Ipsos SA (IPS) Earnings Call Transcript & Summary

Good morning, and welcome to our first quarter results for 2025 at Ipsos. And what can one say about the world in 2025. I think just before we look at those numbers from our company, it's worth reflecting on just what is going on because part of what Ipsos' role is, is obviously to help our clients, business, government, the media understand public opinion, citizen opinion and consumer opinion all over the world. You can see just by looking at the stock markets, the level of volatility that we're now seeing. There on this chart, indexed to start at a single point at the beginning of the year, you can see how the FTSE, CAC 40 and NASDAQ have diverged and also fluctuated dramatically in response to announcements from Washington about the tariffs. Even before those tariffs were announced, we could see that there were heightened levels of anxiety among consumers, both in Mexico, Canada, America, across Europe, the Middle East and Africa and also in China, when the majority of people in virtually every country we have surveyed expressing anxiety about what might happen. It's interesting, of course, to see that in terms of personal impacts on the left on this chart, the Mexicans and Canadians, and I'll come back to the Canadians in a second, are most worried, but half of the population of EMEA and, interestingly, slightly fewer Chinese citizens worried about the impacts of American tariffs before they were announced. We've also seen, of course, that people have reacted to that by changing their views of America and becoming more positive towards China. So over the last 10 years, we tracked the reputation of a wide range of countries for a number of our clients. And you can see that the U.K. and France have been broadly stable with around 7 out of 10 people globally saying that they're positive towards the impact those countries have on world affairs. But you can see very dramatically the impact of recent announcements in terms of what has happened to the United States reputation. And for the first time in this series, we've seen that more people around the world now say that China has a positive influence on world affairs than does the United States. And there's Russia before and after its invasion of Ukraine. But interestingly, even Russia has seen some improvement recently. So the tectonic plates are moving, and I think that's fundamental. And if you dig into that data, you can see just how dramatic the changes have been in terms of how the Canadians at the bottom of that chart, but also many Western allies of the United States have been in terms of their reactions or their negative reaction to some of the recent announcements around defense, alliances and indeed tariffs. With all of that going on, we have seen overall growth at Ipsos of 2% in the first 3 months of the year. The organic growth is slightly negative, reflecting the back end of last year. And of course, remember that this year, as we announced in February with our -- when we reported on 2024 is going to have a profile of revenue recognition that is more similar to what we saw in our 2023 numbers than last year. So we expect to see a gradual strengthening through the year. And in fact, the order book confirms that. Those numbers there of 2% growth are made up, of course, of that negative 1.8% organic, a 2.9% increase overall because of scope effects and positive currency effects from the dollar before in Q1, the tariffs were announced. The scope effect is, of course, driven partly and mainly by the acquisition of infas in our numbers. So overall, these numbers are in line with our expectations, and we can see visibility -- a positive visibility for the rest of the year. Other things going on at Ipsos. I think the key thing, of course, is one of the largest acquisitions that we've done in the last few years, which is our exclusive negotiations we've now begun to acquire BVA. That consolidates our position in France as the leading researcher in the country. It strengthens our position in the U.K. and also in Italy, particularly in customer experience research in mystery shopping and in Public Affairs. Doxa in Italy is a great brand, BVA in France. We also, of course, get PRS IN VIVO, which is a leading global business in Pack Testing, which is very important for our innovation business. And they bring to us also expertise in luxury, which is a key area, consumer goods and also behavioral sciences. So overall, we think that this is something that we can work very, very well with. It brings revenue of around EUR 160 million. And what we plan to do over the next 18 to 24 months, I mean, it's already making a profit, but we will work with the teams there to mutualize our costs and over the next 18 to 24 months, get their margins up to Ipsos levels. So a positive development, we think, and very good to see that happening. I'll now hand over to Dan Levy to talk through a little bit more of the detail behind the headline numbers. Dan?

Thank you very much, Ben. So the first quarter's results show a performance, which is in line with our expectation. As we said a few months ago, the profile of 2025 was very much going to be lower growth at the beginning of the year and then improvement during the course of the year, both because of the comparative effect and particularly in EMEA and in Asia, where we have very tough comparative effect in Q1 2024 and as much as the measure taken by the new management in the United States bear fruits. So if we look at the breakdown by region, EMEA show a total growth of more than 6%, which is mainly driven by the integration of infas. Organic growth is flat in EMEA, which reflects good results in Continental Europe, but also on the other hand, a sharp decline in our Public Affairs business, both in France and in the United Kingdom, mainly driven by the electoral cycle. And obviously, as I said before, because of the comparative effect, we grew by nearly 10% in Q1 2024 in EMEA. We are down in Americas by 1.7%, which is actually encouraging given the performance of 2024. The new management in the U.S. is now fully in place and fully operational. Other service lines than Public Affairs are performing better actually with an overall organic growth of more than 2%, which is mainly supported by the demand from our consumer goods clients. However, public affairs is still in sharp decline, affected obviously by the uncertain and quite unpredictable political context in the U.S. And finally, the region Asia Pacific is down, impacted by the lack of recovery in China and also by a slowdown in activity with certain major clients, international clients and government in Asia as well as, again, a strong base effect comparison with Q1 2024. If we now turn to the performance by audience, our service lines dedicated to consumers, clients and employees are stable and reflect a sustained demand from CPG client globally. Again, this has to be compared with a very strong performance in Q1 2024. We have strong performance in our service line focused on marketing spend optimization, on market positioning and on advertising campaigns measurement. Our Citizens business is down by 14%, so a sharp decline, mainly because of a wait-and-see attitude by government in the context of global and local political instability, particularly in the U.S. and also driven by electoral cycle, both in France and in the United Kingdom. In France and in the U.K., we start seeing resuming discussions with departments. And so we think that the situation will be improving within the next few months. The doctors and patients audience is performing well in Q1, organic growth by more than 5%, as you can see on the chart. The demand from the big pharma seems to be picking up in Q1. We believe that now the post-COVID restructuring are behind us, and there is growing demand on innovations, on oncology, on very rare disease, on anti-obesity treatment and GLP-1 molecules. That said, the recent decisions from the U.S. administration to do some layoffs at the FDA plus the price policy for drugs from the U.S. administration might impact the sector. And so we remain cautious about the outlook for the health care business in 2025. And finally, we see a very good performance from our DIY platform, Ipsos.Digital, which is growing in Q1 by more than 30% organically, and we target EUR 140 million in 2025. So now over to Ben for more business highlights.

So yes, briefly, I wanted to take you through what we're doing on the deployment of AI, which is now becoming a routine tool for a very large majority of our people. 3/4 of our people at Ipsos are already AI-certified, and they've gone through a detailed training, looking at the options for different platforms. Our different businesses now have their own prompt libraries and knowledge companion, which allows them to mine our internal data in a safe, secure environment. And overall, 6 out of 10 people are using it all the time. And that's hugely important in driving both productivity, but most importantly, more speed in delivery and the ability, of course, to do things that were not possible before the arrival of these large language models. And one example of that is the application of synthetic data. This, of course, is something that we have always done in the industry and, at Ipsos, the imputation for missing values but now, of course, we can do this with much more accuracy and much more speed. So you're augmenting data with missing respondents. Certain groups might be in short supply in a sample and you may be able to impute what they would have said, merging different samples with data fusion. And then, of course, the new things that AI is enabling us to do, the creation of synthetic respondents. So based on, of course, large volumes of data. So things like our PersonaBots, where you're able to convert -- we're able to create a synthetic individual for you to ask questions of about data and, of course, the creation of synthetic panels, where they're based, of course, on large volumes of data and our ability as one of the leading players in this industry to marshal huge volumes of historic data that we own is very, very important in this context. But, of course, they offer the ability, again, to dramatically increase speed. So we're working with Stanford University there to really boost our expertise in this area, building on their own machine learning experience. And we can already see that in some areas, we can get a 98% match between the synthetic data that we are testing against the real-world evidence. And I think that's -- it's very, very promising. At the same time, we are very -- we want to be very sensible and cautious about how we apply it in the real world. And we're not putting anything out that would not have the same levels of quality and reassurance that we would apply to offline data or data connected from real consumers. So important development and one that we intend to continue investing in and focusing on. And just to give you an example of how that might work. This is a real-life example from the U.K. from Motability, which is a very large provider of vehicles to people with disabilities. We run there a community of 7,000 customers of that organization. And we understand from that, of course, a lot about their demographics, their underlying attitudes and their needs. What we've done here is create a pilot with 50 synthetic respondents, AI twins of real people, which we can then assess communications with using behavioral science to understand in this example, how people are reacting to the arrival of electric vehicles and what the challenges are for disabled people, in particular in terms of electric vehicle adoption. And this takes down the need to spend sometimes weeks on research in the past down to literally 1 or 2 days. So just one example. Another, of course, is the work that we've been doing with our clients at L'Oréal. Here, we're using AI to understand billions and billions of tweets, blogs and posts with our signals Gen AI web listening solution to very quickly mine that data to understand what is driving concern or interest in particular products. And as L'Oréal themselves put it at their Innovation Day and the -- our industry's -- one of our industry's largest conferences, the SMR conference last year this actually would have saved them 1 year in terms of their understanding of mental health and its relationship to beauty products and product development. So just an example of the speed that AI now gives us to do things that will literally virtually not possible beforehand. And it's very interesting to see people acknowledging the power of some of the tools that we've now deployed. And of course, over the last year, we've rolled out at least 12 of these new services. And another one that I can tell you about today is the launch of our customer experience, PersonaBot. We've already produced these in our pharma business, and you've seen some positive results there. But here, you can talk to, again, an AI model, which brings to life different types of customers so they can understand what they need very, very quickly, brainstorm and test solutions literally in real time using the Ipsos Facto Gen AI platform. So we will continue to roll out PersonaBot for our clients to use, but also, of course, for our own people to use and interrogating data and speeding up the research process generally. And so it's great to see those being deployed across the company. And then, of course, finally, we're not just working on AI. We're also continually developing new services and solutions. And when I thought it wasn't worth talking about today is the Influencers Impact Assessment. Now as you will know, in marketing terms, influencers themselves are now becoming a vital part of how our clients go to market rather than communicating directly using influencers. But of course, which influencers are most relevant and most effective for which brands and on which channels. This toll allows our clients to understand that. It uses advanced analytics to understand how their influencers that they're paying are performing compared to competitor influencers. We can see the ones that are worth spending money on by looking at the engagement levels, by looking at the brand and the closeness to our clients' brands. We've launched this in the Middle East. We will then roll it out globally. So lots and lots of activity on AI and continual innovation. And of course, that's why one of the reasons why we are regularly chosen by our clients as the most innovative full-service research agency in the world. So with the world in an uncertain place, what can we see? What's the outlook for the rest of 2025. And sitting here in mid-April, we are saying that we can see organic growth continues to be above 2024 in terms of what we can say for the year as a whole. And we can also say that we hold our guidance on our operating margins around 13% for our constant scope. Our clients are, I think, Arthur at Publicis says, and I think we can say the same thing, clients are being measured in how they're reacting to a very uncertain environment. And we know that research at times like this is, if anything, even more important. We are seeing record levels of attendance by clients at our various events because, of course, in an uncertain environment, you need to understand what's going on, and any piece of information becomes important. And so we are aiming to provide that regularly for our clients. Do look at our -- understand the -- to -- Know the New America series that we've now produced to really help people all over the world understand what's going on inside the United States. So we will talk to you again at our AGM on the 21st of May. We will have our half yearly results in July, and we will update you later this year on our overall longer-term plans. But thank you very much for listening and very happy now to take any questions.

[Operator Instructions] This question comes from Emmanuel Matot of ODDO.

I have 4 questions. First, historically, Ipsos benefited from a context of uncertainties, except when those uncertainties were too severe. That's your view of the current uncertainties for your business. Second, one of your main competitors was mentioning end of March, some signs of slowdown from CPG customers, is that also something you are seeing at Ipsos? Third, do you still expect a recovery in the U.S. in H2 after several measures you have been taking for now almost a year? And my last question, you did very well to protect your EBIT margin in the last 2 years despite lower revenues than expected. Do you think you can still do the same this year in case you will not have, I will say, an organic sales growth? Are you ready to react quickly if the macro environment is worsening in the coming months?

Thank you, Emmanuel. So in terms of the situation and the extent to which it's a benefit or a drag, I think, again, there is so much uncertainty now that it's difficult to say. Are we at the beginning of something that a recession in the United States. We literally, I don't think anybody fundamentally knows, we can certainly see heightened interest in some of our services and products at this time, but it's, to be honest, too soon to tell. But what we're not seeing is any dramatic slowdown in CPG or anything like that. We are seeing, as I say, a sort of measured pace, I think, by clients. Clients are waiting to see how the tariffs will play out. What will happen at the end of the 90-day period, the pause that was rapidly inserted after the tariffs were announced. Again, we don't know. In the U.S., I think we're on course to the recovery that we are expecting in H2. But again, the U.S. is the epicenter of uncertainty. And in terms of the protection of margin, that is something that we are very, very aware of. We always react rapidly to any signs in the business of a slowdown, and we are confident that we will be able to protect our margins regardless of the impact on revenue. And you saw that. You actually saw margin improvement in 2020. And I'm not expecting at the moment this to be anything like 2020 in terms of revenue. But just as an example, and as you acknowledge, you saw that in 2024 and 2023. Dan, I don't know if you want to add anything to that?

Nothing.

The next question is from Conor O'Shea of Kepler.

Three questions from me. Firstly, just in terms of the guidance and the confidence on that as things stand in the external environment at the moment. Can you give us a sense maybe where the order book is as a percentage of budgeted revenues for '25 versus the same time last year. Secondly, just in terms of the -- your expectations by activity sounds like, from your comments Dan, that the good performance in the pharma activity in the first quarter might tail off a little bit particularly in the U.S. from the -- after the policy announcements and so on. So are you expecting -- which of the activities would you expect to improve sequentially to compensate for that and to generate overall better growth? Would you expect the declines in the Citizens business to have peaked in Q1, given your comments on France and the U.K., discussions reopening or Consumer to do better? Or what's your expectation by activity at this stage? And then the last question, if you can give us a sense, maybe for Dan, what the FX translation impact could be full year, an estimate of that if rates remain unchanged from the current levels? That would be very helpful.

Okay. So thanks, Conor. The order book is in line with where we would expect to be for our guidance for the year. It's positive. We are -- so there is -- that's why we're holding to our guidance to be quite honest, we can see through. We have about 3 or 4 months visibility, and that's positive. In terms of the different sectors, pharma is picking up, but Dan has already talked about possible headwinds from restructuring of the FDA. But what we can also see is that businesses like our ad testing business and, obviously, the advertising industry has turned slightly negative, but we're a tiny part of expenditure there. If you want to know how your advertising spend is going, then you need things like our Creative Excellence solutions. Those continue to perform very, very well, including in the United States as they did last year. And on Public Affairs, I think 1 key feature of that, a structural feature of that is that one of our largest businesses in that space is in the U.K., where we are the #1 leader by some margin. And remember that revenue dropped off a cliff in the summer of 2024 in that business as a natural result of the pause during the pre-election period. And then, of course, a brand-new government trying to work out what it wanted to do the following month. And that means that those 2 months virtually of very, very little revenue indeed in that business in the U.K. last year, where at the moment, we are seeing good numbers. And so again, that should mechanically help our Public Affairs business. We're also seeing now in France, as the situation potentially stabilizes some return and we have a new management team in the U.S. business who are very energetic looking for all sorts of opportunities outside the federal government, for example, with the states. So again, we should see improvement in our Public Affairs business during the year.

On FX, actually, we obviously don't do forecast about FX because usually, it's just impossible and the best model that you can have about that is basically a random walk. But it's even more true in this environment, obviously. It's true that we have seen in Q1 a positive FX effect into the dollar because the dollar appreciated in Q1 before the announcement about the trade. Obviously, since then, the dollar has depreciated, and you can imagine that if it continues, obviously, that will have a negative impact on FX on our top line. This is obviously not -- this is something that we can all forecast. The only point I would make to finish on that is that, obviously, the impact on the margin at the end of the day is very limited because most of our costs are in local currencies. And so the movement that you can see of -- on the foreign FX on the top line, obviously, is not the case on the bottom line.

Can I just have 1 follow up, Ben, just on your comments on public sector. Was there any sense in the Citizens activity in Q1 was the month of March, noticeably worse than the average for Q1. And also in your comments on the U.K., I understand the comp effect, which should help. But I think the U.K. government is also looking for another, I don't know, EUR 40 billion of savings to reduce the deficit. Are any of your activities in the kind of in jeopardy because of that? Or are they targeted at other aspects of spend?

I think there is -- obviously, there's always uncertainty. But what I would say about our business and what we do for governments is that a key part of it is helping them understand the return on investment of the money that they spend. And as the British government part of our growth is reflected the British government's investment in research, which is considerable. And what happened interestingly in the period from 2010 when we had, of course, the David Cameron government with massive austerity program, quite different than what we are currently having was that, yes, of course, to start with, there were a reduction in spend. But then once they started to understand and had clarity about what they were trying to do, spend actually rose because they need to use the tools that we provide and particularly our evaluation business, which is not about doing opinion polls, but it's about understanding what would happen if we built a new bridge in this place. And Britain, of course, is desperate for growth like many countries, but the British government, in particular, talks about nothing else. To understand the impact of different investments that they might make in a steelworks, in a road network, in a rail network, one of the things that they do is use us to assess the likely economic impact, and it's a key part of our business. And Kelly Beaver, the leader of our U.K. business was hired over a decade ago from a consultant precisely because of her experience in that space. So I think, there is uncertainty and the government is being blown around by global events like most governments. But we can see -- we're feeling reasonably positive about demand for some of these key services.

Very clear. And so specifically for the Q1 March, the decline in that...

To be honest, we're not really looking at reporting on monthly figures for the many different parts of the business. And again, there's nothing there to worry me, shall I say?

The next question is from Louise Wiseur of UBS.

I have got 3 questions, please. Just going back to your Citizens part of the business where it was down 14% in the quarter, like how much of the drop do you think was linked to the kind of like U.S. government cost-cutting program? And how much to the U.K. and France where you actually expect an improvement in the commitment? The second question is with regards to the U.S. new management. So obviously, it's been in place since May 2024. So almost a year now. Any update that you can give on the key takeaways from the management and kind of like the actions that the management has been taken in order to improve the business? And then the last one, just around AI, any updates you can give around the competitive environment? Have you seen maybe a change or pick up in terms of investments from your competitors or in terms of the solutions that they've been putting out there?

Okay. So on the Citizens, the large part of that decline is driven by the U.S. And actually, some of it is a comparative effect from before we got new management into the U.S. business. And so it's some of these major contracts that they lost last year that are now showing up in the revenue of this year if you see what I mean, in the comparison. So no, I don't -- I mean, I think we are confident that the new management team knows what they're doing. Our U.S. actual business for the federal government is actually smaller than our business for the U.K. government, for example. So there is some risk there, but I think most of what we're seeing in those numbers is actually things that have happened in the past showing up in the revenue rather than any new issues. And we are, again, cautiously optimistic about the new leadership team in the Public Affairs business in the U.S., really focusing in on all of the demand to understand what's going on in time inside the U.S. and how U.S. voters, in particular, are reacting. But also, of course, we can see governments around the world needing to spend money, wanting to drive growth and protect citizens in an uncertain environment. And again, we think that means that one could be positive. On the U.S. management, they have been meticulous and we've just spent the best of this week here in Paris with our U.S. management team going through their plans. And I think it's fair to say that we have a more detailed assessment of the situation of the U.S. market as a whole and, importantly, of our opportunities and what we're focusing on than I have seen inside this business for a very long time. So again, uncertain environment, which means caution, but I am confident in what the team are trying to do, and there are some real opportunities there for us in the United States. One challenge, in fact, because of the number of opportunities is choosing exactly where to invest and what to focus on, but we will do that. And on AI, I mean, every single business talks about AI these days. We are just -- and there are lots of different products. I think the key point, of course, is to be absolutely systematic. And we've moved from -- and this is -- we're using a service Ipsos Facto that we built that didn't exist 2 years ago. But of course, what we're saying is that -- and what we can -- what I can say is that we need to be absolutely disciplined. I mean it's fine to have to talk about exciting new announcements and new tools important, and they're important and attractive to clients. But fundamentally, in terms of what's going on is for professional services like Ipsos, I think, is making sure that you systematically in a disciplined way, look at your production processes and look at each stage of the production process and work out where you can apply AI to save time, to enhance quality and to improve, of course, the value that we're able to provide to clients. And that's where I can see we're now starting to really, really focus in on. There are some parts of the process, in terms of developing questionnaires or developing reports, that we can see literally things that would have taken days and sometimes weeks being reduced to hours and minutes. And so that's what we're going to focus on. They need to be robust, they need to be widely adopted, and that's what we will be doing in the coming months and years.

And sorry, just on -- versus your competitors, like do you -- have you seen maybe them kind of like picking up in terms of their solutions that they provide? My feeling was that you were slightly ahead, but...

I think, there's -- I mean, I think, we used to believe that we are in the lead in terms of adoption and our clients tell us that. But there are many -- and this is -- as you know, from studying this market, there are literally thousands of smaller competitors, all offering individual solutions. We are not seeing any sort of change in our win rate or anything like that as a result of AI. We -- or 1 competitor, 1 individual competitor stealing share because they've got a new AI tool, we simply aren't seeing that, but it is a very competitive marketplace. Clients are always interested in better value for money. That's a traditional part of this industry. So I think we're -- one of my internal mottos is only the paranoid survive. But we just want to be very, very focused in being disciplined in getting those productivity gains to our shareholders, to our customers as quickly as possible, but in a disciplined manner. And I'm not sort of jumping around every time somebody else says, they've got a new AI tool.

The next question is from Anna Patrice of Berenberg.

A couple of questions from my side. First, if you could elaborate more on the possible BVA acquisition, when you expect it to be closed? Why the timing right now? Why the owners of the company want to exit? How do you think you can improve stability? And how do you think you can benefit from this acquisition? And obviously, how much do you think we'll be paying for it if the management or the founders of the companies are going to stay there or not? That's on the acquisition side. On the current trading because you do have visibility of 3 to 4 months, and you said that the order book is encouraging. So if we look at the Q2 trends, obviously, ahead of the Q1, you have flagged that there will be high comparison basis that the U.S. will be improving a bit more in the second half, so what would you say about the Q2? There is still a bit of high comparison basis because Q2 last year was relatively good, depending where especially in Europe, not everywhere. So would you expect a small decline again in a like-for-like? Or do you think you'll be returning already to growth in Q2 '25?

Okay. So on BVA, I mean, there's some great nuggets, golden nuggets inside that business and it's a business with a culture that is complementary to Ipsos. It's -- in some ways, it's similar to the GfK acquisition that we successfully did in 2018 where we took part of GfK. There's some great people there. We bought over a 100 companies in our history. And in fact, we've done, I think, 15, 16 acquisitions in the last 1 year or 2, just at Ipsos recently. So we know what to do. We know that we need to integrate people. We need to get the teams working together. The benefits for us are, of course, first of all, greater scale and the ability to mutualize cost over a greater scale. We don't need 2 French finance directors when there's only 1 French business rather than 2 separate businesses, as just 1 example. But the other thing, I think, is some of their key strengths. So their PRS IN VIVO business is one that we've long been interested in, which is one of the world leaders in Pack Testing. It's a very specific discipline and it's something that we can add into our portfolio of services for our clients very effectively. And whereas, of course, BVA is only in France, Italy and Britain in their business, we can now roll this out across our network of 90 countries. So that's hugely attractive. But there's also some great teams working in government in areas like mobility, again, which fits very nicely with our business in luxury where they can strengthen our nascent offering in that space. So overall, we think it's a win-win. I think for them, it gives them certainty. The reason my old company, MORI, joined Ipsos in 2005 as a British business with a few global entities attached to it was simply that we could see that we need to join a strong global champion like Ipsos in order to reach our potential. And to be honest, I think that's exactly the same with BVA. So we know how to do this. We know how to make it work. We've done many similar acquisitions in the past. And we can see a clear path to improve margin for that business, but also actually for BVA people listening, a whole range of opportunities across the network. Q2 guidance, I think it's just too early in Q2 to provide -- start providing guidance on a specific quarter. Dan, I don't know if you want to add to that.

Well, I think, we stick to what we explained before, which is that the order book at the end of March for the rest of the year is encouraging. The order book that we see at the end of March is completely consistent as a share of revenue with what we see in previous year in terms of percentage of acquisition of the revenue. So we are comfortable with the guidance as is. Obviously, we also know that, as we said, that the shape of the year was going to be lower in Q1 and then improvement during the course of the year. But given the level of uncertainty that we have on the market, it's difficult to say more.

Okay. And can I just follow up on the IN VIVO because my understanding was that there was acquisition in the U.S., so you have to combine PRS IN VIVO, but then there were some divestments in the U.S. following the bankruptcy, right, or before the bankruptcy of BVA, so what exactly is left on this segment?

Okay. There's another business called Behaviorally, which is a digital-only product testing business. That's now -- so their business effectively split because the U.S. part became Behaviorally and the rest became PRS IN VIVO. What was left is PRS IN VIVO at the time of their restructuring during the pandemic, of course. So there is that competitor. Our geographic footprint, our resources are without being disparaging of any competitor, obviously much, much greater. And so we're quite comfortable with the competitive position. And as I say, we intend to roll out our PRS IN VIVO solutions once we've completed the acquisition, which I think you asked about, which will probably be late June because of the competition rules. We are comfortable about that.

Okay. And the management of the same...

Yes, so we've -- I mean one of the things that we know is that these are all including our business, they're all people businesses. And so we are already -- we've made clear arrangements for the founders of BVA to stay involved and stay committed for years after the transaction completes. And of course, the key thing in any deal like this is to ensure that you keep the great people. And so again, we're very experienced in doing that. We want to show people there is a positive. For all their senior people, there are great opportunities and roles and, in fact, on a bigger geographic footprint. And we have so many stories that we can show and examples of other acquisitions that we can introduce them to. People like I&O in the Netherlands, where we're now #1 in the Netherlands and the great business joining us and finding a home at Ipsos. And in the research community, one of the things Ipsos is known as is the home of researchers. We remain the global leader that is run by researchers rather than accountants or anybody else. And so in terms of being an owner for BVA, I think they're in the best possible hands. And I think that's important for the management. And we're extremely conscious of that in terms of how we approach integrations.

Okay. And maybe a last question on the BVA. So the company filed for insolvency back in 2020, but it seems that back at the time Ipsos was not interested in acquiring the company. And it seems that the management has actually fought quite a bit to get the control of the company, so why Ipsos is now interested and why the management wants now to sell the BVA?

This was at the time in the context of the global pandemic and what happened with BVA at that time. Now things have changed in terms of growth, particularly. This is a growing company. This is a great brand, so we do believe about the brand BVA in France. The brand in Italy, Doxa is extremely strong as well. And the Pack Testing work that they do is world-class and so we do see a commercial synergies about that. And between that time and now, the company was actually quite successful over the last few years. So I think that's the right moment to do it.

The other thing I'd say for the management, this offers the opportunity to actually address any investment needs that they have because we've probably got a -- we're a bigger company. So we have more capacity to help them grow. We offer them the opportunity to go into more markets, and we offer their people opportunities across our network. So I think for all those reasons, to be quite honest, they're exactly the same as when my old management team at MORI made the decision to choose a partner to globalize with and to become part of the Ipsos network. For us at the time, choosing Ipsos was a no-brainer. And I hope that's the same -- been the same for the BVA management.

The next question is from Marie-Line Fort of Bernstein.

Thank you for the presentation and to have answered to a lot of questions. My last question is about China, and we are talking about start of recovery. Are you seeing any signs of improvement there? Any comments on the trend that you're looking on that in China?

China so far, I mean, before the trade issue and story, China has -- is more a story about macroeconomic context. Obviously, we are #1 in China. We have a very successful team in China. We have over-performed the market in 2022 and 2023. We don't have the numbers for 2024, but we do believe that we have over-performed the market, but the market is shrinking because of the macroeconomic context. And I think before the story of the trade tariff, there were structural issues with the Chinese economy, obviously, high unemployment with young people, real issues about the real estate sector, which have some wealth effect on consumption as well. There are questions about consumption, particularly by the middle class as well and whether the Chinese government would or not do some fiscal policy to reinforce growth. So I think there are structural issues in China, which explains basically the performance that we have in China, despite the fact that we have a very strong team. Now the question is, will the Chinese government implements the fiscal policy, which they have been speaking of for a lot of time, but they have not really done it so far. And I think everything now is new with the trade tariff fight with the U.S. So for the time being, we don't see significant improvement in China coming within the next few months, I think.

Having said that, I mean, I spent a week in Shanghai with the teams there recently. And I think they are engaged in hand-to-hand combat on a daily basis to grow that business, and they have -- they are adapting their strategies to the market that they find themselves in, which is very competitive. There are -- interestingly, of course, because China's trade is going to grow outside the United States, there are all sorts of demands from manufacturers in China about understanding new markets, and that's where Ipsos -- being part of Ipsos for our Chinese business is hugely important because there are many businesses that now can see opportunities. I was just talking to our country manager there earlier this week. And of course, he's saying, actually, some people can see opportunities, as you've seen in the data on consumer attitudes to China. Globally, they're becoming more positive. Allies are questioning supply chains involving the United States simply because of what is happening. And so China is perhaps repositioning itself. And there may be some opportunities, but I would reiterate Dan's very sensible caution. But at the same time, I have complete confidence in our team to take advantage of any opportunities that come their way. And possibly, President Xi will decide that now is the time for some really significant stimulus, but we will see.

The next question is a follow-up from Conor O'Shea of Kepler.

Just one follow-up, Ben, on your comments on AI. You mentioned using synthetic data and synthetic panels and so on to reinforce insights and so on. Does this development, in general, increase the risk of new entrants? Or do you need sort of historical datasets that you guys have on surveys and so on to be able to develop such synthetic data and panels?

I think, the more -- basically, as you've seen in the development of the AI industry generally, there are huge costs involved in hoovering up as much information as possible, and that's been a feature of the AI industry in the last 18 months or so. So when it comes to research, being a company in 90 countries, we have a 50-year -- now we're 50 in October, with huge amounts of historic data, which is proprietary, is a massive advantage. There are datasets that are available publicly, open source data, but we have access to all of those and, of course, vast amounts of our own proprietary internal data. And I think those things do present an advantage as well as the network effect that a company like Ipsos would have compared to a smaller new entrant. Remember, there are always new entrants in this industry. One of the features of this industry is new arrivals saying that they're going to completely disrupt and destroy the major companies. That's basically the natural state of affairs in the market. Research industry has been like that for our entire 50-year history, to be quite honest. So -- but the -- having the data to train the models on, I think, is hugely important and that is something that gives me real confidence in the opportunities that we can see. And we're already building synthetic data and AI into some of our solutions and things like advertising, testing. We can tell you without speaking to anybody how an ad is likely to perform based on all of the tens of thousands of previous tests that we've done on other ads as just one example or looking at idea, innovation ideas. So I think having the data does matter, and that's something that, of course, we're very conscious of in terms of how we use it, the protocols around it and above all, providing people with security, which is one of our #1 priorities.

We have a follow-up question from Louise Wiseur of UBS.

Just going back to the BVA family. You mentioned the revenue. What is the current margin and how margin dilutive it would be on the group?

Okay. So we don't communicate on the current margin, but what is clear is that the current margin is significantly lower than the average of Ipsos. We have a very good track record. We have integrated more than 100 companies in the story of Ipsos over the last 50 years. So we know exactly what to do to restore the profitability, which is going to happen within the next 18 to 24 months. There will be different types of effect. Obviously, there will be commercial synergies particularly on the PRS IN VIVO, which again, a world-class capability that we can deploy to all the broadness of Ipsos clients, so that's a strong effect. Then obviously, there will be cost synergies about support function, infrastructure, rents, operations, et cetera. And we are also going to be, to an extent, rationalizing the structure. There are a lot of different legal entities that -- so there's a collection of things that we can do to restore profitability, and this is going to be happening within the next 18 to 24 months, to become -- to come back to the average of the group.

And what would be the impact then for this year on your margin...

In 2025, I mean, if you make the assumption of an integration that would be probably in June or July, depending on the competition decision -- competition authority decision, it would be around 30 to 40 basis points down for 2025.

The final question, gentlemen, is from Anna Patrice of Berenberg.

Yes. If we can go back, please, to APAC region. My understanding was that in Q1 -- sorry, in Q4, the slowdown was also driven by India. And overall, last year, the APAC region was quite volatile in terms of the like-for-like growth. So what's going on in other regions in APAC and parts of China? And what's the outlook there?

You're right and you're right to talk about India because there, there is 1 client, which recently -- the client recently changed its Chief Executive and, therefore, its strategy. And that has had a major impact on our Indian business. I mean, they've been diversifying away from this 1 major client, but it's certainly having an impact. It's coupled with, in India, a slowdown in central government spending, which has impacted our public affairs business. And again, I've been spending some time with the Indian management team looking at how we address that. But India is a particular challenge in that space, and we will be obviously need to look at what other changes we need to make. But it's coupled with China being low growth or no growth, that's a key part of what's going on in APAC. And then, again, there's some uncertainties in some of these markets, partly because of -- even before the tariffs were announced, you can see it's not all plain sailing, I would say. But having said that, I was in Singapore and Malaysia recently, again, really interesting opportunities in some of these markets. So it's very, very mixed, but India and China are probably the heaviest weighed behind the numbers that you're looking at, at a regional level.

Gentlemen, there are no more questions registered at this time. Would you like to make any closing remarks?

No, thank you, everybody. We will -- obviously, there's the AGM. And then, of course, and we'll talk again in July. And at that point, we'll update you on the profile of the revenue and the profitability, et cetera. And we look forward to seeing you then, and you know where to find us. Thank you very much.

Thank you.