Cegedim : 2nd Quarter 2017 Revenues

PRESS RELEASE

Quarterly Financial Information as of June 30, 2017 IFRS - Regulated Information - Not Audited

• Like-for-like revenues rose 6.4% in H1 2017

• Business model transformation is still going strong

• Cegelease business slated for sale

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 July 27, no earlier than 5:45 pm Paris time. The following terms are defined in the Glossary.

Cegedim, an innovative technology and services company, posted consolidated Q2 2017 revenues of €116.9 million, up 7.0% on a reported basis and 6.0% like-for-like compared with the same period in 2016.

All of the divisions helped grow the Group's like-for-like (LFL) growth in the second quarter and first half compared with a year ago.

Growth at the Health insurance, HR and e-services division remained robust, with year-on-year (y/y) increases LFL of 7.3% in the second quarter and 9.8% in the first half of 2017.

Over the same period, the Healthcare professionals division returned to LFL growth in the second quarter. It's 3.8% y/y increase brought the division's LFL first-half growth to 1.4% compared with the year-earlier period. Growth was buoyed by computerization solutions for pharmacists, doctors, nurses and physical therapists in France, and for doctors in Belgium, Spain and the US. Cegelease, the financial lease business, also helped boost revenues.

Part of this growth came from the Group's BPO businesses, most of which are still ramping up their operations. As a result, they will negatively affect Group profitability in 2017.

The business model transformation initiated in fall 2015 is beginning to pay off, and we expect to see the full impact in 2018.

To continue its business model transformation and refocus its strategy, Cegedim is contemplating divestment of its Cegelease and Eurofarmat subsidiaries. These subsidiaries operate principally in the financial domain, are highly valued, and require additional resources to continue pursuing and accelerating their development for the benefit of their clients and employees.

Cegedim

137 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 SIREN 350 422 622

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

   Revenue trends by division

   • In the second quarter of 2017

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

     Activities not allocated

     Cegedim

     2017	2016	Chg. L-f-l	Chg. Reported
     71.7	64.8	+7.3%	+10.5%
     44.3	43.7	+3.8%	+1.5%
     0.9	0.8	+19.4%	+19.4%
     116.9	109.3	+6.0%	+7.0%

     Second quarter

     In the second quarter of 2017, Cegedim posted consolidated revenues of €116.9 million, up 7.0% on a reported basis. Excluding an unfavorable currency translation effect of 1.1% and a 2.1% boost from acquisitions, revenues rose 6.0%.

     The unfavorable currency translation effect of €1.2 million, or 1.1%, was chiefly due to the €1.3 million negative impact of the pound sterling, which represents 10.7% of Group revenues.

     The €2.3 million positive impact from acquisitions, or 2.1%, was mainly due to the acquisition of Futuramedia in France in November 2016.

     All of the divisions improved in like-for-like terms. Health insurance, HR and e-services division revenues rose by 7.3%, and Healthcare professionals division revenues rose by 3.8%.

   • In the first half of 2017

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

     Activities not allocated

     Cegedim

     2017	2016	Chg. L-f-l	Chg. Reported
     140.3	124.6	+9.8%	+12.6%
     88.4	89.4	+1.4%	(1.1)%
     2.0	1.6	+26.2%	+26.2%
     230.6	215.5	+6.4%	+7.0%

     Half-year

     In the first half of 2017, Cegedim posted consolidated revenues of €230.6 million, up 7.0% on a reported basis. Excluding an unfavorable currency translation effect of 1.2% and a 1.8% boost from acquisitions, revenues rose 6.4%.

     The unfavorable currency translation effect of €2.6 million, or 1.2%, was chiefly due to the €2.8 million negative impact of the pound sterling, which represents 10.9% of Group revenues.

     The €3.9 million positive impact from acquisitions, or 1.8%, was mainly due to the acquisition of Futuramedia in France in November 2016.

     All of the divisions improved in like-for-like terms. Health insurance, HR and e-services division revenues rose by 9.8%, and Healthcare professionals division revenues rose by 1.4%.

     Analysis of business trends by division

   • Health insurance, HR and e-services

Growth was driven mainly by:

• Continued double-digit growth at Cegedim SRH, as work began with several new clients of the SaaS platform for HR management;

• Strong sales momentum leading to the start of work with several new clients of the SaaS platform for electronic data exchange, Global Information Services, including payment platforms. As a result, Cegedim e-business posted double-digit revenue growth in the first two quarters of 2017;

• Double-digit growth in iGestion BPO activities for health insurance companies and mutual insurers;

• The continuation of positive trends - for several quarters now - in third-party payment processing services;

• Modest growth in software and services for the personal insurance market, despite the impact of switching to the SaaS format.

  • Healthcare professionals

    The division's first half 2017 revenues came to €88.4 million, down 1.1% on a reported basis. Currency effects made a negative contribution of 2.5%. There was virtually no impact from acquisitions or divestments. Like-for-like revenues rose 1.4% over the period. The Healthcare professionals division represented 38.3% of consolidated revenues, compared with 41.5% over the same period a year earlier. The division's second quarter 2017 revenues came to €44.3 million, up 1.5% on a reported basis. Currency effects made a negative contribution of 2.4%. There was virtually no impact from acquisitions or divestments. Like-for-like revenues rose 3.8% over the period.

    Second-quarter growth more than offset the decline in the first quarter. The key performances responsible for this positive trend were:

• Double-digit Q2 growth from Pulse, the computerization of doctors, and the RCM business in the US. RCM is a BPO-type business and is growing rapidly, with double-digit growth over the first half that will negatively affect EBITDA for the period;

• Computerization products and services for doctors in Belgium, Spain and France, and for French nurses, physical therapists, speech therapists, orthoptists, midwives, and podiatrists;

• Computerization products and services for French pharmacists, which returned to growth thanks to the Smart Rx launch of last September. The business confirmed strong momentum in its order intake compared with a year ago;

• A good performance in the first half by the BCB scientific database for prescription assistance, prescription fulfillment, and health products.

• Cegelease, the financial lease business.

  This performance was partly offset by a decline in revenue of computerization solutions to UK doctors pending the release of a full version in SaaS format. The first modules arrived on the market early this year and were well received.

  • Activities not allocated

    The division's first half 2017 revenues came to €2.0 million, up 26.2% 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 0.9% of consolidated revenues, compared with 0.7% over the same period a year earlier. The division's second quarter 2017 revenues came to €0.9 million, up 19.4% both on a reported basis and like for like. There were no currency effects and no acquisitions or divestments.

    This favorable trend reflects an undemanding comparison and good development in the facilities management and data hosting business, including for health data hosting.

    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.

  • Tessi litigation

    On February 10, 2017, Cegedim was ordered to pay €4,636,000 to the Tessi company for failing to meet certain obligations with respect to an asset sale made on July 2, 2007.

    Cegedim has decided to appeal this decision.

  • Euris litigation

    Cegedim, jointly with IMS Health, is being sued by Euris for unfair competition. Cegedim has filed a motion claiming that IMS Health should be the sole defendant.

  • Partial interest rate hedging

    To hedge part of its exposure to euro interest rate fluctuations arising from its RCF, the Group carried out an interest rate swap on February 17, 2017. Under the zero-premium swap agreement, Cegedim receives the 1-month Euribor rate if it exceeds 0%, receives nothing otherwise, and pays a fixed rate of 0.2680% for a notional amount of €50 million, starting on February 28, 2017, and maturing February 26, 2021.

    To hedge part of its exposure to euro interest rate fluctuations arising from its RCF, the Group carried out an interest rate swap on May 11, 2017. Under the zero-premium swap agreement, Cegedim receives the 1-month Euribor rate if it exceeds 0%, receives nothing otherwise, and pays a fixed rate of 0.2750% for a notional amount of €30 million, starting on May 31, 2017, and maturing December 31, 2020.

  • Acquisition of B.B.M. Systems in the UK

On February 23, 2017, Cegedim acquired UK company B.B.M. Systems through its Alliadis Europe Ltd subsidiary. The deal strengthens the Group's expertise in developing cloud-based products for general practitioners.

As part of the business model transformation plan that the Group initiated in fall 2015, Cegedim is contemplating divestment of its Cegelease and Eurofarmat subsidiaries. These subsidiaries operate principally in the financial domain, are highly valued, and require additional resources to continue pursuing and accelerating their development for the benefit of their clients and employees.

The two businesses have 24 employees in France. In 2016 they contributed €5.4 million to Group consolidated EBITDA. The subsidiaries' standalone EBITDA amounted to €18.1 million in 2016.