Good day, and thank you for standing by. Welcome to the Capgemini Q3 2023 Revenues Webcast and Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automatic message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Aiman Ezzat, CEO. Sir, please go ahead. Thank you. Good morning, and thank you for joining us for this Q3 revenues call. I'm joined today by Carole Ferrand, our CFO, and Olivier Sevillia, our COO. So we delivered another solid performance in the third quarter. At EUR 5.5 billion, our revenues growth was 2.3% at constant currency, and 2% organically in line with expectations. The economic environment remains challenging, and this growth is consistent with the gradual deceleration scenario for 2023 that we shared with you at the beginning of the year. Bookings were also solid, with book-to-bill above historical average at 0.96. As a reference, last year it was 0.97, and after taking into account the comparison basis, it translates to a 1.4% year-on-year constant currency growth. But beyond the headline performance that put us among the leaders in our industry, I am particularly pleased with the sustained growth in our innovation portfolio and in our strategy and transformation business. This perfectly illustrates the strength of our strategic positioning. We have become a major business and technology partner to our clients across the entire value chains. We play a significant role from product innovation through supply chain and manufacturing to customer interaction and service operation. We keep on increasing the value we create for our clients, and this helps us navigate in this environment. Now, the appetite for our clients for technology is intact. I would even say with the development of Generative AI, it has never been greater, and I will come back to that later. But the demand for digital transformation is robust, with a focus on projects with faster payback in this current environment and a renewed demand for those boosting operational efficiency and cost reduction. As a result, we have solid demand for our Digital Core and Agile ERP solution, but also intelligent supply chain and manufacturing, and finally, in data and AI across the board. This portfolio of industry-specific innovative offerings is accretive to our margin and contributes to our sustained operating margin improvement. Looking at our sectors, geographies, and business, the trends are fully consistent with the one observed since the start of the year, with the same areas of relative resilience and softness. Regarding sectors, the contrast between the growth in manufacturing and energy sectors and the contraction observed in financial services and TMT continues this quarter. Public sector stands out with double-digit growth in the third quarter. By region, Europe remains more resilient than North America. The gap between the two is the same as in the previous quarter, as Europe benefits from stronger exposure to the most resilient sectors: public, manufacturing, and energy and utility. Whereas, on the other side, in North America, is overweight in financial services and TMT, and very underweight in public and healthcare, which has strong traction, including in North America. Finally, all our businesses are still growing. The 5.1% growth in strategy and transformation service stands out and illustrates the group's strategic positioning with its clients. Now, if you look at the business portfolio in terms of the deals, for, for the third quarter, in a macroeconomic environment that remains challenging, we are well positioned on the strategic needs of our clients. And Q3 was again, a good quarter for emblematic wins. That gives us a concrete illustration of the strategic journey and how we deliver strong business value to our client. So I'll take three examples to illustrate that. On intelligence industry side, we have been retained by U.S. Gigafactory firm to support the set up and scale up of their production. We are helping them optimize their supply chain while implementing S/4 and an LMS system. On the sustainability side, we are also supporting them around waste management and recycling. Another example on enterprise management, with Toll Group, Asia Pacific's leading integrated logistics service provider, it has chosen Capgemini to be their integrated end-to-end IT services partner. We are leveraging all Capgemini capabilities, from consulting to engineering, to support their growth. Finally, on sustainability, Capgemini is helping L'Oréal monitor and steer carbon emissions across their full global value chain globally. We are designing and rolling out a solution to consolidate, analyze, and report the entire L'Oréal carbon footprint at product reference level. This is delivered jointly with our partner, Sweep, who provide a state-of-the-art SaaS carbon accounting platform.... The platform also support regulatory ESG reporting to steer carbon impact of all the sustainable transformation projects. Now, coming to AI, you know, the client appetite for technology, I, I consider it even greater today with Generative AI and the proliferation of its use cases. Demand in this field of technology investment accelerated in the third quarter. So first, we are ready to respond to our clients' demand. You know, we already announced to you our EUR 2 billion AI investment plan. We have built a capability of more than 30,000 people in data and AI, business and technology talents, as we previously announced, and we continue to broaden our talent base. As a reminder, we intend to double that team to 60,000 people in the next three years. We continue to invest in building and upskilling our people, so our campus to scale up training on GenAI is now fully in operation for all our employees, and more specifically, we, we aim to train over 100,000 talent in GenAI-specific tools in the coming 12 months. Also following the successful launch of our four offerings, which I, I remind you, our GenAI strategy, GenAI for customer experience, GenAI for software engineering, and custom GenAI for enterprise. We'll be launching new offering in the coming weeks, including our Capgemini GenAI Platform. Finally, we're creating more value for our clients, thanks to our partnerships. So besides Microsoft and Google, we are also partnering with Salesforce to help our clients accelerate the implementation of Generative AI for CRM at scale. We are delivering hyper-personalized, data-driven customer experiences by automating customized content creation in a secure, ethical, and responsible manner. We are also recognized as a strategic partner by our clients, able to generate value with GenAI. We're engaging with hundreds of clients on GenAI, and our pipeline keeps growing. With few exceptions, these remain small projects for the time being, but we started to see some larger ones. The business outcomes are visible for our clients, so I'll take three examples to really showcase that. First, we are supporting a major global bank's mobile payment service platform to improve the productivity of their deployment team with GenAI. This is driven through a series of priority use cases, through experimentation, controlled proof of concepts, and benchmarking, aimed at improved benefit realization and reduced time to market for newer development. For Alstom, we have launched a generative AI platform and Prompt Academy to further and seamlessly deploy GenAI across the organization to boost performance, starting with identifying the most valuable use cases and the most appropriate large language models for each use case. Finally, we are working with Generalitat de Catalunya to develop a generative AI-based chat answer system. The aim is to reduce response time for citizens and improve public services by providing the administration with the agility, innovation, and technological solution needed to focus on people's needs. So coming to the outlook. So after this, this solid third quarter, we confirm all our objective for 2023: a revenue growth of 4%-7% at constant currency, a 0-20 basis point operating margin improvement, and an organic free cash flow around EUR 1.8 billion. Now, as we get closer to the end of the year, I'll give you a little bit more color. We expect constant currency growth between -1.5 and +0.5 in Q4, as we see clients tightening spend for the 2023 budget landing. The scope impact should also be around 0.5% in Q4 and full year. Now, in terms of operating margin for the full year, we continue to tighten up our operation and increase efficiency, while improving our mix towards more innovation in our portfolio. As a result, we now target 13.2%, so the top end of the operating margin range for 2023. Finally, on free cash flow, in a liquidity environment that remains tight, we continue to target around EUR 1.8 billion. I consider this combination of growth, margin, and cash conversion reflects the strength of our market positioning and the value we create for our clients and demonstrate that we continue to deliver on our medium-term ambitions. Carole? Thank you, Aiman, and good morning, everyone. Let's start with our quarterly revenues growth. Like the IT services industry as a whole, we are experiencing a gradual slowdown since the beginning of the year, which continued in Q3, as anticipated. In this deceleration context, with a 2% organic growth, we deliver a solid performance. Taking into account the scope impact of 4.3 points, our constant currency growth reached 2.3% in Q3. FX remained a visible headwind this quarter, with a negative impact of 3.6%. As a consequence, our reported growth for Q3 is slightly negative, at -1.3%. For the full year 2023, M&A contribution to growth should be close to 0.5 points, while FX should represent a headwind of close to two points. Moving on to our revenues by regions. In terms of growth rates, we continue to have the same contrast in between regions. The most resilient regions and the ones more affected by the gradual slowdown remained the same since the beginning of the year. Looking at Q3 growth rates at constant currency, the UK and Ireland region continued its solid momentum, growing at +5%. This performance was primarily driven by the strong growth in the public sector and the consumer goods and retail sector, while the financial services and TMT sectors were down. The rest of Europe regions also performed well, with growth of +5.4%, primarily fueled by the public sector and the manufacturing, energy and utilities sectors. France revenues were up by 3.7%. The momentum recorded in the public sector and the solid performance delivered in the consumer goods and retail and manufacturing sectors contrasted with the decline in TMT. Revenues in the North America region were down by 4%. Manufacturing sector growth remained solid during the quarter, whereas TMT sector further contracted and financial services growth turned negative. Lastly, the Asia Pacific and Latin America region boosted its growth with a 7.6% increase in revenues. This improvement was primarily driven by the Asia Pacific regions, with solid growth in the public sector and consumer goods and retail and manufacturing sectors. Turning now to revenues by sectors. Here again, the contrast between our key sectors growth rates at constant currency remained broadly in line with what we had experienced in the previous quarters. As already highlighted by Aiman, the public sector continued to deliver a high growth in Q3 at +14%. Manufacturing and energy and utility sectors also grew nicely during the past quarter, +4.3% and +3.4% respectively. Conversely, as anticipated, TMT recorded a further contraction of -6.7%, and financial services eventually turned negative at -3.4%. Moving on to our revenues by business lines. Strategy and transformation services maintained robust growth, with +5.1% increase in total revenues at constant exchange rates compared to Q3 2022. This is a strong achievement as small discretionary deals are clearly, clearly under pressure in the current environment. Application and technology services, which account for 63% of group revenues and stand as Capgemini core business, reported growth in total revenues of 2.8% at constant exchange rates. Finally, operations and engineering total revenue grew by +4.9% at constant currency, all businesses reporting positive growth. Let's have a look now at the bookings evolution. Bookings amounted to EUR 5.3 billion in Q3, up 1.4% at constant currency. The book-to-bill for Q3 stands at a solid 4.96, four points above our 10-year average. On a year-to-date basis, our bookings amounts to EUR 17.2 billion at 3% year-on-year at constant currency on a demanding comparison basis. Finally, a few comments on the headcount evolution. Our total headcount stands at 342,700 employees as at the end of Q3, slightly down by 4% year-on-year. Our onshore workforce is yet really stable, while offshore resources are down 7% to 196,000 employees, or 57% of our total headcount. As discussed with you on many occasions in the past quarters, after two years of intensive hiring and high attrition, our priority for 2023 was to regain efficiencies and optimize our talent base, especially in offshore locations. Finally, as anticipated, attrition has continued to cool down at 18.6% on the last twelve months basis. Attrition is now within our nominal operating ranges. With that, I hand over to Aiman. Thank you, Carole. So to allow maximum number of people in the queue to ask questions, may I kindly ask you to restrict yourself to one question and a single follow-up, and you might have another opportunity for further question at the end. Operator, could you please share the instructions for the Q&A? Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. We will now take the first question. One moment, please. It comes from the line of Frederic Boulan from Bank of America. Please go ahead. Hi, good morning, Aiman and Carole. Morning. Thanks for taking the question. So maybe to come back on your point just now around Q4. So this is a bit of a change from your previous message in Q2, that you expected growth in Q3, but also Q4. I think at the time as well, you said that considering booking and demand, the rebound could be pretty strong once we pass inflection point. Can you share at this stage how you see, you know, when in your discussions with customers, how you see that demand shaping up, in particular in areas of weakness, like the U.S., financial services and TMT? Any signal that, you know, some of those projects could start to come back on the agenda? I think at this stage, also, any early thoughts on next year, considering booking trends, would be very appreciated. Thank you. ... Yes, thank you. So all good questions. First, regarding Q4, so what we see in Q4, we don't see a degradation in the environment, but, you know, typically, a Q4 has a lot of variability coming from first, budget flushes on the positive side, that you sometimes get. And the second thing, on the other side, we tend to have deferrals in some industries, where basically people are trying to squeeze a little bit at the end of the year. So if you look at this year, there's not much on the positive side. That means the budget flushes are not happening, you know, and I did comment that already in H1, but even less than what we expect. On the other side, we see quite a bit of people trying to do their budget landing, which mean they are squeezing highly as much as they can for the end of the year for their landing on their cost side, in terms of technology. So that's what we see, and this is what basically makes it that, that Q4 is a little bit softer now than Q3, because of this, this further squeeze that we see clients doing. Beginning of the year, we don't see a worsening of the environment. I think it's still a bit too early to look at the potential, you know, inflection point in the cycle. I do confirm that the appetite for technology remains pretty high. The pipeline remains quite full, which again, could give a good inflection point when people restart. We also start to hear clients saying that they have squeezed quite a bit at the end of this year, and some of the projects they will have to do. Now, I cannot tell you exactly when, but definitely it will give a moment in 2024 when we see that inflection point happening. But the timing, of course, is difficult still at this stage to be able to assess. On the positive side, you have to see that the demand for innovation portfolio, and also for all our sustainability, continues to grow at pretty good speed. So what we see is part of what we do is a bit more discretionary and bit more still on the legacy, and this is really where you see the squeeze. On the other side, I'd consider that what's important for us in terms of the growth portfolio is still very well positioned, and as you hear, it's also quite accretive to our margin, which gives us still confidence about the ability to deliver the 14% in 2025. Thank you very much. Thank you. We will now take the next question from the line of Sven Merkt from Barclays. Please go ahead. Yes, good morning. Thank you for taking my questions, Morning. Good morning. So first, just, a bit on pricing, given the clearly slowing macro environment. Have you seen a change in the behavior of your competition? Is there a bit more pricing pressure out there? And how should we expect pricing to evolve going forward? And then, secondly, a question on the bookings. Is there any duration effect in there that resulted in the growth? Are customers committing to shorter projects, and that is having an impact on the growth here? Thank you. Yeah, on the pricing, you know, I would say that on the pricing environment, we don't see much change. Of course, I've always been clear that whenever you, you're coming to the consolidation, clients are looking for from price concession in in view of volume increase, so that's that's not surprising. That's still what we see. There is, of course, competitiveness on number of the deals. I don't see irrational behavior, which is always the thing that we watch out for. Of course, when the environment is a bit tighter, people, you know, are are trying to to prices becomes a bit more competitive, but there's nothing irrational. Second thing, which is important for us beyond pricing, is when we look the portfolio of what we sell, and we always remind you around that, we look at this, what we call the sold margin, which basically is the margin we expect to do on deals that we sign, if we deliver them in line with, with expectation and the risk management that we see around the deals. That continues to be good, which mean looking forward, our portfolio still carries potential for margin improvement versus a margin squeeze. Okay? That's why we remain positive overall, because we continue to see that the value we bring up for our clients enables us to be able to price, even in a more competitive environment, in a way where we continue to see potential for margin improvement. On the booking duration, you know, it's always a bit difficult. I think the bookings continues to be at a healthy level, to be able to support some level of growth going in 2024, which I think is important. And when we look at the pipeline, I have Olivier, who can comment on that, you know, Q4 booking looks pretty good at this stage, you know, which again, will provide us some steam for overall 2024. So, but sitting from where we are today, we still have a pretty good forecast for bookings in the fourth quarter. Olivier, if you want to add some more color to that? Hello. Yes, I mean, I absolutely confirm. We have a solid, very solid perspective on our Q4 bookings. And yes, some of the deals are to three years deals, so we are building more resiliency, in fact. What is missing a bit is discretionary instance spend. But like you, I hear some of our clients really starting to consider they have cut too deep. ... and they will progressively resume, but it's difficult to predict exactly how it's gonna unfold. But yes, bookings are healthy, and the pipe is at an all-time high still. Great. Thank you. Thank you. We will now take the next question from the line of Nicolas David from ODDO BHF. Please go ahead. Yes, good morning, Aiman, Carole, and Olivier. Morning. Thank you for taking the question. My first question is regarding the margin that you now see at the higher end of the guidance. Is this a direct reflection of the improvement we're seeing in utilization rate, or is it more a reflection of your ability to manage OpEx or your ability to reflect price increase? After that, do you need further restructuring below the line to get to this target, notably in markets which are declining, like North America? My second question is also attached to margin, is regarding the 2025 ambition of reaching 14%, are you still confident with this ambition? Thank you. So globally speaking... Thank you for your question, Nicolas. In fact, we are really confident in the way we can reach the top end of our operating margin target at 13.2%, which is a really good result because it's a testimony of the fact that the quality of our growth continues to be there, with more and more CXO reach, more and more being positioned as a business and technology partner for our clients, and that's accretive to our margins. So the mix of our revenue is evolving favorably, and together with that, as we said repeatedly over the last quarters, we have you know, a lower attrition this year. So we are capable to focus more our operations on efficiency gains, and that's what we are doing. For sure, we are capable to chase pockets of savings where need be. So all in all, we are achieving very strong results, and it's all the more remarkable this year, as you recall, because we have been, you know, in an inflation environment, globally speaking, plus the one-off embarked, you know, impact of the lateral recruitment last year. So achieving that kind of performance this year and being, you know, capable to say that despite the context, a very good achievement, and we confirm also our ambition to reach the 14% in 2025. Yeah, just to add a bit flavor to that, you know, we did say at the beginning of the year that we focus the year on trying to optimize more our cost base. So basically, to give us more impetus going into 2024, that we started the year with a high-cost base because of all the reasons that Carole just said, mentioned before, and we are definitely working on that. Yes, there is overall more restructuring this year than last year, but that was expected and but it still remains quite reasonable. We don't, we haven't announced any big plan or big huge restructuring right and left to be able to do that. So it remains reasonable, and we have been working operationally in a good way to be able to work on the optimization to give us more impetus on the margin side, in addition to the quality of our portfolio, going into 2024 and 2025, to secure that 14% margin that we have been targeting. And I think part of what has been done well, I mean, we started with the guidance, but also starting with our commentary from last year. The reason we are limiting the amount of restructuring, we have been able to improve the margin is because we had anticipated quite well basically the cycle and the deceleration cycle, and have been able to manage, you know, our recruitment and our cost base to effectively navigate through lower growth while still improving our margin. Thank you very much. That's helpful. Thank you. We will now take the next question from the line of Charles Brennan from Jefferies. Please go ahead. Good morning. Thanks for taking my questions. Can I just ask a question on AI, and specifically, the business model of AI? It's nice to see you starting to do some projects with clients, but is it clear to you what the ultimate business model is gonna look like? And specifically, I've heard, from the industry examples where global SIs are cutting prices, in the anticipation of future productivity gains from AI. Do you think it's gonna be one of those technologies that's deflationary for revenues, but incrementally positive for margins? And then just as a follow-up, can you just clarify what the Q4 sort of guidance was? I, my line was bad, and I missed it. Was it -1.5 to +1.5, and was that constant currency or organic? Thank you. Let me start with the end, so I clarify that. So it's -1.5 to +0.5 in constant currency. Okay? Okay. Good. Okay. Now going to the model of AI, I think you're talking more on the delivery here, because remember, if you think about Generative AI and what we're talking about from a technology impact, there is three areas. There's the work we do for our clients, helping them in terms of leveraging Generative AI in their own operation, in their own customer experience, in their own product innovation cycles, et cetera. That's one. The second part is how we help improve the work we deliver for our clients, and I think your question is around that. The third part is how we leverage Generative AI in our own operation to be able to train faster, to be able to deploy resources in a more efficient way, et cetera, okay? So if I go to the second part, which seems to be the focus of your, of your questions, around how it impacts what we deliver. I mean, it's clear that Generative AI has an impact around the productivity of delivery. You know, we see it in testing, we see it in, you know, custom development, in ERP configuration, in cybersecurity management, et cetera. So, yes, our job is to fully leverage technology and, and get our clients to benefit from the impact of productivity that it can gain. So today, definitely, in projects, we are looking, like we have looked at the time of automation, around, you know, how we're gonna deliver and bring that value to our client, and that has a positive impact, of course, in the cost of delivery. That we have to start discussing with our clients as we look at some of the new projects. Because we have tested, and we see some of the productivity gains, which don't translate as much in terms of cost reducing, because, again, it's depending what the productivity happens. So again, I just want, as the same kind of case on automation a few years ago, if I look at 20-25% productivity, it's not equivalent to 20%-25% cost reduction. Cost reduction ends up being much less because you are more in India, more at the lower end of the pyramid, so the cost impact is much less than the productivity gain. And in terms of is it deflationary or not? I don't think so. I think that today, when I see the backload that clients have in terms of technology projects, I think clients will benefit from that to be able to get more done. And actually, it will increase as well, the perceived value from the technology projects will create more appetite and unlock, from my perspective, more investment for new technology projects. So I see it more on the positive side in terms of, in terms of growth around technology spend versus, a deflationary side in terms of technology spend. As we have seen in previous technology cycles, they have always been on the positive side, because at the end of the day, when you become more productive, you create more value from technology, which create more appetite for investment. Perfect. Thank you. Good luck with the fourth quarter. Thank you. Thank you. We will now take the next question from the line of Laurent Daure from Kepler Cheuvreux. Please go ahead. Yes, thank you. Good morning, Carole. Good morning, Aiman. Good morning, Laurent. Me as well. The weak spot are the U.S. and the TMT sector. Where do you think you are, we are there on the sector? Do you think there is a lot of room for further deterioration, or what do you see those two areas about to trough in the coming months? And the follow-up, I'm sorry to ask, again on 2024. Mm-hmm. I know it's early, but given that, starting in Q2, you will have a much easier comps, do you believe at this stage, if the macro was to remain as it is today, that you will be in position still to, to deliver a little bit of growth into the, the full year next year? Thank you. Thank you, Laurent. So two good questions. First, let's start with American TMT. You know, at the... I mean, most, most of American TMT, you'll have the base effects, which will start playing at one moment. I think in America, you know, what we have seen from clients, they tend to cut fast, you know, and then move on. So I, I think we are, by the end of the year, will be at the end of cycle of basically the squeeze in North America. As I say, Q4 is a bit more exacerbated by people looking for additional, you know, cuts to be able to close some of the budgets for the end of the year and improve their overall profitability. So that will probably see some of that in Q4 as well. But, you know, starting at the beginning of the year, we don't see any more worsening in the cycle, and we do expect some of the projects to start coming back, because the word I think from clients is they have cut too deep, and now they're gonna have to start getting some of this project basically done next year. So that's what we see in Americas and TMT. Remember, as well, in Americas, it's a bit unfavorable mix that plays against that, because we are heavy, heavyweight in financial services and TMT, and on the other side, we are very light on the public and healthcare, which is really, as you can see, what's still growing at double digit overall in the market. Coming to 2024, I mean, when we look at it, the appetite for technology remains very high. I think the Generative AI side will continue to fuel some additional spend. I don't think it will be huge for next year, but definitely we start getting a little bit more traction. As you said, after Q1, the comps will start easing. We expect the Q4 bookings to remain solid. So do we expect to grow in 2024? Yes, we do expect to grow in 2024, and we do expect to see margin improvement. A bit early to start talking about potential guidance, but we expect 2024 to be a growth year overall. Very clear. Thank you. ... Thank you. We will now take the next question from the line of Balajee Tirupati from Citi. Please go ahead. Thank you. Balajee Tirupati from Citi. Two questions from my side, if I may. Firstly, on the headcount optimization, which has continued for Capgemini and industry in general, could you share view on how has billable resources evolved during the quarter? And in face of recovery of demand, how much of utilization headroom group has at present to service demand if the onboarding new employee takes time? And then I have a follow-up. Mm-hmm. Well, so on the headcount optimization, it continues, yes, but as you see, most of it is still offshore. That we really have ability to be able to squeeze a little bit more utilization. And again, you know, it has been a gradual optimization in terms of operation over the quarters. In terms of when you think from a recovery and you see onshore, this has been much less, and we still have growth in some countries onshore. We have a bit of reduction in some, but overall, we don't have much evolution onshore, at minus 1% over the last 12 months, with some improvement in utilization. In terms of headcount utilization, I mean, overall, with utilization going up, I think overall, I would say that, that we don't, we don't have a... billability, I don't think overall has decreased. I think that might have increased a little bit. We have 2% growth at the end of the day, so, it's fueled by a bit more billability year-on-year. On the recovery of demand, no concerns. I mean, we have a bit of capacity in terms of growth, in terms of utilization. You know, we have gone through that in 2021 and 2022, where it has a bit overheated, so we know we can push utilization higher. In a soft market, you know, before it really start getting hot, we have capacity to be able to, to recruit quite fast, and there is capacity in the market today available that we can tap into. We have also significantly reduced our subcontractor headcounts, so we know there are flexibility to be able to re-accelerate without taking any risk or missing on any growth in case basically we reach inflection point. Thank you. You said you had a follow-up on this? Yes. The follow-up is, again, potentially on the margin side. As the client investment focus is firmly on larger transformational and vendor consolidation deals, how should we think about change in the pipeline mix impacting future business margin profile? And are you being selective to the current environment? Well, again, you know, nobody wants to sign bad deals. It's more competitive in the current environment. As I say, when we look at the overall mix of what we sell, we consider that the sold margin remains healthy, which I think is important, so we're not sacrificing short-term, you know, growth for long-term gains in terms of margin. Which we hold, we want to grow profitable business, and we don't want to take bad structural deals, just to be able to hold the top line. So I think overall, we're having the right balance in terms of how we make decisions and how we qualify some of these deals. We have good growth, as I said, in our innovation and sustainability portfolio, you know, and, and this is helping us to be able to continue to be positive around the overall margin improvement. The pipeline, yes, in the short term, you have a bit more consolidation. You have some more things which are... You know, clients look for cost efficiency. I mean, transformation projects can drive cost efficiency. You know, Generative AI can drive productivity gains. So these are cost-oriented in terms of, in terms of deals, although they are also innovation deals at the same time, so they can hold pretty good margin, even if they are cost-oriented. Very helpful. Thank you. Thank you. One moment, please. We will now take the next question from the line of Joe George from JP Morgan. Please go ahead. Yes. Hi, morning, guys, and thanks for taking my question. I have two, please. Just firstly, on the latest thoughts on the recovery of growth. So Q2, I think the view that Q4 was going to be perhaps too early on the recovery of growth, and that seems to materialize. Can you just give us an update on the view here? Is Q1 or Q2 the way you're thinking about it in terms of internal assumptions for the recovery of growth? Just any color here would be great. Thanks. And then just secondly, on the margin assumptions for the, you know, next 12 months, if and when the discretionary projects and some of the legacy projects do bounce back in terms of demand, how are you thinking about that in terms of impacting the margins from here? Thank you. Listen, on the growth recovery, I mean, again, don't expect that Q1 will be an inflection point. I still don't see it. Again, not gonna predict basically when this is gonna happen, because, as you know, it's very difficult. I did not want to predict it for this year. I'm not gonna predict it for 2024. Am I positive this inflection point will happen in 2024? Yes, I am. The timing exactly is a bit difficult to predict at this stage. As I remember, that beyond the inflection point, we start to see some ease in comp as well, starting in Q2, but that's something to keep in mind. On the margin side, you know, if your question, are we gonna improve margin in the next 12 months? Yes. I mean, I think we have a good margin trajectory. We're doing what is required to be able to continue to improve the margin, even in the slowing growth environment that we have today. We have still pockets of improvement, both coming from the poor quality of the portfolio of what we sell to our clients, but also from an operation side. We continue to work relentlessly on the two, as we have done for the last 10 years. So we still see the potential for continuous margin improvement, including in 2024 and 2025, to get to the 14% target that we have set. Great. Thank you. Thank you. We will now take the next question. From the line of Michael Briest from UBS. Please go ahead. Good morning. Yes, just in terms of Q4, would you expect North America to show further deterioration, or is this going to be largely driven by Europe, trending towards flat or slightly negative? And then just in terms of cash flow guidance, if working capital's going to be, or the business is shrinking or flattish in Q4, that's potentially quite positive for working capital. Could you maybe say where you feel the cash flow might come in, is around EUR 1.8 billion more likely to be above EUR 1.8 billion, or other factors to consider? Thanks. Okay. I'll leave Carole on the beautiful question around the free cash flow above EUR 1.8. On the Q4 in North America, you know, there's some variability on discretionary expense. I'm not going to comment around further duration or not, because you know, it's more client specific, it's going to be region specific. You know, overall, as you can see, there's a little bit of variation between Q3 and Q4. I will not point exactly, you know, where it's going to be, because as I say, you know, some of it is linked really to specific client situation, and squeeze at the end of the year than overall evolution in the environment. So a little bit early to discuss that. Carole, on the working cap? On the working cap and the cash target, so the EUR 1.8 billion, we always said that it was a challenging target because of the tight environment, and we continue to say so. Just Michael, I remind you that at the end of June, the DSO was up four days, and we were all mobilized, you know, to fully limit the impact by the year-end, and we do so. So, as you know, the most important point is that our free cash flow remains one of the best of the industry, with a free cash flow to net income above 1, and it's something that is structurally a key feature of our group. So that's that we are all fully mobilized in a very challenging environment. Okay. Thank you. Thank you. We will now take the next question. From the line of Deepshikha Agarwal, please go ahead, from Goldman Sachs. Hi. Thanks for taking my questions. I have just two. So one is basically, you talked about the regional dynamics in the U.S. and your visibility there. What-- like, and Europe has been relatively resilient so far. So how do you expect that region to evolve, especially, like, in the context of your commentary on the fourth quarter and in 2024? And the second one is, the headcount, like, decreased sequentially, in this quarter as well. So, do you-- like, any color on when do you expect the headcount to, you know, come back to growth sequentially? Hey, listen, evolution in N.A. versus Europe, again, don't want to try to tap in the crystal ball. I mean, but we do expect, of course, N.A. to rebound at one moment, and, you know, N.A. tends to cut faster and rebound faster. So I think at inflection point, we should be able to observe that, not know exactly when. Europe has shown good resilience from softening, like in N..A, but of course, to a lesser extent. We do expect Europe to remain somewhat resilient, but it all depend as well on the economic context coming into 2024. So the balance between N.A. and Europe might vary in the course of 2024, but again, difficult to exactly predict. Regarding your second question, which is around the headcount evolution, return to growth. I have to say, I'm sorry, I'm a bit less obsessed than you all about the headcount evolution, because for us, we are able to manage our capacity in terms of delivery, depending on the environment. So yes, we will resume headcount growth at one moment when we probably reach inflection point. In the meantime, our job is to try to optimize as much as we can our operation, while investing in new skills, in new innovation, in new portfolio, and that's what we're trying to fuel, which is more important than the overall headcount evolution. Headcount evolution will vary depending on the level of automation, the level of productivity we're able to drive, the mix of business that we are driving. You know, so I am really much more focused around how do we manage our capacity to be able to innovate and to deliver the value to our clients. And headcount, yes, of course, it's going to resume at one moment, but I'm not trying to time it. But it is, especially in the current environment where, which is quite soft, which I know our reactivity to be able to scale up capacity is quite easy in the right now, so. But in the course of 2024, we will see, we will see, of course, headcount going back to growth. Thanks. Okay. Thank you, all. This was the last question. So we look forward to interacting with you over the coming weeks, and our full year will be on the fourteenth of February. On 14th of February. Thank you, all. This concludes- Thank you. today's conference call. Thank you for participating. You may now disconnect.