Ipsos In 2006: Growth Surpasses Market

Thursday, February 15, 2007

Paris, France - Ipsos generated consolidated revenues of 857.1 million euros ($1.1 billion USD) in full-year 2006, up 19.4% compared to 2005. This is the strongest annual growth rate since 2001.

  • The currency effect was almost negligible, with a positive effect of 0.6%.
  • There were major changes in the scope of consolidation, which account for 12.3%. Nonetheless, this figure is lower than at the beginning of the year due to the integration of Mori in the UK in October 2005 and Understanding UnLtd in the US in November 2005.
  • Organic growth was 6.5%. In comparison, market growth is estimated at 5%, which is a little less than expected at the beginning of the year due to the ongoing development of online data collection systems and the transfer of European budgets to the developing countries. Both of these two trends had a deflationary effect on the market, which remained nonetheless dynamic.

Under these conditions, Ipsos reports contrasting performances in different regions of the world.

Growth was strong in the Asia-Pacific and Middle East regions, with organic growth largely surpassing 10% in most countries, with the exception of Japan.

In Europe, North America and Latin America, overall growth rates were basically the same, although the components of growth were different.

Latin America was notably propelled by quite remarkable organic growth illustrating the quality of Ipsos teams and the group’s leading positions at the regional level and in most of the main countries, not only in Mexico and Brazil, but also in Colombia and Argentina.

Ipsos had an excellent year in North America, striking a healthy balance between the impact of major changes in the scope of consolidation (+10.5%) and strong organic growth (+8.5%), which largely outgrew the market. Once again, what made the difference was the expertise and commitment of Ipsos teams and the group’s organisation by specialized business line.

In Europe, the main growth engine was the positive impact of the integration of MORI and the creation of Ipsos Mori in the UK and Ireland. Organic growth, in contrast, was weak due to a sluggish fourth quarter in Western Europe (excluding the UK). This poor performance was limited to this region and can be attributed to two specific factors:

  • Commercial activity was weak in November and December, particularly among large-scale retailers (food, beverages, household products), who tended to postpone research programmes until early 2007.
  • In several cases, it took longer than expected to set up major contracts won through competitive bidding.

The negative impact of these two factors will naturally disappear in the first months of 2007.

At the end of January 2007, order books in Europe were up 10% compared to the same month in 2006. As a result, Management is confident that European markets will get off to a strong start this year. Other regions, notably North America, have also reported strong orders.

Lastly, in compliance with Ipsos’ accounting standards, MORI’s 2006 performance is not integrated in the reported organic growth rate. In 2006, pro forma revenues for the new Ipsos Mori entity (resulting from the merger of Ipsos UK and MORI) rose over 6% compared to 2005, and largely outperformed the UK market (whose growth was 2-3%).

Ipsos’ main lines of business reported different growth rates.

The Marketing Research division reported a flat performance, notably in Europe, for the reasons outlined above.

The other lines of business reported very strong growth. Ipsos ASI, which specialises in measuring advertising effectiveness, reported double-digit organic growth for the eighth consecutive year. This performance can be attributed to 1) expansion into new markets, notably in central Europe and Asia, and 2) the increase in the size and quality of major new contracts.

Thanks to the MORI acquisition, but also to remarkable organic growth, the Opinion and Social Research activity has doubled in size, and is quickly becoming one of Ipsos' most important and promising lines of business.

As indicated in November, the operating margin for 2006 will be roughly the same as in 2005. Restated for exceptional items, including restructuring costs for the merger of Ipsos UK and MORI and other non-recurring items, operating margin should improve significantly, marking Ipsos' determination and ability to make it structurally progress in the years ahead.

Outlook for 2007. Market growth is estimated at about 5% in 2007. Ipsos’ objective is to record organic growth that largely outperforms the market, with even stronger growth than in 2006. It will also make a very significant improvement in margins.

To reach its target of a 10% margin, Ipsos depends on growth in all regions of the world and in all its lines of business.

Along with the publication of its full-year 2006 results on 20 March 2007, Ipsos will outline its targets and plans for achieving profitable, sustainable growth in 2007 and beyond. At constant exchange rates, Ipsos is targeting average annual revenue growth of 15% through 2011, half through organic growth and half via acquisitions. Ipsos is targeting an operating margin of 12% for the year 2011.

Ipsos also announces today the acquisition of Apoyo Opinión y Mercado, a Peruvian company that will be presented in a separate press release.

For more information on this press release, please contact:
Elen Alexov
Director, Marketing Services
Ipsos in North America
elen.alexov@ipsos.com
778.373.5000

About Ipsos in North America
Ipsos is the fastest growing market research company in the U.S., market leader in Canada, and among the most trusted research brands in North America. With more than 1,300 professionals and support staff in the U.S. and Canada, Ipsos offers a suite of survey-based services—guided by industry experts and bolstered by advanced analytics and methodologies—in advertising, customer loyalty, marketing, and public affairs research, as well as forecasting, modeling, and consulting. Ipsos companies offer a complete line of custom, syndicated, omnibus, panel, and online research products and services. Ipsos conducts polling on behalf of the Associated Press, the world’s oldest and largest news organization.

In 2006, Ipsos generated €857.1 million ($1.1 billion U.S.) in total revenues, of which 34% came from its North American operations. The Paris-based company was founded in 1975 and has been listed on the Paris Stock Exchange since 1999. To learn more, visit: www.ipsos-na.com.

About Ipsos
Ipsos is a leading global survey-based market research company, owned and managed by research professionals. Ipsos helps interpret, simulate, and anticipate the needs and responses of consumers, customers, and citizens around the world.

Member companies assess market potential and interpret market trends. They develop and build brands. They help clients build long-term relationships with their customers. They test advertising and study audience responses to various media. They measure public opinion around the globe.

Ipsos member companies offer expertise in advertising, customer loyalty, marketing, media, and public affairs research, as well as forecasting, modeling, and consulting. Ipsos has a full line of custom, syndicated, omnibus, panel, and online research products and services, guided by industry experts and bolstered by advanced analytics and methodologies. The company was founded in 1975 and has been publicly traded since 1999. In 2006, Ipsos generated global revenues of 857.1 million euros ($1.1 billion USD)

Visit www.ipsos.com to learn more about Ipsos offerings and capabilities.

Ipsos, listed on the Eurolist of Euronext – Comp B, is part of SBF 120 and the Mid-100 Index, adheres to the Next Prime segment and is eligible to the Deferred Settlement System. Isin FR0000073298, Reuters ISOS.PA, Bloomberg IPS:FP


Ipsos In 2006: Growth Surpasses Market

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Contact

Elen Alexov
Director, Marketing Services,
North America

Ipsos
1.778.373.5136
elen.alexov@ipsos.com