Good morning. This is the conference operator. Welcome, and thank you for joining the Publicis Groupe third quarter 2026 revenue conference call. After the presentation, there will be an opportunity to ask questions by pressing star and one at any time. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero. At this time, I would like to turn the conference over to Mr. Arthur Sadoun, Chairman and CEO of the Publicis Groupe. Please go ahead, sir.
Thank you, Sherry. [Non-English content] and welcome to Publicis Groupe third quarter 2026 revenue call. I am Arthur Sadoun, and I am in Paris with our CFO, Loris Nold. Jean-Michel Bonamy is also with us and will be available to answer your question offline after this call. I will start with the three highlights of this quarter and explain why we are confident for the rest of 2026, but also 2027. Loris will then take you through our numbers before we take your questions together. But first, please take the time to read this disclaimer, which is an important legal matter.
Let's start with our performance. In Q3, we delivered +5% organic growth accelerating from the first half despite a higher comparable. We are bringing our nine months performance to +4.8%. These results are fully in line with the upgraded guidance we gave you in July. We are therefore confirming all of our objectives for 2026. Organic growth between 4.5% and 5% with another strong Q4 within this range, a slight improvement of our record 2025 operating margin rate of 18.2% and free cash flow of circa EUR 2.2 billion.
Three highlights stand out this quarter. First, we continue to accelerate our market share gain and widen growth gap with our competitors. Second, our new business momentum is only getting stronger in a reshaped competitive landscape, giving us already strong visibility into 2027. And third, thanks to AI, our investments in data and technology are setting us apart, expanding our growth opportunities and improving our productivity and capacity to invest. Let me take you through the details of those highlights. First, our market share gains acceleration.
Connected Media, representing 62% of our net revenue, delivered high single-digit organic growth driven by market share gains, increased demand for AI power product and services, and new addressable markets. Intelligent Creativity, representing 25% of net revenue at a solid quarter at low single-digit organic growth fueled by new business wins and scope expansions. At the same time, Technology improved sequentially.
While the situation in the Middle East kept global organic growth slightly negative, the U.S., our largest country, returned to positive growth in Q3. We expect this positive momentum to accelerate in Q4 with the entire business returning to positive performance. To understand these dynamics, it is important to recognize that AI adoption is moving at two different speeds. In marketing services, consumers are using AI daily and are already changing how they search, discover brand, and decide what to buy.
As they turn to AI assistants for recommendation and comparisons, our clients need to adapt how they reach and engage with them. The imperative to adapt is immediate. Clients are ready to commit budgets faster because moving too slowly could mean losing market share. Enterprise transformation follows a longer cycle. It requires changes to core system processes and ways of workings, where adoption is progressing more slowly.
With implementation taking longer and macroeconomic uncertainty remaining high, clients are more cautious about committing significant capital expenditures as expressed by all IT consulting firms, including the market leader again recently. This creates two distinct investment dynamics, urgency to spend on marketing to protect and grow revenue, and more measured commitments to enterprise transformation. Sapient is essential to the growth of both pillars.
Today, its contribution is strongest in marketing services, making its performance increasingly inseparable from the growth of our media and creative operations. Our geographic performance also demonstrates the consistency and resilience of our country model. The U.S., representing close to 60% of net revenue, grew +4.5% in Q3 against a demanding comparable of +7.1% last year, sustaining a strong 4.9% growth year- to- date. This performance was driven by Connected Media and Intelligent Creativity, both up mid-single digit, supported by major client wins.
Europe delivered +4.7%, accelerating versus H1 and leading to +4.5% year- to- date, with strong Connected Media results and continued market share gains. Asia- Pac accelerated to +5.4% in Q3 from 4.1% in H1, with a 4.6% growth year- to- date. China, but also India, remained key contributors, both up double digits. As a result, this quarter, we are further widening the gap with our peers on net organic growth. We are growing more than three times faster than our peers on average in Q3 2026 on a multi-year stack. While we were growing just above 2.5x higher last year.
That sustained outperformance for 25 consecutive quarters demonstrates the strength of our model, its ability to deliver through different market conditions across capabilities and geographies. Our second highlight is new business, where our very strong performance in a newly consolidating landscape is giving us greater visibility into 2027. Omnicom acquisition of IPG has reduced the competitive field by 25%, fundamentally reshaping our industry and opening up two major opportunities for Publicis. Actually, the first benefits to all of the three global player. The consolidated competitive landscape gives Publicis and its two major competitors a greater chance of winning.
We are already seeing this reflected in our respective new business momentum. As the latest COMvergence data shows, more than 90% of the local wins in H1 2026 landed with one of those three global players. They represented less than 75% of the wins a year ago. It is even more important to note that these reduced competitive landscapes create more room to compete on capabilities and business outcome rather than on price alone. That means better condition for profitable growth and value creation across the industry. The second opportunity, however, is highly specific to Publicis.
While our competitors are reducing head count and scaling back investments, we are pursuing a polar opposite strategy. We are strengthening our teams, doubling down on data and technology, and extending our identity first model. Our intention to acquire LiveRamp is the latest step, building on our investment in Sapient and Epsilon, and the position we have established in commerce, influencer, and sports. Clients increasingly value this difference. As they transform for the AI era, they want partners with the talent, technology, and financial strength to invest alongside them.
These continued investment in talent and capabilities are the number one reason why we have a retention rate close to 100% and the best new business track record. This is particularly visible in our Q3 new business performance, where JP Morgan looks at net new business, which is wins minus the losses. Looking year- to- date, we have been on a record run when it comes to net new business, and our performance so far will contribute approximately 200 basis points to organic growth in 2027.
With a dynamic pitch environment and several months still ahead, we have further opportunities to build on that contribution. These are assignments already won with revenue still to come. They give us a solid foundation for another year of industry outperformance. Our third highlight is the way AI is amplifying the value of our investment in data and technology, already setting us apart. Four years after the rise of GenAI, its contribution to our growth, differentiation, and operating performance is clear. Since 2022, we have increased our net revenue by close to 20%, which is more than four times that of our peers on average.
At the same time, we are widening our margin gap from 270 basis points in 2022 to close to 400 basis points in 2025. Looking ahead, AI strengthens our model in two major ways. It connects our capabilities, strengthening our category of one, and it improves our productivity, sustaining our capacity to invest. First, it connects our capabilities into an offering that clients increasingly need and that we can uniquely deliver. Clients are looking for a partner that can transform how they operate and how they grow.
They want an AI-powered marketing engine built inside their own environment with control over their data and technology. An engine that they can plug, play, own, and control. That is what Publicis delivers for our clients end-to-end in a unique way. Sapient modernize their technology and build the data architecture for AI to operate at enterprise scale. Epsilon enables them to identify and engage each customer and prospect. Marcel provides the intelligence and orchestration connecting data, technology, agents, and workflows.
Our media creative production and commerce operations activate this engine across every touchpoint against measurable business outcome. It means client can know their customer individually, personalize interactions, produce content faster, and optimize media in real time, all safely and transparently within their own environments. This is why we are able to increase our addressable market and expand and deepen our client relationship.
That is reflected in our new business leadership for the seventh year in a row and our ability to win three material AI-led transformation assignments this year outside of traditional pitch processes. Beyond this commercial momentum, our connected AI power capabilities enable to drive measurable business outcome for our clients. Using our data and advanced analytics and predictive modeling, we have been able to significantly improve commercial effectiveness and marketing efficiency. Second, AI improves productivity, contributes to margin improvement, and generates additional capacity to invest.
We have focused our efforts on two priorities, making our talent AI fluent, equipping and training more than 90% of our 114,000 employees with AI productivity tools, more recently, thanks to our partnership with Microsoft. Deploying agents to automate manual and repetitive tasks, we have an objective of reducing them by an estimated 25% to deliver efficiencies and allow our people to focus on higher value work.
These efforts have had a visible impact on our financial KPIs, as reflected in the improvement of our people cost as a percentage of net revenue in H1 and in our increasing revenue per head. On our ability to drive further margin improvements while reinvesting more each year in technology, talent, and capabilities that will drive future growth. AI therefore creates more operating leverage that allows us to invest in talent, do more for clients, and deliver EPS goals for our shareholders. Now, let me hand over to Loris to take you through the detail of our numbers.
Thank you, Arthur, and good morning, everyone. Let me begin with the key highlights of our Q3 2026 revenue. Revenue reached EUR 4,614,000,000 , up 6.9% on an organic basis. Net revenue was EUR 3,808,000,000 . Organic growth was +5%, coming on top of +5.7% in Q3 2025. There was a net positive impact of currency of 150 basis points due to the appreciation of the USD and some Asian currencies versus the euro. Acquisitions, net of disposals, contributed a positive 140 basis points, reflecting the impact of our 2025 and 2026 acquisitions, namely 160over90, p-value, Hepmil, and Fabric. When factoring in those items, net revenue was up 7.9% on a reported basis.
Let's move to the next slide and our Q3 net revenue by region. North America was up 4.4% on an organic basis. This comes on top of a very high comparable of +7.1% in Q3 2025. Organic growth for the first nine months was in line with groups total at +4.8%. There was a positive impact of the USD versus euro on top of the contribution from acquisitions, and reported revenue was up 7.6% in Q3. Europe delivered +4.7% in organic growth. It is worth noting that when excluding the impact of technology, organic growth was up 7.7%.
There was a positive impact of the pound sterling versus the euro, leading to a reported growth of +5.3% for the region. Asia- Pacific posted +5.4% organic growth. There, too, there was a net positive impact of currency appreciation versus the euro on top of the contribution from acquisitions, leading to a reported growth of +10.1% in Q3. Latin America continued to perform very strongly and was up 23.8% in organic growth. When adding the positive contribution of currencies and acquisitions, reported growth was +31.4%. Middle East and Africa was down -1.4% as it continues to be impacted by the conflict.
Reported net revenue were up 5% thanks to the positive impact of currency changes. Let's get into more details for each region, starting with North America. The U.S., the group's largest geography, representing 59% of our net revenues, posted organic growth of +4.5% after +7.1% for the same period last year. This brings the year-to-date performance slightly ahead of total group at +4.9%. Connected Media and Intelligent Creativity were both up mid-single digit in Q3, benefiting from new business wins and scope expansions. Technology turned positive, growing low single digit this quarter.
Let's turn to the performance in Europe on the next slide. The region posted +4.7% organic growth and when excluding technology, grew at a very strong +7.7%. The U.K., which represents 9% of our net revenue, was broadly flat on an organic basis in Q3 due to the conflict in the Middle East, which continues to impact Publicis Sapient U.K. hub. When excluding technology, organic growth was +7.1%, driven by very strong growth in Connected Media. France, which represents 5% of our net revenue, was up 4.5% with Connected Media and Technology performing well.
Lastly, our operations in Germany and in Central and Eastern Europe were up 7.7% and 7.2% respectively, driven by strong growth in Connected Media. Turning to the next slide for our performance in the rest of the world. Asia-Pacific, which represents 9% of our net revenues, was up 5.4% organically. China continued to be very strong at +10.6% organic growth in Q3. India was also up double digits. Southeast Asia continued to be softer, still bearing the impact of the Middle East conflict. Latin America posted +23.8% organic growth in Q3, driven by Connected Media and Intelligent Creativity, in particular in Brazil and Mexico.
As mentioned earlier, Middle East and Africa posted a -1.4% organic decline in Q3. For your reference, you will find on the next slide our performance year- to- date by region. As you can see, all of our regions posted a strong organic performance, leading to +4.8% in total for the group year- to- date, after +5.5% for the same period last year. Last, net revenue was up 3.3% over the period and on a reported basis. Moving to my last slide, net financial debt.
The average net debt over the last 12 months was EUR 1, 196,000,000 , in line with our expectations. This represents an increase of EUR 239 million compared to last year due to the acquisitions completed, as well as the impact of the lower USD versus the euro in the last 12 months. We closed Q3 2026 with a net debt of EUR 1, 598,000,000 . This concludes my financial presentation, and I now give the floor back to you, Arthur.
Thank you, Loris. Just to wrap up before we take your questions. As you have seen in Q3, our model continues to deliver market share gains and increase the growth gap with our peers. In a competitive landscape that has been totally reshaped, our net new business wins already provide strong visibility into 2027. Last but not least, AI is only expanding both our growth potential and our capacity to invest. With 5% organic growth in Q3, we are confirming all our objectives for 2026 and are in position to deliver another strong year of outperformance in 2027.
We just completed our 25th quarter of outperformance, and with our unique ability to connect data, technology, and talent through the Power of One, we are confident to continue on the same dynamic for the years to come. [Non-English content] Let me thank our clients for their trust and our people for their outstanding work. Thank you for listening, and now with Loris, we are happy to take all of your questions.
Thank you, sir. This is the conference operator. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. To remove your question, please press star and two. Please pick up the receiver when asking questions. The first question comes from Nicolas Langlet of BNP Paribas.
Yes. Good morning, everyone. I have two topics I would like to discuss, please. First, on the top client spending. Since July, has any of your top clients cut or deferred its Q4 budget, relative to plan? As your top clients set their 2027 budgets, is the tone better or worse than at this point last year? Secondly, on Sapient, great to see you expect a return to growth in Q4. What is driving the expected improvement in Q4 relative to Q3? Is it delayed projects restarting or more new AI-led transformation work? Based on today's pipeline, should we expect Sapient to be positive in 2027? Thank you.
[Non-English content] Nicolas. I am going to start with the client sentiment. I will give you an overall feedback and then Loris, if you want to add something. Basically, and this is why I tried to explain in the first part, is that on the one hand, client continued to invest in AI powered marketing product and services. Because they know that this is the way to gain and retain market share. As I said in my presentation, the AI adoption by consumer is so high that you do not have time to lose. What is great here is that we see our client just investing more in transforming their marketing model.
This is why we are growing so fast with Connected Media. By the way, I will come back to that, this is also why we are growing with Sapient. On the other hand, I think we need to be clear that they are still slower in investing in large discretionary project. This is due to macro uncertainty, and this is what you have heard from any IT consulting firms, including the market leader. If I may come back to us here, this is an advantage for us. Because, do not get me wrong, Sapient is very important for us, and I will come back in a second, but technology is 13% of our revenue.
We roughly have 19% of our revenue that is in marketing transformation. Actually, we have the right revenue mix to help our client today and prepare tomorrow. You want to add something on the client? What I can tell you is that the tone is not better or worse. The tone is committed to transformation because they know they have to do it, but still in a wait and see attitude when it comes to CapEx spend, but definitely accelerating when it comes to OpEx and gaining market share on the consumer that has changed his behavior.
No, the only thing that I would add, Nicolas, is you remember when we upgraded our guidance in H1, we did for two reasons. One is because of the strong new business wins we had in the first part of the year, and the second is because of the confidence that we had in our existing client base, where we lose very little business, as you know. That gave us a lot of visibility, and that visibility and that confidence has not changed into H2.
Let me spend a moment on Sapient because it is definitely a news in our results. I would basically say three things. First, just to recap, we have seen a sequential improvement in Q3 versus Q2, and it is basically thanks to the U.S. that are turning positive. As we said, we expect this dynamic, so I am starting to answer your question, to accelerate for the entire business and to be back to positive overall on technology, in the fourth quarter, which I think is a good and reassuring news. Now, as I said, and I have to insist on that, is like all of the industry expert and peers today, we believe it is too early to see or to expect an inflection on what we call large enterprise AI transformation.
We still have to be cautious on this part. Third, and maybe more importantly, and happy to come back on that later, and I think it will deserve more time than a call to do that. What sets us apart is that this kind of renewed momentum that you see in Sapient today is mainly coming from our ability to boost our marketing transformation capabilities. Every day more Sapient is working hand in hand with our media and creative operation. Together they are position us to capture what is an increasing demand from clients, as I said, who urgently need to adapt in AI when it comes to talking to consumer.
We are trying to do our job as best as we can here, but this is why it is becoming increasingly difficult to separate Sapient revenue from our media and creative operation. Actually, Sapient should not only be viewed as a reporting line, which it is of course, but also as a key AI platform that transform the outperformance of the entire group. If I give you just two quick example to make that very concrete to you. Thanks to our enterprise-grade agentic platform, Sapient is actually allowing us to act not as a simple creative or media agency, but as a true transformation partner for our client in the age of AI.
To put it simply, and you know we don't like to talk too much about new business, but Sapient has been instrumental in winning the two biggest account of the year without a pitch. A second example, and I know it has been a big topic for you guys recently, is in production. As you know, this represents roughly EUR 1 billion of revenue in net revenue for us, and Sapient deliver for us a real competitive advantage. This is why we are growing so fast in production, because at the end of the day, we have great studios and we have great studios for years.
The big question now is the tech platform that really allow you to connect the data with the production to deliver intelligent creativity. So all in all, Sapient is improving as a reporting line, and that is a great news. Even more importantly, it is really contributing to our overall growth. I knew you would have the question for 2027. I would say as for everything, by the way, it is too early to tell you more about 2027, particularly the macro context we are in today.
But there is one thing that I can tell you is that we expect Sapient to continue benefiting from an increasing demand for AI transformation project, including from client on the media and the creative front. So yes, we are confident and optimistic for what is coming. Sorry, Nicolas, I've been a bit long, but hopefully I have covered most of the Sapient question through your two questions.
Very clear. Yeah, very clear. Thank you, Arthur.
Thank you.
The next question, sir, is from Jérôme Bodin of ODDO.
Yes. Good morning, everyone. Just a few questions. First of all, to follow up on Sapient in the U.S. So two questions. Is it mostly back-end loaded in Q3, or is it balanced all over the quarter? Have you seen an improvement mostly in September? That's the first question. Second one, what type of contract is it exactly? Is it more short-term one shot, or is it more long-term contract that should help the business for the next one to two or three years? That's my first question. Second one on the net new business for next year, so for 2027. At Q2, you said 100 basis points. For 2027, now you're saying 200 basis points, but you had PepsiCo, you had Kering, which are quite big.
Just to try to understand, have you included, I know you don't want to be specific on advertiser, but have you included the loss or the possible loss of Coca-Cola? If that's the case, would it be mostly 2027 or Q4? Lastly, on agent. Platforms like OpenAI are now developing their own advertising agent. Just to understand, where do you want Publicis to be in that model? I know it's a bit early stage because it's linked to LiveRamp, but do you want to build and run your own agent, or do you also want to provide data to this external agent like OpenAI or Claude? Thank you.
I can actually start with the third question and then I'll come back on the rest, is our model, as the consultants are saying, comes basically from two things today, the quality of our data and our people. These are things that will not be disrupted by AI. To come back to your question, we will definitely connect our data with any new platform that will exist in the environment. By the way, the more platform, the more complexity, the better for us, because at the end of the day, and you know that AI is nothing without the data.
By the way, the more complex is a marketing model, the more our client will need the service that goes with that. We feel confident that we're going to be able to be agnostic when it comes to platform, and by the way, making sure that we build models that are living in our client environment that they can own and control. On Sapient, I would say it has been pretty balanced over the quarter. It's long-term contract we are talking about.
Again, let me insist on that. If I give you a concrete example, which I tried to do a bit earlier on, when you go to a client and you explain him that he has to put identity at the core of his model, that he has to connect this identity with a full marketing ecosystem, and through that he's going to be able to fuel it with intelligent content and measure in terms of business outcome. They can't do this if they don't modernize their tech framework.
And that's where Sapient gets into play, is that they come with us to the client, and not only they explain what we can deliver, but how they are going to get organized operationally to make it happen. That's the beauty of the model we are building, is Sapient is here to set the foundation of the marketing transformation model that our client need. So it's of course long-term contract. Same thing for production. You build a tech stack and then you operate it. Okay? Then, on new business, as you know, we don't make any comments. We believe that this PRS for wins doesn't make sense, so we don't mention any win and time. But what is certain is that in the 200 basis points, everything is included, the plus and the minus. Jérôme , yeah? Okay.
The next question, sir, is from Ciarán Donnelly of Citi.
Thanks, Arthur, for the presentation. A few from me. I think firstly, since we last spoke, Meta released News. Can you give us insight into three things? I guess one, what does the shift to increasingly advertising for agents and not people mean for the agencies with respect to opportunities and threats? Two, can you just give us a sense of how clients are prepared for the shift to agentic advertising at the moment?
And three, how Publicis are positioned relative to peers to help clients navigate this shift? Then just finally, just on the comps around the return to growth for Sapient in Q4. Should we expect to see that in Europe/Middle East? Is it going to be that recovery? And can you just give a sense of the comps Q3- Q4 for Sapient? Thanks.
Again, maybe we can start on Sapient. We are expecting the overall business to turn positive in Q4. We are not planning for the Middle East to do better so far. And when you look at the news, the coming days, I don't think we should. So you know how we do with this, we bake all the risk into the guidance we are giving you, knowing that, by the way, Q4 is an adjustment quarter. So you should not anticipate Middle East to come back to growth for Sapient in the coming months. You should expect Sapient, for the reason I just mentioned, to come back to growth overall in Q4. You want to add something on that, Loris?
No, the situation in the Middle East, and you know Sapient is a bit more exposed to the Middle East than the rest of our operation. A, because of its presence there, but also because of the impact it's been having on the U.K. hub that is servicing from London, some Middle Eastern-based clients. When we look at Q4, we're not expecting this to change dramatically. Also, there is a very high comparable when you're looking at the Middle East into Q4 that you have to take into account.
Coming back to your two first question. First, definitely clients are preparing for an agentic world. Everyone knows that this is coming and it's going to change a lot of things. Everyone also knows that it's complex, it's longer than expected, and it could be very expensive without direct business outcome at the beginning, but everyone is preparing for this world. As I said, this is a two-speed boat. When it comes to agentic for marketing, clients are moving very fast because, again, their own client and prospects are moving very fast, so they need to adapt.
When it comes to enterprise, they realize that it's a longer process, that it's a lot of change management that is very costly at the moment where there is a lot of macroeconomic uncertainty. By definition, it is slower. How Publicis' position versus their peers, I should let Loris answer this question because I'm going to get competitive, so I've got to be careful on that. More seriously, I think that if you look at our track record over the last seven years, and you can expect next year to be the same, we are showing not only the resilience, not only the strengths, but also the differentiated model that we have built over the year.
Let's be clear. We did not come there by coincidence. This is something that started 13, 14 years ago now when we acquired Sapient and that Maurice Lévy had the vision that the future was not consolidation, which we could have done at the time, but really to invest in data and technology to build the model of the future. As you know, for those that have been with us for a while, we had a couple of very rough year, where we had to change our operating model, where we had to make this acquisition, where we have to start to embrace AI in 2017.
To come back to your question now, I think that the number, repeatedly, for 25 quarters, are showing our level of outperformance. It's basically due to three pillars. We have a different model from our competitors. We don't believe that you should be organized by expertise like media, creative, and technology. We believe you have to be organized by countries because you need to break down the P&L among the different capabilities. This is why by bringing media closer to creative, we are still growing creative when no one is.
This is why by bringing now Sapient closer to media and creative, we are returning Sapient to growth, which is not the case of all of the system integrator. We have a very different model. We have very different capabilities. Some have made the choice to divest their data assets when we have decided to invest, and that has been a big thing with Epsilon. Some have decided to externalize now their IT professional, meaning all their data analysts and engineers, where actually we have more than 30% of our population that now are part of that, and that makes a big difference.
Last but not least, which I think is not a small thing, is that, as I said in my presentation, it's all about investment. We are a market of three. We continue to invest in talent. We continue to invest in capabilities. What you need to understand, which I think is critical, this is what clients expect. They don't expect us to reorganize, to let people go, or to stop making some acquisition. They are expecting us to invest on their behalf. The fact that we are investing in the best talent and the best capabilities give us the kind of result that you can see in Q3 when you look at new business, which is again, net win minus losses. Sorry, I was too long. I know.
No, that's great. Thanks, Arthur.
The next question is from Adam Berlin of Goldman Sachs.
Yeah. Hi, good morning. I've got two questions, please. The first one is, can you just explain the Q4 guidance? You've guided that it will still be in that 4.5%-5% range, but Sapient will be positive in Q4 versus negative in Q3. Is there another part of the business that's going to slow down in Q4? Or is this just caution given, as you said, it's an adjustment quarter and you're just being conservative, but it is possible that we could see further acceleration in Q4?
That's the first question. The second question is, there was news in the last couple of weeks that Apple has changed the WebKit on iOS 27, which is blocking some advertising that's possible on Safari and potentially other parts of Apple. I just wondered if you have any comments on what you think the impact of that could be on the ad ecosystem, especially in the context of you buying LiveRamp.
I'll start with the second one. First, as you can imagine, we can't comment on LiveRamp, but what I can tell you is we are not worried at all about the update we heard from Apple. We are used to this kind of thing, and actually, in this case particularly, we are not exposed. So there is no risk here. On your guidance question, sorry if there are people from Sapient listening, but as I said, they are very important for us, but honestly, technology is only 13%. Again, when we have an acceleration as we have in Q3, this represent basically 20 basis point, an improvement of our growth for the quarter.
If we turn from slightly negative to positive or slightly positive, this is not going to have a major impact on our total growth. I think you guys should be very careful with this. It is a very important asset because it's a differentiating asset that makes a lot for our business in general and an area where we have engineers within the company that makes a big difference. But when it comes to revenue, the valuation of Sapient doesn't change that much. If I want to be a bit provocative, we didn't have a good Q2 with Sapient, and we still have a great Q2 for the group.
So I think you need to be careful there. Now, if I come back to the guidance, I can give you a couple of point more, which is, again, we are confirming our growth of 4.5%-5%. And we are confident that we're going to be able to outperform the industry for the seventh year in a row again this year by far. If you look at the growth, first, the new business won in H1 gives us the visibility in Q4. The reason why we feel so confident about Q4, and by the way, confident that it will be within the guidance range in Q4, which is important when you know it's an adjustment quarter, is because we have won a lot in H1 and it's having an impact here.
Second, we're going to see in H2 an acceleration versus H1 on the underlying business. Again, when you look at the compounding effect of everything we've been winning over time, I think that shows the strong dynamic and the strong underlying business we're having. Finally, Q4 being an adjustment quarter, we could be close to 5% for the full year, if the macro economy gets better. So that's what we're expecting. We can't tell you much more, but honestly, I think we are very precise in our answer.
Okay. Thank you, Arthur.
The next question is from Conor O'Shea of Kepler Cheuvreux.
Yes, thank you. Thank you, good morning, and thanks for taking my questions. Three quick questions from my side as well. Firstly, just on the proportion of revenues in Europe coming from Sapient that took the growth down from 7.7%- 4.7%. Maybe, Loris, if you could give us that number, please. Secondly, on LatAm, obviously a standout number in organic growth this quarter. It is a small part of the business but still not insignificant contribution.
I think the comps were a bit easier this quarter. Anything to call out for Q4? Should we expect a return to more normal level of growth for that region or potentially as high as Q3? Then last question, maybe again for Loris. With the rise in market rates in terms of interest rates, how could that impact your net interest costs for 2027? I think in the previous rise it was beneficial because you got more from your cash balances and your remaining on fixed rates in terms of your debt. Is that still the case? Could you be a beneficiary of that in 2027? Thank you.
A lot of work for you, Loris.
I am going to take the three questions, I think. So on Sapient Europe, just to give you a sense, it is roughly 15% of our total operation. Just about 1/4 when it comes to the U.K. As I said, as the U.K. is carrying a lot of operation directed towards the Middle East. Hopefully, this answers your question.
Yes.
On LatAm, first of all, we have been very happy with the performance in LatAm for quite some time, as you saw in our results in the past few years. It grew 18.5% in 2025. If you look at the first nine months, it is at 16.3%. We have seen, in particular in Q3, a very strong performance coming out of Brazil and Mexico, which are the two largest geography for us in the region. In particular, when it comes to Connected Media, there is minimum impact from inflation, maybe compared to some past years. I would say that our performance in the region is coming from three factors.
First, and quite similar to other region, is we have invested quite a lot in the last few years in differentiated capabilities, starting with our identity solution, as you might remember, and our influencer marketing. Second, our acquisition in the region, like BR Media more recently, have been performing very well. Third, there is also a beneficial impact of our new business wins, both globally and locally. The last question, which was on interest cost. As you said, our financial debt is fixed, in terms of interest rates, so we are not expecting any big movement. As you saw, we issued a EUR 500 million bond in September. Again, that is all fixed, so we are not expecting any significant changes into our interest expenses going forward.
If I may, I will make two comments. The first on the U.K. It is pretty unfair for the U.K. team that most of Sapient revenue in the Middle East is reported there. Those guys are on a roll. As you know, this is our second country, and our media and creative operation are growing roughly 7% again this quarter on a very high comparable. I think it is important to see that outside of the U.S., we also have market that are booming. China, double digit. It tells you a lot, and that is something that I like a lot about the fact that our growth is spread among the different region.
When there is one, like the Middle East, that is having some problem, by definition, the other can make it work. The second thing, I would just insist on what Loris said about LatAm, because the number, it looks huge, but actually it is starting from a small base, and LatAm is benefiting from some global win that are scalable. So when you add one or two global client to a small base, then your number goes up. I think it is just a good proof that as a global network, we are working well in a region that is a region for growth for our client.
It is like China, by the way. As you know, we turn out to be number one in China now in media billing. So despite all the consolidation in our market, we are number one in the U.S. and number one in China, which are the two market that matter the most for our clients. The fact that we are able to sustain this kind of growth rate, thanks to new business and client win locally, makes a big difference.
Very clear. Thank you.
The next question is from Christophe Cherblanc of Bernstein.
Yes, good morning. Two questions from my side. The first one is on the impact of net share gains. You have been delivering 200 basis point plus for several years. That was before the reshape of the competitive landscape. Is it fair to expect the 200 basis point over the next few years, and I know you are not going to be specific, is going to be more 300 basis points, 400 basis point. Is that a realistic assumption? The second question is on Q4, you mentioned it is a quarter of adjustment. In the past, what has been the range of adjustment, positive, negative? Is it fair to say that the volatility of Q4 adjustment has been going down because your portfolio has been changing over time? Thank you.
Thank you. I am going to let Loris answer the second question. Look, 200 basis points, as you know, is roughly EUR 300 million revenue additional. It is net win. It is a number that by definition, the basis point are going up as far as our growth goes up. Can we expect more? Honestly, we are extremely confident in the way the industry is being reshaped. I said it very clearly, you see the benefit of three player versus four for every of the three players.
As you can see, everyone is winning more new business, which I think it is a good thing because we want the industry to go well. What we are really making a difference, Christophe, is on our retention rate. What is very important for us at the moment is yes, continue to win new business, but also making sure that we can grow our own client by rolling out our model. That is why we are focusing on.
Hi, Christophe. As you said yourself, and as you know well by now, Q4 is a very usually for us an adjustment quarter. If you take a look at 2024 and 2025, we benefited from what was fairly significant positive end of year adjustments. Just to remind you, we grew 6.3% in Q4 2024 and 5.9% last year, which essentially making our comparable base this year slightly more difficult. But equally, if the macroeconomic context is supportive, we could deliver another strong quarter like we did in Q3. Normally those positive or negative year-end adjustments tend to be known to us late November, early December. We still have to wait to see how the quarter progresses. But we still feel pretty confident about Q4.
No, as you can see, the tone is very confident for what is coming because, again, our ability to have a very high, almost 100% retention rate and the new business pipeline and the one that we have already won, put us, again, in a very strong position.
Thank you.
Thank you.
The next question is from Steve Liechti of Deutsche Bank.
Yeah, morning. I've just got three. I may have missed it, but have you actually given us a net new business figure for FY 2026? I heard the 2027, the 200 basis points. If you could just give us a hard number there. Secondly, on Sapient, I know we can kind of work it out roughly, but can you give us a hard number in terms of what the group like for like would be, X Sapient, that is, what's the Sapient drag in the nine months and maybe the third quarter? Then the final question is, has Sapient been a material drag on margin, at group level or is it relatively small scale, not really affected the group margin? Anything you can say there? Thanks.
I'll go first on the first question. It's 250 basis points. That's the contribution of net new business to our business this year. That's where we are. Again, we were at 200 basis points when we entered the year, and we felt that with the new business we had in H1, we could move to 250 basis points, which means that we raised our guidance. This is being concrete now in Q3 and for sure in Q4. On Sapient, I will let Loris give you a couple of points, but I don't know for how long you have been following us, but that's a bit what we're experiencing at the moment with Sapient is close to what we experienced with Epsilon a while ago.
Which is, what we are doing exceptionally well at Publicis is what we call the Power of One, which is really to bring together our capabilities to make sure that we can deliver for our clients a service and product that no one else can. That makes a difference. There is a lot of system integrator out there. The difference between us and the other is that we can have an identity-first approach to business transformation, which is a huge difference with consultants. By the way, consultant and system integrator, none of them have identity and data.
So none of them are capable to measure and target what are the business outcome that you can lead out of a marketing transformation and that you can activate later on. That's a big difference. Again, just to explain you the beauty of bringing together our data and our technology. Same thing for creative. We have huge relationship with our client on creative. As you see, we are actually growing. Our ability to bring the tech platform of Sapient when it comes to production closer to the ideation and the creative work we are doing give us a huge competitive advantage.
All of this to say that the more the time is passing, the more it is difficult to distinguish our performance of Sapient with the rest of the business. Having said that, we owe you the transparency of the performance, and this is why we are actually giving you those numbers. I don't know, Loris, if you want to add something on this.
Yeah, Steve, just to echo something Arthur said earlier, which is, you have to keep in mind that Sapient is 13% of our net revenue. So whether you're looking at the impact it has on top line or the impact that it has on margin, it is by definition, fairly limited when you see some improvement, either sequentially or moving from slight negative to slight positive. So I would not account for too big of an impact that Sapient is having on the quarter.
On the margin, it's the same story. We've had the question before on Sapient's margin. It's improved over the years. It is still slightly dilutive to the group, but slightly dilutive to the group overall at 13% of our net revenue is having a very minimum impact. The story here is more the impact that Sapient is having on the overall business than looking at it as a separate reporting segment.
But again, if you look at the four, five-year stack, Sapient is accretive when it comes to our goals and slightly dilutive when it comes to our margin, basically is where we are.
Great. Thank you.
Thank you very much.
As a reminder, if you wish to register for a question, please press star and one on your touchtone telephone. The final question is from Adrien de Saint Hilaire of Bank of America.
Yes. Good morning, everyone. I've got a few questions, if you don't mind. First of all, it seems to be a bit of a new headline that there are now clients switching agencies without a formal pitch process. How do you manage client conflict in that case? I am also interested to hear if this drives a price uplift versus a classic pitch process. Secondly, I noticed a recent win of PepsiCo, for example, is something which has been led seemingly by the CEO of the company, not the CMO. Is that a fair depiction? I am also curious if you see different fees if the client relationship is anchored around the CEO or a different person of the C-suites, as opposed to the CMO. Thank you.
Thank you. I will start by the second question. First, as you know, we never comment on new business on clients, so please take that as a general comment, not as something specific to one client. Your second point, Adrien, is actually highly strategic. It is funny because we are small compared to many players and particularly Walled Garden, or even some system integrator. But as Publicis, and by the way, under the leadership of Maurice, we have created with CEOs around the world, and particularly in the U.S., great relationships.
That makes a big difference, because coming back to the question we had earlier on agentic transformation, this has to start from the top. If you are expecting the people in the countries to change by themselves, they won't, because it is hard, because it is disruptive, because sometimes it is expensive, and the impulse then needs to come from the top. We are increasingly seeing CEOs involved in what we do. I am sure they are seeing that because CEOs are passionate about AI, and they understand that if they want to continue to lead their company, they need to understand AI, and who better than us, that they trust, that they work with for years to, again, listen to advice.
Sometimes they take them, sometimes they don't, but they always listen. So yes, we are strengthening our relationship with CEOs, it is certain. I think the question you asked about less pitches and conflict is a big question. I actually talked a bit about that in the trade press today. But although I don't make any specific comment on any client, please take that more as a market fact. There's a couple of things that I can tell you, which is, if you look at our wins in general, there is definitely a new market reality. I'm not going to come back to that.
I hope we've been clear, but there is only today three large global players. What is very interesting, coming back to the question I had before, is that each of us have now a very different model, very different capabilities, and very different strategies. Don't get me wrong. I'm not saying that one is better than another. That it's clients we choose, the number that we show, we are on the race, we'll see what will happen.
But what I can tell you is that in this context, we see an increasing number of clients who know exactly what they want for their business, and actually truly understand the difference between the three of us, will it be the CMO or the CEO, by the way. And those same clients increasingly consider it is way more efficient to spend their time, and by the way, their money, digging deeper and actually kicking the tires of the partner they are interested in, rather than organizing this kind of big beauty contest for months that actually is disturbing not only their organization, but also losing the focus on goals that they need to bring at the moment.
To be clear, this is something that we are starting to see, client that knows exactly what they want in a competitive landscape that is way clearer with three competitors, and instead of spending months just looking at everyone, they focus on the one they want to work with. Now, to be clear, this opens the other question, which is how do you manage conflict? What I can tell you is that now clients perfectly understand that we can manage conflict because we have the scale to do that. That's a very, very important point.
By the way, it's true for us, it's true for our competitors. Those three players are big enough to manage conflict as long as we do two things. First, we need to be totally transparent to whom we are working with. Second, we need to make sure that we bring the right firewalls in term of people, in term of capabilities, and in term of geographies, which again, mean you need to have some scales. But just to give you an idea, this is what our clients are already doing. They are doing it with a data platform. They are doing it with cross-cloud solution. They are doing with system integrator. They are doing with consultant.
This is something that they are already doing, and now they understand that they can do it with us. Thank you for asking the question because this is a big shift. I understand that it's important to focus on Publicis, but I think it's good also for you to see that the industry is moving. The industry is simpler. There is more opportunity for each and even more opportunity for Publicis. I think there is no more question, right? I am just going to close by, again, thanking you for listening and thank you for all the question because I think it was a highly strategic question. I hope you are going to take basically three key messages out of our Q3 performance, is that we are basically accelerating on every front.
Organic growth, new business, market share gain, Sapient, and hopefully you feel it also in our tone. We are very confident for the end of the year and for 2027, we will outperform again. Second, I said it, the competitive landscape has been totally reshaped. As investor looking out at the industry, I think it is good news for all of the three player and particularly for us, because again, we are investing in talent, we are investing in capabilities, and we are accelerating our pace of growth versus competition.
Last but not least, I wish we have spent even more time on that. Hopefully, quarter-after-quarter, we are making the demonstration that AI is a tailwind on our growth and on our margin. To be clear, what we are focusing on at the moment is really rolling out our model with our client, because as you asked, they are focused on their own agentic transformation and focusing on our own execution. Thank you very much. Have a great day, and I am sure we will talk soon. Thank you. Bye-bye.
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