Hello everyone, and welcome to the Havas 2025 Results conference call. The speakers are today Yannick Bolloré, Chairman and Chief Executive Officer, and François Larose, Chief Financial Officer and Chief Operating Officer. My name is Sergei, and I will be your coordinator for today's event. Please note this conference is being recorded, and for the duration of the call, your lines will be on a listen only. However, you will have the opportunity to ask questions at the end of the presentation. This can be done by pressing star one on your telephone keypad to register your participation at any time. Please note that three questions and one follow-up question are allowed to each analyst. If at any point you require assistance, please press star zero, and you will be connected to an operator. I will now hand you over to your host, Yannick Bolloré, to begin today's conference. Thank you. Yeah, thank you very much, and hi everyone. Thank you for joining us today. Before we dive into today's presentation, Delphine Maillet is asking me to draw your attention to the disclaimer in the presentation that you should read carefully. Please take a moment to review it, as it provides important legal information and cautionary notices concerning forward-looking statements. As you can see, Havas has delivered a solid first half of the year. All our key indicators are trending upward, both in terms of business and profitability. In terms of business, in the first half of 2024, net revenue reached EUR 1,346 million, representing a 2.9% increase year on year. We delivered organic growth at 2.3% on the first half, with an acceleration during Q2 at +2.6%, confirming positive momentum. In terms of profitability, Adjusted EBITDA came in at EUR 144 million, marking a strong 8.3% growth compared to the same period last year. The Adjusted EBITDA margin improved by 50 basis points to 10.7%, reflecting enhanced operational efficiency. François will provide further insights in a few minutes. This solid financial performance reflects the strength of our model, which continues to deliver across key strategic pillars. If you go to the next slide, commercial momentum. First, we are driving dynamic commercial momentum, particularly in North America, along with numerous integrated wins we are especially proud of. We are delivering robust performance in both new business and in-business growth, which clearly demonstrates the strength of our client partnerships. A few examples of key wins this half year include Olive Garden, EasyJet, or even Under Armour for the creative assignments. We have continued to grow with existing clients such as Sanofi or GSK. One year ago, you remember, we announced a major strategic pivot with the launch of our new global strategy and operating system called Converge. This transformative project is clearly bearing fruit and delivering meaningful impact for clients. If you go to the next slide, creative excellence remains at the heart of everything we do, and we are especially very proud of Cannes Lions this year, with 39 awards, including two Grand Prix and three Gold Lions. If you go to the next chart, our talent and unique corporate culture, fostering collaboration and creativity, are great drivers of our performance. We are very proud to have welcomed, as you can see on this chart, top-tier talent from some of the most respected groups in the industry since January 1. On the next chart, our data tech and AI strategy is clearly another powerful asset. Last year, we announced an acceleration of our investment in this field, as we reaffirm our EUR 400 million commitment through 2027. EUR 100 million a year, we proceed strategic investments and partnerships with major players. Some of them are on this chart to strengthen its capabilities. We accelerate innovation, and we help clients address their specific business challenges. AI, which is, of course, of the utmost importance, we are clearly transforming Havas to become an AI-driven organization, fueled by human ingenuity. We've made incredible progress over the past year, so much progress that we decided in Cannes to evolve into Converged.Ai to mark the next chapter of our transformation. We are fully committed to this journey with the goal of having 100% of our workforce trained to harness AI's full potential. In terms of dynamic and M&A strategy, we've continued to execute on our strategy of targeted bolt-on acquisitions. We acquired majority stakes in five agencies. In Spain, we see a spot for Havas Play. In the U.S., we've Channel Bakers for e-commerce. In Argentina, a creative agency DON, a very powerful creative agency. A smaller acquisition in France has met for the launch of our health agency, Jacques Paris. Recently, a CRM agency in Canada, Inverta Digital. These acquisitions not only expand our capabilities, but also support our ambition to strengthen expertise in high-potential areas of our business. I'll now hand over to our CFO, François Larose. We hope you're through the financial performance in more detail. Hi, everyone. Pleased to welcome you and just ask for your call. I will start by the performance of the first quarter, second quarter, sorry, with this EUR 697 million revenues. It's 0.8% growth. This growth is coming from 2.6% from the organic, reminding the acceleration of the second half, second quarter coming from 2.1% on the first quarter to 2.6% on the second. The scope for the second quarter is 1%, and we have a negative forex impact on the second quarter. We had a positive one during the first quarter, but as you know, the evolution of the euro-dollar currency leads to this minus 2.7% after the impact of the slowdown of the U.S. dollar after Liberation Day. On the Q2, you got the geographical spread of our organic growth, 2.6% for the World Group. Important to point out the very strong performance of the North American continent with 4.6% positive growth, but also Europe, 2.6% after a weaker first quarter. Latin America is still growing by 2.5%, and Asia-Pacific is down by 4.9%, mainly due to some budget cuts from some sub-clients, but no negative trend neither on macro or on the positive evolution of our client portfolio. If we just move now to the world first half, the figures are roughly on the same trend with 2.3% of organic growth, still very strong in the U.S., 3.9% positive in Europe and Latin America, and slightly negative in Asia-Pacific for the reason I just gave. On the next page, important to remind the scope and forex impact. On the scope, we were 1.4% on the first quarter. It's 1% on the second quarter for 1.2% for the world first half. On the forex, we have this strong evolution. We were positive by 1.7%, and we are negative by 2.7% on the second quarter. It's, as I said, mainly due to U.S. dollar, but also some Latin American currencies which have negatively impacted our revenues during this second quarter. In terms of revenue breakdown, no major change compared with the last communication we did six months ago. Havas Creative is still the first business unit with 41%, Havas Media 36%, and Havas Health 23%. Same for the geographies. North America at 35%, France number two with 18%, and UK number three with 16%, the rest of Europe being at 16% as well. In terms of sectors, Health is still our first business sector with 30% of the revenues, followed by Finance and Consumer Goods at 10% each. If we now focus on the P&L of this first half, as you have seen, the net revenue is up by 2.9% on the net revenue, and our Adjusted EBITDA margin is up by 50 basis points from 10.2% to 10.7%. This mainly reflects our performance in terms of staff cost management, as our staff cost went up by 1.6% compared with the 2.9% increase of the net revenue. That is this evolution which explains our performance in Adjusted EBITDA margin from 10.2% to 10.7%. The Adjusted EBITDA in gross figures moved from EUR 133 million to EUR 144 million. It's an 8.3% increase. If we now move to the full P&L, starting by the Adjusted EBITDA, then we add the net financial expense, which are minus EUR 17 million for the first half, mainly due to the net foreign exchange loss of minus EUR 10 million on this first half, also due to the evolution euro-dollar. On the income tax, we have a reduction of our tax paid from tax accounted, sorry, from EUR 48 million to EUR 37 million, and the non-controlling interests are slightly above last year, EUR 3 million more, mainly due to the good performance of our recent acquisition, among which Uncommon, which has delivered a very strong first half. In terms of cash flow generation, we moved from this positive cash of EUR 211 million at the end of the year 2023 to a net debt of EUR 79 million. As always, during this first half, we have a very strong seasonality impact on our working capital. Our working capital deteriorated by EUR 183 million. That's, as I said, the common trend of the first half. Let's remark that during the first half 2023, the deterioration was higher at EUR 204 million. Nothing to worry about this evolution of the working capital here again due to the seasonality of our business. The operating cash flow before working capital is still solid at EUR 117 million. You see all the evolution: CapEx EUR 15 million, M&A EUR 25 million, tax EUR 37 million, and the transaction with shareholders EUR 88 million, which is the sum of dividend paid by EUR 84 million, and the share buyback that we have launched early June for EUR 4 million. This net debt evolution is strongly impacted also by the forex, more than EUR 50 million due to the assets in dollars, which have been impacted by the evolution of the euro-dollar currency. It's a EUR 79 million net debt at the end of June. The next slide, we compare this with the end of June 2023. It was minus EUR 26 million. It's a net debt of EUR 26 million one year ago. Between the two, we have the EUR 50 million evolution of the forex. If we restate this net debt of EUR 79 million from the forex impact, we are roughly at the same level as last year. It is important also to remind our liquidity available, which is EUR 1.2 billion at the end of June, EUR 350 million coming from our net cash, the remaining coming from the Federalized Credit Line, RCF for EUR 700 million, and some overdraft which has been negotiated. Today, Havas has EUR 1.2 billion available liquidity in case we would like to accelerate in our M&A policy. In terms of guidance, before entering into the guidance, let's remind what we have achieved over the last two years in terms of revenues, in terms of organic growth, and Adjusted EBITDA. You see on this chart our revenue going up from EUR 1.2 billion to EUR 1.3 billion, and the Adjusted EBITDA coming from EUR 120 million to EUR 144 million in two years' time. We also remind our ability to increase the EBITDA ratio from 9.5% at the end of June 2023 to 10.2% June 2024, and now 10.7% in June 2025. That is a very positive trend we would like to confirm for the future. In terms of outlook, we confirm the guidance we gave in November and reiterated in March with this net organic growth above 2%, with the Adjusted EBITDA in the range of 12.5% to 13.5%, the payout ratio of 40%, around 30%, and the midterm guidance, which is still the aim of reaching 14% to 15% of EBITDA margin in 2028, and the payout ratio is still high at around 40%. Thank you, François. Maybe we jump to Q&A? Thank you, ladies and gentlemen. As a reminder, to ask a question, please signal by pressing star one. If you wish to cancel your request, please press star two. We kindly remind you to limit your questions to three questions plus one follow-up. Our first question is from Lisa Yang from Goldman Sachs. Please go ahead. Good evening. Thanks for taking my questions and congratulations on the results. Firstly, I was just wondering if you can maybe give us a bit of an update on how you're thinking about Q3. Obviously, Q2 saw a very good acceleration. I'm just thinking in Q3, you should see the impact of new business wins you had earlier in the year, like Olive Garden or LVMH, for instance. Faster comps are easier. Do you think we could get to basically 2.5%, 3% for Q3? That's the first question. Second question, I was just wondering, obviously, there are a lot of concerns on the impact of GenAI on the agency, especially in creative. How are your basically agencies being impacted so far, or any sort of conversations we have with clients regarding, for instance, renegotiating the fees because you can now do things cheaper or faster, or the opposite? Does that enable you to do more for your clients and therefore potentially even earn more revenue? The third question is just on the margins. You grew your margins 50 bps in H1. I was just wondering, is that basically ballpark the right level of margin improvement for the full year as well, or what are the moving parts which basically would get you to a lower or higher margin improvement for the full year? Thank you. Thank you very much, Lisa. Maybe I'll take the first and second questions. I'll take the question on margins. Maybe you want to answer on Q3. On Q3, it's too early to say. We will have a favorable basis effect on Q3, to be fully transparent with you, because last year we had a decline on Q3. We are quite confident that we believe we can achieve our guidance. We are still cautious or prudent because we are still living in an environment where we have a lot of geopolitical, regulatory, and macroeconomic uncertainty. We prefer to be prudent and to be confident that we can deliver on our guidance. The wins that you mentioned will mainly affect Q4 and especially 2026. Having said that, we are confident that we can achieve our guidance for the full year. When it comes to GenAI, we don't see yet any kind of impact or significant impact on the revenue, to be frank with you. We have adopted GenAI since the end of 2022. It started with Midjourney and now with Adobe and all the great tools. We are more in our discussion with clients in the mood to do more for the same price, so more assets, like thousands of assets now generated through AI. We believe it could be for an agency like Havas an opportunity to grow, especially on the production side of the business, where we're a little bit late on those changes. I believe GenAI could help us to maybe leapfrog the industry on production. Still too early to confirm. I think it could be, at the end, a good opportunity to grow for us. Maybe, François, on margins? Yes, on margins. First of all, let me remind that our margin profile is not the same on the two halves because we have finalized 10.7% for the first half, and we still intend to be in the range of 12.5% to 13.5% for the whole year, which confirms that the second half is far stronger in terms of EBITDA margin. To answer clearly your question, we still have the intention to increase our margin for the whole year at the same pace that the first half, roughly around 50 basis points. Okay, thank you. Thank you. Our next question is from Annick Maas from Bernstein. Please go ahead. Good evening. I have two as well. The first one, I understand you don't give comments on Q3, but why do you keep your full-year guidance? It feels very cautious to keep it at the current level considering you are already more than there and your comps are getting much easier. Do you actually see something happening in Q3, Q4 that is worse than what it is at the moment? That's my first one. The second one is on North America. If you could just tell us what is driving there the growth, except the fact that, or besides the fact that the comps were easier. On APAC, you suggested that there were some budget cuts which explained the decline of net revenues. Is that now totally phased out, or shall we expect some more of that impacting the next quarters? Thank you. Thank you very much. Thank you, Annick. On the guidance, I hear what you say. It was a question we raised with François and the team at Havas. We wish something about the guidance because we guided the market above 2%, and we are 2.3% on the first half with a favorable basis effect on the second half. That is the first year of the flotation for Havas, not the first year, but the first year since the last IPO. You know how we are. We want to make sure that we can deliver on our results. We don't have any client loss that will affect the growth on Q2. There is nothing that we are hiding. We are being fully transparent with you. In terms of North America, François, and Tyler, you want to? North America, I think, first of all, it's an anticipated bounce-back of the health business, which has been hit by the loss of Pfizer in 2020 at the end of 2023, impacting 2024. There is this anticipated bounce-back on health, but not only. We have our operation in direct marketing in San Diego, which have performed very well during this first half with some nice wins like Jacuzzi or others. That explains the performance. I would say more to come on media where we have some nice wins. Lisa was referring to Olive Garden. That will impact the maybe fourth quarter, and more important, the year 2026. U.S., it comes from all the year, all business, including health for the bounce-back after the performance in 2024, but also media, which has performed very well during this second quarter, and the direct marketing. On APAC, as I said, it's clearly some, when I was referring to client loss, we had some big clients in automotive, and I would say in ancient time automotive, which are partly replaced by electric ones in Asia. We have to adapt our agency and our offer to this new paradigm. We are not worried about the future, and we consider this poor performance of the second quarter must not be projected on the full year. Thank you very much. Thank you. Thank you. We will now move to our next question from Julien Roche from Barclays. Please go ahead. [Foreign language] Yannick, François, Delphine. Only questions for François, so Yannick, if the exchange rates stay the same for the rest of the year, can we get the full-year impact of FX? That's my first question. Can we get some indications of the items between Adjusted EBITDA and net income for full year 2025? One, level of exceptional. Two, level of interest is much higher in the first half, is it going to be higher for the full year? Three, tax rate. Four, minorities. Finally, how much of your $127 million of pass-through in 2024 were linked to production? On the exchange rates, quite simple figures. Today, if we take $0.10 on the U.S. dollar, it impacts for $100 million for the full year. If we, on the first half, we were at 1.08 for U.S. dollar euro. If we remain in the range of 1.16 to 1.18, it will impact, let's say, around $50 million for the second half. It's roughly $100 million for the full year, $0.10, and $50 million for the net revenue for the second half. That's the figure you should have in mind. In terms of P&L, we are not able to give too precise figures on the financials as we had not anticipated these net losses, the exchange losses due to the evolution of euro-dollar. We could consider that the impact on the second half should be far lower as we do not today anticipate a new evolution of the dollar, which seems to be stabilized around the range of 1.16, 1.18. If it's the case, the net financial expense for the second half will be far lower than this loss of $17 million. On the income tax, we have this 31.8% effective tax rate that we today project for the whole year. In non-controlling interest, we should be above last year due to the performance of Uncommon and some agencies in which we do not own 100%. Pass-through, pass-through production? On the pass-through, the pass-through, it's partly due to production and partly due to our event operations. I will give you the detailed performance, but it's both production and event-driven operation, as we did last year in Saudi Arabia or things like that. Okay. Thank you, Julien. Thank you. Thank you. We will now move to our next question from Laura Metayer from Morgan Stanley. Please go ahead. Hi. Congratulations on a good quarter. Three questions from me, please. On AI, just a follow-up question. How do you expect the business model/payment model to evolve? Do you have any clients today asking for more outcome-based payment model, or is it more time and materials and retainers? Second question on margin expansion. The trajectory has been quite impressive. Are you able to give us a bit more details on where exactly you are creating efficiencies? Third question, you've mentioned some client wins. Can you tell us why you think clients pick Havas over other ad agencies and how you differentiate? Thank you. Thank you very much for your comments on the quarter. Honestly, on the AI business model, we don't see, I think, François, correct me if I'm wrong, but any huge changes in the way we are remunerated. No, up to now, no, we have not seen any changes. Where are the increase of the margins coming from? Yes, the increase of the margin, I think, again, we always refer to that, but I think this first half confirmed the success of our integration operation with the development of what we call the in-bids. We have some clients who give us more and more assignments, the ones who entered through media and now who are in creative or production. We know these types of assignments are more profitable than the others. I would say the increase of the margin is, first of all, the ability to have more profitable revenue through in-bids, and the second being our ambitions to do more business with the same staff. Our headcounts are stable since the end of the year 2024, even if our revenue went up. We try to be able to do more business with the same staff. I think that's the two main reasons why we're able to increase our EBITDA ratio half after half. AI will help us to achieve, of course, those margin expansions. Why Havas? I mean, it's a key question. Why Havas? It's a question that keeps us up at night, as you can imagine. We have been very, coming times, have been very positive with us during this first half. I mean, it's a combination of different things. First, I want to highlight the quality of the teams because it's always François and I that are front on this kind of meetings, but we have 23,000 great people at Havas, and you've seen some of the newcomers, new joiners, but the quality of the teams, the longevity of the teams, I mean, teams have been working at Havas for a long time. I would add the quality of the service. We are clearly client-centric. The integrated model, the creativity, not just about being creative, doing creative campaigns, but the way we do media, the way we do production, the way we do everything. We try to do something more. A great strategy. We have invested heavily on our tools. Now I'm proud to say that we might have the best tools or some of the best tools of the industry in the tech data and AI space. This is this combination of things that I think makes quite giving us a high client satisfaction and is giving some reasons for clients to decide to join Havas. [Foreign language]. Thank you, [Foreign language]. Thank you. Our next question is from Nicolas Langley from BNP Paribas Exane. Please go ahead. Hello. Good afternoon, everybody. I've got three questions as well. First, it's great to see all those business wins. Can you tell us what was the impact of net new business in the first part of the year and whether you expect an acceleration of that effect in the second part of the year? Secondly, you have mentioned the rise of the agentic platform at Havas. I'm just curious if the plan is to use them mostly internally or you plan to build an environment at client level. Do you think those platforms can actually bring additional businesses or mostly improve what you already provide to clients? Finally, on the scope effect, given the recent de-announcement, what sort of impact should we expect in H2 on top? Thank you. You want to take a question, François? First of all, yes, let's start with the scope. We did these figures for the first half of 1.2%. I would say that for the full year, depending on the closing on the different agencies we are looking at, it could be in the range of 1.2% to 1.5% for the whole year. This is roughly in line with what we have announced. It still can change as we have several operations due to the process of acquisition. In terms of new business impact, it's not easy to answer on the impact. As you know, we start year after year our budget and business with what we call unnamed new business. We, first of all, have to fill the bucket of the unnamed new business, which we have done very strongly during the second quarter with the nice win Yannick described. Today, we are in line with our forecast. If we keep on, I would say, winning some clients during the third or fourth quarter, we should be able to be more optimistic on the impact on the organic growth. Until now, we are exactly in line with what we anticipated. It may be more if some nice wins come to be confirmed in the coming months. On the platform, not sure I got 100% of your question, Delphine. It was about the in-housing, no? No, Nicolas? Can you, Nicolas, can you come back on the question too? I'm not sure I got it. Sure. Sure. No, the question is whether those agentic platforms will be mostly used by your own employees, or you plan to build an environment using those agentic platforms at client level. I'm interested to understand. Sorry. Go Go ahead. Go ahead. Go ahead. I got your question, I think. No, no. Finally, it's just to understand whether you think this brings additional businesses for you or whether you are mostly improving the services you already provide to clients. Yeah. Oh, no, I mean, it's a great question. Thank you very much. We launched our platform called Converge last year, which was basically an evolution of a previous platform that has been boosted with data tech and AI. It's a platform that is used both by our people but also with our clients. For all the validating process, everything, we are shifting from sending hundreds of emails to validating everything on the platform, from building audience segments, this kind of thing, all the production, the validation of the credit. Everything is used on the platform, both on the agency side but also on the client side. The news is that we are incorporating much more AI now. It's going to become a kind of agentic-led platform. Everyone will have an agent when coming in on the platform. It will be much more intuitive and easy to use it. At the end, everything will converge, sorry to use the same word, on this platform, both from talents, clients. I mean, it's really bringing lots of effectiveness and also efficiencies for us. We are transferring all our existing clients to this platform, even though most of them are already using it today. We are onboarding all the new clients to this platform. Today, the feedback we receive from clients is very high on this platform when they compare with what they can find on the competition. We will continue to invest in this platform. Okay. Perfect. Thank you, Yannick. Thank you, Nicolas. Thank you. We'll now take our final question today from Conor O'Shea from Kepler Cheuvreux. Please go ahead. Yes, thank you. Take my questions. A few on my side still. Firstly, in terms of the wins, I think I know you don't like to discuss individual wins, but I think there was one LVMH, you won some territories on the media side, six largest global advertisers. I'm just wondering if that is more significant than some of the others and can make an incremental contribution in the second half of the year. Second question, in terms, can you give us a sense of what the growth breakdown or in broad terms was between creative and media activities in the first half? Last question, in terms of the healthcare business, it seems from your comments, Yannick, that health and pharma held up very well again in the second quarter. Do you see a risk that some of the activity in this sector was maybe pulled forward in the first half of the year ahead of maybe some tariff changes or other changes in the U.S. healthcare sector in particular, maybe later in the year? Thank you. Yeah. No, thank you very much, Conor. On the healthcare for now, we have a very strong dynamic. Last year, Havas was seriously impacted by a big loss of a health client, but it has allowed us to do a lot of new business last year. Today, this year, health is growing fast. Client satisfaction is very strong. We don't see any slowdown for now. There is a lot of uncertainty on the, I would say, regulatory environment with some rumors on the market that the new U.S. Secretary of Health can make some changes. Honestly, for now, we haven't heard anything. The two main rumors, the first one is on the potential ban of TV advertising for prescription-based drugs. If it happens, we are working with our clients to transfer it to digital. It should marginally impact our results. Still, I'm talking about something we don't know because nothing was official. There's a second rumor about the vaccine, which is not the main activities of Havas in the U.S. for other healthcare. We won't be impacted seriously by vaccine. For now, we don't see any slowdown. Clients are investing. Teams are working very hard. We are mostly bearing the fruits of all the investments on health. For now, it's positive. In terms of wins, we don't disclose too much the wins. The wins we've mentioned, Olive Garden, EasyJet, and Under Armour are impacting this year. We didn't mention LVMH or some other wins because they will impact 2026 mostly because it's clients that have awarded us with their business, but it will start in 2026. It won't have any impact on our business this year. In terms of growth breakdown, François? Yes, we do not disclose the growth breakdown by business unit, but you can confirm that all the business units contributed to the performance of the first half. We have some very rapid growing agencies in both businesses. In creative, we have had very strong growth in some top creative agencies, including Uncommon or others. In media, the same. What is important is to understand that all these business units contributed to the growth: creative, media, and direct marketing, which is part of media, and health for sure. It has been quite well spread during the different ones. Okay. Great. Many thanks. Thank you. Thank you very much, Conor. I think this is the end of the Q&A session. Thank you. I'd like to hand the call back over to Yannick Bolloré for closing remarks. Thank you very much for joining this conference. I know you have a lot of other conferences to attend, so I will leave you now. Thank you. Thank you. This concludes today's conference call. Thank you for your participation. Ladies and gentlemen, you may now disconnect.