Ipsos

Earnings Release • Oct 27, 2010

+6%, +9%, +10.5% Here's to growth!

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Nine-month revenues: Up 21.3% to 812.5 million euros, Organic growth: 8.7%

Paris, 27 October 2010. Ipsos generated revenues of 283.6 million euros in the third quarter of 2010, up 27.9% compared with the same period last year and up 21.1% compared with the third quarter of 2008.

On a like-for-like basis and at constant exchange rates, revenues were up 10.5%, after a first quarter at +6.0% and a second quarter at +9.1%. It is the first time since the first quarter of 2007 that Ipsos has registered double-digit organic growth.

Ipsos' revenues for the first nine months of 2010 totalled 812.5 million euros, up 21.3% compared with the same period of 2009. At this stage, it is clear that for the first time, Ipsos' annual revenues will exceed by far the one billion euros mark.

Over the first nine months of 2010:

• Organic growth was 8.7%
• Changes in the scope of activity had a positive impact of 6.4% reflecting the strong performance of MRBI (Ireland) and in particular OTX (USA), the two companies Ipsos has integrated over the last 12 months
• Currency effects strengthened to +6.2% (+4.7% over the first six months) because of the weakening of the euro compared with other currencies: the American dollar, the pound sterling, Japanese yen and also emerging countries' currencies.

Consolidated revenues In millions of euros	2010	2009	2008
st quarter 1	236.9	207.3	217.3
nd quarter 2	291.9	240.5	245.5
rd quarter 3	283.6	221.8	234.2
9-month total (at 30 September)	812.5	669.6	697.0
th quarter 4		274.1	282.3
Full-year total		943.7	979.3

Trends in business volumes by geographic area

Trends by geographic area show growth across all regions and the out-performance of emerging countries which grew organically by 16.7%, three times faster than developed countries. Over the nine months, they represent 30% of Ipsos' revenues, close to North America (32%) and Western Europe (35%), the remaining 3% being achieved in Northern Asia.

Consolidated revenues by geographic area in millions of euros	2010 (9 months)	2009 (9 months)	Change 2010/2009	Organic growth
Europe	342.3	311.4	+10%	+5%
North America	259.1	196.6	+32%	+6%
Latin America	102.5	80.7	+27%	+15%
Asia-Pacific / Middle East	108.6	80.9	+34%	+22%
9-month total (at 30 September)	812.5	669.6	+21.3%	+8.7%

Trends in business volumes by specialisation

All business lines contributed quite evenly to Ipsos' growth, except for Opinion and Social Research which had performed well in 2009. This activity is now adversely affected by spending cuts in the Public Sector in the UK – and everybody knows the situation will not be getting better in the coming 18 months. In 2011, Ipsos Public Affairs teams will make up for the expected decline of their activity in the UK by working more in other countries and with other clients.

Consolidated revenues by specialisation in millions of euros	2010 (9 months)	2009 (9 months)	Change 2010/2009	Organic growth
Advertising Research	180.8	144.9	+25%	+11%
Marketing Research	374.4	315.5	+19%	+10.5%
Media Research	81.4	52.0	+56.5%	+6.5%
Opinion & Social Research	96.2	87.6	+10%	-0.5%
Customer Relationship Management Research	79.7	69.6	+14.5%	+8%
9-month total (at 30 September)	812.5	669.6	+21.3%	+8.7%

Overview of business conditions over the first nine months of 2010

Operating margin was up about 40% on the same period of 2009, which was admittedly adversely affected by the crisis. Cash flow from operations follows the growth in revenues. The net debt to equity ratio remains stable at 37% at 30 September 2010 versus 39% at 30 June 2010.

Successful bond issue

On 10 August 2010, Ipsos successfully issued a bond of 300 million dollars on the US private placement (USPP) market, from which Ipsos has benefited since 2003 with a NAIC2 level credit rating allowed by the National Association of Insurance Commissioners, which is equivalent to an investment grade. Fixed coupons for the three tranches of 7, 10 and 12 years maturity are 4.46%, 5.18% and 5.48% respectively.

Funds received on 28 September were used to refinance the existing debt of Ipsos.

Ipsos would like to thank bond investors for their trust and support in this long-term refinancing transaction.

Outlook for 2010 and 2011

The market in 2010 has been more robust than anticipated. Ipsos will perform better than in 2009 – as predicted – and better than in 2008 – exceeding predictions. Organic growth will reach the upper estimate released in July (of 6% to 8%) while the operating margin will be over 10%, compared with 9.4% in 2009.

The keys to success are neither new nor surprising. Ipsos' position in emerging countries, our capacity to take advantage of the consolidation of research programmes by major clients, our efforts to deliver innovative, different and relevant services, and last but not least, the quality and commitment of our teams, are the individual and – even better – combined ingredients underpinning our profitable growth.

The story is not over. Ipsos is a medium-sized player in a transforming and growing market. Ipsos has strong assets, including pride in having increased fourfold its revenues and tenfold its profit over the last 10 years. Its major strength lies in its lucidity towards its current limits. Ipsos represents today only 5% of the global market and is competing with companies two or three times its size. Its profitability, though increasing, is far from achieving its full potential. Its position with major clients, though strengthening, is too seldom dominant.

In 2011, Ipsos' projects will be focused around five areas:

• Strengthening Ipsos' direct position in emerging countries by creating new offices, such as in Lagos (Nigeria) and Kuala Lumpur (Malaysia) this month, and through suitable acquisitions;
• Developing and implementing new services through Ipsos Open Thinking Exchange the Ipsos R&D Centre, including in the areas of digital marketing and social networks. These resources will be increased, particularly due to the settling up of a new IOTX team in China by summer 2011;
• Speeding up plans for mutualising our production systems between countries and regions, by creating new platforms in emerging countries;
• Increasing the role of Ipsos' teams in emerging countries. Lifeng Liu, Head of Ipsos in China for 8 years, will join the Ipsos Executive Committee next January 1st as the new Head of Ipsos in the Asia-Pacific region;
• Extending our Client Relationship programmes: first, via the Global PartneRing programme, which will include eight new clients (against 17 today) by end-2011. Furthermore, Ipsos will dedicate more resources to deepening its relationships with major companies based in emerging countries, whose development and specific needs are strong drivers of growth opportunities.

Ipsos is beginning a new development cycle, just like its market, which is growing and becoming more professional. As mentioned before, the organic growth of Ipsos will be over 5% in 2011 and its operating profit will be at least 11%. These estimates will be updated on 23 February 2011, when Ipsos will release its annual results.

Nobody's Unpredictable

'Nobody's Unpredictable' is the Ipsos signature.

Our clients' clients are increasingly demanding. They change direction, change their views and preferences often and easily. We at Ipsos anticipate and meet those changes. We help our clients to understand their clients, to bring focus and clarity to even the most difficult situations. We understand the dynamics of their markets and we deliver the insight needed to give them the leading edge.

Listed on Eurolist by NYSE - Euronext Paris, Ipsos is part of the SBF 120 and the Mid-100 Index and is eligible to the Deferred Settlement System.

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