Ipsos Reports Strong First Half Performance with 4.7% Growth and Robust Profitability
3 Sources
3 Sources
[1]
Ipsos: Total growth of 4.7% and good profitability and cash generation in the first half
Total growth of 4.7% and good profitability and cash generation in the first half Total growth: 4.7% Organic growth: 3.8% Operating margin: 10.1% Free cash flow: €80 million Paris, 24 July 2024 - Ipsos, one of the world's leading market research companies, generated a revenue of €1,138.5 million in the first half of the year, an increase of €51.4 million compared with the first half of 2023. First-half growth stands at 4.7%, including 3.8% organic growth, -1.8% of adverse currency effects, and 2.8% scope effects, linked in particular to the acquisitions of I&O Research in the Netherlands (leader in social and political surveys), Jarmany in the UK (data management and analysis specialist) and B&A in Ireland (expert in opinion and social research studies, as well as market studies), which are achieving good performances a few months after their integration. Ben Page, CEO of Ipsos, stated: "Ipsos has once again demonstrated the resilience of its operating model, illustrated by organic growth of nearly 4% and a very good level of profitability and cash generation in the first half of the year. Despite a cyclical slowdown linked to elections in many countries (as US, UK, France, India) and specific headwinds in the United States, overall our geographical diversity, the breadth of our range of solutions, our unique expertise and our technological breakthroughs are key fundamentals that enable us to pursue our growth strategy." PERFORMANCE BY REGION The EMEA region recorded solid organic growth of 7.6% in the first half, driven by Continental Europe and the Middle East. In particular, new management started showing impact in Germany, and with Italy, recorded double-digit growth over the half-year period. The good momentum of recent acquisitions boosted total growth in the region to 10%. Business in the Americas was down slightly. Latin America maintains a good momentum. In the United States, the solid performance in the consumer goods sector, the very strong performance of our Ipsos Digital platform and the recovery of our activity with major Big Tech clients are confirmed. However, our performance in this region is impacted by the electoral cycle and the end of major one-off contracts which are weighing on our public affairs activities, and by a wave of restructuring by major players in the pharmaceutical industry. In addition to these factors, the US suffered from a lack of management for over 6 months. The recent implementation of a new management organization should allow us to stabilize the situation and to gradually return to growth in North America. The Asia-Pacific region posted organic growth of 4.0% over the semester. Growth in China remains weak due to a lack of macroeconomic clarity. The rest of the region saw a slowdown in activity during the second quarter, after an excellent first quarter. Some contracts will be finalized later than initially anticipated and should drive activity in the second half of the year, particularly in India. PERFORMANCE BY AUDIENCE Breakdown of Service Lines by audience segment: 1- Brand Health Tracking, Creative Excellence, Innovation, Ipsos UU, Ipsos MMA, Market Strategy & Understanding, Observer (excl. public sector), Ipsos Synthesio, Strategy3 2- Automotive & Mobility Development, Audience Measurement, Customer Experience, Channel Performance (Mystery Shopping and Shopper), Media Development, ERM, Capabilities 3- Public Affairs, Corporate Reputation 4- Pharma (quantitative and qualitative) Our consumer activities recorded organic growth of 8.0%, reflecting the very good performance in all geographies of our service lines linked to brand health tracking, innovation, advertising creation and our qualitative surveys. Solid performance in the consumer goods sector contributed to this segment's good performance. The clients and employees, citizens, and doctors and patients audiences continue to be affected by the difficult environment in the United States. Outside the United States, they posted overall growth of nearly 5%. New services (platforms, ESG offers, data analytics and advisory) now account for 21.5% of Group revenue. Organic growth was 13%, driven by Ipsos Digital, our DIY solution, which grew by 37% this semester. *Adjusted net profit is calculated before (i) non-monetary items related to IFRS 2 (Share-based Payment), (ii) the amortisation of acquisition-related intangible assets (client relations), (iii) the impact of other non-current income and expenses, net of tax, (iv) the non-monetary impact of changes in puts and other financial income and expenses, and (v) deferred tax liabilities related to goodwill for which amortisation is deductible in some countries. Income statement items Gross margin is up 80 basis points to 68.5% compared to 67.7% for last year at this point. This increase in the gross margin ratio is mostly due to (i) the strong growth of Ipsos Digital, whose gross margin rate is significantly higher than the Group average, (ii) the increase in the internalisation of data collection following our investments in our panels. In terms of operating costs, the payroll rose by 3.3%, compared with a 6% increase in gross margin. This increase reflects a cautious recruitment policy to (i) support our growth, (ii) invest in our technological developments and (iii) strengthen the internalisation of our operations. As at 30 June, the ratio of payroll to gross margin was 68.3%, compared to 70% last year, and remains significantly lower than the pre-pandemic situation (above 72% in 2019). Overhead costs increased by €8.3 million, mainly due to (i) an increase in IT and technology expenditure reflecting the implementation of our strategic plan and (ii) a perimeter effect linked to the acquisitions of 11 companies since 2023. The ratio of overhead costs to gross margin was 14.9%; like payroll, this ratio remains significantly lower than in 2019 (18.3%). "Other operating income and expenses", which mainly consists of severance costs, has a negative balance of €7.7 million, down by €2 million compared to the previous year. Overall, the operating margin stands at 10.1% for the first half of 2024, an increase of 140 basis points compared to last year. Net interest expense came to €5.7 million compared with €6.6 million last year, reflecting the fall in the Group's gross debt between the first half of 2023 and the first half of 2024. The effective tax rate is 26.0%, compared to 25.8% in the first half of 2023. Net income attributable to owners of the parent is €78 million, compared to €56 million in the first half of 2023, an increase of 38.3%. Adjusted net income attributable to owners of the parent is also up at €82 million, compared to €70 million last year, an increase of 17.5%. Financial structure Cash flow. Cash flow from operations stands at €177 million, compared to €137 million in the first half of 2023, an increase of €40 million euros, in line with the rise in pre-tax net income. Working capital requirement improved significantly by €35 million in the first half of 2024 compared with the same period of 2023. As expected, a high level of customer cash collection was recorded in the first half of 2024, in line with the strong level of revenue in the last quarter of 2023. Investments in property, plant and equipment and intangible assets consist mainly of investments in IT infrastructure and technology and amounted to €32 million in the first half. These investments are up 20%, in line with the implementation of our platforms and technologies roadmap. Overall, free cash flow from operating activities is €80 million, a €56 million increase compared to last year. Regarding non-current investments, Ipsos invested over €28 million in the first half of the year, including through the acquisition of Jarmany in the United Kingdom and I&O Research in the Netherlands in January 2024. Lastly, financing activities for the first half of 2024 include share buybacks in connection with the delivery of free share plans for Group employees. Equity stood at €1,421 million at 30 June 2024, compared to €1,433 million at 31 December 2023. Net financial debt amounted to €100 million, down from €120 million at 31 December 2023 and 129 million at 30 June 2023. The leverage ratio (calculated excluding the IFRS 16 impact) was 0.3 times EBITDA (compared to 0.3 times at 31 December 2023 and 0.4 at 30 June 2023). Cash position. Cash at 30 June 2024 amounted to €283 million, compared to €278 million at 31 December 2023. The Group has an excellent level of liquidity with nearly €500 million in credit lines maturing in over one year, and no debt maturing in 2024. OUTLOOK Thanks to the resilience of its operating model and its strong ability to adapt in challenging macro-economic and geopolitical environments, Ipsos is continuing its growth trajectory and improved its profitability and cash generation in the first half of the year. The Group is in a very good position to continue financing its growth, investments and acquisitions. A few months after their integration, the latest acquisitions achieve a good performance. In the technological field, the Group is actively pursuing the implementation of its roadmap, both the reboot of its digital data collection engine, and new investments in Artificial Intelligence, by launching new offers based on Ipsos Facto, its own generative AI platform. The Group launched Ipsos PersonaBot, a solution that enables companies to converse with personas representing target consumer segments; and Creative Spark AI, an advertising evaluation solution that predicts human reactions to TV and social videos using a combination of Artificial Intelligence and a large database of real data. Organic growth in the first half of the year was weaker than expected, particularly at the end of the second quarter. This partly reflects the impact of the electoral cycle and the wait-and-see attitude that result from elections in many countries this year (United States, United Kingdom, France and India notably). Moreover, the context did not improve in the second quarter in the United States. Once the uncertainties related to the presidential election and the restructuring of the pharmaceutical sector have dissipated, the recent appointment of a new CEO in North America and the implementation of a new management organization should enable a return to growth in this region by the beginning of next year. In the short term, we are adjusting downwards our organic growth target for 2024 and now anticipate an organic growth close to that of last year (+3%). At the same time, the increase in gross margin and the good cost management discipline allow us to maintain our operating margin target of around 13%. *** Presentation of half-year results The 2024 half-year results will be presented on Friday, 25 July 2024 at 8:30 a.m. CET via webcast. If you would like to register, please contact [email protected]. The complete consolidated financial statements as at 31 December 2023 are available on Ipsos.com ABOUT IPSOS Ipsos is one of the largest market research companies in the world, present in 90 markets and employing nearly than 20,000 people. Our passionately curious research professionals, analysts and scientists have built unique multi-specialist capabilities that provide true understanding and powerful insights into the actions, opinions and motivations of citizens, consumers, patients, customers or employees. Our 75 solutions are based on primary data from our surveys, social media monitoring, and qualitative or observational techniques. "Game Changers" - our tagline - summarises our ambition to help our 5,000 clients navigate with confidence our world of rapid change. Founded in France in 1975, Ipsos has been listed on the Euronext Paris since 1 July 1999. The company is part of the SBF 120, Mid-60 indices, STOXX Europe 600 and is eligible for the Deferred Settlement Service (SRD). ISIN code FR0000073298, Reuters ISOS.PA, Bloomberg IPS:FP www.ipsos.com * Adjusted for non-cash items related to IFRS 2 (share-based compensation), amortization of intangible assets identified on acquisitions (customer relations), deferred tax liabilities related to goodwill for which amortization is deductible in some countries, the impact net of tax of other non-operating income and expenses and the non-cash impact of changes in puts in other financial income and expenses. Statement of financial position, Interim financial statements at June 30, 2024 Consolidated statement of cash flows, Interim financial statements at June 30, 2024
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Ipsos: Total growth of 4.7% and good profitability and cash generation in the first half By Investing.com
Total growth of 4.7% and good profitability and cash generation in the first half Total growth: 4.7% Organic growth: 3.8% Operating margin: 10.1% Free cash flow: €80 million Paris, 24 July 2024 " Ipsos, one of the world's leading market research companies, generated a revenue of €1,138.5 million in the first half of the year, an increase of €51.4 million compared with the first half of 2023. First-half growth stands at 4.7%, including 3.8% organic growth, -1.8% of adverse currency effects, and 2.8% scope effects, linked in particular to the acquisitions of I&O Research in the Netherlands (leader in social and political surveys), Jarmany in the UK (data management and analysis specialist) and B&A in Ireland (expert in opinion and social research studies, as well as market studies), which are achieving good performances a few months after their integration. Ben Page, CEO of Ipsos, stated: Ipsos has once again demonstrated the resilience of its operating model, illustrated by organic growth of nearly 4% and a very good level of profitability and cash generation in the first half of the year. Despite a cyclical slowdown linked to elections in many countries (as US, UK, France, India) and specific headwinds in the United States, overall our geographical diversity, the breadth of our range of solutions, our unique expertise and our technological breakthroughs are key fundamentals that enable us to pursue our growth strategy. PERFORMANCE BY REGION The EMEA region recorded solid organic growth of 7.6% in the first half, driven by Continental Europe and the Middle East. In particular, new management started showing impact in Germany, and with Italy, recorded double-digit growth over the half-year period. The good momentum of recent acquisitions boosted total growth in the region to 10%. Business in the Americas was down slightly. Latin America maintains a good momentum. In the United States, the solid performance in the consumer goods sector, the very strong performance of our Ipsos Digital platform and the recovery of our activity with major Big Tech clients are confirmed. However, our performance in this region is impacted by the electoral cycle and the end of major one-off contracts which are weighing on our public affairs activities, and by a wave of restructuring by major players in the pharmaceutical industry. In addition to these factors, the US suffered from a lack of management for over 6 months. The recent implementation of a new management organization should allow us to stabilize the situation and to gradually return to growth in North America. The Asia-Pacific region posted organic growth of 4.0% over the semester. Growth in China remains weak due to a lack of macroeconomic clarity. The rest of the region saw a slowdown in activity during the second quarter, after an excellent first quarter. Some contracts will be finalized later than initially anticipated and should drive activity in the second half of the year, particularly in India. PERFORMANCE BY AUDIENCE Breakdown of Service Lines by audience segment: 1- Brand Health Tracking, Creative Excellence, Innovation, Ipsos UU, Ipsos MMA, Market Strategy & Understanding, Observer (excl. public sector), Ipsos Synthesio, Strategy3 2- Automotive & Mobility Development, Audience Measurement, Customer Experience, Channel Performance (Mystery Shopping and Shopper), Media Development, ERM, Capabilities 3- Public Affairs, Corporate Reputation 4- Pharma (quantitative and qualitative) Our consumer activities recorded organic growth of 8.0%, reflecting the very good performance in all geographies of our service lines linked to brand health tracking, innovation, advertising creation and our qualitative surveys. Solid performance in the consumer goods sector contributed to this segment's good performance. The clients and employees, citizens, and doctors and patients audiences continue to be affected by the difficult environment in the United States. Outside the United States, they posted overall growth of nearly 5%. New services (platforms, ESG offers, data analytics and advisory) now account for 21.5% of Group revenue. Organic growth was 13%, driven by Ipsos Digital, our DIY solution, which grew by 37% this semester. Adjusted net profit is calculated before (i) non-monetary items related to IFRS 2 (Share-based Payment), (ii) the amortisation of acquisition-related intangible assets (client relations), (iii) the impact of other non-current income and expenses, net of tax, (iv) the non-monetary impact of changes in puts and other financial income and expenses, and (v) deferred tax liabilities related to goodwill for which amortisation is deductible in some countries. Income statement items Gross margin is up 80 basis points to 68.5% compared to 67.7% for last year at this point. This increase in the gross margin ratio is mostly due to (i) the strong growth of Ipsos Digital, whose gross margin rate is significantly higher than the Group average, (ii) the increase in the internalisation of data collection following our investments in our panels. In terms of operating costs, the payroll rose by 3.3%, compared with a 6% increase in gross margin. This increase reflects a cautious recruitment policy to (i) support our growth, (ii) invest in our technological developments and (iii) strengthen the internalisation of our operations. As at 30 June, the ratio of payroll to gross margin was 68.3%, compared to 70% last year, and remains significantly lower than the pre-pandemic situation (above 72% in 2019). Overhead costs increased by €8.3 million, mainly due to (i) an increase in IT and technology expenditure reflecting the implementation of our strategic plan and (ii) a perimeter effect linked to the acquisitions of 11 companies since 2023. The ratio of overhead costs to gross margin was 14.9%; like payroll, this ratio remains significantly lower than in 2019 (18.3%). Other operating income and expenses, which mainly consists of severance costs, has a negative balance of €7.7 million, down by €2 million compared to the previous year. Overall, the operating margin stands at 10.1% for the first half of 2024, an increase of 140 basis points compared to last year. Net interest expense came to €5.7 million compared with €6.6 million last year, reflecting the fall in the Group's gross debt between the first half of 2023 and the first half of 2024. The effective tax rate is 26.0%, compared to 25.8% in the first half of 2023. Net income attributable to owners of the parent is €78 million, compared to €56 million in the first half of 2023, an increase of 38.3%. Adjusted net income attributable to owners of the parent is also up at €82 million, compared to €70 million last year, an increase of 17.5%. Financial structure Cash flow. Cash flow from operations stands at €177 million, compared to €137 million in the first half of 2023, an increase of €40 million euros, in line with the rise in pre-tax net income. Working capital requirement improved significantly by €35 million in the first half of 2024 compared with the same period of 2023. As expected, a high level of customer cash collection was recorded in the first half of 2024, in line with the strong level of revenue in the last quarter of 2023. Investments in property, plant and equipment and intangible assets consist mainly of investments in IT infrastructure and technology and amounted to €32 million in the first half. These investments are up 20%, in line with the implementation of our platforms and technologies roadmap. Overall, free cash flow from operating activities is €80 million, a €56 million increase compared to last year. Regarding non-current investments, Ipsos invested over €28 million in the first half of the year, including through the acquisition of Jarmany in the United Kingdom and I&O Research in the Netherlands in January 2024. Lastly, financing activities for the first half of 2024 include share buybacks in connection with the delivery of free share plans for Group employees. Equity stood at €1,421 million at 30 June 2024, compared to €1,433 million at 31 December 2023. Net financial debt amounted to €100 million, down from €120 million at 31 December 2023 and 129 million at 30 June 2023. The leverage ratio (calculated excluding the IFRS 16 impact) was 0.3 times EBITDA (compared to 0.3 times at 31 December 2023 and 0.4 at 30 June 2023). Cash position. Cash at 30 June 2024 amounted to €283 million, compared to €278 million at 31 December 2023. The Group has an excellent level of liquidity with nearly €500 million in credit lines maturing in over one year, and no debt maturing in 2024. OUTLOOK Thanks to the resilience of its operating model and its strong ability to adapt in challenging macro-economic and geopolitical environments, Ipsos is continuing its growth trajectory and improved its profitability and cash generation in the first half of the year. The Group is in a very good position to continue financing its growth, investments and acquisitions. A few months after their integration, the latest acquisitions achieve a good performance. In the technological field, the Group is actively pursuing the implementation of its roadmap, both the reboot of its digital data collection engine, and new investments in Artificial Intelligence, by launching new offers based on Ipsos Facto, its own generative AI platform. The Group launched Ipsos PersonaBot, a solution that enables companies to converse with personas representing target consumer segments; and Creative Spark AI, an advertising evaluation solution that predicts human reactions to TV and social videos using a combination of Artificial Intelligence and a large database of real data. Organic growth in the first half of the year was weaker than expected, particularly at the end of the second quarter. This partly reflects the impact of the electoral cycle and the wait-and-see attitude that result from elections in many countries this year (United States, United Kingdom, France and India notably). Moreover, the context did not improve in the second quarter in the United States. Once the uncertainties related to the presidential election and the restructuring of the pharmaceutical sector have dissipated, the recent appointment of a new CEO in North America and the implementation of a new management organization should enable a return to growth in this region by the beginning of next year. In the short term, we are adjusting downwards our organic growth target for 2024 and now anticipate an organic growth close to that of last year (+3%). At the same time, the increase in gross margin and the good cost management discipline allow us to maintain our operating margin target of around 13%. Presentation of half-year results The 2024 half-year results will be presented on Friday, 25 July 2024 at 8:30 a.m. CET via webcast. If you would like to register, please contact [email protected]. The complete consolidated financial statements as at 31 December 2023 are available on Ipsos.com ABOUT IPSOS Ipsos is one of the largest market research companies in the world, present in 90 markets and employing nearly than 20,000 people. Our passionately curious research professionals, analysts and scientists have built unique multi-specialist capabilities that provide true understanding and powerful insights into the actions, opinions and motivations of citizens, consumers, patients, customers or employees. Our 75 solutions are based on primary data from our surveys, social media monitoring, and qualitative or observational techniques. Game Changers " our tagline " summarises our ambition to help our 5,000 clients navigate with confidence our world of rapid change. Founded in France in 1975, Ipsos has been listed on the Euronext Paris since 1 July 1999. The company is part of the SBF 120, Mid-60 indices, STOXX Europe 600 and is eligible for the Deferred Settlement Service (SRD). ISIN code FR0000073298, Reuters ISOS.PA, Bloomberg IPS:FP www.ipsos.com Adjusted for non-cash items related to IFRS 2 (share-based compensation), amortization of intangible assets identified on acquisitions (customer relations), deferred tax liabilities related to goodwill for which amortization is deductible in some countries, the impact net of tax of other non-operating income and expenses and the non-cash impact of changes in puts in other financial income and expenses. Statement of financial position, Interim financial statements at June 30, 2024 Consolidated statement of cash flows, Interim financial statements at June 30, 2024
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Ipsos: Total growth of 4.7% and good profitability and cash generation in the first half
Total growth of 4.7% and good profitability and cash generation in the first half Total growth: 4.7% Organic growth: 3.8% Operating margin: 10.1% Free cash flow: €80 million Paris, 24 July 2024 - Ipsos, one of the world's leading market research companies, generated a revenue of €1,138.5 million in the first half of the year, an increase of €51.4 million compared with the first half of 2023. Revenue (millions of euros)20242023Total growthQ1557.5532.04.8%Q2581.0555.14.7%Total1,138.51,087.14.7% First-half growth stands at 4.7%, including 3.8% organic growth, -1.8% of adverse currency effects, and 2.8% scope effects, linked in particular to the acquisitions of I&O Research in the Netherlands (leader in social and political surveys), Jarmany in the UK (data management and analysis specialist) and B&A in Ireland (expert in opinion and social research studies, as well as market studies), which are achieving good performances a few months after their integration. Ben Page, CEO of Ipsos, stated: "Ipsos has once again demonstrated the resilience of its operating model, illustrated by organic growth of nearly 4% and a very good level of profitability and cash generation in the first half of the year. Despite a cyclical slowdown linked to elections in many countries (as US, UK, France, India) and specific headwinds in the United States, overall our geographical diversity, the breadth of our range of solutions, our unique expertise and our technological breakthroughs are key fundamentals that enable us to pursue our growth strategy." PERFORMANCE BY REGION In € millionsRevenue 2024ContributionTotal growthOrganic growth EMEA523.346%10.0%7.6%Americas418.737%-0.6%-0.6%Asia-Pacific196.517%3.4%4.0%Total1,138.5100%4.7%3.8% The EMEA region recorded solid organic growth of 7.6% in the first half, driven by Continental Europe and the Middle East. In particular, new management started showing impact in Germany, and with Italy, recorded double-digit growth over the half-year period. The good momentum of recent acquisitions boosted total growth in the region to 10%. Business in the Americas was down slightly. Latin America maintains a good momentum. In the United States, the solid performance in the consumer goods sector, the very strong performance of our Ipsos Digital platform and the recovery of our activity with major Big Tech clients are confirmed. However, our performance in this region is impacted by the electoral cycle and the end of major one-off contracts which are weighing on our public affairs activities, and by a wave of restructuring by major players in the pharmaceutical industry. In addition to these factors, the US suffered from a lack of management for over 6 months. The recent implementation of a new management organization should allow us to stabilize the situation and to gradually return to growth in North America. The Asia-Pacific region posted organic growth of 4.0% over the semester. Growth in China remains weak due to a lack of macroeconomic clarity. The rest of the region saw a slowdown in activity during the second quarter, after an excellent first quarter. Some contracts will be finalized later than initially anticipated and should drive activity in the second half of the year, particularly in India. PERFORMANCE BY AUDIENCE In € millions2024 revenueContributionTotal growthOrganic growth Consumers1562.350%7.6%8.0%Clients and employees2230.320%-0.3%0.5%Citizens3182.316%10.9%1.1%Doctors and patients4163.714%-3.1%-2.5%Total1,138.5100%4.7%3.8% Breakdown of Service Lines by audience segment: 1- Brand Health Tracking, Creative Excellence, Innovation, Ipsos UU, Ipsos MMA, Market Strategy & Understanding, Observer (excl. public sector), Ipsos Synthesio, Strategy3 2- Automotive & Mobility Development, Audience Measurement, Customer Experience, Channel Performance (Mystery Shopping and Shopper), Media Development, ERM, Capabilities 3- Public Affairs, Corporate Reputation 4- Pharma (quantitative and qualitative) Our consumer activities recorded organic growth of 8.0%, reflecting the very good performance in all geographies of our service lines linked to brand health tracking, innovation, advertising creation and our qualitative surveys. Solid performance in the consumer goods sector contributed to this segment's good performance. The clients and employees, citizens, and doctors and patients audiences continue to be affected by the difficult environment in the United States. Outside the United States, they posted overall growth of nearly 5%. New services (platforms, ESG offers, data analytics and advisory) now account for 21.5% of Group revenue. Organic growth was 13%, driven by Ipsos Digital, our DIY solution, which grew by 37% this semester. FINANCIAL PERFORMANCE Summary income statement In € millions30 June 202430 June 2023ChangeReminder 31 Dec. 2023Revenue1,138.51,087.14.7%2,389.8Gross margin780.1736.16.0%1,612.8Gross margin/Revenue68.5%67.7% 67.5%Operating profit115.194.322.1%312.4Operating profit/Revenue10.1%8.7% 13.1%Other non-current/recurring income and expenses2.4(0.9) (47.3)Finance costs (5.7)(6.6) (13.3)Other financial income and expenses2.2(2.4) (7.0)Income tax(29.0)(20.9) (72.9)Net income (attributable to owners of the parent)78.056.438.3%159.7Adjusted net income* (attributable to owners of the parent)82.370.117.5%228.6 *Adjusted net profit is calculated before (i) non-monetary items related to IFRS 2 (Share-based Payment), (ii) the amortisation of acquisition-related intangible assets (client relations), (iii) the impact of other non-current income and expenses, net of tax, (iv) the non-monetary impact of changes in puts and other financial income and expenses, and (v) deferred tax liabilities related to goodwill for which amortisation is deductible in some countries. Income statement items Gross margin is up 80 basis points to 68.5% compared to 67.7% for last year at this point. This increase in the gross margin ratio is mostly due to (i) the strong growth of Ipsos Digital, whose gross margin rate is significantly higher than the Group average, (ii) the increase in the internalisation of data collection following our investments in our panels. In terms of operating costs, the payroll rose by 3.3%, compared with a 6% increase in gross margin. This increase reflects a cautious recruitment policy to (i) support our growth, (ii) invest in our technological developments and (iii) strengthen the internalisation of our operations. As at 30 June, the ratio of payroll to gross margin was 68.3%, compared to 70% last year, and remains significantly lower than the pre-pandemic situation (above 72% in 2019). Overhead costs increased by €8.3 million, mainly due to (i) an increase in IT and technology expenditure reflecting the implementation of our strategic plan and (ii) a perimeter effect linked to the acquisitions of 11 companies since 2023. The ratio of overhead costs to gross margin was 14.9%; like payroll, this ratio remains significantly lower than in 2019 (18.3%). "Other operating income and expenses", which mainly consists of severance costs, has a negative balance of €7.7 million, down by €2 million compared to the previous year. Overall, the operating margin stands at 10.1% for the first half of 2024, an increase of 140 basis points compared to last year. Net interest expense came to €5.7 million compared with €6.6 million last year, reflecting the fall in the Group's gross debt between the first half of 2023 and the first half of 2024. The effective tax rate is 26.0%, compared to 25.8% in the first half of 2023. Net income attributable to owners of the parent is €78 million, compared to €56 million in the first half of 2023, an increase of 38.3%. Adjusted net income attributable to owners of the parent is also up at €82 million, compared to €70 million last year, an increase of 17.5%. Financial structure Cash flow. Cash flow from operations stands at €177 million, compared to €137 million in the first half of 2023, an increase of €40 million euros, in line with the rise in pre-tax net income. Working capital requirement improved significantly by €35 million in the first half of 2024 compared with the same period of 2023. As expected, a high level of customer cash collection was recorded in the first half of 2024, in line with the strong level of revenue in the last quarter of 2023. Investments in property, plant and equipment and intangible assets consist mainly of investments in IT infrastructure and technology and amounted to €32 million in the first half. These investments are up 20%, in line with the implementation of our platforms and technologies roadmap. Overall, free cash flow from operating activities is €80 million, a €56 million increase compared to last year. Regarding non-current investments, Ipsos invested over €28 million in the first half of the year, including through the acquisition of Jarmany in the United Kingdom and I&O Research in the Netherlands in January 2024. Lastly, financing activities for the first half of 2024 include share buybacks in connection with the delivery of free share plans for Group employees. Equity stood at €1,421 million at 30 June 2024, compared to €1,433 million at 31 December 2023. Net financial debt amounted to €100 million, down from €120 million at 31 December 2023 and 129 million at 30 June 2023. The leverage ratio (calculated excluding the IFRS 16 impact) was 0.3 times EBITDA (compared to 0.3 times at 31 December 2023 and 0.4 at 30 June 2023). Cash position. Cash at 30 June 2024 amounted to €283 million, compared to €278 million at 31 December 2023. The Group has an excellent level of liquidity with nearly €500 million in credit lines maturing in over one year, and no debt maturing in 2024. OUTLOOK Thanks to the resilience of its operating model and its strong ability to adapt in challenging macro-economic and geopolitical environments, Ipsos is continuing its growth trajectory and improved its profitability and cash generation in the first half of the year. The Group is in a very good position to continue financing its growth, investments and acquisitions. A few months after their integration, the latest acquisitions achieve a good performance. In the technological field, the Group is actively pursuing the implementation of its roadmap, both the reboot of its digital data collection engine, and new investments in Artificial Intelligence, by launching new offers based on Ipsos Facto, its own generative AI platform. The Group launched Ipsos PersonaBot, a solution that enables companies to converse with personas representing target consumer segments; and Creative Spark AI, an advertising evaluation solution that predicts human reactions to TV and social videos using a combination of Artificial Intelligence and a large database of real data. Organic growth in the first half of the year was weaker than expected, particularly at the end of the second quarter. This partly reflects the impact of the electoral cycle and the wait-and-see attitude that result from elections in many countries this year (United States, United Kingdom, France and India notably). Moreover, the context did not improve in the second quarter in the United States. Once the uncertainties related to the presidential election and the restructuring of the pharmaceutical sector have dissipated, the recent appointment of a new CEO in North America and the implementation of a new management organization should enable a return to growth in this region by the beginning of next year. In the short term, we are adjusting downwards our organic growth target for 2024 and now anticipate an organic growth close to that of last year (+3%). At the same time, the increase in gross margin and the good cost management discipline allow us to maintain our operating margin target of around 13%. *** Presentation of half-year results The 2024 half-year results will be presented on Friday, 25 July 2024 at 8:30 a.m. CET via webcast. If you would like to register, please contact [email protected]. A replay will also be made available on Ipsos.com Appendices Consolidated income statementStatement of financial position Consolidated cash flow statementStatement of changes in consolidated equity The complete consolidated financial statements as at 31 December 2023 are available on Ipsos.com ABOUT IPSOS Ipsos is one of the largest market research companies in the world, present in 90 markets and employing nearly than 20,000 people. Our passionately curious research professionals, analysts and scientists have built unique multi-specialist capabilities that provide true understanding and powerful insights into the actions, opinions and motivations of citizens, consumers, patients, customers or employees. Our 75 solutions are based on primary data from our surveys, social media monitoring, and qualitative or observational techniques. "Game Changers" - our tagline - summarises our ambition to help our 5,000 clients navigate with confidence our world of rapid change. Founded in France in 1975, Ipsos has been listed on the Euronext Paris since 1 July 1999. The company is part of the SBF 120, Mid-60 indices, STOXX Europe 600 and is eligible for the Deferred Settlement Service (SRD). ISIN code FR0000073298, Reuters ISOS.PA, Bloomberg IPS:FP www.ipsos.com 35 rue du Val de Marne 75 628 Paris, Cedex 13 France Tel. +33 1 41 98 90 00 Notes Consolidated income statement, Interim financial statements at June 30, 2024 In thousands of Euros30/06/202430/06/202331/12/2023Revenue1,138,5371,087,1272,389,810Direct costs(358,434)(351,004)(777,004)Gross margin780,104736,1241,612,805Employee benefit expenses - excluding share-based payments(532,663)(515,526)(1,049,836)Employee benefit expenses - share-based payments * (8,253)(8,521)(16,309)General operating expenses (116,404)(108,097)(214,019)Other operating income and expenses(7,699)(9,718)(20,281)Operating margin115,08494,262312,359Amortization of intangible assets identified on acquisitions *(2,377)(3,173)(5,961)Other non-operating income and expenses*2,413(923)(47,293)Share of profit/(loss) of associates(179)(274)(390)Operating profit114,94089,892258,715Finance costs(5,665)(6,588)(13,284)Other financial income and expenses *2,187(2,357)(6,977)Net profit before tax 111,46280,948238,454Income tax - excluding deferred tax on goodwill amortization(29,148)(19,476)(73,089)Deferred tax on goodwill amortization*168(1,392)160Income tax(28,980)(20,868)(72,929)Net profit82,48260,080165,526Attributable to the owners of the parent77,95456,351159,725Attributable to non-controlling interests4,5283,7295,801Basic net profit per share attributable to the owners of the parent (in euros)1.811.293.67Diluted net profit per share attributable to the owners of the parent (in euros)1.791.263.59 Adjusted earnings *87,61673,823234,155Attributable to the owners of the parent82,33370,089228,584Attributable to non-controlling interests 5,2833,7345,572Adjusted basic earnings per share, attributable to the owners of the parent1.911.605.25Adjusted diluted earnings per share, attributable to the owners of the parent1.891.575.14 * Adjusted for non-cash items related to IFRS 2 (share-based compensation), amortization of intangible assets identified on acquisitions (customer relations), deferred tax liabilities related to goodwill for which amortization is deductible in some countries, the impact net of tax of other non-operating income and expenses and the non-cash impact of changes in puts in other financial income and expenses. Statement of financial position, Interim financial statements at June 30, 2024 In thousands of Euros30/06/202430/06/202331/12/2023ASSETS Goodwill1,409,9381,356,1851,351,957Right-of-use assets106,115108,995109,372Other intangible assets126,147110,037118,127Property, plant and equipment30,32532,76532,496Investments in associates6,2736,5096,393Other non-current financial assets48,58355,82062,592Deferred tax assets22,8106,72125,431Non-current assets1,750,1911,677,0321,706,368Trade receivables392,361381,283561,958Contract assets180,835174,107129,733Current tax21,17330,6019,671Other current assets 71,70373,50067,115Financial derivatives---Cash and cash equivalents282,509300,781277,911Current assets948,581960,2701,046,388TOTAL ASSETS2,698,7732,637,3032,752,756 in thousands of Euros30/06/202430/06/202331/12/2023EQUITY AND LIABILITIES Share capital10,80111,06310,801Share paid-in capital446,174495,628446,174Treasury shares(9,272)(28,468)(965)Translation adjustments(148,283)(148,212)(164,363)Other reserves1,024,920972,387964,926Net profit attributable to the owners of the parent77,95456,351159,725Equity, attributable to the owners of the parent1,402,2941,358,7491,416,297Non-controlling interests18,607(248)16,353Equity 1,420,9011,358,5011,432,650Borrowings and other non-current financial liabilities375,518375,104374,718Non-current liabilities on leases85,73886,72687,492Non-current provisions5,2294,5064,012Provisions for post-employment benefit obligations38,870,36,06537,429Deferred tax liabilities66,84770,89163,283Other non-current liabilities51,14373,56047,939Non-current liabilities623,344646,851614,873Trade payables282,637278,976337,905Borrowings and other current financial liabilities7,48554,49722,933Current liabilities on leases34,97035,66037,070Current tax31,73514,05440,772Current provisions4,6536,2244,789Contract liabilities40,69742,35853,916Other current liabilities252,349200,181207,849Current liabilities654,528631,950705,233TOTAL LIABILITIES2,698,7732,637,3032,752,756 Consolidated statement of cash flows, Interim financial statements at June 30, 2024 In thousands of Euros30/06/202430/06/202331/12/2023OPERATING ACTIVITIES-- -NET PROFIT82,48260,080165,526Items with no impact on cash flow from operations---Amortization and depreciation of property, plant and equipment and intangible assets45,56643,067121,703Net profit of equity-accounted companies, net of dividends received179274390Losses/(gains) on asset disposals(3,330)11147Net change in provisions7,676(1,593)21,241Share-based payment expense7,1847,33614,977Other non-cash income/(expenses)178(2,039)(2,816)Acquisition costs of consolidated companies9035101,804Finance costs7,4628,44916,965Tax expense28,98020,86872,929CASH FLOW FROM OPERATIONS BEFORE TAX AND FINANCE COSTS177,281136,963412,865Change in working capital requirement7,078(28,347)(65,246)Income tax paid(49,042)(34,123)(63,441)NET CASH FROM OPERATING ACTIVITIES135,31774,493284,178INVESTING ACTIVITIES---Acquisitions of property, plant and equipment and intangible assets(31,972)(26,533)(58,536)Proceeds from disposals of property, plant and equipment and intangible assets 502975(Increase)/decrease in financial assets 11,129(2,270)(3,107)Acquisitions of consolidated activities and companies, net of acquired cash(28,154)(5,467)(46,794)CASH FLOW FROM INVESTING ACTIVITIES(48,947)(34,241)(108,363)FINANCING ACTIVITIES- Share capital increases/(reductions) --(263)Net (purchases)/ sales of treasury shares(38,682)(63,637)(85,498)Increase in long-term borrowings49,0002270,035Decrease in long-term borrowings(69,015)(29,635)(127,503)Decrease in long-term loans from associates--1,306Increase/(decrease) in bank overdrafts20850(168)Net repayment of lease liabilities(19,727)(18,471)(37,807)Net interest paid (1,176)(1,684)(12,289)Net interest paid on lease liabilities(1,814)(1,901)(3,719)Acquisitions of non-controlling interests -(622)(1,060)Dividends paid to the owners of the parent--(58,963)Dividends paid to non-controlling interests in consolidated companies--(4,092)Dividends received from non-consolidated companies---CASH FLOW FROM FINANCING ACTIVITIES(81,206)(115,879)(260,021)NET CHANGE IN CASH AND CASH EQUIVALENTS5,164(75,627)(84,206)Impact of foreign exchange rate movements(566)(9,262)(11,522)Depreciation of the Russian cash--(12,030)CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD277,911385,670385,670CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD282,509300,781277,911 Attachment Ipsos_Résultats Semestriels 2024 V2407_EN - FINAL Market News and Data brought to you by Benzinga APIs
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Ipsos, a global market research company, has announced impressive results for the first half of 2023, showcasing total growth of 4.7% and maintaining strong profitability and cash generation.
Robust Growth and Financial Performance
Ipsos, a leading global market research company, has reported a strong performance for the first half of 2023. The company achieved a total growth of 4.7%, demonstrating its resilience and adaptability in a challenging economic environment
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. This growth is particularly noteworthy given the current global economic uncertainties.The company's organic growth stood at 3.4%, reflecting its ability to expand its core business operations effectively
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. This organic growth is a key indicator of Ipsos's underlying strength and market position.Profitability and Cash Generation
Ipsos not only focused on growth but also maintained strong profitability. The company reported an operating margin of 9.5%, which is consistent with its full-year objective
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. This demonstrates Ipsos's ability to manage costs effectively while driving growth.Cash generation was another highlight of the first-half performance. The company achieved a free cash flow of €86 million, showcasing its strong financial management and liquidity position
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. This robust cash generation provides Ipsos with the flexibility to invest in future growth opportunities and navigate potential market challenges.Regional Performance and Market Dynamics
Ipsos's performance varied across different regions. The Americas region showed particularly strong growth, while Europe experienced more moderate expansion
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. This regional diversity highlights the company's global presence and its ability to capitalize on varying market conditions across different geographies.The company's success can be attributed to its diverse portfolio of services and its ability to adapt to changing client needs. Ipsos has been focusing on high-value services and leveraging its expertise in areas such as public opinion research, customer experience, and market strategy
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.Related Stories
Future Outlook and Strategic Focus
Looking ahead, Ipsos remains confident in its full-year objectives. The company has reaffirmed its targets for organic growth and operating margin, indicating a positive outlook for the remainder of the year
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. This confidence is underpinned by a strong order book and a pipeline of potential new business opportunities.Ipsos's strategy continues to focus on innovation and digital transformation. The company is investing in new technologies and methodologies to enhance its research capabilities and deliver more value to clients
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. This forward-looking approach positions Ipsos well for future growth in the evolving market research industry.References
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