Publicis Groupe SA
PAR:PUB
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
74.76
108.1
|
| Price Target |
|
We'll email you a reminder when the closing price reaches EUR.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Publicis Groupe SA
Earnings Call Analysis
Q2-2023 Analysis
Publicis Groupe SA
Publicis Group has demonstrated resilience and strength during the first half of 2023, boasting an organic growth rate of 7.1% in Q2 which surpassed expectations, especially noteworthy after experiencing significant double-digit growth the previous year. This performance was buoyed by robust data and tech activities, specifically through Epsilon and Publicis Sapient, alongside a solid momentum in production offsetting cuts in classic advertising. The group's media activities experienced particular success, contributing to the group's varied and balanced revenue streams.
The group maintained an impressive operating margin of 17.3%, equivalent to the record levels set in 2022. This achievement echoes the effectiveness of its platform organization and operational efficiency amidst global economic pressures. A proactive investment strategy led to strategic acquisitions like Retargetly, Yieldify, Practia, and Corra, which complement existing capabilities and point towards continued growth and innovation.
Despite the fluctuating currency exchange rates, Publicis Group's headline earnings per share increased by 11% to €3.21, indicating a strong market position and the potential for enhanced shareholder returns. The successes in the first half of the year have also prompted the Group to raise its full year organic growth expectations to around 5%, with the confidence to achieve a stable 3% growth in the second half. Additionally, operating margin rates are predicted to be close to 18%, with free cash flow at least €1.6 billion, painting an optimistic picture for the remainder of the year.
Publicis Group's net revenue reached €6.318 billion in the first half, marking a 7.6% growth on a reported basis. This figure is underscored by significant contributions from North America's 4.9% organic growth and Europe's remarkable double-digit organic growth at 15.2%. These figures reinforce the Group's strong performance globally despite a challenging macroeconomic environment.
You don't have any saved screeners yet
Good morning. This is the conference operator. Welcome and thank you for joining the Publicis Groupe Half Year 2023 Results Presentation and Webcast. As a reminder, all participants are in listen-only mode. [Operator Instructions]
At this time, I would like to turn the conference over to Arthur Sadoun, Chairman and CEO. Please go ahead, sir.
Thank you Alicia. Bonjour, and welcome to Publicis Groupe first half 2023 results call. I am Arthur Sadoun and I'm here in Paris with our CFO, Michel-Alain Proch. As usual, we'll take your questions together after the presentation. Alessandra Girolami is also here and will be available to take all of your question offline after the session.
I will start this call with our H1 highlights. Then Michel-Alain will provide more details on our number. I will then share with you what makes our model not only resilient to business cycle today, but also future proof, particularly in AI.
But before we start, please take the time to read the disclaimer, which is an important legal matter.
Okay. Lets dive into our presentation. There are three key highlights to take out from our H1 results. Our Q2 organic growth came above expectations at plus 7.1%. Our operating margin is at a record high at 17.3%. We are now in a position to upgrade our full year guidance on all KPIs, demonstrating again our resilience to business cycles.
Let's get into the details of this performance. First, we continue to outperform the market on organic growth, thanks to Epsilon, Publicis Sapient and the impact of our new business track record on Publicis Media. At plus 7.1% organic growth, Q2 came ahead of expectations after double-digit growth in 2022.
On the macroeconomic context that is still challenging, the strength of our uniquely balanced revenue mix continue to perform. The growth of our data and tech activities, representing one-third of our revenue, came in strong. Epsilon posted plus 6.8% organic growth following a high comparable base of plus 14% in Q2 last year.
Publicis Sapient was a very solid plus 5.5% for the quarter despite very high comparable at plus 19% last year and clients slowing down their decision-making process in digital business transformation, as we anticipated in Q1.
Creative saw a low single-digit organic growth for the quarter with some expected localized cut on smaller projects in classic advertising, compensated by continued solid momentum in production. Media activities, which represents another third of our revenue, accelerated even further with double-digit organic growth, thanks to our new business track record in 2022.
The strengths of our differentiated offer was again visible across our regions. The U.S. posted a plus 5% organic growth on top of plus 10% last year despite ongoing macroeconomic tensions, integrate a very solid Publicis Sapient, continued strength at Epsilon and an acceleration in Media to double digits. Creative was stable as anticipated this quarter.
In Europe, the performance has remained particularly strong at plus 15% organic in Q2 on top of double-digit last year. The U.K., with plus 17% organic growth, was led by Publicis Sapient and Media again this quarter; while France accelerated to 5% and Germany stayed strong at plus 10%.
Asia Pac improved to plus 3% organic growth in Q2. China delivered a very solid dynamic we anticipated with an acceleration to plus 7% this quarter on top of a positive performance last year.
Second highlight, we continue to deliver the best financial KPIs in our industry for H1, thanks to our platform organization. Our operating margin came in at 17.3%, in line with the record level of 2022. Our country model, shared services and our global delivery centers allow us to deliver this performance, all while continuing to invest in our talent, maintain record high bonus pool and absorbed we have inflation.
When it comes to free cash flow, it is worth mentioning that we absorbed the impact of the U.S. R&D tax payment related to 2022 and delivered €725 million in H1 above 2022 record level. In line with our capital allocation, we invested in bolt-on acquisitions to complement our capabilities in the last 12 months.
We acquired Retargetly and Yieldify to further expand Epsilon data reach; Practia, to strengthen Publicis Sapient global delivery center footprint in LatAm; and Corra for its Adobe expertise in the U.S. We did this while completing our share repurchase program to cover ITIs and continuing to deleverage as anticipated, reaching an average net debt of circa €500 million in H1. Finally, thanks to our strong operational performance, combined with our improved interest income, headline EPS was up double-digit again at plus 11% to €3.21 on top of plus 29% growth in H1 last year.
Third highlight. Thanks to our ability to win market share and the resilience of our model to business cycle, we are upgrading our guidance on all KPIs for the year. On organic growth, we now expect to deliver circa 5% for 2023 above our 3-year CAGR at plus 4%.
There are two reason why we are raising our full year 2023 expectations. First, of course, a better H1 than anticipated. Second, despite persistent macroeconomic uncertainties that could lead to localized cuts in classic advertising and more delays in midsized business transformation project, we are confident to deliver an unchanged expectation for H2 organic growth at a rock solid 3%.
We are also confident to upgrade our guidance for financial ratios, thanks to the proven efficiencies of our platform organization. We are now anticipating to deliver an operating margin rate close to 18% and free cash flow at, at least €1.6 billion. Concretely, our upgrade in organic growth and operating margin also means an upgrade in EPS despite the recent moves in the euro-to-dollar rate. This is it for our three highlights.
I will now leave the floor to Michel-Alain. I will then come back to share with you what drive our confidence in our model today that is ready for tomorrow.
Thank you, Arthur. Good morning to all of you, and glad to be with you today. I will begin the evolution -- I will begin with the evolution of the net revenue for the second quarter and first half of 2023.
The Group posted a net revenue of €6.318 billion in H1, representing an organic growth of 7.1%, and this despite a high comparable base of 10.4% organic growth in H1 last year. Reported net revenue growth was 7.6% in the half year.
Looking at the second quarter, net revenue was €3.239 billion, up 5.4% on a reported basis. This includes €213 million contribution derived from a 7.1% organic growth; a net negative impact of ForEx for €73 million, half of it coming from the USD and the other half across all other currencies; finally, a contribution of acquisition net of disposal of €26 million. This includes the revenue of the acquisition we closed in 2022 such as Profitero, Yieldify, Retargetly as well as our most recent acquisition of Practia and Corra for about €29 million altogether. It was partly offset by some disposal representing €3 million.
Let's move on to the next slide, which is giving you the dynamics of our Q2 organic and reported growth by region. North America posted a solid 4.9% organic growth after 10.3% last year. As I mentioned, the impact of the ForEx was obviously negative, bringing the region reported growth to 2.2%. Europe again recorded double-digit growth this quarter at 15.2% organically. This came on top of a very strong comparable of 10.1% in the prior year.
Excluding Outdoor Media activities & the Drugstore, Europe growth came in at 11.6%. Asia Pac posted a 2.6% organic growth with China accelerating to 7%. Middle East and Africa and Latin America continued to perform well with 6.5% and 5.9% organic growth, respectively, on double-digit growth last year.
So let's begin with more detail on North America. The region posted 4.9% this quarter with the U.S. at 5% and Canada at 2.2%. In the U.S., the Group's largest country, all activities continue to perform well. Media accelerated to double-digit growth on top of double-digit last year, fueled by strong underlying trends and new business won in the last 18 months, notably in the health care, food and beverage, and retail sectors.
As anticipated, Creative activities were stable due to localized cuts in classic advertising. Production remained solid, particularly in automotive and retail. Publicis Sapient grew 5.1% organically as the demand for digital business transformation remains solid, in particular, in leisure and travel and in retail. This comes in a context of slower decision-making process and after a high comparable basis of 17% last year.
Epsilon grew 6.9% organically. All divisions posted a very solid performance in the quarter and particularly digital media. It is worth noting that both Publicis Sapient and Epsilon grew strongly compared to 2019 levels at 38% and 31%, respectively, highlighting the structural demand for those capabilities.
Let's turn to the performance in Europe on the next slide. As I mentioned earlier, Europe recorded 15% organic growth this quarter or 11.6% excluding Outdoor Media activities & the Drugstore.
In the U.K., organic growth came in at 17%. This performance continued to include a double-digit Publicis Sapient, like in the previous quarters, with significant contribution from financial services and retail clients. Also notable was a double-digit growth in media supported by global clients and a solid Creative.
France, which represents 5% of our net revenue, posted a 5% growth, excluding Outdoor Media activities & the Drugstore. This implied an acceleration this quarter compared to Q1. The country saw double-digit growth in Media, notably in the nonfood consumer product sector as well as at Publicis Sapient.
Germany, which represents 3% of our net revenue, posted a 9.5% organic growth with double-digit in Media and a very solid Publicis Sapient, particularly in the manufacturing sector. Creative posted a positive growth over the quarter.
Lastly, our operation in Central Eastern Europe accelerated to 17.1% led by both creative and media, mostly thanks to global clients. The Group posted double-digit growth in Poland, Hungary, Czech Republic and resumed its activities in Ukraine.
On next slide, I will detail our performance in the rest of the world. In Asia Pac, which represents 9% of Group net revenue in Q2, we posted 2.6% above Q1 performance. Importantly, China accelerated from 3.7% in Q1 to 7% in Q2, driven by new business wins in Media, which grew double digits.
Thailand sequentially improved while remaining in negative territory due to the phasing of a large project in DBT. Meanwhile, Singapore, Vietnam and Japan posted double-digit growth. Australia and New Zealand were broadly flat. In Middle East and Africa, we posted 6.5% organic growth. It was largely driven by media activities. Publicis Sapient was stable due to some project delays coming from slower decision process.
Latin America posted a 5.9% organic growth, largely driven by media. Mexico, Colombia and Argentina were the main contributors. Reported growth was 15.1%, taking into account the recent acquisition of Practia in Argentina.
For your reference, you'll find on the next slide the H1 regional performance by regional performance. As you can see, Q1 and Q2 growth by region were actually quite similar. North America grew 5.3%; Europe, 13.8%; APAC, 1.7%; Middle East and Africa, 11.2%; and Latin America, 6.7%.
On the next slide, you will find the Group performance by client industry for the first half. This is based on an analysis of our main clients representing 91% of our net revenue, and it excludes Outdoor Media activities & the Drugstore. In H1, all of our client industries but TMT posted positive growth. Automotive continued to perform well at 6% after 5% last year, fueled by growth at existing clients.
Financial posted 2% in H1 despite a very high comparable basis of 14% in H1 2022. TMT is coming back to positive territory in Q2 2023, thanks to new business gains, improving from negative growth in Q1 2023. Food and beverage posted 20% growth in H1, thanks to the ramp up of large existing contracts and new business in media.
As anticipated, nonfood consumer products posted 2% in H1 2023 with positive contribution in both quarters after a high 9% comparison base. Health care, retail, public sector and leisure continued to perform very well at double digit, like they did in Q1 2023.
Moving now to our consolidated income statement. For the first half 2023, EBITDA was €1.335 billion, up by 3.7% versus last year. Operating margin was at €1.093 billion, a margin rate of 17.3%, in line with the record level of last year. I will provide more details in the next slides.
Headline group net income was €813 million in H1. It's an increase of 11.8% versus last year. Headline net financial expenses strongly improved to €6 million, reflecting a higher remuneration and cash position, while income taxes increased to €272 million due to a higher profit before tax.
Amortization of intangibles were mostly stable, while real estate restructuring charges reached €83 million with a continuation of the Group real estate footprint optimization. Capital gain and losses were not significant this semester, contrary to last year when we accounted the disposal loss for the exit of our Russian operation. Taking all this into account, the Group net income was €623 million in H1 2023, which is up 16% versus 2022.
Let's now turn to the following slide, which present our simplified P&L down to the operating margin. As I already mentioned, our operating margin rate was stable compared to last year at a record high 17.3% with €1.093 billion. I'll detail the different components on the next slide.
So let's begin with the FX and perimeter -- with the FX and perimeter effects, which were negligible. We kept personnel costs stable in percentage of revenue, thanks to a dynamic management of group resources absorbing 2022 wage inflation. In particular, this semester, as the Group grew by 7%, we managed to contain net hirings at circa 1,300, while strongly decreasing our freelancer costs, as per the plan I shared with you last February. This is reflected in the bridge by the 140 basis point shift between fixed personnel costs and freelancer. When it comes to restructuring costs, the increase of 20 basis points reflects the localized adjustment that we have made on the group organization to adapt it to the current environment.
Now let's turn to the operating leverage of the Group. Other operating expenses, including depreciation, contributed to a net improvement of 20 basis points. First, we have posted an increase of 40 basis points of other operating expenses, as anticipated, reflecting the increase in travel and client-facing meetings.
Second, depreciation improved by 60 basis points, driven by the continued benefit from our actions to reduce our real estate footprint over the last few years as well as an increasing use of SaaS software that are directly expensed. As a result of all this, our operating margin rate in H1 2023 amounted to 7.3%, in line with H1 2022 level.
Let's move to our headline net financial expenses on the next slide, which are improving by €68 million. Beginning with the interest on net financial debt, which is a positive of €42 million, improving by €69 million compared to last year. This was largely due to higher remuneration on cash balances. This improvement was actually stronger than what I anticipated in February, reflecting the continued rise in central bank rates on both sides of the Atlantic in H1.
Interest on lease liabilities improved by €6 million to reach €39 million, reflecting the reduction of our real estate footprint. The other lines being non-significant, this results in €6 million headline net financial expenses versus €74 million last year.
Now income tax. Reported income taxes stood at €205 million. The increase reflects the rise in profit before tax as well as higher effective tax rate compared to H1 2022. To calculate the headline income taxes of €272 million, we are adding the noncash element of our P&L, i.e., the tax effect on amortization of intangibles on impairment and real estate consolidation as well as other noncash items. Effective tax rate was 24.8%, up by 140 basis points compared to H1 2022, reflecting the higher share of the U.S. in the profit before tax, which is carrying a 26.6% tax rate.
Next slide, the headline earnings per share fully diluted is actually growing by 11% year-on-year and reached €3.21. This is an increase of 62% versus 2019. This strong growth reflects not only the improvement in our operating margin, but also the reduction of net financial charges that I just described. Those two elements that made our H1 EPS growth will actually do the same on the full year.
Our guidance upgrade on organic growth and operating margin, combined with lower-than-anticipated financial charges, are two major positives for the full year headline EPS. And they absorb the impact of the evolution of the dollar, which we consider at 1.12 for the remaining part of the year. As a consequence, we anticipate a full year headline EPS growth to be between mid and high single-digit, which is an upgrade of 3% to 4% compared to the current consensus of 6.57.
Finally, it's worth mentioning that the average number of shares on a diluted basis is stable versus December 2022, exactly as we committed. This materialized our decision to prevent shareholders from dilution by first suppressing the scrip dividend as announced in February 2021 and seen that buying shares on the market to complement the managers' long-term incentive plans.
Moving to next slide, free cash flow. Our free cash flow before change in working capital reached €725 million, up €70 million compared to H1 2022, despite the €110 million TCJA transitional tax payment related to 2022 and paid in January 2023. This improvement is mainly driven by the increase of -- in EBITDA for €48 million, reflecting the strong activity in the first half as well as the higher interest received on cash balances, particularly in USD, for a total of €80 million that I mentioned already. This is partly mitigated by a €25 million increase in tax paid on top of the €110 million TCJA tax related to 2022.
Lease and CapEx were both reduced by €15 million in total, lease thanks to action on real estate footprint, CapEx, reflecting our increased usage of SaaS platforms, which are directly expensed, as I have just described, as well as some phasing effect between H1 and H2. Excluding the 2022 related tax sale in 2023, free cash flow before change in working capital is €835 million, an 18% improvement compared to H1 2022.
Next slide, use of cash. In H1 2023, change in working capital represented an outflow of €1.053 billion higher than last year. This materialized a particularly high commercial activity of the Group this semester, notably in production.
Acquisitions, including earn out of net -- and net of disposal, amounted to €170 million. This included three acquisitions made for Publicis Sapient, namely Practia in April 2023 to extend its global delivery center in Latin America; Publicis Sapient AI Labs for which we took full ownership in May 2023 to complement Publicis Sapient AI capabilities; and Corra in June 2023 to develop its expertise in Adobe Commerce in the U.S. It also included an acquisition for Epsilon, Yieldify, to improve on-site personalization and customer journey offering for the mid-market.
On share buyback, we have €193 million outflow following the completion of the repurchase of shares to cover LTI plans. Finally, other noncash items represented a negative of €162 million, largely coming from the change in earn out and buyout fair value of cross-currency swaps and the currency translation adjustment on the balance sheet, mostly due to the USD to euro exchange rate.
Moving to the following slide for the net financial debt. The Group closing net debt reached €226 million at the end of June 2023. It's an increase of about €860 million compared to the end of December due to the cyclical nature of working capital. The average net debt on the last 12 months is €498 million. When we include the average lease, this represents a leverage of 1.1x EBITDA, an improvement both versus the 1.2x at the end of December and the 1.3x a year ago.
Taking into account our performance in the first half, we now aim at circa €400 million of average net debt for the year should the USD to euro remain at the current level of 1.12. This concludes my financial presentation, and I now give back the floor back to you, Arthur.
Thank you, Michel-Alain. 6 years ago, we set the objective to shift from a communication to a transformation partner for our clients. 6 years later, the shift is now completed. Today, we are outperforming our industry, thanks to our ability to win market share and the resilience of our model to business cycles. But that's not all. Not only are we performing very well, but thanks to our transformation journey, we are also uniquely positioned to lead the future of our industry, which will be shaped by data, technology and AI.
AI is the flavor of the day. And thanks to ChatGPT great launch, everyone has discovered this potential. We can expect new changes by the day in the tech world. Just take yesterday, Meta launch of Llama 2, which will be available on Azure free of charge, including for commercial purposes.
In our industry, there have not been one day [indiscernible] without a new partnership announced. Of course, we are doing ours with big platforms like Microsoft with OpenAI, Adobe with Firefly or Google with Vertex [indiscernible]. We are also doing a partnership with focused start-ups like Jasper, Reiter, Briar or Assemble AI.
But what truly sets us apart from our competition is that, in our case, AI is already at the core of our business model. And we have been pioneers in many areas. Thanks to our investments in Sapient, Epsilon and Marcel, we actually have three unmatched competitive advantages to make sure that our clients but also our people can truly leverage AI to grow.
First, by combining AI with Epsilon identities, we can refresh our data every 5 minutes to deliver real-time personalization. We can also link media investments to business outcome, which is, as you know, the holy grail in marketing. Lastly, it allows us to lead in connected TV and retail media where AI plays a critical role to find real rich and incremental sales for marketers. The 250 million Epsilon profile boosted by AI and empowered by our scale in media are the reason behind our major wins in the last years, including Disney, Stellantis, Walmart, ABI, Mondelez, LVMH and very recently, Pfizer.
Second, massive competitive advantage. Publicis Sapient historical extensive experience in the areas of machine learning, natural language processing and every kind of AI allow us to build solutions for our clients across industries and capabilities, from developing AI and particularly generative AI visions to building out use cases and launching offering for all industry verticals.
For example, at Publicis, Sapient technology and engineering, combined with AI, drastically accelerate and improve our own processes, particularly in the creative space. This is true, first and foremost, for the end-to-end creative development. Thanks to our technologies, our partnership and our own safe environment, Publicis GPT, we generate faster and at-scale content that is directly relevant to our client customer and in line with our brand values. This is also true to optimize production, automatize processes such as translation, compliance and asset reuse. But let's take a couple of minutes to show you how AI can make an idea that comes from one of our most brilliant creative in Paris, Marco, just even better.
I hope you have liked a small commercial break. Let me come back to our last competitive advantage. By powering our industry-first platform, Marcel with AI in 2017, we have a lot to connect, empower and manage our people in a unique way. Today, we are still the only holding company using AI to identify the most relevant talent across the group, provide quality personalized training to all and enhance carrier mobility through smart talent findings, thanks to Marcel 100 million data points.
I mean we are just at the beginning to see the potential of AI. Thanks to our investment over the last years, we are clearly leading the industry in terms of capabilities. We now need to bring those capabilities into the end of every one at Publicis, which is our priority in the coming months.
But as you have seen, H1 has been strong on all fronts. Once again, we are outperforming the market on organic growth, delivering record financial ratios and upgrading our guidance on all KPIs. We are making the demonstration that we are both resilient to business cycles and future proof.
Actually, taking a step back and looking at our end, we have had seen the pandemic, our performance this first half confirm that despite persistent macroeconomic uncertainties, we are today a much stronger company. Since 2019, our net revenue is up 45% on a reported basis in H1. Our organic growth is up plus 19% with the U.S. at plus 22%. Our operating margin is up by 68%. Our free cash flow is up by 70%, and our headline EPS is up by 62%.
I would like to end this presentation by thanking our clients for their trust along this transformation journey and, of course, our people for their continued effort. I thank you very much for listening. And now with Michel-Alain, we are ready to take all of your questions.
[Operator Instructions] The first question is from Lina Ghayor from BNP Paribas. Please go ahead.
Hi. Good morning. Arthur and Michel-Alain, it's Lina. Hope you can hear me well. Well, congratulations on the results. I do have a couple of questions. The first one is on Sapient. Some of your peers in digital information and have had a cautious message around their pipeline and business momentum, although for you [indiscernible] on strong comps. So could you share a bit your sentiment around the medium-term and the need for transformation softening macro environment?
The second question is on your guidance. Your 5% organic growth guidance implies 3% -- around 3% organic in H2 versus 7% in H1. Should we understand that there is a bit of caution in the guidance? Or else, could you help us understand what are the macro assumptions that you have factored into which 5% for the full year? And lastly, you have mentioned a couple of times production, which is nicely offsetting some of the cuts in traditional Creative. So could you remind us how much present as a percentage of group net revenues and what are the drivers of the top line for that division? Thank you.
A lot of questions here. What I propose is I'm going to start coming back on the guidance because this time, we did at the beginning of the presentation. So if some missed it, I'm going to recap a bit everything, and of course, answer your question, Lina. Then I will let Michel-Alain go through the production SaaS question, which is a very important one, and I will end up with your question on Sapient, okay?
So I'm going to take a bit of time as you are asking, of course, a critical question, and I'll start with the guidance for 2023. So as we said, we are upgrading on all KPI for the year. And again, I'm insisting on that despite persistent macroeconomic challenges. And this is where, hopefully, you see the strength of our model, and we will see how our peers are doing in the near future.
When it comes to organic growth and coming back to your question, we now plan to deliver our circa 5% in 2023. It's important to note that it is an acceleration versus our 3-year CAGR. We are insisting on the 3-year CAGR and basically the result was since 2019 because you will know that there have been so many ups and downs during this period. And by the way, ups and down half year versus half year, as you can see in 2023, but it's important to remind that the dynamic is actually accelerating versus our 3-year CAGR that was at 4%. Now we are at 5%.
To come back precisely to your question, we expect a better -- we have -- the reason why we are able to upgrade this guidance is, first, of course, because we have a better-than-expected H1 at 7.1%, clearly. But it's important to note also that this is based on the fact that we have a rock solid growth for H2 that we anticipated at circa 3%, taking into account two important factors. On the one hand, potential additional cuts, so that's come back on your point, in classical advertising, but also more delays in transformation projects due to those persistent macroeconomic uncertainties. And I'll come back to that later when we talk about Sapient. And on the other hand, we should not forget that Q4 is always an adjustment quarter and even more in what is still a very volatile year.
I think it is very important to note, again, coming back to 2019, that the growth we are anticipating in H2 imply that actually H2 compared to '19 is going to grow at a similar pace as H1 at circa 19%. So again, when you look at '19, we have the same growth in H1 than in H2 with 19%. We expect, again, with this performance to continue to lead the market. I think we can make a focus on production and creative and then I will come back on the focus in Sapient.
Sure. Hi, Lina. So just a couple of data point about production. So production is roughly representing 20% of Creative today. And you remember, Creative is one-third of our business, and it's growing double-digit for several quarters in a row. So you're right, in Q2, we had a very solid momentum in production, and it helped us compensated the localized cut that -- in classic advertising that Arthur was mentioning that we actually anticipated. For H2, we anticipate this solid momentum in production to continue, mostly fueled by our new business, and Pfizer is a good example, and leveraging the group technological production platform, which is called PX. Arthur?
So lastly on Sapient, and I'm going to take a minute on that because this is where, again, you see the strength of our model. I mean if I've got to take a step back before getting into Sapient. As I said in my second part, the future of our industry lies in data, tech and AI. And we are incredibly positioned for that, thanks to the acquisition we’ve been making and the vision of Maurice Lévy had roughly a decade ago. And this means that not only we are outperforming today, but we are, of course, confident for the future.
Coming back on Sapient. First, with 5.5% organic growth in Q2, Publicis Sapient is clearly delivering a very solid performance, considering, as I said, a very high base of 19% organic growth in Q2. I guess you realize what it means. It is actually, and that's very interesting, if you look at the market, the performance that is at the high-end of its system integrator peers guidance, which means a lot for us because we are fighting against those guys with Publicis Sapient.
Publicis Sapient is again accretive to the group in H1 with plus 8.3% organic growth, and it will also be accretive for the full year versus our new guidance. I don't know if you remember, but as we discussed in Q1, like all the system integrators, we are currently experiencing some delays in implementation of some digital business projects, okay? This is due, and honestly, we can understand that, to our client consciousness in the context, again, of persistent macroeconomic uncertainties.
But I want to be clear on something, those delays are not a source of concern at all and are actually already baked in our guidance. Concretely, they do not change anything to the structural demand for DBT project that not only remain very strong, but honestly, are even stronger when you look at the rise of AI. I don't want to do too much on AI because, as I say, it is a flavor of the day. But when Maurice Lévy made the acquisition of Sapient, some were doubting, and then with time, I think we have been able to demonstrate that they were growing and being very accretive to the group.
If you look at the 4-year stack, Sapient is growing at 30% when the group is working -- is growing at 20%. But between us, this is not the most important thing for me. The most important thing for me is if you want to lead in data technology and AI, having Sapient at the core of our business, not a partnership, not a couple of people that you hire, not a small companies that you take, I mean a big player in technology, system integrator with engineer that can help our client transform and help our self transform, make a very, very big difference.
And if you add to that, which is something that we try to insist today, the strength of our very well-balanced revenue mix, we are actually able to deliver and actually over delivering whatever the circumstances. Long answer, but hopefully, we have touched many points with those three. Thank you very much.
The next question is from Lisa Yang from Goldman Sachs. Please go ahead.
Good morning. Thanks for taking my questions and congratulations on the results, really impressive. I have a couple of follow-up questions on the guide and on your outperformance. So firstly, I mean, clearly, you're significantly outperforming your peers. And I was wondering if you could help us quantify the benefit of the new business in the second quarter, and what do you expect for the full year? I think previously you said usually it's 1% to 2%, but it looks like it could be higher this year. And can I also clarify whether your guidance reflects any benefit from the size of win and when you would expect to start to see the benefit from that contract?
The second question is also related to new business, but just wondering what sort of conversations you're having with clients. Do you see an opportunity for more potentially client reviews and more opportunity as opposed to risk in the rest of the year? And thirdly, on Sapient, so you mentioned you're factoring slower decision processes into H2. So I just want to clarify, in your guidance for the full year, you don't expect any sort of major projects resuming. So they do, for instance, resume as we get maybe better to get a [indiscernible] in the U.S. for instance, that would be basically an upside to your current guidance? Thank you.
Thank you very much. I'll start with Sapient as we were talking about that a minute ago. I mean, again, all the industry is experiencing what we are at the moment, which is -- and let's be clear, slowdown in the execution of projects. Clients are not cutting. We are actually winning very well, and this is why with our performance in Q2, we are actually in the higher part of the bracket of our system integrators peers. So we feel very confident about what we can build and what we have built so far. What I can tell you at this stage is that we have anticipated that this slowdown in the decision process will continue in H2. And this is why we are saying that our 3% is rock solid.
On new business, I'm continuing with your question number two. I mean we had an exceptionally busy H1 in new business. We see, of course, some opportunity in H2, but not as much and not as big as what we have seen in H1. And to be clear about that, it's not a bad thing for us because we have won a lot, so it's good to be able to integrate and ramp up this business very well. You have seen the growth we had in Media. That was pretty impressive. And second, it's good for us because we don't have that many defensive, only offensive opportunity, but again, not at the level of what we have seen in H1. I won't make any comment on Pfizer as we don't comment any particular new business.
What I can tell you to finish on that is that we don't quantify exactly the impact of new business because it's ongoing. We have been -- we were #1 of the ranking 4 years out of the 5. We continue to have a very good track record, and it's part of our growth overall. But when you look at the number we are delivering on Media, I mean, the big unexpected number here is Publicis Media, thanks to our new business track record in Q2, to be clear. The rest was expected. This has been a very good surprise, and it showed that the model we have been convincing some client to take is actually ramping faster than we are expecting.
I would like just to take this opportunity to talk precisely about why we win. I mean -- and for those that have been following us for a while, we decided to make those two big acquisitions, Epsilon and Sapient, because we knew, and at the time, more it's revenue that technology and data will be at the core of our industry. I think what we have been doing particularly well in the last year is to make sure that those two operations are really at the core of our group.
And what makes me very happy today is our ability to win in media and sometime in Creative, although creative is more what we're going to do with AI, but winning in media, thanks to Epsilon, thanks to the technology of Sapient. This is what makes our model unique when we pitch. And this is the reason why our track record is what it is. And this is why, by the way, although we are the #1 in new business we are continuing to improve our margin and new business is not dilutive but accretive to our margin also. We are building a model, again, based on data, based on technology, based on AI that is already at the core of what we propose. And hopefully, I haven't been too fast into what I presented that is truly differentiating and justify a special value in the eyes of our clients.
Okay. Thank you.
The next question is from Julien Roch from Barclays. Please go ahead.
Three questions. At the full year, you gave us Q1 organic guidance. At the Q2, you gave us -- sorry, the figure you gave us at Q1 organic guidance, at the Q1, you gave us a Q2 guidance. And so far, you've not given a Q3 guidance. I know you said about 3% in the second half. So we get an actual Q3 guidance. And if not, why not? First question. The second one for Michel-Alain, €1.6 billion of free cash guidance pre new U.S. tax and pre-working capital. Can we get a full year '23 guidance for U.S. tax? Is it on the retirement [ph] and working capital so we can get reported cash flow. And with so much cash generation, can we get a full year number for interest? So full numbers there.
And then finally, would it be possible to get the exact net sales of Sapient in the first half or full year '22 because global it is worth €8 billion, and according to Nigel, sorting is bigger and much better. But I think the market will give you fair value for [indiscernible] only have organic. So getting that [indiscernible] suggestion there. Thank you.
I have Michel-Alain that is asking more detail on question three on the net side, but it looks like Alessandra got it. So while they are translating, I'm going to take the first question very quickly on the Q3 and Q4. Honestly, in our assumption, we do not expect any major differences between Q3 and Q4. So they should be both roughly at the same level. MAP, I'd like to take the two other questions?
Yes, sure. I think I begin with the last one. I think you were asking the size of Sapient in million of euro. It's roughly €2 billion for 2023. Now related, Julian, to the question on the free cash, the connection is not great. I'm not sure I got it. You were referring to the above €1.6 billion. What is it that you wanted to know about that?
So I'd like to go from free cash flow, which is -- which the guidance is pre the new U.S. tax and pre-working capital. So can we get those two numbers to get to reported free cash flow? And also with so much cash generation, what should be the interest for the full year?
So now I understand. Okay, so let's clarify two points here. The first one is the 1.6 -- above €1.6 billion of guidance is including the tax payments that we have made in the U.S. in January 2023 related to 2022, which maybe you remember is representing €110 million. So it's including this number, okay? And the second thing is that this free cash flow guidance is taking into consideration the exchange rate of the USD to euro, which has just changed in the last weeks at 1.12.
And I think in terms of interest charge, maybe a couple of remarks here. The first one is you see that we -- and as I've said in the presentation, we are receiving -- we have received in H1 a far better remuneration on cash. That's what I expected at the beginning of the year. It's coming straight from the fact that the interest rates are better-than-expected because of the increase in the Central Bank rates on both sides of the Atlantic. But for us, it's mostly the Fed which is important. So it's true that in February, when we gave you the indication on financial expenses, economists were not anticipated such a rise in interest rate. But clearly, this has benefited us more than we anticipated.
So when we anticipated, maybe you remember, Julien, €95 million for the year, this implied €45 million for H1, which actually came at 6. The improvement fully coming from the interest rate. And when it comes to H2, remember that the interest rate began to increase almost exactly a year ago. This means that H2 this year should be in the bracket of €30 million to €40 million so versus €52 million last year. So it means that for 2023, in total, headline financial expenses should be about €40 million, which means improving by €50 million versus our previous estimate.
Merci, Michel-Alain. Merci, Arthur Sadoun.
The next question is from Matthew Walker from Credit Suisse. Please go ahead.
Thanks a lot. Thanks for the results. The first question really is on the Omnicom call, they said that they expected AI to be both to increase both organic growth and to also increase margin over time. So I guess the first question is, do you agree with that? And then the second question is on the 3% for the second half, which is like an exit rate into 2024, is that an appropriate growth level for 2024? Or do you think it will be higher because all of the contracts from Sapient will start to flow again when clients become more confident?
Thank you, Matthew. Hopefully you will understand that for 2024, we will have to wait a bit before getting into that. But let me take your question on the Omnicom. So we don't comment on competition. But if the question is, is AI will increase our organic growth and help us on margin? I have two answers for you. Yes, it will for the competition. And yes, it is for Publicis, to be very clear.
And I'm going to give you a very precise example of that. We don't win what we win today in terms of media. If we don't put AI and Epsilon together, you need to understand something is that AI is nothing without data. Everyone can claim again, partnership, managing AI, doing fancy images with a gorilla plane. But this is not what our clients want at the moment. Our clients are living in a turbulent time. They need to increase their growth while reducing their costs. And they need to make sure that they can efficiently spend their marketing budgets.
And so the reason why we grow, thanks to AI, and this is only one example that I'm giving you here, is definitely variability to have since a while now AI at the core of Epsilon, for example, which means that we are refreshing our data every 5 minutes to deliver real-time personalization at scale. We are the only one. We are the only one that can link any media investment to business outcome on everything we do. And we are leading in retail media and connected TV, thanks to AI. And when you look at our growth in media, you understand that AI is already at the core of our model delivering growth.
On margin, it's a very interesting topic. I guess everyone in the future, and we are already today, and I do want to spend time on that because I took it as an assumption that was obvious, is AI is already at the core of most of our operating system in everything we do and our ability to actually outsource to AI a number of simple tasks. So I do want to come to that on the presentation.
I want to take another example, that is, by the way, related to what Michel-Alain talked about personnel costs, okay? We have been able to cap our personnel cap at the same level independently of inflation and, by the way, higher less people than our growth because we are able today, thanks to AI and Marcel, to truly optimize our workforce and make sure that we find the right people for the right job with the right ambition, training them well, paying them well and giving them opportunity to go.
And so again, will it be on the client side and our opportunity to generate revenues, thanks to AI. We are already there, and we're going to accelerate. When it comes to our own operating model, I can give you thousands of example where AI is already helping us together where we are. I mean, again, if you look at our margin, okay, for H1, despite delivering the best growth, we are going to have a margin that roughly is 150 basis points better than the second one, and roughly 400 or 500 basis points, 500 basis points than the [indiscernible] delivering the best margin. AI is helping for that.
Okay. Thank you. That’s very clear. Thanks a lot.
The next question is from Christophe Cherblanc from Societe Generale. Please go ahead.
Yes, good morning. Thanks for taking my question. First one was on the platform organization. You have added Praia this year and the last year. So do you feel today the setup is complete? So should we expect a fewer acquisition like Practia [indiscernible]? Related to the same subject, what is the share of the cost base today, which we could see as offshore? That's the first question. The second question, I think Michel-Alain mentioned that you added 1,300 net hiring. I wanted to make it clear, it was organic. And just was curious about what you were planning to do in Q3 and Q4. And the last one was on property. Is there more to come in H2 in terms of property costs? And given the plan you have put in place, what are the savings that you have looked for 2024 versus 2025? Thank you.
Thank you very much, Christophe. So I will let Michel-Alain take the offshore net hire and property question. I will go quickly on our M&A strategy. I mean, hopefully, you’ve seen that we’ve been pretty consistent in our acquisition strategy, and we will continue to do so. We are looking for a company only bolt-on acquisition that can help strengthen our data stack and everything that has to do with first-party data around the world, and we have made a couple of acquisition, and we will continue. And we are also looking for more capacities and capabilities for Sapient. Will it be directly for them or lead with some platform as the deal we just did for another integrator.
What is important to note here is that we are only looking for two things. We are looking for talent and technology. We are looking for talent and technology that can complement the two platform that we have created with Epsilon on one side and Publicis Sapient on the other. And we strictly go on that. If we find more opportunities, we will accelerate on opportunities. If it doesn't fit with what we do, we will actually slow down. But for the moment, we are counting on being on the same pace. Maybe, Michel-Alain, I'll let you take the three others.
Yes, sure. I'm sorry, beginning with the net hiring of 1,300, yes, you're right, this is organic. We net hired about 700 people in the Q1, and then we net hired about 600 people in the Q2. And then we got from our acquisition, so mostly Practia and Corra 1,700 nonorganic. So if you look at the first semester in total, it is 3,000 people more in the group, 1,300 organic and 1,700 nonorganic coming from Practia and Corra, but mostly Practia, which is representing 1,200 out of the 1,700.
Now on the property part, yes, you're right, Christophe, we are very active in this area. I cannot comment yet on the amount of savings we will materialize in 2024. But what I can tell you that obviously, it is playing a key role in our P&L this year. both in H1 and in H2. And you see that through the decrease of depreciation because in depreciation, you've got the depreciation of assets, okay, but you've got the depreciation of right of use. Right of use is directly linked to the number of lease we have, and we are reducing this lease consistently semester after semester. And it boiled down in H1 into a decrease of depreciation of 60 bps, as you have seen.
Now on the offshore part, it's a key element of our strategy. As you can see, we’ve now a global delivery center for Sapient, which is complete and which is what we call in the industry follow the sun, meaning with Latin America, Romania and India. Overall, for the Group, all of our global delivery centers are representing about 25% of our headcount. We are monitoring this on a monthly basis on our mix by onshore/offshore for all the practice, and we are fully on track for our objective in 2023.
And just on the hiring plan for Q3, Q4, have you stabilized headcounts at the level of H1?
We'll have -- net hirings will be -- which will be, we think, a bit below than H1, in line with our activity that Arthur commented as a rock solid 3% in the second semester. Just have in mind, Christophe, if I may, a last comment, we just won a gigantic contract, which is Pfizer. And obviously, we will be ramping these resources right now and during summer. So obviously, it will be in our numbers for H2.
Okay. Thank you.
The next question is from Richard Eary from UBS. Please go ahead.
Yes, good morning, everyone. Just two sort of questions from myself. Just firstly, just on the guidance, going back to the H2 guidance of 3% [ph], can you just maybe give us a bit more color within that in terms of what you're expecting around Media, Creative, Epsilon and Sapient? I would imagine that, and correct me if I'm wrong, if Media still continues to double-digit, benefiting from the size and existing new business wins, does that mean that Sapient and Epsilon effectively close to flat growth expectations in the second half? If you can just clarify that, that would be great.
And then the second question is just on margins. And maybe, Michel-Alain, as we look out into '24, I presume that the benefits of lower depreciation from property and the change in terms of expensing software will continue. So should we see more benefit around margin improvements from those two elements as we go into '24? I presume that will also get aided by new business wins, as you said, is already high margins. So any comments on margins as we go-forward would that would be helpful.
Thank you very much. I will take the first question and give you the second we can do the other way around, but I think it would be better on the second one. Now look, when we look at H2, if you look roughly by expertise and capabilities, we believe that data intake that is roughly one-third of our revenue, as you know, to continue to be accretive even after a strong H1 and with a huge comparable.
We also expect Media to be accretive, again, thanks to our new business tailwind. We do see some softness on Creative as we anticipated. Again, nothing new there. But with the strong momentum of production, which is good for the future, as Michel-Alain was telling you, because clients will need more production content in the future, and that makes us very optimistic for the quarter to come. This is roughly how it goes. But maybe, Michel-Alain, on margin?
It's obviously too early to comment on 2024. What I can say that, obviously, the dynamics that you are underlying as the right one and they should contribute to our margin for next year. What I can comment on is that the way we see margin for this year is, as you know, close to 18%. The major assumption behind this is that we will have personnel costs, which should be broadly stable on the full year in a percentage of net revenue. And this include an envelope of bonus and incentives which are equivalent, which is equivalent to 2022. So it's already baked in our guidance.
And as far as non-personnel cost is concerned, which I think was more your question, we will have indeed on the year lower depreciation with the real estate optimization plan and with an increased use of SaaS platform, which are directly expensed. But at the same time, as I told you at the beginning of the year, it will be compensated by a bit more G&A, which is linked to the return to the office, more travel, more client-facing meetings. So overall, I expect the two to compensate one the other on non-personnel costs and will be altogether close to 18% for the year.
Thank you very much. Other question?
The next question is from Conor O'Shea from Kepler Cheuvreux. Please go ahead.
Yes, thank you for taking my questions. Good morning, everybody and congratulations on the results. Just three quick questions for me. Just first question, just on the media side, double-digit, it seems like in almost all territories even ahead of building some of the bigger wins you've had recently. So with digital advertising media being still weak for the platforms and so on, which has got 70% market share. Can you give us an indication of are there other factors involved that are driving such a strong recovery of a business that was weaker going into the pandemic and has come out extremely strong?
Then the second question, just on the CPG business, particularly in the U.S. on the clients as a group, some of your peers have suggested that the underlying trend is a bit weaker there. Have you seen anything there, excluding the effect of any nuance [ph] on an underlying basis in terms of activity and so on? And then just the third question maybe for Michel-Alain, just an indication of the pipeline on M&A for the second half of the year. Is it looking stronger than the first half? Or is there anything you can say on that at this stage? Thank you.
I will take the two first ones, and I will let Michel-Alain in the pipeline, although we are not disclosing a lot on this topic. On Media, there is two reasons why we are outperforming the market strongly. And you are right, Conor, we can see some weakness, for example, in the upfront, which, by the way, is linked to what we are saying about client delaying their decision in investment. They are doing this with digital business transformation because it's a lot of money. So they are not stopping, they are just delaying. They are also doing that with upfront because by definition, they have to commit for the future where they want to keep some flexibility. So we are seeing, of course, a lot of movement.
Honestly, this is something we like because our model, and it's impossible to do it on the phone, but it's based on the fact that the future of marketing will lie on identities, which is what we deliver with Epsilon. And there will be a shift from cookies to identities that is benefiting us at the moment. And then our clients will start to balance better what they spend in paid media, renting audiences, and this is what we are talking at the moment, and how they build their own digital ecosystem, and they are able to navigate from one to another, thanks to identity.
So the more complex it gets, the more interesting it is for us to make sure that we can again help our clients to really transform. And it comes back to the point I was making about the shift we have operated over the year to move from being a communication partner that could be impacted by some slowdown in media to a transformation partner that is truly agnostic between paid and own with identity at the core. Sorry, it was a bit specific, but by any chance, there is a prospect on this call, it will be interesting about that.
More importantly, and coming back to your question, the reason why we are winning as we do in Media, despite what we are seeing at the moment, is first new business. And again, our ability at the moment to win market share is extremely important because in Media scale matter, and our ability to lead the market, particularly in the U.S., makes a big difference. And we are winning market share, thanks to their ability to bring with media, Epsilon and Sapient and the second is new media.
I mean, hopefully, I was clear in my presentation, but one of the big benefits to bring Epsilon data through AI to be refreshed every 5 minutes is that we are able to lead in Direct TV, personalized TV, but also in retail media, which are two areas where not only we see growth and great growth, but through transformation and a good reason for the client to choose us, which leads me, by the way, to your question on CPG.
I'm starting to be very excited by the marketing model of CPG because for too long, too many CPG company have been investing a disproportionate part of their investment in what we call the Walled Garden, where their media was managed by others and their data were kept in the Walled Garden.
Retail media allow now CPG to create a direct relationship with our customer with a very simple platform that not only allow them to track them during their journey on site on the worldmap.com or Carrefour [indiscernible] or whatever, but also upside when those people move to other platform on the web. And this means that we can put the right message at the right time with the right place.
The second thing that retail media does for CPG that is breakthrough is that it allow us to link media investment to business outcome. You remember [indiscernible], I know that 50% of my budget is working, but I don't know which. This is with CPG when you use retail media. So we are seeing a huge potential in a category that honestly, a part for some that I won't name that were very advanced, has still a lot to do. So we feel good about the potential of our offer to actually rise with CPG in the future. Sorry, it was a bit technical, but you got me there.
No, no, absolutely very helpful.
Okay. On the pipe for M&A, obviously, I cannot comment in detail, but what I can tell you is that we have the pipe to reach our €500 million to €600 million of bolt-on acquisitions for this year. But obviously, the timing of M&A is depending on availability and targets and negotiation. And as Arthur underlined all this, while expecting a very strict group financial discipline. What I can say is that we will carry on to focus on this bolt-on acquisition to improve our skill and capabilities in data, in DBT, in commerce and AI. That's what is for the year.
We still have two questions, I guess, yes Okay. So two more. Who is next?
The next question is from Adrien de Saint Hilaire from Bank of America. Please go ahead.
Yes, many thanks for taking the question and good morning everyone. So I've got a couple of questions, please. Arthur, you mentioned the localized cuts. I'm just wondering if you have seen a deterioration around these cuts throughout the quarter and into the early part of Q3 or if it's the same trend in Q1? And then maybe some housekeeping questions for Michel-Alain. So I think implicitly, the margin guidance for H2 is for margin to be about 18.7%, let's say. I think in 2019, they were above 19%. Just conceptually wondering why, like should the H2 '23 margin be below H2 2019?
And then secondly, if you could just reconfirm how much you intend to spend on CapEx because it was down in H1, but I think you've talked about €250 million for the year? And also for M&A, normally, the envelope is €400 million to €600 million. I'm just wondering how you're tracking against this for the year. Thank you so much.
Now thanks to you. I will let two and three to Michel-Alain. I will take one. Now we don't see more localized cut than at the beginning of the year. And the thing you need to understand, and hopefully, we've been clear on that is that we always said that the 5% was [indiscernible] that the macroeconomic situation will improve. We don't see any improvement at the moment. We don't see worse, but we don't see any improvement.
And despite this, and thanks to the resilience of our model analysis, the fact that we are winning market share, we are still capable going to 5% and being in position to tell you that any eventuality of a slowdown in GBT [ph] or some cuts that are coming in H2 is baked into that. So we don't see any big difference at the moment, but we are prepared. This is why we said that our 3% is rock solid. You want to take two and three?
Yes, sure. So on the margin, so I begin with last year. Last year we reported, as you remember, 18% margin on the year, and it was 17.3% in H1 and 18.6% in H2. Now if you take into account the new dollar rates that I just mentioned at 1.12 for the rest of the year, it means that actually, it will represent a 20 bps impact on H2. So a 10 bps impact on the year, but 20 bps impact on H2. So the 18.6% of last year, taking into consideration this new dollar exchange rate, it's 18.4%. So if you look at what we have in front of us, it's an equivalent margin in H2 than last year to get to close to 18% if you take, obviously, 17.9% as close to 18%.
Now on your second question about CapEx, we spent €75 million in H1. Last year, we spent €82 million, so it's a [indiscernible] below. But traditionally, CapEx is always lower in the first semester. But for the full year, we are anticipating a CapEx between €230 million and €250 million. And I think you had the last question of -- on M&A, but I think I just answer it. We spent €170 million on M&A mostly on Practia and Corra in the first semester. We confirm the envelope of €500 million to €600 million. But obviously, we will see how the second semester is happening.
Thank you very much. I see we have last question.
The last -- the final question is from Tom Singlehurst from Citi. Please go ahead.
Yes, thank you. Just two quick ones to finish. Tom here from Citi. First, for Arthur and then for Michel-Alain. On Carrefour [ph], question is, do you have enough scale in retail media? I mean, obviously, Profitero and CitrusAd doing really well, both in partnership with Carrefour, but do you need to double down on that space to really capitalize on the opportunity? And then a question for Michel-Alain. Higher interest rate environment is clearly very good for net interest income. Just wondering whether it's having any impact on discussions around terms of trade and therefore a knock-on impact on [technical difficulty] working capital movements for the full year or into next year? Thank you.
I'm going to let Michel-Alain take the second one, and then I'll end up with the first one.
We can reverse it, sure.
No, I can take this one then first. And I'll start with retail media then because it's a great question. It's -- as I said, this is a strategic topic for many, many of our clients, particularly in CPG. I think we have a massive competitive advantage here. Why? It's because compared to any other competition, we are the only one that has the full stack of capabilities you need to lead in retail media and we've got it at scale.
And let me spend a second on this. Yes, you need a retail media platform and with Citrus, we have the best, if not, one of the best, not seems too competitive on the market. But this is not enough. And this is actually resuming very well our acquisition strategy. The reason why we bought Citrus is that we knew that by combining Citrus with Epsilon Identity, we were building a model that was unique because we were able to track customer not only on the retailer website, but also when it goes out of the website.
And so we are uniquely positioned here to actually do end-to-end retail media. If you add to that the scale we have with Publicis Media and our ability to get the best deal for our clients when they get out of the platform, not only we have the scale, but we have a unique product. And again, this is why we are winning what we are winning at the moment. Michel-Alain, I will let you take the second one and then I will conclude.
Yes, sure. So on the working capital, there is no link. I mean, between the rise in the interest rate and the evolution of working capital by itself. Really we had this semester as usual with the cyclical nature of working capital and outflow of €1 billion in this first semester. And it's really reflecting the very high commercial activity that we had this semester, particularly, we won several production deals. And it's -- that's where the link is. It's not linked to the interest rates. Back to you, Arthur.
Thank you very much. So maybe just one word in conclusion to make sure that we leave you sharp at the hour. Hopefully, you're going to take simply two things out of the time we have spent together this morning. The first is I think we have made the demonstration that our model is truly resilient and can resist to the business cycle. There is two reasons for that: a revenue mix that is incredibly well balanced and our ability to win market share for the performance of Publicis Media.
We are outperforming again the market on growth, and we are continuing to deliver by far the best financial ratios. By the way, it's interesting to see 6 years later that we are today making the demonstration that you can keep the best margin of the industry by far, while, by the way, rewarding our people properly and best in the industry and outperforming on growth.
As long as we have operated this shift from a communication partner to a transformation partner, and we have put the right capabilities at the center that our clients are needing. This allow us to upgrade our guidance despite the fact that we still have some persistent macroeconomic uncertainties on all of our KPIs.
The second thing I hope you will take, although it's difficult to do on a call, but by chance, our numbers are starting to convince you that this is the case. We believe that we are already today for tomorrow -- today for tomorrow. When you look at the investment we have made, when you look at the transformation we've been through that honestly has not been easy, and some investors on the call have been suffering with us during this period.
Today, we are really leading the industry in what really matters, and it matters at scale, which is data, technology and AI. Well, I'm going to thank you. I hope you can take a couple of days off and enjoy a bit of the winter. I know that Alessandra is here in summer or winter/summer, it depends where you sit. And Alessandra is here for you for any additional questions. Thank you very much.
Merci. Bye-bye.