Ipsos SA (IPS) Earnings Call Transcript & Summary

Welcome to Ipsos Half Year Investor Call. My name is Suzanne, and I will be your coordinator for today's event. Please note, this call is being recorded. [Operator Instructions] Please also note that the slide show can be downloaded on the Ipsos website. I will now hand over to your host, Ben Page, to begin today's conference. Thank you.

Good morning, good afternoon or good evening, everybody. I'm the new CEO or relatively new CEO of Ipsos, having worked here for 35 years, but formally, started in November last year. I'm joined by our much newer CFO, who's been with us for about a month, that has known Ipsos for many years, my colleague, Dan Levy. So we're pleased to present these results to you, which I think shows the resilience of our business despite a number of headwinds in the economic environment that we find ourselves part of. So I'm going to take you through the background to the growth in H1. Dan will take you through the detail on the first half results. Do look at the slides on the Internet as I go along, and I'll try and make sure when I'm talking about detail, you'll know exactly which page I'm referring to or which slide I'm referring to. And then I'll talk about the outlook for the rest of the year and perhaps beyond that. So overall, we are, I think, in a good place. I think it's worth reminding ourselves that in terms of our day-to-day work, which is about looking at consumer opinion all over the world, while we can see in many of the studies of economic confidence per se, when you ask the public, what do they think is going to happen in the economy, in many of those time series that we run, people have picked up the signals about inflation, war, COVID and in the last week, sort of massive climate change, and they're often pretty negative. When you take a slightly more balanced view, and this is what you can see on the slide that says falling but not collapsing consumer sentiment, you can see that when we ask about people's personal expectations on their employment, property acquisition of things like white goods and their job prospects as well as what they think is happening on the economy, you can see, of course, a sharp fall at the beginning of the COVID crisis in early 2020. But actually, since then, of course, there's a rebound as the vaccines become available. But actually, we aren't seeing a sort of collapse in consumer confidence overall. When you look at a rounded balance of measures. And in many countries like Japan or Britain, where we aren't actually seeing a collapse, I would say. And I think that's important because obviously, on the next slide, as you can see, inflation is a major concern all over the world. It's well ahead now of COVID and also in a week of record temperatures in much of Europe, fires breaking out, et cetera, well ahead, of course, of concern about climate change. And I think that's important to confirm. But when you look at our -- this is sort of informing much of our thinking in some ways about where the world may be going, the consumers really are concerned. I don't think we aren't yet in a place where I think recession is guaranteed in 2023. And I am with the central bankers that we work for, can see signs that inflation may be starting to cool off. But nevertheless, it's certainly an issue in terms of consumer spending power. It is affecting a minority of our clients' decision-making, and I'm happy to talk a little bit about that. But again, fascinating to see in France, many more people worried about climate. France and Italy climate change more concerning than COVID, and of course, the fact that COVID is also a massive issue still in Asia and particularly in China. And as you will see as we go through the results, while our Asia Pac business has bounced back after last year, that, that bounce back would have been even more pronounced if it wasn't for the effect of COVID in China. So pleased to announce our growth of 12.9% in the first half. The organic growth is 6.9%, so there are some currency effects. But it's also incredibly important and particularly in looking at this semester, this half of this year, to remember the COVID cliff edge that we've just gone through in this. We had a big boost in temporary, very specialized testing programs that we were able to take advantage of during 2020 and 2021 that gave a big boost to our revenues, and those have now stopped abruptly in H1 as we anticipated. I think this is, in some ways, a moment of truth for us, but I'm really pleased to say that if we look at the underlying business, net of those effects, the growth is 11%. And so I find that -- I think I find that and I hope you find that reassuring, that the COVID work was a great opportunity for us as a business like many other businesses to respond to the opportunities of the pandemic and the infrastructure that Ipsos has made us able to do that, but the underlying business is still growing strongly. And if we look at the performance by sector, you can see that we have got good growth in nearly all the sectors that we work for. So consumer packaged goods, CPG, back up 11%. Technology, media and telecoms clients, up 17%. The pharma industry, up 8%. Financial services up 19%. Retail, with the reopening of Shpock generally around the world, up 13%. And of course, we've gotten more -- we are showing you 23% growth, which is slightly -- we need to caveat this slightly, 23% growth in our public sector business if we discount the COVID effect of the special testing contracts in the Western governments that, of course, have stopped, which means that the overall figure, net-net is down 21% for the public sector in H1. If you take out the effects of this very particular effect of the COVID contract, the underlying government business is up 23%, because governments all over the world have to act, have to find out what citizens need, have to find out how effectively they're spending money. So we've got all of the services that we offer. Nearly all of them are in double-digit growth. And in terms of the sectors that we cover, as you can see, good growth across the spread of our portfolio. And part of our strategy is that we have this balanced portfolio that means that we are in a strong place if one part of that is to suffer like Automotive did during the pandemic, we will have other parts that can still grow. And combine that with our geographic footprint means that we think we're in a reasonable position for whatever that the second half will throw at us, but as importantly, what 2023 might throw at us. And I wanted to share with you, just to make some slightly more detailed examples of individual clients and examples of the work that we do, because I think it is a diverse portfolio of things that we have. But we believe that if we can run -- that we can run them profitably and effectively, we are able to realize extra opportunities. And whereas some of our major global competitors are doubling down on a few areas, our diversity in some ways for us is our strength. So we've got 11% growth for one of the world's largest beauty companies, working with them on what they're describing as the biggest innovation in suncare in 30 years. We've become their exclusive partner for all their innovation and makeup. But I think what's -- so those are strategic growth projects for them. But at the same time, they are now drawing on the work of our customer experience teams, looking at how the people selling the product and how their retailers feel about them. We are looking at how health care practitioners regard their products. We're looking at how people working for them feel. Because obviously, if you've got engaged employees, your business is likely to be more successful than if you don't. And our public affairs practices, which looks at social issues and working often for governments, but also for a number of other partners looking at shifts in how society is changing. So they're buying a wide range of services. And overall, we have 11% growth with them. So that's one example in the CPG area. And overall, the challenges that many of the CPG companies face in terms of inflation, sometimes pressure on consumer budgets, certainly raw material shortages, problems in their supply chain, actually mean that they need us more than ever to help them look at their portfolio to demonstrate to focus on the products that demonstrate value for money, perhaps rework their formula for their products so they can actually find cheaper ingredients or better ingredients that they can actually produce more easily, make sure that they're visible in store. So again, we've built tools to help them do that, build those strategic relationships with retailers and making sure that our advertising is working effectively in a changed environment. So in all these ways, we're able to help them respond to this changing environment. And generally, for us, as a business, we often find that uncertainty of which there is plenty this year, and I suspect in much of the 2020s, uncertainty actually drives demand for more accurate data and research to help these businesses respond and plan. So there's an example in CPG. In health care, of course, we're up 8%. And again, that growth is across a range of diverse services that we offer in the health care sector. So whether it's around new diagnostics and therapeutic studies on COVID-19, vaccine studies, the therapy monitors that we run, those are seeing growth. We're seeing growth in medical devices and diagnostics, a boom in in-vitro diagnostics; a boom in, of course, tech and med tech; and of course, also regulators then coming to us as well as pharma companies, wanting evidence to show what's working. Alongside all of that, we have the growth of added value services in this space. So advisory services, helping clients enter new markets. And then a key area for us, real-world evidence, noninterventional studies. I mean all of these things are on top of our conventional therapy monitors and studies of health care practitioners. So some good growth there. And this is a sector really where I've been surprised that some of the players in this market leaving this, like Kantar because actually, this is, I think, a growth area. The technology is moving on a pace. We have aging populations, we can see that generally developed countries see increased spending in this sector, and it's an area where we can see real opportunity. Another sector -- sorry, one example we've included here, just to give you a very specific example of a study. And again, it's quite diverse, this one won an award for the best patient-centric approach, also co-presented at the Healthcare Research Annual Meeting. This one is for Johnson & Johnson, but partnering with a charity called Obesity U.K. And this is looking at the stigma that's attached to obesity. So around 42% of the global population say they want to lose weight. But at the same time, people are faced with all sorts of discrimination and the sort of stigmatization of obesity, means that often people just want to hide away, not talk about the issue. So how do we help people overcome those barriers. And then, of course, what we're doing in this study with Johnson & Johnson, who, of course, do have products to help with this as well and services to help with this as well, is produce some findings that are informing government policy on how this might change. So some really specific and interesting research there and just addressing perhaps something that people don't always think about. In Public Affairs, this is an area our work for government for the public health care systems, for charities, for NGOs, for organizations like UNICEF and the United Nations. Again, this is the underlying performance, putting aside the very specific COVID testing programs ending this half year, up 23%. With the pandemic changing lots of dimensions in public services, but also health care, what exactly is stopping people accessing health care, massive pent-up demand in many countries with people who didn't go and see doctors during the pandemic because they were -- they knew they were busy with COVID. So you've got a backlog of diagnosis. So we're looking at that, how does COVID boosters work -- vaccine boosters work on immunosuppressed people. In India, looking at how people perceive some of the testing programs. And then across the world, programs around social issues, the government, the large financial regulators. So looking at financial inclusion in Lat Am. A fascinating study in India, where we are -- not only are we looking at water quality in the world's biggest country, but we're looking at perceptions of water quality, but we're actually linking that to tens of thousands of real-world samples of water quality. And the infrastructure that Ipsos has allows us to do is we are not a digital-only company, we can act and do linked physical data to perception data, to understand things. And so major programs for the Indian government. Looking at parenting in 42 different countries for the University of Zurich and the Jacobs Center, separately for UNICEF looking at child development in 80 countries. So there's a hugely diverse range of products and services that we're providing. And I think it's important to understand that -- and this is important when we look at an uncertain world going forward, because our business is not just about digital marketing of consumer goods or just about advertising, it covers a very wide waterfront. And that means that we are well placed for whatever happens in the global economy. My clicker doesn't go forward. The knowledge panel, this is a gold standard digital product that, again, bridges the offline world with the online world. So what this does is make sure that everybody in a country can be very rapidly and very accurately surveyed. So many of the panels that are provided for research and are used by many CPG companies, for example, are good enough. They are not, however, good enough to provide highly accurate figures on, for example, the percentage of people who have been vaccinated in a given country because there is an element of self selection. The knowledge panels, which we started off in the United States of over 60,000 members, actually has people recruited online, but also people who were not even online at all when they were first contacted. And there are still millions of people across Europe and America, who are not online with this methodology. When we find people who are not online, we connect them to the Internet, we equip them with a tablet to take part. And you then have a tool that major clients want to use, whether they are government or some of the world's biggest tech companies, interestingly. And we're rolling this methodology out now across the European Union. We will then look at other markets like India and Africa. Because this is gold standard in both the United States, Nature Magazine in the U.K., Professor Pat Sturgis have validated this independently as the highest quality online research that you can do. So that's the knowledge panel. And so I think that's a good spread of just a very short taster of some of the things that we're doing. I'm going to hand over to my colleague, Dan Levy, our CFO, just talk you through the actual financials, including Dan, our record-breaking first half profitability.

Thank you very much, Ben. Good afternoon, ladies and gentlemen. So I'm going to get into more details on the number. As Ben said, the H1 results show a very good level of activity despite all the uncertainties around the world and particularly, the war in Ukraine affecting Europe and despite the lockdowns in China. So we post today EUR 1.122 billion revenue, with a total growth in H1 of 12.9%, above which you have 6.9% organic growth. And if now you remove the effect of the COVID contract that Ben has just described before, then the underlying growth is 10.6%, which is obviously very good performance. That's for H1. In Q2, after having a very good first quarter, we have an 8.9% growth, of which 2.1% is organic. And again, when you remove from that the effect of COVID contract, then the underlying growth is up to 7.7%, which, given again the all the uncertainties in Europe and in China, is a very good performance. Furthermore, if we have been able to respond to rising inflation, in our pricing in front of our clients to protect our operating margin. So as Ben said, we have a record operating margin for H1 at 11.3%, which is going up from 11% last year at the same period. And finally, the company is in a very good shape in terms of financial situation with the leverage ratio of 0.4x EBITDA. So I'm turning now for to another slide, which is the breakdown by region. So we post, as you can see on the second line, a very good performance in the Americas with double-digit organic growth in both North and South America. In the U.S., our growth is driven by our activity with our TMT clients but also by the activity within our DIY platform, Ipsos.digital. This is actually quite encouraging because as you know, the U.S. is one of the most important priorities in our strategic plan that Ben is going to come back within a few minutes. Asia Pacific is performing well as well. That's the third line, 10% organic growth, and this is despite the lockdown in China. And finally, the EMEA zone is obviously affected by the war in Ukraine and by the end of the COVID contract, which mainly take place in EMEA. If you take out this COVID contract effect, we are still seeing a very solid organic growth of around 6% in EMEA and particularly in our important markets for Ipsos, which are the U.K. France and Italy as well. Turning now to the next slide, which shows our revenue by audience. Despite all the problems in supply chain disruptions, but also despite of inflation, the post-pandemic rebound that we have seen on consumers at the end of 2021 is still the case in 2022, with a 14% of organic growth in H1. This is mainly driven by Ipsos.digital but also, I think it reflects the fact that as Ben explained before, our CPG clients need to understand in this new world, which is a world of inflation, which is the world after the COVID, need to understand how consumer spending patterns are changing. And this raises the need for a true understanding of how consumption is evolving. As we said many times, uncertainties are driving the need for accurate and relevant information. Fourth line, doctors and patients. This activity is rising by 8% organic. Our clients and employees activity is growing by 9% organic. This, again, is following the reopening of the economy and all our clients in physical retail, on travel and hospitalities, for instance, have relaunched projects that they had put on hold during the pandemic. And finally, if you look at the Citizens activity, it is going down organically by 12%, but this is quite heavily affected by the end of the COVID contract in H1. If you remove this effect, again, you would have a very strong organic growth of 23% on the public sector activity. And again, I think this shows very clearly that the governments continue to face very important challenges on the impact of inflation on how a structural change in the society are operating, things like aging, things like economic digitalization. And all of this creates a very strong demand for true understanding of society and is good for Ipsos business. I'm now turning to the Slide #18, which is the new services. So all these new services include, as you might remember, for people who are following Ipsos regularly, data analysis using passive measurement and also social media. So that would be our activity within Synthesio. Second, our DIY platform, Ipsos.digital, I will come back to that within a few minutes. Big data analysis, which is the way we do integrate technologies to analyze very large amounts of data, which could be either structured or unstructured, and our advisory services for our clients. All these new services in all, overall grew by 12% this half organically, and the raise -- and they're up to now 21% of total Ipsos revenue. So maybe turning on next slide, a few words on Ipsos.digital, which is our DIY platform and which enables our clients to compute their own surveys to define their own targets and to reach very quickly and in the competitive price their own results. It could be within 1 or 2 days. Ipsos.digital is a great success. We keep on developing Ipsos.digital, both in terms of new solutions for our clients, but also geographically for the time being, 48 markets of Ipsos are covered by Ipsos.digital, and we have the intention to increase this number. We post a EUR 30 million revenue this half -- for first half 2022 and targeting EUR 65 million for full year on Ipsos.digital. We are targeting also more than EUR 100 million revenue for 2023. And we aim at having 12% of the group's revenue in 2025, which is the end of our strategic plan. I'm now going to comment the income statement. So I've largely commented the top line. So I'm not coming back to that. In terms of gross margin, the gross margin, which is basically revenue minus direct cost is increasing by 1.2 points at 65.9%. I think this reflects two things. First of all, our ability to pass on inflation on prices and to maintain our margins. But also it reflects a mix effect, which is basically the shift from offline to online method surveys that you can see actually on the next slide, if you turn to the next slide, you will see that online surveys are increasing from '22. So it's structurally increasing before the crisis, and it has accelerated during the crisis for obvious reasons. But so it's increasing from 62% last year to 63% this first half. And because of that and because of the direct cost on online are lower, gross margin on online are higher. In terms of profitability, the group's profitability improved by 30 basis points. So that's the operating margin line. So it grows from 11.0 % to 11.3% this year. And this reflects, obviously, good top line, good increase as well in gross margin, but also contained expenses. The payroll remains contained, despite the higher inflation context and even accounting for a resumption in our recruitment to cope with growth in activity. But it is important to say that even if you have a catch-up effect on recruitment, the payroll in terms of gross margin remains below the level of 2019. So payroll remains quite contained. We have also a catch-up in IT and technology spending as compared to 2021, because the spendings were constrained during the pandemic. And obviously, we travel more than in the pandemic. So that's explained also an increase in travel expenses. But again, the level of expense on travel is far below the level of 2019 by 45%. So again, this is quite contained. Commenting on now the finance cost, is down by nearly EUR 1 million. So that's explained basically by the good generation of cash but also by the renewal of the Schuldschein loan at the end of 2021. Not a lot of things to say about income tax. The effective tax rate is very close to last year. And at the end of the day, the net -- sorry, the adjusted net profit attributable to the group is increasing by more than EUR 15 million at EUR 98 million, so more than EUR 15 million compared to last year. I'm now going to 2 slides after that, which is the slide on change in operating margin. So this -- the aim of the part to explain the move in operating margins from 11% last year to 11.3% in this [indiscernible] 2022. So basically, you will have the big yellow bar down of 0.8%, which is the impact of the COVID contract. I was saying just before that the COVID contract has lower gross margin because of the collection cost, but it has also a higher operating margin because there is no so much payroll involved in this contract. And so when you remove these COVID contracts, it does improve your -- it has decreased, sorry, your operating margin by [indiscernible]. On the rest of the scope, which is basically the rest of our business, excluding COVID-19 contracts, there is an improvement of gross margin of 2 points for the reasons that I've already mentioned, our ability to pass through inflation but also the shift from offline to online. And on the other hand, as I just explained before, recruitment and the catch-up effect on IT spending led to a decrease in operating margin by respectively, 0.5% and 0.4%. There are other few effects that I'm not going to dwell on too much because they are very small acquisition. That's the effect of Karian and Box acquisition, free shares effect, which is an impact of the increase in the share price and hardly no FX rate effect. Commentating now the cash flow statement. So the gross operating cash flow amounted to EUR 172 million. So improving from EUR 150 million last year. You will see on the slide that we -- the working capital experiences, a negative change of EUR 22 million in relation with both a growing activity, but also to the fact that we have paid more bonus this year because of the very good performance last year in 2021. Next slide, which is the property, plant and equipment assets, which is basically IT investments, so IT and technology investment, that is up by EUR 9 million, which is clearly showing that we have already started the implementation of our 2025 strategic plan, which calls for significant increases in investment on our various platforms, Ipsos.digital, Infotools and Askia. And overall, and as a consequence of all of this, the free cash flow amounts to EUR 53 million compared to EUR 93 million last year. So if you just take a bit of a step back from that and try to understand the bridge between the 2 years, so we have EUR 40 million lower cash flow, which is mainly linked to IT investments and bonus payments and also the impact on working capital of the growing activity. And also at the next line, we spent EUR 3 million in acquisition for both We Check, which is a small company that we bought in Canada on Mystery Shopping. And we paid also an earn-out on Infotools. And we, as you can see, purchased also shares in our free -- in order to finance our free share program for EUR 17 million. As a consequence of all of it, of all of this, the cash in June 30, 2022 is EUR 338 million, which is an improvement of nearly EUR 40 million as compared to the end of 2021. So turning down to the balance sheet. I think it's fair to say that Ipsos is in a very good shape in terms of financial situation. The equity stands at EUR 1.440 billion , so an increase of EUR [50 million] compared to the end of last year. The net debt amounts to EUR 154 million, again, decreasing if you compare it to last year. All the financial ratios are improving. Gearing is 10.7%. And net leverage is 0.4x of EBITDA improving also from as compared to last year. And it's important to say also that at June 30, 2022, we have EUR 250 million of undrawn credit lines with maturities of over 1 year, which means that if you look at the next slide that we have, obviously, no problem to make our repayments -- debt repayments for this year and next year, which will amount in all to EUR 107 million. So thank you for your attention. And now over to Ben for the conclusion.

Thank you, Dan. So what's going to happen? Well, of course, if anybody on this call knows what President Putin is going to do to gas supplies, do let me know. I mean, I think uncertainty is, in many ways, the only certainty. That is something we reflect on all the time. We actually have a small business that works on futurology and scenarios for the future. But let's look at where we are. We've got a pretty challenging environment, and we have been very cognizant of that in our thinking and planning. We do have a strong order book going into the second half of the year. It's up 14%, about 8% organic. Because of all of that and our strong performance, we are expecting a minimum organic growth of 5%, so over 5%. And looking at our operating margins, we're expecting them to be comparable to last year. I think we could be more aggressive, but we don't know how inflation will play out. We don't know how the war in Ukraine will play out. We don't know what will happen to gas supplies in Europe. So overall, of course, we're working to our 2025 growth plan, which we presented at our Investor Day on the 14th of June, and that has 3 main strands. The first and absolutely fundamental one is a focus on some key geographies. When we look at where our industry is in terms of geography, 53% of the entire global expenditure on research is in the United States. Last year, only about 29% of our actual business was in the United States. We have a huge number of small competitors. We are growing very rapidly, but we can grow even faster. We also have a lot of opportunities in our established large markets, whether that's China, India or indeed in Europe, in countries like France and the U.K. and Germany, where despite being mature, we can still see very good growth. And then, of course, we have the rest of the world. So we will work on our plans for America. And of course, in terms of our services, we have a growing number of services that are being delivered through our Software-as-a-Service platform, Ipsos.digital. And we will continually put more services onto that. It's performing very well this year. A particular focus on tech and media clients, they're some of our biggest clients now. They weren't anywhere like that 10 years ago, but now they are. And it's great to see their confidence in us. I think, what did Google say? We use Ipsos because they can understand data in the way machines cannot, which was a nice way of describing our partnership with them. Health care, we've talked about, it's a huge area of opportunity for us. We're not divesting. We're focusing in on it. And similarly, government. We already believe that we work for more governments around the world than anybody else in the public sector, but we can see huge opportunities in the U.S. and across Europe as well as in Asia and Africa. And then finally, we are a business that is focusing -- a professional services company that focuses on people. One of the interesting things that we have found is that even when we offer people a pure DIY Software-as-a-Service, our clients appreciate service and advice from human beings. And so we are not just getting rid of anybody expensive on the payroll. We are keeping our great people as long as they're delivering. And we want to pair that great people with great technology. So we have allowed for a doubling in our CapEx to spend more on technology, that where we need to strengthen what our offering is and also more on data analytics. We currently have a set of work -- different work strands being set up as part of the operationalizing of this plan. So whether it's looking at data science, whether we are looking at how we need to develop our people, an automation of end-to-end tracking, which is a major area of international research, tracking opinions, tracking brands. Business-to-business is a huge area of opportunity, we believe. We've been working with senior -- surveying senior business people, for example, in some markets since the 1970s, but we need to be more systematic and so we will. We have a strand of work on new service adoption, covering 90 countries as we do. We need to ensure that the services, the new services that we're producing and that become more important and of course, build our profitability, are being rolled out effectively across our network. So we have a strand of activity on that. The immersive web or the Metaverse, our clients -- some of our clients like Apple, don't like calling it the Metaverse because it's too much like one of their competitors. So we call it the immersive web. But we're already holding meetings in the Metaverse. We're going to be running focus groups in the Metaverse. And for some of our clients, this is the next frontier of the Internet. So we want to look at how we will help them into that space and protect their brands. Clearly, we have strands of activity then on the United States, on government and the public sector, on health. But we also have a team looking at how we streamline and speed up our acquisitions process. Given the need to do go more and do more in acquisitions, we need to review how that works. We have a long funnel of potential acquisitions that we're in the process of talking to. And remember, Ipsos is a company that has done hundreds of acquisitions in the past, but we certainly are looking at that. And then finally, ESG. This is an area of interest to our clients because often, they are being judged on these characteristics and performance. And so we are helping them with what they need to do. That includes both in terms of how they should communicate about these issues, but also what consumers are willing to bear in terms of reformatting, paying more. And also, there's a whole stream of activity in what Ipsos itself is doing. Ipsos is becoming more diverse. Ipsos is focusing on helping disadvantaged communities around the world with our Ipsos Foundation. Ipsos, like many organizations, is reducing its carbon footprint. And so we have both an internal and an external strands on that. So those are the work strands that make up the operationalizing of the 2025 plan. And in terms of acquisitions, I think we are in a good place to accelerate. As we show on this slide, they are part of our DNA. We are a business that has grown through acquisition. I myself joined the company by selling my company MORI to Ipsos 17 years ago, during the phase when Ipsos was growing its global footprint. And it was very clear to me that we had to sell one of the national champions in Britain, MORI, to Ipsos, and they were our preferred partner because we could see that the market was consolidating in a way that have made it very difficult for us. But we have done hundreds of very large acquisitions, much larger, in fact, than the amount that we're planning to spend in each of the next 4 years, in a single year, Synovate with hundreds of millions. So I think we're ready to do it. We know how to integrate businesses. We know how to keep people. And the key point, I think, is we'll be doing 2 types of things. One is to obviously look where we need to, where we can grow faster in a particular geography or perhaps in a particular service line like public affairs or et cetera, but they will be acquisitions where we are not just going to go crazy and pay too much, where we can target things that add to our abilities in data analytics or advisory services, other areas where we can just bolt on a specialist to keep consolidating our market share. But importantly, culture matters, too. And so we are not going to buy businesses that do not want to work with us. We are not going to buy businesses that don't share our values, it is fundamental to extracting to making an integration and an acquisition work is making sure that the culture is right because otherwise, we will destroy value. And we've got a good experience of integrating businesses, most recently in 2018, KKR kindly sold as part of GfK at 0.5x revenue. We have successfully integrated that business. In fact, the knowledge panel that I talked to you earlier about comes from that successful integration. And this is the criteria that we will be using for some sensible acquisitions. So finally then, our financial targets going forward over the next 4 years, we are talking about averaging 5% to 7% organic growth. I think all the headwinds mean that some people might say that's not -- that's a bit cautious, given some of our recent performances. I think we know that you would probably rather that we underpromised and overdelivered rather than did it the other way around. Targeting 30% of our revenue on new services, which will help drive margin, particularly Ipsos.digital at 12% and targeting a profitability above 13%, we still retain the target of 15%. But again, we'll see what happens. And with our free cash flow of around EUR 900 million that we anticipate in this period, plus some increase in our gearing because at the moment, I think, if anything, it's too low, frankly, we're looking at acquisitions of EUR 100 million to EUR 200 million a year, some more CapEx to allow it to make sure that our technology is fit for purpose and is giving us the advantages in terms of productivity and speed that we can see already helping our margin. Dividends at about 25% to 30% of the adjusted earnings per share. And by popular request, some share buybacks. So this is both for the employee free shares because we need to motivate our people and share with our key people, some of the rewards of growth. But also, we've identified up to EUR 185 million in a new buyback program, about up to 2% of capital, again, as one way along with the dividends of rewarding shareholders. So that, to 100 miles an hour, is the strength and diversity of Ipsos. We are confident about the future as we go into a pretty unsettled period in the global economy. And I'm very happy to take any questions, as is my colleague, Dan.

[Operator Instructions] We have no questions coming through, so I'll hand back to you.

Thank you very much. Well, I hope that was useful. It's slightly strange talking into a void. But if we can help, we're always available at any time if you have any questions. Thank you so much.

Thank you.

Thank you. Thank you for joining today's call. You may now disconnect.