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Cegedim: Revenue grew by 7.7% in FY 2019

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PRESS RELEASE

Quarterly financial information as of December 31, 2019
IFRS – Regulated information – Not audited

Cegedim: Revenue grew by 7.7% in FY 2019

  • Like-for-like revenues grew 7.0% over FY 2019
  •  Like-for-like revenues grew 6.5% over Q4 2019

Boulogne-Billancourt, France, January 27, 2020, after the market close

Cegedim, an innovative technology and services company, generated consolidated full year revenues of €503.7 million in 2019, an increase of 7.7% as reported and 7.0% like-for-like compared with the same period in 2018. All the operating divisions made positive year-on-year contributions to the Group’s like-for-like growth

Group revenue trends, consolidated and by division

·Full year 2019

    Full year
in € million   2019 2018 Chg. LFL Chg. Reported
Health insurance, HR and e-services   340.5 307.7 +8.6% +10.7%
Healthcare professionals   159.8 156.2 +4.2% +2.3%
Corporate and others   3.4 3.8 (10.2)% (10.2)%
Cegedim   503.7 467.7 +7.0% +7.7%

Excluding a favorable currency translation impact of 0.1% and a favorable scope effect of 0.6%, revenues rose 7.0%.

The €2.6 million boost from scope effects, or 0.6%, was chiefly due to the acquisition of Ximantix in Germany on January 21, 2019, BSV in France on January 31, 2019, Cosytec in France in July 2019, and that of NetEDI in the United Kingdom, partly offset by the sale of virtually all the business activities of Pulse Systems Inc in the United States in August 2019. Pulse Systems contributed €11.3million to the Group’s consolidated revenue in 2018 and €7.4 million in 2019.

BPO activities for the insurance and human resources business generated revenues totaling €45.5 million over the full year 2019, a 26.8% improvement compared with 2018.

·Fourth Quarter 2019

    Fourth quarter
in € million   2019 2018 Chg. LFL Chg. Reported
Health insurance, HR and e-services   98.4 86.5 +11.3% +13.8%
Healthcare professionals   40.2 43.7 (2.5)% (8.1)%
Corporate and others   0.9 1.0 (11.7)% (11.7)%
Cegedim   139.5 131.2 +6.5% +6.3%

Cegedim’s Q4-2019 consolidated revenues came to €139.5 million, up 6.3% as reported. Excluding a favorable currency translation impact of 0.2% and an unfavorable scope effect of 0.4%, revenues rose 6.5%.

The unfavorable scope impact of €0.5 million, or 0.4%, was mainly attributable to the acquisitions of Ximantix in Germany on January 21, 2019, BSV in France on January 31, 2019, Cosytec in France in July 2019, and that of NetEDI in United Kindown, offset by the sale of virtually all the business activities of Pulse Systems Inc in the United States in August 2019.

Analysis of business trends by division

·Health insurance, HR and e-services

The division’s reported revenues rose 10.7% in the full year 2019 to €340.5 million. Currencies had virtually no impact. Acquisitions had a favorable impact of 2.0%. Like-for-like revenues rose 8.6% over the period. Over the full year 2019, acquisitions’ positive contribution of 2.0%, or €6.2 million, came mainly from Ximantix, BSV, NetEDI and Cosytec. This division represented 67.6% of consolidated FY 2019 revenues compared with 65.8% a year earlier.

The businesses that made the biggest contributions to this growth in 2019 were—in the health insurance sector—BPO and third-party payment flow processing activities, Cegedim e-business (document and process digitization), Cegedim SRH (HR management solutions), Cegedim Health Data (data and analytics for the healthcare market), and Cegedim-Media (digital and conventional communications solutions in pharmacies).

·Healthcare professionals

The division’s reported revenues rose 2.3% in the full year 2019 to €159.8 million. Currency translation had a positive impact of 0.4%. Acquisitions and disposals had a negative impact of 2.3%. Like-for-like revenues rose 4.2% over the period. Over the full year 2019, the 2.3% negative impact from acquisitions and disposals, or €3.6 million, was mainly due to the sale of virtually all the business activities of Pulse Systems Inc in the United States in August 2019. This division represented 31.7% of consolidated FY 2019 revenues compared with 33.4% a year earlier.

The businesses that made the biggest positive contributions over the year were computerization solutions for doctors and allied health professionals in France, for pharmacists in the United Kingdom and Romania, for appointment scheduling and remote consultations (Docavenue), and for doctors in Romania and the UK.

The decrease in Q4-19 revenues was the result of a challenging comparison caused by one-off sales to the NHS recorded in the fourth quarter in 2018 and in the second quarter in 2019.

·Corporate and others

The division’s revenues fell 10.2% as reported and like for like in the full year 2019, to €3.4 million.

Highlights

To the best of the company’s knowledge, apart from the items listed below, there were no events or changes during the fourth quarter of 2019 that would materially alter the Group’s financial situation.

·Tessi lawsuit
On September 17, 2019, the Paris Court of Appeals overturned the Commercial Court’s ruling and reduced Cegedim’s penalty for financial damages resulting from the breach of a contract of sale to €2,857,693 from €4,586,000. Tessi repaid Cegedim the sum of €1,694,678 during the fourth quarter of 2019.

Significant transactions and events post December 31, 2019

To the best of the company’s knowledge, there were no post-closing events or changes that would materially alter the Group’s financial situation.

Outlook

For the full year 2019, the Group had expected like-for like growth above 5%. Cegedim recorded full year 2019 like-for-like revenue growth of 7.0%.

The Group is clarifying its 2019 objective for EBITDA* growth. Apart from the positive impact of the first application of IFRS 16, EBITDA growth should be in line with the growth recorded in revenue.

The Group will communicate its 2020 outlook when it releases its 2019 results on March 19, 2020, after the market close.

The Group does not expect to make any significant acquisitions in 2020.

Lastly, the Group does not provide earnings forecasts.

·Potential impact of Brexit

In 2018, the UK accounted for 10.0% of consolidated Group revenues and 9.9% of consolidated Group EBITDA*. In 2019, the UK accounted for 9.8% of consolidated Group revenues.

Cegedim deals in local currency in the UK. Brexit is unlikely to have a material impact on Group EBITDA*.

With regard to healthcare policy, the Group has not identified any major European programs at work in the UK, and no contracts with entities in the UK contain clauses dealing with Brexit.

Additional information

Fourth quarter 2019 and full year 2019 revenue figures have not been audited by the Statutory Auditors.

The fourth quarter 2019 revenue presentation is available at:

−      The website: https://www.cegedim.com/finance/documentation/Pages/presentations.aspx

−      The Group’s financial communications app, Cegedim IR. To download the app, visit: https://www.cegedim.com/finance/profile/Pages/cegedimir.aspx.

(*) Alternative performance indicator
EBITDA is equivalent to recurring operating income plus net depreciation and amortization expenses.
“Recurring operating income” is defined as the difference between operating income and other non-recurring operating income and expenses.
“Other non-recurring operating income and expenses” may include impairment of tangible assets, goodwill, and other intangible assets, gains or losses on disposals of non-current assets, restructuring costs, and costs relating to workforce adaptation measures.

2020 Financial calendar

WEBCAST ON OCTOBER 24, 2019, AT 6:15 PM PARIS TIME
FR : +33 1 72 72 74 03  USA : +1 646 722 4916  UK : +44 (0)207 1943 759 PIN CODE: 34380666#
The webcast is available at: www.cegedim.fr/webcast
  March 19 after the market close

March 20 at 10:00 am CET

April 27 after the market close

June 17 at 9:30 am CET

June 25 time to be defined later

July 28 after the market close

September 17 after the market close

September 18 at 10:00 am CET

October 28 after the market close

2019 results

Analyst meeting (SFAF) in Cegedim’s auditorium

First quarter 2020 revenue

Cegedim shareholders’ meeting

Cegedim’s investor day

Second quarter 2020 revenue

First half 2020 results

Analyst meeting (SFAF) in SFAF’s offices

Third quarter 2020 revenues

Annexes

Breakdown of revenue by quarter and division

·Year 2019

in € thousands   Q1 Q2 Q3 Q4 Total
Health insurance, HR and e-services   79,239 83,260 79,585 98,444 340,527  
Healthcare professionals   39,100 42,472 38,014 40,201 159,788  
Corporate and others   882 842 836 869 3,430  
Revenue from continuing activities   119,222 126,574 118,435 139,514 503,745  
Revenue from activities held for sale   0 0 0 0 0  
IFRS 5 restatement   0 0 0 0 0  
Group revenue   119,222 125,574 118,435 139,514 503,745  

·Year 2018

in € thousands   Q1 Q2 Q3 Q4 Total
Health insurance, HR and e-services   72,923 76,613 71,620 86,526 307,684  
Healthcare professionals   38,029 38,133 36,291 43,731 156,184  
Corporate and others   989 947 900 985 3,820  
Revenue from continuing activities   111,941 115,693 108,811 131,242 467,688  
Revenue from activities held for sale   2,066 0 0 0 2,066  
IFRS 5 restatement   (36) 0 0 0 (36)  
Group revenue   113,970 115,693 108,811 131,242 469,717  

Breakdown of revenue by geographic zone and division

·As of December 31, 2019

as a % of consolidated revenues   France EMEA excl. France Americas APAC
Health insurance, HR and e-services   95.8% 4.2% 0.0%
Healthcare professionals   62.1% 32.9% 4.9%
Corporate and others   99.4% 0.6% 0.0%
Cegedim   85.2% 13.3% 1.6%

Breakdown of revenue by currency and division

·As of December 31, 2019

as a % of consolidated revenues   Euro GBP USD Others
Health insurance, HR and e-services   96.5% 2.6% 0.0% 0.9%
Healthcare professionals   67.2% 25.4% 4.7% 2.8%
Corporate and others   100.0% 0.0% 2.8% 0.0%
Cegedim   87.2% 9.8% 1.5% 1.5%
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.

Corporate and others: 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.

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.

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.

  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.

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.

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.

Life-for-like data (L-f-l): At constant scope and exchange rates.

Net cash: Net cash is defined as cash and cash equivalent minus overdraft.

Operating expenses: Operating expenses is defined as purchases used, external expenses and payroll costs.

Glossary

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 January 27, 2020, no earlier than 5:45 pm Paris time.
The terms “business model transformation” and “BPO” are defined in the glossary.
The Group applies the IFRS 15 accounting standard, “Revenue from contracts with customers”.
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 Chapter 2, points 2.5, “Risk factors and insurance”, and 2.7, “Outlook”, of the 2018 Registration Document filled with the AMF on March 29, 2019.
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 almost 5,000 people in more than 10 countries and generated revenue in excess of €500 million in 2019. Cegedim SA is listed in Paris (EURONEXT: CGM).
To learn more, please visit: www.cegedim.com
And follow Cegedim on Twitter: @CegedimGroup, LinkedIn and Facebook.

 

Aude Balleydier
Cegedim
Media Relations
and Communications Manager
Tel.: +33 (0)1 49 09 68 81
[email protected]
Jan Eryk Umiastowski
Cegedim
Chief Investment Officer
and head of Investor Relations
Tel.: +33 (0)1 49 09 33 36
[email protected]
Céline Pardo &
Inrène Semerard
suPR
Media Relations
Tel: +33 (0)6 52 08 13 66
  +33 (0)6 80 80 83 97
[email protected]
 

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