Quarterly Financial Information as of June 30, 2017 IFRS -
Regulated Information - Not Audited
Cegedim: all divisions helped grow like-for-like revenues in
first half 2017
- Like-for-like revenues rose 6.4% in H1 2017
- Business model transformation is still going strong
- Cegelease business slated for sale
Disclaimer: This press release is available in French and in
English. In the event of any difference between the two versions,
the original French version takes precedence. This press release
may contain inside information. It was sent to Cegedim's authorized
distributor on July 27, no earlier than 5:45 pm Paris time. The
following terms are defined in the Glossary. |
Conference CALL on July 27, 2016, at 6:00PM
CET |
FR: +33 1 72 00 15 10 |
USA: +1 646 722 4907 |
UK: +44 (0)20 3043 2440 |
PIN
Code:30006191# |
The webcast is available at the following
adress : http://bit.ly/2uM93g1 |
Boulogne-Billancourt, France, July 27, 2017 after the market
close
Cegedim, an innovative technology and
services company, posted consolidated Q2 2017 revenues of €116.9
million, up 7.0% on a reported basis and 6.0% like-for-like
compared with the same period in 2016.
For the first half of 2017 consolidated
revenues came to €230.6 million up 7.0% on a reported basis and
6.4% like-for-like compared with the same period in 2016.
All of the divisions helped grow the Group's
like-for-like (LFL) growth in the second quarter and first half
compared with a year ago.
Growth at the Health insurance, HR and
e-services division remained robust, with year-on-year (y/y)
increases LFL of 7.3% in the second quarter and 9.8% in the first
half of 2017.
Over the same period, the Healthcare
professionals division returned to LFL growth in the second
quarter. It's 3.8% y/y increase brought the division's LFL
first-half growth to 1.4% compared with the year-earlier period.
Growth was buoyed by computerization solutions for pharmacists,
doctors, nurses and physical therapists in France, and for doctors
in Belgium, Spain and the US. Cegelease, the financial lease
business, also helped boost revenues.
Part of this growth came from the Group's BPO
businesses, most of which are still ramping up their operations. As
a result, they will negatively affect Group profitability in
2017.
The business model transformation initiated in
fall 2015 is beginning to pay off, and we expect to see the full
impact in 2018.
To continue its business model transformation
and refocus its strategy, Cegedim is contemplating divestment of
its Cegelease and Eurofarmat subsidiaries. These subsidiaries
operate principally in the financial domain, are highly valued, and
require additional resources to continue pursuing and accelerating
their development for the benefit of their clients and
employees.
Revenue trends by division
- In the second quarter of 2017
|
|
Second quarter |
In €
million |
|
2017 |
2016 |
Chg. L-f-l |
Chg. Reported |
Health insurance, HR and
e-services |
|
71.7 |
64.8 |
+7.3% |
+10.5% |
Healthcare
professionals |
|
44.3 |
43.7 |
+3.8% |
+1.5% |
Activities not
allocated |
|
0.9 |
0.8 |
+19.4% |
+19.4% |
Cegedim |
|
116.9 |
109.3 |
+6.0% |
+7.0% |
In the second quarter of 2017, Cegedim posted
consolidated revenues of €116.9 million, up 7.0% on a reported
basis. Excluding an unfavorable currency translation effect of 1.1%
and a 2.1% boost from acquisitions, revenues rose 6.0%.
The unfavorable currency translation effect of
€1.2 million, or 1.1%, was chiefly due to the €1.3 million negative
impact of the pound sterling, which represents 10.7% of Group
revenues.
The €2.3 million positive impact from
acquisitions, or 2.1%, was mainly due to the acquisition of
Futuramedia in France in November 2016.
All of the divisions improved in like-for-like
terms. Health insurance, HR and e-services division revenues rose
by 7.3%, and Healthcare professionals division revenues rose by
3.8%.
- In the first half of 2017
|
|
Half-year |
In €
million |
|
2017 |
2016 |
Chg. L-f-l |
Chg. Reported |
Health insurance, HR and
e-services |
|
140.3 |
124.6 |
+9.8% |
+12.6% |
Healthcare
professionals |
|
88.4 |
89.4 |
+1.4% |
(1.1)% |
Activities not
allocated |
|
2.0 |
1.6 |
+26.2% |
+26.2% |
Cegedim |
|
230.6 |
215.5 |
+6.4% |
+7.0% |
In the first half of 2017, Cegedim posted
consolidated revenues of €230.6 million, up 7.0% on a reported
basis. Excluding an unfavorable currency translation effect of 1.2%
and a 1.8% boost from acquisitions, revenues rose 6.4%.
The unfavorable currency translation effect of
€2.6 million, or 1.2%, was chiefly due to the €2.8 million negative
impact of the pound sterling, which represents 10.9% of Group
revenues.
The €3.9 million positive impact from
acquisitions, or 1.8%, was mainly due to the acquisition of
Futuramedia in France in November 2016.
All of the divisions improved in like-for-like
terms. Health insurance, HR and e-services division revenues rose
by 9.8%, and Healthcare professionals division revenues rose by
1.4%.
Analysis of business trends by division
- Health insurance, HR and e-services
The division's first half 2017 revenues came
to €140.3 million, up 12.6% on a reported basis. The November 2016
acquisition of Futuramedia in France made a positive
contribution of 3.1%. Currency effects made a negative contribution
of 0.3%. Like-for-like revenues rose 9.8% over the
period.The Health insurance, HR and e-services
division represented 60.8% of consolidated revenues, compared
with 57.8% over the same period a year earlier.
The division's second quarter 2017 revenues
came to €71.7 million, up 10.5% on a reported basis. The November
2016 acquisition of Futuramedia in France made a
positive contribution of 3.5%. Currency effects made a negative
contribution of 0.3%. Like-for-like revenues rose 7.3% over the
period.
Growth was driven mainly by:
- Continued double-digit growth at Cegedim SRH, as work began
with several new clients of the SaaS platform for HR
management;
- Strong sales momentum leading to the start of work with several
new clients of the SaaS platform for electronic data exchange,
Global Information Services, including payment platforms. As a
result, Cegedim e-business posted double-digit revenue growth in
the first two quarters of 2017;
- Double-digit growth in iGestion BPO activities for health
insurance companies and mutual insurers;
- The continuation of positive trends - for several quarters now
- in third-party payment processing services;
- Modest growth in software and services for the personal
insurance market, despite the impact of switching to the SaaS
format.
The division's first half 2017 revenues came
to €88.4 million, down 1.1% on a reported basis. Currency effects
made a negative contribution of 2.5%. There was virtually no impact
from acquisitions or divestments. Like-for-like revenues rose 1.4%
over the period.The Healthcare professionals
division represented 38.3% of consolidated revenues, compared
with 41.5% over the same period a year earlier.
The division's second quarter 2017 revenues
came to €44.3 million, up 1.5% on a reported basis. Currency
effects made a negative contribution of 2.4%. There was virtually
no impact from acquisitions or divestments. Like-for-like revenues
rose 3.8% over the period.
Second-quarter growth more than offset the
decline in the first quarter. The key performances responsible for
this positive trend were:
- Double-digit Q2 growth from Pulse, the computerization of
doctors, and the RCM business in the US. RCM is a BPO-type business
and is growing rapidly, with double-digit growth over the first
half that will negatively affect EBITDA for the period;
- Computerization products and services for doctors in Belgium,
Spain and France, and for French nurses, physical therapists,
speech therapists, orthoptists, midwives, and podiatrists;
- Computerization products and services for French pharmacists,
which returned to growth thanks to the Smart Rx launch of last
September. The business confirmed strong momentum in its order
intake compared with a year ago;
- A good performance in the first half by the BCB scientific
database for prescription assistance, prescription fulfillment, and
health products.
- Cegelease, the financial lease business.
This performance was partly offset by a decline
in revenue of computerization solutions to UK doctors pending the
release of a full version in SaaS format. The first modules arrived
on the market early this year and were well received.
The division's first half 2017 revenues came
to €2.0 million, up 26.2% both on a reported basis and like for
like. There were no currency effects and no acquisitions or
divestments.The Activities not allocated
division represented 0.9% of consolidated revenues, compared
with 0.7% over the same period a year earlier.
The division's second quarter 2017 revenues
came to €0.9 million, up 19.4% both on a reported basis and like
for like. There were no currency effects and no acquisitions or
divestments.
This favorable trend reflects an undemanding
comparison and good development in the facilities management and
data hosting business, including for health data hosting.
Highlights
Apart from the items cited below, to the best of
the company's knowledge, there were no events or changes during the
period that would materially alter the Group's financial
situation.
On February 10, 2017, Cegedim was ordered to pay
€4,636,000 to the Tessi company for failing to meet certain
obligations with respect to an asset sale made on July 2, 2007.
Cegedim has decided to appeal this decision.
Cegedim, jointly with IMS Health, is being sued
by Euris for unfair competition. Cegedim has filed a motion
claiming that IMS Health should be the sole defendant.
- Partial interest rate hedging
To hedge part of its exposure to euro interest
rate fluctuations arising from its RCF, the Group carried out an
interest rate swap on February 17, 2017. Under the zero-premium
swap agreement, Cegedim receives the 1-month Euribor rate if it
exceeds 0%, receives nothing otherwise, and pays a fixed rate of
0.2680% for a notional amount of €50 million, starting on February
28, 2017, and maturing February 26, 2021.
To hedge part of its exposure to euro interest
rate fluctuations arising from its RCF, the Group carried out an
interest rate swap on May 11, 2017. Under the zero-premium swap
agreement, Cegedim receives the 1-month Euribor rate if it exceeds
0%, receives nothing otherwise, and pays a fixed rate of 0.2750%
for a notional amount of €30 million, starting on May 31, 2017, and
maturing December 31, 2020.
- Acquisition of B.B.M. Systems in the UK
On February 23, 2017, Cegedim acquired UK
company B.B.M. Systems through its Alliadis Europe Ltd subsidiary.
The deal strengthens the Group's expertise in developing
cloud-based products for general practitioners.
B.B.M. Systems had 2016 revenues of around €0.7
million and earned a profit. It contributes to the Group's scope of
consolidation from March 1, 2017.
- Changes to Cegedim SA's Board of Directors
In keeping with the wishes of BPIFrance, Ms.
Anne-Sophie Hérelle has been appointed to replace Ms. Valérie
Raoul-Desprez on the Board of Directors. The permanent
representative of BPIFrance, is now Ms. Marie Artaud-Dewitte,
Deputy Head of Legal Affairs at Bpifrance Investissements. She
replaces Ms. Anne-Sophie Hérelle.
- Acquisition of Adaptive Apps in the UK
On May 3, 2017, Cegedim acquired UK company
Adaptive Apps through its In Practice Systems Limited subsidiary.
The deal strengthens the Group's expertise in developing
cloud-based and mobile products for healthcare professionals.
Adaptive Apps had 2016 revenues of around €1.5
million and earned a profit. It contributes to the Group's scope of
consolidation from May, 2017.
Significant post-closing transactions and events
To the best of the company's knowledge, apart from the items
cited below, there were no events or changes after the accounts
were closed that would materially alter the Group's financial
situation.
On July 21, 2017, Cegedim paid €4,636,000 to the
Tessi company to comply with a court ruling of February 10,
2017.
Cegedim has decided to appeal this decision. The appeal is
currently under way
- Cegelease contemplated disposal
As part of the business model transformation plan that the Group
initiated in fall 2015, Cegedim is contemplating divestment of its
Cegelease and Eurofarmat subsidiaries. These subsidiaries operate
principally in the financial domain, are highly valued, and require
additional resources to continue pursuing and accelerating their
development for the benefit of their clients and employees.
The two businesses have 24 employees in France.
In 2016 they contributed €5.4 million to Group consolidated EBITDA.
The subsidiaries' standalone EBITDA amounted to €18.1 million in
2016.
If the Group receives satisfactory offers and is
able to obtain the necessary approvals, it plans to close the deal
in the second half of 2017. The Group in no way guarantees that a
deal will be carried out.
A successful sale would give the Group a
portfolio of businesses that fit well together and generate strong
synergies. Cegedim is not planning any further divestments.
Assisting Cegedim on this transaction are the
consulting firm of Ohana & Co and the law firm of Freshfields
Bruckhaus Deringer.
Outlook
Cegedim continues to reinvent itself in 2017,
pursuing innovation and investing in the future by transforming its
business model. The business model transformation is well under
way, so growth momentum is expected to continue and lead to
improving profitability in the future.
Even though our first-half revenue growth was
stronger than our current guidance and we do not expect trends in
the Group's core businesses to change, Cegedim is reiterating its
full-year outlook of:
- Like-for-like revenue growth between 4.0% and 6.0%.
- EBITDA in a range of €66.0 million to €72.0 million
inclusive.
The above outlook does not reflect the potential
divestments of Cegelease and Eurofarmat.
Cegedim expects to see the full positive impact
of its investments, reorganization and transformation in 2018.
The Group does not expect any significant
acquisitions in 2017 and does not disclose earnings projections or
estimates.
- Potential impact of Brexit
In 2016, the UK accounted for 12.7% of
consolidated Group revenues and 14.8% of consolidated Group
EBIT.
Cegedim deals in local currency in the UK, as it
does in every country where it is present. Thus Brexit is unlikely
to have a material impact on Group EBIT.
With regard to healthcare policy, the Group has
not identified any major European programs at work in the UK and
expects UK policy to be only marginally affected by Brexit.
The figures cited above include guidance on
Cegedim's future financial performances. This forward-looking
information is based on the opinions and assumptions of the Group's
senior management at the time this press release is issued and
naturally entails risks and uncertainty. For more information on
the risks facing Cegedim, please refer to points 2.4, "Risk factors
and insurance", and 3.7, "Outlook", of the 2016 Registration
Document filed with the AMF on March 29, 2017, under number
D.17-0255.
|
September 21, 2017, after market closing September 22,
2017, at 2:30 pm October 26, 2017, after market
closing |
Half-year 2017 earnings Analyst meeting (SFAF) Q3 2017
revenues |
Financial calendar
July 27, 2017, at 6:00pm (Paris
time) |
The Group will hold a conference call hosted by Jan
Eryk Umiastowski, Cegedim Chief Investment Officer and Head of
Investor Relations. The webcast is available at the following
address: http://bit.ly/2uM93g1 The second quarter 2017 revenue
presentation is available at: The website:
http://www.cegedim.fr/finance/documentation/Pages/presentations.aspx
The Group's financial communications app, Cegedim IR. To download
the app, visit:
http://www.cegedim.fr/finance/profil/Pages/CegedimIR.aspx |
Contact Numbers : |
France : +33 1 72 00 15 10 United
States : +1 646 722 4907 UK and
others : +44 (0)20 3043 2440 |
PIN Code: 30006191# |
Additional information
Q2
2017 revenue figures have not been audited by the Statutory
Auditor. |
Annexe
Breakdown of revenue by quarter and division
In
€ thousands |
|
Q1 |
Q2 |
Q3 |
Q4 |
Total |
Health insurance, HR and e-services |
|
68,606 |
71,650 |
- |
- |
140,256 |
|
Healthcare
professionals |
|
44,045 |
44,334 |
- |
- |
88,379 |
|
Activities not
allocated |
|
1,054 |
930 |
- |
- |
1,983 |
|
Cegedim |
|
113,705 |
116,913 |
- |
- |
230,618 |
|
In
€ thousands |
|
Q1 |
Q2 |
Q3 |
Q4 |
Total |
Health insurance, HR and e-services |
|
59,728 |
64,847 |
60,607 |
77,143 |
262,325 |
|
Healthcare
professionals |
|
45,687 |
43,676 |
41,459 |
44,404 |
175,226 |
|
Activities not
allocated |
|
793 |
778 |
770 |
954 |
3,295 |
|
Cegedim |
|
106,208 |
109,301 |
102,836 |
122,501 |
440,846 |
|
Breakdown of revenue by geographic zone and division
In
€ thousands |
|
France |
EMEA excl. France |
Americas |
APAC |
Health insurance, HR and e-services |
|
96.9% |
3.1% |
- |
- |
Healthcare
professionals |
|
60.5% |
30.4% |
9.1% |
- |
Activities not
allocated |
|
99.5% |
0.5% |
- |
- |
Cegedim |
|
83.0% |
13.5% |
3.5% |
- |
Breakdown of revenue by currency and division
In
€ thousands |
|
Euro |
GBP |
USD |
Others |
Health insurance, HR and e-services |
|
96.9% |
2.0% |
0.0% |
1.1% |
Healthcare
professionals |
|
64.6% |
25.3% |
9.0% |
1.1% |
Activities not
allocated |
|
100.0% |
0.0% |
0.0% |
0.0% |
Cegedim |
|
84.6% |
10.9% |
3.4% |
1.1% |
Activities not allocated: This division encompasses the
activities the Group performs as the parent company of a listed
entity, as well as the support it provides to the three operating
divisions. BPO (Business Process Outsourcing): BPO is the
contracting of non-core business activities and functions to a
third-party provider. Cegedim provides BPO services for human
resources, Revenue Cycle Management in the US and management
services for insurance companies, provident institutions and mutual
insurers. Business model transformation: Cegedim decided in
fall 2015 to switch all of its offerings over to SaaS format, to
develop a complete BPO offering, and to materially increase its
R&D efforts. This is reflected in the Group's revamped business
model. The change has altered the Group's revenue recognition and
negatively affected short-term profitability EPS: Earnings
Per Share is a specific financial indicator defined by the Group as
the net profit (loss) for the period divided by the weighted
average of the number of shares in circulation. Operating
expenses: Operating expenses is defined as purchases used,
external expenses and payroll costs. Revenue at constant
exchange rate: When changes in revenue at constant exchange
rate are referred to, it means that the impact of exchange rate
fluctuations has been excluded. The term "at constant exchange
rate" covers the fluctuation resulting from applying the exchange
rates for the preceding period to the current fiscal year, all
other factors remaining equal. Revenue on a like-for-like
basis: The effect of changes in scope is corrected by restating
the sales for the previous period as follows: by removing the
portion of sales originating in the entity or the rights acquired
for a period identical to the period during which they were held to
the current period; similarly, when an entity is transferred, the
sales for the portion in question in the previous period are
eliminated. Life-for-like data (L-f-l): At constant scope
and exchange rates. Internal growth: Internal growth covers
growth resulting from the development of an existing contract,
particularly due to an increase in rates and/or the volumes
distributed or processed, new contracts, acquisitions of assets
allocated to a contract or a specific project. |
|
External growth: External growth covers acquisitions during
the current fiscal year, as well as those which have had a partial
impact on the previous fiscal year, net of sales of entities and/or
assets. EBIT: Earnings Before Interest and Taxes. EBIT
corresponds to net revenue minus operating expenses (such as
salaries, social charges, materials, energy, research, services,
external services, advertising, etc.). It is the operating income
for the Cegedim Group. EBIT before special items: This is
EBIT restated to take account of non-current items, such as losses
on tangible and intangible assets, restructuring, etc. It
corresponds to the operating income from recurring operations for
the Cegedim Group. EBITDA: Earnings before interest, taxes,
depreciation and amortization. EBITDA is the term used when
amortization or depreciation and revaluations are not taken into
account. "D" stands for depreciation of tangible assets (such as
buildings, machines or vehicles), while "A" stands for amortization
of intangible assets (such as patents, licenses and goodwill).
EBITDA is restated to take account of non-current items, such as
losses on tangible and intangible assets, restructuring, etc. It
corresponds to the gross operating earnings from recurring
operations for the Cegedim Group. Adjusted EBITDA :
Consolidated EBITDA adjusted, for 2016, for the €4.0m of
negative impact from impairment of receivables in the Healthcare
Professional division Net Financial Debt: This represents
the Company's net debt (non-current and current financial debt,
bank loans, debt restated at amortized cost and interest on loans)
net of cash and cash equivalents and excluding revaluation of debt
derivatives. Free cash flow: Free cash flow is cash
generated, net of the cash part of the following items: (i) changes
in working capital requirements, (ii) transactions on equity
(changes in capital, dividends paid and received), (iii) capital
expenditure net of transfers, (iv) net financial interest paid and
(v) taxes paid. EBIT margin: EBIT margin is defined as the
ratio of EBIT/revenue. EBIT margin before special
items: EBIT margin before special items is defined as the ratio
of EBIT before special items/revenue. Net cash: Net cash is
defined as cash and cash equivalent minus overdraft. |
Glossary
About
Cegedim: Founded in 1969, Cegedim is an innovative technology and
services company in the field of digital data flow management for
healthcare ecosystems and B2B, and a business software publisher
for healthcare and insurance professionals. Cegedim employs more
than 4,000 people in 11 countries and generated revenue of €441
million in 2016. Cegedim SA is listed in Paris (EURONEXT: CGM).To
learn more, please visit: www.cegedim.comAnd follow Cegedim on
Twitter: @CegedimGroup |
Aude
BalleydierCegedim Media Relations and Communications
ManagerTel.: +33 (0)1 49 09 68 81aude.balleydier@cegedim.com |
Jan Eryk
UmiastowskiCegedimChief Investment Officerand head of
Investor RelationsTel.: +33 (0)1 49 09 33
36janeryk.umiastowski@cegedim.com |
Anne PezetPRPA
AgencyMedia Relations Tel.: +33 (0)1 46 99 69
69anne.pezet@prpa.fr |
Follow Cegedim:
|
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