Faster pace of growth and margin improvement at Ipsos

Operating profit up 17.6% Net profit up 23.9%

22 September 2003

Corporate

Paris, 22 September 2003 - During a half-year marked by worldwide instability, Ipsos has managed to deliver both significant growth and an improvement in its margins, just as it has done in previous periods.

Growth Though adversely affected by the unfavourable exchange rate fluctuations, Ipsos' first-half 2003 revenue came to 264.3 million euros, up 8.1% compared with the first half of 2002.

This performance was influenced by three main factors:

Negative currency effects resulting from the translation into euros of business in the UK, North and South America, Central Europe, Asia and the Middle East. These currency effects had a negative impact of 15% on Ipsos' revenues during the first half of 2003. Based on the exchange rates prevailing during the corresponding period of 2002, revenues would have reached 301 million euros.
The first-time consolidation of certain companies, primarily in Europe, generated a 13% increase in revenues. By way of these acquisitions, Ipsos has become a leading player in the German, Russian, Polish, Swedish and Belgian markets.
Robust organic growth (10.1%), which was much faster than that of the market at large and that posted by the Group's major international rivals. This strong momentum was attributable to the steady improvement in Ipsos' position in certain specific fields, such as the measurement of advertising effectiveness, as well as its success with international customers looking to forge long-term alliances to optimise their marketing strategies.

(M euros)	First half			Last year
(M euros)	June 2003	June 2002	% Change	2002
Revenues	264.3	244.5	+8.1%	538.4
Gross Margin	155.0	144.3	+7.4%	311.5
Operating Profit Operating Profit / Revenues Operating Profit / Gross Margin	20.9 7.9% 13.5%	17.8 7.3% 12.3%	+17.6%	43.6 8.1%14.0%
Net Interest charge	(3.1)	(3.3)	(8%)	(5.9)
Net income, Shareholders' part*	11.7	9.5	23.9%	23.7

*These figures are shown before goodwill amortisation.

Profitability Operating profit rose twice as rapidly as revenues, reaching 20.9 million euros, which represented a rise of 17.6% compared with the first half of 2002. The operating margin grew to 7.9% of revenues compared with 7.3% during the same period of 2002.

Once again, currency effects had a major impact since operating profit would have risen by 43% to 25.5 million euros had exchange rates remained at the same level as in 2002.

Margin improvement was driven primarily by a healthy rate of organic growth. It also flowed from the very significant increase in the use of online data collection systems, especially in North America.

This improvement gives Ipsos scope to bolster its R&D efforts (to develop new ranges of products and services in all its business lines) and its internal training programmes (to enable Ipsos' operational teams, now working in 35 countries around the world, to share the same knowledge and the same expertise).

Net financial expense decreased thanks to the decline in interest rates and the stabilisation in debt even though the group continued to pursue an active programme of acquisitions.

All in all, net profit attributable to the Group advanced by 23.9% to 11.7 million euros. At constant exchange rates, it would have risen by 60% to 15.2 million euros.

Controlled financial position Operating cash flows increased by 26% compared to the same period last year, due to the improvement in operating profit.

As of June 30, 2003, the company's net debt stood at 162 million euros versus 134 million euros as of December 31, 2002. This is due in part to traditionally higher levels of working capital needs at mid-year as well as the impact of the acquisitions program, 31 million euros having being paid out during the first half.

In order to strengthen the balance sheet structure, Ipsos realised in May 2003, by private placement, a 10-year bond issue of 90 million dollars. It was particularly attractive in view of current interest rate levels to refinance the existing debt related to the expansion of the group in North America.

Outlook for 2003 and 2004 Ipsos' growth is set to hold up at a very healthy pace for the remainder of 2003. The European businesses will post faster growth than during the first half. In North and South America, further brisk growth is expected, even though it may be slightly weaker than at the start of the year because the comparatives will be less favourable as both regions posted particularly strong levels of business during the second half of 2002.

All in all, the pace of Ipsos' organic growth will be significantly higher than the initial target of 8%. Its operating margin and net profit will also see a healthy increase.

Ipsos is set to continue growing during 2004. As during 2003, it will pursue five main priorities:

selective acquisitions in the Asia-Pacific region, as well as in key markets, such as North America and the UK
the pursuit of its programme aimed at defining its offering more clearly through its five areas of specialisation
efforts to step up its partnership with its major international customers
an increase in the proportion of research carried out online, not just in North America, but also in Europe
continued emphasis on the quality and professionalism of its teams, which guarantee the excellence of its services

2004 is therefore likely to bring organic growth well in excess of the market average and a fresh improvement in Ipsos' operating margin and net profit.