Ipsos

Welcome to the 2024 half-year results for Ipsos. It's good to be joined by you. I'm here with my colleague Dan Levy, our CFO, and I want to take you through where we find ourselves halfway through the year in this Olympic city of Paris. So overall, we've seen good growth at 4.7% overall. Organically, that is at 3.8%. And if you look at Q2, it was a little weaker, particularly at the end of Q2, at 3.1%. We have a positive scope effect because of the acquisitions that we have successfully made over the last 18 months. And those are working well and adding to our growth, but a negative FX effect at minus 1.8%. The profitability is good, 10.1% versus 8.7% for the same period last year. And we've also done well on our free cash flow, which is up nearly 60 million. It's 80 million now for the first half. What I'd like to do now is pass over to Dan, who will take you through more detail behind some of those figures in a second. But one key thing that we need to remember is the mixed situation in the United States. Now here, organic growth is negative at minus 2.2%. Outside the US 6.5% growth but in the US negative and that's a very mixed picture. It's caused by on the negative side the electoral cycle, the end of some of the major contracts that we have which are one-off in our public affairs work and of course the restructuring that we're seeing in the pharma industry there. I think 20,000 layoffs in the pharma industry in the US in the first part of this year. On the positive side, of course, are the businesses facing CPG clients, so in growth, and in some of those cases, double digits, strong growth in our Ipsos digital business. So it really is a very mixed picture. We've seen, as you will see in a minute, recovery in growth with some of our big tech clients. And I just spent last week in the U.S., with our new CEO, Marianne Paco, our new management organization. And what we're expecting now is stabilization in H2 and a return to growth at the beginning of next year. So outside the U.S., pretty good growth, but the U.S. is a challenge at the moment. But now, Dan, please take us through the detail of the numbers.

Thank you very much, ladies and gentlemen. Hello. As usual, I'd like to start by looking at a geographic breakdown of revenue. So we had a very good year period in EMEA of 7.6% organic growth for the first half, and that was actually driven by continental Europe and the Middle East. good performance in Germany, where the new managerial structure is starting to bear fruit. Also, solid performance in Italy. So these two countries with double-digit growth. We're talking about organic growth. Talking about acquisitions, major acquisitions in Europe, INO in Netherlands, Gemino in the UK, and an acquisition in Ireland. So all solid performance. performance for those acquisitions. And when we look at the scope effect of those acquisitions, we now have overall growth for EMEA at 10% for the first half of the year. Turning now to the Americas, it was slightly down 0.6%. Latin America is still doing well. However, the United States, they have a 2.2% negative growth. So I won't spend too much time talking about that. Asia-Pacific now, we have 4% organic growth for the first half of the year. Growth in China is still quite weak, given the macroeconomic context, which is quite murky. For the rest of the zone, we had a pullback of business for the first half, despite a solid quarter here and there. And the second quarter and the third quarter should see some of our contracts coming through, which should buoy business as we go into the end of the year. And that's particularly the case for India. If I now look at revenue breakdown by audience, our consumer side business is still doing very well. Organic growth up 8% over the half. And that reflects all of our business lines, our consumer side business lines. So that is good. brand tracking, innovation, advertising creation content. And all of that needs to be compared with the major consumer division, which is also doing very well, and which buoys up the consumer division. Talking about clients and employees, citizens, doctors and patients, they are still being hard hit by business in the United States, as Ben just mentioned. So if we were to remove the United States from those figures, all of those three segments, all of those three audiences, sorry I should say, they should be up 5% organic growth. Now looking at revenue by sector as a breakdown, I'll quickly zip through this because there's no point repeating myself. We continue doing very well when looking at major consumer divisions. because we had a huge inflation in 22, 23, and we were able to stave off the effects of that inflation. We have 60% growth in TMT, and that is predominantly thanks to the major tech companies in the United States coming back. For the rest, as I said, the pharmaceutical division and the public sector division, they are what they are. We're still having solid performance in new services with 13% organic growth for the first half of the year. Ipsos Digital in particular is up 37%. And all of the new services reflect 21.5% of overall total revenue. Let's now move to our accounts. We have 6% growth on gross margin, which is 80 basis points up. So the margin there can be explained for two reasons. First, a solid digital business, which has a margin which is above the group average, and that is still showing solid growth. And on top of that, we have also been doing a lot within Ipsos to internalize a lot of our panel and data collection work. So because of that, our data is now more reliable. and it also costs less to collect all of that data. 3.3% growth compared to 6% for our gross margin. So what that means is that we need to be a bit more cautious, and we have an overall ratio, which is actually significantly up on last year, which is 68.3% compared to 70% last year. Now, overheads. Overheads are at 8.3 million. So that is predominantly due to a lot of tech and IT spending. Now, for the first half of the year, we are at 10.1% overall, which is up considerably on last year. Now, when we look at the adjusted net profit group share, so that's roughly 18% up. Let's now look at cash generation. So we are 35 million up in terms of contributions compared to the same time last year. As we saw, there was solid inflows in the first quarter and that's because we had solid revenue in the fourth quarter of last year, so 8% organic growth all over that time period. In terms of investment, We have both tangible and intangible assets and we've still been investing in things such as our IT and our data sections. So we have 33 million in investments and this is in line with our tech roadmap. In terms of free cash flow, we are roughly at 80 million euros, which is up 56 million compared to last year. Moving on to M&A. We spent about 28 million in the first half of the year by buying up Germania and INO in the UK and the Netherlands. And we spent about $39 million on buying back shares, and that is predominantly due to the employee shareholder program that we have been rolling out. And overall cash position is 280 million euros, give or take. So we have a strong financial position. When we look at our leverage effect, 0.3 multiplies, which is compared to 0.4 for the same period last year. So we're doing very well. We have no debt maturities coming in this year. We have $300 million in 2025, which is a public bond, which will come through in autumn. And we have strong liquidity position, roughly $500 million over undrawn credit lines. with our banks. And again, they will have maturities over one year. Well, that's it for me. I'll hand over to Ben now, who will go over our tech roadmap.

Thank you Dan. And I'd just like to take you through where we are on our tech, our digital backbone and the changes we're making there which are helping improve our profitability and also of course generative AI where we have some new products that we've talked about before. These are now going into the market and receiving really positive responses from our clients. So whether it's persona bots where we're creating synthetic profiles for different consumer segments that our clients can talk to directly using Ipsos Facto, our own proprietary platform, or Signals Gen AI, which is allowing us to mine billions of social data points into insights in just a few seconds. All of those show real promise and are helping us engage more deeply than ever with our clients. So I wanted to talk just a little about a few of those before we talk about the outlook. So Creative Spark is a way of looking at ads. based on 18,000 data points, previous cases that we have, built now into Ipsos Facto and it allows our clients to very quickly understand how a potential execution for TV or for social video might perform in real life. Could we run the launch video please?