Ipsos

We are going to take you through what we've seen overall this year and also in Q3 and discuss a little bit more about the situation. I'm joined, of course, by my colleague Dan Levy from Ipsos. Could somebody turn on the screens in the studio, please? Thank you. So let's look at the numbers to start with. Overall, at this point in the year, we have a total growth at Ipsos of 3.3% growth. Of that, 2.4% is organic with a scope effect from our acquisitions of 2.8% and a negative FX effect taking us to where we are. But of course, in Q3, As we announced recently, growth has slowed down at half a percent. Organically, it's pretty much flat, 0.1, again with the scope effect and a negative FX effect. So definite slowdown in activity, which we can now talk about. Let's have a look at what we can see around the world. So first of all, I think in France, where I'm sitting today, we have a lot of political uncertainty and a clear slowdown in our French business. It's around 5% of our revenue, but it is significant. In the UK, the new government is still deciding what to do. There is a budget there in six days' time that will set some clarity. And of course, in some Asian countries, we've also seen a slowdown. And that is compounded, in a sense, by the continued mixed performance in the United States and there we can see strong growth in our advertising business, in our innovation business, but we also have some significant and major parts of that business that are underperforming where we are making changes. Overall in the United States we have a new management team now in place over the summer and we're making significant changes inside that business, but it will take time of course for that to feed through. The challenge, of course, is that the world is volatile and uncertain. And across the world, we can see good performance, interestingly, in some other continental European countries like Germany and Italy. The Middle East and LATAM are actually showing double-digit growth. We have resilient demand from CPG, which is important, a major part of our overall customer base. And our Ipsos digital solution is growing strongly as planned. And actually, outside the United States, in the first nine months of the year, we've seen growth at 5.6%. It's just showing the heavy weight of the United States inside Ipsos' numbers. So a mixed picture, but also, of course, some signs of slowdown. I'll hand over to Dan now who will take you through some more of the details.

Thank you very much Ben. So let's start with the revenue breakdown by region and Ben has already spoken a little bit about that. The activity in the EMEA region is still strong with a 4.9% organic growth in Q3 and 6.7% over nine months. The Middle East records double digit growth and we have also very good growth in several countries from continental Europe and particularly Germany and Italy. And conversely, as Ben said, we do see some slowdown in the UK and in France, and in France particularly on the back of the political uncertainty. In the Americas, the Latin America business is still growing very well, but our performance is penalized particularly by the situation in the US. As Ben said, the situation in the US is quite uneven. So we have good growth on some service lines and particularly innovations, but also creative excellence, which are performing well. And this is penalized more by the specific situation in public affairs and health care, which are declining. We have, as you know, appointed a new country manager in the US in May, and we expect the situation to improve during the course of 2025. And finally, in Asia-Pacific, we are growing by a bit more than 3% over nine months. The Chinese situation, the Chinese economic climate is still sluggish, so there is not a lot to expect in the short term from China. And we have seen also some slowdown in the rest of the region, particularly in countries like India, who used to grow by nearly 20 percent at the beginning of the year, but where we see some delays and some wait and see attitude, particularly by large international clients. Turning now to the performance by audience, the consumers activity are driving the group growth, 6% organic growth over nine months. And this is again coming from innovation, customer experience and advertising. The citizens, doctors and patients audiences are shrinking and this is particularly linked to the specific situation in the US that I described before on the pharma sector and on public affairs. By sector now, good growth, very resilient growth, actually, on the CPG client, plus 7% over nine months. I think, again, this is coming from the fact that these clients have been able to increase their prices during the inflation period. And it's probably also driven by the fact that consumer behaviors are changing a lot in this very moving world. And that drives innovation for new products. And that drives, ultimately, demand from market research. Technology, media, and telecom is growing well, plus 5% over nine months. This is mainly driven by the big tech clients' demands. As you remember, we had a very strong growth in 2022 on these big tech clients. Then we have a correction in 2023, and we are now back to a mid-single-digit organic growth in 2024, mainly on product development linked to generative AI development. And I will not be commenting pharma and public sector that I commented in the previous slides. Very good performance of Ipsos Digital, our DIY platform, which is currently growing at 32% organically. Ipsos Digital, as you remember, is typically twice the profitability of the group. And it is actually the very good success of Ipsos Digital which is partly explaining the fact that we are increasing our gross margin in 2024 which enables us to confirm our guidance on the operating margin. We are also pursuing our investments in acquisition and we have launched, as you know, a voluntary takeover bid for Infas. Infas is the leader in Germany on public sector research. It's 300 plus employees and 50 million revenue and we have purchased so far nearly 90% of the share of Infas and so we expect to finish this deal within the next few weeks. And finally, as you know, the LAC1 fund, managed by BPI France, became a major long-term shareholder for Ipsos, which I think demonstrates the confidence in Ipsos' long-term growth potential. LAC1 is targeting to hold between 5% and 10% of Ipsos' capital. Thank you for your attention, and now over to Ben for more business updates.

Thank you very much, Dan. So I just wanted to share with you the real world impact that Ipsos has for many of our clients in some examples now, because of course, our whole job and the unique thing about the company is of course our global footprint, but also now our unique position in the market in terms of the range and diversity of services that we're providing to our clients. It's a very complex global context. We've recently released our latest global trends report. There's a link on this slide if you'd like to have a look at it. But it's a reminder of the, you know, just the volatility of the world that we're now in. And whether it's the environment, politics, which throws up new surprises virtually every day, geopolitics, whether they're geopolitical or indeed locally, changes that we're now seeing in our societies, both with migration, but also, of course, the declining birth rates, which are going to become more and more of an issue right across the West. And then, of course, the impact of technologies like generative AI and how people as individuals and just individual consumers are reacting to that. can see for example the rise of a trend we call nouveau nihilism if you have a look at our report the young younger people who have just given up trying to get on because the cost of housing is so difficult the chances of getting a good pension are too challenging so a lot of things that our clients are facing and we're helping them navigate some real-world examples of work that we're currently doing for the Renault group we're looking at behavioral change around mobility and And this is helping Renault to pair up its individual brands, so Renault, Dacia, Alpine and Mobilize, really digging in deep into where people are on the migration to electrification of car use and how they're making choices over engine type, etc., their frequency of use and indeed attitudes to car ownership. So pretty fundamental in terms of understanding the market. Over in the United States, where we have a very exciting election, which of course is producing huge uncertainty, it's currently pretty much a toss-up, although if you ask my personal opinion, Donald Trump is likely to win at the moment, but still some time to go. But of course the challenge the United States has at the macro level is becoming a multiracial democracy that is at ease with itself. Many of America's biggest challenges are actually around becoming comfortable with itself rather than any external challenge. So for Paramount, we're looking at how do you serve a very diverse population? What are these different groups in the population looking for? How do you make your advertising effective? And interestingly, we can see in our in our latest work, six out of 10 people in the US saying that people are at brands are actually losing authenticity when they're trying to look diverse and inclusive because it just looks so fake. So how do you do that in an authentic way? Back here in France during the Olympics this summer, we've been looking at how do people actually get there? How did that work out across France? 13,000 interviews during the Olympics from dawn till dusk in multiple languages, looking at all of the big games venues. Just again, an example of the diversity of the work that we're doing and helping SNCF do a brilliant job in terms of making the networks work, much better than in my country, the UK. And then finally in Britain for the BBC, the British Broadcasting Corporation, looking at how the BBC can responsibly use AI. Of course, the BBC is responsible for the majority of broadcast content in the United Kingdom and looking there at exactly how do people react to the use of AI in the production of news and entertainment using AI. And that, of course, has shaped their editorial guidelines. As they say, the chief technical advisor says it's fundamental in planning their future AI use. So across the economy, across the world, Ipsos is making a difference. And it's one of the things that motivates our 20,000 keen employees. We've also just been named one of the world's most trustworthy companies by Newsweek and one of the best companies to work in the world by Time magazine, which again is nice to see. And so overall, we can see some headwinds at the moment, but we're very positive about the overall direction. And when it comes to the outlook, of course, as Dan has already said, of course, we can see a slowdown in growth. We have depreciated our expectations for Q4, which takes us to an organic growth for this year of around 1%. But we are protecting our operating margin by managing our costs carefully and also helped, of course, by the ongoing improvement in our gross margin. So our operating margin will be around 13%. Acquisitions this year have added around 60 million. And of course, we are in ongoing conversations about more. And with that, I will stop and take your questions. So thank you.