Year of transformation - Ipsos
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FULL-YEAR 2018 RESULTS
2018, year of
transformation
28 February 2019
© 2019 Ipsos All rights reserved. Contains Ipsos' Confidential and Proprietary information
1 © 2019 Ipsos. Résultats Annuels 2018
and may not be disclosed or reproduced without the prior written consent of Ipsos.
Agenda
1 2 3 4
A market in The Total 2018 Results Outlook
transformation Understanding
programme:
Objective growth
2 © 2019 Ipsos. Résultats Annuels 2018
The market is transforming: Words from our clients
James Quincey, CEO Coca-Cola
CHANGE IN CONSUMERS
CHANGE IN THE PRODUCT OFFERING CHANGE IN METHODS
“The basic motivations of consumers have
“For more than a century, we were “We have to be organised to
not changed that much... The big change is
able to grow by offering a relatively make the best use of data,
that we have gone from a world that
limited range of products. Today, it's create new marketing
generally suffered from food shortages to a
essential that we offer broader ranges platforms, adapt our sales
world of surplus. The main problem today is
both in terms of price ladder and methods and still keep in touch
not feeding yourself but feeding yourself
product.“ with the consumer.”
well.”
THE POWER OF BEING LOCAL
AGILITY
“You have to be willing to delegate more power and
“You have to multiply message forms, you have to go
responsibility to the local level.”
faster, you have to be willing to test and try everything,
“...Today it's the people on the ground who can
while working to get better as you go. We have to go into
understand and adapt to consumers, who are different in
'agility' mode.“
every culture.“
3 © 2019 Ipsos. Résultats Annuels 2018 Source: Les Echos, 15 February 2019 – « Coca-Cola doit passer en mode agile »
A volatile market increases the need for
reliable data
• Today, it is increasingly important to anticipate
and act quickly
• This increases the value of sound information
4 © 2019 Ipsos. Résultats Annuels 2018Data taken from market research and
surveys have certain characteristics
By using statistical science and sampling, research can inexpensively
produce data that provide:
Accuracy Freshness
Security
Representativeness Predictability 4 S's Simplicity
Speed
Thoroughness Neutrality Substance
5 © 2019 Ipsos. Résultats Annuels 2018The explosion in Big Data highlights the relevance
of market research
Success depends on the usefulness of information and one’s ability to
transform the data into action
Data means any form of fact or Information is a form of data Knowledge is a piece of
statistic that can be used because it information processed to make it
has been given meaning actionable
“The sun rises at 5:38.” “The sun rises in the east at “If you are lost, look towards the
5:38 and sets in the west.” rising sun to find your way again.”
6 © 2019 Ipsos. Résultats Annuels 2018A dynamic market
The wider market ($76.3 billion in 2017) is
growing faster, over 5% on average, and
The core market ($45.8 billion in 2017) is resilient particularly includes the following segments:
and growing at about 3% per year on average • Analytics;
• Social Media monitoring;
• Survey software.
Growth of the total research market:
5,9% 5,8% 6,2%
4,3%
3,5% 3,7% 3,3%
Core market
2,0%
Wider market
2014 2015 2016 2017
7 © 2019 Ipsos. Résultats Annuels 2018 Sources: ESOMAR Global Market ReportsIpsos outperforms its direct competitors
MAJOR COMPANIES IN THE INDUSTRY:
• often focused on the CPG sector;
• sometimes overlook local markets;
• less involved in services that use new technology, new uses and
downstream – including decisions to be taken and aligning the teams.
Implementation of TU
Macro uncertainties, sector changes,
New Way intrinsic factors
→ Return to growth → Accelerate growth ‘19-21
2014 2015 2016 2017 2018
0.3% -1.0% 3.0% 2.4% 0.7%
1
4.5% N/A 3.1% 1.8% 0.8%
0.6% -0.2% -0.9% -2.9% -1.4% 2
1
-2.0% 1.1% -1.7% -1.3% N/A
Sources: Company publications, Nielsen: estimates of organic growth based on statements made by
8 © 2019 Ipsos. Résultats Annuels 2018 management during earning calls, Kantar: figures from WPP’s Data Investment Management division
(1) H1 figure only, (2) 9M figure onlyFrom data generation to full control of information
TECHNOLOGY AND AUTOMATION
DEFINITION OF DATA
NEEDS PRODUCTION
• Understanding of client • Primary data from DATA INFORMATION
issues
DATA ANALYSIS ADVISORY
surveys and panels INTEGRATION DELIVERY
• Study design • Third-party data
(behavioural, social,
customer, other • Analytical models • Understanding of the • Visualisation • Support clients in
available data) societal context platforms taking action
• Artificial intelligence
• Reliability and • Storytelling
relevance of data
• Sector / category /
segment expertise
TEAM EXPERTISE
9 © 2019 Ipsos. Résultats Annuels 2018The Total
Understanding
programme:
Objective Growth
28 February 2019
10 ©©2019 IpsosRésultats
2019 Ipsos. All rights reserved.
Annuels 2018 Contains Ipsos' Confidential and Proprietary information
and may not be disclosed or reproduced without the prior written consent of Ipsos.The pillars of Total Understanding
Kick-off: 1 July 2018
Implemented by: 31 December 2018
REINFORCED CROSS-
CLIENT STRONG LOCAL ACQUISITIONS
SERVICE LINES COMPANY
ORGANISATION PRESENCE CAPABILITIES
• Ensure • Better • Greater • Science Team A • Opportunity
competitiveness of management of responsibility • Tech Team A • Technology
all our services our client of local markets • Ipsos Knowledge • Know-how
• Use the New relationships, • Greater presence in Centre
Services globally and locally key markets
• Re-balance the
client base among
sectors
11 © 2019 Ipsos. Résultats Annuels 201875 Services operated by 17 Service Lines SERVICE
LINES
CONSUMERS Contribution of audience segment DOCTORS AND PATIENTS
in 2018 Revenue
Audience Measurement Healthcare3
Brand Health Tracking
11%
CITIZENS
Clinics and Mobility Labs
Public Affairs
Creative Excellence
12%
Corporate Reputation
Innovation
CLIENTS AND EMPLOYEES
Ipsos UU (Qualitative)1
Ipsos MMA
16% Customer Experience
61% Retail & Consumer Intelligence
Market Strategy & Understanding
Observer2 Mystery Shopping
Social Intelligence Analytics Quality Measurement
(1) Qualitative research, excl. pharma
12 © 2019 Ipsos. Résultats Annuels 2018 (2) Excl. public sector
(3) Includes quantitative & qualitative researchPursuing innovation: New Services SERVICE
LINES
Each Service Line has a programme of innovation and
incorporation of New Services
MEASURE DIFFERENTLY
Web listening, Communities, Behavioural Economics,
Contribution of New Services Ethnography, Neurosciences, Consumer & Retail Audit,
Mediacell
Weight
of New
14%
Services in
13% HAVE THE DATA IN REAL TIME
Mobile, Services Overnight, Enterprise Feedback
revenue 11% Management (EFM).
ANALYSE BIG DATA
Data analytics / Data Science, Ipsos Science Center, Path to
Purchase
2016 2017 2018
Organic OFFER EXPERT ADVISORY SERVICES
Growth
+27% + 17% +13% Market Entry Research, Workshops, Advisory services,
Insight Cloud
Continued momentum of the New Services in 2018
13 © 2019 Ipsos. Résultats Annuels 2018Analyse big data: SERVICE
LINES
Radio France and France Télévisions
CITIZEN INPUT ABOUT PUBLIC RADIO AND TV
• 130,000 participants expressed what they want for the future
of public radio & TV
• Open expression via a web platform: +30 open- and close-
ended questions
• 400,000 transcripts, 20,000 photos, avg. 22 mins. spent per
respondent
• Artificial Intelligence: creation of semantic analysis algorithms
• Human intelligence: reading of the fraction of transcripts
contributing the most to the nature of the topics
14 © 2019 Ipsos. Résultats Annuels 2018Re-balancing the client base CLIENT
ORGANISATION
Sector changes in 2018
reminder
% of 2017 % of 2018 Organic growth by sector
Revenue Revenue
29% 26% CPG -9,1%
17% 18% TMT 8,0%
13% 13% Pharma 0,1%
8% 9% Financial services 3,5%
7% 7% Public sector 5,6%
7% 7% Automotive -1,4%
19% 20% Other sectors
15 © 2019 Ipsos. Résultats Annuels 2018Special attention to a dynamic sector: GAFA, CLIENT
ORGANISATION
platforms, mobile
KEY FIGURES
COMPLEMENTARY KNOW-HOW
Portfolio of the 7 main TMT sector clients
• Services involved, in particular:
2018 weight: 6.0% (4.5% in 2017)
Brand Health Tracking, Ipsos UU, Customer Experience,
Corporate Reputation, Social Intelligence Analytics, User
Experience, Media Development (other Specialist
Services) REVENUE GROWTH
Euro millions at current exchange rates
• Ipsos provides its expertise in analysing consumer 104
behaviour together with data collected in real time by 78
those clients. 58 +33.4%
Organic
2016 2017 2018
16 © 2019 Ipsos. Résultats Annuels 2018Local client organisation: closer to clients CLIENT
ORGANISATION
Client strategy
• Be the client’s voice in Ipsos and the voice of Ipsos with the client
Growth
• Presence in all key countries (45 countries, 214 professionals)
• Local experts focused on the business challenges of key clients
• Increase market share
Collaboration
• Through more tailored services
• Through a multiplication of touchpoints within the client
Client
relationship
17 © 2019 Ipsos. Résultats Annuels 2018Developing client relationships: Škoda AUTO CLIENT
ORGANISATION
A CUSTOMER EXPERIENCE PROGRAMME
CONDUCTED IN 30 COUNTRIES KEY FIGURES
• Comprehensive client assistance SKODA
− Production of new data, analyses of
existing data Ipsos client since 2012
− Creation of a data reporting portal
− Development of a new technology for Majority of revenue generated in Czech
measuring the quality of the customer Republic
experience REVENUE GROWTH
− Standardisation of methods Euro millions at current exchange rates
• Services proposed 2,9
2,2
− Mystery Shopping 1,7
− Enterprise Feedback Management +71%
− Advisory in 2 years
− Workshops 2016 2017 2018
18 © 2019 Ipsos. Résultats Annuels 2018Targeting growth markets: India STRONG LOCAL
PRESENCE
PUBLIC AFFAIRS IN INDIA:
• Large-scale polling to determine the configuration of
public opinion in India before the 2019 elections: Key figures - India
− prominent nationwide coverage of the study;
− 34,000 individuals polled in > 700 employees
320 parliamentary districts
Mumbai, Delhi, Bangalore
• Study of the attractiveness of Indian cities for the World
Bank: 2018 weight: 1.2%
− quality of life and economic attraction indices; 2018 Revenue: €21 million
− 100+ Indian municipalities covered.
Revenue growth:
in millions of INR
1 721
1 374
+24.4%
EXAMPLE OF A MAJOR FMCG SECTOR PLAYER: Organic
• Setup of a global centre for product testing. 2017 2018
19 © 2019 Ipsos. Résultats Annuels 2018Reinforced cross-company capabilities REINFORCED CROSS-
COMPANY CAPABILITIES
Apply the sciences for a better understanding of individuals
and groups and measure their behaviour
Science Team A
Science
Cutting-edge technologies to 43 years,
process all data formats in 89 countries,
Tech Team A 200 cities,
Teams
5,000 clients,
Technology Know-how 8,000 researchers
Expert teams
Ipsos Knowledge Centre
20 © 2019 Ipsos. Résultats Annuels 2018Acquisition of GfK Research ACQUISITIONS
OPPORTUNISTIC ACQUISITION COMPLETED SINCE OCTOBER 2018 2019
• Additional leadership in these • 97% of staff agreed to being • Potential in key countries
segments: transferred within Ipsos
• Momentum for NORM (a
- Public Affairs; • Integration of staff completed virtual reality platform)
- Healthcare;
- Innovation; • Client relationships • Optimisation of staff and
- CX and Mystery Shopping. consolidated operational capabilities
• Low integration costs • Master Service Agreements Revenue impact (MEUR)
transferred at 31 March 2019 180 200
• Attractive acquisition multiple:
(90%) 30
0.5x sales (price: €105m)
2018a 2019e 2020e
For operational reasons, 2019 will
not be a full year
21 © 2019 Ipsos. Résultats Annuels 2018Acquisition of Synthesio ACQUISITIONS
STRATEGIC ACQUISTION MADE IN 2018 2019
• Acquisition of a recognised tech • Integration of personnel: • Maintain platform leadership
leader (per Forrester & Gartner1)
‐ Product Teams concentrated • Investment in text analytics
in monitoring and analysing
on the platform and
conversations from social
technology
networks
‐ Reporting Teams within Ipsos
• Broadened Ipsos service offering,
new services for Synthesio clients • Integration of capabilities: Social Intelligence Analytics 2019E
• Double-digit 2018 growth ‐ Shared development plan Revenue:
between the Data Science
• Strengthens transition from single
channel to a multi-channel
teams
€30m (+44%2)
strategy incl. c.€20m for Synthesio
• Price: $50m
(1) Forrester Wave report – Social Listening Platforms, Q3 2018, Gartner report - Market Guides
22 © 2019 Ipsos. Résultats Annuels 2018 for Social Analytics Applications since 2013
(2) as compared to pro forma 2018 revenue with Synthesio 2018 revenue on a full-year basisBenefits of Total Understanding
• More competitive in every market segment
A more specialised
vs. niche players
offering • Worldwide leadership
A more agile • A client organisation to guarantee the value
organisation of the service to the client
• An organisation more in keeping with the
Increased responsibility
client's
by local markets • Trusted partner
23 © 2019 Ipsos. Résultats Annuels 2018Annual
Results
2018
28 February 2019
24 ©©2019 IpsosRésultats
2019 Ipsos. All rights reserved.
Annuels 2018 Contains Ipsos' Confidential and Proprietary information
and may not be disclosed or reproduced without the prior written consent of Ipsos.Key figures FY 2018
€1,749.5 + 0.7% (4.1%) 9.9% €108
million million
Currency Operating
Revenue Organic growth Free Cash Flow
effects margin
25 © 2019 Ipsos. Résultats Annuels 2018A stable adjusted net profit
Change
In millions of euros 2018 2017
2018 – 2017
Revenue 1,749.5 1,780.5 -1.7%
Gross profit 1,138.4 1,156.7 -1.6%
Gross margin 65.1% 65.0% -
Operating margin 172.4 182.3 -5.4%
Operating margin / revenue 9.9% 10.2% -
Other operating income and expense (5.3) (14.3) -63.3%
Finance costs (21.3) (20.4) 4.4%
Income Tax (38.5) (14.6) 163%
Net profit (attrib. to the Group) 107.5 128.5 -16.3%
Adjusted net profit* (attrib. to the Group) 125.2 127.4 -1.7%
* Adjusted net profit is calculated before (i) non-cash items covered by IFRS 2 (share-based payments), (ii) amortisation of intangible assets identified on acquisitions (client
relationships), (iii) the net tax effect of other non-operating income and expenses, (iv) the non-cash effect on changes in puts in other financial income and expense and (v)
deferred tax liabilities from goodwill, which in some countries can be amortised.
26 © 2019 Ipsos. Résultats Annuels 2018Share of revenue by region
2018 Revenue Total growth
Share Organic growth
(in millions of euros) 2018 – 2017
EMEA 761.5 44% -0.8% 0%
Americas 653.4 37% -5.1% -0.9%
Asia-Pacific 334.6 19% 3.2% 6%
Revenue 1,749.5 100% -1.7% 0.7%
Including: Share Organic growth
Developed countries 68% -0.8%
Emerging countries 32% 3.9%
27 © 2019 Ipsos. Résultats Annuels 2018Breakdown of revenue by audience
2018 Revenue Total growth
Share Organic growth
(in millions of euros) 2018 – 2017
Consumers1 1,059.7 61% -3.9% -0.3%
Clients and employees2 287.6 16% -1% 1.3%
Citizens3 205.9 12% 8.8% 7.5%
Doctors and patients4 196.3 11% -0.8% -0.9%
Revenue 1749.5 100% -1.7% 0.7%
Breakdown of Service Lines by audience segment:
1Audience Measurement, Brand Health, Clinics & Mobility Labs, Creative Excellence, Innovation, Ipsos UU (excl.pharma), Ipsos MMA, Market Strategy & Understanding, Observer (excl. public sector),
Media Development, Social Intelligence Analytics
2Customer Experience, Market Measurement, Mystery Shopping, Quality Measurement, Retail Performance, ERM
3Public Affairs, Corporate Reputation
4Healthcare (quantitative and qualitative)
28 © 2019 Ipsos. Résultats Annuels 2018Cash flow statement:
good free cash flow generation
Change
In millions of euros 2018 2017
2018 – 2017
Gross Operating cash flow 206.3 197.2 4.6%
Change in WCR 3.5 (37.8) -
Tax and interest expense (57.8) (60.2) -5.0%
Property, plant and equipment and intangible
(43.6) (18.4) x2.4
assets
Free cash flow 108.1 80.8 32.5%
Acquisitions (161.6) (15.0) -
(Purchase) / Sale of shares 1.2 6.4 -81.3%
Net change in debt 122.9 (53.3) -
Dividends (37.8) (36.4) 3.8%
Cash at end of period 168.8 137.3 22.3%
29 © 2019 Ipsos. Résultats Annuels 2018A solid balance sheet
In millions of euros 2018 2017
Shareholders’ equity 1,035 966
Net debt 575 464
Gearing 56% 48 %
Net debt (at 31/12 exchange rates) / EBITDA
x2.8 x2.1
(at average exchange rates)
Interest coverage
x8.3 x9.7
(operating margin/interest expense)
Ipsos has a good liquidity position with over 400 million euros in available credit lines, following the success of its 7-year 300
million euro bond issue (2.875% annual coupon) and the refinancing of its main bank facility of 160 million euros, for 5 years (with
an option for 2 additional years), both carried out in September 2018.
30 © 2019 Ipsos. Résultats Annuels 2018Breakdown by currency
DEBT BREAKDOWN BREAKDOWN OF IPSOS
BUSINESS ACTIVITIES
Eurozone 17%
EUR: 64% Other regions: 43%
UK: 12%
USD 36%
Dollar Zone: 28%
31 © 2019 Ipsos. Résultats Annuels 2018Debt by maturity
SPLIT BY MATURITY
Gross Debt
(€M)
746
300
174 167
5 26
75
31/12/2018 2019 2020 2021 2022 2023 0
2024 2025
32 © 2019 Ipsos. Résultats Annuels 2018Proposed dividend of 88 euro cents (+1.1%)
2018 2017
Dividend per share 0.88 0.87
Earnings per share 2.48 3.00
Adjusted earnings per share 2.88 2.98
Dividend payout 30.6% 29.2%
33 © 2019 Ipsos. Résultats Annuels 2018Outlook
28 February 2019
34 ©©2019 IpsosRésultats
2019 Ipsos. All rights reserved.
Annuels 2018 Contains Ipsos' Confidential and Proprietary information
and may not be disclosed or reproduced without the prior written consent of Ipsos.2019-2021 Outlook
Organic growth
BALANCED CASH ALLOCATION
At least at market level
Annual acquisitions
3 categories: opportunities, technology
and know-how
2%-4%
€50M -
Capex €100M Operating margin
Organic and non-organic, through
€35M - 10%+ to 11% continued digitisation of data
€45M collection and economies of scale
2019: 10%+
2.5x – 2021: 11%
3.0x 10%
Optimized leverage 25% - Average EPS growth1
Conservative and supporting 30%
growth
Dividend payout ratio ATTRACTIVE GROWTH RATE
(1) On diluted EPS basis, at constant currency
35 © 2019 Ipsos. Résultats Annuels 2018Q&A 36 © 2019 Ipsos. Résultats Annuels 2018
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