Cegedim: Revenue grew in the 3rd quarter of 2019
Quarterly financial information as of September 30, 2019 IFRS -
Regulated information - Not audited
Cegedim: Revenue grew in the third quarter of
2019
- Like-for-like revenues grew 6.9% over the quarter and 6.6% over
the first nine months
- Reported revenues grew 8.8% over the quarter and 8.3% over the
first nine months
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 October 24, 2019, no earlier than 5:45 pm
Paris time. The terms “business model
transformation” and “BPO” are defined in the glossary.
The Group applies the IFRS 15 accounting standard, “Revenue
from contracts with customers”. |
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Boulogne-Billancourt, France, October 24, 2019, after
the market close
Cegedim, an innovative
technology and services company, generated consolidated Q3 revenues
of €118.4 million in 2019, an increase of 8.8% as reported and 6.9%
like-for-like compared with the same period in 2018.
Over the first nine months of 2019, Cegedim
generated consolidated revenues of €364.2 million, an increase of
8.3% as reported and 6.6% like-for-like compared with the same
period in 2018.
In the third quarter and over the first nine
months, all the operating divisions made positive year-on-year
contributions to the Group’s like-for-like growth.
BPO activities revenues reached €32.1 million
over the first nine months of 2019, a 20.6% improvement compared
with 2018.
Revenue trends by division
·Third quarter of 2019
|
|
Third quarter |
in € million |
|
2019 |
2018 |
Chg. L-f-l |
Chg. Reported |
Health insurance,
HR and e-services |
|
79.6 |
71.6 |
8.2% |
11.1% |
Healthcare
professionals |
|
38.0 |
36.3 |
4.7% |
4.7% |
Corporate and
others |
|
0.8 |
0.9 |
(7.1)% |
(7.1)% |
Cegedim |
|
118.4 |
108.8 |
6.9% |
8.8% |
Currency translation had no impact.
The €2 million boost from scope effects, or
1.9%, was chiefly due to the acquisition of BSV in France on
January 31, 2019, the acquisition of Ximantix in Germany on January
21, 2019, and that of NetEDI in the UK in August 2019.
·First nine months of 2019
|
|
First nine months |
in € million |
|
2019 |
2018 |
Chg. L-f-l |
Chg. Reported |
Health insurance,
HR and e-services |
|
242.1 |
221.2 |
7.3% |
9.5% |
Healthcare
professionals |
|
119.6 |
112.4 |
5.5% |
6.3% |
Corporate and
others |
|
2.5 |
2.8 |
(9.7)% |
(9.7)% |
Cegedim |
|
364.2 |
336.4 |
6.6% |
8.3% |
The favorable currency translation impact is
under 0.2%.
The €5 million boost from scope effects, or
1.5%, was chiefly due to the acquisitions of BSV, Ximantix and
NetEDI.
Analysis of business trends by division
·Health insurance, HR and
e-services
in € million |
|
2019 |
2018 |
Chg. L-f-l |
Chg. Reported |
Third quarter
revenue |
|
79.6 |
71.6 |
8.2% |
11.1% |
First nine months
revenue |
|
242.1 |
221.2 |
7.3% |
9.5% |
Over the first nine months of 2019, acquisitions
made a positive contribution of 2.1%, or €4.7 million. The main
contributions came from BSV, Ximantix andNetEDI.
The businesses that made the biggest
contributions to this growth in the first nine months of 2019
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).
·Healthcare professionals
in € million |
|
2019 |
2018 |
Chg. L-f-l |
Chg. Reported |
Third quarter
revenue |
|
38 |
36.3 |
4.7% |
4.7% |
First nine months
revenue |
|
119.6 |
112.4 |
5.5% |
6.3% |
Over the first nine months of 2019, acquisitions
made a positive contribution of 0.3%, while currency effects
contributed 0.5%.
The businesses that made the biggest positive
contributions over the first nine months were the computerization
solutions for doctors and allied health professionals in France,
for doctors in the UK, and for doctors and pharmacists in Romania,
as well as the Docavenue appointment scheduling and remote
consultation portal.
·Corporate and others
in € million |
|
2019 |
2018 |
Chg. L-f-l |
Chg. Reported |
Third quarter
revenue |
|
0.8 |
0.9 |
(7.1)% |
(7.1)% |
First nine months
revenue |
|
2.5 |
2.8 |
(9.7)% |
(9.7)% |
Highlights
To the best of the company’s knowledge, there
were no events or changes during the third quarter of 2019 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.
·Acquisition of NetEDI
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.
The divestment resulted in asset impairment
totaling €16.3 million. Pulse contributed €11.3 million to the
Group’s consolidated revenues in 2018 and €7.2 million over the
first nine months of 2019.
·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.
·TaxOn 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.
·Tessi lawsuitOn September 17,
2019, the Paris Court of Appeals overturned the Commercial Court’s
ruling and reduced Cegedim’s penalty for financial damages
resulting from the breach of a contract of sale to €2,857,693 from
€4,586,000.
By our calculations, it appears that Cegedim can
now demand that Tessi repay €1,615,660 of the €4,938,015.84 the
Group paid in 2017, with the caveat that the court is responsible
for calculating interest.
Significant transactions and events post September 30,
2019
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.
Outlook
The Group confirms the targets it revised upward
on September 19, 2019, i.e. like-for-like revenue and EBITDA*
growth above 5%.
The Group does not expect to make any
significant acquisitions in the second half of 2019.
And lastly, the Group does not provide earnings
estimates or forecasts.
(*) Alternative performance indicator
EBITDA: This financial performance indicator is
equivalent to operating profit from continuing activities plus net
depreciation and amortization expenses.
·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.
Brexit is unlikely to have a material impact on Group EBIT from
continuing activities.
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.
Additional information
Third quarter 2019 revenue figures have not been
audited by the Statutory Auditors.
The third quarter 2019 revenue 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:
https://www.cegedim.com/finance/profile/Pages/cegedimir.aspx.
Annexes
Breakdown of revenue by quarter and
division
·Year 2019
in € million |
|
Q1 |
Q2 |
Q3 |
Q4 |
Total |
Health insurance, HR and e-services |
|
79,239 |
83,260 |
79,585 |
|
242,084 |
|
Healthcare
professionals |
|
39,100 |
42,472 |
38,014 |
|
119,586 |
|
Corporate and
others |
|
882 |
842 |
836 |
|
2,561 |
|
Revenue
from continuing activities |
|
119,222 |
126,574 |
118,435 |
|
364,231 |
|
Revenue from
activities held for sale |
|
0 |
0 |
0 |
|
0 |
|
IFRS 5
restatement |
|
0 |
0 |
0 |
|
0 |
|
Group revenue |
|
119,222 |
125,574 |
118,435 |
|
364,231 |
|
·Year 2018
in € million |
|
Q1 |
Q2 |
Q3 |
Q4 |
Total |
Health insurance, HR and e-services |
|
72,923 |
76,613 |
71,620 |
86,526 |
307,684 |
|
Healthcare
professionals |
|
38,029 |
38,133 |
36,291 |
43,731 |
156,184 |
|
Corporate and
others |
|
989 |
947 |
900 |
985 |
3,820 |
|
Revenue
from continuing activities |
|
111,941 |
115,693 |
108,811 |
131,242 |
467,688 |
|
Revenue from
activities held for sale |
|
2,066 |
0 |
0 |
0 |
2,066 |
|
IFRS 5
restatement |
|
(36) |
0 |
0 |
0 |
(36) |
|
Group revenue |
|
113,970 |
115,693 |
108,811 |
131,242 |
469,717 |
|
Breakdown of revenue by geographic zone and
division
·As of September 30, 2019
Consolidated revenues in € million |
|
France |
EMEA excl. France |
Americas |
APAC |
Health insurance, HR and e-services |
|
232,783 |
9,301 |
- |
- |
Healthcare
professionals |
|
73,325 |
38,778 |
7,484 |
- |
Corporate and
others |
|
2,551 |
10 |
- |
- |
Cegedim |
|
308,659 |
48,089 |
7,484 |
- |
Breakdown of revenue by currency and
division
·As of September 30, 2019
Consolidated revenues in € million |
|
Euro |
GBP |
USD |
Others |
Health insurance, HR and e-services |
|
234,432 |
5,513 |
- |
2,228 |
Healthcare
professionals |
|
78,946 |
30,129 |
7,202 |
3,309 |
Corporate and
others |
|
2,561 |
- |
- |
- |
Cegedim |
|
315,849 |
35,642 |
7,202 |
5,537 |
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.EBIT margin: EBIT margin is
defined as the ratio of EBIT/revenue.EBIT margin
before special items: EBIT margin before special
items is defined as the ratio of EBIT before special
items/revenue.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.Life-for-like data (L-f-l): At
constant scope and exchange rates.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.comAnd follow Cegedim on Twitter: @CegedimGroup,
LinkedIn and Facebook. |
Aude
BalleydierCegedim Media Relations and
Communications ManagerTel.: +33 (0)1 49 09 68
81aude.balleydier@cegedim.com |
Jan Eryk
UmiastowskiCegedimChief Investment
Officerand head of Investor RelationsTel.: +33 (0)1 49 09 33
36janeryk.umiastowski@cegedim.com |
Agnès
GilbertFor Madis
Phileo Media RelationsTel: +33 (0)6
84 61 30 71agnes.gilbert@madisphileo.com |
|
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