Cegedim: H1 2019 Earnings
First-half financial information at June 30, 2019 IFRS –
Regulated information – Audited
Cegedim: Revenues and profit margin improved in the
first half of 2019
- First-half revenues rose 8.0%
- First-half EBIDTA(1) grew 12.9% before the IFRS 16 impact
- BPO business increased by 20.3%
- 2019 revenue and EBITDA targets revised
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 September 19, 2019, no earlier than 5:45
pm Paris time. The terms “business model
transformation” and “BPO” are defined in the glossary.
Cegedim has applied IFRS 16 Leases for the first time in
its condensed consolidated interim financial statements for the six
months ended June 30, 2019. Applying this new
standard—which supersedes IAS 17
Leases—had a material impact on Cegedim’s
consolidated financial statements given the importance of leases to
the Group’s activities. The Group elected to use
the “modified retrospective” approach for its transition to IFRS
16, under which entities are not authorized to restate prior-period
comparative financial information. Consequently, the first-half
2019 income statement is presented differently than the Group’s
prior-period income statements. Please refer to Annex 2 for more
details. |
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Boulogne-Billancourt, France, September 19, 2019, after
the market close
Cegedim, an innovative
technology and services company, posted consolidated, H1 2019
revenues of €245.8 million, up 8.0% on a reported basis and 6.4%
like for like compared with the same period in 2018. First-half
EBITDA(1) came to €45.5 million,
up 36.5% year on year. EBITDA(1)
margin improved from 14.6% a year earlier to 18.5% in H1
2019. Restated for the €7.9 million positive impact of the initial
application of IFRS 16, EBITDA(1)
came to €37.6 million. The restated
EBITDA(1) margin improved from
14.6% a year earlier to 15.3% in H1 2019.
In like-for-like terms, revenue improved at both
operational divisions. The Health insurance, HR and e-services
division gained 6.9% and the Healthcare professionals division,
5.9%
The €4.3 million EBITDA(1) increase, restated
for the positive impact of the initial application of IFRS 16,
reflected the €5.7 million EBIDTA(1) increase at the
Healthcare professionals division, partly offset by decreases of
€1.0 EBITDA(1) at the Health insurance, HR and e-services division
and €0.4 million at the Corporate and others division.
(1) See Annex 3 – Alternative performance indicators.
Income statement summary
|
H1 2019 IFRS 16 |
H1 2018 IAS 17 |
Chg. |
|
€m |
% |
€m |
% |
% |
Revenues |
245.8 |
100.0 |
227.6 |
100.0 |
+8.0% |
EBITDA |
45.5 |
18.5% |
33.3 |
14.6% |
+36.5% |
Depreciation & amortization |
(32.8) |
(13.4)% |
(21.4) |
(9.4)% |
+53.6% |
Recurring operating income |
12.6 |
5.1% |
11.9 |
5.2% |
+5.8% |
Other non-recurring operating income and expenses |
(16.3) |
(6.6) |
(9.6) |
(4.2)% |
+69.0% |
Operating income |
(3.6) |
(1.5)% |
2.3 |
1.0% |
n.m. |
Cost of net financial debt |
(4.5) |
(1.8)% |
(2.2) |
(1.0)% |
+100.7% |
Tax expenses |
(2.1) |
(0.8)% |
(0.8) |
(0.3)% |
+176.7% |
Consolidated net profit from continuing
activities |
(10.2) |
(4.1)% |
(0.7) |
(4.0% |
n.m. |
Net earnings from activities sold |
- |
- |
1.3 |
0.6% |
n.m. |
Profit attributable to the owners of the
parent |
(10.2) |
n.m. |
0.7 |
0.3% |
n.m. |
Recurring EPS |
(0.4) |
- |
0.2 |
- |
n.m. |
EPS |
(0.7) |
- |
0.0 |
- |
n.m. |
- Consolidated P&L impact of IFRS 16 in the first half of
2019
In € million |
06/30/2019IFRS 16Reported |
06/30/2019IAS 17Restated |
06/30/2018IAS 17Reported |
ChangeIAS 17% |
Revenue |
245.8 |
245.9 |
227.6 |
+8.0% |
Purchases used |
(15.3) |
(15.3) |
(15.4) |
(0.7)% |
External expenses |
(55.7) |
(63.5) |
(58.5) |
+8.6% |
Payroll costs |
(124.5) |
(124.5) |
(114.6) |
+8.7% |
Other operating income and charges |
(4.9) |
(4.9 |
(5.9) |
(17.1)% |
Depreciation and amortization
expenses |
(32.8) |
(25.1) |
(21.4) |
+17.4% |
Other non-recurring operating income
and expenses |
(16.3) |
(16.3) |
(9.6) |
+69.0% |
Operating income |
(3.6) |
(3.7) |
2.3 |
n.m. |
as % of revenue |
(1.5)% |
(1.5)% |
1.0% |
- |
Cost of net financial debt |
(4.5) |
(3.7) |
(2.2) |
+67.4% |
Total taxes |
(2.1) |
(2.3 |
(0.8) |
+200.2% |
Consolidated profit (loss) |
(10.2) |
(9.7) |
0.7 |
n.m. |
Group share |
(10.2) |
(9.7) |
0.7 |
n.m. |
- IAS 17-adjusted non-IFRS financial indicators for 2019
In € million |
06/30/2018 Reported |
06/30/2019 IAS 17 |
06/30/2019 IFRS 16 |
Change IAS 17 % |
Recurring
operating income |
11.9 |
12.5 |
12.6 |
+5.0% |
as % of
revenue |
5.2% |
5.1% |
5.1% |
- |
EBITDA |
33.3 |
37.6 |
45.5 |
+12.9% |
as % of
revenue |
14.6% |
15.3% |
18.5% |
- |
The impact of applying IFRS 16 to operating
income, recurring operating income and net profit is not
significant.
Revenue increased by €18.2
million, or 8.0%, to €245.8 million in H1 2019, compared to €227.6
million for H1 2018. Excluding a favorable currency translation
effect of 0.2% and a 1.3% boost from acquisitions, revenue rose
6.4%. In H1 2019, on a like-for-like basis, the Health
insurance, HR and e-services division grew by 6.9% and the
Healthcare professionals division, by 5.9%.
EBITDA(1)
increased by €12.2 million, or 36.5%, to €45.5 million in H1 2019,
compared with €33.3 million in H1 2018. EBITDA represented 18.5% of
consolidated revenue in H1 2019, compared with 14.6% in H1 2018.
Restated for the positive €7.9 million impact of the initial
application of IFRS 16, the increase amounted to €4.3 million, or
12.9%.
Depreciation and amortization
expenses increased by €11.5 million to €32.8 million in H1
2019, compared with €21.4 million in H1 2019. Restated for the
negative €7.8 million impact of the initial application of
IFRS 16, the increase amounted to €3.7 million, or 17.4%. The
increase was also attributable to the €1.4 million increase in the
amortization of capitalized R&D expenses over the period.
Recurring operating income
(REBIT)(1) increased by €0.7 million, or 5.8%, to €12.6
million in H1 2019, compared with €11.9 million in H1
2018. The H1 2019 figure represented 5.1% of revenue, compared with
5.2% in H1 2018. Applying IFRS 16 to recurring operating income had
no material impact.
Other non-recurring operating income and
expenses(1) amounted to a net charge of €16.3 million in
H1 2019 compared with a net charge of €9.6 million in H1 2018. The
H1 2019 figure arose mainly from the disposal of virtually all the
business activities of Pulse System Inc, which led to a €2.5
million impairment of goodwill and a €12.3 impairment of
capitalized R&D.
Cost of net financial debt
increased by €2.2 million to €4.5 million in H1 2019, compared with
€2.2 million in H1 2018. This increase reflects the positive impact
of refinancing transactions carried out in H2 2018.
Tax amounted to a charge of
€2.1 million in H1 2019 compared with a charge of €0.8 million in
H1 2018. The main factors were an increase in corporate income tax
on foreign subsidiaries and a decrease in deferred tax asset on
French subsidiaries.
As a result, consolidated net
profit came to €10.2 million loss in H1 2019 compared with
a profit of €0.7 million in H1 2018. Recurring net profit
per share came to a loss of €0.4 in H1 2019 compared to a
profit of €0.2 in H1 2018. Earnings per share were
a loss of €0.7 in H1 2019 compared with a profit of €0.0 a year
earlier.
Analysis of business trends by division
Reported |
|
Revenues |
|
REBIT(1) |
|
EBITDA(1) |
In € million |
|
H1 2019 IFRS 16 |
H1 2018 IAS 17 |
|
H1 2019 IFRS 16 |
H1 2018 IAS 17 |
|
H1 2019 IFRS 16 |
H1 2018 IAS 17 |
Health insurance,
HR and e-services |
|
162.5 |
149.5 |
|
10.7 |
13.4 |
|
26.7 |
24.2 |
Healthcare
professionals |
|
81.6 |
76.2 |
|
2.9 |
(0.9) |
|
14.9 |
6.9 |
Corporate and
others |
|
1.7 |
1.9 |
|
(1.0) |
(0.6) |
|
3.9 |
2.2 |
Cegedim |
|
245.8 |
227.6 |
|
12.6 |
11.9 |
|
45.5 |
33.3 |
IFRS 16-restated H1 2019 |
|
Revenues |
|
REBIT(1) |
|
EBITDA(1) |
In € million |
|
H1 2019 IAS 17 |
H1 2018 IAS 17 |
|
H1 2019 IAS 17 |
H1 2018 IAS 17 |
|
H1 2019 IAS 17 |
H1 2018 IAS 17 |
Health insurance,
HR and e-services |
|
162.5 |
149.5 |
|
10.6 |
13.4 |
|
23.2 |
24.2 |
Healthcare
professionals |
|
81.6 |
76.2 |
|
2.9 |
(0.9) |
|
12.6 |
6.9 |
Corporate and
others |
|
1.7 |
1.9 |
|
(0.9) |
(0.6) |
|
1.8 |
2.2 |
Cegedim |
|
245.8 |
227.6 |
|
12.5 |
11.9 |
|
37.6 |
33.3 |
- Health insurance, HR and e-services
The division’s reported revenues rose
8.7% in the first half of 2019 to €162.5 million.
Acquisitions—mainly BSV
and Ximantix—accounted
for 1.7 percentage points. Currencies had virtually no impact.
Like-for-like revenues rose 6.9% over the period.
The businesses that made the biggest
contributions to this growth in H1 were—in the health insurance
sector—BPO and third-party payment flow processing activities,
Cegedim Health Data (data and analytics for the healthcare market),
Cegedim e-business (document and process digitization), and Cegedim
SRH (HR management solutions).
EBITDA increased by €2.4 million, or
10.1%, to €26.7 million over H1 2019, compared with €24.2 million
in H1 2018. The H1 2019 figure represented 16.4% of revenue,
compared with 16.2% in H1 2018. Restated for the positive €3.4
million impact of the initial application of IFRS 16, EBITDA
decreased by €1.0 million, or 4.1%.
This decline reflects the strong growth in BPO
activities, particularly following the start of the BCAC contract
at the beginning of the year and the development of Cegedim
e-business.
The division’s reported revenues rose
7.1% in the first half of 2019 to €81.6 million. Currency
translation had a positive impact of 0.7 percentage points.
Acquisitions had a positive impact of 0.5 percentage points.
Like-for-like revenues rose 5.9% over the period.
The businesses that made the biggest positive
contributions in H1 were computerization solutions for doctors and
allied health professionals in France and for doctors in the UK,
and for doctors and pharmacists in Romania.
EBITDA increased by €8.0 million, or
116.1%, to €14.9 million over H1 2019, compared with €6.9 million
in H1 2018. The H1 2019 figure represented 18.3% of revenue,
compared with 9.1% in H1 2018. Restated for the positive €2.3
million impact of the initial application of IFRS 16, the increase
amounted to €5.7 million, or 82.1%.
This increase in EBITDA was mainly due to the
positive performances of doctor computerization activities in the
UK, France, Spain, and the US, of pharmacist computerization
activities in France, and of the medication database business
(BCB), partly offset by the start-up of the Docavenue business.
The division’s reported revenues fell
10.9% as reported and like for like in the first half of 2019, to
€1.7 million. Currencies and acquisitions had no
impact.EBITDA increased by €1.7 million to €3.9
million over H1 2019, compared with €2.2 million in H1 2018.
Restated for the positive €2.1 million impact of the initial
application of IFRS 16, the EBITDA decreased by €0.4
million.
Balance sheet structure
The consolidated total balance
sheet amounted to €745.6 million at June 30, 2019, a €97.5
million, or 15.0%, increase over December 31, 2018. This increase
included €67.0 million related to the application of IFRS 16 as of
January 1, 2019, with right-of-use assets relating to leases with
fixed lease payments recognized as assets in the balance sheet,
offset against lease liabilities which were recognized as
liabilities in the balance sheet.
Acquisition goodwill
represented €180.5 million at June 30, 2019, compared with €173.0
million at end-2018. The €7.5 million increase, or 4.3%, was
chiefly attributable to the €10.7 million impact of the acquisition
of BSV and RDV médicaux in France and Ximantix in Germany, and was
partly offset by the €2.5 million of impairment related to the
disposal of virtually all of Pulse Systems Inc’s assets.
Acquisition goodwill represented 24.2% of the total balance sheet
at June 30, 2019, compared with 26.7% on December 31, 2018.
Cash and equivalents decreased
by €54.9 million compared with December 31, 2018, to €26.2 million
at June 30, 2019. The decrease was chiefly attributable to a
requirement of €47.6 million in working capital and to €40.8
million of investments. Of the increase in working capital
requirement, €14.9 million was due to the cancellation of factoring
arrangements and €31.3 million was due to the negative trend in
advances paid by clients at the health insurance BPO business, of
which €15.8 million were classified as current client
receivables to reflect the specific clauses of a significant
contract. The outflow related to investment activities included
€24.6 million of R&D capitalization and a €10.9 million of
impact from changes in consolidation scope. It worth noting that
the liquid assets presented on the balance sheet include €17.3
million of commitments related to the BPO activity in health
insurance (delegated management of payment of health benefits).
Equity fell by €9.8 million, or
4.9%, to €189.2 million at June 30, 2019, compared with €199.0
million at December 31, 2018. Equity represented 25.4% of
total assets at June 30, 2019, compared with 30.7% at June 30,
2018.
Total net financial
liabilities(1) amounted to €232.6 million, up €124.6
million compared with six months ago. They represented 123% of
shareholders’ equity at June 30, 2019, restated for the IFRS 16
liabilities, the net financial liabilities came to €165.1 million
and represented 87% of shareholder’s equity at June 30, 2019,
compared to 54% at December 31, 2018.
Cash flow after cost of net financial
debt and taxes came to €36.6 million at June 30, 2019,
compared with €26.0 million at June 30, 2018.
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
markets in Belgium, France, the UK, 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 20, 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.
Cegedim, jointly with IQVIA (formerly IMS
Health), is being sued by Euris for unfair competition. Cegedim
asked the court to dismiss the case against the Group. On December
17, 2018, the Paris Commercial Court granted Cegedim’s request.
IQVIA has appealed that decision. Euris is claiming €150 million in
damages. After consulting its external legal counsel, the Group has
decided not to set aside any provisions.
Significant post-closing transactions and
events
Apart from the items cited below, to the best of
the company’s knowledge, there were no post-closing events or
changes that would materially alter the Group’s financial
situation.
- Acquisition of Cosytec in France
In July 2019 Cegedim acquired French company
Cosytec, which was founded in 1990 and sells HR and equipment
planning software that uses constraint programming technology.
Cosytec’s offerings will augment Cegedim SRH’s product range.
The company’s client base is made up of SMEs and
large corporations in the media, transportation, and services
sectors.
Cosytec generated revenues of €1.3 million in
2018 and earned a profit. It began contributing to the Group’s
consolidation scope in August 2019.
In August 2019 Cegedim acquired UK company
NetEDI, a major provider of e-procurement (using the PEPPOL EDI
system) and e-invoicing for the UK National Health System. Building
on the BSV and Ximantix acquisitions, the addition of NetEDI
strengthens Cegedim e-business’ ability to work with its clients
internationally.
NetEDI generated revenues of €2.8 million in
2018 and earned a profit. It began contributing to the Group’s
consolidation scope in August 2019.
- Business activities of Pulse Inc sold
In August 2019, Cegedim sold virtually all the
business activities of its wholly owned subsidiary, Pulse Systems
Inc., to CareTracker Inc., an affiliate of N. Harris. Under the
terms of the sale, Pulse’s software solutions and services, RCM
services, all customer contracts, a portion of supplier contracts,
and much of its personnel were transferred to the buyer.
As part of a group with a solid foundation in
North America, Pulse will have all the resources it needs to
successfully pursue its development. The deal will allow Cegedim to
focus its efforts on Europe and the UK, and to improve its
financial position.
The divestment resulted in asset impairment of
€16.3 million. Pulse contributed €11.3 million to the Group’s
consolidated 2018 revenues and €5.6 million to H1 2019 revenues. In
H1 2019, Pulse’s contribution to group EBITDA was insignificant and
its contribution to operating income was negative €18.2 million.
Pulse Systems Inc. will be wound up in the coming months.
- Director appointed to Cegedim SA’s board
At the annual general meeting on August 30,
2019, shareholders appointed Ms. Catherine Abiven to a six-year
term as a director. Her term will expire following the AGM held to
approve the financial statements for the year 2024.
On February 21, 2018, Cegedim S.A. received
notice that French tax authorities would perform an audit of its
accounts covering the period January 1, 2015, to December 31, 2016.
The Group received the statement of tax adjustment on April 16,
2019. Cegedim replied on June 14, 2019, and based on its reply, the
tax authorities rescinded the first proposal and made a second
proposal on September 9, 2019. Cegedim is working with its lawyers
to prepare its response. Based on ample precedent, the Group
believes that the adjustment is unwarranted. As a result, Cegedim
believes that there is little risk posed to the amount of deferred
tax assets recorded on its balance sheet and has decided not to
make any revisions.
Outlook
Based on its H1 2019 performances, the Group is
upgrading its outlook for 2019 and now expects like-for-like
revenue and EBITDA growth to be higher than 5%.
In H2 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
no contracts with entities in the UK contain clauses dealing with
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, under
number D.19-0230.
Additional information
The Audit Committee met on September 17, 2019,
and the Board of Directors—chaired by Jean-Claude Labrune—met on
September 18, 2019, to review the consolidated financial statements
for the first half of 2019. The statutory auditors conducted a
limited review of the financial statements. The statutory auditors’
report is dated September 19, 2019. The 2019 Interim Financial
Report is available on our website and on Cegedim IR, the Group’s
financial communications app.
Cegedim Group earnings take into account the
initial application of IFRS 16 on January 1, 2019. The main impacts
are presented in Annex 2.
2019 Financial calendar
|
September 20, 2019, at 11:30 am CET
October 24, 2019, after the market close |
Analyst meeting (SFAF) in SFAF’s offices Third quarter 2019
revenues |
|
|
The
H1 2019 earnings presentation is available at:
- The website:
https://www.cegedim.com/finance/documentation/Pages/presentations.aspx
- The Group’s financial communications app, Cegedim IR. To
download the app, visit:
http://www.cegedim.fr/finance/profil/Pages/CegedimIR.aspx..
|
Annex 1: Financial statement as of June 30,
2019
In thousands of euros |
06/30/2019 |
12/31/2018 |
Goodwill on acquisition |
180,478 |
173,024 |
Development costs |
36,794 |
13,103 |
Other intangible fixed assets |
114,541 |
143,606 |
Intangible fixed assets |
151,335 |
156,709 |
Property |
544 |
544 |
Buildings |
3,259 |
3,554 |
Other tangible fixed assets |
29,440 |
29,306 |
Construction work in progress |
90 |
11 |
Right-of-use assets |
66,883 |
|
Tangible fixed assets |
100,216 |
33,416 |
Equity investments |
1,214 |
1,214 |
Loans |
13,425 |
13,425 |
Other long-term investments |
6,747 |
6,318 |
Long-term investments – excluding equity shares in equity
method companies |
21,386 |
20,957 |
Equity shares in equity method companies |
10,848 |
10,486 |
Government – Deferred tax |
28,645 |
28,196 |
Accounts receivable: long-term portion |
45 |
87 |
Other receivables: long-term portion |
698 |
562 |
Prepaid expenses: long-term portion |
460 |
530 |
Non-current assets |
494,111 |
423,966 |
Services in progress |
3,479 |
- |
Goods |
1,070 |
2,670 |
Advances and deposits received on orders |
113,141 |
268 |
Accounts receivables: short-term portion |
94,375 |
97,278 |
Other receivables: short-term portion |
3 |
33,318 |
Cash equivalents |
0 |
152 |
Cash |
26,157 |
80,939 |
Prepaid expenses |
13,303 |
9,516 |
Current Assets |
251,529 |
224,142 |
Total Assets |
745,640 |
648,108 |
The Group applied IFRS 16 for the first time on
January 1, 2019, under the modified retrospective approach, which
does not require restatement of the comparative figures for
2018.
- Liabilities and shareholders’ equity as of June 30, 2019
In thousands of euros |
06/30/2019 |
12/31/2018 |
Share capital |
13,337 |
13,337 |
Group reserves |
191,466 |
185,287 |
Group exchange gains/losses |
(5,587) |
(5,613) |
Group earnings |
(10,180) |
5,771 |
Shareholders’ equity, Group share |
189,036 |
198,781 |
Minority interests |
164 |
175 |
Shareholders’ equity |
189,200 |
198,957 |
Long-term financial liabilities |
185,729 |
185,845 |
Non-current lease liabilities |
53,299 |
|
Long-term financial instruments |
1,040 |
961 |
Deferred tax liabilities |
7,430 |
6,605 |
Non-current provisions |
26,913 |
26,389 |
Other non-current liabilities |
0 |
15 |
Non-current liabilities |
274,409 |
219,814 |
Short-term financial liabilities |
5,491 |
3,211 |
Current lease liabilities |
14,219 |
|
Short-term financial instruments |
4 |
1 |
Accounts payable and related accounts |
44,266 |
41,774 |
Tax and social liabilities |
83,523 |
89,074 |
Provisions |
3,125 |
2,945 |
Other current liabilities |
131,403 |
92,332 |
Current liabilities |
282,030 |
229,337 |
Total Liabilities |
745,640 |
648,108 |
The Group applied IFRS 16 for the first time on
January 1, 2019, under the modified retrospective approach, which
does not require restatement of the comparative figures for
2018.
- Income statement as of June 30, 2019
In thousands of euros |
06/30/2019 |
06/30/2018 |
Revenue |
245,795 |
227,633 |
Purchased used |
(15,260) |
(15,365) |
External expenses |
(55,693) |
(58,501) |
Taxes |
(4,425) |
(4,640) |
Payroll costs |
(124,493) |
(114,566) |
Allocations to and reversals of provisions |
(1,517) |
(2,327) |
Change in inventories of products in progress and finished
products |
(79) |
(6) |
Other operating income and expenses |
(282) |
(229) |
Income of equity-accounted affiliates |
1,426 |
1,315 |
EBITDA |
45,472 |
33,316 |
Depreciation expenses |
(32,828) |
(21,369) |
Operating income before special items |
12,643 |
11,947 |
Depreciation of goodwill |
(2,500) |
- |
Non-recurring income and expenses |
(13,784) |
(9,633) |
Other exceptional operating income and
expenses |
(16,284) |
(9,633) |
Operating income |
(3,640) |
2,314 |
Income from cash and cash equivalents |
52 |
1,077 |
Gross cost of financial debt |
(4,387) |
(4,048) |
Other financial income and expenses |
(125) |
748 |
Cost of net financial debt |
(4,460) |
(2,222) |
Income taxes |
(1,914) |
(1,546) |
Deferred taxes |
(168) |
793 |
Total taxes |
(2,082) |
(752) |
Share of profit (loss) for the period of equity method
companies |
(8) |
- |
Profit (loss) for the period from continuing activities |
(10,190) |
(661) |
Profit (loss) for the period from discontinued activities |
- |
1,345 |
Consolidated profit (loss) for the period |
(10,190) |
684 |
Consolidated net income (loss) attributable to owners of
the parent |
(10,180) |
655 |
Minority interests |
10 |
29 |
Average number of shares excluding treasury stock |
13,853,244 |
13,941,543 |
Current Earnings Per Share (in euros) |
(0.4) |
0.2 |
Earnings Per Share (in euros) |
(0.7) |
0.0 |
Dilutive instruments |
None |
None |
Earning for recurring operation per share (in
euros) |
(0.7) |
0.0 |
The Group applied IFRS 16 for the first time on
January 1, 2019, under the modified retrospective approach, which
does not require restatement of the comparative figures for
2018.
- Consolidated cash flow statement as of June 30, 2019
In thousands of euros |
06/30/2019 |
06/30/2018 |
Consolidated profit (loss) for the period |
(10,190) |
684 |
Share of earnings from equity method companies |
(1,417) |
(1,315) |
Depreciation and provisions |
48,220 |
26,609 |
Capital gains or losses on disposals |
(25) |
- |
Cash flow after cost of net financial debt and
taxes |
36,588 |
25,978 |
Cost of net financial debt |
4,460 |
2,276 |
Tax expenses |
2,082 |
39 |
Operating cash flow before cost of net financial debt and
taxes |
43,130 |
28,293 |
Tax paid |
(473) |
(697) |
Change in working capital requirements for operations:
requirement |
(47,584) |
- |
Change in working capital requirements for operations: surplus |
- |
11,549 |
Cash flow generated from operating activities after tax
paid and change in working capital requirements (A) |
(4,927) |
39,145 |
Of which net cash flows from operating activities of held for
sale |
- |
(5,145) |
Acquisitions of intangible assets |
(26,066) |
(22,208) |
Acquisitions of tangible assets |
(4,880) |
(5,662) |
Acquisitions of long-term investments |
391 |
(2,437) |
Disposals of tangible and intangible assets |
51 |
88 |
Change in loans made and cash advances |
555 |
106 |
Impact of changes in consolidation scope |
(10,922) |
64,550 |
Dividends received |
97 |
1,969 |
Net cash flows generated by investment operations
(B) |
(40,773) |
36,405 |
Of which net cash flows connected to investment operations of
activities held for sale |
- |
13,892 |
Dividends paid to the minority interests of consolidated
companies |
- |
(55) |
Loans issued |
- |
- |
Loans repaid |
(354) |
(82,038) |
Repayment of lease liabilities |
(7,017) |
- |
Interest paid on loans |
(245) |
(1,628) |
Other financial income and expenses paid or received and interest
expense on lease liabilities |
(1,714) |
(1,362) |
Net cash flows generated by financing operations
(C) |
(9,330) |
(85,083) |
Of which net cash flows related to financing operations of
activities held for sale |
- |
(13,073) |
Change in cash before impact of change in foreign currency
exchange rates (A + B + C) |
(55,030) |
(9,533) |
Impact of changes in foreign currency exchange rates |
96 |
112 |
Change in cash |
(54,934) |
(9,421) |
Opening cash |
81,088 |
22,998 |
Closing cash |
26,154 |
13,577 |
The Group applied IFRS 16 for the first time on
January 1, 2019, under the modified retrospective approach, which
does not require restatement of the comparative figures for
2018.
Annex 2: First-time application of IFRS 16 –
Leases
First-time application of IFRS 16 – Leases
Cegedim has applied IFRS 16 Leases for the first time in its
condensed consolidated interim financial statements for the six
months ended June 30, 2019. Applying this new standard—which
supersedes IAS 17 Leases—had a material impact on Cegedim’s
consolidated financial statements given the importance of leases to
the Group’s activities.
The Group elected to use the “modified retrospective” approach
for its transition to IFRS 16, under which entities are not
authorized to restate prior-period comparative financial
information. Consequently, the first-half 2019 income statement is
presented differently than the Group’s prior-period income
statements.
In order to assist users of the Group’s financial statements to
understand the impact of its transition to IFRS 16, and to help
provide meaningful comparisons between the financial data for 2019
and 2018 presented below, the Group has chosen to present two types
of data in this activity report, for which reconciliations have
been performed:
- IAS 17-adjusted financial data for 2019: the data for
first-half 2019 has been adjusted for the impact of IFRS 16 on that
period in order to provide meaningful comparisons with the
first-half 2018 data, to which IAS 17 has been applied.
- IAS 17-adjusted non-IFRS financial indicators for 2019: key
indicators such as recurring operating income, EBITDA and free cash
flow from operations have been presented on an adjusted basis as if
IAS 17 had been applied instead of IFRS 16.
Definitions of these non-IFRS financial indicators are presented
in the Interim Financial Report in section 2.5.3, page 19.Impact of
IFRS 16 in the first half of 2019
IAS 17-adjusted financial data for 2019
Balance sheet
In € million |
06/30/2019 IFRS 16 Reported |
06/30/2019 IAS 17 Restated |
12/30/2018 IAS 17 Reported |
Change IAS 17 % |
Assets |
|
|
|
|
Right-of-use assets |
66.9 |
0.0 |
0.0 |
n.m. |
Other non-current assets |
427.2 |
427.1 |
424.0 |
+0.7% |
Non-current assets |
494.1 |
427.1 |
424.0 |
+0.7 |
Current assets |
251.5 |
251.5 |
224.1 |
+12.2% |
Total assets |
745.6 |
678.6 |
648.1 |
+4.7% |
|
|
|
|
|
Liabilities |
|
|
|
|
Long-term financial debt |
239.0 |
185.7 |
185.8 |
(0.1)% |
Other non-current liabilities |
35.4 |
35.4 |
34.0 |
+4.2% |
Total non-current liabilities |
274.4 |
221.1 |
219.8 |
+0.6% |
Short-term financial debt |
19.7 |
5.5 |
3.2 |
+71.0% |
Other current liabilities |
262.3 |
262.3 |
226.1 |
+16.0% |
Total current liabilities |
282.0 |
267.8 |
229.3 |
+16.8% |
Total liabilities |
556.4 |
488.9 |
449.2 |
+8.9% |
Shareholders’ equity |
189.2 |
189.7 |
199.9 |
(4.7)% |
Total liabilities and shareholders’ equity |
745.6 |
678.6 |
648.1 |
+4.7% |
Impact of IFRS 16 in the first half of 2019
Consolidated Income statements
In € million |
06/30/2019 IFRS 16 Reported |
06/30/2019 IAS 17 Restated |
06/30/2018 IAS 17 Reported |
Change IAS 17 % |
Revenue |
245.8 |
245.9 |
227.6 |
+8.0% |
Purchases used |
(15.3) |
(15.3) |
(15.4) |
(0.7)% |
External expenses |
(55.7) |
(63.5) |
(58.5) |
+8.6% |
Payroll costs |
(124.5) |
(124.5) |
(114.6) |
+8.7% |
Other operating income and charges |
(4.9) |
(4.9) |
(5.9) |
(17.1)% |
Depreciation and amortization expenses |
(32.8) |
(25.1) |
(21.4) |
+17.4% |
Other non-recurring operating income and expenses |
(16.3) |
(16.3) |
(9.6) |
+69.0% |
Amortization of goodwill |
(3.6) |
(3.7) |
2.3 |
n.m. |
Operating income |
(1.5)% |
(1.5)% |
1.0% |
- |
as % of
revenue |
(4.5) |
(3.7) |
(2.2) |
+67.4% |
Cost of net financial debts |
(2.1) |
(2.3) |
(0.8) |
+200.2% |
Total taxes |
(10.2) |
(9.7) |
0.7 |
n.m. |
Consolidated profit (loss) |
(10.2) |
(9.7) |
0.7 |
n.m. |
Group share |
|
|
|
|
IAS 17-adjusted non-IFRS financial indicators for
2019
In € million |
06/30/2019 IFRS 16 |
06/30/2019 IAS 17 |
06/30/2018 Reported |
Change % |
Recurring operating income |
12.6 |
12.5 |
11.9 |
+5.0% |
as % of revenue |
5.1% |
5.1% |
5.2% |
- |
EBITDA |
45.5 |
37.6 |
33.3 |
+12.9% |
as % of revenue |
18.5% |
15.3% |
14.6% |
- |
The impact of applying IFRS 16 to operating income, recurring
operating income, and net profit is not significant.
Annex 3: Alternative performance indicators
To monitor and analyze the financial performance of the Group
and its activities, Group management uses alternative performance
indicators. These financial indicators are not defined by IFRS
norms. This note presents a reconciliation of these indicators and
the aggregates from the consolidated financial statements under
IFRS.
Reported and like-for-like revenueDefinitionThe Group’s reported
revenue corresponds to its actual revenue. The Group also uses
like-for-like data. The following adjustments are made:
- neutralize the portion of revenue corresponding to entities
divested in 2018;
- include the portion of revenue corresponding to entities
acquired in 2019;
- recalculate 2018 revenue at 2019 exchange rates.
These adjustments give rise to comparative data at constant
scope and exchange rates, which serve to measure organic
growth.Reported and like-for-like revenueReconciliation table
In € thousands |
D1 |
D2 |
D3 |
Group |
|
|
|
|
|
2018 Revenue (a) |
149,537 |
76,162 |
1,936 |
227,634 |
Impact
of disposals |
0 |
0 |
0 |
0 |
2018
Revenue before impact of disposals |
149,537 |
76,162 |
1,936 |
227,634 |
|
|
|
|
|
Currency impact |
3 |
525 |
0 |
528 |
2018
revenue at 2019 exchange rate (b) |
149,540 |
76,687 |
1,936 |
228,162 |
|
|
|
|
|
2019
Revenue before impact of acquisitions (c) |
159,892 |
81,208 |
1,724 |
242,824 |
Revenue
from acquisitions |
2,606 |
365 |
0 |
2,971 |
2019 Revenue |
162,498 |
81,572 |
1,724 |
245,795 |
|
|
|
|
|
Like-for-like growth ([c-b]/a) |
+6.9% |
+5.9% |
(10.9)% |
+6.4% |
D1: “Health insurance, HR and e-services” Division;D2:
“Healthcare professionals” Division;D3: “Corporate and others”
Division.
Recurring operating income (REBIT)Definition
The Group’s operating income includes all revenues and expenses
directly related to Group activities, whether these revenues and
expenses are recurring or arise from non-recurring decisions or
transactions.
“Other non-recurring operating income and expenses” consists of
unusual items, notably as concerns the nature or frequency, that
could distort the assessment of Group entities’ financial
performance. Other non-recurring operating income and expenses may
include impairment of tangible assets, goodwill, and other
intangible assets, gains or losses on disposals of non-current
assets, restructuring costs, and costs relating to workforce
adaptation measures.
Consequently, Cegedim monitors its operating performance using
“Recurring operating income”(REBIT), defined as the difference
between total operating income and other non-recurring operating
income and expenses.
Recurring operating income (REBIT) is an intermediate line item
intended to facilitate the understanding of the Group’s operating
performance and as a way to estimate recurring performance. This
indicator is presented in a manner that is consistent and stable
over the long term in order to ensure the continuity and relevance
of financial information.
EBITDADefinition
The Group uses EBITDA to monitor its operating performance. This
financial indicator corresponds to recurring operating income plus
depreciation and amortization expenses.
Recurring operating income (REBIT) and EBITDAReconciliation
table
In € million |
H1 2019 |
H1 2018 |
Operating income (a) |
(3.6) |
2.3 |
Other
non-recurring operating income and expenses (b) |
(13.8) |
(9.6) |
Amortization of goodwill (c) |
(2.5) |
0.0 |
Recurring operating income (REBIT) (c=a-b-c) |
12.6 |
11.9 |
Depreciation and amortization expenses (d) |
(32.8) |
(21.4) |
EBITDA (e=c-d) |
45.5 |
33.3 |
Effective tax rate on recurring income
The effective tax rate on recurring income corresponds to the
effective tax rate excluding tax effects relating to “Other
non-recurring operating income and expenses”.
Free cash flow from operationDefinition
The Group also uses an intermediate line item, Free cash flow
from operations, to monitor its financial performance. This
financial indicator measures net operating cash flow less net
operating investments (defined as acquisitions and disposals of
tangible and intangible assets).
Free cash flow from operationReconciliation table
In € million |
H1 2019 |
H1 2018 |
Cash flow generated from operating activities after tax
paid and change in working capital requirements |
(4.9) |
39.1 |
Acquisition of intangible assets |
(26.1) |
(22.2) |
Acquisition of tangible assets |
(4.9) |
(5.7) |
Disposal of tangible and intangible assets |
+0.1 |
+0.1 |
Free cash flow from operations |
(35.8) |
+11.4 |
Net financial debtDefinition
Net financial debt comprises gross borrowings, including accrued
interest and debt restatement at amortized cost less cash and cash
equivalents. Net financial debtReconciliation table
In € million |
30/06/2019 |
31/12/2018 |
Long-term financial liabilities |
239.0 |
185.8 |
Short-term financial liabilities |
19.7 |
3.2 |
Total
financial liabilities |
258.7 |
189.1 |
Cash
and cash equivalents |
26.2 |
81.1 |
Net financial debt excluding IFRS 16 debt |
232.6 |
108.0 |
Non-current IFRS 16 debt |
14.2 |
- |
Current
IFRS 16 debt |
53.3 |
- |
Net financial debt |
165.1 |
108.0 |
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. |
|
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. 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. 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. Net cash: Net cash is defined as
cash and cash equivalent minus overdraft. Operating
expenses: Operating expenses is defined as purchases used,
external expenses and payroll costs. |
|
|
|
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: www.cegedim.com
And follow Cegedim on Twitter: @CegedimGroup, LinkedIn and
Facebook. |
Aude
Balleydier Cegedim Media Relations and
Communications Manager Tel.: +33 (0)1 49 09 68 81
aude.balleydier@cegedim.com |
Jan Eryk
Umiastowski Cegedim Chief Investment
Officer and head of Investor Relations Tel.: +33 (0)1 49 09 33 36
janeryk.umiastowski@cegedim.com |
Agnès
Gilbert For Madis Phileo
Media Relations Tel: +33 (0) )6 84 61 30 71
agnes.gilbert@madisphileo.com |
|
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