Feb 6, 2020
Operator
Ladies and gentlemen, good day, and welcome to the Full Year 2019 Results Presentation of Publicis Groupe. For your information this conference is being recorded.
At this time, I would like to turn the call over to Mr. Arthur Sadoun, Chairman and CEO of Publicis Groupe.
Arthur Sadoun
[Foreign Language] Welcome to the Publicis Groupe 2019 Full year earnings call. I am Arthur Sadoun and I am here in Paris with our CFO, Jean Michel Etienne.
The two other members of the directors are here with us. Our Secretary General, Anne-Gabrielle Heilbronner and Steve King, COO of Publicis Groupe.
As usual, we'll take your questions altogether at the end of the presentation. Alessandra Girolami is also here and will be ready to take your questions offline after the session.
We will start this call with an overview of 2019 results and highlights. Then Jean-Michel will give a full detail on our numbers.
I will conclude by sharing our 2020 business priories and outlook before taking all of your questions. Now let's dive into the presentation but before anything please take the time to read the disclaimer which is an important legal matter.
Okay, 2019 has been without a doubt a challenging year but a constructive one. We have definitely seen the two phases actually of our transformation.
Our organic growth was severely impacted by the headwinds on the traditional business and the cost of your transition. That said, thanks to our [new model] we are shifting our revenue stream delivering very robust financial results and the best new business performance in the industries.
Now that we have finalized our transformation in terms of assets and structure, our focus is only on execution. Before Jean-Michel take you through the details of our number, let me share with you the four key highlights of last year.
First, 2019 was a pivotal year in our transformation with the acquisition of Epsilon. We just decided that we now have the technology and the data capabilities to compete in the market that is incredibly and increasingly driven by personalization scale.
Epsilon is now positioned as a core expertise in building, enriching and activating first party data. And we haven't lost one second to include these capabilities in our broader offering to clients.
We have merged Epsilon advertising activities in [indiscernible] and decided to play CG affiliate on the strategic review to explore different ways to unload values. The integration is largely complete and Epsilon added the significant impact already on our client relationship.
It has also been instrumental in our major external business wins. With this may end of [indiscernible] these are most notable examples.
We are shifting our revenue stream towards data and technologies which now represents nearly 30% of our group revenues. With Epsilon the reported net revenue growth for the group reached 9.3% in the full year and 16.2% in H2 fully oriented to our innovative products and digital services that our clients increasingly need.
Second, our organic growth for 2019 stand at minus 2.3 and again in line with the expectation that we shared with you in October. Our overall performance was severely impacted by three well identified headwinds.
The first is the attrition on our traditional advertising business which represents an impact of around 200 basis points globally above year which mean over 300 basis points in the U.S. Second, we have seen negative impact of few medias of 2018 and third we felt the cost of our transition mainly with the repositioning of [indiscernible] in the U.S.
The good performance of our game changer growing by 18% and the positive effect of our new business were not sufficient to affect these headwinds. These situation is reflected into our geographical performance.
North America was at minus 3.5% for the year. Europe at -2% and A-Pac slightly positive at 0.8%.
The UK and France delivered a resilient performance despite tough comparables at the end of the year. Overall, Q4 came in line with expectations.
But the headwinds we are facing continue to be stronger and as we already shared in October they will continue to impact particularly in the first half of 2020. Thank to our model we continue to deliver strong financial results while reinvesting in our business.
Our operating margin increased by 30 basis points to 17.3% including significant additional investments in talent for an amount of around EUR 100 million. Headline EPS is up 8.2% we will be proposing dividend of EUR 2.30 representing an increase of 8.5% versus last year.
And payout ratio close to 46%. We maintain free cash flow generation at high level reaching nearly EUR 1.3 billion.
This will enable us to fully deliberate in the four years following the acquisition of Epsilon as planned and announced. This financial performance was driven largely by our [indiscernible] mix and our continued efforts in simplifying our structure.
Last but not least for the second year in a row we are leading the industry in new business performance as you can see in JP Morgan and Goldman Sachs research. As I said earlier Epsilon has made an important contribution to that momentum.
When you look at the most significant wins you can distinguish actually three different buckets of win and we are equally proud of each of them. First, the new clients that are elected to group for their marketing transformation like [Disney].
Second existing clients with whom we have taught the new part of their business like [indiscernible] where we want the creative excitements or GSK that [indiscernible] the Pfizer business just require only one year after we won the account. And finally the existing clients that have organized a review to consolidate like the [indiscernible] where we have been able to regain their trust for the future and get more business.
It is important to underline that at the same time while we were doing this effort we have not lost any major global accounts in 2019. The new business momentum is actually continuing in 2020.
Just yesterday Bank of America has decided to consolidate this creative business with [indiscernible] to accelerate their data-driven creative approach with PVCs. I will now let Jean Michel Etienne to go into the detail of our numbers and I will then come back to you with our priority for 2020.
Jean Michel Etienne
Thank you Arthur and good morning everybody. I will now present our Q4 value and 2019 financial results.
As usual let's start with a net revenue which is up 9.3% on the reported basis at EUR 9.800 billion currencies at the 3.1% positive impact, acquisitions impact is at plus 8.5% all in all the organic growth in 2019 is minus 2.3% in line with our October update. For Q4 2019 net revenue is up by 15.2% on the reported basis.
Currencies have 2.1% positive impact. Acquisitions have a positive impact of 17.7% thanks to Epsilon.
However, organic growth is down by 4.5% in Q4. Moving to page 9, let's present the net revenue by geography.
In Europe net revenue is down 7% on an organic basis. This is largely explained by the consequence of the few 2018 media losses combined with some specific items.
First, the high comps in Q4 last year in the three main countries of the region with a double-digit growth in Germany in Q4 2018 for instance. Second in the UK the uncertainty linked to the BREXIT adds an impact in Q4 because of our exposure to financial services.
And finally fourth is impacted by some projects that have ended as expected and some reduction in scope of work at the end of the year which is typical in Q4 which is an adjustment quarter. North America at minus 4.2% this is explained by the U.S.
where attrition is continuing but also with 2018 media losses with high and high comparatives activities media and finally the repositioning of PVC recipients on business transformation. Asia-Pacific is down 2.3% with some pressure due to metro environment mostly in China.
Latin America returned to positive at 0.9% supported by easier comparatives for this quarter. Middle East and Africa is down by 1.2% in the context of high comps and some digital business transformation projects which have been completed.
Thus for the group organic growth is down 4.5% in Q4. On page 10 you will find the performance for the entire year by geography.
We just give you the growth on an organic basis. Europe is down by 2%.
North America is down by 3.5%. Asia-Pacific is up by 0.8%.
Latin America decreased by 4.9%. Middle Eastern and Africa is growing double digit for the full year at plus 10% for the group organic growth is at -2.3% in 2019.
On page 11, let's have a closer look at our performance by country. Above 10% we are for example United Arab Emirates at plus 1 7%.
In India at 10.4% between 5% and 10% you will find Canada at plus 8.3% and Malaysia at plus 5.3% between 0 and 5% Israel is at plus 3.2% and Spain at plus 1.1%. Below 0% we have the UK and [France] very close to 0 is respectively minus 0.2% and minus 0.8%.
China minus 1.8% and the U.S. at -4.1%.
Let's move now to our consolidated income statement on page 12. I want to remind you that Epsilon is a consolidated from July 1 and in order to present an accurate comparative analyses, we have isolated the Epsilon transaction cost as already disclosed in H1 for an amount of a 40 million before tax.
To introduce our income statement we have in the reality three buckets. First bucket starts with EBDA which stands at 2.245 billion Euros up by 9.6% year-on-year.
Excluding Epsilon acquisition cost EBDA is up by 11.5% in the operating income by 11.6%. Operating income stands at 1.699 billion Epsilon contributing as said already on the last 6 months.
Second bucket is our headline group net income up by 9.8% at EUR 1.188 billion after taking into account net financial expenses of EUR 106 million and income tax of EUR 396 million will detail that later in my presentation. Third bucket is further down in the P&L with a group that income which is down by 8.5% at EUR 841 million and includes the Epsilon transaction cost net of tax at EUR 30 million a capital gain of EUR 21 million mostly coming from the disposal of PVCs Health Services, it also includes some non-cash items namely the amortization of intangibles of EUR 153 million net of tax, the real estate consolidation charge due to vacant location as well as an impairment charge for total of 163 million net of tax and the revelation of now it’s representing a charge of minus EUR 22 million.
On page 13, let's now enter in our operating margin details. To start first on the cost decrease by 2.1 percentage points representing 60.8% of net revenue.
The reduction of this ratio is mainly due to the consolidation of Epsilon which is typically less people intensive than the rest of the group [restructuring] cost at the EUR 180 million up by EUR 12 million versus last year in line with our transformation plan. Also operating expenses amounts to EUR 1.586 billion representing 16.2% of net revenue compared to 14.2% last year.
Again this is largely due to the Epsilon consolidation which have higher as operating costs than the rest of the group and EUR 40 million of Epsilon transaction cost before tax. This leads us to an operating margin of EUR 1.7 billion excluding Epsilon acquisition cost representing an operating margin rate of 17.3% up by 30 basis points versus 2018 in line with indication given in October.
If we move now to page 14 showing the change in operating margin rate. Foreign exchange mostly due to the U.S.
dollar combined with M&A, with the disposal of the PHS and proxy media added the 50 basis point positive impact on operating margin rate. This does not include the impact of Epsilon, which is shown separately.
Higher restructuring charges than 2018 as a 10 basis point impact. As part of our strategic plan we continue to invest in talent to grow out game-changers.
We have also been active in hiring key talents to support the future of our trade-even media operations notably in the second half. All in all this has an impact of 120 basis points.
The implementation of our new organization especially regarding the country model implies some simplifications which have brought 40 basis points to the margin. We also benefit from 30 basis point in lower occupancy costs coming from our real estate consolidation plan.
Variable compensation has been mechanically affected by the means of our targeted organic growth. On the other hand the portion related to the operating margin and cash flow has been raised as we over-delivered on these targets.
The net impact is 70 basis points. Also operating cost including bad debt had the negative impact of 20 basis points.
Depreciation had also a negative impact of 20 basis points and finally Epsilon had a positive impact of 10 basis points on the margin as expected. Overall this has led us to deliver in 2019 and operating margin rate of 17.3% excluding the Epsilon transaction cost.
Regarding now the net financial expense on page 15. The amount of interest paid has doubled in 2019 due to the Epsilon acquisition largely financed with a 2.250 billion bond issue.
This is partly offset by the increase in interest income coming from our cash generation over the last 12 months. All in all interest on net financial debt amounted to EUR 25 million versus EUR 11 million last year.
When we include three elements which are first the interest on these liabilities following IFRS 16 implementation. Second the net exchange to gain or loss.
Third, the other financial expenses, the headline net financial expense is a EUR 106 million charge versus a EUR 80 million charge in 2018. After change in the fair value of financial instruments net financial expense up by EUR 20 million at EUR 91 million.
Regarding the income tax on page 16, the 2019 tax rate is at 25%, up 100 basis point versus last year. We should note that in 2019 we have additionally the impact of the BEAT tax which is the U.S.
tax on imported high added value services for roughly EUR 20 million which compared to EUR 30 million estimated at the beginning of the year. For 2020 we expect an effective tax rate to be slightly lower than 25% in a context where some countries have decided to lower their corporate tax rate.
On page 17, the headline earnings per share fully diluted is growing by 8.9% year-on-year to EUR 5.02 at constant currency and excluding the BEAT tax, headline EPS fully diluted is up by 8.2%. Moving on page 18 relating to the dividend.
We propose a dividend of EUR 2.30 representing an increase of 8.5% compared to last year reflecting the increase in the headline EPS that would imply a payout ratio of 45.8% up by nearly 100 basis point slightly above our commitment of 45%. The dividend will be submitted to the AGM on May 27.
On page 19, free cash flow before change in working capital is 1.250 billion up by nearly EUR 100 million compared to 2018 improving by 8.2%. The main items are first the EBDA at EUR 2.245 billion up by EUR 196 million mostly thanks to the contribution of Epsilon in H2.
Second the tax paid is EUR 349 million up by EUR 21 million and increase mainly due to the big tax as already mentioned. Third the CapEx is EUR 225 million up EUR 29 million with a contribution of Epsilon in H2.
Going into the change in working capital it is a positive EUR 394 million this year supported by few positive elements such as our cash management policy and a better new recovery as well as the impact of Epsilon. Now as I've been saying that during years, four years the objective is to be neutral on the change in working capital year-after-year.
Overall group free cash flow amount to 1.647 billion growing by EUR 336 million. If we move now to page 20, showing the use of cash you can see that the main impact on the increase of our net debt is of course the acquisition of Epsilon.
Indeed acquisition net of disposal amounted to nearly EUR 4 billion in 2019. The earn out and buy out paid is EUR 125 million.
The dividend is an outflow of EUR 297 million. We have also a non-cash impact on net debt of minus EUR 283 million.
Last year it was a positive impact of EUR 183 million due to foreign exchange impact on the debt. This year foreign exchange impact is smaller but there are two main other items which are the change in the mark to market value on cross currency swaps due to the drop in the U.S.
dollars interest rate and the second reason is the impact of the new earn out and buy out. That leads to an increase in a debt of EUR 3 billion.
On page 21, we are presenting the balance sheet. The biggest impact is of course acquisition of Epsilon and to a lower extent currency impact.
Goodwill and intangibles are increasing by EUR 3.700 billion to EUR 13.6 billion. On the liability side you can obviously see the increase in the debt to finance the acquisition.
We are also regrouping all our people in the same building in New York allowing better collaboration between our teams and thus committed a lease extension in June. This translate into an increase of EUR 400 million in the net right of use and rise in least liabilities and IFRS 16.
Let's move to page 22 about the net financial debt. Average net financial debt is EUR 2.375 billion up by EUR 1 billion versus last year.
I will remind you that in 2019 the debt linked to the acquisition of Epsilon has been accounted for only 6 months in the average as it will be taken into account for 12 months in 2020 of course the average net debt will naturally increase. Net financial debt at the end of 2019 is at EUR 2.7 billion.
Regarding our financial ratios on page 23 we show the evolution of our financial ratios including the IFI 16 impact which means including the impact of lease liabilities. With 6 months of Epsilon including our average net financial debt our leverage ratio is increasing by 0.5 times to 2.1 times EBDA.
We also confirm our goal to deliver hedge in four years reflecting our present approach in term of balance sheet management. To conclude my presentation now a brief word on our strong liquidity position at the end of December standing at EUR 6 billion and now I hand back to Arthur who will give you an update to our strategic outlook and of course I remain available for questions during the Q&A session.
Thank you.
Arthur Sadoun
Thank you Jean-Michel. Before we take your question let me give you an overview of where we stand strategically and our priority for 2020.
In 2019 we completed our transformation in term of assets but also in terms of organization. During this period we have been obsessed with what our client wants.
More than ever they have to differentiate and add value to their product through creative excellence and navigate the increasingly complex media landscape. But they also need new capabilities to take back control of their customer relationships and adapt their business model to the digital ecosystem.
Thanks to the investments we have made and all the changes we have implemented. We are now uniquely positioned to deliver what they need to continue to grow profitably.
This through the four pillars of our first of all with a iconic creative brand we can deliver groundbreaking dynamic creativity. Thanks to our unique media networks, tool and partnerships we have unparalleled [growth] and scale along with the strong leadership position in the U.S.
With Epsilon, we have the technology and data expertise to build, enrich, and activate client's third-party data. Any finally, with stability Sapient, we have the engineering and the consulting capabilities to redesign the operation with the customer centric view.
We not only have all of these expertise at say now with Epsilon. But we are also about to deliver them similar fish which is exactly what they need and thanks to our country model we are able to do that in every country and by the way to do it globally through our unified client P&L and the power of one.
Today, our model is clearly adapted to our client needs as you can see on this chart. And it has been the case and it does make the difference when we have been between those and new business track record that you've seen.
Now, for 2020, our priority is to execute on the four steps of organic growth recovery plan. First step, stabilize and progressively return to growth in advertising and media activities.
In 2019, we completed the necessary changes to our organization to set the foundation for these. This is done and we won't need any further improvements.
In 2020, we will focus on leveraging on new structure to faster cross-fertilization in order to improve our performance, thanks to three structural actions. We are finalized our country model over 10 operation, each with a single P&L and a single leadership team.
In the U.S. which represents more than 55% of our activities, we have appointed a single governing body.
The U.S. connects that I am definitely sharing composed of activity there in the market.
This year for the first time, business plans have been following this country like structure, the incentives model has shifted from global expertise to country or regional performance. Any design to reward overall delivery on those targets.
This should accelerate RDC to cross sell and up sell our expertise in creative and media of course but also in other areas like production, commerce, and CRM. We are leveraging our client centric organization with upped up client to fight attrition and grow with them.
Growth plan have been defined for each of them across our 10 markets and around six different capabilities. Finally, we need to increase our win rate in regional and national account entities.
We will apply our new business model that does enable us to win most of the largest pitches interest to yield to mid-size opportunity. Second step, we will bring back Publicis Sapient to grow in the U.S.
by making the necessary challenges to turnaround the situation there. As we have announced at the beginning of last year, we are focusing Publicis Sapient through as on business transformation through industry verticals actually reflecting the structure that support growth in Publicis Sapient internationally.
This evolved again three decisive moves. First, we integrated Publicis Sapient U.S.
digital marketing activities with our creative agencies. And though the brand of [indiscernible] to strengthen our relationship we share client and drive cross-fertilization.
Second, as we did this, we are also disengaging from small one-off project and digital marketing services to focus on resources that are less labor intensive with additional gross potential. Finally, positioning Publicis Sapient through as solely around digital business transformation means we are also shifting from project base work to multi-layer client assignments.
These are necessary measures and it is the right thing to do if we want to drive certain able to chop a finance in the U.S. for Publicis Sapient.
And they are and do exactly the same as what we've done in commentary. These changes produced already some positive results but it would take time to fully materialize in our numbers.
Third step, we will leverage Epsilon expertise for all of our assets. In only six months, we have put Epsilon as the heart of the group and the integration is largely complete.
We now are one unified team gathering all the Publicis Groupe data and capabilities on the Epsilon leadership. We have built a unique data platform, Epsilon People Cloud that span the all data value change in onboarding, enriching and activating our client's data.
And Epsilon has been connected to our share services. We have also started to expand Epsilon outside of the U.S.
thanks to our footprint. And we are preparing the rollout of Epsilon People Cloud in key European countries.
There have been many questions during the last months on whether a group like Publicis should own data units. We actually believe that the right question is another one.
"Can our clients afford to fully outsource the management of their own data to a walled gardens or an internet platform. Or should they also start to build their own data capabilities?"
Some will tell you that the legacy role is only to help clients navigate around the complex digital ecosystem of competing platform. Let be clear, of course our clients need the scale of the platform to be held.
But at Publicis we also believe that they are actually jeopardizing their future is they don't stop building the direct relationship with their own customers through third-party data. It is not a coincidence that the companies that are the most advanced in this domain are also the more successful one.
This is why offer both. On the one end, with Publicis Media we have developed over the last decades the right capabilities and partnership with Google, Facebook, and Amazon of the world.
The billing we are managing and the new business performance in 2019 clearly the most right that we are leader in this market. But as we believe clients need to control their data, we are also bringing with Epsilon something unique that none of our competitor have.
Data and technology upscale to [indiscernible] first-party data and start to engage directly with our customer in a personalized way at scale. This is actually becoming even more important in an environment where privacy requirements are increasing.
Third-party cookies are likely to do shifts at the year and some platform are changing the rules post publish as we have seen recently with good income. Combining Epsilon capabilities with our traditional business give us a unique point of difference on the market.
As I said earlier, today our beta intake capability now represent nearly 30% of our revenues. In the future, this should be the biggest contributor to our growth seamlessly connected with our traditional activities and in creativity in here.
We will now focus on the execution with three clear areas for investment: talent, training, and CapEx. This is the first step of our organic growth recovery gun.
We are a people business. In 2019, while we were implementing our model, we continue to promote a new generation of retail in strategic positions.
And our most iconic brands are biggest countries and after plans. Only last year, we have invested an additional €100 million in talent.
We promoted 100 liters internally and hire 150 top executives. This is one of the reason why we are actually performing so well in the business.
We made the decision to provision our talent profile and actually proceed to a massive talent uplift. This mean that we have also have to let go some people along as reflected in our restructuring cost of €160 million last year.
We will continue exactly the same strategy in 2020 by attracting the best people but also continuing to transform and change the kind of profile we need for the future. To do so, we have put in place a new talent organization and we will also align our incentive plan to encourage greater collaboration across teams.
And backing everyone in our transformation journey is exciting and demanding. This mean that we will need to over invest in-come of trainings.
Our L&D program, Learning and Development program should allow everyone to play an active role in our transformation. We will invest more than €50 million in 2020 to continue to develop the initiative taking in 2019, to rise in our regional expertise products and services.
And on CapEx, our approach will reflect the fact that we are now both the service and product companies. This is why our CapEx should reach around €300 million in 2020 including the integration of Epsilon.
As a percentage of net revenue, this is above traditional agency profile and perfectly the most right, the uniqueness of our business model with investment that we make a difference to future growth initiative and new capabilities. So in 2019, despite the challenge faced on organic growth, we are shifting the revenue profile of the book.
We are demonstrating attractiveness of both in transformative pitches and consistently delivering robust financial ratios. Now that the transformation is completed in term of asset and structure, our organic growth recovery plan will be our main focus.
We have to be realistic, this recovery won't happen overnight. We have designed our map to drive profitable organic growth with a revenue mix that fits with our client needs in the future.
But in the short-term, we will still experience headwinds and the cost of our position will continue to impact our growth rate. When it comes to 2020 outlook, we are confirming what we said in October, our organic growth should be between -2% and +1%.
We therefore anticipate that the first half of the year should be negative particularly in Q1. Most of the improvements we can manage too.
We will update you on outlook at the end of H1. We will then have more visibilities on the four very identified elements that we shape our performance for the year.
The attrition we are experiencing on our traditional expertise, the new business ramp-up mainly in our media activities, the result of the shift we are undertaking with Publicis Sapient in the U.S. and the contribution of Epsilon in H2.
And for margin, our model makes us confident that we will sustain a margin around 17% and it will continue to be supported by the simplification of our structure on one side and our new revenue stream. Seven and 19 was a tough fight, they made us stronger, we are more ready than ever to work as a united team.
Now we will put 100% of our energy in executing our roadmap. Well, to conclude our presentation, I would like to thank our clients for their support in this transformation journey and of course everyone at Publicis Groupe for their efforts.
I would also like to express our solidarity with our teams and clients in China. We are constantly monitoring the situation and are here for them at any time.
Thank you, very much for listening and now we will take your question.
Operator
Thank you. [Operator Instructions] We will now take our first question from Lisa Yang from Goldman Sachs.
Your line is open, please go ahead.
Lisa Yang
Good morning. I have three questions, please.
Firstly, to follow-up on your comments around Google Chrome dropping the third-party cookies. I mean, investors seems to having they're worried about being part of Epsilon and it looks like you implied this could be in a [indiscernible].
So, could you elaborate on that more specifically? The second question is on Sapient.
Could you maybe give us some color in terms of how much of the business has been already transitioned away from the long tail / digital marketing services, how much bookings there are left to do, is that I mean in Q1. Could there still be a few left in the Q2, Q3?
And have you seen any proceeding part from that transition on your DBT business; if you can comment on the pipeline with new contract you may have got so far. And thirdly, it's about the level of attrition.
I'm just wondering how much of that is related to comp specific issues, and you then think you guys could do in 2022 which you start. And related to the issue strategically, P&G's been talking about reinvesting in marketing spending lately and has also outperformed on the organic growth.
Just wondering if that could ease the level of attrition for 2020. Thank you.
Arthur Sadoun
I have already mentioned but I'm afraid the three question are for me. I was hoping that someone here could take one of those.
But I will start, I will take it the other way around or maybe I'll start with attrition. Possible, we don’t comment on any particular clients.
The good news is the clients you just mentioned comment on it. So, my feeling that you should ask him a bit our position there.
He will tell you more thing that I can't in my position. Are we fighting attrition?
Of course. And actually the exercise we did this year with the business plan with upped up clients to make sure that we find every opportunity for cross-fertilization is a big operation.
I don’t know if you remember last year where they announced that someone called Was King [ph], nothing to do with Steve King by the way. That was coming onboard, who was the CMO of Lloyds.
She was coming onboard to help us manage the business spend for every of our clients. This is in place.
We did all the business gun. Of course we've a growth plan for every our clients.
And so, we are doing everything we can in this area. And as you have seen, this is a very well identified point that we have to manage.
Now, to give you a bigger flavor on that, I mean, although we are seeing encouraging sign that actually attrition could slow down and we are again doing everything we can, we are not seeing addition on members. So, so far as you have seen in our press release, we are taking a conservative view on attrition and the -2% low-end of organic growth outlooks.
So, again this is saying that we'll be able to update you at the end of Q2 but I want to make sure that we do the things properly, is way too early earnestly. Sapient, I'm not going to go into every detail but I think you're right a fantastic question about marketing services.
And Sapient, well today this is pretty simple. We have a model internationally that is based on industry practices or industry vertical that we call it where we sell business transformation that has been delivering growth every year for the last five or six or this for the time I knew Sapient.
It's brilliant because it's exactly what are guaranteed and it's very complimentary to our marketing affair. So, we are really bringing together marketing transformation with media and creative and business transformation with Sapient.
And now we can put date at the go. So, this is very powerful and a reason why we won what we've won this year.
By the way I will invite you to look at the press release of some of the client that we win and you will understand that they are not seeing us as a communication partner but as a transformation partner. And again, it's not me saying this, it's our clients.
But coming back in the U.S. we are at a very different position because it was organized by Jo Leslie [ph].
It was a mix of marketing services, a bit of consulting, here and then different thing and we took the hard decision to rationalize it. Nigel Vaz, that doesn't set the lot for the last year, I've done an outstanding job since he took his job in March to actually come with industry verticals with new kind of re-deals.
We brought people from the ex-country of BCG and making there the world to help us bring this culture in the U.S. and we are starting to see the beginning of the traction.
But we had all those people walking in digital marketing services that's actually brilliant, its great talent. And its people that we have here but this is exactly what our creative brands need to actually come with a fully-fledged offer that goes end-to-end in terms of marketing transformation.
So again, we didn’t think in time of operation, we thought in term of spend we brought, I'm not going to give you all the name but we brought that is and give you one the CEO of our East operation in creative, Jem Ripley that came from Capgemini but that who was the former Sapient manager. So, new in the company to actually take on accretive agency there and bring with him all the marketing services expertise and more importantly talent that we were having in [indiscernible].
It made two things. First it enables [indiscernible] and his team to focus on business transformation and on experience because don't get me wrong the differences at the end compared to an Epsilon we know the brand we understand creativity and [indiscernible] and so they brought that to the client and focus on that while all of these people and you will forgive me if I can't give you the detail of number moved into our creative addresses and again I have to be realistic.
We will see progress on our goals but it's going to come step by step but what we are seeing there is for sure incredibly encouraging when you look at the dynamic of the talent, very encouraging when you look at our new business and hopefully we start to pay the organic growth. Now the Google question is a key one and again I'm sorry my friend I promise the next question is for you wherever it is if it's on the creativity will give it to Jean-Michel.
The decision announced by Google will have significant impact on the entire marketing ecosystem. Agencies, publisher a lot to be sure actually clients and customers.
The truth is we still don't know at this stage what will replace cookies at Google Chrome. So I have to be cautious in what I'm telling you but there are some certainties that I can share with you at this stage.
First when it comes to Publicis this announcement implied limited risk and a far bigger opportunity thanks to the acquisition of Epsilon. If you give me a minute let me remind you what is Epsilon, why it will not be affected and how it will be an opportunity for us.
First I am very reliant on cookies. This is completely inaccurate.
Why? Let me explain you why because the data gathered by Epsilon is actually very diverse.
It's online and offline, also offline. It's behavior and social demographic.
It’s intent and transaction. Let's go into facts.
Epsilon can see more than 55% of a non-cash transaction in the U.S. you are what you buy.
We see one both buy out of two on a credit card in the U.S. Okay.
They have gather on and this is critical they have gathered 200 million individual IDs which is a base to create customer relationship and out of those 200 million individual ids they are going up to 7,000 attributes to look at how people behave. So clearly this is why any decrease in sub party cookies will not materially impact Epsilon rich data sets.
That's the first point but there is a second one we believe that what has been announced will be an opportunity for us as our clients will need to find alternative ways to deliver personalization at scale with transparency in measurements. I mean it's as important to deliver personalization at scale than to deliver it with transparency in measurement.
If you don't have the transparency you won't build a long-term relationship with your client. We can do both and where it gets very interesting and maybe Steve can elaborate a bit on that when you combine Epsilon expertise with the leadership position to business media in the U.S.
we are building unique point of difference in the market that is involving constancies. We have seen that in the recent past throughout our new business track record you already have I mean I won't comment on any client that we won but if you take some client that we won and you compare with the kind of results they have posted on things that we have done together you will understand that our unique capabilities to understand customers to build, enrich and activate first party data and bring the scale of media make the difference.
Everyone talks about personalization at scale. We know how to personalize but you should never forget that we also have the scale with media.
You need both if not for big clients and you name the few they won't be able to fight against a direct-to-consumer brand. Steve?
Steve King
Thank you Arthur. I hope you can understand my accent.
I think as Arthur says what Epsilon very simply brings us is technology and data and scale and helps our clients manage their own data and another first party data much more effectively. I think you saw that during 2019 we finished number one in new business again.
And certainly for the major clients that we converted in the second half of the year after we closed the Epsilon transaction Epsilon was a core fundamental component of those successful wins. I suspect that without Epsilon I don't think we would have had the same differentiated offer for those clients.
So you could see the scale of those clients Arthur referred to some of those earlier. So in the same way that we've been using Sapient behind all of our successful pitches before 2019.
The second half of the year we really saw how clients were reaching into how we could use technology and data in a really compelling way.
Arthur Sadoun
I mean I think everyone to assume that the role of the world garden will get higher and we want to make sure that we can help our client build an alternative when they want to take back control on their customer and again we should not oppose both. As I said in the presentation we need to make sure that we leverage the scale of those platforms and to this media is doing an outstanding job on that but in the same time they need to build a direct relationship with the customer.
Thank you, Lisa sorry for the long answer but I guess it was an important point. So hopefully I was not too long.
Lisa Yang
No. thanks.
That was really helpful. Thanks.
Operator
[Operator Instructions] We will now take our next question from Conor O'Shea from Kepler Cheuvreux. Please go ahead.
Conor O'Shea
Yes. Good morning.
Thanks for taking my questions. Three quick questions as well.
First question just on -- following up on the previous question on the repositioning of Sapient U.S. just to clarify, did that already started in the fourth quarter and in your guidance of 2020 minus 2 to plus 1 what kind of range of sort of headwind are you assuming for that repositioning?
Second question on Epsilon I think on the previous Q3 you gave the number for the organic growth for Epsilon. I want to could you share it for the fourth quarter as well and then the final question maybe for Jean-Michel could you give us some guidance on the financial costs and restructuring costs in 2020?
Thank you.
Arthur Sadoun
Thank you. If you don't mind I am going to take question one on Sapient and then I am going to give Jean-Michel and I will end up with Epsilon for the last quarter.
Sapient U.S. yes we did started and again this had a big impact in 2019 and it is one of the well identified element that will make the difference next year.
Let me tell you quickly what we did. We’ve changed the management team in February or March and put Nigel Vaz that is the one who made the success of the U.S.
Sapient internationally to build it in the U.S. He knows how to do that.
He has a fantastic group with clients. He has been with Sapient for 20 years but he is a very model manager hope he is not listening to the call and he is doing a very tough because we are talking about a big-big shift but a great job at the moment and as I said we are starting to see the results.
There is virtually to sit in on numbers so to make a long story short we have not waited to start it actually the structure is in place, the organization is in place, most of the talent out there for example we brought the fantastic creative called John Maeda because again one of our differentiator is that we take an experience view and customer view on business transformation. So this is actually starting to get traction.
We are taking the tough decision to cut the long tail to move from project-based to long-term contract. We have decided to focus our best people on the project of the future versus shorter term organic growth.
Now as you rightly pointed out in the well identified elements that will make the difference between the minus two and the plus one sapient in the U.S. as definitely an important role to play.
No pressure Nigel. I think Jean-Michel you want to take the next one and then I answer on Epsilon.
Jean Michel Etienne
So Conor we will answer regarding the restructuring charge for 2020. So we expect restructuring charges to be at a similar level as in 2019 with some postponement from 2019 to 2020.
So we should expect an amount between EUR 110 million and EUR 120 million.
Conor O'Shea
Okay and the financial cost with the full year debt from Epsilon?
Jean Michel Etienne
Regarding the financial cost we should expect plus EUR 60 million for regarding the acquisition of Epsilon. This is what we have in our forecast.
Conor O'Shea
Okay. Many thanks.
Arthur Sadoun
First of all most of them are the U.S. so I guess not a lot of them listening to this call but the least we can say that the Epsilon team had very, very busy year.
When you take it back we had the sales process during all H1. We had the integration as soon as H2 and [indiscernible] it is almost completed and more importantly so far it is really a success.
We didn't wait actually one day for them to focus on new business with us and this is what you see what you have seen on the [indiscernible] and even more important year on this note and if it was not enough we have done everything that we said in terms of efficiency which had obviously a very important impact of the suppliant. So very busy year.
Now as anticipated and as we said from day one Epsilon total organic growth probably is at minus 2% on the full year. This is a very important point fully explained by CG affiliate and [indiscernible].
The truth is we did not wait one second to address the difficulties of this both businesses that represent more than 100% of the decline. CG affiliate I told you quickly we place them on the strategic review to explore different ways to extract value while they are starting to collaborate with PVCs media.
The agency took a week. We merge it with [indiscernible] which by the way is giving great talent to those networks.
I was talking about earlier about Bank of America with -- you can see how energized the brand is and we created immediately thanks to those capabilities, center of excellence in [indiscernible] in Chicago within [indiscernible] but we did that I would say in the first month which by the way are impacting again. This is why you have this number.
We cut the wrong pair I mean we did the work that needs to be done when you start it. Now let's focus on Epsilon 2.0 which is roughly 80% of the business which is what we are expecting building, enriching and activating first party later.
The growth of 80% of Epsilon now which is what we bought what is making the difference in your business and will help us and help our client to navigate into change we just told. The growth overall year is the plus 1% with a flat H2 which is exactly in line with what we are expecting.
So we are on track. Now it's really about using Epsilon people cloud platform to actually deliver personalization for our clients, continue to grow our business through personalization and new business and don't miss the culture.
I made the point about learning and development. This is also why we are increasing our pool there is we have a fantastic engine that represents a massive opportunity to help our client in a new way and again the Google Chrome announcement have that but we need to make sure that it's spread everywhere.
Hopefully we made a simple and comprehensive presentation about our four pillars. Epsilon is a new one in the family and we need to make sure that people that are not part of Epsilon but will need them in media and creative in Sapient can understand how it works.
Conor O'Shea
Many thanks.
Arthur Sadoun
Thank you very much.
Operator
We will now take our next section from Julien Roch from Barclays. Your line is open.
Please go ahead.
Julien Roch
Yes, good morning Arthur and Jean-Michel, Steve I have four questions but they're all numbers driven and you can answer in less than one minute. I'll ask them one by one if that's okay with you.
You're moving to one Publicis still have verticals like communication media. How much did media grow in 2019?
If you don't want to give us an exact number and I wouldn’t prefer an exact number. Can you tell us whether it was negative?
Zero to 2.5, 2.5 to 5 or 5 to 7.5?
Arthur Sadoun
As you know we don't give the number of products that is but the reason why we are doing it and this is because it's becoming more difficult also to differentiate the value that each of our person bring. I want to give you a very simple example.
When you win this it is a media pitch. Okay.
But when we go on stage we said we're not going to give you a media proposal. We're going to explain you how we can help you to transform your marketing true for[Bio], true for Novartis, true for [indiscernible] before that is we come on stage and we explain that and so the winner is going to be individual media but the different component picture without the help and then follow up in the same way this is why we are moving to a country model.
I think that I guess it's difficult for you to understand how much of the shift it is. when you start to say the UK and took time about the U.S.
That you're going to have a single CEO with a single team on the single P&L and that’s what a client it is more integration it's to connect creativity with media with data and technology and for the sake of this transformation we stop to, we need to start thinking in term of the power of one and bring an end to end solution. This changed the culture definitely but also change the way we report our number.
And so I can't give you a detail on that, I can tell you that if you look at the new business type table you will see that PVCs media won most of the pitches and at least two biggest in 2018 which were GSK and FCA and this year again not most but all the significant pitches with a significant difference which is we haven't lost any image or account in 2019. That was the first part.
Julien Roch
That's okay. Attrition cost 200 basis point in 2019 but how much was attrition in terms of revenue either in Euros or percentage in 2018 the starting point or in 2019 the ending point?
Arthur Sadoun
Unfortunately the same. I mean that's same.
Julien Roch
But.
Arthur Sadoun
It was roughly the same. This is why we are staying very realistic for next year.
Again we are feeling that attrition is slowing down mainly because we are [indiscernible] better but for the moment there is no impact on our number and by the way we continue to see some client that are calling you and you just have to look at the earnings and compared to the client. As I said we are in a significant massive for saving plan and as a partner you will have to take a part of it and as usual we are very, very exposed in traditional way which is a good news for our margin but not always a good news for our revenue because this is what they cut first and we have to assume at this stage that if we want to be realistic there will be attrition for sure.
Will it be the same level of ‘18 and ‘19? Too early to say.
We will tell you more at the end of H1.
Julien Roch
Sorry Arthur I wasn't clear. I am not asking what's the impact of attrition which was 200 basis point in 2019 I'm asking why is the percentage of revenue that you consider to be attrition?
So do you know did you start attrition 30% of revenue? Is attrition 50% of revenue?
Arthur Sadoun
If I understand what your question is you touched you're asking what part of our activities is impacted by attrition?
Julien Roch
I'm asking what percentage of revenue when you say attrition impacted revenue by 200 basis points which is the annual impact, what is the starting point or the ending point. When you say –
Arthur Sadoun
You are talking about the accretive business that is roughly 30% of our revenues or roughly 3 billion.
Julien Roch
Okay. Thank you.
Third question is impact of net new business in 2019 overall. You said negative but how much and whether you can give us any indication on 2020 already?
Arthur Sadoun
Now the net new business is positive. You just have to look at the different report but I can't give you a number.
Julien Roch
I thought you said in a statement that net new business in 2019 if you include the losses in 2018 was negative.
Arthur Sadoun
No. I missed something, but maybe Jean Michel you want to add something on that?
Jean Michel Etienne
The contribution is positive. There are other factors which has been also negative on the growth of the year
Arthur Sadoun
No, no if you want to decompose organic growth, it's pretty simple. There are two good news and two structural headwinds.
As the good news is our game changer are continuing to grow of course less than the past year because the scale is bigger about 18% and our net new business is definitely positive but then when you add to that the attrition we're having our traditional business on one side and the cost of our transition you understand the net and what I was saying earlier on my presentation is that although our game changer are progressive in a good way and although new business is helping our growth enough not enough to compensate the headwinds we are saying both items I just mentioned.
Julien Roch
Okay. And the last one.
CGA period which you were selling what were the revenues and operating profit in 2019 so we can have the base and they consolidate CGF units?
Steve King
Not a lot of change compared to what you know already regarding CGA [indiscernible] roughly $150 million with a high margin as you know.
Arthur Sadoun
But again we put it on the strategic review and we are exploring the different option at this stage. The thing is hopefully you would agree that we didn't include the second to integrate Epsilon and the reason why honestly the integration is going so well is that it's not one or two people that both Epsilon it's an entire management committee that decided that this is what we needed and once we did that integration as the way faster we have spent most of our time on what is the future of Epsilon and future of [indiscernible] which are the ability to build, enrich and activate first party data which is 80% of the business.
We have been fast in integrating the creative business because we knew that for revenue and cost reason if I was making sense and by the way the expertise were having [indiscernible] on CJ was taking our time. It's we're going to do what is best for everyone starting with the shareholders we're taking our time.
Julien Roch
Okay. Thank you very much.
Operator
We will now take our next question from William Packer from Exane BNP Paribas.
William Packer
Hi there. Thanks for taking my questions.
Three please. Firstly, you didn't really want to comment on the performance by vertical.
So could we have a performance by client type. So FMCG it was around 25% of revenue in 2019 I think how rapidly did it decline in 2019 and can it can improve in 2020?
Secondly could you just remind us on Publicis Sapient what percentage of Groupe revenues that exposed to those difficult dynamics that you mentioned on the call? And then finally if we rewind to this time last year we had an outlook which was focused on an improvement in the second half of the year.
We don't have the same by now but [indiscernible] second half weighted, could you just talk us through what's different this time? What gives you the added confidence that the second half of the year should improve?
Thanks very much.
Arthur Sadoun
Maybe I will start with outlook.
William Packer
Thank you.
Arthur Sadoun
Hopefully what you will feel here is we have decided in 2019 to do the hard work. I mean the country model, the repositioning of Sapient, the acquisition of Epsilon, bringing more than 150 new talents, doing 100 promotion, investing 100 million in talent at the moment where we have a negative growth.
We need a lot of things to make sure that we can come back to organic growth. We have been feeling good about it because whether you like it or not winning new business shows that you have the right model for the future and we have been able to sustain a very strong financial which by the way shows the fantastic work that has been done to simplify a structure which is not only focus region.
It's first because this is how you should manage a company in a linear and more agile way but it's social showing that despite the negative growth [indiscernible] margin which means that something should happen what we are winning versus what we are losing. So all of this is good.
Now we know that organic growth is a top priority and focus. We have a very clear roadmap as I described to create cross fertilization will it be at country level, or at client level we know how we can turn around Sapient because it is the case outside of the U.S.
so we need to bring it there. We have an Epsilon that is starting very good momentum and traction that has already won new business with us.
That was of course bring next year and we have very solid financial ratio which means that we can continue to invest. So you take all of these.
You look at the dynamic routing at the moment again, Bank of America yesterday and yes we feel confident that you will see sequential improvement of overtime and although I mean H1 should be negative particularly in Q1 we think that we will see some improvement in H2 and time will tell but we are focusing only on that. We gave a large guidance from minus 2% to plus 1% for the same reason which is we know that if we want to have a good edge to attrition I have to go down, new business ramp up I have to accelerate Sapient US has to win project and the contribution of Epsilon should be better but that things that are on the way we are doing these 20 hours a day and the truth is it would take time.
We have to be realistic. We need to make sure that we manage through time and we do that properly but we feel extremely confident in the matter we are building.
We went through a tough time. We took tough decision.
It's a moment where we are working like crazy but there are signs of the fact that yes contribution in H2 should be better. That was for this.
Then the Sapient is roughly 20% of our revenue the U.S. is roughly 2/3 and out of those 2/3 you can extract the marketing services the part that which is very more competitive and you have an idea of the level.
Now I'm not going to comment on every industry vertical and how they are growing but I'm happy to take the FMCG question. I mean for those that are European for me FMCG is a bit like [indiscernible].
We are mixing things that are completely different. Within the FMCG you have roughly those that have been investing in technology, investing in our brand, investing innovation and that are being a fantastic track record and I guess during this year earning results you will see some and another that didn’t notice us and the truth is, the good news is the one that are winning we have some.
The good news is the one that we are not winning yet we are doing everything we can to be on their side to add them grow in the future but it's true that for some of them we’ve take the pain for them with them and something for them and we will make sure that in the future we leverage our loyalty and our commitment but honestly it becomes more difficult every day to talk about FMCG in general.
William Packer
And just in terms of improvement in the trends with those customers are you expecting an improvement?
Arthur Sadoun
Improvement on what, sorry?
William Packer
With the FMCG client spends with you, do you expect that to improve next year?
Arthur Sadoun
We are seeing some early sign of slowdown in attrition but when I say we are seeing is now in the commercial relationship in the time we spend with clients, is the where we want to invest in our business in general but it is not yet materialized in our number and this is why again we presented the minus 2 to plus 1.
William Packer
Thank you.
Operator
We will now take our next question from Adrien de Saint Hilaire from Bank of America. Please go ahead.
Adrien de Saint Hilaire
Hello, good morning everybody and thanks for taking my questions. So I've got a few of them please.
First of all we saw this week that Accenture decided to stop their media auditing practice. Do you expect Accenture to be more aggressive around media buying and planning for 2020 as they drop this activity?
Secondly, can we have an idea of the different growth rates between Sapient International and Sapient U.S. if the international bit is the blueprint for the U.S.?
And then thirdly after your [indiscernible] short-term trends but should we deduct from your comments that you expect Q1 to be in line with the Q4 trends? Thank you very much.
Arthur Sadoun
Thank you Adrien. So first of all as I said each one should be negative mainly in Q1 but we expect sequential improvement.
So we are not expecting Q1 to be at the level of Q4 but Q1 will be negative. H1 should be negative.
So you understand that again if we are negative on six months the impact on our growth in Q1 will still be significant. Okay.
The second question was on the growth rates of Sapient internationally and in the U.S. Let me do a short answer that is in line with what I just said before.
We are growing outside of the U.S. We are not growing in the U.S.
That's it. And then the question of Accenture is very important one actually and let's start by where we are I mean first of all and they said it properly well by the way in shutting down their media department Accenture is aligning itself with the kind of new non-conflict rule that are in our business and that are very important.
So they had to do so. You can take the glass half full or half empty.
If you take it half empty you say okay, you have a company that is very powerful that is coming into our field because the truth is they are coming into our field. If you take the glass half full [indiscernible].
This is actually and this is very important because this is something that we've been discussing for a while where the discussion with the [indiscernible] and more importantly this is something that we are claiming since the acquisition of Sapient, which was honestly maybe the most visionary acquisition that we did so far. What is happening with Accenture today is definitely an additional sign that the convergence between marketing transformation and business transformation is happening.
And so if you believe that Accenture is going to spend more time on our field the fact that we have Sapient 15,000 strong engineer data analyst consultant that can bring the same fire power in term of technology and data to a pitch or to a client put us in a unique situation. I won't mention any pitch but you will find it in the price.
It will not be the first time that we've been opposed with them and on every big pitch while we have been confronted to Accenture in our marketing field where they were bringing their expertise we are able to win for two reasons. The first is we know our field for decades and the second is we have an arm with Sapient that can fight back [indiscernible].
So it doesn't mean that we're going to win everything. We are a trillion dollar market.
So it's not the market of transformation the truth is there is room for everyone. But this is an additional sign of the convergence between marketing transformation and business transformation.
Adrien de Saint Hilaire
Thank you very much.
Operator
We will now take our next question from Matthew Walker from Credit Suisse. Your line is open.
Please go ahead.
Matthew Walker
Thanks a lot. Thanks for some of the explanations around Epsilon.
If you could just clarify, so within Epsilon you have a lot of client first-party data that is usually matched with third-party cookies to see how people are moving around the web and what they're doing. So could you say how much revenue in Epsilon does come from that area where you are matching first party data with third-party cookies.
The second thing is could you maybe explain the costs of expanding Epsilon around the world? You mentioned that you are expanding it into markets outside the United States.
So if you could tell us how much is that going to cost and how long is it going to take?
Arthur Sadoun
Okay. So as I said now on the first question, we are definitely not depending on third-party cookies.
And I can't give you the detail. Maybe Steve can tell you what by the way on how it moves because this is more, on Epsilon it's an opportunity where more than a risk.
On media it will need some changes that we can't anticipate too much at the moment, but it will have, it will need some changes. So maybe Steve you can tell so well on that
Steve King
Yes. Hi Matthew.
Yes. I mean as we said earlier this decision which was just announced by Google but what we had anticipated as you have seen and heard it is definitely going to have a significant impact on the entire ecosystem that we operate in the sort of whole marketing sphere on obviously on agencies, on publishers, on clients and of course customers.
The impact probably is going to be on clients as you ask is probably going to be threefold. Enriching their own data is going to become more difficult, definitely.
It's going to narrow the number of potential partners that are able to do the activation and it's going to limit their ability to measure effectiveness in a really transparent way. So this is likely to translate into less relevant advertising for consumers and more marketing waste.
I think as you've seen earlier when we first met with Epsilon during the due diligence one of the most impressive things if they have been planning for a cookie less world back from 2012 they are really prepared for this. So this we think is a huge opportunity for us and as our clients need to find other ways, alternative ways to deliver personalization at scale with transparency in measurement and obviously with Epsilon we can do two things.
One, we can find an alternative ways of reaching these consumers and two we can use the technology to help them build their own first-party data solutions. The data sets that they're going to be able to enrich it and of course a platform in order to activate it.
So the fact that we have Epsilon at the core of our business as you can see is something that we actually see as a huge opportunity although the impact of this by Google Chrome is difficult to predict on the whole environment but certainly I think our clients are going to see this as a positive momentum from us.
Arthur Sadoun
Thank you Steve. On international I know that time is flying but I would love to take a second.
Again Epsilon does three things. The first is they have the technology to build first party data.
This is a technology that we can export in our main countries and we have a plan for that. This is not huge source of investment.
We need to make sure that we have the people in the countries that can do it. The second point is the opposite.
Epsilon in the U.S. has these massive data sets that again is a fantastic opportunities at the moment where the wall of the world garden are getting higher that of course is not exploitable and so the question is what kind of data do we have in the different countries.
Okay. And in some countries we are pretty advanced like in France or in Germany.
In other we need to make sure that we build the right data set and this is where there might be some investment to make. It's too early to say because we can start with what we got but to answer your question this could be an area investment which is data that could be activated at the local level.
And then the platform is going to be only one platform is the Epsilon [indiscernible] you will see the interface the way we can work with that, the way we can boost it, from by the way [indiscernible] for those that remember the investor days it's not that we started eight months ago thinking that data where what we do and that first party data will be the future. We started two years ago but we put a big investment on the table to make sure that we can accelerate and get the scale and the Epsilon people [indiscernible] is something that we're going to export fast but we are going to do it with Epsilon but also our media operation.
Matthew Walker
Okay. Thank you very much.
Thanks a lot.
Operator
We will now take our next question from Omar Sheikh from Morgan Stanley. Your line is open.
Please go ahead.
Omar Sheikh
Morning everyone. So due to time just a couple of quick ones.
If that's okay. So first of all on actually on Sapient.
Could you just quantify what do you expect the shift from project based work to have on organic growth in 2020? So what drag do you expect during this year?
That's the first question. And secondly on attrition you kind of tantalized us with the comments you made about it encouraging signs that it could slow down.
Could you just maybe just quantify that? You highlighted 200 basis points of drag in 2019.
Do you expect that to be better in 2020? Thank you very much.
Arthur Sadoun
Okay. So I guess my English is not good enough.
I'm going to have to make sure that we are very, very clear on that. We see some early sign of our clients starting to spend and understand that there is a future in spending more in data, in technology and in creativity which is a good thing.
The problem we are having there is that we don't see that in our number. So we need to be realistic for the moment.
I can promise you that at the second we see this improvement we will come back to you and starting with Omar. But for the moment we need to be very, very realistic on that.
On Sapient I can't give you the details of the project base because again it's going from one year to another and some things that we have stopped this year with last year we still have an impact this year but again as I said earlier definitely Sapient is the well identify, one of the well identified elements that will make the difference between the minus 2 and the plus 1. I'm sorry I can give you more detail at this stage but hopefully we'll understand at least that we are sharing all of this with you to put you in our kitchen, to understand the kind of decision that we are putting on the table to make sure that we come back to have any growth and to come back to one of previous questions with sequentially improve organic growth while maintaining our financial ratios and bringing to our client what they need for the future.
Omar Sheikh
Okay. Thank you very much.
Arthur Sadoun
Thank you Omar Sheikh. I see we have time for one last question.
Operator
We will take our next question from Lori Davidson from Deutsche Bank. Please go ahead.
Lori Davidson
Okay just one question for me. I mean just time the CapEx is 300 million.
When we think about the new level of CapEx intensity for this business going forwards can you give us some idea of where you're thinking about CapEx sales now going forward? Thanks.
Jean Michel Etienne
It’s Jean Michel. So taking you through these CapEx.
So we said EUR 300 million of CapEx for 2020 this has increased due to Epsilon of course which is a techno company. So this meant that we have more CapEx on the [indiscernible] part of the group for sure.
We should also take into consideration that in 2019 and 2020 we have still some CapEx which are incurred for to support the real estate consolidation program which is some things which would be finished at the end of 2020. So we could have a little bit less CapEx in 2021 but we have also to invest in the platform that we have -- various platforms.
So we consider that the EUR 300 million of CapEx that we have in the 2020 is something sustainable for the future.
Arthur Sadoun
But it comes back to the previous question about the investment on Epsilon and part of this CapEx is the development of Epsilon internationally in terms of technology and asset. So it's all in our plan and it's again the good news about Epsilon is that this is what people wants now.
Our client wants now and this is why we are accelerating on the international side is that our client I've seen the kind of traction starting to have in the U.S. and they want to make sure that we can expand that.
Look, just to wrap up I mean 2019 has definitely been a year for transformation and a tough year in a way and a very exciting year on. We have adapted a structure with the country model.
We are and we have transition to the Sapient in the U.S. to make sure that we can bring business transformation as we are doing outside of the U.S.
and finally we have acquired and I would say sincerely successful integrated Epsilon. Adjusting the pressure and in the presentation we definitely have the profiles via sets to deliver what our client needs and we are obsessed by that at the moment.
What has happened with Google Chrome, what has happened with Accenture the way our client are moving now means that what we make the difference tomorrow if we want to sustain a very valuable business and grow is to bring what they need which will always be creativity, which will always be media because they need the scale but they will need the data to take back control and they will need the technology to transform their business. It's very difficult to bring all of these people together.
It's very difficult to make them understand that what matters is an end-to-end model but when we do it well we win as we showed in our new business and by the way when we are doing well we are improving our financial ratios. So to be clear our main focus in 2020 is the execution of our plan to faster organic growth and we will be focusing on that every day.
I will just thank you very much for this attention and this long call. Normally we do shorter and I hope to see you soon.
Thank you.
Operator
Thank you. That will conclude today's conference call.
Thank you for your participation. Ladies and gentlemen you may now disconnect.