CEGEDIM Public company with share capital of 13,336,506.43 euros Trade and Commercial Register: Nanterre B 350 422 622 www.cegedim.com
PRESS RELEASE
Page 1
Quarterly Financial Information as of September 30, 2015 IFRS - Regulated Information - Audited
Revenue up 3.3% and EBITDA, 3.2%
Rapid development of BPO deals
Accelerated migration of offerings toward SaaS / cloud models
Boulogne-Billancourt, November 26, 2015 - Cegedim, an innovative technology and services company, generated consolidated first nine months 2015 revenues from continuing activities of €366.6 million, up 1.0% like for like and 3.3% on a reported basis compared with the same period in 2014. All Group divisions contributed to the reported increase. The like-for-like decline at the Healthcare Professionals division was more than offset by stability at the Cegelease division and an increase at Health Insurance, HR and e- services. The Health Insurance, HR and e-services division made a noteworthy return to strong growth in the third quarter despite the migration of clients towards SaaS and cloud offerings.
EBITDA amounted to €60.3 million over the first nine months of 2015, up 3.2% compared with a year earlier. This EBITDA trend was attributable to the increases at Health Insurance, HR and e-services, Cegelease and at the Activities not allocated division, which were partially offset by the decrease at the Healthcare Professionals division. The EBITDA margin remains virtually stable at 16.4% for the first nine months of 2015 compared to 16.5% a year earlier.
These performances reflect the main development areas the Group is prioritizing for future growth:
Speeding up the migration of its software offerings from a perpetual license model to SaaS / cloud models
The rapid deployment of its BPO offering (Business Process Outsourcing)
Strengthening its businesses through targeted acquisitions
During this transition period, revenue and profitability are being negatively impacted by the significant investment needed in human resources and innovation. Furthermore, the change in revenue and costs recognition induced by the migration to SaaS is leading to an unfavorable base effect during the transition year.
Over the longer term, Cegedim will increase its customer loyalty and forge closer relationships, simplify its operating processes, and strengthen its offering and its geographic footprint. This move will simultaneously increase the share of recurring revenues, make growth stronger and more predictable, and increase the Group's profitability.
The Group reiterates, as announced on October 27, its target of 2015 like-for-like revenue growth of 1.0% for continuing activities, and a 5.0% increase in EBITDA.
Net financial debt fell by €327.3 million to €176.9 million, mainly as a result of the sale of the CRM and Strategic Data division to IMS Health on April 1.
-
Simplified income statement
9M 2015
9M 2014
€M
%
€M
%
Revenue
366.6
100%
355.0
100%
+3.3%
EBITDA
60.3
16.4%
58.4
16.5%
+3.2%
Depreciation
(32.0)
─
(28.4)
─
+13.0%
Operating income before special items
28.2
7.7%
30.1
8.5%
(6.0)%
Special items
(5.0)
─
(8.1)
─
(37.9)%
Operating income
23.2
6.3%
22.0
6.2%
+5.7%
Cost of net financial debt
(32.7)
─
(38.2)
─
(14.3)%
Tax expenses
(2.7)
─
(1.5)
─
+85.1%
Consolidated profit from continuing activities
(10.8)
(2.9)%
(16.3)
(4.6)%
+34.0%
Net earnings from activities sold
34.1
3.5
-
n.m.
Consolidated profit (loss) Group Share
23.3
6.4%
(12.8)
(3.6)%
n.m.
Over the first nine months of 2015, Cegedim generated consolidated revenue from continuing activities of
€366.6 million, up 3.3% on a reported basis compared with the same period in 2014. Currencies and acquisitions had positive impacts of respectively 1.9% and 0.3%. Like-for-like revenue grew by 1.0%.
The decline in like-for-like revenues at the Healthcare Professionals division was more than offset by growth at the Health Insurance, HR and e-services; Cegelease; and Activities not allocated divisions.
EBITDA increased by €1.9 million, or 3.2%, to €60.3 million; the margin remained virtually stable at 16.4% for the first nine months of 2015, compared to 16.5% for the first nine months of 2014. This EBITDA trend was attributable to the drop at the Healthcare professionals division being more than offset by EBITDA improvements at Health Insurance, HR and e- services; Cegelease; and Activities not allocated.
Depreciation increased by €3.7 million, from €28.4 million for the first nine months of 2015 to €32.0 million for the first nine months of 2015. Special items at the end of September 2015 amounted to a charge of €5.0 million, compared with a charge of €8.1 million one year earlier. Most of these charges are linked to reorganizational costs tied to the computerization of doctors in the UK and fees related to the sale of the CRM and Strategic Data division to IMS Health.
EBIT before special items decreased by €1.8 million, or 6.0%, to €28.2 million, with a decrease in margin from 8.5% for the first nine months of 2014 to 7.7% for the first nine months of 2015.
The cost of financial debt decreased by €5.5 million, from €38.2 million at the end of September 2014 to €32.7 million at the end of September 2015. This decrease reflects the gain on financial investments and the positive impact of the restructuring of bond debt in 2014 and 2015.
Tax expense increased by €1.2 million, from a charge of €1.5 million over the first nine months of 2014 to a charge of €2.7 million over the first nine months of 2015.
Thus, the consolidated net profit from continuing activities amounted to a loss of €10.8 million at the end of September 2015, compared with a €16.3 million loss a year earlier. The loss per share from continuing activities before special items was €0.4 at the end of September 2015, compared with a €0.6 loss at the end of September 2014. The consolidated net profit attributable to the Group amounted to a profit of €23.3 million at the end of September 2015, compared to a €12.8 million loss at the end of September 2014. This profit came from the adjustment of the result on disposal (see note 13 of the consolidated financial statements).
Analysis of business trends by division
-
Key figures by division
Revenue EBIT before special items
EBITDA2015
2014
55.9
51.4
36.5
36.9
27.2
27.3
0.8
0.7
120.4
116.4
2015
2014
4.5
6.2
3.6
6.3
1.3
1.6
(0.4)
(1.5)
9.1
12.5
2015
2014
8.6
10.0
6.4
8.8
4.6
4.1
0.4
(1.0)
20.0
21.9
in € million 3rd Quarter 3rd Quarter 3rd Quarter
Health Insurance, HR and e-services
Healthcare professionals
Cegelease
Activities not allocated
Cegedim
Revenue EBIT before special items
EBITDA2015
2014
167.5
158.0
113.0
111.5
83.3
83.1
2.8
2.3
366.6
355.0
2015
2014
16.2
15.7
10.5
16.5
3.0
3.6
(1.4)
(5.8)
28.2
30.1
2015
2014
28.1
26.9
18.9
24.0
12.7
12.2
0.6
(4.6)
60.3
58.4
in € million 9M 9M 9M
Health Insurance, HR and e-services
Healthcare professionals
Cegelease
Activities not allocated
Cegedim
- Health Insurance, HR and e-services
Over the first nine months of 2015, division revenues came to €167.5 million, up 6.0% on a reported basis. The acquisition of Activus in July 2015 in the UK made a positive contribution of 0.7%. Currencies had virtually no impact. Like-for-like revenues grew 5.2% over the period.
The Health Insurance, HR and e-services division represented 45.7% of consolidated revenues from continuing activities, compared with 44.5% during the same period a year earlier.
EBITDA came to €28.1 million for the first nine months of 2015, up €1.2 million or 4.6%. The margin came to 16.8%, compared to 17.0% a year earlier.
These positive performances stem chiefly from:
Cegedim Health Insurance, driven mainly by the third-party payments processing and BPO activities. Others activities were impacted in the short term by the transition from a perpetual license model to an SaaS / Cloud model. Finally, the acquisition of health and personal insurance software publisher Activus gave Cegedim Health Insurance access to new markets (UK, US, Middle East, APAC, etc.).
Cegedim SRH, the SaaS HR management platform, which got a boost from numerous commercial successes and from the successful development of its BPO activities. This last element initially had a negative impact on margin.
Digital communication activities, following the successful transition to digital
- Healthcare Professionals
Over the first nine months of 2015, division revenues came to €113.0 million, up 1.4% on a reported basis. Currency effects made positive contributions of 6.0%. Acquisitions had virtually no impact. Like-for-like revenues fell 4.7% over the period.
The Healthcare Professionals division represented 30.8% of consolidated revenues from continuing activities, compared with 31.4% during the same period a year earlier.
EBITDA came to €18.9 million for the first nine months of 2015, down €5.1 million or 21.3% compared to a year earlier. Thus, the margin came to 16.7%, compared to 21.5% a year earlier.
These performances stem chiefly from:
Weaker trends in the computerization of UK doctors following the market's migration to cloud-based offerings. However, the investments the Group is now making in order to get a cloud offering in 2016 should allow this segment to gradually return to growth.
The impact of rolling out Revenue Cycle Management (RCM) products in the US. This product range allows doctors to manage reimbursements from multiple US insurers. This is a BPO-like offering that required the size of the RCM team to be doubled before requested work could begin with clients. This significantly increased costs. As business with clients gradually ramps up over Q4 2015 and H1 2016, this activity should return to growth and improve its profitability. Revenues related to RCM offerings are recognized over the life of the contract, unlike EHR products.
The definitive adoption in October of the ICD-10 standards in the Unites-States, which means we can expect a gradual pick-up in EHR sales momentum following a period in which doctors have been hesitant to invest.
Lastly, the September 2015 acquisition of Nightingale's US assets gives the Group product ranges that use both client-server and cloud models.
Growth in the computerization of doctors in Spain, Belgium and Romania, and the computerization of nurses and physical therapists in France.
Growth in the Base Claude Bernard (BCB) medication database.
Cegedim is strengthening its SoCall remote medical receptionist offering by launching Docavenue, an innovative online appointment scheduling solution. This platform connects patients directly to their healthcare professional's calendar so they can request an appointment. Patients then receive a text message confirming the appointment. The service also gives patients access to information on diseases and on medications, via the BCB database. It meets a growing need, both before and after consultations, for vetted information on treatments, indications, side-effects and contraindications. The Group plans to expand the Docavenue offering to other countries.
-
Cegelease
Over the first nine months of 2015, division revenues came to €83.3 million, up 0.3% on a reported basis and like for like. There were no acquisitions or divestments, and currencies had no impact.
The Cegelease division represented 22.7% of consolidated revenues from continuing activities, compared with 23.4% during the same period a year earlier.
EBITDA came to €12.7 million for the first nine months of 2015, up €0.5 million or 4.1% compared to a year earlier. Thus, the margin came to 15.2%, compared to 14.6% a year earlier.
The increased use of self-financing for financial lease contracts, principally in the second quarter, negatively affected revenues and EBITDA. Favorable financing conditions are leading the Group to reduce the share of self-financed contracts.
As a reminder, margins are higher on self-financed contracts than on resold contracts, but the margin on resold contracts is recognized when the contract is signed, whereas in the case of self-financed contracts, the margin is recognized over the duration of the contract.
- Activities not allocated
-
Cegelease
Over the first nine months of 2015, division revenues came to €2.8 million, up 18.5% on a reported basis and like for like. There were no acquisitions or divestments, and currencies had no impact.
The Activities not allocated division represented 0.8% of consolidated revenues from continuing activities, compared with 0.7% during the same period a year earlier.
EBITDA improved by €5.3 million to a €0.6 million profit for the first nine months of 2015 compared with a €4.6 million loss a year earlier. The margin came to 22.2% at the end of September 2015.
This favorable EBITDA trend reflects cost-containment efforts and the impact of invoicing for IT services that are being provided to IMS Health.
|
distributed by
|
