NEWS8 April 2020

Ipsos introduces cost savings; expects Q1 results to be hit

Covid-19 Europe News

FRANCE – Ipsos has indicated its first quarter results will be lower than expected as it announces various measures – including a recruitment freeze – to protect its margins as a result of the Covid-19 outbreak.

Ipsos said its orders were down 40% in March, with a “very significant volume of cancellations and postponements”. New orders declined by around 20%.

Activity was hampered by social distancing measures, which have resulted in postponement or cancellation of much of the company’s face-to-face research, while difficulties facing clients and “uncertainties and misunderstandings” arising from the outbreak have also been factors, Ipsos said.

Face-to-face work accounts for a third of the company’s turnover, and the “vast majority” of this stopped after the lockdowns. While some have resumed by shifting to different methods such as phone or online, most will not begin again until after social distancing measures have been lifted.

Ipsos is suspending any estimate of what its activity will be for the whole year and has said that its first quarter results are likely to be lower than expected.

The company has frozen recruitment and planned salary increases, while its main directors and executives – around 700 people – will see their salaries cut by up to 20%. Bonuses relating to 2020 have been put on hold.

It has also changed to weekly rather than monthly reporting and reduced spending, including leases and capital investments.

The general meeting, planned to take place on 28th May, is likely to be held behind closed doors without the physical presence of shareholders if restrictions on collective gatherings still apply.

Ipsos will propose to the shareholders to distribute a dividend of 45 cents per share, almost 50% less than what had initially been planned. Share buybacks have been suspended.

The company said in its statement that it is “confident” that it can get through the period, and added that the pandemic will “reinforce Ipsos’ conviction that information, as long as it is properly produced, analysed with rigour and communicated with vigour and clarity, is the most essential tool that these same institutions and companies need”.