Christophe Cherblanc

Christophe Cherblanc asked about the addressable population for STM tools like Scopus AI, including institutional and individual researcher numbers, and the expected ramp-up penetration time. He also questioned the extent of pricing contract changes in Legal over the last 12-24 months, specifically moving away from per-seat pricing, and future pricing adjustment intentions.

Answer

CEO Erik Engstrom stated that the potential addressable market for Scopus AI includes all institutions currently using RELX platforms and over 10 million global researchers. He noted that pricing is based on institution scale and research intensity, with a potential individual researcher subscription option. Engstrom highlighted strong customer feedback and value uplift for Scopus AI, but expects gradual adoption due to academic institutions' longer decision cycles. The transcript does not contain a direct answer to the pricing question in Legal, as the speaker was interrupted.

Christophe Cherblanc of Societe Generale inquired about the M&A strategy for the platform organization, the current share of offshore costs, net hiring plans for H2, and the outlook for property cost savings.

Answer

Chairman & CEO Arthur Sadoun reiterated that the M&A strategy remains focused on bolt-on acquisitions to enhance data and technology capabilities around Epsilon and Publicis Sapient. CFO Michel-Alain Proch detailed that H1 saw 1,300 organic net hires and that H2 hiring would be slightly lower. He stated that offshore global delivery centers now represent about 25% of total headcount and that property cost savings, which drove a 60 bps improvement in depreciation in H1, will continue to be a key focus.

Christophe Cherblanc of Societe Generale inquired about the headcount at the end of Q1 and hiring plans for Q2. He also asked about the long-term vision for offshoring mix and sought details on the Practia acquisition, including its revenue, margin, and the availability of similar assets in the market.

Answer

CFO Michel-Alain Proch reported the headcount at just over 98,000, with 700 net hires in Q1, and detailed the current offshoring mix at 25% of total headcount. He explained the Practia acquisition creates a third global delivery center for Sapient, crucial for serving North American clients. Chairman & CEO Arthur Sadoun added that the primary driver for offshoring is accessing high-end expertise at scale, with cost savings being a secondary benefit, and emphasized the significant competitive advantage of their established delivery centers.

Christophe Cherblanc asked how Publicis's one-third revenue from data and tech compares to peers and inquired about client demand and internal use cases for generative AI tools like ChatGPT.

Answer

Chairman & CEO Arthur Sadoun asserted that no competitor has a data and technology business close to Publicis's €4 billion scale, which is a key differentiator in both revenue mix and go-to-market strategy. Regarding AI, he explained that while clients are not asking for specific tools, Publicis heavily uses AI to enhance its platforms, such as optimizing Epsilon's real-time data, but stressed that human strategic and creative input remains paramount.

Christophe Cherblanc of Societe Generale asked about the staff cost percentage from Global Delivery Centers, the impact of the Indian rupee on margins, the year-to-date headcount increase, and the status of the real estate consolidation program.

Answer

CFO Michel-Alain Proch stated that 7,000 net new recruits were added in H1, with half going to Global Delivery Centers, and that the pace of hiring would slow in H2. He noted the H1 real estate charge of €44 million is part of a program concluding in 2022, with future plans yet to be determined. Chairman and CEO Arthur Sadoun added that Global Delivery Centers are a strategic advantage for talent acquisition and flexible resource allocation, not just cost savings.