Quarterly Financial Information as of June 30,
2016
IFRS - Regulated Information - Not Audited
Cegedim: A dynamic first half of
2016, with revenue up 4.3% on a reported basis
-
Transition toward cloud offerings
continues
-
Robust investment plan still in place
-
Q2 impact from reorganization of US
operations
-
Significant number of contracts signed
Disclaimer: Pursuant to IAS 17 as it applies to
Cegelease's activities, leases are now classified as financial
leases, resulting in an adjustment to the Q1, Q2 and Half-year 2015
figures published in 2015. Readers should refer to the last annexe
of this press release for full details of the adjustments. All of
the figures in this press release reflect the adjustments. |
Conference CALL on July 26, 2016, at 6:15PM
CET |
FR: +33 1 70 77 09 44 |
USA: +1 866 907 5928 |
UK: +44 (0)20 3367 9453 |
No access code required |
Boulogne-Billancourt, July 26,
2016
Cegedim, an
innovative technology and services company, generated first half
2016 consolidated revenues from continuing activities of €215.5
million, up 4.3% on a reported basis and 3.6% like for like
compared with the same period in 2015.
The Health
insurance, HR and e-services division's like-for-like growth
increased to 10.3% in the second quarter from 8.7% in the first
quarter, even though clients are being transitioned over to SaaS /
cloud offerings. Conversely, the Healthcare
professionals division experienced a 6.3% like-for-like decline
in Q2 revenues after a stable first quarter. The decline was
chiefly due to the SaaS switch, particularly in Belgium, and to
business delays in the US, mainly as a result of ongoing
restructuring.
As we have already said, 2016 is a
transitional year that will transform the Group. Cegedim continues to invest heavily in innovation and
is developing new offerings, notably BPO solutions. Cegedim's
clients demonstrated their enthusiasm for the new strategy in the
first half of 2016, which saw several new contract wins and 3.6%
like-for-like revenue growth.
During this transitional period,
which affects the business model, profitability is negatively
impacted. In an uncertain economic conditions and a challenging
geopolitical context, Cegedim maintains its
target for 2016 revenue and will update the EBITDA target in
September. Cegedim expects to start seeing the benefits of its
investments, reorganization and transformation in 2017, with the
full impact coming in 2018.
Further out, Cegedim will enjoy greater customer loyalty, closer
client relationships, simpler operating processes, more robust
offerings and stronger geographic positions. These changes will
also boost the share of recurring revenues, improve sales growth
and predictability, and enhance the Group's profitability.
Revenue trends by
division
|
|
Half-year |
In € millions |
|
2016 |
2015 |
Chg. Reported |
Chg. L-f-l |
Health
insurance, HR and e-services |
|
124.6 |
110.7 |
+9.6% |
+12.5% |
Healthcare professionals |
|
89.4 |
94.0 |
(3.0)% |
(5.0)% |
Activities not allocated |
|
1.6 |
1.9 |
(18.4)% |
(18.4)% |
Cegedim |
|
215.5 |
206.7 |
+3.6% |
+4.3% |
In the first half of 2016,
Cegedim posted consolidated revenues from
continuing activities of €215.5 million, up 4.3% on a reported
basis. Excluding an unfavorable currency translation effect of 0.9%
and a 1.6% boost from acquisitions, revenues rose 3.6%.
In like-for-like terms, the
Health Insurance, HR and e-services division's
revenue rose by 9.6%, whereas the Healthcare
professionals divisions' revenues fell by 3.0%.
|
|
Second quarter |
In € millions |
|
2016 |
2015 |
Chg. Reported |
Chg. L-f-l |
Health
insurance, HR and e-services |
|
64.8 |
57.0 |
+10.3% |
+13.8% |
Healthcare professionals |
|
43.7 |
48.1 |
(6.3)% |
(9.2)% |
Activities not allocated |
|
0.8 |
1.1 |
(29.2)% |
(29.2)% |
Cegedim |
|
109.3 |
106.2 |
+2.4% |
+2.9% |
In the second quarter of
2016, Cegedim posted
consolidated revenues from continuing activities of €109.3 million,
up 2.9% on a reported basis. Excluding an unfavorable currency
translation effect of 1.3% and a 1.9% boost from acquisitions,
revenues rose 2.4%.
In like-for-like terms, the
Health Insurance, HR and e-services division's
revenue rose by 10.3%, whereas the Healthcare
professionals divisions' revenues fell by 6.3%.
Analysis of business trends by
division
The division's
first half 2016 revenues came to €124.6 million, up 12.5% on a
reported basis. The July 2015 acquisition of Activus in the UK made
a positive contribution of 3.0%. Currencies had virtually no
impact. Like-for-like revenues rose 9.6% over the
period.
The Health
insurance, HR and e-services division
represented 57.8% of consolidated revenues from continuing
activities, compared with 53.6% over the same period a year
earlier.
This significant half year 2016
revenue growth was chiefly attributable to:
-
Cegedim Insurance
Solutions, boosted by robust growth in the business of managing
third-party payment flows and in software and services for the
personal insurance segment. The start of operations with new
clients in the software and services segment more than offset the
effects of switching over to a cloud-based offering. The iGestion BPO solution for health insurers posted
double-digit growth. And the division benefited from the July 2015
acquisition of Activus.
-
Double-digit growth in revenue from operating
Cegedim e-business' Global Invoice Services,
the SaaS platform for electronic data exchanges, including payment
platforms, following the start of operations with new
clients.
-
The start of operations with several clients on
the SaaS platform for human resources management at Cegedim SRH, resulting in double-digit revenue
growth.
The division's
second quarter 2016 revenues came to €64.8 million, up 13.8% on a
reported basis. The July 2015 acquisition of Activus in the UK made
a positive contribution of 3.5%. Currencies had virtually no
impact. Like-for-like revenues rose 10.3% over the period.
The trends seen in the first
quarter accelerated in the second quarter.
The division's
first half 2016 revenues came to €89.4 million, down 5.0% on a
reported basis. Currency effects made a negative contribution of
2.0%. There was no impact from acquisitions or divestments.
Like-for-like revenues fell 3.0% over the period.
The Healthcare professionals division
represented 41.5% of consolidated revenues from continuing
activities, compared with 45.5% over the same period a year
earlier.
The division's second quarter 2016 revenues came
to €43.7 million, down 9.2% on a reported basis. Currency effects
made a negative contribution of 2.9%. There was no impact from
acquisitions or divestments. Like-for-like revenues fell 6.3% over
the period.
This decline in revenue in the
first half and second quarter of 2016 was mainly attributable
to:
-
Double-digit growth in Pulse revenues in the first half that, however, revenue
declined in June due to the postponement of certain projects,
chiefly ones related to RCM products. The Group also set up a new,
more responsive organization to keep pace with a growing and
rapidly changing market, particularly in BPO. Thus changes have
been made to local management teams, and the cloud offerings of
Nightingale, acquired in late 2015, are being integrated and should
be available in the next few months. These efforts will weigh on
profitability in the short term but will ensure profitable growth
over the long run.
-
Brisk growth in offerings for physical
therapists and nurses in the second quarter, which more than made
up for the shortfall in the first quarter.
These performances were mainly
offset by:
-
Weaker activity in the computerization of UK
doctors, as the market is now moving predominantly to cloud-based
offerings. The investments now being made in Cegedim's own cloud offering are expected to result in
renewed sales growth starting in 2017.
-
The short-term negative impact of switching
Belgian doctors over to an SaaS model.
-
The second-quarter impact of low order intake by
the pharmaceutical segment in France at end of 2015. The segment's
order book has filled back up since May following the release of
the new Smart Rx, a comprehensive pharmacy
management solution built around a hybrid architecture that
combines local and cloud-based computing. The new solution will
allow networks amongst individual pharmacies and links with
healthcare professionals. Thus, revenues are likely to resume their
growth in the next few months.
The division's
first half 2016 revenues came to €1.6 million, down 18.4% 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 0.7% of consolidated revenues from continuing
activities, compared with 0.9% over the same period a year
earlier.
The division's first quarter 2016 revenues came to
€0.8 million, down 29.2% both on a reported basis and like for
like. There were no currency effects and no acquisitions or
divestments.
This trend reflects the return to
a normal level of billing.
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.
In January 2016, the Group took
out a new five-year revolving credit facility (RCF) of €200
million. The applicable interest rate for this credit facility is
Euribor plus a margin. The Euribor rate can be the 1-, 3- or 6-
month rate; if Euribor is below zero, it will be deemed to be equal
to zero. The margin can range from 0.70% to 1.40% depending on the
leverage ratio calculated semi-annually in June and December (Refer
to point 2.1.1.1 on page 14 of the Q1-2016 Quarterly Financial
Report).
On April 1, 2016, Cegedim exercised its call option on the entire 6.75%
2020 bond with ISIN code XS0906984272 and XS0906984355, for a total
principal amount of €314,814,000.00 and a price of 105.0625%, i.e.
a total premium of €15,937,458.75. The company then cancelled these
securities. The transaction was financed by drawing a portion of
the RCF obtained in January 2016 and using the proceeds of the sale
to IMS Health. Following this transaction, the Group's debt
comprised the €45.1 million FCB subordinated loan, the partially
drawn €200 million RCF, and overdraft facilities.
After Cegedim
announced that it would redeem the entire 6.75% 2020 bond, rating
agency Standard and Poor's raised the company's rating on April 28,
2016, to BB with a positive outlook.
Significant post-closing
transactions and events
To the best of the company's
knowledge, there were no events or changes after the accounts were
closed that would materially alter the Group's financial
situation.
Outlook
In an uncertain economic
conditions and a challenging geopolitical context, Cegedim maintains its target for 2016 revenue and will
update its EBITDA target in September. Cegedim expects to start
seeing the benefits of its investments, reorganization and
transformation in 2017, with the full impact coming in 2018. For
2016, Cegedim expects revenues from continuing
activities to be at least stable.
In 2015, the UK represented 15.1%
of consolidated Group revenue and 19.2% of Group EBIT.
Cegedim
operates in the UK in local currency, as it does in all the
countries where it operates. Thus, the impact on the consolidated
Group EBIT margin should be marginal.
The Group does not expect any
significant acquisitions in 2016 and does not disclose profit
projections or estimates.
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 2015
Registration Document filed with the AMF on March 31, 2016, as well
as point 2.4, "Risk factors", of the Interim Financial Report of Q1
2016.
|
September 15, 2016, after market closing
September 15, 2016, at 10am CET
November 29, 2016, after market closing |
2016 Half-year earnings
Analyst meeting (SFAF meeting)
Q3 2016 earnings |
Financial calendar
July 26, 2016, at 6:15pm
(Paris time) |
The Group
will hold a conference call hosted by Jan Eryk Umiastowski, Cegedim
Chief Investment Officer and Head of Investor Relations.
The H1 2016 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 70 77 09 44
United States: +1 866 907 5928
UK and others: +44 (0)20 3367 9453 |
No access code required |
Annexe
Breakdown of revenue by quarter
and division
In € thousands |
|
Q1 |
Q2 |
Q3 |
Q4 |
Total |
Health insurance, HR and e-services |
|
59,728 |
64,847 |
|
|
124,575 |
|
Healthcare professionals |
|
45,687 |
43,676 |
|
|
89,363 |
|
Activities not allocated |
|
793 |
778 |
|
|
1,572 |
|
Cegedim |
|
106,208 |
109,301 |
|
|
215,509 |
|
In € thousands |
|
Q1 |
Q2 |
Q3 |
Q4 |
Total |
Health insurance, HR and e-services |
|
53,712 |
57,000 |
|
|
110,712 |
|
Healthcare professionals |
|
45,931 |
48,093 |
|
|
94,024 |
|
Activities not allocated |
|
825 |
1,100 |
|
|
1,925 |
|
Cegedim |
|
100,468 |
106,193 |
|
|
206,661 |
|
Breakdown of revenue by
geographic zone and division
In € thousands |
|
France |
EMEA excl. France |
Americas |
APAC |
Health insurance, HR and e-services |
|
96.1% |
3.9% |
- |
- |
Healthcare professionals |
|
57.4% |
33.3% |
9.2% |
- |
Activities not allocated |
|
99.1% |
0.9% |
- |
- |
Cegedim |
|
80.1% |
16.1% |
3.8% |
- |
Breakdown of revenue by currency
and division
In € thousands |
|
Euro |
USD |
GBP |
Others |
Health insurance, HR and e-services |
|
96.1% |
- |
2.7% |
1.2% |
Healthcare professionals |
|
60.1% |
9.2% |
29.7% |
1.0% |
Activities not allocated |
|
100.0% |
- |
- |
- |
Cegedim |
|
81.2% |
3.8% |
13.9% |
1.1%- |
Restatement of the accounting
treatment of the financial lease business in the group consolidated
financial statement
Cegelease
is a wholly owned subsidiary of Cegedim,
which since 2001 has offered financing options
through a variety of contracts dedicated to pharmacies and
healthcare professionals in France. Initially, these solutions were
aimed at serving pharmacists who preferred to lease the pharmacy
management software they bought from the Cegedim group rather than pay up front. Over time, Cegelease
has diversified its activities. Having started as
the exclusive financial lease provider for Cegedim group products, Cegelease
is now a broker proposing a variety of leasing
solutions (for group products as well as products developed by
third parties) to a variety of clients (including clients who are
not already in business with other group entities).
After the sale of
its CRM and strategic data business to IMS Health, Cegedim
investigated these activities in depth and found
that they had to be reclassified pursuant to IAS 17 on March 23,
2016, when the 2015 accounts were published. All the impacts on
previous accounts are indicated in the 2015 Registration Document
filled with the AMF on March 31, 2016, in Chapter 4.4, point 1.3,
pages 89 to 94. Impacts on first half 2015 consolidated financial
statements are described below.
In € thousand |
|
Q1 2015
reported |
IFRS 5
impact for Cegedim Kadrige |
Restatement of leases |
Division
aggregation |
Q1 2015
restated |
|
|
|
(1) |
(2) |
(3) |
|
Health insurance, HR and e-services |
|
54,004 |
(292) |
- |
- |
53,712 |
Healthcare professionals |
|
37,187 |
- |
- |
8,744 |
45,931 |
Cegelease |
|
29,293 |
- |
(20,549) |
(8,744) |
- |
Activities not allocated |
|
825 |
- |
- |
- |
825 |
Cegedim |
|
121,309 |
(292) |
(20,549) |
- |
100,468 |
In € thousand |
|
Q2 2015
reported |
IFRS 5
impact for Cegedim Kadrige |
Restatement of leases |
Division
aggregation |
Q2 2015
restated |
|
|
|
(1) |
(2) |
(3) |
|
Health insurance, HR and e-services |
|
57,546 |
(546) |
- |
- |
57,000 |
Healthcare professionals |
|
39,352 |
- |
- |
8,741 |
48,093 |
Cegelease |
|
26,842 |
- |
(18,101) |
(8,741) |
- |
Activities not allocated |
|
1,100 |
- |
- |
- |
1,100 |
Cegedim |
|
124,839 |
(546) |
(18,101) |
- |
106,193 |
In € thousand |
|
HY 2015
reported |
IFRS 5
impact for Cegedim Kadrige |
Correction
of leases |
Division
aggregation |
HY 2015
restated |
|
|
|
(1) |
(2) |
(3) |
|
Health insurance, HR and e-services |
|
111,549 |
(837) |
- |
- |
110,712 |
Healthcare professionals |
|
76,539 |
- |
- |
17,485 |
94,024 |
Cegelease |
|
56,134 |
- |
(38,650) |
(17,485) |
- |
Activities not allocated |
|
1,925 |
- |
- |
- |
1,925 |
Cegedim |
|
246,148 |
(837) |
(38,650) |
- |
206,661 |
(1) The Cegedim Group decided to
sell the Kadrige activities. These activities are thus isolated in
separate lines of the profit and loss statement and balance sheet,
according to the IFRS 5 accounting standard.
(2) The correct accounting
treatment of the Cegelease finance lease business, for all types of
contracts (self-financed, sold except process management, or backed
by a bank) requires a downward restatement of the Q1 2015
consolidated revenue by €21m, of the Q2 2015 consolidated revenue
by €18m, and the HY 2015 consolidated revenue by €39m.
(3) The financial lease business
accounts for less than 10% of the consolidated revenue or EBITDA,
and as such is no longer isolated within the Group internal
reporting. These activities are reported into the "Healthcare
professionals" division, where they were classified prior to the
2014 annual closing.
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.
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: 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: 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.
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: defined as the ratio of
EBIT/revenue.
EBIT margin before special
items: defined as the ratio of EBIT before special
items/revenue.
Net cash: 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
3,600 people in 11 countries and generated revenue of €426 million
in 2015. Cegedim SA is listed in Paris (EURONEXT: CGM).
To learn more, please visit: www.cegedim.com
And follow Cegedim on Twitter: @CegedimGroup
|
Aude Balleydier
Cegedim Communications
Manager
and Media Relations
Tel.: +33 (0)1 49 09 68 81
aude.balleydier@cegedim.com |
Jan Eryk Umiastowski
Cegedim
Chief Investment Officer
and head of Investor Relations
Tel.: +33 (0)1 49 09 33 36
janeryk.umiastowski@cegedim.com |
Guillaume de Chamisso
PRPA Agency
Media Relations
Tel.: +33 (0)1 77 35 60 99
guillaume.dechamisso@prpa.fr |
Cegedim_TO_2Q_2016
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announcement is distributed by NASDAQ OMX Corporate Solutions on
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The issuer of this announcement warrants that they are solely
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information contained therein.
Source: Cegedim SA via Globenewswire
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