FULL-YEAR 2018 RESULTS 2018, year of transformation · 2018, year of transformation FULL-YEAR 2018 RESULTS ... • Understanding of client issues • Study design • Primary data

© 2019 Ipsos. Résultats Annuels 20181

2018, year of

transformation

FULL-YEAR 2018 RESULTS

© 2019 Ipsos All rights reserved. Contains Ipsos' Confidential and Proprietary information

and may not be disclosed or reproduced without the prior written consent of Ipsos.

28 February 2019


Agenda

1

A market in transformation

4

Outlook The Total Understanding

programme: Objective growth

2

2018 Results

3


CHANGE IN CONSUMERS“The basic motivations of consumers have not changed that much... The big change is that we have gone from a world that generally suffered from food shortages to a world of surplus. The main problem today is not feeding yourself but feeding yourself well.”

CHANGE IN THE PRODUCT OFFERING “For more than a century, we were able to grow by offering a relatively limited range of products. Today, it's essential that we offer broader ranges both in terms of price ladder and product.“

CHANGE IN METHODS“We have to be organised to make the best use of data, create new marketing platforms, adapt our sales methods and still keep in touch with the consumer.”

THE POWER OF BEING LOCAL “You have to be willing to delegate more power and responsibility to the local level.”“...Today it's the people on the ground who can

understand and adapt to consumers, who are different in every culture.“

AGILITY“You have to multiply message forms, you have to go faster, you have to be willing to test and try everything, while working to get better as you go. We have to go into 'agility' mode.“

The market is transforming: Words from our clientsJames Quincey, CEO Coca-Cola

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


Data taken from market research and surveys have certain characteristics

Security

Simplicity

Speed

Substance

4 S's

By using statistical science and sampling, research can inexpensively produce data that provide:

Accuracy

Representativeness

Thoroughness

Freshness

Predictability

Neutrality


The explosion in Big Data highlights the relevance of market researchSuccess depends on the usefulness of information and one’s ability to transform the data into action

Data means any form of fact or statistic

“The sun rises at 5:38.”

Knowledge is a piece of information processed to make it

actionable

“If you are lost, look towards the rising sun to find your way again.”

Information is a form of data that can be used because it

has been given meaning

“The sun rises in the east at 5:38 and sets in the west.”


The core market ($45.8 billion in 2017) is resilient and growing at about 3% per year on average

2,0%

3,5% 3,7% 3,3%

5,9% 5,8%

4,3%

6,2%

2014 2015 2016 2017

Core market

Wider market

A dynamic market

Sources: ESOMAR Global Market Reports

Growth of the total research market:

The wider market ($76.3 billion in 2017) is growing faster, over 5% on average, and particularly includes the following segments:• Analytics;• Social Media monitoring;• Survey software.


Ipsos outperforms its direct competitors

Sources: Company publications, Nielsen: estimates of organic growth based on statements made by management during earning calls, Kantar: figures from WPP’s Data Investment Management division(1) H1 figure only, (2) 9M figure only

2014 2015 2016 2017 2018

0.3% -1.0% 3.0% 2.4% 0.7%

4.5% N/A 3.1% 1.8% -1.5%

0.6% -0.2% -0.9% -2.9% -2.0%

-2.0% 1.1% -1.7% -1.3% N/A1

New Way

Implementation of TUMacro uncertainties, sector changes,

intrinsic factors

→ Return to growth → Accelerate growth ‘19-21

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.

Note: this slide has been updated on March 1, 2019 to account for Nielsen’s and WPP’s latest publications


From data generation to full control of information

DEFINITION OF NEEDS

DATA PRODUCTION

DATA INTEGRATION

• Understanding of client

issues

• Study design

• Primary data from

surveys and panels

• Third-party data

(behavioural, social,

customer, other

available data)

• Analytical models

• Artificial intelligence

DATA ANALYSISINFORMATION

DELIVERYADVISORY

• Understanding of the

societal context

• Reliability and

relevance of data

• Sector / category /

segment expertise

• Visualisation

platforms

• Storytelling

• Support clients in

taking action

TECHNOLOGY AND AUTOMATION

TEAM EXPERTISE


The Total

Understanding

programme:

Objective Growth



28 February 2019


The pillars of Total Understanding

SERVICE LINESCLIENT

ORGANISATIONSTRONG LOCAL

PRESENCE

REINFORCED CROSS-COMPANY

CAPABILITIES

ACQUISITIONS

• Ensure competitiveness of all our services

• Use the New Services

• Better management of our client relationships, globally and locally

• Re-balance the client base among sectors

• Greater responsibility of local markets

• Greater presence in key markets

• Science Team A• Tech Team A• Ipsos Knowledge

Centre

• Opportunity• Technology• Know-how

Kick-off: 1 July 2018Implemented by: 31 December 2018


75 Services operated by 17 Service Lines

(1) Qualitative research, excl. pharma(2) Excl. public sector(3) Includes quantitative & qualitative research

Audience Measurement

Brand Health Tracking

Clinics and Mobility Labs

Creative Excellence

Innovation

Ipsos UU (Qualitative)1

Ipsos MMA

Market Strategy & Understanding

Observer2

Social Intelligence Analytics

CONSUMERS

Customer Experience

Retail & Consumer Intelligence

Mystery Shopping

Quality Measurement

CLIENTS AND EMPLOYEES

DOCTORS AND PATIENTS

Healthcare3

Public Affairs

Corporate Reputation

CITIZENS

61%

11%

12%

16%

Contribution of audience segment in 2018 Revenue

SERVICE LINES


HAVE THE DATA IN REAL TIMEMobile, Services Overnight, Enterprise Feedback Management (EFM).

MEASURE DIFFERENTLYWeb listening, Communities, Behavioural Economics, Ethnography, Neurosciences, Consumer & Retail Audit, Mediacell

11%

13%14%

2016 2017 2018

Pursuing innovation: New Services

+27% +13%+ 17%

Continued momentum of the New Services in 2018

Each Service Line has a programme of innovation and incorporation of New Services

SERVICE LINES

ANALYSE BIG DATAData analytics / Data Science, Ipsos Science Center, Path to Purchase

OFFER EXPERT ADVISORY SERVICESMarket Entry Research, Workshops, Advisory services, Insight Cloud

OrganicGrowth

Weight

of New

Services in

revenue

Contribution of New Services


Analyse big data: 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

SERVICE LINES


Sector changes in 2018

Re-balancing the client base

-1,4%

5,6%

3,5%

0,1%

8,0%

-9,1%

Other sectors

Automotive

Public sector

Financial services

Pharma

TMT

CPG

Organic growth by sector% of 2018

Revenue

26%

18%

13%

9%

7%

7%

20%

% of 2017

Revenue

29%

17%

13%

8%

7%

7%

19%

reminder

CLIENT ORGANISATION


COMPLEMENTARY KNOW-HOW

• Services involved, in particular:Brand Health Tracking, Ipsos UU, Customer Experience, Corporate Reputation, Social Intelligence Analytics, User Experience, Media Development (other Specialist Services)

• Ipsos provides its expertise in analysing consumer behaviour together with data collected in real time by those clients.

Portfolio of the 7 main TMT sector clients

2018 weight: 6.0% (4.5% in 2017)

REVENUE GROWTHEuro millions at current exchange rates

5878

104

2016 2017 2018

KEY FIGURES

Special attention to a dynamic sector: GAFA, platforms, mobile

+33.4%

Organic

CLIENT ORGANISATION


Local client organisation: closer to clients

• Be the client’s voice in Ipsos and the voice of Ipsos with the client

• Presence in all key countries (45 countries, 214 professionals)

• Local experts focused on the business challenges of key clients

• Increase market share • Through more tailored services• Through a multiplication of touchpoints within the client

CLIENT ORGANISATION

Client strategy

Growth

Collaboration

Client relationship


Developing client relationships: Škoda AUTO

A CUSTOMER EXPERIENCE PROGRAMME CONDUCTED IN 30 COUNTRIES• Comprehensive client assistance

− Production of new data, analyses of existing data

− Creation of a data reporting portal − Development of a new technology for

measuring the quality of the customer experience

− Standardisation of methods

• Services proposed − Mystery Shopping− Enterprise Feedback Management− Advisory− Workshops

Ipsos client since 2012

Majority of revenue generated in Czech

Republic

REVENUE GROWTHEuro millions at current exchange rates

1,72,2

2,9

2016 2017 2018

KEY FIGURES

SKODA

+71%

in 2 years

CLIENT ORGANISATION


Targeting growth markets: India

PUBLIC AFFAIRS IN INDIA:

• Large-scale polling to determine the configuration of

public opinion in India before the 2019 elections:− prominent nationwide coverage of the study;

− 34,000 individuals polled in

320 parliamentary districts

• Study of the attractiveness of Indian cities for the World

Bank:− quality of life and economic attraction indices;

− 100+ Indian municipalities covered.

> 700 employees

Mumbai, Delhi, Bangalore

2018 weight: 1.2%

2018 Revenue: €21 million

Revenue growth:in millions of INR

1 374

1 721

2017 2018

Key figures - India

+24.4%

OrganicEXAMPLE OF A MAJOR FMCG SECTOR PLAYER:

• Setup of a global centre for product testing.

STRONG LOCAL PRESENCE


Reinforced cross-company capabilities

Apply the sciences for a better understanding of individuals

and groups and measure their behaviour

→ Science Team A

Cutting-edge technologies to

process all data formats

→ Tech Team A

43 years,

in 89 countries,

200 cities,

5,000 clients,

8,000 researchers

Expert teams

→ Ipsos Knowledge Centre

Science

Teams

Know-howTechnology

REINFORCED CROSS-COMPANY CAPABILITIES


• 97% of staff agreed to being

transferred within Ipsos

• Integration of staff completed

• Client relationships

consolidated

• Master Service Agreements

transferred at 31 March 2019

(90%)

Acquisition of GfK Research

• Additional leadership in these

segments:

- Public Affairs;

- Healthcare;

- Innovation;

- CX and Mystery Shopping.

• Low integration costs

• Attractive acquisition multiple:

0.5x sales (price: €105m)

For operational reasons, 2019 will not be a full year

OPPORTUNISTIC ACQUISITION COMPLETED SINCE OCTOBER 2018 2019

• Potential in key countries

• Momentum for NORM (a

virtual reality platform)

• Optimisation of staff and

operational capabilities

30180 200

2018a 2019e 2020e

Revenue impact (MEUR)

ACQUISITIONS


• Integration of personnel:

‐ Product Teams concentrated

on the platform and

technology

‐ Reporting Teams within Ipsos

• Integration of capabilities:

‐ Shared development plan

between the Data Science

teams

Acquisition of Synthesio

• Acquisition of a recognised tech

leader (per Forrester & Gartner1)

in monitoring and analysing

conversations from social

networks

• Broadened Ipsos service offering,

new services for Synthesio clients

• Double-digit 2018 growth

• Strengthens transition from single

channel to a multi-channel

strategy

• Price: $50m

STRATEGIC ACQUISTION MADE IN 2018 2019

• Maintain platform leadership

• Investment in text analytics

€30m (+44%2)incl. c.€20m for Synthesio

Social Intelligence Analytics 2019E

Revenue:

(1) Forrester Wave report – Social Listening Platforms, Q3 2018, Gartner report - Market Guides for Social Analytics Applications since 2013(2) as compared to pro forma 2018 revenue with Synthesio 2018 revenue on a full-year basis

ACQUISITIONS


Benefits of Total Understanding

• More competitive in every market segment vs. niche players

• Worldwide leadership

• A client organisation to guarantee the value of the service to the client

• An organisation more in keeping with the client's

• Trusted partner

A more specialised offering

A more agile organisation

Increased responsibility by local markets


Annual

Results

2018



28 February 2019


Key figures FY 2018

Revenue Organic growthCurrency effects

Operating margin

Free Cash Flow

€1,749.5 million

+ 0.7% (4.1%) 9.9% €108million


In millions of euros 2018 2017Change

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.

A stable adjusted net profit


Including: Share Organic growth

Developed countries 68% -0.8%

Emerging countries 32% 3.9%

2018 Revenue(in millions of euros)

ShareTotal growth 2018 – 2017

Organic growth

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%

Share of revenue by region


2018 Revenue(in millions of euros)

ShareTotal growth 2018 – 2017

Organic growth

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 Analytics2Customer Experience, Market Measurement, Mystery Shopping, Quality Measurement, Retail Performance, ERM3Public Affairs, Corporate Reputation4Healthcare (quantitative and qualitative)

Breakdown of revenue by audience


In millions of euros 2018 2017Change

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 assets

(43.6) (18.4) x2.4

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%

Cash flow statement:good free cash flow generation


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 (at average exchange rates)

x2.8 x2.1

Interest coverage(operating margin/interest expense)

x8.3 x9.7

A solid balance sheet

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.


EUR: 64%

USD 36%

DEBT BREAKDOWN

Eurozone 17%

UK: 12%

Dollar Zone: 28%

Other regions: 43%

BREAKDOWN OF IPSOS

BUSINESS ACTIVITIES

Breakdown by currency


SPLIT BY MATURITY

746

5174 167

2675

0

300

31/12/2018 2019 2020 2021 2022 2023 2024 2025

Gross Debt

(€M)

Debt by maturity


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%

Proposed dividend of 88 euro cents (+1.1%)


Outlook



28 February 2019


2%-4%

10%

Organic growth

Average EPS growth1

Dividend payout ratio

Annual acquisitions

2.5x –

3.0xOptimized leverage 25% -

30%

€50M -

€100M

2019-2021 Outlook

Operating margin

ATTRACTIVE GROWTH RATE

10%+ to 11%

BALANCED CASH ALLOCATION

€35M -

€45M

Capex

3 categories: opportunities, technology

and know-how

Conservative and supporting

growth

At least at market level

Organic and non-organic, through

continued digitisation of data

collection and economies of scale

(1) On diluted EPS basis, at constant currency

2019: 10%+

2021: 11%


Q&A

Documents

FULL-YEAR 2018 RESULTS 2018, year of transformation · 2018, year of transformation FULL-YEAR 2018 RESULTS ... • Understanding of client issues • Study design • Primary data