Cegedim: Growth picked up speed in the first quarter of 2019
PRESS RELEASE |
Quarterly Financial Information as of March 31, 2019
IFRS - Regulated Information - Not Audited
Cegedim: Growth picked up speed in the first quarter of 2019
- Like-for-like revenue grew 4.6%
- Growth accelerated at the Health insurance, HR and e-services division
- Healthcare professionals division revenues grew in Q1
| 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 May 15, 2019, 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". |
| CONFERENCE CALL ON MAY 15, 2019, AT 6:15PM CET | ||||
| FR: 03 | USA: +1 844 286 0643 | UK: +44 (0) 207 1943 759 | PIN Code: 85432790# | |
| The webcast is available at: /webcast | ||||
Boulogne-Billancourt, France, May 15, 2019 after the market close
Cegedim, an innovative technology and services company, generated consolidated Q1-19 revenues of €119.2 million, an increase of 6.5% as reported and 4.6% 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.
BPO revenues rose 25% in the first quarter of 2019 to €10.6 million.
Revenue trends by division
| First quarter | |||||
| In € million | 2019 | 2018 | Chg. L-f-l | Chg. Reported | |
| Health insurance, HR and e-services | 79.2 | 72.9 | +6.4% | +8.7% | |
| Healthcare professionals | 39.1 | 38.0 | +1.7% | +2.8% | |
| Corporate and others | 0.9 | 1.0 | (10.8)% | (10.8)% | |
| Cegedim | 119.2 | 111.9 | +4.6% | +6.5% | |
In the first quarter of 2019, Cegedim posted consolidated Group revenues of €119.2 million, up 6.5% as reported. Excluding a positive impact of 0.3% from currency translation and 1.6% from acquisitions, revenues rose 4.6%.
The positive impact of €0.4 million, or 0.3%, was mainly attributable to US dollar appreciation, which represents 2.4% of Group revenue, and the virtual stability of the Sterling, which represents 9.4% of Group revenue.
The €1.8 million boost from acquisitions, or 1.6%, was chiefly the result of acquiring Rue de la paye in France on March 30, 2018, and of Ximantix in Germany on January 21, 2019.
In like-for-like terms, all the divisions made positive contributions to like-for –like growth. The Health insurance, HR and e-services division’s revenues rose 6.4% and the Healthcare professionals division’s revenues, 1.7%.
Analysis of business trends by division
- Health insurance, HR and e-services
The division’s reported revenues rose 8.7% in the first quarter of 2019 to €79.2 million. Acquisitions accounted for 2.3 percentage points. The biggest contributors were Rue de la Paye in France, consolidated from March 30, 2018, and Ximantix in Germany, consolidated from January 21, 2019. Currencies had virtually no impact. Like-for-like revenues rose 6.4% over the period.
The businesses that made the biggest contributions to this growth were Cegedim Health Data (sales data and statistics for pharmaceuticals), and—in the health insurance sector—BPO, third-party payment flow processing activities, Cegedim e-business (document and process digitization) and Cegedim SRH (HR management solutions).
The Health insurance, HR and e-services division represented 66.5% of revenues compared with 65.1% a year earlier.
- Healthcare professionals
The division’s reported revenues rose 2.8% in the first quarter of 2019 to €39.1 million. Currency translation and acquisitions had positive impacts of respectively 0.9 and 0.2 percentage points. Like-for-like revenues rose 1.7% over the period.
The businesses that made the biggest positive contributions were software for doctors and allied health professionals in France and Belgium and the BCB medication database. Doctor computerization business was steady in the UK and US.
The Healthcare professionals division represented 32.8% of revenues compared with 34.0% a year earlier.
- Corporate and others
The division’s reported revenues fell 10.8% as reported and like for like in the first quarter of 2019, to €0.9 million. Currencies and acquisitions had no impact.
The Corporate and others division represented 0.7% of consolidated revenues compared with 0.9% a year earlier.
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.
- Acquisition of XimantiX in Germany
On January 21, 2019, Cegedim acquired German company XimantiX. Building on its presence in the digitalization market in Belgium, France, the United Kingdom, and Morocco, Cegedim now has a solid base for this activity in Germany, Europe’s leading economy. By acquiring a German leader positioned on the midmarket segment, Cegedim e-business will be able to develop its offer for SMEs. XimantiX customers will gain access to a wider range of services, thanks to Cegedim’s international scope.
XimantiX’s 2018 revenues came to €2.2 million, and it earned a profit. It began contributing to the Group’s consolidation scope in January 2019.
- Acquisition of RDV médicaux in France
On February 2019, Cegedim acquired French company RDV Médicaux, an online appointment scheduling site whose close collaboration with hotlines gives it a unique positioning. This deal clearly reaffirms Docavenue’s ambition to help healthcare professionals focus on patient care by offering innovative services that are 100% designed to improve the French healthcare system. RDV Médicaux’s 2018 revenues came to €0.6 million. It began contributing to the Group’s consolidation scope in March 2019.
- Acquisition of BSV in France
On January 31, 2019, Cegedim acquired BSV Electronic Publishing, the leading provider of invoice digitization solutions to French municipalities and widely respected for its successful Electronic Document Management System (EDMS). BSV’s ZeDOC software suite includes electronic document management--a dynamic data capture tool that sets it apart from a conventional EDMS based on document indexing--Optical Character Recognition (OCR) and Automatic Document Recognition (ADR).
BSV Electronic Publishing generated revenue of €1.2 million in 2018. It began contributing to the Group’s consolidation scope in February 2019.
Significant post March 31th, 2019 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
Cegedim operates in constantly changing markets, and its strategic refocus is complete. The Group boasts solid fundamentals, a balanced portfolio of complementary offerings, a diverse client base, a broad geographic footprint, and the strength of an integrated group. These factors should enable it to sustain its current momentum and reach a new stage in its development where it can deliver lasting, profitable growth. Building on 2018, Cegedim continues to follow a strategy primarily focused on organic growth and driven by robust innovation.
The Group has set a target of around 5% growth in both like-for-like revenues and EBITDA.
In 2019, the Group does not expect any significant acquisitions and is not issuing any earnings estimates or forecasts.
- Potential impact of Brexit
In 2018, the UK accounted for 10.0% of consolidated Group revenues from continuing activities and 9.9% 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 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.
Additional information
First-quarter 2019 revenue figures have not been audited by the Statutory Auditors.
Financial calendar
| June 19, 2019, at 9:30 am CET July 25, 2019, after the market close September 19, 2019, after the market close September 20, 2019, at 11:30 am CET October 24, 2019, after the market close | Cegedim shareholders’ meeting Second quarter 2019 revenues Half year earnings 2019 Analyst meeting (SFAF) in SFAF’s offices Third quarter 2019 revenues | |||
| The first quarter 2019 revenue presentation is available at: The website: The Group’s financial communications app, Cegedim IR. To download the app, visit: /finance/profil/Pages/CegedimIR.aspx | ||||
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 | 79,239 | ||||||
| Healthcare professionals | 39,100 | 39,100 | ||||||
| Corporate and others | 882 | 882 | ||||||
| Revenue from continuing activities | 119,222 | 119,222 | ||||||
| Revenue from activities held for sale | 0 | 0 | ||||||
| IFRS 5 restatement | 0 | 0 | ||||||
| Group revenue | 119,222 | 119,222 | ||||||
- 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 March 31, 2019
| As a % of consolidated revenues | France | EMEA excl. France | Americas | APAC | |
| Health insurance, HR and e-services | 96.1% | 3.9% | - | - | |
| Healthcare professionals | 61.4% | 31.2% | 7.4% | - | |
| Corporate and others | 100.0% | - | - | - | |
| Cegedim | 84.7% | 12.9% | 2.4% | - |
Breakdown of revenue by currency and division
- As of March 31, 2019
| As a % of consolidated revenues | Euro | GBP | USD | Others | |
| Health insurance, HR and e-services | 96.7% | 2.3% | 0.0% | 0.9% | |
| Healthcare professionals | 65.8% | 24.1% | 7.2% | 2.9% | |
| Corporate and others | 100.0% | - | - | - | |
| Cegedim | 86.6% | 9.4% | 2.4% | 1.6% |
| 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. 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:
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 4,500 people in more than 10 countries and generated revenue of €468 million in 2018. Cegedim SA is listed in Paris (EURONEXT: CGM). To learn more, please visit: And follow Cegedim on Twitter: @CegedimGroup, and . |
Aude Balleydier Cegedim Media Relations and Communications Manager Tel.: +33 (0)1 49 09 68 81 | Jan Eryk Umiastowski Cegedim Chief Investment Officer and head of Investor Relations Tel.: +33 (0)1 49 09 33 36 | Marina Rosoff For Madis Phileo Media Relations Tel: +33 (0)6 71 58 00 34 | Follow Cegedim: |
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