Ipsos SA (IPSOF) Q1 2025 Earnings Call Highlights: Navigating Growth Amidst Global Challenges

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Fri, Apr 18, 2025, 1:00 AM 4 min read

Overall Growth: 2% in the first quarter of 2025.
Organic Growth: Negative 1.8%.
Scope Effects and Currency Impact: 2.9% increase due to scope effects and positive currency effects.
EMEA Growth: More than 6%, driven by the integration of IFA.
Americas Performance: Down by 1.7%, with other service lines showing over 2% organic growth.
Asia Pacific Performance: Decline due to lack of recovery in China and slowdown with major clients.
Citizens Business: Down by 40% due to political instability and electoral cycles.
Doctors and Patients Audience: Organic growth of more than 5%.
DIY Platform (Ipsos Digital): Over 30% organic growth in Q1.
Revenue from BVA Acquisition: Around EUR160 million.
Operating Margin Guidance: Around 13% for constant scope.

Warning! GuruFocus has detected 4 Warning Signs with BOM:534618.

Release Date: April 17, 2025

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

Positive Points

Ipsos SA (IPSOF) reported overall growth of 2% in the first quarter of 2025, with positive currency effects and scope effects contributing to this growth.
The acquisition of BVA is expected to consolidate Ipsos SA's position in France and strengthen its presence in the UK and Italy, particularly in customer experience research and public affairs.
Ipsos Digital, the company's DIY platform, showed strong performance with over 30% organic growth in Q1, targeting EUR140 million in 2025.
The company is actively deploying AI across its operations, with 75% of employees AI certified, enhancing productivity and speed in delivery.
Ipsos SA is leveraging synthetic data and AI to improve research processes, offering faster and more accurate insights for clients.

Negative Points

Organic growth was slightly negative at -1.8%, reflecting challenges from the previous year.
The public affairs business experienced a sharp decline, particularly in France and the UK, due to the electoral cycle and political instability.
The Asia Pacific region faced a downturn, impacted by a lack of recovery in China and a slowdown in activity with major clients.
The Citizens business saw a significant decline of 40%, attributed to a wait-and-see attitude by governments amid global political instability.
The US market remains uncertain, with ongoing challenges in the public affairs sector and potential impacts from US administration policies on the healthcare business.

Q & A Highlights

Q: How does Ipsos view the current uncertainties in the market, and are there signs of a slowdown from CPG customers? A: Ben Page, CEO, stated that while there is heightened interest in Ipsos' services due to uncertainties, it is too early to determine the full impact. There is no dramatic slowdown in CPG, but clients are cautious, waiting to see how tariffs will play out. Ipsos expects a recovery in the US in H2, and they are prepared to protect margins despite potential revenue impacts.

Q: Can you provide insights into the order book and expectations for different business activities? A: Ben Page mentioned that the order book aligns with their guidance for the year, providing positive visibility for three to four months. While pharma is picking up, potential headwinds from FDA restructuring exist. Public affairs should improve due to structural features and new management efforts in the US. Dan Levy, CFO, noted that FX impacts are unpredictable, but the effect on margins is limited as costs are in local currencies.

Q: What is the impact of the US government's cost-cutting on the Citizens business, and how is the new US management performing? A: Ben Page explained that the decline in the Citizens business is largely due to past contract losses in the US. The new management team is focused on opportunities outside the federal government. They have a detailed assessment of the US market and are confident in their strategy. Ipsos is optimistic about the new leadership's ability to drive growth.

Q: How is Ipsos leveraging AI, and what is the competitive landscape like? A: Ben Page highlighted that Ipsos is systematically integrating AI into production processes to enhance quality and speed. They are using AI for synthetic data and panels, which requires significant historical data, giving Ipsos an advantage. While competitors are investing in AI, Ipsos remains focused on disciplined implementation and maintaining a competitive edge.

Q: Can you elaborate on the potential BVA acquisition and its expected impact? A: Ben Page stated that BVA offers complementary strengths and aligns with Ipsos' culture. The acquisition will enhance scale and mutualize costs, with PRS in vivo's pack testing being a key asset. The acquisition is expected to close by late June, and Ipsos plans to integrate BVA's capabilities across its global network. Dan Levy noted that the acquisition would be margin dilutive initially but expects profitability improvements within 18 to 24 months.

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

This article first appeared on GuruFocus.

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