Ipsos (Euronext:IPS) Q3 2026 Earnings Call

0:00 Hello and welcome to Ipsos' Q3 results. I'm Kelly Beaver, Chief Executive of Ipsos and I'm also with my colleague Olivier Champourlier, our Chief Finance Officer. So firstly on the results for the quarter. In Q3 organic growth reached 2% and over the nine months organic growth is sitting at 1.2% versus 0.8% in H1. Our performance is something we are working on accelerating, which is why the delivery of our Horizon Strategy needs to accelerate at pace. Just a reminder for those of you on the call around what the Horizon Strategy is, this is the right strategy for Ipsos. It was put in place in January this year and it is composed of two key dynamics.

0:50 One which is around building on IPSOS's already very distinctive competitive strengths, our multi-specialist expertise, our global reach with of course our local presence and our direct access to real people, our deep data assets and our methodologies. These are really valuable and increasingly unique. The second key aspect is around AI and technology, ensuring that we strengthen and accelerate innovation and speed as a result of infusing artificial intelligence through our products and through the way in which we work across our organisation. And lastly, making sure that we can leverage as an organisation some of the adjacent growth opportunities in our industry, which AI makes even more possible.

1:38 Those lie largely in data integration capabilities and data analytics. Together, these distinctive assets that Ipsos has, doubling down on those alongside the infusion of AI, are what we are creating called an augmented Ipsos. When I last spoke to you in the period of September, we discussed three key areas where I was seeking to make progress in that time period. And I just want to cover with you now those three areas. Firstly, leadership. This was an area where I spoke about making significant progress and over the last few weeks we have indeed made good progress on leadership in our organisation. There were two areas where I wanted to improve particularly.

2:28 One was around the technology space and the way in which our teams are set up to deliver our AI capabilities. We have indeed got leadership in place now for our agentic capabilities and the rollout of AI across our organisation. Secondly, a key area of focus was around our solutions and our offers and there is now a lead for across all of our service line solutions which is a gentleman called Sean Dix as well as a leader for our globally managed services which is a specific component of our service line offers which are higher margin and accelerating faster than the overall growth rate. These two big areas, so technology and indeed our offer development, are critical to our ability to accelerate the Horizons programme at pace.

3:17 The second area that I want to mention is the rollout of AI across our company. And this strategic partnership has been something we've put in place over the end of the summer period and indeed is now into full execution mode. This is a strategic partnership with Google Gemini. It's a multi-year partnership to accelerate AI deployment right across the group, which both does two things. Firstly, it enhances our employees' capabilities, augmenting the way in which they work. And secondly, and more importantly, it gives us an agentic AI platform which builds on the existing Ipsos Facto 1.0 to create Ipsos Facto 2.0 which allows us to accelerate the delivery of AI products right across our organisation in a more industrialised way at scale. This partnership helps us to accelerate innovation, automation, the speed of research delivery and importantly the speed with which we will accelerate the product rollout right across the world and in our markets.

4:25 Augmenting speed, which is around accelerating the speed of workflows. Augmenting trust with strict data privacy, governance, and as you would expect, model controls for ownership and protection of our data. And augmenting insights, enabling our researchers to spend more of their time delivering insightful insights to our clients. Secondly and importantly, our Ipsos digital platform. This is our end-to-end research platform which enables us to deliver insights at speed for our clients. It's a really important part of Ipsos' speed delivery infrastructure. And over the last weeks, we have been really accelerating the amount of products that we have available to our teams and our clients on Ipsos Digital.

5:13 We've been expanding the AI capabilities within Ipsos Digital and rolling out an adoption programme. Just some of the things that are now on Ipsos Digital. We have our creative impact product which now has moved to deliver research in 48 hours for our clients across six key markets. We have added employee experience essentials to Ipsos Digital. This is a faster turnaround employee pulse capability largely targeted at EHR professionals but not explicitly. Many clients in many organisations are interested in getting a quick pulse of what their employees are thinking and feeling today. And Open Reach, which is another important capability that unlocks the ability for us and our clients to put client sample into Ipsos Digital, which expands the multiplicity of use cases for the tool and the platform.

6:08 A second important area is the AI innovation. We now have agentic concept testing on Ipsos Digital with InnoExplorer, which is one of our innovation service tools and capabilities. This has got self-service chat across 61 markets. And next we will be developing the AI-powered questionnaire design and indeed agents within each of the products that we have in Ipsos Digital. and the platform developments is a really important part. But the secondary part, of course, is ensuring that we are adopting the use of Ipsos Digital at scale in the company to really drive and accelerate its performance overall. We have launched Ipsos Digital First, which is a mandate for Ipsos Digital to be the first port of call for the use and delivery of research in our organisation.

6:57 Global certification of power users, and Rollout of Global Company Training Program. All of this helps us to accelerate the delivery and execution of Horizons and build that augmented Ipsos. I'm now going to hand over to Olivier who can talk you through the results.

7:16 Thank you, Kelly. Good morning, everyone. So let me go through our financial performance for the third quarter. So, in the third quarter 2026, Ipsos generated revenue of €636 million, broadly stable compared to the same period last year on a reported basis. The organic growth was positive, plus 2% for the quarter alone, driven by good performance in EMEA. China, and the citizen business. For the first nine months of the year, the organic growth reached 1.2%. As a reminder, in the first quarter, the revenue was growing on an organic basis at minus 1.4%.

8:02 It moved to plus 0.8% at the end of June, so for the first six months, and now we are at 1.2% organic growth for the first nine months of the year. At the end of September, we have some positive scope effects of 1.6% which are driven mostly by the acquisition of the BVA family. As a reminder, this is an acquisition that we made last year at the end of June. So when you compare this year to last year, last year we have one quarter of revenue and this year we have three quarters of revenue. So this is a positive impact on the scope effect and offset partly the deconsolidation of the Russian business. that move out from the scope from January the 1st, 2026.

8:48 Currency effects were negative at minus 1.9% and reflect mainly the appreciation of the euro against the dollar for the first nine months of the year. But it's worthwhile noting that actually for the last quarter itself, in the fourth quarter, we had positive effect of 0.8%. So the trend reversed. Lastly, regarding our order book, so the order book is for the revenue that will be generated in the year, it reached 1.2% at the end of September, a similar level than what we have already at the end of June. So for the quarter alone, it's growing at 2%, but it's not strong enough to change the decimal.

9:36 So now let me go through the performance by region. Starting with EMEA which is our largest region. So for this region the organic growth for the third quarter was plus 3.5%. So all of the sub-regions have delivered positive performance with the exception of our Our sub-region which is Middle East which has been negatively impacted by the conflict in Iran. So all in all for EMEA the total growth is plus 2.8% and in addition to the organic growth we add as I said already some positive scope effect which impact mostly EMEA which has been driven by the acquisition of the BVA family. So now fully conciliated for nine months this year and that has offset partly the deconciliation of our business in Russia.

10:39 Moving to Americas now. So this region experienced a negative growth for the third quarter of minus 1.2% and to be flat at the end of September. So for the first nine months of the year the organic growth is flat. Those results are definitely below our expectations and mainly reflecting delays in the execution of the Horizon plan for the first half of 2026. This is one of the reasons why we need to accelerate and we are going to accelerate in the execution of the plan for the remainder of the year. Asia Pacific achieved a nice organic growth of 4.3% for the third quarter and in total for the first nine months of the year it's plus 2.8%.

11:31 So in the region we continue to experience a very strong performance in China supported by good momentum among both large local and international clients as well by the success of our AI enabled offerings. India also contributed positively to the growth of the region in the third quarter. So let me now look at the performance by audience perspective. So here, as you can see, we have mixed performance amongst our audience. Our service line dedicated to consumers, clients, and employees recorded organic growth of 0.7% and minus 2.5% respectively in the third quarter alone, and 0.9% minus 1.1% over the first nine months of 2020.

12:24 Activity was notably driven by our innovation and marketing optimization marketing spend optimization solution so we have a business line MMA in the US who had significant growth in the second in the third quarter while we have certain businesses that have experiences less growth notably advertising campaign measurement on the back of a very strong quarter last year Our activities serving citizens performed strongly, with organic growth of 8.6% in the third quarter and 4.7% for the first nine months of the year. The recovery is supported by several contract wins since March, particularly multi-year agreements reflecting renewed demand for a deeper understanding of citizens.

13:16 This is the core area of expertise of Ipsos and one where our global scale gives us a strong competitive position. We also saw strong acceleration of the growth in the doctor and patient segment with organic growth reaching 5.7% in the third quarter and 1.6% for the first nine months of the year. The growth is supported by a dynamic market environment driven by increased drug approval in the US and continued innovation in the pharma sector. We have seen particularly strong momentum in GLP-1 alongside Immology and Oncology.

14:03 Lastly, I would like to highlight that our platform, do-it-yourself platform, Ipsos Digital, grew by 14%. for the first nine months of the year. As mentioned by Kelly already, increasing the use of Ipsos Digital is an important component of our speed program and of the broader execution of Horizon. So let me finish now with the outlook for 2026. Given the level of the order book at the end of September, which is growing on an organic basis at 1.2%, A comparable number than what we had at the end of June. Now the organic growth expected for the year is between 1.2% to 1.5%.

14:53 And this outlook takes obviously into account the uncertain microeconomic and geopolitical environment, notably marked by the impact of the conflict in Middle East that has negatively impacted our business in the region. Lastly, the group confirms its objective of achieving an operating margin rate equivalent to the one of 2025. We continue to maintain strong financial discipline while making the necessary adjustments to successfully execute the Horizon Plan. And with that, I will hand back to Kelly, who will present now Horizon in action.

15:37 Thanks very much, Olivier. So I wanted to share with you some examples of how we are delivering from an AI augmented capability perspective. And just taking a few of these and what's been delivered over the last quarter. Firstly, having a look at something delivering under Strategic Aim 4, which is our ability to deliver AI as a catalyst for market leadership. Predominantly new products, AI powered. And this example is an AI enhanced observation which augments L'Oréal's ability to make R&D decisions. It's a lovely example because I think it is easy to understand in many ways. So we have conducted work which took consumer recorded videos of how people did their home hair colouring. So this was to help L'Oréal uncover what some of the key friction points were in at home hair colouring and so that they could understand how they could improve the overall product.

16:36 So those at home recorded consumer videos have been transformed into insights and actionable improvements for our clients. using AI computer vision and modelled with deep observational science which is led by our qualitative researchers at Ipsos which enables our clients ultimately in this case to understand what were the barriers or the challenges or the friction points to doing hair colour at home so that they could then think about what they can do to make it easier for people to use those kits, the instructions and indeed understand the packaging requirements better. This This particular example has led to industry awards for the team that has delivered it and for us it is a capability that has since been expanded across many of our markets across the world.

17:23 This test, learn, scale and the industrialisation of our AI solutions is critical to the acceleration of the Horizons programme. Secondly, a good example from our Synthesio capability. So Synthesio is a capability that allows us and our clients to analyse millions of conversations that are happening online so that they can take those conversations and take decisions off the back of them as part of a often a wider data ecosystem. So for Synthesia we now have a dedicated AI agent which is integrated through an MCP which allows our clients to have social listening and intelligent social listening delivered directly into their LLMs and ultimately their workflows as clients which increasingly is an important aspect of how we are working today and what we need to continue to accelerate in the future.

18:19 For the clients, they can make quicker decisions. It's integrated into their workflows and ultimately seamless insights into the decision-making process. Over the course of the last quarter, we've also had some great new success stories with this particular partnership with TV Beat in New Zealand. Audience Measurement is one of our multi-specialist service lines and under our Strategic Game 1, leveraging our multi-specialist business offerings, we can see this as a great example of where we're bringing our deep knowledge of audience measurement and the local context that we are deeply rooted within in New Zealand to win and deliver exciting programmes for our clients. This example is a partnership with TVBeat to deliver the new total TV audience measurement system for TV New Zealand and Sky in New Zealand as well. Ipsos is delivering the establishment survey component of this and also using our proprietary media cell Thank you very much.

19:34 And then lastly, before we open up for Q&A, I wanted to share one of the pieces that happened just a few weeks ago. So Ipsos led a conference called the Human Advantage Conference. This is one example of many of Ipsos leading really the future of conversations, not just of our industry, but of wider societal change, how the world of work is changing, how innovation in organisations is changing. This conference brought together over 2,000 organisations, companies, business leaders, Nobel Prize winners, some of the greatest thinkers of our time to really discuss and move forward with what is the future of work? What does leadership look like in a world of AI? How will consumer behaviour and trust respond?

20:20 Absolutely fantastic, Ipsos convening, world-class thought leadership, and thanks to ultimately the BVA family acquisition that was done in 2025, where we inherited a high degree of additional behavioural expertise. So I'll stop there and we can open for Q&A. Thank you. This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their telephone. Please pick up the receiver when asking questions. Anyone who has a question may press star and 1 at this time. The first question is from Connor O'Shee, Qatar Chevreux.

21:08 Yes, thank you. Good morning, everybody. Thanks for taking my questions. Three questions from my side. Firstly, Kelly, on Q3, the 2%, did you see a slowdown in September toward the end of the quarter? So can you give us a sense of what the exit rate for growth was in Q3, or was it pretty even month by month? If you could just have some qualitative comments on that. Secondly, in EMEA, Can you just remind us, or maybe Olivier, remind us of the deconsolidation impact per quarter on average from the exit of Russia from the start of the year?

21:58 And then the third question in the press release, there's reference to the U.S. performance and delays in implementation of the Horizon Plan. There seems to be company-specific. Are you contemplating some leadership changes there? And maybe you could update us also on the CTO role at a group, White Paces. Maybe you mentioned that earlier. I might have missed that. But if you could update us on some of the US management team, that would be good.

22:36 Do you want to do the first two and I'll take the last one?

22:39 Yes. Thanks.

22:42 Good morning. Regarding the performance of the quarter, as we said, the revenue grew by 2% in the third quarter and our order book also grew by 2%. This is below what was expected and this is one of the reasons why we have revised our full year guidance. The month of September itself is not representative of the quarter, but you have to notice that 2% organic growth in the third quarter was below our expectation. So the need to accelerate on the execution of the plan and to launch our new offerings quicker.

23:29 Regarding your second question about the exit of Russia, so the impact on the organic growth of the third quarter is 2.2%. And in average, we have always said that Russia represents around 2% of our total revenue for the year. So this will be the overall impact expected for the full year.

23:54 And I'll just take your questions Conor on the technology leadership in the organisation and then the Americas part of the press release more broadly. So we have a Chief Platforms and Technology Officer who is Humair Mohammed who was appointed in mid-August. Humair has worked alongside myself in order to put the Organisation for Technology together in a way that will allow us to accelerate the Horizons delivery and implementation, specifically linked to the rollout of Ipsos Facto 2.0 and the agentic platform so that we can really accelerate how we industrialize the delivery of the tools and the offers that we deliver for our clients so we have now got uh obviously humair in post we also have a head of ai platforms head of the gemini rollout and ahead of the each of the agentic builds That alignment within the technology organisation is critical and it is now in place.

24:52 So that's just on technology. The second question about the Americas more broadly, as Olivier said, it does remain below our expectations and it is a very dynamic market in the US, which is why the horizon strategy is absolutely pivotal for us to be able to make good progress in the US. We must accelerate it in a across the US and across the Americas more broadly. And that is really one of my top priorities.

25:23 OK, fair enough. Thank you. The next question is from Marilyn for Bernstein. Hi. Yes, good morning. Thank you for taking my question. Just asking you, the execution of the plan is taking more time than previously expected. What are the specifics, Edwin, in implementing the plan, and what time or reason we should expect some more dynamic organic sales growth It will be 2027, just to give an idea when we can expect something with more muscle.

26:15 Excellent question. So during the first half of this year, the board and indeed the leadership team were not happy with the overall acceleration in the Horizons implementation. That is why there was a change of chief executive in the summer of 2026. My job now is to ensure that we can accelerate the delivery and execution of this plan, which is what I'm very focused on, as is the leadership team. And so we are working, as you can see, on some of the key aspects I've showed you today. Those are not the only areas where we are pushing and making more progress. And I will keep you updated as we come into the next key communication moment in February next year. The next question is from Laurent Gelebar, BNP Paribas.

27:11 Yes, good morning. Three questions. The first one, regarding the Middle East, could you remind us the impact of the situation on your Frisian members?

27:20 Yes.

27:21 The second one relates to your order book that you can share where you stand at the end of October. And the last one is related to the acquisition of Felicien Labs by Salesforce. Do you see this triggering more competition? And more broadly, do you see more competition from AI-native companies in your market?

27:40 Okay, so Olivier, if you want to take the first two, I'll take the last one.

27:44 Yes, I will take the first question regarding the activity in the Middle East which represents roughly 3% of the total revenue of the group and we have been impacted by a couple of millions in the region. So that's true that initially the idea and the thought was that the conflict will stop sooner and the impact has been slightly bigger than what we initially thought. Now your second question about what is the order book in October. The month of October is not closed yet, so we can't give any indication. But you can do the math yourself. The order book at the end of September is at 1.2%.

28:30 This represents roughly more than 90% of the revenue of the year. So it means that the last quarter, the order book that we will win will represent only around less than 10%. So this is why we have disclosed an expected organic growth for the year between 1.2% with the hypothesis where it will remain stable to 1.5% in the hypothesis who will continue to grow above the average that we have experienced so far. So we think this is a realistic guidance.

29:09 And on your question relating to Listen Labs, of course, we follow all of the market developments that are taking place in the broader insights industry. And it's an interesting development because for me, it doubles down what I believe and what I know, which is that the insights industry is becoming, it's an increasingly important industry for our clients. They want to understand how their consumers, how citizens are thinking and feeling and likely to behave. So that acquisition Okay, and maybe a last one. On Ipsofactor 2.0, when will it be ready? Ah, imminently, imminently.

30:08 So 1.0 obviously has been in place since 2024. And we are working through the sort of back end of this year to deliver the first phase of the rollout across some of our power users of Ipsos Digital. and we will then accelerate that in the first quarter of next year. So those are just some of the timings at the minute. We are working with the Google team and an implementation partner to put some of the guardrails, the governance, etc. in place today. Okay, thank you. Pleasure. As a reminder, if you wish to register for a question, please press star and one on your telephone. Once again, if you wish to ask a question, please press star and 1 on your telephone.

31:05 There are no more questions registered at this time. Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones. Thank you.