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Profiling people. Results for the first half 2002 How Ipsos makes progress Financial results Outlook The market.

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Presentation on theme: "Profiling people. Results for the first half 2002 How Ipsos makes progress Financial results Outlook The market."— Presentation transcript:

1 Profiling people

2 Results for the first half 2002 How Ipsos makes progress Financial results Outlook The market

3 Key figures: growth and profitability Revenues % Operating income % Net income, shareholders’ part* % * Before amortization of goodwill in millions of euros

4 The market

5 A non-cyclical market… The research market*: a market that keeps on growing 2001 vs % H vs. H to 4% The research market*: a market that keeps on growing 2001 vs % H vs. H to 4% “[…] Market information remains valuable to clients even in a time of economic downturn.” Mike Kirkham, CEO Taylor Nelson Sofres *Source: Esomar

6 “[…] Fear and uncertainty rule a lot of client thinking today […]” Sir Martin Sorrell, CEO WPP … unlike the advertising market “This has been a longer and deeper advertising recession than anyone predicted. The US advertising market began to show some tentative signs of recovery in the first half of the year, however the European market was down." Doug Flynn, CEO Aegis Group plc The advertising market*: a shrinking market 2001 vs % H vs. H % The advertising market*: a shrinking market 2001 vs % H vs. H % *Source: Zenith Media

7 Ipsos is outgrowing its competitors H vs. H vs N/a+5.9%N/a+15.3%Kantar (WPP) +3.6%+17.7%+6.6%+11.0%GfK* +1.4%+9.1%+6.1%+21.6%TNS +7.3%+13.0%+8.0%+46.0%Ipsos Organic growth Overall growth Organic growth Overall growth * Overall growth H1 02 / H1 01: % according to 2001 published data Source: competitors

8 Change in operating margins Ipsos’ profitability is improving 0.4% 1.3%2.5%  Ipsos vs. competitors (average) 7.6%9.5%9.4%Kantar (WPP) 8.3%8.5%8.0%TNS 7.2%7.4%7.0%GfK 7.3%6.4%5.6%Ipsos H1 02H1 01H1 00 Source: competitors

9 How Ipsos makes progress

10 Our objective To become the world leader in survey-based research

11 Our business: survey-based research Continuous services & one off projects Mono & multi-clients services Branded products & custom research International & local operations Qualitative & quantitative research Consultancy & fab & tabs works Off & on line data collection systems

12 Four rules for success 2. Reinforce our leadership in key countries 4. Steer transition toward on-line data collection systems 3. Develop our expertise in our areas of specialization 1. Build long-term relations with major international clients

13 Our business with these 10 major clients grew 30% in 2001 / 2000 and 32% in H / H of pure organic growth Some 50 corporations spend over 75 million euros per annum on consumer research  Ipsos works with the majority of them  A special program (KAM) for 10 of them Some 50 corporations spend over 75 million euros per annum on consumer research  Ipsos works with the majority of them  A special program (KAM) for 10 of them These 10 major clients will contribute around 20% of Ipsos revenues in 2002 (16% in 2001) and account for 2/3 of its total organic growth

14 Major international clients in The KAM programme expanded to 5 extra clients in 2003  International clients  Ipsos has worked with them for several years  A large growth potential  Ready to contract global commitments The KAM programme expanded to 5 extra clients in 2003  International clients  Ipsos has worked with them for several years  A large growth potential  Ready to contract global commitments Market share gains will continue  Objective: to lead at least 15% of the survey-based contracts of the 15 key accounts  Potential: 100 million additional euros Market share gains will continue  Objective: to lead at least 15% of the survey-based contracts of the 15 key accounts  Potential: 100 million additional euros

15 Four rules for success 2. Reinforce our leadership in key countries 4. Steer transition toward on-line data collection systems 3. Develop our expertise in our areas of specialization 1. Build long-term relations with major international clients

16 2. Reinforce our leadership in key countries In 10 of them  Ipsos is in the top five  Ipsos utilizes at least three of its five specializations In 10 of them  Ipsos is in the top five  Ipsos utilizes at least three of its five specializations Ipsos is established in 14 of these 15 main countries 15 countries spend over 100 million euros on research each year; between them they account for 87% of the world market In 2002, Ipsos strengthened its position in the following countries: USA 1 st market (Ipsos-Vantis) Germany 3 rd market (Sample-INRA) Japan 5 th market (Lyncs) Sweden13 th market (Ipsos-Imri, Ipsos-Eureka) China 14 th market (Fams)

17 Ipsos in the 15 key countries in 2002 Belgium China Sweden Holland Mexico Australia Brazil Spain Canada Italy Japan France Germany UK USA Rate of development Ipsos position Profitability

18 Four rules for success 2. Reinforce our leadership in key countries 4. Steer transition toward on-line data collection systems 3. Develop our expertise in our areas of specialization 1. Build long-term relations with major international clients

19 3. Develop our expertise in our areas of specialization Ipsos has a unique position: a single business, survey-based research, with five specializations  Advertising Research  Marketing Research  Media Research  Opinion and Social Research  Quality and Customer Satisfaction Ipsos has a unique position: a single business, survey-based research, with five specializations  Advertising Research  Marketing Research  Media Research  Opinion and Social Research  Quality and Customer Satisfaction

20 Ipsos-ASI: a model July 1, 1999: Ipsos-ASI founded, an integrated global organization A comprehensive range  Pre-tests (with the Next range)  Advertising and brand tracking (Equity Builder and Ad*Graph)  Post-tests A comprehensive range  Pre-tests (with the Next range)  Advertising and brand tracking (Equity Builder and Ad*Graph)  Post-tests 15% average organic growth per annum Ipsos-ASI is present in 15 countries, and is setting up in Japan, China, Russia, Poland and Sweden Advertising research: to measure the foreseeable and evidential effects of advertising expenditure on brand positions

21 Ipsos Marketing today Ipsos’ current position  N o.4 in the world / 300 million euros  7% organic growth (12% for KAM)  Separate businesses (Ipsos-NPD, Ipsos-Novaction, Ipsos-Focus, Ipsos-Explorer…) Ipsos’ current position  N o.4 in the world / 300 million euros  7% organic growth (12% for KAM)  Separate businesses (Ipsos-NPD, Ipsos-Novaction, Ipsos-Focus, Ipsos-Explorer…) Marketing Research: to know and understand markets and consumers’ relations with products and brands in order to evaluate and optimize options

22 Ipsos Marketing in 2003 Three main sectors  Manufactured products / Services / Pharmaceuticals Three main sectors  Manufactured products / Services / Pharmaceuticals Global services  Brand Equity / Concept Forecaster / STM Global services  Brand Equity / Concept Forecaster / STM Specific areas of expertise  Qualitative research / Modeling and sales forecasting  International research Specific areas of expertise  Qualitative research / Modeling and sales forecasting  International research Major clients  P&G / General Mills / Kraft / Unilever / L’Oréal / Mars …  Visa / ATT / Microsoft...  Pfizer / GSK / J&J... Major clients  P&G / General Mills / Kraft / Unilever / L’Oréal / Mars …  Visa / ATT / Microsoft...  Pfizer / GSK / J&J... A single brand and a global leader  Jean-Michel Carlo (Ipsos Europe) A single brand and a global leader  Jean-Michel Carlo (Ipsos Europe)

23 Four rules for success 2. Reinforce our leadership in key countries 4. Steer transition toward on-line data collection systems 3. Develop our expertise in our areas of specialization 1. Build long-term relations with major international clients

24 4. Steer transition toward on-line data collection systems Source: Inside Research 13.6%9.6%6.6% % of overall spending On-line expenditure in millions of USD Change is gathering pace in the USA Significant benefits  Speed: from week to day  Reliability: easier access to interviewees  Global perspective: a unique platform  Innovation: new protocols due to high-speed data processing Significant benefits  Speed: from week to day  Reliability: easier access to interviewees  Global perspective: a unique platform  Innovation: new protocols due to high-speed data processing

25 Ipsos and on-line data collection systems In the USA, 30% of Ipsos Marketing revenues are generated on-line  The Ipsos-NPD group panel is the most used  A profitable business  Ipsos has been selected by one of our big accounts as “preferred worldwide supplier” for the changeover to on-line copy-testing (due in 2004) In the USA, 30% of Ipsos Marketing revenues are generated on-line  The Ipsos-NPD group panel is the most used  A profitable business  Ipsos has been selected by one of our big accounts as “preferred worldwide supplier” for the changeover to on-line copy-testing (due in 2004)

26 Financial results for the first half of 2002

27 Sharp growth in first-half revenues in millions of euros +34% +64% +12% +13%

28 1 st half 2002: a steady organic growth Organic growth rate* * On a comparable basis +9.9 %+7.3 % In millions of euros

29 Sharper increase in organic growth in 2 nd quarter Organic growth rate T1 2002T %+7.7 % In millions of euros

30 FY 2002 organic growth estimated at least at 8% +8.0 %*+8.0 %480.2 Year +7.7 % th quarter +5.0 % rd quarter +7.7 % % nd quarter +7.0 % % st quarter Organic growth RevenuesOrganic growth Revenues * estimated In millions of euros

31 Growth varies according to region %+7.3 %244.5 Total +10 % 6.8 Asia-Pacific and Middle East +6 %+11 %23.9 Latin America +10 %+15 %106.5 North America +7 % 0 %107.3 Europe Reminder organic growth 2001 Organic growth H Revenues H In millions of euros

32 … and to business lines Organic growth H Reminder organic growth 2001 Revenues H Advertising research +15%+14.0%55.1 Marketing research +7%+7.0%129.5 Media research -1%+3.5%24.1 Customer satisfaction research +6%+7.5%18.6 Total +7.3%+8.0%244.5 Other N/S 3.1 Opinion and social research +9%+15.0%14.1 in millions of euros

33 Improved profitability

34 Strong improvement in results H H102 /H101 * after employees’ share in profits ** before goodwill H Revenues % Gross margin % Operating profit * % Financial results % Exceptional items Companies at equity00- Net income, shareholders’ part** % EBITDA % Minority interests in millions of euros

35 2.7% 4.3% 5.0% 5.5% 6.4% 7.3% Continued improvement in first half operating margin First-half operating profit / Revenues

36 Breakdown of operating margin increase H Increased margin on existing perimeter Companies consolidated aft. H1 01 Regional managem t structures Europe and Asia Worldwide products offer Economies of scale parent co. management expenses H Currency effects % 6.4%

37 Results show seasonal trend 6.4% 5.5% 8.5% 8.8% 7.3% Operating margin increase

38 Cash flow statement H H102/ H101 H Change in working capital requirements Investments in tangible and intangible fixed assets Acquisitions and impact of changes in consolidated scope Cash used in investing activities Share issue Net change in debt / marketable securities in millions of euros Cash provided by operating activities X 9 Dividends Cash provided by financing activities Net change in cash Operating cash flow before working capital items %

39 A sound financial position Shareholders’ equity Net debt Gearing79%92%76% Net debt / EBITDA pro forma Coverage of financial charges x 5.4 x 3.8x 4.4 June 30, 2001 June 30, 2002 Dec. 31, 2001 in millions of euros

40 Commitments arising from acquisitions From July 1 st, 2002 to December 31, 2003  A maximum total of 40 million euros Of which 10 to 12 million in 2 nd half 2002  For payment of acquisitions already announced but not consolidated in 1 st half 2002 plus all earn outs From July 1 st, 2002 to December 31, 2003  A maximum total of 40 million euros Of which 10 to 12 million in 2 nd half 2002  For payment of acquisitions already announced but not consolidated in 1 st half 2002 plus all earn outs After December 31, 2003  4 million euros in earn outs between 2004 and 2006 After December 31, 2003  4 million euros in earn outs between 2004 and 2006 Ipsos holds the financial resources to pursue its plan  Payment in cash and/or securities  Financing by free cash flow  Flexibility to recourse to borrowing Ipsos holds the financial resources to pursue its plan  Payment in cash and/or securities  Financing by free cash flow  Flexibility to recourse to borrowing

41 Outlook

42 Second half 2002: Ipsos confirms its commitments Continuing strong growth in North and Latin America  Growth above 10% Slow turnaround in Europe  Moderate growth below 5% Continuing strong growth in North and Latin America  Growth above 10% Slow turnaround in Europe  Moderate growth below 5% Establishment of network in Asia-Pacific region Improvement in profitability

43 2003 and beyond: leadership Continuing development of Ipsos-ASI  New countries  New accounts  On-line offering Continuing development of Ipsos-ASI  New countries  New accounts  On-line offering A more specialized and global Ipsos Marketing organization Rapid expansion of major accounts strategy CSM / CRM, Medias, and Opinion new offerings

44 Ipsos: An increasingly specialized world leader Revenues of 1 billion euros Operating margin equal or superior to 10% A sound financial position An increasingly specialized world leader Revenues of 1 billion euros Operating margin equal or superior to 10% A sound financial position

45 Profiling people


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