Cegedim : 2nd Quarter 2016 Revenues

PRESS RELEASE

Quarterly Financial Information as of June 30, 2016 IFRS - Regulated Information - Not Audited

• 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.

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.

Cegedim

127 rue d'Aguesseau, 92100 Boulogne-Billancourt

Tel: +33 (0)1 49 09 22 00

www.cegedim.com

Public company with share capital of 13,336,506.43 euros SIRET 350 422 622 00141

1. C. S. Nanterre B 350 422 622 Page 1

   Revenue trends by division

   • In the first half of 2016

     In € mi ll ions Health insurance, HR and e-services Healthcare professionals

     Activities not allocated

     Cegedim

     2016	2015	Chg. Reported	Chg. L-f-l
     124.6	110.7	+9.6%	+12.5%
     89.4	94.0	(3.0)%	(5.0)%
     1.6	1.9	(18.4)%	(18.4)%
     215.5	206.7	+3.6%	+4.3%

     Half-year

     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

     In € mi ll ions Health insurance, HR and e-services Healthcare professionals

     Activities not allocated

     Cegedim

     2016	2015	Chg. Reported	Chg. L-f-l
     64.8	57.0	+10.3%	+13.8%
     43.7	48.1	(6.3)%	(9.2)%
     0.8	1.1	(29.2)%	(29.2)%
     109.3	106.2	+2.4%	+2.9%

     Second quarter

     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

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.

  • Healthcare professionals

    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.

  • Activities not allocated

    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.

  • New credit facility

    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.