CEGEDIM : Commercial success under tough conditions

Regulatory News:

Cegedim (Paris:CGM), a global technology and services company specializing in the healthcare field, posted consolidated Q3 2011 revenues of ?197 million, down 6.7% on a reported basis and 5.6% like-for-like.

Trends observed in the first half continued: numerous commercial successes with pharmaceutical companies, a surge in the medical computerization of healthcare professionals worldwide, and the revolution in online services in the French insurance sector.

Building on first-half trends, the Group continues to garner a substantial number of new contracts and renewals across the product range for pharmaceutical companies.

The financial impact of these substantial sales efforts and Cegedim's cost-saving measures will be felt in the second half of 2012.

• The change in revenues per sector of activity for the third quarter is as follows:

*at constant scope and exchange rates

Like-for-like* revenues in the third quarter of 2011 fell 5.6% compared with the year-earlier period. Acquisitions boosted revenues by 0.7%, and currencies had a negative impact of 1.8%.

• The change in revenues per sector of activity over nine months is as follows:

*at constant scope and exchange rates

Like-for-like* revenues over the first nine months of 2011 fell 2.3% compared with the year-earlier period. Acquisitions boosted revenues by 2.4%, and currencies had a negative impact of 0.8%.

Analysis of business trends by sector

• CRM and strategic data

Q3 2011 revenues came to ?112.0 million, down 8.6% on a reported basis. Currencies had a negative impact of 2.4%. There were no scope effects in the third quarter. Like-for-like* revenues fell 6.2% for the period.

Over the first nine months of 2011, sector revenues were ?361.2 million, down 2.8% on a reported basis. Acquisitions boosted revenues by 0.2%, and currencies had a negative impact of 1.2%. Like-for-like* revenues fell 1.8% over the period.

CRM business trends continue along the trajectory set early in the year, Following a remarkable first half, the third quarter brought another round of excellent sales performances across the product range and around the world. This momentum reflects confidence at Cegedim's clients following the release of the new version of Mobile Intelligence, including the iPad version, as well as new products, including compliance solutions. As a reminder, the financial impact will not be fully felt until the second half of 2012.

By contrast, the strategic data activity continues to be affected by the various natural disasters that have struck Asia this year. In France, the activity is being hurt by pharmaceutical companies' hesitancy. The fourth quarter is typically strong for these types of services.

• Healthcare professionals

Q3 2011 revenues came to ?53.7 million, down 7.1% on a reported basis. The Pulse acquisition in the US boosted revenues by 1.7% over the quarter. Currencies had a negative impact of 1.5%. Like-for-like* revenues fell 7.3% for the period.

Over the first nine months of 2011, sector revenues were ?194.0 million, down 1.3% on a reported basis. Acquisitions boosted revenues by 3.5%, and currencies had a negative impact of 0.4%. Like-for-like* revenues fell 4.5% over the period.

Sector business lines include:

• CHS (Cegedim Healthcare Software), which houses software activities catering to pharmacists, physicians, paramedics and medication databases;
• Point-of-sale advertising in pharmacies and health & personal care shops with the RNP company;
• Financial leasing with the Cegelease company.

Revenues over the first nine months were negatively affected by the significant decline - of more than 10% - in Cegelease's activity. This decline was expected due to the return of bank competitors to the market. Conversely, CHS benefited principally from growth in the UK and US markets.

• Insurance and services

Q3 2011 sector revenues came to ?31.3 million, up 1.7% on a reported basis. Acquisitions boosted revenues by 1.4%. Like-for-like* revenues rose 0.3% for the period.

Over the first nine months of 2011, sector revenues were ?100.5 million, up 9.5% on a reported basis. Acquisitions boosted revenues by 8.8%. Like-for-like* revenues rose 0.6% over the period.

Still hampered by a tough year-on-year comparison, Cegedim Activ, the leader in software and services dedicated to personal insurance, saw its revenues fall over the quarter However, it is currently at a very advanced stage of discussions with three large French insurers on contracts for the sale of a substantial number of licenses.

At the same time, platforms for managing complementary health insurance payment flows continue to grow at a brisk pace. Demonstrating the business' strong sales momentum, Mutuelle Familiale decided to entrust Cegedim with all of its direct payment flows starting July 1, 2011.

Financial resources - Third quarter highlights

With the exception of the item noted below, to the best of the company's knowledge, there were no events or changes of the sort to significantly alter the Group's financial situation during the period. Cegedim is in compliance with all its bank covenants.

• Maturity of subordinated debt extended by two years

FCB (held by the Labrune family and the principal shareholder of Cegedim, with 52% of capital) granted Cegedim S.A. a ?50 million loan in May 2007. FCB subscribed the December 2009 capital increase by partly offsetting this debt. This resulted in the ?50 million debt being reduced to ?45.1 million. The loan is a bullet loan with a maturity of May 2014.

On September 21, 2011, FCB and Cegedim signed an amendment to the loan contract extending the maturity to June 10, 2016. The financial conditions of the loan are unchanged.

Significant post-closing transactions and events

To the best of the company's knowledge, there have been no significant events since the closing date.

2011 outlook

Growing uncertainty in France and the USA with respect to the marketing strategies of pharmaceutical companies and economic conditions in general has made on September the Group more cautious regarding its full-year targets. This uncertainty continues due to the difficulty in the short term of assessing the divergent impacts of current trends: these include a weaker financial situation over nine months and the expense of cost-saving measures, combined with the recent pick-up in commercial successes and the fact that Q4 revenues are generally 15-20% higher than the average of the previous three quarters. Operating income from continuing operations could thus be near the low end of market expectations.

Financial calendar

February 2, 2012, after the market closes

• FY 2011 revenues announcement, followed by a conference call at 6:15 pm in French and at 7:00 pm in English (Paris time).

April 2, 2012, after the market closes

• FY 2011 results announcement followed by a conference call

April 3, 2012, at 11:30 am

• SFAF meeting to present FY 2011 results

May 3, 2012, after the market closes

• Q1 2012 revenues announcement

August 1, 2012, after the market closes

• Q2 2012 revenues announcement

September 19, 2012, after the market closes

• H1 2012 results announcement

September 20, 2012

• SFAF meeting to present H1 2012 results

November 8, 2012, after the market closes

• Q3 2012 revenues announcement

Additional information

Complete financial information is available on our website: www.cegedim.fr/finance.

A presentation of Cegedim's third quarter revenues is also available on the website.

Appendices

• Revenues by sector and by quarter:

* at constant scope and exchange rates

FY 2011

FY 2010

• 9M revenues by sector and by region are as follows:

• 9M 2011 revenues by sector and by currency are as follows:

Cegedim
Aude Balleydier
Sylvie Delangle
Media Relations
Tel.: +33 (0)1 49 09 68 81
sylvie.delangle@cegedim.com
or
Jan Eryk Umiastowski
Chief Investment Officer
Investor Relations
Tel.: +33 (0)1 49 09 33 36
investor.relations@cegedim.fr
or
Presse Papiers Agency
Guillaume de Chamisso
Press Relations
Tel.: +33 (0)1 77 35 60 99
guillaume.dechamisso@pressepapiers.fr