roche and Sanofi. So I am just trying to find out really, A, what the share of account wins was in your organic revenue growth in the quarter. More importantly, is it fair to assume that you will have a tailwind from account wins, at least for the next two quarters? That would be my first question. Second question is then on margins. Clearly, you got it for further margin expansion, but could you help us a bit more kind of squaring the different elements? Clearly, you have hopefully some operational gearing, you have some cost savings, and then most importantly, what kind of restructuring charges you envisage for 2018 from your current point of view? The third question, very simple. Could you give us an FX rate impact for 2018, roughly at current spot? Yeah, that would be very helpful. Thank you. Thank you for your question. The good news, I am going to be able to pass over on the table to make sure that everybody can talk. Just before I give the word to Steve on the revenue growth and opportunities, one of the big things that will happen in 2018 is that there will be a lot of activities when it comes to media and new business in media. What I propose is that Steve give you a flavor about what is and will happen when it comes to new business and growth in this category that is going to be at the heart of what we are going to do in term of growth this year. Okay. Thank you, Arthur and Markus. This is Steve. If I talk on the media profile, I think as everybody on this call will know, back in 2014 and 2015, we were in the midst of what we called Mediapalooza, and this is when we had this sort of unprecedented number of opportunities around the world with clients reviewing their media assignments. It is very clear now that we are entering already in the midst of MediaPalooza 2, and initial indications indicate that the number of opportunities in media are going to be even greater than we saw in MediaPalooza 1. To the question of momentum in media, like the entirety of this organization, really our new focus started about two years ago, and that was very much when we created the new media organization of Publicis Media, and that was one that we created a new organization focused around brands, global practices, very much trying to deliver trust and transparency to our clients. From our perspective, one of the reasons that we, I think, have got some positive momentum is that has a very strong pick up by our clients. If we look last year, we won some 440 assignments around the world. You have heard earlier on some of the wins, such as P&G, which Arthur has already mentioned, but in the U.S. and globally with Lowe's, Molson Coors, Lionsgate, Fiat Chrysler, Audible, L'Oréal, et cetera. If the question is about momentum, on the annual basis last year, we converted some EUR 7.5 billion of billings. To your question about momentum, in the last quarter, we actually won EUR 2.2 billion. So there seems to be positive momentum coming out of 2017. If we look at the opportunities right now, we are anticipating a stronger scale of opportunities in 2018 and 2017, and hence the fact that we are quite optimistic about growth and margin for the group. There is one other point that I would make, which is that although we have talked about, I am very much focusing on the media opportunities, many of these now come with connectivity with the rest of the group. We have already mentioned how P&G, but so many of these assignments now are coming because we are bringing in Sapient or digital or data or content or creative from the other parts of the group to build far more connected solutions. That is a trend that we saw in 2017, and I am sure that is going to continue in 2018. By the way, it has been part of our success. If you look at the win we had in 2017, the major one like McDonald's, Carrefour, Southwest Airlines, the fact that we can go with an end-to-end model with a group and an offer that is totally seamless is making the difference, because when you start putting the consumer journey at the center, you cannot afford to have silos. This is why our organization is starting to pay off. I will quickly take the question on margin expansion because it will give me the opportunity to come back on what Jean-Michel said on that, because it is an important point for us. With margin increasing in 2017 by 40 basis points at constant restructuring charges, 2017 results really demonstrate our ability to increase margin even in a low growth environment, which is of course an important point. This has been delivered through the internal transformation that we launched almost two years ago, and where we are now starting to see the benefit. We have been making significant effort on costs. Let us be clear, some saving has been reinvested in IT, in data and talent. We cannot tell you that we need to transform our industry and not invest on that. On the top of this investment to boost our future growth, as I said, we really expect a multi-year improvement of our margin starting as early as 2018. We will try to go in detail and give you KPIs when we see you in a month, but this is an important topic for us, as I said, because we need to demonstrate our competitiveness, because we need to increase our margin, and because to transform, we need to bring the right expertise and talent on board. I think Jean-Michel is going to take the FX impact. Regarding your question, we are at the beginning of February, so it is very difficult to make a prediction on what exchange rates could be for the full year 2018. All our budget, something that some of you know, all our budget are done assuming the same FX rates in 2018 on average as they were in 2017. So we budget with the same exchange rates, and we are not predicting and introducing new exchange rates. Having said that, I can see that exchange rates have moved significantly for the last four months. This is a fact. Please don't take my comment for guidance, but more for sensitivity analysis. Assuming exchange rates stay for the full year of 2018 at the level where they are today, the impact of FX on 2018 revenue could be negative by EUR 450 million. Again, this is not a guidance given the volatility. Okay. Perfect. That's helpful. Maybe one very quick follow-up. Yes, please. Is it fair to say that you have basically a tailwind on your organic revenue growth throughout 2018 from account wins and Roche, Sanofi, and Sprint will only hurt financial year 2019? Is that fair? Again, we will not comment on those numbers because they are going into a much bigger number. What is important is that we do believe that we have the structure, we have the team, we have the model, and by the way, we have a relationship with our clients and a position on the market that should create some tailwinds. We will see how it goes in the coming weeks. I think that reaffirming that we will deliver growth in 2018 and making sure that at the same time we improve our margin is a sign of our confidence in the future, confidence in our model. This is why, sorry to insist, I am doing the ad guy. I hope you will come to the Investor Day because until you see what we are bringing to our clients, it is difficult to understand the kind of headwind we are creating. Perfect. Thanks. Thank you. We will move on to our next question from Brian Wieser from Pivotal Research. Please go ahead. Okay. Thanks for taking the question. I am hoping you can clarify with respect to the IFRS 15 issue. You say that Q4 2017 organic growth includes the impact of reclassification on a gross basis, but then also say you have not implemented IFRS until January 1, 2018. I just want to make sure that I understand if the 2.2% for 4Q of 2017 is directly comparable to the 1.2% from prior quarter. Or would it have been 3.1% if not for IFRS 15? Then a related question, does reclassification impact one region more than another? Thank you, Brian. I guess I will leave Jean-Michel answer all the questions. First of all, IFRS 15, as I said, has not been implemented yet in the numbers that you have seen today, for sure. It is something which is coming for 2018 figures. We will add to the revenue, more than EUR 600 million to the total revenue of the group. This is changing a little bit the profile. But having said that, the 2.2% that we are disclosing in Q4 2017, are totally comparable with the 1.2% for the previous quarter and so on. During the year, everything is comparable and consistent quarter after quarter. Okay. What is the regional impact in the year ahead? Sorry, can't hear you. He cannot hear you, sorry. Can you clarify, will there be any regional disparities between where you will see an impact? You mentioned there is a scale of difference, obviously, but are the activities which cause a difference in revenue recognition skewed to one region over another? The impact that we are disclosing is mostly on Europe. Got it. Mostly Europe. Thank you very much. Next, please. Thank you. We will move on to our next question from Lisa Yang from Goldman Sachs. Please go ahead. Good morning. Thanks for taking my question. The first one is on your target about expansion of your margins in the coming years. Just wondering if you could share what the level of organic growth is required for margin to continue to expand. Clearly, you talk a lot about reinvestment, so if growth doesn't meet expectation, just wondering if you would still want to reinvest or the priority is really to expand your margin, whatever the growth rate will look like. That's the first one. Second question is on Sapient. I know you don't like breaking out the performance of the individual segments, but given it's really the core of what you're trying to build, I think we really appreciate if you can comment on the recent trends of organic growth and given the recent wins, what's the outlook that you expect for 2018? The third one is on your comments around Spain and Germany being negative in Q4. Just wondering if there's anything kind of market specific, is it like TV or any other media being impacted or is it because you're losing share? Thank you. Thank you, Lisa. I guess I'm going to take the first question on organic growth versus profits. I will then move on to Sapient and maybe I will ask Steve to say a word about Germany. Let's be clear. We don't want to oppose organic growth and making sure that we are competitive in terms of costs. As I said, what we have started two years ago is to make sure that we low down our cost base to invest in the talent and expertise we need to grow faster, but also to improve our margin. To answer very directly your question, we are, as I said, committed to deliver growth next year and improve our margin. We will do the work on the cost base whatever happen, because we are doing it and we will put the level of investment compared to the growth. If we can deliver higher than what we expect, good, but we have set a target that we think is at the same time reasonable and ambitious, and we will make sure that we adapt with one with another because we're not going to trade. We know that we need a margin expansion because we want to be more profitable, and we will never at the same time make sure that we deliver growth at the expense of the margin. On Sapient, no we can't break out. But I can tell you two things. First, the fourth quarter was good. Second, when you look at the kind of contract they can get, the kind of wins they are starting to have, really show that there is a momentum and we are extremely pleased with the organization that has been put in place. We are extremely pleased about the integration. Let's be clear, the acquisition of Sapient was a game changer for us, no doubt. You can say this or that, but at the end of the day, the winner in this industry will be the one that can converge marketing and business transformation. This is why you see some of the system integrators paying very expensively smaller agencies to get into that. They are right by the way, this is the way for all of us. But coming from the communication world, Sapient was the only company at scale that can transform a group like ours and bring the level of technology we need to be relevant in the next decade with our clients. Is that an easy journey? Of course not. You mix engineer and creative. But when you start to do it well, it creates magic, and you start to see this magic in the new business win and the early result we are having. I guess on Germany, I will pass to my friend, Steve. Thank you, Arthur. Lisa, to your question on the geographies. I think at the beginning of the year, we did not anticipate that Germany would be as weak as it was. If we had this conversation a year ago, I am sure we would have anticipated some weakness in the U.K., post-Brexit, but that really didn't come through. The situation in Germany, as you probably saw during the course of the year, Zenith forecast we downgraded from 3% growth to 1%, and very much connected to the political uncertainty, the lack of clarity on the coalition, which similarly actually we saw in Spain, with the Catalonia dispute. Both of those geopolitical uncertainties gave rise to uncertainty by consumers and by our advertisers. You will be pleased to know actually this year, the coming year, we think we will be stronger in both markets, particularly in Germany, where we think we are going to have some better success in terms of clients, but also we think the economy is going to be far more normalized and less uncertain. We have a great team in Germany, so we are very confident. Thank you, Lisa. Great. Thank you. Next, Lisa. Thank you. We will now move on to our next question from Charles Bedouelle from Exane. Please go ahead. Good morning, everyone. Thanks for taking the time. First, Jean-Michel, please apologize for my early comment. The bonuses were not down as much as I previously have written. Please accept that. Now, on with my questions. Two things here, really. The first one, you talk about the opportunities coming from Mediapalooza, in terms of growth and margin. Last time, the opportunity turned out to be actually a negative one, I think both on margin and revenue. I don't wish you the same. But are you baking in your guidance for the year or budget for the year any net wins, from Mediapalooza or the new Mediapalooza? That's my first question. The second question, I just wanted to come back on the margins, because you said that you reinvest a lot of the savings into talents and attracting the talents. But when I look at your numbers, it's actually the compensation ratio which is going down over the year, and the other cost, which is going up as a percentage of revenue. So I just wanted to clarify, if I'm missing something here relative to your comments. The third question, if I may, is you talked about some magic in what you're doing, and I wanted to know how magic or how good Q1, Q2 could be. If you give us just a little bit more color, that would be very helpful. Thank you very much. I come back to the magic at the end. Thank you, Charles. Steve will give you a word on Mediapalooza, although obviously this is strictly confidential information. There are things that you can read in the press, but he will give you word. Then our friend, Jean-Michel, will come back on margin. I talk a bit about magic, but I talk also about bonuses. So I guess, we'll start with Steve. Yeah. Thank you, Charles. As I already indicated, and as you've heard, we anticipate that Mediapalooza 2 could exceed the previous account reviews where, as we've indicated, perhaps we did not perform as we would have wanted to do. I think we're all much more optimistic about our prospects. Certainly, if we look at the number of reviews that are on at the moment, if we compare ourselves to the other major holding companies, we have a smaller percentage of accounts that we're defending compared to our competitors. We also look at our conversion rate last year, which steadily improved during the course of the year. But your specific question, we don't include accounts not won yet into our numbers. One of the things we will be doing on March 20 is we will be trying to quantify the total potential scale of Mediapalooza 2, and obviously we will have some more information of where we are in that process. Okay. Jean-Michel, I guess. Regarding the margin components. Okay, you are right. We are improving our ratio of personal cost. As I said in my presentation on the social change, there is a very important reduction of freelance cost, which is totally coming from the benefit of this new organization, Power of One. We are working on a far more integrated way, which means that people are sharing far more their needs within the company in term of headcount or people to deliver the work. This has led to a good reduction that we have seen coming significantly already in the first part of the year. If you remember what I said at time of releasing our June numbers, first half numbers. We saw that already. This is a direct benefit of our new organization. Of course, we are very pleased with that. Of course, we are also incurring some restructuring costs where there are people who are leaving. Of course, this has also some benefit on the rest of the personal cost ratio. Regarding the other operating charges, we have some costs which are totally linked, again, to the transformation that we are implementing. We are developing tools, system. There are a lot of IT projects which has some cost effect on the P&L. We are training the people, which has also some effect because this is complex. People have to meet together. There are seminars, which are, of course, implying costs that, of course, are totally linked to the transformation process. Thank you, Jean-Michel. I guess I will come back to the magic. We believe that magic needs two things to happen and make sure that it works with you. First, we need to be credible. Here again, this is what we will try to demonstrate in the months from now, showing you the value we are bringing to our client, because at the end of the day, this is how we bring extra growth and extra profit. Second is magic needs KPIs. We know that we have to demonstrate through the time that the transformation we are in are the right one. We are working extremely hard on this second point to try to give you KPIs. We will be financially or strategically that will demonstrate that, yes, what we are creating is unique to come back more seriously on the world. What we want to bring is a model that is unique, a model that delivers sustainable value for our clients, and we believe that we have a positioning that enables that. Now we need to deliver. When it comes to growth, will it be for Q1, Q2, or for the full year, by the way? We know that GDP growth is expected to be stronger. The truth is clients have not given us indication that marketing spending will follow. We have to be very cautious. This is why at this stage, given the lack of visibility in a way, we can only say that our organic growth in 2018, whether it be full year or in Q1 and Q2, will be better. We believe that it is already a good performance, and surely know well the market when you take into account the market context and what you can read from our peers, it is already an achievement, and you can make sure that we will try everything we can to accelerate, but at this time, this is the basis we can give. I want to take a minute on bonus to come back to your point. I will not comment the number, but, you are right to say, we cannot expect to lead the market if we do not have the best talent. To get the best talent, you need to make sure that they are rewarded. So I want to be very clear on the direct part there. By the way, our people are listening to this call. Bonus are extremely important for us. As we want to create an entrepreneur culture, we want people to feel that Publicis is there, and that together we are transforming and growing again. So there will be absolutely no compromise for that. Everyone who has delivered will get his bonus. We will never use bonus as an adjustment for margin. I want it to be clear on that. So it is true that bonus went slightly down in 2017 versus 2016. The truth is that is due to a mechanical effect that we can explain you if you have time, but I see that there is a lot of question. I am sorry to come back on that, but it was critical for me. So if you may, we are going to move to the next one because time is flying. We said that we'll do shorter calls, and we're already on one hour and 10, so I guess we're going to take the next question. Thank you. We'll move on to our next question from Adrien de Saint Hilaire from Bank of America, Merrill Lynch. Please go ahead. Hello. Good morning, everyone. Thanks for taking the questions, and sorry to be a bit of a doom monger, but I've got a few, perhaps, tricky questions. The first one is about consultancies. I'm curious to know what is the percentage of pitches where you clash with consultancies, how it has evolved in 2017 versus 2016, and what's your hit ratio, let's say your success rate, firstly. Arthur, you mentioned talent as a way to, well, as a proof of your attractiveness. But couldn't we say that over the last 18 months, there's been a lot of net loss of talents from the industry, the ad agency industry to consultancies, including from Publicis? Then perhaps for Jean-Michel, I'm just curious if your 2018 guidance is based on what we can see today, or is it based on the IFRS 15 adjustment, i.e., is the organic growth acceleration based on 0.8% or 0.4%, and same for EBITDA margin. Thank you very much. Thank you very much, Adrien. I will take your point on consultancy first. When our peers, the holding company, are saying that consultancy is not a competition, and for us is not part of our market, they are right. We do not meet any consultant or system integrator on the communication or media pitch today. We can meet them as a consultant, by the way. We can organize a pitch, but they are not participating. You will not find any significant win anywhere from a consultant or a system integrator when it comes to marketing. As you may have noticed, we have a slight difference with the rest of our peers, which is digital business transformation, thanks to Publicis Sapient. In the case of Publicis, yes, those consultant and system integrators could be fierce competitors on the other part of our business, on our second leg. Our competitive advantage there is not the size, because most of them are bigger than we are. But who cares? What you care is about serving one client. What we bring on the top of technology expertise is our understanding of the brand, our understanding of the data, and something that I said at the beginning, which is critical, our relationship with CMOs. Because no company tomorrow will transform if you do not connect the Chief Marketing Officer with the CIO in charge of IT. Our ability to bring both together in a connected way with data at the core make us unique when we fight against those competitors on these specific segments. On talent, sorry to say so, but we have not lost one talent that we did not want to lose. Not one. By the way, we have been attracting a lot. I know it is not in your industry, but when you look at the kind of profile we have been attracting in the last year, if you look a bit at the professional press, you will see how impressive it is. Which is, by the way, very reassuring because it means that we are still in the people business. The arrival of Nick Law in the U.S. has been a shock because we have demonstrated that our model was truly creative and digital as the company was running before, but at a scale which is obviously totally different. Just for the fun part, I encourage you to look at some brilliant people that have moved to consultancy and that are coming back now very fast to the ad world. Much. Next question, please. I have a question for Adrien that I need to answer. Oh, sorry. Yes, go on. A question on the 2018 guidance, of course, has been based on a totally comparable basis on what we deliver in 2017 because we are, unfortunately, not able to speak under IFRS 15 at this stage because the work is still in progress, and our budget has been based on the 2017 standards regarding revenues and not IFRS 15. We are planning to move to IFRS 15 at a later stage, but this step is not already done, unfortunately, I would say. Thank you very much. The growth objective is against the 0.8% that we post in the 2017, of course. Very clear. Thank you. Thank you very much. Thank you. We can take the next question, please. We now move on to our next question from Julien Roch from Barclays. Please go ahead. Yes, good morning. My first question is on Steve, who said that you won EUR 7.5 billion of billings last year. Is that a net number or a gross number? Because if it's a net number and you use the usual 2%-3% billing to revenue conversion, it looks like it's 130-190 basis points of benefit. That is my first question. The second question is on the reclassification of production contracts, which is not linked to IFRS 15. You told us it was a 40 basis point benefit in 2017, but was there any benefits in 2016 in Q3 or Q4? That is my second question. Then the third question is what makes you so confident that Q1 will be very positive, maybe indication of January or are you thinking behind you being so positive on Q1? Thank you. Thank you very much. I guess we are going to start with Steve, then Jean-Michel, and I take the last one. Thank you, Julian. It is very nice of you to suggest that I have won EUR 7.5 billion. Unfortunately, that was not the case. We have many, many thousands of people who have contributed to those successes. I said it was you. Well, I know. You thought that was you. You've passed on the comment about bonus. When we talk about the EUR 7.5 billion, that is the gross number. That is the billing number, which obviously as we have different sorts of assignments, is becoming very difficult to measure. But as you'll know, that is a gross number, and we do not provide conversion rates of what that converts to in terms of net revenue. But then I mean gross versus net, I mean, is that only what you won or is it what you won plus what you lost? That is the figure that we won. So also as you, as other people have pointed out, there were obviously losses as well. So similarly, when I talk about the EUR 2.2 billion in Q4, that was the gross number. Then my question will be- The losses during the course of Then my question will be, how much did you lose in 2017? So the loss number that is comparable to the 7.5. Okay. I think the 7.5 is the gross number. The 2.2 is the gross number. We'll need to come back to you and provide some clarity on the net number once you take out the losses. Okay. Thank you. Regard, yeah. To you. We have a problem with microphone. Are you okay? Yes. Regarding the impact of reclassification in 2016 in Q4, we had some impact. Q4 2016 has been impacted also, but much lower, which explains why we have this reversal in Q4 effect on Q4 2017. We have an impact in 2016, for sure. Maybe I will take briefly the third one because this is typically the kind of topic we will come back to, but as I say, we expect Q1 2018 to be positive. By the way, it will be compared with the negative start of the year in 2017 at -1.2%. To be clear, we are committed. It will not be an easy achievement in the context. When you look at the dynamic we are starting to have, we do not want to oversell what we do, but we are pretty confident that if we can continue to accelerate as we do, obviously, we will diversify our results. Okay. Merci. Thank you. Our time is flying. So I guess we still have time for another question. Thank you. We can move on to our next question from Tom Singlehurst from Citi. Good morning. Tom here from Citigroup. Just two very quick ones. Firstly, you talk about cross-selling as being one of the main sort of pillars of the investment case. I was just wondering whether you can give us, just as a starting point so we can benchmark you on this, whether you can give us the sort of current or historic overlap between Publicis Sapient customers and sort of traditional marketing services customers so we can track how cross-sell is progressing. Second very quick question, growth trends by discipline. I know you weren't comfortable giving us an organic growth figure for Publicis Sapient, but can you talk about any sort of variance in growth between traditional creative functions and media buying? Because as you heard from Adrien's question, I think there are a lot of people who are really worked up about pressures on media. It would be great to get a sense of whether you're actually seeing any negative trends in media buying on a sort of pure like-for-like basis. Thank you. Thank you, Tom. Quick question, quick answer. On cross-selling, this is a great question, and we believe this is a kind of KPIs we need to develop. I.e., how many clients from the advertising/media part could be cross-sell with PS. You are seeing the most significant of it through the wins we're having and the work we're doing. I don't want to push it back to the investor there, but this will be a KPI for sure, is our ability to cross-sell. But more than cross-sell, by the way, because I don't like the word cross-sell. It's about how deep can we go in the transformation of our clients. Because this is how we will demonstrate that our model is the right one. Is when you move from being a provider of communication to truly be a partner in the transformation of our clients. This is where, I hope you will see that we'll bring KPIs that will show how we're progressing through time, knowing, to be clear, that our objective is not to accelerate too fast. It's to do it properly, to deliver to our clients, and to show the business results that will then accelerate. Steve, you want to take the second question or you want me to take it? No, you take it? Sure. Come on. Tom, when you asked a question about media buying, certainly the media business was started out of That was the original roots, but the business now is much more widely dispersed than that. And now obviously we offer planning and strategy and content development and econometrics and analytics and data. While certainly the media buying business has changed quite dramatically and the platforms that we use, I think answering your question in a general perspective, we are seeing greater growth out of media in totality than the group average. I guess we will show you also during the investor day, the convergence between media and creative. What matters today is to bring one-to-one communication at scale. To bring one-to-one at scale, you need the power of creativity to build and produce a different message, but then you use the data and the media to make sure that it goes in the right way. This is the power of our group, is that at the end of the day, we, Steve, when it comes to communication and media, we have done the thing in a way in our key countries where we have killed the P&L silos to make sure that we bring this offer. We will see how it goes, but there is a series of pitch and experience that we are doing at the moment on this model, where I hope, let us cross finger, we can share the benefit with you when we see you in a month and a half. Looking forward to it. Thank you. Very much. Next question, please. Thank you. Last one. I am sorry because I promised that we will be short. We are not that short, but we want to make sure that we can take as much question as possible. Last question, please. Okay, we move on to our last question from Tim Nollen from Macquarie. Please go ahead. Great. Thank you for fitting me in here at the end. Sorry to come back with another couple of, I guess they are housekeeping questions on the numbers. Arthur, did you note on the 2017 number that you had a restructuring, I think you said of EUR 120 million, and I could not catch if you had given a number for 2018 expectation. Secondly, on the tax rate, I think what you are implying is to use an effective tax rate of 25%-26%. Then back on the IFRS 15, could you please repeat what you had said that it adds in terms of revenues? I wrote down EUR 600 million. That looks like a very big number, and if that is a 2017 or an 2018 number. Those are the quick numbers. Lastly, please, you mentioned, and I am very surprised this has not gotten more attention on the call. You said that the FMCG sector showed some slight improvement in Q4. I just wonder if there's any further comment you can put on that, and if we can get more optimistic on 2018 from that sector. Thanks. Okay. We'll take the last one, and I will let somebody else talk about the other one. The restructuring cost that we are incurring in 2017, you saw that is a very high number, which is EUR 120 million. But transformation is still not completed, and we will incur still a high number of restructuring in 2018 that we have estimated at EUR 100 million in 2018. Regarding the tax rate, yes, we will improve the tax rate next year. And the kind of rate that you have indicated in your question is absolutely correct, we will be between 25% and 26% tax rate. And what is important is to get that on a sustainable basis, obviously. Regarding the impact of IFRS 15, as you said, it has been the more than EUR 600 million is based on 2017 numbers. Because we are preparing a comparative for 2018 month by month, which is ongoing. But the more than EUR 600 million additional revenue that by implementing this new statement we will get in the P&L is based on the 2017 numbers. Last question. Thank you, Jean-Michel. I will take the FMCG question to conclude. Yes, we have a slight improvement when it comes to our FMCG client in Q4. I guess we cannot draw any conclusion on 2018 on that. What is important that about growth difficulties and challenges for the FMCG, I will leave you with a thought. Do not ask me to mention any name, but think about all the brands that you have known forever that are beyond FMCG. They will not disappear. They will be there in the year to come. They will go through some difficulties, they will go through some transformation. This is at the core of what we believe. We are a company that has been built through its clients. We became international thanks to our clients. Now we are transforming thanks to the transformation we are bringing to our clients. All of those clients that we have been working for decades when it comes to FMCG, the big topic for us is to make sure that we transform the relationship that we are having today as a communication partner to a transformation partner. We strongly believe that the day that we will be able to do that at scale, putting data, content, and technology at the core of our relationship, we will bring them the kind of growth and margins they need, and we will finish with this kind of discussion. It is not easy. It is going to be a challenge. As I said, it is not about the vision. We are pretty confident that we have the right one. We do believe that in 2017, as I said, we delivered what we were expecting, and at the same time, we have incredibly accelerated on our transformation. There is still a lot to do, but at the end of the day, I am finishing on your question, we believe that all of those clients will be there. They will transform, sometimes slower, sometimes faster, but we will be the one accompanying them in their transformation. I would thank you now. Here again, last commercial message. Come to London. You will have a good time, and I hope you will have a good experience. Hopefully, we will meet you all on the 20th of March in London. Thank you very much. [Foreign language]. That will conclude today's conference call, ladies and gentlemen. Thank you for your participation. You may now disconnect.