Daily Research News Online no. 22567 - Ipsos Starts 2016 on a High

Ipsos Starts 2016 on a High

April 27 2016

Ipsos has announced organic growth of 3.7 percent for the first quarter of 2016, with revenue rising to EUR 386.9m, its best result for some time. The rise 'concerns all regions', with revenue up 4.6% in emerging economies and up 3.3% in developed markets.

Ipsos on the up again A year ago the global group reported organic growth of just 0.8% - and 'sluggish' growth continued throughout 2015. Now Ipsos says 'the situation is different', with its best Q1 result, in Euros, ever recorded, and the best quarterly growth rate since the acquisition of Synovate in October 2011. The group notes with satisfaction the final settlement in February of the dispute between Ipsos and Aegis concerning the acquisition price and actual value of the assets - with Aegis paying £20m and bringing an end to all claims and legal proceedings. Minus costs, this resulted in a net exceptional gain of EUR 15m in the statement for the current quarter.

The reported revenue figure was up 1.9% - but the positive impact from acquiring US-based RDA Group, at 1.4%, was more than offset by gains in the Euro against other currencies this year (-3.2%), hence the higher organic growth figure.

Ipsos says gross profit continues to outpace revenue due to more online activities, higher margins on New Way services, and good pricing practices. Taking into account planned investments, profitability is in line with the firm's objectives.

Consolidated revenues by geographical area (in millions of euros)	1st quarter 2016	1st quarter 2015	Change 2016 / 2015	Organic Growth
Europe, Middle East and Africa	166.8	169	-1.3%	2.0%
Americas	154.2	147.2	4.7%	4.0%
Asia-Pacific	66.0	63.4	4.0%	6.5%
Quarterly revenues	386.9	379.6	1.9%	3.7%

Ipsos says its four business lines showed a more varied picture of success, with the Connect division slowly recovering after poor results last year, and set for an improvement again this quarter; Public Affairs stable after 'an atypical activity cycle in 2015'; Loyalty benefitting from strong investment in technology and new solutions; and the largest division, Ipsos Marketing, producing 'highly satisfactory results, even though the excellent first quarter performance will be difficult to match over the next quarters'. The last is in part driven, says Ipsos, by the good overall performance of the marketing services industry, as seen in the results of the major advertising groups.

Consolidated revenues by business line (In millions of euros)	1st quarter 2016	1st quarter 2015	Change 2016 / 2015	Organic Growth
Media and Advertising Research	86.4	90.1	-4.0%	-1.0%
Marketing Research	206.4	199.8	3.3%	6.0%
Opinion & Social Research	40.2	41.8	-3.7%	-0.5%
Client and Employee Relationship Management	53.9	48.0	12.4%	6.5%
Quarterly revenues	386.9	379.6	1.9%	3.7%

In terms of the outlook for 2016, Ipsos notes that 'the days of exceptionally high economic growth rates are well behind us', but says within this the news is good for 2016, with more active consumers in key regions. The company's 'New Way' services took a much larger share of business, with real revenues up 16.2% in the quarter, and have good potential for future growth, with many only available so far for a few months. Overall it expects the good performance to continue in the next quarters, but cautions that the performance for the whole of 2016 may not match that of the first months of the year. It aims 'to record satisfying organic growth in 2016, to maintain its operating margin, and to generate a significant amount of surplus cash, which should allow it to continue to reduce its debt and perhaps seize one or more targeted acquisition opportunities'.

Web site: www.ipsos.com .

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas, 2024- by Nick Thomas, unless otherwise stated.