*** HALF YEAR FINANCIAL REPORT Half-year ended June 30, 2018

Transcription

1 IPSOS SA French Public Limited Company with a share capital of ,75 Registered office : 35, rue du Val de Marne Paris RCS Paris *** HALF YEAR FINANCIAL REPORT Half-year ended June 30, 2018 (Article L III of the Monetary and Financial Code and Article and subsequent of the General Regulations of the AMF)

2 Page 2/37 I. First-half 2018 management report Ipsos' revenue for the first half of 2018 was 786 million, down 5.7% compared to the same period in In the absence of scope effects, Ipsos' level of business in euros was the result of two factors working in opposite directions. Organic growth was positive at +1.5%. Currency effects, on the other hand, had a negative effect of -7.3%. The euro strengthened against all currencies, and especially, but not exclusively, those of emerging countries. For example, the average value of the US dollar against the euro decreased by almost 12% year-on-year, slightly more than that of the Australian dollar (-9%), and slightly less than the Russian rouble (-15%). Only the pound sterling, which, it must be said, had fallen considerably, following the referendum triggering Brexit, just about maintained its value against the euro. Year-on-year, the pound/euro difference was only -2%. For the second quarter alone, revenue was 419 million, down 5.6% compared to the period April-June Currency effects were negative at -6.5%, only slightly better than the first quarter (-8%), and the impact of changes in accounting standards (IFRS 15) was also negative at -0.3%. Total organic growth for the quarter (+1.2%) only partly offset these negative elements. Performance by region and business line Consolidated revenues by geographical area (in millions of euros) 1 st half st half 2017 Change 2018/2017 Organic growth Europe, Middle East and Africa % 1.5% Americas % 0% Asia-Pacific % 5% First-half Revenues % 1.5% Consolidated revenues by business line (in millions of euros) 1 st half st half 2017 Change 2018/2017 Organic growth Media and Advertising Research % 1% Marketing Research % 1.5% Opinion & Social Research % 5% Client and employee relationship management % 0.5% First-half Revenues % 1.5% By geographical areas and business lines, the changes recorded during the first-half 2018 were similar to those recorded during previous periods. Ipsos' revenue showed a constant increase in Asia-Pacific, which today represents almost 20% of total business and also in the Opinion and Social Research areas. "New Services" recorded also a significant 12% increase.

3 Page 3/37 Financial performance Summarized income statement In millions of euros 1 st half st half 2017 Change 1 st half 2018 / 1 st half 2017 Revenue % Gross profit % Gross margin 65.2% 65.3% - Operating profit % Operating margin 5.8% 6.1% - Total of exceptional, non-recurring items (1.4) (7.9) - Finance charge (9.4) (9.7) -2.6% Tax (8.6) (7.9) 8.6% Adjusted net profit* (attributable to the Group) % *Adjusted net profit is calculated before non-cash items linked to IFRS 2 (share-based payments), amortisation of acquisition-related intangible assets (client relationships), deferred tax liabilities related to goodwill on which amortisation is tax-deductible in certain countries and the impact net of tax of other non-recurring income and expenses. Impact on revenue of the transition to IFRS 15 IFRS 15 replaced IAS 18 Revenue and IAS 11 from 1 January 2018 and incorporates new principles for the recognition of revenue, in particular in respect of the obligating event for the recognition of revenue, the identification of performance obligations, the recognition of variable revenue and the allocation of the transaction price for contracts with multiple components. Revenues from contracts with Ipsos clients will still be recognised according to the percentage of completion under IFRS 15, since control in respect of the service provided is seen to be passed on a continuous basis. Methods that do not reflect the percentage of completion of research have been abandoned under IFRS 15, in favor of the straight-line method, as much as this reflects the percentage of completion in a reliable manner. In addition, Ipsos has elected to apply the simplified transition method, which involves restating only revenue from contracts impacted by the change in standard and still in force at 1 January The impact of this change is recognised in opening consolidated shareholders equity at 1 January Accordingly, FY 2017 presented for comparison is not restated. Throughout 2018, for the calculation of organic growth in 2018 and as required for the disclosures in the notes to the financial statements published in respect of the impact of the change in method, revenue (and other items impacted) have continued to be monitored in accordance with the former standard (IAS 18) solely in the Group's internal reporting. As announced, this change in accounting principles does not have a significant impact on Ipsos' revenue under IFRS 15. The impact amounted to only million for the first-half 2018 compared to the previous IAS 18 method.

4 Page 4/37 Income statement - Other Gross profit (calculated by deducting from revenue the variable and external direct costs related to contract execution) amounted to 65.2% compared with 65.3% in the first-half of 2017 (and 65.0% for full year 2017). The decrease of the gross profit ratio from semester to semester is due to a less favourable mix in view of the decrease of the dollar against the euro and the fact that the highest gross profit rate is in the US (16 basis points impact). Without this currency changes, gross profit ratio would have been stable, knowing that as last year, the weight of major contracts, for which gross profit is often lower but which does not say anything about the operating margin on these contracts compensates positive effects of digitisation of data collection and growth in New Services. Concerning operating costs, payroll expenses are down 4.2%, with Group headcount rising 0.5%, mainly in emerging countries, to give a permanent headcount of 16,664 at 30 June The cost of variable share-based payments was slightly down at 4.9 million. Overhead costs are under control and fell by 9.4%, notably due to savings in Transport, IT and rental costs. Other operating income and expenses show a slight net decrease, mainly including the impact of transactional currency effects on operating account items. Group operating profit amounted to 45.6 million, or 5.8% of revenue, a drop of 30 basis points compared to the same period in the previous year, due mainly to negative effects of currency changes with: firstly, a less favourable mix of countries and, secondly a weaker coverage of central costs mostly denominated in euros. At constant exchange rates, operating profit would have been of 6.16%. Moreover, due to the seasonality of the market research activity, the level of operating margin of the first-half is not an indicator of that of the full year. Below the operating margin, the amortisation of intangibles identified on acquisitions concerns the portion of goodwill allocated to client relationships during the 12-month period following an acquisition, recognised in the income statement over several years, in accordance with IFRS. This allocation amounted to 2.2 million compared with 2.4 million the previous year. The balance of other non-operating and non-recurring income and expenses was million, compared with million in the previous year. It comprises unusual items not related to operations and includes acquisition costs as well as the costs of the current restructuring plans. It included, in particular, in the first half of 2018, a net gain of 7.6 million in relation to the decision to capitalise internal development expenses since 1 January The Group has until now only capitalised its external development expenses when the conditions defined in its accounting methods were met. Following improvements to its internal monitoring system, Ipsos can capitalise its internal development expenses, comprising the payroll of its teams working on its platforms and projects, under these same conditions. This decision enable a better understanding of total Research & Development costs of Ipsos. It has led to a change in accounting estimates of the amounts that will now be capitalised. In accordance with IAS 8, the prospective method is applied from 1 st January 2018 to record these impacts. In respect of the first-half 2018, capitalised payroll amounts to 9.1 million and amortisation relating to this capitalisation amounted to 0.5 million. Furthermore, to avoid creating a mismatch in the operating profit by recognising capitalisation income not offset by amortisation during the first period of changes in accounting estimates, the positive impacts on the operating profit of this first period of assets recognition were reclassified Total of exceptional, non-recurring items below operating margin. This same treatment will

5 Page 5/37 be applied at 31 December, and for the coming years, until the implementation of the capitalisation achieves its full momentum, in 2022, considering a depreciation period of 5 years for this category of assets. For more details, please refer to the note 5.2 of First-half consolidated income statement. Finance costs. The net cost of interest amounted to 9.4 million, compared with 9.7 million, down 2.6%, mainly due to a fall in debt compared to the first-half Taxes. The effective tax rate on the IFRS income statement was 25.7%, compared with 26.8% for the previous year. It includes a deferred tax liability of 0.6 million (compared with a deferred tax liability of 1.3 million in the first-half of 2017), cancelling out the tax saving achieved through the tax deductibility of goodwill amortisation in certain countries, even though this deferred tax charge would fall due only if the activities concerned were sold (and which is restated accordingly in adjusted net profit). The main reason is the decrease of corporate income tax in the US. Net profit (attributable to the Group), stood at 24.9 million compared to 21.7 million in first-half Adjusted net profit (attributable to the Group), which is the relevant and constant indicator used to measure performance, came to 34.0 million, down 5.4% compared with the first-half of 2017, and in line with the percentage decrease in revenue. Financial structure Free cash flow. Operating cash flow stood at 64 million, up 7.4 million, notably due to the impact of the capitalisation of internal development expenses. Furthermore, the working capital requirement improved by 8.6 million. Finally, current investments in property, plant and equipment and intangible assets consist mainly of IT investments. This item was up 12.6 million, due to capitalised payroll of 9.1 million, and marginally due to the investment in the renovation of some offices. Concerning non-current investments, Ipsos invested 8.8 million over the half-year in acquisitions, proceeding in particular with the buyback of non-controlling interests in a US company and in certain emerging countries (notably Vietnam). In addition, Ipsos received 1.2 million from funds raised from its IPF 2020 stock option plan. The potential dilution of the 61,341 shares subscribed was offset by the cancellation of the same number of its own shares from among those held in auto-control and bought back in November As a reminder, in 2016 Ipsos invested in its share repurchase programme, including 65 million in November 2016 for the purchase of a block of shares from LT Participations, its holding company, prior to the Merger between Ipsos and LT Participations on 29 December At 30 June 2018, Ipsos holds 858,916 of own shares (1.9% of its share capital) allocated to the involvement plans of its employees shares. Shareholders equity totalled 948 million as at 30 June 2017, compared with 966 million published as at 31 December 2017, after deduction of the 38.3 million in dividends paid on 4 July Net financial debt totalled 464,0 million at 30 June 2018, stable compared to 31 December 2017 ( 464,2 million), including a negative currency effect on gross financial debt in foreign

6 Page 6/37 currency for around 10 million (impact of the change in exchange rates between 31 December 2017 and 30 June 2018). Net gearing was 49%, compared with 48% at 31 December 2017 and 55% at 30 June Liquidity position. Net cash at the end of the half-year period was 103 million, compared with 137 million at 31 December 2017, giving Ipsos a good liquidity position. Ipsos also has over 300 million available through credit facilities. OUTLOOK FOR 2018 The implementation of the "Total Understanding" project First-half 2018 data reflects a complex market in which Ipsos has performed slightly better than its most direct competitors. For Ipsos, the emergence of New Services over the last few years has had a positive impact. The reinforcement of teams in areas where growth outlooks are the strongest, particularly in Asia, and in activities relating to public opinion, social research and the assessment of public policies is also a supporting factor. At the same time, Ipsos needs to meet the challenges generated by the transformation in the demand for information and associated services. The reasons for this transformation are clear: companies and institutions need more, fresher, more accessible, more operational and more useful information to facilitate the way in which they run their businesses in a demanding, competitive, volatile and sometimes difficult to read society and markets, and which remain difficult to anticipate. Established research companies, including Ipsos, are faced with traditional competition mainly in the form of "boutiques", i.e. fairly small structures represented by a very senior professional or group of professionals personally involved in relations with a limited number of clients. Accordingly, in this segment there have been for a long time local and/or regional companies that are more or less generalist and more or less well-known, benefiting from local contracts, fairly low costs and prices, in a category where proximity and habits also play an important role. Beyond these well-known and established competitors, the transformation of the market and the new demands that define it have also generated two new types of competitors. On the one hand, all strategic and/or operational consulting companies are called on more often than before for specific issues that were once the preserve of research companies such as Ipsos. They are present, in addition to other times, whenever a situation calls for understanding of market structures and changes, customer relationship management and the assessment of public policies, their legitimacy is the importance of these questions for managements, who are their discussion partner on other subjects. Their strength is the trust that they have been able to establish with corporate management teams. Their weakness is their poor knowledge of methods and techniques used to build and analyse data stocks and flows. They have a high price positioning. On the other hand, new companies, well-funded, focusing on the development, marketing and operation of platforms have been created in service segments where technologies fairly easily enable the standardisation of work protocols and the automation of production processes in order to meet "better / quicker / cheaper" demands and facilitate data and indicator publication via dashboarding systems made to be accessible and visually pleasing. Companies and institutions that are clients of market research companies are looking also to better understand how they can have access to new sciences such as neurosciences and to different technologies such as machine learning or Artificial Intelligence, or simply larger databases combined with more powerful analytical models. The market is finally being transformed by a sort of sectorial rotation in which certain clients - such as CPG companies spend less or in a less recurrent and automatic way, whereas other

7 Page 7/37 clients, in other sectors such as pharmaceuticals, fintechs, automotive manufacturers and their partners spend more. Building on these findings, for the past year, Ipsos has been working on defining and implementing a new organisation. The project, called "Total Understanding", has mobilised several hundred of the company's executive managers in all markets in which it operates. Since 1 July, Ipsos operates in a different configuration. A new client organisation has been created with dedicated teams at a global level but also on local markets. These teams are the voice of the client within Ipsos and the voice of Ipsos within our clients. They are composed of several hundreds of senior executives with major experience. Working closely with our new Services Lines, they work in a holistic and continuous way, bringing the best solutions to clients, understanding their challenges and speaking their language. 17 Service Lines have been set up to replace our existing 5 business lines in place since Service Lines are more numerous and more specialised. They oversee the development of a more focused and competitive offer, based on the highest level of know-how and technical expertise, and recognised as such in the market. Enhanced specialisation and greater focus on developing and operating specific Services are at the heart of their mandate. In addition, Ipsos is determined to build best-in-class capabilities, encompassing technology, sciences relevant to information markets, operations and access. The needs of each Service Line are more specific than those of our old business lines. The objective is to improve simultaneously operational performance and an acceleration of innovation. In combination, 4 Service Lines illustrate the ambition of Ipsos: Public Affairs provides a real understanding of Society; Market Strategy and Understanding does the same for the Markets in which our clients operate; and Ipsos UU and Social Intelligence Analytics provide deep insight into People. These four Service Lines have strong growth potential, a good competitive position and global deployment. Together, they can provide Ipsos clients with Total Understanding of Society, Markets and People. The countries in which Ipsos operate have more autonomy but have also to take more responsibilities: they know their clients, their market and their teams better than anyone. From now on, the P&L is owned by the country rather than jointly with the Global Service Lines. Ipsos is a united team with one shared vision, one set of values and rules, one narrative, one plan and one budget. Total Understanding is a growth project as close as possible to clients needs. For the full financial year 2018, the company s organic growth will range between 2 and 3%, slightly above the organic growth of this first-half year. Ipsos 2018 operating profit will also show a slight increase.

8 II. Half-year 2018 consolidated financial statements 1. Consolidated income statement Half-year ended 30 June 2018 In thousand euros Notes 30/06/ /06/ /12/2017 Revenue 3 786, ,794 1,780,453 Direct costs 4.1 (273,294) (289,583) (623,787) Gross profit 512, ,211 1,156,666 Payroll (excluding share-based payments) (358,583) (379,309) (747,500) Payroll (share-based payments) (4,944) (5,104) (10,094) General operating expenses (101,280) (111,727) (210,865) Other operating income and expenses 4.2 (2,272) (2,355) (5,931) Operating margin 3 45,628 50, ,275 Amortisation of intangible assets identified on acquisitions (2,240) (2,405) (4,668) Other non-current income and expense 4.3 (1,355) (7,973) (14,364) Income from associates (8) Operating profit 42, ,460 Financing costs 4.4 (9,428) (9,682) (20,380) Other financial income and expenses (1,134) 633 Profit before tax 33,511 29, ,713 Income tax - excluding deferred tax on goodwill 4.5 (8,027) (6,622) (39,118) Deferred tax on goodwill (585) (1,308) 24,482 Income tax 4.5 (8,612) (7,930) (14,636) Net profit 24,900 21, ,076 Attributable to the Group 24,719 21, ,507 Attributable to minority interests Earnings per share (in euros) - Basic Earnings per share (in euros) - Diluted

9 Page 9/37 2. Statement of Comprehensive Income Half-year ended 30 June 2018 In thousand euros 30/06/ /06/ /12/2017 Net profit 24,900 21, ,076 Other comprehensive income Hedges of net investments in a foreign subsidiary (7,398) (282) (432) Currency translation differences 969 (38,147) (67,357) Deferred tax on hedges of net investments in a foreign subsidiary 1,602 (745) (1,849) Total of other reclassified comprehensive income (4,826) (39,173) (69,638) Actuarial gains and losses Deferred taxes on actuarial gains and losses - 95 Total of other non-reclassified comprehensive income Total of other comprehensive income (4,826) (39,173) (69,362) Comprehensive income 20,072 (17,513) 59,715 Attributable to the Group 19,501 (16,162) 61,086 Attributable to minority interests 572 (1,351) (1,372)

10 Page 10/37 3. Consolidated balance sheet Half-year ended 30 June 2018 In thousand euros Notes 30/06/ /12/2017 ASSETS Goodwill 5.1 1,164,083 1,159,352 Other intangible assets ,517 59,964 Property, plant and equipment 33,426 32,228 Investments in associates 1, Other non-current financial assets ,623 21,425 Deferred tax assets 19,897 21,252 Non-current assets 1,315,555 1,295,136 Trade receivables , ,660 Current income tax 19,415 13,517 Other current assets ,328 75,802 Derivatives financial assets ,462 Cash and cash equivalents , ,267 Current assets 712, ,708 TOTAL ASSETS 2,028,542 2,140,844 In thousand euros Notes 30/06/ /12/2017 LIABILITIES AND EQUITY Share capital ,109 11,109 Share premium 516, ,130 Treasury shares (23,051) (35,235) Other reserves 543, ,717 Currency translation differences (117,735) (112,515) Shareholders' equity - attributable to the Group 929, ,208 Minority interests 18,184 17,290 Shareholders' equity 947, ,498 Borrowings and other long-term financial liabilities , ,432 Non-current provisions 5.8 8,986 8,964 Retirement benefit obligations ,737 26,918 Deferred tax liabilities 63,505 66,450 Other non-current liabilities ,848 18,183 Non-current liabilities 662, ,948 Trade payables 210, ,432 Borrowings and other short-term financial liabilities ,338 25,527 Current taxes 6,343 14,658 Current provisions 5.8 7,087 7,189 Other current liabilities , ,592 Current liabilities 418, ,398 TOTAL LIABILITIES AND EQUITY 2,028,542 2,140,844

11 Page 11/37 4. Consolidated cash flow statement Half-year ended 30 June 2018 In thousand euros Notes 30/06/ /06/ /12/2017 OPERATING ACTIVITIES NET PROFIT 24,900 21, ,076 Items with no impact on cash flow Amortisation and depreciation of property, plant and 24,910 12,705 12,796 equipment and intangible assets Net profit of equity associated companies - net of 8 (69) dividends received (217) Losses/(gains) on asset disposals 40 (118) (43) Net changes in provisions 1, (511) Share-based payments expense 4,585 4,747 9,549 Other non-cash income/(expense) 2,157 (109) (778) Acquisition costs of consolidated companies Finance costs 9,428 9,682 20,380 Income tax expense 8,612 7,930 14,636 OPERATING CASH FLOW BEFORE FINANCIAL EXPENSES AND TAX PAID 64,029 56, ,182 Change in working capital requirement ,004 7,383 (37,771) Interest paid (8,332) (9,715) (21,245) Income tax paid (22,349) (24,707) (38,975) CASH FLOW FROM OPERATING ACTIVITIES 49,352 29,637 99,191 INVESTMENT ACTIVITIES Acquisitions of property, plant and equipment and intangible assets Proceeds from disposals of property, plant and equipment and intangible assets 6.2 (20,406) (7,850) (17,518) (Increase)/Decrease of financial assets (5,047) 1,024 (1,201) Acquisitions of companies and consolidated activities, net of acquired cash CASH FLOW FROM INVESTMENT ACTIVITIES FINANCING ACTIVITIES (3,987) - (2,212) (29,343) (6,627) (20,647) Increase/(Decrease) in capital (Purchase)/Proceeds of treasury shares 1,198 3,790 6,399 Increase/(Decrease) in long-term borrowings (43,341) (57,170) (53,315) Increase/(Decrease) in bank overdrafts and short-term debt (838) (338) 86 Purchase of minority interests (8,779) (5,441) (12,785) Dividends paid to Parent-Company shareholders - - (36,414) Dividends paid to minority shareholders of consolidated companies (841) - - CASH FLOW FROM FINANCING ACTIVITIES (52,601) (59,159) (96,030) NET CHANGE IN CASH (32,592) (36,149) (17,485) Impact of foreign exchange rate movements (1,195) (5,662) (10,140) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE SEMESTER 137, , , , , ,267

12 Page 12/37 5. Statement of changes in consolidated shareholders equity In thousand euros Share capital Share Premium Own shares Other reserves Currency translation difference Shareholders' equity - attributable to the Group Shareholders' equity Minority interests January 1st, , ,489 (55,905) 492,738 (44,819) 919,612 19, ,417 - Change in capital Dividends paid (35,993) - (35,993) (20) (36,013) - Impact of share buy-out commitments - Delivery of free shares related to 2015 plan (264) - (264) (984) (1,248) ,427 (10,427) Other movements on own shares - (214) 3, ,782-3,782 - Share-based payments taken directly to equity ,747-4,747-4,747 - Other movements (434) - (434) (38) (468) Total Transactions with the shareholders- - (214) 14,358 (42,306) - (28,162) (1,042) (29,200) - Net profit ,631-21, ,660 - Other elements of the Comprehensive Income Hedges of net investments in a foreign subsidiary (598) (598) 316 (282) Deferred tax on hedges of net investments in a foreign subsidiary (745) (745) - (745) Currency translation differences (36,450) (36,450) (1,697) (38,147) - Total of Other Comprehensive Income (37,793) (37,793) (1,381) (39,173) Comprehensive income ,631 (37,793) (16,162) (1,351) (17,513) June 30 th, 2017 Comprehensive income 11, ,275 (41,547) 472,063 (82,611) 875,289 17, ,701 January 1st, , ,130 (35,235) 569,719 (112,515) 949,208 17, ,498 - IFRS 15, change in accounting policy (6 977) - (6 977) ( 22) (6,998) - Dividends paid (37 484) - (37 484) ( 841) (38,325) - Impact of share buy-out commitments ( 317) - ( 317) Delivery of free shares related to 2016 plan (10 905) Other movements on own shares - ( 81) ,198 - Share-based payments taken directly to equity ,585 - Other movements ( 334) - ( 334) 177 (157) Transactions with the shareholders- - ( 81) (44 455) - (32 352) 343 (32,009) - Net profit ,900 - Other elements of the Comprehensive Income Hedges of net investments in a foreign subsidiary (7 267) (7 267) ( 131) (7,398) Deferred tax on hedges of net investments in a foreign subsidiary ,602 1,602-1,602 Currency translation differences Total of Other Comprehensive Income (5,218) (5,218) 392 (4,826) Comprehensive income ,719 (5,218) 19, ,072 June 30 th, 2018 Comprehensive income 11, ,049 (23,051) 543,007 (117,734) 929,380 18, ,564

13 Page 13/37 Notes to the consolidated financial statements Half-year ended 30 June Information about the company and significant accounting policies 1.1. Information about the Company Ipsos is a global company which offers surveys solutions for companies and institutions. It is currently the world's third-largest player with consolidated subsidiaries in 89 countries. Ipsos SA is a Société Anonyme (limited liability corporation) listed on Euronext Paris. Its head office is at 35 rue du Val de Marne, Paris, France. On 25 July 2018, Ipsos Board of Directors approved and authorized publication of the half-year financial condensed interim consolidated statements as at 30 June Significant accounting policies Basis of preparation of half-yearly financial information 2018 Ipsos condensed interim consolidated financial statements for half-year 2018 have been drawn up in line with IAS 34 Interim Financial Reporting. These condensed interim consolidated financial statements as of June 30 th, 2018 do not include the entirety of the disclosure requested for the annual consolidated financial statements. These condensed interim consolidated financial statements as of June 30 th, 2018 should be read and understood in conjunction with the consolidated financial statements published as of December 31 st, The accounting principles applied to prepare the condensed interim consolidated financial statements for the halfyear ended 30 June 2018, are identical to those used to prepare the consolidated financial statements for 2018 except for amendments of standards and interpretations which are obligatory applicable as from January 1 st, These accounting principles are described in the note 1 of the consolidated financial statements for 2017 and were prepared in accordance with International Financial Reporting Standards (IFRS) adopted for use in the European Union. Standards, amendments and interpretations adopted by the European Union and effective for reporting periods beginning on or after January 1 st, IFRS 15: In late May 2014, the IASB issued IFRS 15 "Revenue from contracts with customers". This standard was developed as part of a joint project between the IFRS and US benchmarks. Since 1 January 2018, IFRS 15 replaces IAS 18 "Revenue" and IAS 11 "Construction contracts". Ipsos began its project to implement IFRS 15 in 2017 with a diagnostic phase during which the various categories of contracts concluded with clients, representative of Ipsos' business, were analyzed by duration and type of contract in the main countries. In parallel, as part of a market research industry working group led by ESOMAR (the global trade union of market research practitioners), the Ipsos Group participated in meetings with two market research companies, also members of ESOMAR, to determine recommendations and "best practices" for the market. These have been published on the Esomar website. Six themes emerge from this reflection: recognition of revenue upon advancement or completion; interpretation of contractual termination clauses; measurement of progress; separation of a contract into several components; capitalization of costs; presentation of financial statements: trade receivables or studies in progress. Ipsos is following all the recommendations of this working group. The Group has been able to draw its first internal conclusions in the second half of the year and presented them to the dedicated Audit Committee on 12 December The contracts that Ipsos signs with its clients are concluded either individually or as part of framework agreements known as MSAs ("Master Service Agreements"). In both cases, the contractual clauses of the general terms and

14 Page 14/37 conditions of sale were amended to meet the requirements of IFRS 15, particularly about the possibility for the customer to terminate the contract early for convenience. These clauses have been applied within the Group since the beginning of The Ipsos Group has also introduced new standard customer invoicing rules from the beginning of 2018, consisting of invoicing contracts with customers on a monthly basis and in advance. This is in line with the practice in other service and business advisory sectors. Revenue from contracts with customers remains recognized on a percentage-of-completion basis under IFRS 15, as the transfer of continuous control over the service performed is demonstrated. Methods that do not reflect the percentage of completion of studies have been discontinued under IFRS 15 in favor of the straight-line method, insofar as it reliably reflects the percentage of completion. The Group has applied IFRS 15 since January 1, 2018 and has chosen to apply the simplified retrospective transition method, which consists of restating only the income from contracts impacted by the change in standard and still in force on January 1, 2018, given the immaterial nature of the impact of this change in method on revenue and in accordance with the options proposed by IFRS 15. The impact of this change is recognized in opening consolidated shareholders' equity at January 1, The year 2017 presented for comparison is therefore not restated. On an equity basis published at 31 December 2017 of million, the amount of the equity adjustments in the opening balance sheet amounts to -6.9 million. In addition, for the purposes of calculating organic revenue growth, the old standard (IAS 18) continues to be applied and monitored for 2018 in the Group's internal reporting. The impact on half-year revenue of the application of IFRS15 is 322k. The impacts of IFRS15 on the opening balance sheet are as follows: In thousands of euros ASSETS Notes 31/12/2017 IFRS 15 adjustments 01/01/2018 restated Deferred tax assets 21,252 2,399 23,651 Non-current assets 1,295,136 2,399 1,297,535 Trade receivables and related accounts ,660 (21,383) 596,277 Current assets 845,708 (21,383) 824,325 TOTAL ASSETS 2,140,844 (18,984) 2,121,860 In thousands of euros LIABILITIES Notes 31/12/2017 IFRS 15 adjustments 01/01/2018 restated Other reserves 569,717 (6,998) 562,719 Shareholders' equity attributable to the company's shareholders 949,208 (6,998) 942,210 Trade payables and related accounts 259,432 (11,986) 247,446 Current liabilities 476,398 (11,986) 464,412 TOTAL LIABILITIES 2,140,844 (18,984) 2,121,860

15 The impacts of IFRS15 on the income statement as of June 30, 2018 are as follows: In thousands of euros Notes 30/06/2018 excluding IFRS15 IFRS 15 adjustments 30/06/2018 published Revenue 3 785, ,000 Direct costs 4.1 (273,219) (75) (273,294) Gross margin 512, ,706 Operating margin 3 45, ,628 Taxes - excluding deferred taxes on goodwill amortization 4.5 (7,901) (126) (8,027) Net income 24, ,900 Of which attributable to equity holders of the Parent Company 24, ,719 Of which minority interests (185) (3) 181 IFRS 9 IFRS 9 has been structured around three main themes: classification and measurement of financial assets and liabilities, impairment and hedge accounting. This standard, approved by the European Union, is mandatory for annual periods beginning on or after January 1, The Ipsos Group has applied IFRS 9 as from 1 January 2018 and due to the nature of its activities, the impacts are not material. - Classification and measurement of financial assets and liabilities: The standard allows the irrevocable choice, upon initial recognition of each financial asset having the nature of an equity instrument within the meaning of IAS 32, to be recognized at fair value against other non-recyclable comprehensive income (FVOCI) or at fair value through profit or loss. Other financial assets include non-consolidated investments of 2,179k at December 31, The Ipsos Group has classified a portion of these securities at fair value through profit or loss (FVOCI) for 1,256k and another portion at fair value through profit or loss for 923k. At June 30, 2018, non-consolidated investments amounted to 6,706k, of which 5,254k in fair value against other comprehensive income (FVOCI) and 1,452k at fair value through profit or loss. - Impairment of financial assets: IFRS 9 requires the recognition of impairment losses up to the amount of expected losses with no significant impact on the Ipsos Group. - Hedge accounting: IFRS 9 has no impact on Ipsos' consolidated financial statements. Only the interest rate swap set up to hedge one third of the $300 million bond issue meets the criteria for fair value hedge accounting under IAS 39, and IFRS9 has no impact on this type of hedging relationship. Amendment to IFRS2 The amendment has three parts and has no impact on the Ipsos Group financial statements. Standards, amendments and interpretations published by the IASB, whose application is not mandatory for annual periods beginning on or after January 1, 2018 IFRS 16 In January 2016, the IASB issued IFRS 16 "Leases", which aligns the accounting for operating leases with the accounting for finance leases (recognition on the balance sheet of a liability for future lease payments and an asset under the right of use). The implementation of this standard will also entail a change in the presentation of the rental expense in the income statement (i.e. Depreciation, amortisation and interest expense) and in the cash flow statement (the amount used to repay the debt will be presented in cash flows from financing activities and the amount allocated to the asset will be presented in cash flows related to investment activities). The standard is applicable for financial years beginning on or after 1 January 2019 and its adoption by the European Union is underway. Analysis of the impacts of this standard is underway

16 1.2.2 Use of estimates When drawing up the consolidated financial statements, the measurement of certain balance sheet or income statement items requires the use of assumptions, estimates and assessments. These assumptions, estimates and assessments are based on information or situations existing on the date on which the financial statements were drawn up and which may in future prove to be different from the actual situation. The assumptions, estimates and assessments used during the half-year closing remain unchanged than the last year ended closing excluding: - the pension liabilities (which are estimated according to a forecast based on the latest available actuarial valuation); - the income taxes for the Group have been calculated according to the effective income tax rate forecasted for the whole year 2017 (see note 4.5); - the goodwill for which the recoverable amount is tested for impairment annually and only when there is an indication that they may be impaired (see note 5.1.1). - changes in commitments to buy out minority interests and earn-out payments. 2. Changes in the scope of consolidation Changes in the scope of consolidation during the first semester 2018 are shown in the following table : Name Type Change in % of voting rights Change in % stake Date of inclusion or exclusion from scope of consolidation Country Ipsos MMA Inc Ipsos LLC Buy-out of minority interests Buy-out of minority interests +2.6% +2.6% 2nd quarter 2018 USA +49% +49% 1st quarter 2018 Vietnam

17 Page 17/37 3. Segment reporting The segment reporting presentation is based on internal reporting regularly reviewed by the Management to evaluate the segments performance and to allocate them resources. The Executive Committee is the main operational decision-maker according to IFRS8. The holdings as well as the intra-segments eliminations are included into these three segments, which are reported into the section Other. Furthermore, Ipsos has a single business activity : i.e. survey-based research. Segment assets are made of tangibles and intangibles assets (including goodwill), trade receivables and other receivables. 3.1 Segment reporting as at 30 June 2018 In thousands of euros Europe, Middle East, Africa Americas Asia Pacific Rest of the World Revenue 363, , ,799 (31,100) 786,000 Sales to external clients 352, , , ,000 Inter-segment sales 11,004 10,332 10,095 (31,430) 0 Operating margin 14,920 13,879 11,570 5,258 45,628 Depreciation and amortization (7,883) (3,072) (1,750) (0) (12,705) Segment Assets (1) 828, , ,448 (104,910) 1,854,034 Segment Liabilities 317, ,951 80,950 (130,427) 390,883 Capital expenditure for the period 9,018 9,341 2,046 (0) 20,406 (1) Segment assets consist of property, plant and equipment and intangible assets (including goodwill), trade and other receivables. 3.2 Segment reporting as at 30 June 2017 Total In thousands of euros Europe, Middle East, Africa Americas Asia Pacific Rest of the World Total Revenue 371, , ,535 (32,202) 833,794 Sales to external clients 360, , ,913 (0) 833,786 Inter-segment sales 11,503 10,085 10,622 (32,202) 9 Operating margin 7,918 22,505 11,720 8,573 50,716 Depreciation and amortization (7,707) (3,419) (1,667) (4) (12,796) Segment Assets (1) 839, , ,382 (109,604) 1,907,515 Segment Liabilities 332, ,427 92,664 (146,467) 412,396 Capital expenditure for the period 3,432 1,041 1, ,501 (1) Segment assets consist of property, plant and equipment and intangible assets (including goodwill), trade and other receivables. In thousands of euros 3.3 Segment reporting as at 31 December 2017 Europe, Middle East, Africa Americas Asia Pacific Rest of the World Total Revenue 792, , ,138 (73,609) 1,780,453 Sales to external clients 767, , ,146 (795) 1,780,383 Inter-segment sales 25,442 24,449 22,992 (72,814) 70 Operating margin 71,861 84,331 30,353 (4,269) 182,275 Depreciation and amortisation (15,087) (6,385) (3,434) (4) (24,910) Segment Assets (1) 863, , ,742 (106,496) 1,945,006 Segment Liabilities 354, ,220 92,573 (174,952) 420,739 Capital expenditure for the period 11,686 2,732 3, ,518 (1) Segment assets consist of property, plant and equipment and intangible assets (including goodwill), trade and other receivables.

18 Page 18/ Reconciliation of segment assets with total Group assets In thousand euros 30/06/ /06/ /12/2017 Segment assets 1,854,034 1,907,515 1,945,006 Financial assets 31,631 20,558 22,341 Tax assets 39,312 45,394 34,769 Financial instruments assets 84 2,898 1,462 Cash and cash equivalents 103, , ,267 Total Group assets 2,028,542 2,099,448 2,140,844

19 4. Notes to the income statement 4.1. Direct costs In thousand euros 30/06/ /06/ /12/2017 Interviewer payroll costs (40,407) (45,120) (89,105) Other direct costs (232,887) (244,463) (534,682) Total (273,294) (289,583) (623,787) 4.2. Other operating income and expenses This figure mainly consists of non-recurring items related to currency effects related to commercial transactions Other non-operating income and expenses In thousand euros 30/06/ /06/ /12/2017 Acquisition costs (132) (151) Provision for social dispute in Brazil Costs of restructuring and rationalization Variation of commitments of buy-out of minority interests Capitalization of internal development costs (*) 7,559 (1,422) (2,638) (12,278) (7,054) (6,761) (4,582) (438) 1,558 2,648 Total (1,355) (7,973) (14,364) (*) See note 5.2 on capitalization of internal development expenses 4.4. Financial income and expenses In thousand euros 30/06/ /06/ /12/2017 Interest expenses on borrowings and bank overdrafts (10,323) (11,064) (22,819) Change in the fair value of derivatives Interest income from cash and cash equivalents 666 1,213 2,049 Finance costs (9,428) (9,682) (20,380) Foreign exchange gains and losses 1,095 (924) 526 Other financial items (181) (210) 107 Other financial income and expenses 913 (1,134) 633 Total financial result (8,514) (10,816) (19,747)

20 4.5. Current income tax Income taxes for the half-year 2017 have been calculated according to the effective income tax rate forecasted for the whole year 2018 in the Ipsos group. Based on these projections, the effective income tax rate amounts to 25.7 % as described below: In thousands of euros 30/06/ /06/ /12/2017 Profit before tax 33,511 29, ,713 Less the share of profit of associates 8 (69) (26) Profit before tax of consolidated companies 33,519 29, ,687 Income tax (8,612) (7,930) (14,636) Effective tax rate 25.7% 26.8% 10.2% 4.6. Earnings per share Earnings per share Weighted average number shares 30/06/ /12/2017 Figure at previous year end 42,980,742 44,625,512 Capital increase (61,341) (271,304) Exercise of options 61, ,304 Own shares (1,105,005) (1,644,770) Number of shares used to calculate basic earnings per share 41,875,737 42,980,742 Number of additional shares potentially resulting from dilutive instruments 1,238, ,148 Number of shares used to calculate diluted earnings per share 43,113,746 43,718,890 Net Profit attributable to equity holders of the Parent (in thousand euros) 24, ,507 Basic earnings per share (in euros) Diluted earnings per share (in euros) Adjusted earnings per share Adjusted net profit - group share Adjusted net profit attributable to equity holders of the Parent Items excluded: 30/06/ /06/ /12/ ,719 21, ,507 - Staff costs (share-based payments) 4,944 5,104 10,094 - Amortization of intangibles identified on acquisitions 2,240 2,405 4,668 - Other non-recurring income and expense 1,355 7,973 14,364 - Deferred tax on goodwill amortization (1,814) - Non monetary impact on variation of puts 585 1,308 (24,482) - Income tax on excluded items 479 (2,336) (3,507) - Minority interests on excluded items (416) (246) (446) Adjusted net profit 34,092 36, ,384 Average number of shares 41,875,737 42,757,389 42,980,742 Average diluted number of shares 43,113,746 43,410,148 43,718,890 Basic adjusted earnings per share (in euros) Diluted adjusted earnings per share (in euros)

21 Page 21/ Adjusted net profit In thousands of euros 30/06/ /06/ /12/2017 Revenue 786, ,794 1,780,453 Direct costs (273,294) (289,583) (623,787) Gross profit 512, ,211 1,156,666 Payroll - excluding share based payments (358,583) (374,309) (747,500) Payroll - share based payments (*) (4,944) (5,104) (10,094) General operating expenses (101,280) (111,727) (210,865) Other operating income and expense (2,272) (2,355) (5,931) Operating margin 45,628 50, ,275 Amortization of intangibles identified on acquisitions (*) (2,240) (2,405) (4,668) Other non-operating income and expense (*) (1,355) (7,973) (14,364) Income from associates (8) Operating profit 42,026 40, ,460 Finance costs (9,428) (9,682) (20,380) Other financial income and expense (*) 913 (1,134) 633 Profit before tax 33,511 29, ,713 Income tax - excluding deferred tax on goodwill (8,027) (6,622) (39,118) Income tax - deferred tax on goodwill (*) (585) (1,308) 24,482 Income tax (8,612) (7,930) (14,636) Net profit 24,900 21, ,076 Attributable to the Group 24,719 21, ,507 Attributable to Minority interests Adjusted net profit (*) 34,689 36, ,400 Attributable to the Group 34,092 36, ,384 Attributable to Minority interests ,015 Adjusted earnings per share (in euros) - Basic Adjusted earnings per share (in euros) - Diluted (*) The adjusted net profit is calculated before non-monetary items linked with IFRS2 (free shares), before amortization of intangibles linked with acquisitions (customer relationships), before deferred tax liabilities concerning goodwill whose amortization is deductible in some countries, before the net tax coming from the other non-recurring income and expense and the non-monetary impact of changes in puts in other financial income and expense

22 4.8. Dividends paid and proposed Ipsos policy is to pay single dividend in respect of a given accounting period in the July following the end of the period. The amounts per share paid and proposed are as follows: In respect of Net dividend per share (in euro) 2017 (1) (¹) Total dividend payment of 37.8 million (after elimination of dividends linked to treasury shares as at 31 December 2017) to be proposed to the General Meeting of Shareholders on 4 May The dividend was paid on 4 July Notes to the balance sheet 5.1 Goodwill Goodwill impairment tests At 31 December 2017, on basis of measurements carried out in-house in coherence with accounting principles as reported in notes of the consolidated 2016 financial statement. Ipsos management concluded that the recoverable value of goodwill allocated to each group of cash-generating units exceeded its carrying amount. As of 30 June 2018, following the sensitivity noted in previous years in the Latin America area, additional follow up work was conducted on the basis of comparable transactions and 2017 s previsions updated and on the long-term vision on the basis of a 8 % operational margin (8.5% in this case in 2022 final year). As of June 30, 2018, the work performed in Latin America, as well as in the rest of the Group, did not lead to the identification of any indications of impairment and to the questioning of the conclusions of December 31, Changes as of 30 June 2018 In thousand euros 01/01/2018 Increases Decreases Changes in commitments to buy out minority interests Exchange rates 30/06/2018 Goodwills 1,159, (167) 4,899 1,164,083

23 5.2 Other intangible assets In thousand euros 01/01/2018 Increases Decreases Exchange rates Changes in scope of consolidation and other movements 30/06/2018 Trademark 1, ,983 Panels on line 26,868 1,594 0 (91) 0 28,371 Panels off line 6, (679) ,057 Customer relationships 68, ,883 Other intangible assets (1) 89,963 12,741 (1,319) 674 (2) 102,058 Gross value 194,243 14,346 (1,998) 762 (2) 207,352 Trademark (670) 0 0 (8) 0 (677) Panels on line (18,788) (1,405) 0 (26) 0 (20,220) Panels off line (5,059) (124) 0 (4,505) Customer relationships (33,417) (2,240) (35,569) Other intangible assets (1) (76,345) (4,304) 1,311 (526) (1) (79,864) Amortisation and depreciation (134,279) (7,948) 1,990 (596) (1) (140,835) Net value 59,964 6,398 (8) 165 (3) 66,517 (1) Capitalization of internal development expenses Until now, the Group only activated its external development costs when the conditions defined in note to the consolidated financial statements of of its accounting principles and methods were met. Following the improvement of its internal monitoring system, Ipsos can capitalize its internal development costs, which consist of the staff costs of its teams working on its platforms and projects, under the same conditions. This decision has resulted in a change in the accounting estimate of the amounts that will now be capitalized. In accordance with IAS8, the prospective method has been applied as from 2018 to account for these impacts. For the first half of 2018, capitalized staff expenses amounted to 9,141k and depreciation relating to this capitalization amounted to 533k. The impacts of this change in the financial statements at June 30, 2018 are as follows: In the balance sheet, other intangible assets increased by 8,608k and deferred tax assets decreased by 2,212k. The impact on net income amounts to 6,396k in the income statement at 30 June At June 30, 2018, in order not to create any distortion in the reading of the operating margin by the recognition of a capitalization product not offset by amortizations during an initial period, the positive effects on income of this first year of asset recognition were reclassified from operating margin to other non-operating income. The same treatment will be applied on 31 December, and over the coming years, until the implementation of capitalization reaches cruising speed. The impact on net income before taxes at 30 June 2018 was 8,608k, broken down as follows: - Net impact on staff costs 2018 if the method had been applied continuously +1,049 k. - The exceptional impact of the application of the prospective method was recorded net in other non-operating income and expenses for a positive amount of 7,559 k. The Ipsos Group has assessed the impact of this change in accounting estimate on subsequent years. Insofar as the Group estimates that the capitalized amount would remain constant over the next few years, the impacts on the income statement for subsequent years would be as follows: