Thank you, Maris. Welcome to Publicis Groupe First Half 2020 Earning Call.

I am Arthur Sadoun, and I'm here in Paris with 2 other members of the Directoire; our CFO, Jean-Michel Etienne; and our Secretary General, Anne-Gabrielle Heilbronner. Steve King, COO of Publicis Groupe, is joining us from London.

As usual, we will take all of your question together after the presentation. Alessandra Girolami is also in Paris and will be available to take your question off-line after this session.

During this call, we will do 3 things. First, we will go through the H1 highlights and results.

We will demonstrate that before being hit by the virus, we were off to a very good 2020, commercially and financially. Second, we will give you a strategic update, and I will come back on why our fundamentals make us confident to weather this crisis.

Third, the Directoire will take all of your question altogether. Please take the time to read the disclaimer, which is an important legal matter.

Now let's dive into the presentation. I won't add my voice to those who have already covered all the issues created by the pandemic and this unprecedented crisis, but I would like to start this presentation by warmly thanking our teams around the world.

They have demonstrated outstanding commitments, solidarity, dedication and resilience despite the challenges they have endured professionally, but also personally during the lockdown. In the last three years, we have worked very hard to transform Publicis.

We have invested and developed a new model to help our clients win in a digital-first world. We have promoted new talents and reorganized our operations to collaborate seamlessly.

But it's not been easy, and the profound changes we have made have sometimes been at the expense of short-term organic growth. However, those efforts are starting to pay off and set us apart from competition.

Our clients understood what we are building for them, and as a result, we led the new business leagues for the last 2 years. This placed us in a good position to start the year.

With our transformation, almost completed, strong tailwind in the U.S. and continued new business momentum, we were off to a good 2020.

When the crisis began, we were able to reduce its impact, thanks to our U.S. revenue flow and our strong fundamentals, which are unique offer combining creative, media, data and technologies delivered seamlessly; our unmatched backbone of shared services; and our strong balance sheet.

Our H1 numbers are actually the results of those fundamentals. Let's dive into the highlights.

First, we posted organic growth at minus 8% in the first half, fueled by the strong start to the year in the U.S. across all of our activities.

In Q2, our organic growth was minus 13%. This is significantly better than the 23% decline in advertising expenditures predicted by Zenith and the 30% mentioned by WFA for Q2.

In the U.S., the decline in organic growth was limited to minus 3.3% in H1 with minus 6.8% in Q2. This also compares favorably to the estimated decline of 18% in ad spend in the quarter.

With plus 5% organic growth at the end of February, creative and media in the U.S. were still positive at the end of May and ended H1 slightly negative.

The same pattern was visible at Publicis Sapient U.S., with a negative performance in the second quarter following a positive Q1. Our health practice in the U.S.

continued to perform well across the period and was up 10% in the first half. Europe suffered in Q2.

Organic growth was minus 23.5%, as the lockdowns impacted most of the second quarter. Performance varied per country, reflecting different activity mix and local economic situations.

The U.K. was down minus 18.2% organic, with similar evolutions in both marketing and business transformation.

In France, our outdoor media activities and the Drugstore were shut down. These specific stand-alone activities weighted for 200 basis points at group level in the quarter and 640 basis points on the European region.

Without the impact of those operations, France recorded a negative growth at minus 22.7%. On the other hand, Germany posted a low single-digit decline of minus 3.4%, also suffering from the lockdown but benefiting from the contribution of last year important new business wins.

In Asia, the performance in the region was negative at minus 5.7% in Q2. China clearly improved from Q1 but remain negative, as only a few sectors started to recover in an uncertain environment with a lot of volatility.

Finally, Epsilon benefited from a very good start of the year and was impacted in March due to this exposure to the automotive segment and midsized nonfood retail in the U.S. Net revenue was down high single digits for the first half.

Second highlight, the group demonstrated resilient financials in the first half. Our operating margin rate came at 13%.

Despite the sudden drop in net revenue in March, we adapted fast, thanks to our strong culture in managing costs. We reduced our cost base by 6.4% in the first half, representing €286 million concentrated in the second quarter.

There are three main reasons that explain the resilience of our margin. The first one is a strong measure that we took early on at group level.

Our country model was instrumental in implementing fast those measures locally. Second, our resource management tools allow us to reallocate internal talent to the operation that continued to grow and freeze external recruitments.

Third, our strong start of the year in the U.S. also largely contributed to this performance.

To sum up, it is worth noting that with the contribution of Epsilon, our overall reported net revenue was up 9.7% in H1. Our EBITDA was €923 million, up 4.3% compared to last year.

Our operating margin was €622 million, up 1.6%. Our diluted headline EPS was €1.75, a limited decline compared to the €1.98 in H1 2019.

And we generated close to €500 million in free cash flow before change in working capital, a slight increase compared to the first half 2019. To conclude this part, I would like to stress that we continue to record significant wins in new business.

We won new clients across the world, starting with Sephora in North America, Volvo in China, or ING and Française des Jeux in France. We also strengthened our relationship with some of our largest clients.

Zenith retained the media planning and buying of Reckitt Benckiser in the U.S., adding data and analytics. At the end of June, we won GSK global production business after gaining the media several months ago.

We also defended and increased our footprint with New York Life on search and social media on top of digital. We finally expanded our remits in different markets with several existing clients like GSK in Brazil or Heineken in Canada, both in creative.

In media, we won the planning assignments for McDonald's in China, thanks to our Power of One approach. These diverse wins confirm our ability to win large pitches, but also increasingly demonstrate our ability to cross-fertilize our different expertise with existing clients, thanks to our unique system.

I am now handing over to Jean-Michel, who will take you through the detail of our numbers.

Thank you, Arthur, and good morning, everybody. I will now present our Q2 revenue and the first half 2020 financial results.

As usual, let's start with H1 net revenue, which is up by 9.7% on a reported basis at €4.774 billion. Currencies have 0.7% positive impact.

Acquisition impact is at plus 17.1%, of course, due to mostly to Epsilon. All in all, organic growth in H1 is minus 8%.

Just for information but our organic growth is at minus 6.9%, excluding our French activities that were shut down in Q2, I mean the outdoor media in public transportation and the Drugstore at [indiscernible]. For Q2 2020, net revenue is up by 2.6% on a reported basis.

The impact of currencies is 0. Acquisitions have a positive impact of 15.6%, thanks to Epsilon again.

Organic growth is down by 13% in Q2, impacted by the effect of the global pandemic. Organic growth is at minus 11%, excluding French activities that were shut down, as mentioned previously.

Moving to Page 11. Let's review the Q2 net revenue by geography by now.

In Europe, net revenue is down 23.5% on an organic basis. It is minus 17.1%, excluding the impact of the French outdoor media activity and the Drugstore.

The consequences of the slowdown in the European economy during the lockdown has affected, obviously, our performance in Q2. First, France has been more impacted than other European countries due to some activities that we have shut down during the vast majority of Q2, as mentioned previously.

Excluding this impact, organic growth in France is at minus 22.7%. Second, in the U.K., the lockdown has affected the whole economy in Q2, particularly for the financial services sector, where we are very present.

Organic performance in the U.K. is at minus 18.2%.

Finally, Germany was more resilient at minus 3.4% organic growth, the lockdown having been shorter than in other countries and also thanks to the ramp-up of the 2019 new business wins. North America is at minus 7.6%, June being the low point in the quarter because of the increase in the number of COVID cases in many states and also the impact of the social unrest.

However, it is worth noting that our health operation is very resilient with a double-digit growth. Asia Pacific is down 5.7%, supported by good performance at Publicis Sapient in Southeast Asia and Pacific.

China performed in line with the region in Q2. Latin America was down by 20.2%, with a decline in Brazil and Mexico above 20%, where the pandemic has rapidly spread in May and June.

Middle East and Africa is at minus 23.5%, mainly due to the COVID, where various clients have cut media spending. Thus, for the group, organic growth is down 13% in Q2.

It is minus 11%, excluding the shutdown of some French activities. Page 12.

You will find the performance for the first half by geography within H1. Q2 negative performance has been balanced by our good start of the year, notably in the U.S., where we were positive until the end of May.

I will just go through the organic growth numbers very quickly. Europe is down by 16.5%.

The decline is limited to 12.9%, excluding the French activities that were shut down. North America is down by 3.6%.

Asia Pacific is down by 3.9%. Latin America decreased by 15.7%, and Middle East and Africa is down 11.8%.

For the group, organic growth is at minus 8% for -- in the first half of 2020. Again, the decline is 6.9% if we exclude the impact of the French activities that were shut down in Q2.

On Page 13, let's have a closer look at our performance by country. This time, we provide both Q2 and H1 on the same slide to reflect the impact of the virus.

Positive in Q2, you have Thailand with plus 10.8%; and Sweden at plus 6.5%. Positive in H1, you have also Saudi Arabia at plus 11.2%; and India at plus 3.6%.

Between minus 10% and 0% in Q2, you will find the U.S. at minus 6.8%; Germany at minus 3.4%; and China at minus 5.9%.

In H1, Japan at minus 1.8%; Australia at minus 5.4%; and the U.S. at minus 3.3%.

Between minus 20% and minus 10% in Q2, you will find the U.K. at minus 18.2%; and South Africa at minus 13.2%.

In H1, you have Canada at minus 10.1%; and Mexico at minus 14.4%. Below 20% in Q2, you have Brazil at minus 25.5%; and France at minus 22.7%, excluding activities that were shut down.

In H1, you have Spain at minus 20.5%; and Russia at minus 21.1%. Let's move now to our consolidated income statement on Page 14.

To introduce our income statement, we have, in reality, 3 buckets. The first bucket starts with the EBITDA, which is at a €923 million, up by 4.3% year-on-year.

Operating income is up by 1.6% on the reported basis. It is minus 4.6%, excluding Epsilon acquisition cost in H1 2019.

The contribution of Epsilon partly offsets the negative impact of the COVID-19 pandemic on our activity. Second bucket is our headline group net income, which is down by 9.9% at €417 million, after taking into account net financial expenses of €88 million and income tax of €133 million, both will be detailed later in my presentation.

Third bucket is further down in the P&L, with a group net income which is down to €136 million, including a loss of €3 million on a fair -- a change in fair value of financial assets. It also includes some noncash items, namely the amortization of intangible of €107 million, net of tax, of which €51 million coming from Epsilon.

It also includes the amortization of client relationships and other intangibles arising from previous acquisitions. It also -- it includes also the real estate consolidation charge due to vacant locations, which is treated accounting-wise as an impairment charge for a total of €173 million, net of tax, mostly due to the elimination of one of our significant building in New York, with the aim, of course, to concentrate our business in one single building.

On Page 15, let's now enter in our operating margin details, which includes 2 opposite effects: first, the impact of the consolidation of Epsilon in H1 because the Epsilon integration starting on July 1, 2019; second, the impact of our cost reduction plan that I will detail in the following slide. On a reporting basis -- reported basis, personnel cost increased by 130 basis points, representing 60.1% of net revenue.

This increase is mostly due to the drop in revenue in Q2 that cannot be immediately matched by the adaptation of the personnel cost. Restructuring cost totaled €69 million in H1 2020, up by €8 million versus H1 2019, reflecting additional severance charges coming with our cost-reduction plan.

Restructuring charges are expected to reach more than €100 million in H2. The other operating expenses amount to €627 million, representing 13.1% of net revenue compared to 13.5% last year and despite Epsilon having higher other operating cost compared to revenue.

As already said by Arthur, we moved fast to adapt quickly our cost base, stopping spending in some areas. On top of that, some expenses went to 0, notably during the lockdowns, like travel, of course, recruitments cost and seminar-related expenses.

This leads us to an operating margin of €622 million, representing an operating margin rate of 13%, down by 110 basis points versus H1 2019. If we exclude the Epsilon transaction cost in H1 2019, the operating margin rate declined by 200 basis points in H1 2020.

On Page 16, we are providing you with details on our cost reduction plan. On the comparable basis, we have controlled the reduction of our cost base and have been able to reduce our OpEx base by €286 million in H1 2020.

In these difficult circumstances, we had the ability to test the flexibility of our model and the agility of our new structure. For this, we have been able to put in place immediate cost reduction work streams.

Part of the exercise leads to restructuring actions to downsize our business due to the drop in revenue. All in all, we were able to save €50 million on the cost of sales, which have mechanically declined due to the revenue drop; €101 million on personnel expenses, of which €61 million reduction in fixed personnel cost and €43 million on freelancers.

We're anticipating more cost reduction in personnel cost in H2. On real estate consolidation plan initially -- initiated in 2018 has allowed us to save, again, €19 million of occupancy cost versus H1 2019.

The main part of our cost reduction in H1 comes from G&A and was mainly due to some expenses that came almost to 0 during the lockdown. It is notably the case for travel, recruitment, recruitment cost and seminar-related expenses.

I want to highlight that most of these costs will progressively come back as we enter in H2 and the lockdowns are lift. For this reason, you shall not expect our cost reduction plan to accelerate in H2.

All in all, we reduced in H1 our OpEx base by €286 million, representing a reduction of minus 6.4% to be compared with the H1 organic growth rate, which is at minus 8%. On Page 17, I will present the change in operating margin.

Reported operating margin rate was 14.1% in H1 2019; 15.0%, excluding Epsilon acquisition cost, which have an impact of 90 basis points. FX restructuring and structural changes, excluding Epsilon, have a 10 basis points positive impact.

Fixed personnel costs have 460 basis point negative impact in H1 2020. As already explained, the sudden drop in net revenue cannot be immediately matched by an adjustment in our fixed personnel cost.

In addition, we continue to invest in our transformation in H1 2020 as we want to be ready for the recovery. We managed to reduce our freelance cost by 70 basis points in H1, with the aim to reallocate, first, internal resources.

Occupancy costs have a 60 basis point positive impact on margin, thanks again to our real estate consolidation plan. Bonuses have increased, representing 50 basis points, recognizing the exceptional work performed by the team during this tough period.

The COVID-19 crisis affecting the global economy, nobody will be surprised to see our provision for bad debt increasing consequently by 50 basis points. G&A was the main savings source in H1, as some expenses stopped overnight, notably with the lockdowns, as already mentioned.

The impact of G&A savings in H2 will be lower than in H1 simply because the expenses that mechanically stopped during Q2 will progressively restart in Q3. Finally, Epsilon has a small dilutive impact on H1 margin due to higher seasonality in margin between H1 and H2, as already highlighted.

The net impact is 20 basis points. All in all, the operating margin of our group is at 13% in H1 2020.

Regarding now the net financial expenses on Page 18. Interest on net financial debt totaled €48 million.

It is mainly composed by the interest expense of €76 million. The main difference versus H1 2019 being the inclusion of the interest of Epsilon acquisition debt for €51 million and a net interest income of €31 million.

When we have 3 elements which are: first, the interest on lease liabilities following IFRS 16 implementation for an amount of €40 million in H1 2020, the increase of H1 2019 is explained by Epsilon and the extension on lease liabilities, mainly in New York; second, the net foreign exchange gain or loss; third, the other financial expenses. The headline net financial expense is €88 million versus €20 million in H1 2019.

After a change in fair value of financial instruments, the net financial expenses in H1 2020 is at €92 million. Let's move to Page 19 on taxation.

Headline income tax is at €133 million. For the determination of the headline income tax, we are reversing the income taxes relating to the amortization of intangible for €35 million and the tax charge relating to the impairment due to the real estate consolidation for €58 million.

The H1 2020 effective tax rate is at 25.0%, improving by 80 basis points compared to H1 2019. This tax rate reflects the higher BEAT tax in the U.S.

simply because the U.S. profit before tax has decreased, compensated by tax credits recognized on recoverable losses.

On Page 20, the headline earnings per share, fully diluted, is decreasing by 11.6% year-on-year to €1.75. It is impacted by 3 main factors, which are: decrease in operating margin at constant perimeter, partly offset by the integration of Epsilon, and there is also the weight of the financial charges on the acquisition debt of Epsilon.

On Page 21, free cash flow before change in working capital is at €495 million, representing an improvement of 0.8% versus last year. The main items are: the EBITDA at €923 million, up by €38 million, thanks to the contribution of Epsilon; and to our cost reduction plan, which is compensating part of the revenue decline.

Interest paid and received amount to €81 million. It was an inflow of €33 million in H1 2019.

Repayment of lease liabilities and related interest for €234 million. Tax paid is €74 million.

This amount is down by €160 million, representing a decrease mainly due to the agreed delays to pay our tax in few countries, mostly in the U.S. But to be clear, payment will happen mostly in Q3 for €84 million.

We also have obtained some tax reimbursement in India. The CapEx are at €73 million, up by €8 million, including the contribution of Epsilon.

We managed to be very selective on our CapEx spending, giving priority to IT spending for people working from home. Moving to Page 22, showing the use of cash, starting with the change in working capital.

We have been able to deliver a change in working capital very close to what we did in H1 last year. We have a slight decrease of €27 million at minus €853 million.

It has been made possible, thanks to the daily control on the inflows and outflows managed by our treasury people and a great contribution of our shared services organization. Acquisition spending, net of disposal, is at €14 million.

Please note that last year, we had the reported figures. In the reported figures, the proceed on the disposal of Publicis health services.

The earnout and buyout paid is €28 million. We have also a noncash impact on net debt of minus €107 million, mostly due to a negative €246 million related to the change in the mark-to-market value on cross-currency swaps, mostly due to the drop in the U.S.

dollar interest rate. Accrued interest for a positive €66 million.

Other impact includes the new earnout and buyout for €22 million; and other item for €51 million, mostly relating to the impact of the currency on gross debt. That leads to an increase in net debt of €508 million versus end of 2019.

On Page 23, let's now move to the balance sheet. The balance sheet has been relatively stable since end of 2019, after being materially impacted in 2019 by the acquisition of Epsilon from July 1, 2019.

We note an increase of €86 million for our total assets versus end of 2019, which is coming from decrease of €230 million in goodwill and intangibles due to the amortization of intangibles; a decrease is a net right-of-use of €291 million due to the amortization over the period and an impairment on vacant space, mainly in New York; and more importantly, a change in working capital of €546 million due to Epsilon, which has a positive working capital at June 30 at €578 million. On the liability side, the increase in net debt is mostly related to our structural negative free cash flow position at the end of June.

Group equity is decreasing mainly due to the dividend to be paid and the negative currency translation adjustment. On Page 24, the net financial debt.

Average net financial debt is €3.7 billion. The debt related to the acquisition of Epsilon is part of our average net debt since 1st of July 2019.

It was consequently taken into account for 6 months in H1 2020, and it will be include for 12 months for the whole 2020 versus only 6 months in 2019. Net financial debt at the end of June is at €3.2 billion.

Moving now to our financial ratio on Page 25. As each year, our ratios at end of June 2020 are impacted by the seasonality versus end of 2019.

At end of June, the impact of seasonality is amplified by the crisis, especially for the average net debt-to-EBITDA ratio, which includes, since last year, the average lease liability following IFRS 16 implementation. Consequently, this ratio is above our internal objectives at end of June and should normalize partly at the end of 2020.

Our deleveraging program is also impacted by the crisis. It could take a little bit longer than initially planned, but we are still committed to reduce our net debt progressively in the coming years.

Moving to Page 26. Our liquidity position is still strong at €5.4 billion at end of June.

After having preemptively drawn down our €2 billion RCF in Q1 to face any potential liquidity impact relating to the global pandemic, we decide to refund half of the line in June as we were reassured by our treasury forecast, showing that the full drawn was not necessary anymore. In addition, we did not apply for any government borrowing fund.

I will now hand back to Arthur, who will give you an update on our strategic outlook, and I remain, of course, available for questions during the Q&A session. Thank you.

There is no doubt that we will all have to live with the virus and its economic and social consequences for a while. This is creating a high level of uncertainty, and it makes it very difficult to give you a specific guidance for the second half of the year.

What I can tell you is that we are confident in our ability to weather this crisis as well as we did in the previous one. Thanks to the profound transformation we have put in place in the last years, we are very well armed with strong fundamentals.

We have the product and services that our client needs in this new world; the platform organization to work in a remote environment, notably, thanks to Marcel; and a very solid financial backbone to get through this difficult period. Let's dive into the details of each of those 3 pillars and start with our clients.

In the last few months, we have seen an increased client demand for all the capabilities that drove our strategy in the last few years: first-party data, breakthrough creativity, digital-first media and technology to deliver personal experience at scale. The acquisitions of Sapient and Epsilon, in addition to our creative brands and leadership in media, have enabled us to build a model that is unique in the industries and adapted to these new client needs.

This is particularly the case in the U.S., where we have diversified and very balanced revenue streams between data, creative, media and technologies. All of these under one single P&L managed by a U.S.

ComEx which we put in place in Q4 last year. This gives us an unparalleled position in our market and a winning formula in new business.

The crisis has clearly accelerated the relevance of our go-to-market, but it has also created the opportunity to develop new products and services. Only a few weeks after the pandemic began, we launched The Pact, an outcome-based solution that guarantees delivery on business KPIs with full measurement transparencies.

This was made possible by new customer behaviors identified during the lockdown, strengthening the Epsilon platform with 20% more digital touch points. Our clients are experiencing tremendous pressure.

They have to reduce their costs while increasing their sales. To do so, they will have to take back control on their customer relationships and deliver personalized experience at scale.

It actually represents a challenge and an opportunity for all of them, and we are uniquely positioned to be their partner in this journey. Second, in a world where our structure need to be flatter, more agile and remote, we are now truly operating as a platform.

This starts with Re:Sources, our shared service organization that centralize all back office tasks for the group. It has proven its efficiency once again by transitioning smoothly in a matter of days, 80,000 of our people to work from home with absolutely no disruption to their daily work for clients.

It continues with our global delivery center based in India as well as Costa Rica, Colombia and Mauritius. They increased our production capabilities and drove efficiencies for every one of our agencies and clients, thanks to an agile allocation of our digital, data and technological resources.

More recently, we have finalized the implementation of our country model and Marcel. With our country model, we have been able to answer immediately to all of our client needs to face the crisis in a seamless way.

It enables us to decide faster at local level and increase the accountability of our managers, giving them more control on their operation. Creating a single P&L per country managed by a single leader was a difficult cultural change.

This has had an impact on short-term organic growth last year, but it has been game-changing in this period and gave us a huge competitive advantage in the industries. When it comes to Marcel, our talent around the world now have a unique way to share expertise, learn, collaborate and contribute to client assignments.

90% of our employees have adapted our platform in the U.S. in less than a month, and 60,000 profile have been created globally.

Marcel is becoming central in our ability to allocate resources for clients and new business within the group, train our talent for this new world, communicate and sometimes celebrates what we are doing, like in the case of the Cannes-Do Awards. It will also be a great tool to accelerate our diversity and inclusion agenda.

So as you can see, we have the product and services that our client needs in this new world. We have a platform organization to bring the necessary nimbleness to execute our strategies.

Last but not least, we have a proven culture in managing costs that has enabled us to deliver double-digit margin in the first half. As we explained, this is due to tight control on our operation, the recent implementation of our country model, but also the dynamic we have experienced in the U.S.

are making the difference. We are managing our cash and liquidities on a daily basis, and we are taking strong measures to protect them.

For example, we reviewed our CapEx and re-prioritized our plan for this year and next. Thanks to our robust liquidity situation at the end of June, we decided to refund half of the €2 billion RCF that we have preemptively drawn in March.

We did not apply for any government borrowing fund during the period. Overall, we have been fast and committed in executing our cost saving plan, and we are constantly looking to improve with new initiatives to optimize our cost base structurally.

Just to give you a few examples. We are implementing one central staffing function for each countries.

We are also expanding our All in One real estate plan launched 2 years ago based on the lessons learned from the lockdown and new working behaviors. Finally, we are systematically reviewing contracts with third parties so we can stay within the group to deliver.

So to conclude, at this stage, the full impact of the crisis on the economy remains largely unknown. When it comes to our revenue, Q2 could be the low point.

But in the face of uncertainties, it is premature to say whether H2 revenue will be better or worse than H1. Some sectors, but also some countries, will recover faster than others, and clients will react differently.

When it comes to margin, in the first half, we were quick to adapt our cost structure when the crisis began. In H2, our margin will be higher than in H1, taking into account that several factors will have a negative impact.

First, some of our operating expense will resume as countries reopen. Second, we will continue to invest in our model.

As we head into the second half, we are committed to limit the impact of client cuts by aggressively pursuing growth and accelerating on our new offering for our clients. We will adapt our costs to the evolution of the revenue and monitor our financial resources on a daily basis.

Beyond the short term, we will continue to execute our strategic road map, putting our clients first and our people because they are the one that will drive our success and the success of our clients. We will further build on our competitive and unique offer while leveraging the efficiency of our model.

Thank you very much for listening, and we will now take all of your questions.

Two questions, please. First off, I wonder if you could address if there are any permanent -- or, I guess, what the permanent changes might be from the virus on your operating model, things like staff levels or office space or technology solutions, anything like that.

What might be some permanent cost savings? And if it's possible to put a number on that, that would be great, seeing how impressive the cost saves already were in the first half.

And then secondly, I might have missed this, but did you give a number for Epsilon organic growth? Or is it possible to give us some indication what that was?

Sorry, I was on mute, as we say all the time. Sorry for that.

If you don't mind, I'm going to start with permanent change. Maybe I'll give the word also to Steve to tell you a word and a flavor about the context because it's a great question, and then we can move on to Epsilon.

I mean, what is important to understand is this crisis has actually accelerated things that the market already knew. This is what has happened.

The market, i.e., our clients, but I guess, also our industries. And if I have to put those changes into what are the two most important bucket, which is our client on one side and our people on the other.

And starting with our clients, I will tell you that what we have seen and that is going to be a permanent change is the need for our client to really shift to personalization at scale and really deliver valued experience on an individual basis at scale. This means that what we are observing at the moment is an increased need for first-party data even more than before and our ability for our clients to really build a direct relationship with their customer.

We are seeing, which is a good news for our industry, I mean, a will for breakthrough creativity because it's becoming tougher to justify your price in a difficult economic situation. So this is actually putting a positive pressure on us.

And on the top of that, there is still a need for the right technology to deliver those experience. So all of these are things that, by the way, we knew before the crisis, expertise that we invested in the past, and we see an acceleration of our clients.

And this is going to be structural. When it comes to operation, I mean, things will change for real.

I don't think we can draw a conclusion on the fact that we work well on Teams or Microsoft. It will help us.

It will bring some efficiencies. It will, in some areas, facilitate relationship, but the big change won't come from this.

The big change will come from the ability of the different player, and by the way, it's true for our client too, to come with an integrated solution, i.e., killing the silos that doesn't allow our agencies to deliver an end-to-end model. And again, what you should take out of that team is that there is nothing new in what I'm saying.

There is just an acceleration. But maybe, Steve, you might add something to that?

Tim, yes, I think the answer to the changes, I think, as Arthur has said, our ability to work remotely across 80,000 people is something that I think has been perhaps a surprise but very reassuring, not just our people working in our various markets around the world. But as you know, we have over 20,000 talents sitting in India who are computer scientists and engineers, and almost within a few days, we were able to have them up and running remotely.

And they're now building many products and services and platforms, like Marcel which we talked about, which we delivered around the world and in new capabilities. And that ability to sort of maintain those services has been really critical.

I think and it won't be a surprise to you or anyone on this call, probably the biggest change has been the acceleration of e-commerce. It's become, as we would say, a lifeline for consumers.

And there's a lot of research to suggest that something like over half of consumers have discovered what some form of online shopping that they plan to continue. Retail footfall is obviously going to remain subdued for some months, if not for years.

So this has forced brands to accelerate their digital transformation and made it critical to have a robust commercial commerce strategy in place, either through D2C or through retail partners. So these are the type of changes.

Our ability to build out these capabilities and platforms while working remotely, I think, has been very reassuring. And this accelerated move and structural shift to new platforms and capabilities like e-commerce and like personalization at scale is something that we've really seen accelerate over the last few months.

Thank you, Steve. Maybe I will...

Maris, and sorry, we had a technical issue here, but normally, now we are connected. So I'm going to take back on the second question where it was on Epsilon.

Epsilon is broadly in line with the group organic growth in H1. As you might remember, when we presented our Q1 results, we actually had a very good start of the year, and then we have been hit particularly in 2 areas: our automotive practice, and you have seen what has happened in the U.S.

with the shutdown of all the fabrics; and our non-food retail that also was shut down. So this, of course, had a big impact in Q2.

What is extremely important to note because it came back to what I was saying in introduction of this question is that the first-party data management that is the core of what we deliver performed well. And if I can make a last comment, and it's something that we feel very confident on, is that today, Epsilon is delivering well more than stand-alone results for the entities.

I would take just a few examples. No doubt that it is thanks to Epsilon that we are having the new business rate we had for the last year now.

And you will see how they are integrated, how we're able to put data at the core. It gives us a massive competitive advantage.

Because when we go into a pitch in the U.S., we have access to 250 million IDs, individuals, with 7,000 attributes. We see 56% of every noncash transaction.

So we start from the customer, and this makes a big difference in our new business approach and with our clients. And it's part of our model now.

It helped us build products that are made for this time. I went very fast on The Pact, but The Pact was actually created at the moment where digital signal were exploding because every one of you, not only was using your professional device, but you started to use your personal device to work.

And this created incredible signal that actually has increased the accuracy of our data, and we're able to come with offers that were very innovative. So again, Epsilon, of course, in the future, needs to contribute to organic growth, but it is core to our transformation.

And congratulations on the great results today. My first question is on the U.S., I mean, clearly, an impressive performance there in Q2.

Could you maybe just elaborate why the U.S. held up so well in Q2, especially the creative business?

To what extent that was market-related as opposed to being more specific to Publicis? And do you think there could be a lag effect?

And what basically that means for the outlook for Q3? That's the first question.

The second one is on Sapient. I mean, you gave a number for Epsilon.

Is it possible to have some color on Sapient as well in Q2? And how does the pipeline of potentially new contracts or projects look like, given your clients will definitely need more digital transformation, need to accelerate their digital transformation in this environment?

And the third one, could you maybe talk about the ramping up of new contracts? Obviously, you had a very strong new business activity over the last 12 months.

So could you maybe comment on the revenue of the new -- of the big contracts, like Disney, Novartis, Mondelez, et cetera? And should that basically benefit more H2?

Thank you. I'll start with the U.S.

It's -- we were really off to a good 2020, and you have seen the dynamic in Q1. And I think that it's not only the 5% that we reported at the end of February on our media and creative operation that was making us confident nor, by the way, the fact that those sale operations were still positive at the end of May.

It's that overall, we were in a very positive in organic, again with our media and creative, with Sapient that was positive in the first quarter, hence, double digit. And you know what we have done with the sale of PHS, which, by the way, is timely, I would say.

And overall, it's very hard to see that after so much hard work, we have been hit at the moment, where hopefully would have had a great dynamic. But that's life, and we have to live with it.

If I want to come back on the reason why we had this kind of tailwinds because this is what happened. We entered the crisis with tailwinds in the U.S.

First, our model. I mean, in a normal world, we would take time to show you how we operate like this.

But the ability we have today to have a model that is almost equally balanced between data, creativity, leadership in media and technology with Sapient is unique. And what matters in our business today is to position yourself versus competition, and competition, as you know, is well larger than the holding companies.

And this is helping us a lot. New business, and maybe I'll answer the third question in this one.

Yes, we are, of course, benefiting of the win we had in Q4 and Q3 last year. It's true for Disney.

It's true for Novartis. It's true for many of the win rate.

True for Bank of America. It's true for many of them.

But again, it is also a good combination between this plus cross-fertilization, but it make a big difference. And then the problem is that my partners in the U.S.

are still sleeping, so they won't hear me at that moment, or maybe not, by the way. Maybe they woke up for the call.

But we have been working extremely hard in the U.S. We knew we have some challenges and, by the way, we still have challenges to be clear.

But we knew that if we could work as one, if we can bring our operation together, if we are able to create a single P&L that I'm actually directly leading with great people in the U.S. ComEx, it will make a difference.

And it is starting, only starting, and we have to be proven right in the future. But the truth is the dynamic we have created is making a difference, and we'll continue it.

Just to give you an example because it shows you a bit how we work. We are finishing this call, and tomorrow morning, the first thing I'm doing is to go to the U.S.

to spend the weekend and do a U.S. ComEx.

Most of the people will be virtual, but some will be there with the social distancing because the kind of dynamic we are creating there will make a difference. On Sapient, I don't want to go into too much detail, but as you know, we were having challenges in the U.S.

We demonstrated in H1 that the dynamic was there. And the fact we moved into industry verticals is really starting to work.

Our transformation is achieved in terms of products. We need an offer.

We need the right people. And as you have seen, positive in Q1 and negative in Q2 but still with a number that is improving.

I think that what is very important is that there is -- I'm sorry, I'm going to be a bit technical, but it shows you again what we are trying to build. There is 2 products coming from Sapient that will make, hopefully, a big difference in the future.

The first is commerce and what we can build in terms of commerce experience, particularly with Publicis Media. And so this is a kind of product that will have even more traction in this new world.

The second is our ability to work as a system integrator on data platform, combining our Sapient offer with Epsilon. These are concrete things, concrete products that our people from the creative and media side can propose to their clients and make a difference.

So is our results from Sapient's globally satisfactory? No, as well as our results, by the way.

We are negative. But is there the beginning of a dynamic?

We have the impression. But maybe even more importantly, and hopefully, this is what you feel today, do we have the strong fundamentals when it comes to our product to really deliver what our client needs?

This is where we are pretty confident.

Great. May I just follow-up on my first question?

So is it fair to say that you have outperformed the market in the U.S. given the new business and the cross-fertilization you talked about?

Is it fair to say that? And how should we think about the lag effect?

Could there be a risk on Q3? You mentioned June was a low point.

But given the potential lag effect, is there is a risk on Q3 versus Q2?

Honestly, we don't know if we outperform the market or not because we are the first to publish. We did outperformed the market trends, and Steve can tell you more about that if you want, but that's a certainty, and it's written everywhere.

And actually, the need that we publish a new report in the coming days, and it will demonstrate that we are definitely outperforming the market trends. The lag effect is a great question and a tough one to answer because the truth is the level of uncertainty is such, I mean, particularly in the U.S.

but not only. We don't even know -- to take a very specific example, we don't even know if Barcelona will go into lockdown or not.

It's so, so uncertain at the moment, and this is why I'm sorry, we can't give you more detail on our guidance. That to make a long story short, I don't think there is a lag effect, but I don't know what we could expect for the second part of the year.

Three questions from me as well. The first question and, I mean, just to come back on the North America performance in Q2.

I realize you don't like to focus month by month, but I think, Jean-Michel, you mentioned that June -- the exit rate in June was a bit weaker. Should we read much into that?

Is there potential for the third quarter to be weaker than the second quarter for North America at this stage? Second question, just in terms of Epsilon.

I think I'm not sure you mentioned that it will drag down by exposure to autos and midsized nonfood retail. Can you give us a sense of what proportion of Epsilon's revenues those 2 industry categories represent as clients?

And then the final question, just more generally, after all the changes in the group over the last few years and acquisitions, pro forma for -- including Epsilon, what do you think the percentage of group revenues that is not exposed, let's say, traditional advertising marketing spend? If I could phrase it like that.

Could you give us a sense of what proportion that is, which we would tend to expect to maybe be less cyclical?

Thank you very much. So I should not forget the last one, not exposed to traditional.

I'll start with North America. Again, as you know, normally, we don't give any numbers on a monthly basis.

But as we did in Q1 and taking into account the level of uncertainty and lack of visibility in the future, we are trying our best to give you more granular information about what is happening currently to hopefully give you more picture about what could be the future. You raised a very important question, which is actually June was lower than May, and we saw the drift in June.

And so this is why we are being extremely cautious, and this is why we are saying very clearly that we don't know if H2 will be better or worse than H1 globally. It's because, although overall, May might be the worst month for the group in June, to give you some granularity, and U.S.

was lower, but China was lower than May. And so this show you the level of volatility we're having at the moment and the fact we have to be very careful.

On Epsilon, I can't give you the detail because, by the way, everything is interconnected. Because to give you an example, the auto practice is directly linked to digital media, and some clients are shared among several industry.

What I can tell you, though, is that we are talking about businesses that shut down. And so if they are reopened, we should be more optimistic.

The first thing I looked, honestly, is if my automotive client reopening at the moment they should, and they did, by the way, which gave us at that time a bit of confidence. And now at the moment, I'm waking up every morning listening that in the U.S., things are getting worse in terms of pandemia, and I start to be worried again.

So I think we really have to wait a bit to see how things evolve. I think your question about exposed to traditional is extremely important, and I would like to spend a minute on that to tell you the figures, if you will, behind that.

We are an 80,000 strong company, and our job is to make sure that whatever we do has some value in the future. And the reason why we made acquisition, by the way, under the vision of more STV at the time where no one was thinking that it would be so important with Sapient, that has been a challenge.

And Epsilon, that is proving to be the right thing at the right time, is actually to make sure that our more traditional business becomes modern again. And it's a very -- it doesn't mean that we're going to succeed everywhere, by the way.

And it doesn't mean that we don't have to take the tough decision in terms of operation in some places. And again, you don't know how committed we are to make sure that we simplify our thing and that will build for the future and that we manage our cost while going aggressively for clients.

But our mission is to make sure that a layer of earnout is actually -- is relevant. And to be relevant, as creativity will always be there, is to make sure that we can boost it with data and enable it by technology.

So I won't even be able to answer your question. I would be able to tell you this or that operation is more relevant for the future.

Can we transform it? Or should we close it?

But it will be so granular that we're not going to go into the discussion, I guess.

I'll start with the cost cutting. I was still on for €500 million for the full year because, Jean-Michel, you said that the cost cutting wouldn't be as good as the €286 million in the first half, in the second half, but can you still do the €500 million?

And also, what is the equivalent of the pro forma constant FX cost in full year '19, which is €4.438 billion on Page 16? That's my first question.

The second one is there's no mention of strategy game changers and attrition in the presentation. So have we given up on those?

Or do you consider them still important? And if you consider them still important, can we get the organic for strategic game changer and the percentage of revenue in the first half?

And then my last question is, on a divisional basis, how precise can you track revenue? Can -- to Conor's question, you say, "Well, I can't give you an answer on traditional business because we digitized them."

But how do you track revenue internally? Can you track creative?

Can you track media? Adopt the integration, branding, PR, health care?

I mean, can you track 20, 30, 40 different revenue line? Do you have the tools to do that?

That's my third question.

Thank you. Actually, I'm going to let Jean-Michel on those three, and maybe I'll make a comment later.

So we'll start with the cost cutting, I mean.

No, we could start with the digital.

Okay.

Because the digital is an interesting question. We have been able to track -- we were the only one or the first of our sector to track digital revenues during many, many years at a point where it was small and growing year-after-years with the acquisition and so on, since part of the strategy, which was in place.

Today, it's very complex. I have still have that in a reporting system, which is a burden for people but nobody is looking at anymore because everything is -- start to be digital.

And today, segregating digital, non-digital appears to be very artificial today. So we are not publishing that, but we are -- the rate of digital has increased dramatically, you can imagine during the recent years.

So -- and today, it's not anymore relevant to do that. It is a little bit the same for all the game changers.

You remember, at time we created this concept, at the time of the 2018 Investor Day, 20th of March 2018, this concept was indicating clearly our strategy. DBT data was the main game changers.

And we have -- you have seen what we did. We have increased the weight of DBT, for sure, but even more on data.

We bought Epsilon. So I mean, the strategy on game changer today, the percentage -- the weight of the game changer in the total revenue of the group has increased dramatically, as you can imagine.

So these two concepts, digital and game changers, appear to be a little bit old today. And we -- my vision is that we should put that aside, and we will maybe track differently the performance -- the growth performance in the future.

But we have a lot of way to analyze revenues. Too many ways.

It's a big burden for our people, by the way. In terms of cost cutting, the cost cutting, H2.

Yes, I mentioned that H2, it will be -- we will have to take into account the fact that we -- some categories of spending could increase naturally because it will depend on the level of activity. And today, as we do not know and we're unable to provide you with a guidance on the growth rate on the second part of the year, it is extremely -- we see an exercise that we will perform on a day-to-day basis to manage the cost according to the level of the activity.

This is why there are some cost. Let's assume that people are able to travel again.

Arthur is going to the U.S. tomorrow.

He will travel again, but I can tell you, not a lot of people will travel during the next months. We have put in place some very specific rules to avoid that when it is not for client needs.

Clearly, there is no travel for other reasons than client needs. We will have still the benefit of no travel during a few months.

But let's assume that the business is coming back. Okay, this kind of spending on G&A will increase.

But we will have the benefit -- more benefit, as I said during our presentation, on the personnel cost side. We'll have more benefit during the second part of the year of the efforts that we are making on the personnel cost side.

Yes. I think that, again, as for every number that we are posting today, what we are trying to do is to demonstrate through the numbers that we have very strong fundamentals to weather the crisis.

And hopefully, with this number of €286 million in 1 quarter, we are demonstrating that we know how to manage tightly our costs. What is important there, because this is a big differentiator, coming back to the first question, is our country model now.

I won't insist enough on that. And I'm going to give you a concrete example that shows how we have been able to significantly decrease our cost base in such a short period.

Thanks to the platform we have put in place and including Marcel, if you have a great talent, I don't know, in Los Angeles, that is working on an agency that sees strong decline because clients are just cutting. And at the same time, we are winning something in New York that ask for this kind of expertise.

We're able to support this person in L.A. and make our work immediately in New York, which means that: first, we don't have to hire, and this is why we don't go outside; and second, most of the time, it's very difficult to act fast on revenue decline, which means that this has helped a lot and will continue to help us.

And as I said, this is something that we're going to continue to leverage. But to come back to your question because this is something that -- again, as we can't give you some guidance because of uncertainty, we have to manage the group in this uncertainty.

And so what we are doing here is pretty simple. We know how to adjust our costs.

We have the culture, we have the model, and we have a proven track record on that. And now if revenues gets a bit better, let's say, that if the virus in the U.S.

disappear faster than expected, we have to invest. Because, again, we want to make sure that we take advantage of the next step and that we are really recover already.

At the opposite, if things get tenser, we can adjust again, but again, depending on what will happen. I think that the point Jean-Michel made is very important.

The reduction of costs we did on G&A is pretty significant. And I don't think it will happen in the same level in the second part of the year.

Hopefully, it won't because it means that things are coming back. But on the top of that, we won't lose any opportunity to make the necessary investments to actually accelerate on the model that is just starting to prove that he has some strength in the new world.

Just a couple of sort of follow-up questions. I think just if we look at -- we talked about business wins within the first and second quarter.

Can you just sort of clarify that in terms of whether that was actually a positive contribution on a net basis versus wins and losses and what the magnitude was across the first half and the second quarter? That's the first question.

Should I answer this one, first? I can make a short answer into this one.

First, as you know, we don't comment on any specific win at this stage or, by the way, any account that we have to defend. What I can tell you is that in H1, we did have a positive effect because we won some stuff around the world.

And we had no loss, and that we are superior, our €5 million around for the entire year 2020. So we are on a good track, but again, first of all, it's becoming increasingly difficult to track new business wins because I have personally seen some things in report that were not making that much sense.

It's very difficult to track. And more importantly, where we focus, and that's an important point at the moment, is the integration of our model, making sure that we grow with our clients and continue to demonstrate the competitiveness and the uniqueness of our model through new business.

And this is what we, of course, have in mind for 2020. That was the first one.

You had another one?

Yes. Arthur, just going to Epsilon.

You talked about Epsilon performing broadly in line with H1 organic growth. Were you -- in that comment, were you talking about group?

Or were you talking about North America?

Group. Group.

This is what I said in my introduction. It's aligned with group growth in H1, roughly, yes, and again, with a big discrepancy between first-party data that is doing very well and a huge drop in what is automotive and some categories.

I mean, when things are shut down, we have experienced that in France. I think that the French example, I mean, we went fast.

But when you shut down media transport and the Drugstore, and it has an impact of 200 basis points on our organic growth at group level for Q2. So without this, we'll be at 11%.

It shows the magnitude of the impact of those things of our business. I mean, when you know that €25 million is 100 basis points of growth on a quarter, you understand why it's so difficult to navigate in this uncertainty.

Third one, I mean, obviously, you gave some data out there for the first 5 months for the U.S., and obviously, things then deteriorated, looks -- by the looks, the number have risen significantly in June. If we look across major markets within Europe, how has it tracked through the quarter?

And is the exit rate now better than what we were seeing when we were in lockdown in April, May? Or is it disjointed across the markets?

I'm sorry, I don't get the question.

So you said that they were positive for the first 5 months in the U.S. and then the U.S.

numbers sort of first half was down 7.6% in North America. So June, obviously, was a bad month for the business.

If we look at Europe, you didn't give any sort of color between the actual months and the quarter. So given [indiscernible] coming out of lockdown earlier, I'm just trying to get a sense of whether we've got an improvement in Europe through the quarter or whether things feel tough.

Okay. So I'll start with a footnote saying I am not sure we can drive any conclusion from what I'm going to tell you, okay?

But if I go month by month and give you a flavor, the truth is that in Europe, June has improved a bit with the lift of the lockdown. But it remains heavily negative.

So I think we have -- we are not seeing, which, I guess, you see everywhere, by the way, a kind of a recovery at all. We see a bit better, better number that were very, very low and still lower.

So as you are, I guess, still very, very worried there, we will see what happen. But we have to be very careful in the way we manage this kind of news because, yes, we see us better June now, which is not the case, as I said, in the U.S.

and in China, but still a big question mark. I think if I understand well, we are done.

So if I may, I'm going to take just 1 minute, first of all, to thank you warmly for your time. Hopefully, we gave enough flavor here.

I know that Alessandra and Maurice will continue in the coming days to inform you as much as we can. What I hope is that -- as I said, I just hope you took one thing out of this call is that we definitely have strong fundamentals to weather this crisis, and we are committed and focused to adapt our costs.

And hopefully, you have seen that we are managing them tightly enough to be able to reduce, if necessary, or to invest if things get better. We are staying extremely close from our clients.

They need us more than ever. And as I said, this crisis has not reinvented what they need.

It has just created a sense of urgencies that is in line with the vision we had for a long time now that is coming to fruition. We're going to fight for growth because, of course, we need to reduce the gap as much as we can.

And we are, of course, very dissatisfied with the number we're having, and we're going to take care of our people. And I'm going to end up by that.

I mean, we did not have that much time to discuss because there are no questions for Anne-Gabrielle on that, but the health and the wellness of our people is, of course, our first priority. Our trust with our client is our second, and this is where we're going to focus.

I thank you very much. Take good care of yourself and hopefully talk soon.