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, France, July 26, 2016 (GLOBE NEWSWIRE)
--
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
- In the first half of 2016
|
|
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%.
- In the second quarter of 2016
|
|
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
- Health insurance, HR and e-services
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).
- Exercise of the call option on the entire 2020 bond
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.
- S&P has raised Cegedim's rating to BB with positive
outlook
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.
- Potential impact of Brexit
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.
- First quarter 2015 revenue by division
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 |
- Second quarter 2015 revenue by division
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 |
- Half-year 2015 revenue by division
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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