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

Profiling peopleProfiling people

Results for the first half 2002Results for the first half 2002

How Ipsos makes progress How Ipsos makes progress

Financial results Financial results

Outlook Outlook

The market The market

Key figures: growth and profitabilityKey figures: growth and profitability

Revenues 244.5+13% Revenues 244.5+13%

Operating income 17.8 +27% Operating income 17.8 +27%

Net income, shareholders’ part* 9.5 +29% Net income, shareholders’ part* 9.5 +29%

* Before amortization of goodwill* Before amortization of goodwill

in millions of euros

The marketThe market

A non-cyclical market…A non-cyclical market…

The research market*: a market that keeps on growing

2001 vs. 2000 +4%

H1 2002 vs. H1 2001 +3 to 4%

The research market*: a market that keeps on growing

2001 vs. 2000 +4%

H1 2002 vs. H1 2001 +3 to 4%

“[…] Market information remains valuable to clients even in a time of economic downturn.”

Mike Kirkham, CEO Taylor Nelson Sofres

“[…] Market information remains valuable to clients even in a time of economic downturn.”

Mike Kirkham, CEO Taylor Nelson Sofres

*Source: Esomar

“[…] Fear and uncertainty rule a lot of client thinking today […]” Sir Martin Sorrell, CEO WPP

“[…] Fear and uncertainty rule a lot of client thinking today […]” Sir Martin Sorrell, CEO WPP

… unlike the advertising market… unlike the advertising market

“This has been a longer and deeper advertising recession than anyone predicted. The US advertising market beganto show some tentative signs of recovery in the first halfof the year, however the European market was down."

Doug Flynn, CEO Aegis Group plc

“This has been a longer and deeper advertising recession than anyone predicted. The US advertising market beganto show some tentative signs of recovery in the first halfof the year, however the European market was down."

Doug Flynn, CEO Aegis Group plc

The advertising market*: a shrinking market

2001 vs. 2000 -4%

H1 2002 vs. H1 2001 -2%

The advertising market*: a shrinking market

2001 vs. 2000 -4%

H1 2002 vs. H1 2001 -2%

*Source: Zenith Media

Ipsos is outgrowing its competitorsIpsos is outgrowing its competitors

H1 2002 vs. H1 20012001 vs. 2000

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: + 4.4 % according to 2001 published data

Source: competitors

Change in operating margins

Ipsos’ profitability is improvingIpsos’ 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

How Ipsos makes progressHow Ipsos makes progress

Our objectiveOur objective

To become the world leader insurvey-based research

To become the world leader insurvey-based research

Our business: survey-based researchOur business: survey-based research

Continuous services & one off projects Continuous services & one off projects

Mono & multi-clients services Mono & multi-clients services

Branded products & custom research Branded products & custom research

International & local operations International & local operations

Qualitative & quantitative research Qualitative & quantitative research

Consultancy & fab & tabs works Consultancy & fab & tabs works

Off & on line data collection systems Off & on line data collection systems

Four rules for success Four rules for success

2. Reinforce our leadership in key countries2. 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




Our business with these 10 major clients grew30% in 2001 / 2000 and 32% in H1 2002 / H1 2001of pure organic growth

Our business with these 10 major clients grew30% in 2001 / 2000 and 32% in H1 2002 / H1 2001of pure organic growth

Some 50 corporations spend over 75 million eurosper 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 eurosper 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

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

Major international clients in 2003-2005Major international clients in 2003-2005

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









2. Reinforce our leadership in key countries

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 Ipsos is established in 14 of these 15 main countries

15 countries spend over 100 million euros on researcheach year; between them they account for 87% ofthe world market

15 countries spend over 100 million euros on researcheach year; between them they account for 87% ofthe world market

In 2002, Ipsos strengthened its position in the following countries:

USA 1st market (Ipsos-Vantis)Germany 3rd market (Sample-INRA)Japan 5th market (Lyncs)Sweden 13th market (Ipsos-Imri, Ipsos-Eureka)China 14th market (Fams)

In 2002, Ipsos strengthened its position in the following countries:

USA 1st market (Ipsos-Vantis)Germany 3rd market (Sample-INRA)Japan 5th market (Lyncs)Sweden 13th market (Ipsos-Imri, Ipsos-Eureka)China 14th market (Fams)

Ipsos in the 15 key countries in 2002Ipsos in the 15 key countries in 2002

Belgium

China

Sweden

Holland

Mexico

Australia

Brazil

Spain

Canada

Italy

Japan

France

Germany

UK

USA

Rateof development

Ipsos position

Profitability









3. Develop our expertisein our areas of specialization

3. Develop our expertisein 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

Ipsos-ASI: a modelIpsos-ASI: a model

July 1, 1999: Ipsos-ASI founded, an integrated global organization

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 15% average organic growth per annum

Ipsos-ASI is present in 15 countries, and is setting upin Japan, China, Russia, Poland and Sweden

Ipsos-ASI is present in 15 countries, and is setting upin Japan, China, Russia, Poland and Sweden

Advertising research:to measure the foreseeable and evidential effectsof advertising expenditure on brand positions

Advertising research:to measure the foreseeable and evidential effectsof advertising expenditure on brand positions

Ipsos Marketing todayIpsos Marketing today

Ipsos’ current position

No.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

No.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

Marketing Research: to know and understand markets and consumers’ relations with products and brands in order to evaluate and optimize options

Ipsos Marketing in 2003Ipsos Marketing in 2003

Three main sectorsManufactured products / Services / Pharmaceuticals

Three main sectorsManufactured products / Services / Pharmaceuticals

Global servicesBrand Equity / Concept Forecaster / STM

Global servicesBrand Equity / Concept Forecaster / STM

Specific areas of expertiseQualitative research / Modeling and sales forecasting International research

Specific areas of expertiseQualitative research / Modeling and sales forecasting International research

Major clientsP&G / General Mills / Kraft / Unilever / L’Oréal / Mars …Visa / ATT / Microsoft ...Pfizer / GSK / J&J ...

Major clientsP&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)











Source: Inside Research

13.6%9.6%6.6%% of overall spending

578392258On-line expenditurein millions of USD

200220012000

Change is gathering pace in the USA 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

Ipsos and on-line datacollection systemsIpsos and on-line datacollection systems

In the USA, 30% of Ipsos Marketing revenuesare generated on-line

The Ipsos-NPD group panel is the most used

A profitable business

Ipsos has been selected by oneof 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 revenuesare generated on-line

The Ipsos-NPD group panel is the most used

A profitable business

Ipsos has been selected by oneof our big accounts as “preferred worldwide supplier”for the changeover to on-line copy-testing(due in 2004)

Financial resultsfor the first half of 2002Financial resultsfor the first half of 2002

244.5217.0

132.498.988.7

H1 1998 H1 1999 H1 2000 H1 2001 H1 2002

Sharp growthin first-half revenuesSharp growthin first-half revenues


+34%+34%

+64%+64%

+12%+12%

+13%+13%

244.5217.0

H1 2001 H1 2002

1st half 2002: a steady organic growth 1st half 2002: a steady organic growth

Organic growth rate*

* On a comparable basis

+9.9 % +7.3 %

In millions of euros

Sharper increase in organic growth in 2nd quarterSharper increase in organic growth in 2nd quarter

Organic growth rate

108.4 136.1

T1 2002 T2 2002

+7.0 % +7.7 %


FY 2002 organic growth estimated at least at 8%FY 2002 organic growth estimated at least at 8%

+8.0 %*+8.0 %480.2Year

+7.7 %147.34th quarter

+5.0 %115.93rd quarter

+7.7 %136.1+10.1 %122.02nd quarter

+7.0 %108.4+9.7%95.01st quarter

Organic growth

RevenuesOrganic growth

Revenues

2001 2002

* estimated


Growth varies according to region...Growth varies according to region...

+8.0%+7.3 %244.5Total

+10 %+10 %6.8Asia-Pacific and Middle East

+6 %+11 %23.9Latin America

+10 %+15 %106.5North America

+7 % 0 %107.3Europe

Reminderorganic growth

2001

Organic growth H1 2002

Revenues H1 2002


… and to business lines… and to business lines

Organic growth

H1 2002

Reminder organic growth

2001

RevenuesH1 2002

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 N/S3.1

Opinion and social research +9% +15.0%14.1


Improved profitabilityImproved profitability

Strong improvement in resultsStrong improvement in results

H1 2001

H102 /H101

* after employees’ share in profits** before goodwill* after employees’ share in profits** before goodwill

H1 2002 2001

Revenues 217.0244.5 480.2 +13%

Gross margin 272.0144.3 126.0 +15%

Operating profit * 36.917.8 13.9 +27%

Financial results -8.8-3.3 -3.7 -9%

Exceptional items -1.1-0.1 -0.3 -

Companies at equity -1.00 0 -

Net income, shareholders’ part** 17.39.5 7.4 +29%

EBITDA 51.025.9 19.8 +31%

Minority interests 2.20.9 0.9 -


H1 1997 H1 1998 H1 1999 H1 2000 H1 2001 H1 2002

2.7%

4.3%5.0%

5.5%

6.4%7.3%

Continued improvement in first half operating marginContinued improvement in first half operating margin

First-half operating profit / Revenues

Breakdown of operating margin increaseBreakdown of operating margin increase

H1 2001 Increasedmargin

on existingperimeter

Companiesconsolidated

aft. H1 01

Regionalmanagemt

structuresEurope

and Asia

Worldwideproducts

offer

Economiesof scale

parent co.management

expenses

H1 2002Currencyeffects

+0.1+0.1

7.3%7.3%

6.4%6.4%

+1.0+1.0

-0.2 -0.2 -0.1-0.1

+0.2+0.2

-0.1-0.1

Results show seasonal trendResults show seasonal trend

6.4%5.5%

8.5% 8.8%

7.3%

Operating margin increase

Cash flow statementCash flow statement

H1 2001

H102/ H101

H1 2002 2001

Change in working capital requirements + 5.9- 5.7 -10.5

Investments in tangible and intangible fixed assets -14.5-5.9 -9.5

Acquisitions and impact of changes in consolidated scope

-196.7-4.9 -155.6

Cash used in investing activities -207.2-10.8 -165.1

Share issue 20.3- -

Net change in debt / marketable securities +171.2+0.5 +175.1


Cash provided by operating activities 37.211.3 1.3 X 9

Dividends -2.8-3.2 -2.8

Cash provided by financing activities 188.7-2.7 172.3

Net change in cash +20.8-2.2 +8.5

Operating cash flow before working capital items 11.817.0 31.3 +44%

A sound financial positionA sound financial position

Shareholders’ equity 186 184 200

Net debt 147 169 153

Gearing 79% 92% 76%

Net debt / EBITDA pro forma 2.6 3.5 2.99

Coverage of financial charges x 5.4 x 3.8 x 4.4

June 30, 2001

June 30, 2002

Dec. 31,2001


Commitments arising from acquisitionsCommitments arising from acquisitions

From July 1st, 2002 to December 31, 2003 A maximum total of 40 million euros

Of which 10 to 12 million in 2nd half 2002

For payment of acquisitions already announced but not consolidated in 1st half 2002 plus all earn outs

From July 1st, 2002 to December 31, 2003 A maximum total of 40 million euros

Of which 10 to 12 million in 2nd half 2002

For payment of acquisitions already announced but not consolidated in 1st 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

OutlookOutlook

Second half 2002: Ipsos confirms its commitmentsSecond half 2002: Ipsos confirms its commitments

Continuing strong growth in North andLatin America

Growth above 10%

Slow turnaround in Europe

Moderate growth below 5%

Continuing strong growth in North andLatin America

Growth above 10%

Slow turnaround in Europe

Moderate growth below 5%

Establishment of network in Asia-Pacific region Establishment of network in Asia-Pacific region

Improvement in profitability Improvement in profitability

2003 and beyond:leadership2003 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

A more specialized and global Ipsos Marketing organization

Rapid expansion of major accounts strategy Rapid expansion of major accounts strategy

CSM / CRM, Medias, and Opinion new offerings CSM / CRM, Medias, and Opinion new offerings

Ipsos: 2005 - 2006Ipsos: 2005 - 2006

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

Profiling peopleProfiling people

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

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