Cegedim: Orders Postponed from H1 to H2. 2013 Outlook Maintained

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Cegedim: Orders Postponed from H1 to H2. 2013 Outlook Maintained

  • Results dipped in the second quarter after meeting expectations in the first quarter
  • Growth expected in the second half after recent commercial successes
  • The Group reiterates its target for 2013 of growth in the operating margin from recurring operations

PARIS--(BUSINESS WIRE)-- Regulatory News:

Cegedim, a global technology and services company specializing in the healthcare field, generated consolidated first-half 2013 revenues of €437.2 million, down 3.5% on a reported basis and 2.8% like for like* compared with a year earlier. EBITDA was €55.4 million, down 18.9% year on year, and the EBITDA margin came to 12.7% compared with 15.1% in H1 2012.

Following a satisfactory first quarter, in the second quarter - particularly in June - several orders were postponed that affected the CRM and strategic data and Healthcare professionals divisions at a time when market conditions remain challenging. The Insurance and services division, on the other hand, continued to grow.

The delayed orders caused first half revenues to drop, negatively affecting EBITDA. However, the phenomenon was cushioned by the €7 million drop in operating expenses (purchases used, external expenses and payroll costs) stemming from the Performance Improvement Plans executed in 2011 and 2012, as well as ongoing cost-control efforts. Costs continued to fall during the second quarter. It is worth noting that the capitalization of R&D also declined. Thus, whereas revenues fell by €16.1 million, EBITDA fell by only €12.9 million.

Due to the order delays, both revenues and EBITDA are expected to show year-on-year growth in the second half. Thus, for 2013 the Group expects stable revenues and a 50bp increase in its operating margin from recurring operations. In fact, the Group has significant opportunities for growth at all of its divisions.

  • Simplified income statement
    H1 2013   H1 2012  


  €M   %   €M   %  
Revenue   437.2   100%   453.3   100%   (3.5%)
EBITDA 55.4   12.7% 68.3   15.1% (18.9%)
Depreciation (29.4) (30.7) (4.1%)
Operating income from recurring operations   25.9   5.9%   37.6   8.3%   (31.0%)
Exceptional operating income / expenses (4.0) (117.0) n.m.
Operating income   21.9   5.0%   (79.4)   (17.5%)   n.m.
Net cost of financial debt (36.1) (21.6) +67.0%
Tax expenses 0.4 (2.4) n.m.
Share of earnings in equity-accounted affiliates 0.1 0.1 +10.3%
Consolidated profit   (12.8)   (2.9%)   (102.6)   (22.6%)   +87.5%
Profit attributable to the owners of the parent   (12.8)   (2.9%)   (102.6)   (22.6%)   +87.5%

* at constant scope and exchange rates

In the first half of 2013, Cegedim posted consolidated revenues of €437.2 million, down 3.5% on a reported basis and 2.8% like for like* compared with the same period in 2012. Acquisitions and divestments had a net positive impact of 0.4%, while currencies had a negative impact of 1.1%.

The execution of the Performance Improvement Plans in 2011 and 2012, along with ongoing cost-control efforts in 2013, allowed the Group to lower costs - defined as revenues minus EBITDA - by €3.1 million. This performance was principally the result of a €6.4 million decrease in total payroll (of which €1.3 million was attributable to the CICE1 tax credit for competitiveness and employment). Purchases used increased only slightly, while external expenses fell by €1.1 million following the development of Cegelease activity. The capitalization of R&D declines by €2.2 million. Thus, the €16.1 million drop in revenues resulted in a €12.9 million drop in EBITDA to €55.4 million, and the margin fell from 15.1% in H1 2012 to 12.7% in H1 2013.

Depreciation fell by 4.1% to €29.4 million. Most of the costs linked to the 2011 and 2012 Performance Improvement Plans had already been recorded, so restructuring costs fell.

Operating income from recurring operations came to €25.9 million, down €11.6 million compared with H1 2012, with the margin falling from 8.3% to 5.9%. The drop is chiefly the result of delayed orders affecting the CRM and strategic data and Healthcare professionals divisions, partly offset by improvement at the Insurance and services division.

The cost of financial debt came to €36.1 million vs. €21.6 million a year ago, the direct result of an exceptional event: the March 2013 redemption of part of a bond maturing in 2015 and the refinancing of an amortizing loan with a bond.

The tax expenses fell by €2.8 million, principally from the use of deferred tax assets.

The net profit attributable to the owners of the parent came to a loss of €12.8 million, compared with a loss of €102.6 million a year earlier. The loss per share from recurring operations amounted to €0.6, vs. €1.01 over the same period in 2012.

Analysis of business trends by division

  • Key figures by division
  Revenue   EBIT for recurring operations   EBITDA
in € million 2 nd Quarter 2 nd Quarter 2 nd Quarter
  2013   2012 2013   2012 2013   2012
CRM and strategic data 110.0   126.1 6.9   13.9 10.9   20.8
Healthcare professionals 74.5 75.8 9.5 16.1 14.9 21.1
Insurance and services 39.9 37.1 6.7 7.6 10.1 10.7
Cegedim 224.4   239.1 23.2   37.6 35.9   52.6
  Revenue   EBIT for recurring operations   EBITDA
in € million H1 H1 H1
  2013   2012 2013   2012 2013   2012
CRM and strategic data 214.6   237.2 (2.0)   4.3 9.5   17.9
Healthcare professionals 145.6 143.1 16.5 23.8 27.7 34.6
Insurance and services 77.0 72.9 11.4 9.6 18.2 15.8
Cegedim 437.2   453.3 25.9   37.6 55.4   68.3
  • CRM and strategic data

In the second quarter of 2013, division revenues totaled €110.0 million, down 12.8% on a reported basis. Currencies and the April 2012 divestment of Pharmapost had negative impacts of respectively 1.9% and 0.3%. Like-for-like* revenues fell 10.6% over the period.

L-f-L* revenues in H1 2013 fell 7.0% year-on-year. Changes in scope and currencies made negative contributions of respectively 0.8% and 1.7%.

The CRM and strategic data division represented 49% of consolidated Group revenues compared with 52% over year-earlier period.

The division's revenues were chiefly affected by a change in the seasonal nature of order intake for market studies, which has caused an overwhelming shift to the second half of the year.

As a result, revenues fell by €22.6 million. However, EBITDA fell by only €8.4 million owing to a €14.1 million drop in expenses attributable to the Performance Improvement Plans of 2011 and 2012, as well as continued cost-control efforts in 2013.

Amortization charges fell by €2.2 million, and operating income from recurring operations came to a €2.0 million loss, compared with a €4.3 million profit in the first half of 2012.

The Group's ongoing investment strategy will allow it to launch new products and services over the coming months.

Management remains confident that the second half will be more robust in light of the order book, planned product launches, "Compliance" offerings -that are likely to get a boost from the release of the "Transparency" decree in France, which will require companies to publish reports starting October 1, 2013, making up lost ground in market research, and cost-control measures.

  • Healthcare Professionals

The division's Q2 2013 revenues amounted to €74.5 million, down 1.7% on a reported basis. The acquisition of ASP Line boosted revenues by 2.3%, whereas currencies had a negative impact of 1.0%. Like-for-like* revenues fell 3.0% over the period.

H1 2013 L-f-L* revenues amounted to (0.1%) compared with the same period in 2012. Acquisitions boosted revenues by 2.5%, whereas currencies had a negative impact of 0.8%.

The Healthcare professionals division represented 33% of consolidated Group revenues compared with 32% in the year-earlier period.

The activity was hurt by the postponement of healthcare professional software orders, particularly in France, although the impact was offset by fine performances by physician software in the UK and Cegelease.

These delays, combined with a change in the seasonal product mix, caused EBITDA to drop by €6.9 million to €27.7 million. The division's operating income from recurring operations came to €16.5 million, down €7.3 million compared with the same period in 2012.

Management expects to make up the lost ground in the second half, starting in the third quarter, allowing it to meet its 2013 targets.

  • Insurance and services

The division had Q2 2013 revenues of €39.9 million, up 7.4% on both a reported and a like-for-like* basis. Currencies had virtually no impact, and there was no change in the division's scope.

First-half 2013 revenues rose 5.6% on a reported basis and like-for-like* compared with the year-earlier period.

The Insurance and services division represented 18% of consolidated Group revenues against 16% in the same period last year.

Cegedim Assurances, which has set the standard among large clients and is the market leader, continues to win new contracts and has seen its revenues grow. Among others, Mutualité Sociale Agricole (MSA), which manages the health insurance scheme for farmers in France, has chosen Cegedim Activ's Activ'Infinite solution to manage payer activities covering more than two million individuals.

In addition, the division continues to enjoy double-digit growth at CegedimSRH (HR management) and e-business (electronic invoicing).

The division's operating income from recurring operations came to €11.4 million, up 19.6% year on year. Thus, the operating margin from recurring operations rose to 14.9% from 13.1% a year earlier. This improvement is chiefly due to the growth in online third-party payer management services, e-business activities, and Cegedim SRH.

As a result of this growth, Management remains confident that it will meet its 2013 targets.

Financial resources

Cegedim's total consolidated balance sheet at 30 June 2013 amounted to €1,313 million, up 1.9% compared with end-2012. Acquisition goodwill rose slightly owing to currency fluctuations, to €615.8 million, and represents 46.9% of total assets.

Cash and equivalents, at €64.4 million, rose €21.0 million on the back of the debt refinancing operation in March 2013. Net cash came to €25.5 million, a €4.0 million increase.

Shareholders' equity fell to €415.7 million and now represents 31.6% of total liabilities.

Net financial debt came to €495.1 million at the end of H1 2013, compared with €475.6 million at end-2012. We note that the increase of €19.5 million is chiefly attributable to the March refinancing operation.

Before the cost of net financial debt and taxes, operating cash flow was €51.9 million at the end of the first half of 2013, down €9.8 million year on year. Gearing was relatively stable, at 1.2x compared with 1.1x at end-December 2012.

2 nd quarter highlights

On March 20th, Cegedim issued a €300 million senior Reg S/144A bond with a coupon of 6.75% maturing April 1, 2020. The issue price was 100% of the nominal value. Cegedim used the proceeds to:

  • Redeem 7% bonds maturing in 2015 as part of a redemption offer at a price of 108% on a principal amount of €111.5 million. Including accrued unpaid interest, the total amount was €121.5 million. There are €168.6 million in bonds still outstanding;
  • Repay a term loan of €140 million;
  • Repay amounts drawn on a revolving credit;
  • Pay fees and charges related to these transactions.

On April 26th, 2013, Standard and Poor's upgraded its rating on Cegedim and its two bonds to "B+ with stable outlook".

Apart from the items cited above, 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.

Significant post-closing transactions and events

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.


In the wake of a second quarter affected by order postponement and unfavorable market conditions, Cegedim is still working to rein in costs while continuing to prioritize innovation and debt reduction.

As a result, in the absence of any major changes in its market trends, the Group expects stable revenues and a 50 basis point improvement in the operating margin from recurring operations for 2013.

Financial calendar

The Group will hold a conference call on September 19th, 2013, at 6:15 pm in English (Paris time). The call will be hosted by Jan Eryk Umiastowski, Cegedim Chief Investment Officer and Head of Investor Relations.

A presentation of Cegedim 2013 Q2 Financial Results will also be available on the website:


Contact numbers:  

France: +33 (0)1 76 77 22 23

US : +1646 254 3360

UK and others: +44 (0)20 3427 1917

  Access code:


September 20, 2013 - 10:30 am (24 rue de Penthièvre - 75008 Paris)

  • SFAF Meeting for 2013 HY Results

November 28, 2013 (after the stock market closes)

  • 2013 Q3 Revenue and Results release

Additional information

The Audit Committee and the auditors met on September 13th, 2013, and the Board of Directors met on September 19th, 2013, to review H1 2013 consolidated financial statements.

The half-year financial report, including management discussion and analysis, is available in the Finance section of Cegedim's website:


  • Balance sheet


In thousands of euros   06/30/2013   12/31/2012
Goodwill on acquisition   615,780   613,727
Development costs 37,148 26,408
Other intangible fixed assets   181,285   183,714
Intangible fixed assets 218,434 210,122
Property 389 389
Buildings 5,185 5,766
Other tangible fixed assets 30,108 33,343
Construction work in progress   82   2,192
Tangible fixed assets 35,764 41,690
Equity investments 531 544
Loans 1,925 1,917
Other long-term investments   10,836   11,445
Long-term investments - excluding equity shares in equity method companies 13,292 13,906
Equity shares in equity method companies 8,224 8,143
Government - Deferred tax 63,130 57,855
Accounts receivable : Long-term portion 17,344 15,909
Other receivables : Long-term portion   725   726
Non-current assets 972,694 962,078
Services in progress 203 188
Goods 11,693 10,798
Advances and deposits received on orders 1,105 971
Accounts receivable : Short-term portion 215,141 215,223
Other receivables : Short-term portion 30,385 38,696
Cash equivalents 3,812 3,862
Cash 60,624 39,599
Prepaid expenses   17,763   16,881
Current assets   340,725   326,219
Total assets   1,313,419   1,288,297


In thousands of euros   06/30/2013   12/31/2012
Share capital   13,337   13,337
Issue premium 185,562 185,561
Group reserves 214,768 297,712
Group exchange reserves (238) (238)
Group exchange gains/losses 14,649 13,736
Group earnings   (12,826)   (85,351)
Shareholders' equity, Group share 415,251 424,757
Minority interests (reserves) 415 418
Minority interests (earnings)   2   89
Minority interests   416   507
Shareholders' equity 415,667 425,263
Long-term financial liabilities 518,607 457,103
Long-term financial instruments 9,375 13,207
Deferred tax liabilities 14,103 13,617
Non-current provisions 30,120 29,615
Other non-current liabilities   3,396   3,562
Non-current liabilities 575,601 517,104
Short-term financial liabilities 51,111 72,609
Short-term financial instruments 22 13
Accounts payable and related accounts 105,558 91,092
Tax and social liabilities 105,469 123,872
Provisions 4,532 4,533
Other current liabilities   55,458   53,810
Current liabilities   322,150   345,930
Total Liabilities   1,313,419   1,288,297
  • Income statement
In thousands of euros   06/30/2013   06/30/2012
Revenue   437,229   453,274
Other operating activities revenue - -
Capitalized production 22,601 24,817
Purchases used (57,184) (56,719)
External expenses (113,539) (114,598)
Taxes (7,326) (7,431)
Payroll costs (222,344) (228,758)
Allocations to and reversals of provisions (3,797) (2,063)
Change in inventories of products in progress and finished products 8 348
Other operating income and expenses (248) (570)
EBITDA 55,397 68,299
Depreciation expenses   (29,448)   (30,714)
Operating income from recurring operations 25,949 37,586
Impairment of goodwill on acquisition - (115,000)
Non-recurrent income and expenses (4,048)
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