• Revenue: EUR2.4 billion, up 2.1%.
• Organic Growth: 1.3% with a scope effect of 2.3% and a negative FX effect of 1.5%.
• Gross Margin: Improved by 120 basis points to 68.7%.
• Operating Margin: Maintained at 13.1%.
• Free Cash Flow: EUR216 million, up from EUR168 million last year.
• Adjusted Net Profit: Up close to 7% at EUR244 million.
• Adjusted Net Per Share: EUR5.7.
• Cash Position: EUR343 million, up EUR65 million over last year.
• Debt: EUR57 million, down EUR63 million over last year.
• Leverage: Net debt to EBITDA almost nil at 0.1 times.
• EMEA Growth: 5.5% with double-digit growth in major geographies.
• Americas Latam Growth: Close to 10% organic growth.
• APAC Growth: 1.6% organically, with China business flat.
• Consumer Clients Growth: Organic growth of 6%.
• Ipsos Digital Solution Growth: Up 30%.
• Free Cash Flow Generation: EUR430 million, up from EUR413 million last year.
• Dividend Proposal: Increase to EUR1.85 per share, subject to AGM vote.

Release Date: February 27, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Ipsos SA (IPSOF) maintained strong profitability despite slower growth, with a significant improvement in cash flow generation.
• The company's digital solutions saw a 30% growth, highlighting the success of their digital transformation efforts.
• Ipsos SA (IPSOF) achieved a gross margin improvement of 120 basis points, reaching a record level of 68.7%.
• Client satisfaction remains high, with a score of 9 out of 10, indicating strong client relationships.
• The company has a strong balance sheet with low debt levels and a high level of liquidity, providing financial stability.

Negative Points

• Ipsos SA (IPSOF) faced headwinds in the United States, with mixed performance across different sectors, particularly in government, public sector, and healthcare.
• The company experienced limited growth in China, with no real economic recovery observed.
• Political uncertainty in the US and Europe, including elections, led to a slowdown in orders and impacted client demand.
• Organic growth was modest at 1.3%, indicating a need for stronger growth strategies.
• The healthcare sector in the US was affected by restructuring, declining sales due to patent expirations, and regulatory uncertainties.

Q & A Highlights

Q: Did Ipsos lose market share in the US healthcare and public sector, or was it just market dynamics? Also, why not increase the share repurchase program instead of dividends? A: Ben Page, CEO: In the US public sector, we lost some major contracts, which contributed to the decline. In healthcare, competition and post-pandemic changes in life sciences affected us. Dan Levy, CFO: Our capital allocation priorities are acquisitions and investments in AI and platforms. Share buybacks are an option if M&A doesn't progress as expected.

Q: What scenario could enable Ipsos to finish 2025 stronger, and what are the main triggers? Also, why did new services slow down in Q4 2024? A: Ben Page, CEO: Global stability would encourage market research investments. The slowdown in new services in Q4 was due to a strong base effect from 2023. We expect stronger growth in H2 2025 as the year progresses.

Q: Is AI increasing barriers to entry, or does it allow new players to enter the market with pricing pressures? How high can gross margins go, and what about staff costs? A: Ben Page, CEO: AI requires proprietary data, which we have, creating barriers to entry. Gross margins are improving due to digitization and automation. Staff costs are increasing due to investments in AI and transformation initiatives, but long-term productivity gains are expected.

Q: How do you view the M&A pipeline, and what are the price expectations and potential synergies? A: Dan Levy, CFO: We have around 20 targets in the pipeline. Prices have become more reasonable compared to two years ago. We expect both cost and revenue synergies from acquisitions, as they often bring expertise that can benefit our broad client base.

Q: Given Ipsos' strong balance sheet, is there potential for major acquisitions, or will you focus on smaller ones? A: Ben Page, CEO: We are open to both major and smaller acquisitions that can consolidate our position or add new talents and technology. We are actively looking at 20 to 30 different opportunities at any given time.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.