Ipsos

Good morning, good afternoon, good evening. I'm Jean-Laurent Poitou, the Chief Executive Officer of Ipsos, and I'm delighted to be joined by you in presenting our third quarter results for the year 2025. I'm joined by Dan Levy, our Chief Financial Officer. Over the next 45 minutes or so, I will start by sharing a few observations about what I've seen since joining Ipsos last month. I'll share a little bit about myself, my background, and I'll talk about a few of the beliefs on which we will ground our strategy for the next few years. Dan will present our results, and we will open up, of course, for questions and answer session. Let me start with a few observations regarding what I've seen since joining Ipsos and spending time across various geographies with our clients, with our technology and digital partners, and most importantly with our teams. First of all, Ipsos has a unique position as an independent leader in market research. One of the characteristics that struck me most is the global reach and diversity of geographies, of sectors, of services we offer. No other firm have this combination of looking at in particular the people as citizens, as patients, as clients or customers who experience the channels and products of the companies we serve. that is combined with a long history. Ipsos is actually celebrating its 50th anniversary this year, which on top of the legacy it gives us, provides us with unmatched depth, breadth, and length of data which is the fuel without which no technology, digital and particularly artificial intelligence-based solution can be trained. The other thing I've been very impressed with is the robustness and diversity of our cadre of close to 20,000 people ranging from sociologists, project managers, researchers, data engineers, data scientists, field interviewers, and all the support functions. Ipsos has a unique diversity of talent. I've also been impressed in discussing with clients, also with technology partners, digital solution providers that we work with and leverage, with the trust and respect that Hypsos has in our industry. And that trust, particularly the trust from our clients, which materializes in the long-term relationship we have with many of our largest customers, is one of the foundations on which to build our future sustainable, profitable growth. And then finally, we have the means to our ambitions. We have the financial profile. with growth, and we will talk about that some more as we talk about our results, profits and cash, which are allowing us to have the wiggle room to invest or repurpose some of the existing investments into what we believe is critical to accelerate our organic growth in particular. So we have the means of our ambitions. However, we cannot rely on what got us there. My experience, which I'll talk about in a minute, shows me that it always is critical to be able to change and have the courage to change, in fact, at the moments when we are successful. There's no room for complacency in this rapidly evolving market. And in particular, as I think about the main two things I want to focus on, one, while our growth has been steady, the organic component of that growth does need to accelerate. It is absolutely critical. Second, I strongly believe that being a technology-enhanced professional services firm means that we need, at this point, of inflection in how technology, digital solution, artificial intelligence change the way many industries evolve. We must embrace this even more. There are very solid foundations on which to build, and we need to accelerate. We need to accelerate with speed as the main thing our clients are demanding of us. And scientific rigor as the absolute mandatory ingredient without which our clients won't trust the insights that we provide them based on the combination of what we learn from the real world respondents we interview and mobilize and the data including synthetic respondent that we leverage. So my beliefs in what will guide our direction moving forward. We will continue to be the diversified firm we are. We will have this unique advantage of leveraging the history of data that we can rely on and the breadth and depth of data so that we can train models and provide insights that are usable and actionable at speed with scientific rigor. And then we will continue to leverage the fundamentals of rigor and discipline, which I'm very clear are needed more than ever to drive the sustainable, profitable growth I mentioned. I have the background to deliver on these ambitions. I come from over three decades of being a consultant, but more importantly and significantly, over two decades being a leader in the professional services industry. I have a very international profile and background. I spent some of my youth in the U.S. I was an expatriate in Asia based in Tokyo over a number of years. I've worked and lived across a variety of European countries. I understand the differences in the markets we serve from the U.S. to China, from Europe to Asia Pacific. I'm also a very growth and innovation focused leader. And I believe that growth through innovation is, as I just touched on briefly, a key ingredient of what is going to drive Ipsos moving forward. Now, I will be able to talk more about how those ingredients materialize in a strategy and financial trajectory for the years ahead in January, as it's pretty clear that with just a month or just over a month, in fact, under my belt at this point, it would be unreasonable to do it right now, even though I have the luck to be leveraging a lot of work that has gone on into building the strategy that I will disclose on January the 22nd. In terms of what I will do over the next few weeks, I just mentioned that finalizing the strategy is absolutely critical. You all want to understand what we will be investing in, how we will continue to leverage mergers, acquisitions, but also partnerships as a way to fuel our growth as Ipsos historically has with over 100 acquisitions throughout its 50 years of history. I will be spending a lot of time, as I've already started to, in the field, meeting with the people, meeting with the clients, where the action actually means that I will be able to get the best sense for what is critical in our future success. And then, while we work on the long-term strategy, I will be raising the bar on execution on a few areas of rigor and execution discipline, where it is absolutely critical that we get it right now and not later. So with that, let me hand it over to Dan who will present our results for the quarter.

Thank you very much, Jean-Laurent. So, Ipsos posted a good performance in Q3 with a total growth in Q3 of 7.6%. And as you can see, an improvement in organic growth, 2.9%, compared to Q1, which was minus 1.8%, and Q2, 0.7%. If we look at the first nine months of the year, we posted nearly 1.8 billion revenue since the beginning of the year, with a total growth of 3.6%, organic growth of 0.7%. Obviously, FX effect with negative impact, which is mainly linked to the depreciation of the dollar and a few other currencies against euro, and the scope effect of around 5%, which is mainly coming from the acquisition of BVA of Infas that we did since the beginning of the year. The situation is improving in the US, where organic growth since the beginning of the year amounts to 0.9%. And the US is still a bit of the tale of two cities. Excluding public affairs, we are growing organically by 3% since the beginning of the year. And this is on the back of improvement in the pharma sector, good performance with CPG clients. But on the other hand, we do have a tough political context in the US, as you all know, with the Doge at the beginning of the year and the shutdown that has now happened a few weeks ago, and we don't know how long it's going to last. And all of this, obviously, is continuing to impact our public affair business, which is down by 15% since the beginning of the year. We see a good improvement and growth improvement across all regions in the third quarter. I've already spoken about Americas, but if you take EMEA, EMEA is growing by 10% as a total growth on the back of the acquisition of Infas and BVA. Organic growth at the end of September is 1.6%, which is a good performance given the tough comparative that we had last year. And only on the third quarter, we are growing by 3.2%. in EMEA. We see good performance in continental Europe, but also in Middle East. But this is partly offset by the situation in France, where, as you know, there is a lot of political instability. France is down because of this political instability and public affairs by 4%. If we were to strip out the public affairs business, France would be in slight positive growth. In Asia-Pacific, we see a slight positive growth in China. But again, this is offset by the public affair business in several countries in Asia-Pacific, particularly in Australia, New Zealand and India, where there have been either in 24 or in 25 general elections and sometimes tough budget constraints. If we now move to the performance by audience, we see good performance across most audiences, but obviously the performance is held back by our public affair business. Our service line, which are dedicated to consumers, clients, and employees are growing by 2% since the beginning of the year. This performance is driven by our activities relating to ad testing, to marketing, spending optimization, and to mystery shopping. The doctor and patient audience is growing and is recovering compared to what we saw last year in 2024. It's growing by 5% since the beginning of the year organically. This is on the back of coming, re-coming innovation on a lot of several of pathologies. But on the other hand, there are risks on these audiences which are coming from the current discussions in the U.S., on drug pricing and also the slowdown in the drug approvals by the FDA after there has been a few thousand layoffs in the FDA with the Doge action. As you see, the citizen business is really driving down the performance, minus 9.2% since the beginning of the year organically. It continues to impact by political instability, and this is the case in the US, in France, and again in several countries in Asia. If you strip out the public affair business, our organic growth at the end of September would stand at 2.3% instead of 0.7%. And if we strip it out on the third quarter, we would grow by 4.2% excluding public affairs, which shows how our performance is weighed down by public affairs and the rest of the business is doing well. We continue to see very good momentum on ipsos.digital. Over the first nine months of the year, we are growing organically by 28%, mainly on product testing and ad testing. The profitability of ipsos.digital is twice the profitability of the group, and we target around €140 million of revenue on ipsos.digital for 2025. So at the end of the third quarter, you have understood that the Group posted a solid performance among the private sector clients, but the Group organic growth is being impacted by our business on public affairs, on the back of political instabilities, many general elections, budget constraints. And as a consequence, we revise our organic growth target to around 0.7% for 2025. Our operational discipline and financial discipline enables us to maintain and confirm our operating margin at around 13% at constant scope. This is excluding the temporary dilutive effect of the acquisitions of BVA of Infas, which are estimated at around 60 basis points for 2025. I thank you for your attention and now I hand over to Jean-Laurent for some concluding remarks.

Thank you, Dan. And I would like to emphasize what impresses me most in today's discussion, which is the growth trajectory, starting the year with minus 1.8% in the first quarter, all the way to 2.9% in the quarter we're announcing today, which is a number that Ipsos hasn't reached in quite a while. And I think it's important to note that. And the other thing that is very important, as we all think about the impact that several disruptions, particularly digital, AI, and technology disruption may have in our markets, our private sector activities, the ones where probably the innovation intensity is one of the highest, continues to grow quite significantly with 2.3% year-to-date and, most importantly, 4.2% over the quarter we're announcing today. So those are some of my takeaways and things that I wanted to emphasize. Now, I have... to invite you to the very important investor day we intend to hold in January that was initially scheduled to be in November. But as I alluded to in my introductory comments, it's quite clear that we need a couple of months to actually make this strategy mine and finalize it with the many people who are working on it together with me at the Ipsos management and in the teams. And then there will be the announcement of our annual results on February 25th. Let me now open it for questions and answers.