Cegedim: 2012: An Improvement Relative to 2011

Cegedim: 2012: An Improvement Relative to 2011

Growth in the Second Half

  • CRM and Strategic Data Margin Maintained

  • Robust Growth in the Healthcare Professionals and Insurance and Services Sectors Continued R&D Efforts


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

Cegedim, a global technology and services company specializing in the healthcare field, posted consolidated 2012 revenues of €921.8 million, up 1.1% on a reported basis, and operating income from continuing operations of €90.1 million, up 7.4%. Operating margin was 9.8%, up from 9.2% a year earlier.

The second half was more favorable, with reported revenues up 3.4% and a 23.6% increase in operating income from continuing operations compared with the second half of 2011.

As a result, the CRM and strategic data margin was stable over the full year despite a drop in revenues, whereas the Healthcare professionals margin rose and the Insurance and services margin dipped slightly.

Continued sales momentum, ongoing R&D efforts, innovative new product launches and the effects of the Performance Improvement Plan will all boost Group revenues and operating income from continuing operations in 2013.

2012

2011

Δ

€m

%

€m

%

Revenue

921.8

100%

911.5

100%

+1.1

EBITDA from continuing operations

153.6

16.7%

150.4

16.5%

+2.2

Depreciation

-63.5

-66.5

-4.5

Operating income from continuing operations

90.1

9.8%

83.9

9.2%

+7.4

Exceptional operating income / expenses

-9.9

-8.0

+23.8

Impairment of goodwill on acquisition

-124.9

Operating income

-34.8

-3.8%

75.9

8.3%

Net cost of financial debt

-44.1

-37.7

+17

Tax expenses

-7.6

-6.6

+15.1

Share of earnings in equity-accounted affiliates

1.2

1.0

Consolidated profit

-85.3

-9.3%

32.7

3.6%

Profit attributable to the owners of the parent

-85.4

-9.3%

32.6

3.6%

* at constant scope and exchange rates

Cegedim generated 2012 revenues of €921.8 million, up 1.1% on a reported basis and down 1.0% in organic terms relative to 2011. The net effect of acquisitions and divestments was neutral, and currencies provided a 2.1% boost.

Operating income from continuing operations was €90.1 million, up 7.4% year on year. This increase was chiefly the result of stronger operating income from continuing operations in the Healthcare professionals and Insurance and services sectors, offset by a marginal decline in the CRM and strategic data sector.

Weak activity in the CRM and strategic data sector in the first half 2012 led the Group to record a goodwill impairment of €115 million at end-June 2012. As a result, operating income for the full year was a loss of €34.8 million.

Interest expense rose from €37.7 million to €44.1 million, or 17.1%, principally due to non-cash items.

The consolidated loss attributable to the owners of the parent came to €85.4 million, and earnings per share were €2.7 compared with €2.8 a year earlier.

Analysis of business trends by sector

  • CRM and strategic data

Sector revenue for 2012 was €488.1 million, down 4.4% on a reported basis. Perimeter effect had a negative impact on revenue growth of 0.8% thus currencies had a positive impact on revenues of 2.7%. As a result, 2012 like-for-like* revenue was down by 6.4% relative to December 2011.

This decrease was primarily due to a decrease in the number of medical sales representatives and a reduction in other marketing expenditures by some pharmaceutical companies in mature countries. On the other hand, the increase in the number of medical sales representatives in certain emerging countries and of revenue from our OneKey database and compliance offer partially offset this decrease.

While the revenue in this sector decrease by €22.5 millions of euros, the operating income from recurring operations decrease only by 0.9 millions of euros partly thanks to the implementation of our Performance Improvement Plan.

It should be emphasized the improved EBIT margin in the second half, which stood at 12.4% against 11.8% in the second half of 2011. For the year 2012 the EBIT margin was 6.7% against 6.6% in 2011.

  • Healthcare professionals

2012 revenues came to €282.6 million, up 8.8% on a reported basis compared with end-2012. Currency effects and acquisitions boosted revenues by respectively 1.7% and 1.9%. On a like-for Like basis revenue increased by 5.2%. This increase was mainly due to better performance on the three main areas of this sector and among other things to the continued computerization of healthcare professionals in the United Kingdom and France.

Operating income from continuing operations came to €35.2 million, a 20.0% increase over the year-earlier period. As a result, the margin from continuing operations was 12.4%, compared with 11.3% a year earlier.

  • Insurance and services

2012 revenues came to €151.0 million, up 7.1% on a reported and on a Like-for-Like basis compared with end-2012. There were no disposals or acquisitions and there was minimal impact from foreign currency translations.

Operating income from continuing operations came to €22.3 million, a 6.1% increase over the year-earlier period. As a result, the margin from continuing operations was 14.7%, compared with 14.9% a year earlier.

This increase was primarily due to the growth in online third-party payer management services, e-business activities and Cegedim SRH, a system which provides outsourcing of payroll and human resources management.

Financial resources

Cegedim's total consolidated balance sheet at December 31, 2012, was €1.288 billion, down slightly from the end of 2011. The dip is chiefly attributable to a €115 million depreciation of goodwill in CRM and strategic data activities during the first half of 2012.

Share capital decreased by €91.0 million and now represents 33% of total assets.

Following an impairment, goodwill amounts to €613.7 million, compared with €725.1 million at end-2011, representing 47.6% of total assets.

Cash and equivalents come to €43.5 million.

Net financial debt comes to €475.6 million, compared with €453.3 million at end-2011. This €22.3 million increase is the result of earn-out payments made en 2012.

The Group was in compliance with all of its bank covenants at end-2012.

Before the cost of net financial debt and taxes, cash flow was €141 million, compared with €140.1 million at end-2011. The level of gearing improved from 0.9 at end-2011 to 1.1 at end 2012.

2012 highlights

  • Divestment
    Cegedim sold its Pharmapost subsidiary on April 30, 2012, one of France's leading printers of drug information sheets, to the Chesapeake group. Pharmapost contributed €5.9 million to Group consolidated revenues in 2011; its contribution to consolidated EBITDA was close to zero. Under the terms of the agreement between the two parties, all other details regarding the transaction are confidential.

  • Acquisition
    On July 3, 2012, Cegedim completed the acquisition of ASP Line, France's fourth-largest publisher of pharmacist software, Cegedim's leadership position in the pharmacy computerization market in France (see release sent on July 3, 2012). Financed by internal financing, these activities represent annual revenues of around €9 million and are part of the consolidation scope of Cegedim Group from July 1, 2012.

  • Award
    On September 26, Cegedim received the "Mid Cap Corporate Governance" award, sponsored by L'AGEFI, in recognition of the quality of the transparency and governance practices that the Group has adopted.

  • Readjustment of bank covenants
    On October 3, Cegedim obtained the consent of its banking partners under the credit facility to amend certain covenants thereunder. This consent signals the continued confidence of our banking partners in the Group.

Significant post-closing transactions and events

To the best of the company's knowledge, there have been no post-closing events or changes that would materially alter the Group's financial situation.

Outlook

For 2013, barring any significant changes in market trends, the Group expects modest growth in consolidated revenues and a 50bps increase in the operating margin on continuing operations.

Financial calendar

The Group will hold a conference call today March 4th, 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.Cegedim's annual results presentation is available at:

http://www.cegedim.com/finance/documentation/Pages/presentations.aspx

Contact numbers:

France: +33(0)1 70 48 01 66

Access code:

USA: +1 646 254 3365

8149257

UK and other: +44 (0)20 7784 1036

March 5, 2013 - 11:30 am

  • SFAF meeting

May 6, 2013 (after the stock market closes)

  • 2013 Q1 Revenue announcement

July 30, 2013 (after the stock market closes)

  • 2013 Q2 Revenue announcement

September 19, 2013 (after the stock market closes)

  • 2013 H1 Results announcement

September 20, 2013

  • SFAF Meeting

November 7, 2013 (after the stock market closes)

  • 2013 Q3 Revenues announcement

Additional information

The Audit Committee met on March 1st, 2013. The Board of Directors and the Auditors met on March 4, 2013, to approve 2012 consolidated financial statements. Audit procedures have been performed and the 2012 Full-year statutory auditors' report on the financial statements is forthcoming.

The financial information presented in this press release comes from Cegedim Full-year consolidated financial statements and is fully available on the 2012 Reference Document at www.cegedim.com/finance as of March 5, 2013.

A presentation of Cegedim 2012 Full-year results will also be available on the website:

Appendices

  • Balance sheet

Assets

In thousand of euros

12/31/2012

12/31/2011

Goodwill on acquisition

613,727

725,058

Development costs

26,408

24,446

Trademarks, patents

-

-

Other intangible fixed assets

183,714

167,002

Intangible fixed assets

210,122

191,448

Property

389

409

Buildings

5,766

5,147

Other tangible fixed assets

33,343

35,958

Construction work in progress

2,192

2,594

Tangible fixed assets

41,690

44,108

Equity investments

544

443

Loans

1,917

1,400

Other long-term investments

11,445

9,637

Long-term investments - excluding equity shares in equity method companies

13,906

11,480

Equity shares in equity method companies

8,145

7,645

Government - Deferred tax

57,855

48,093

Accounts receivable : Long-term portion

15,909

14,498

Other receivables : Long-term portion

726

651

Non-current assets

962,078

1,042,982

Services in progress

188

305

Goods

10,798

10,274

Advances and deposits received on orders

971

1,151

Accounts receivable : Short-term portion

215,223

222,350

Unpaid, called-up capital

-

-

Other receivables : Short-term portion

38,696

25,778

Cash equivalents

3,862

14,041

Cash

39,599

59,087

Prepaid expenses

16,881

17,347

Current assets

326,219

350,334

Total assets

1,288,297

1,393,316

Equity and Liabilities

In thousand of euros

12/31/2012

12/31/2011

Share capital

13,337

13,337

Issue premium

185,561

185,562

Group reserves

297,712

263,439

Group exchange reserves

-238

-238

Group exchange gains/losses

13,736

21,058

Group earnings

-85,351

32,580

Investment subsidies

-

-

Regulated provisions

-

-

Shareholders' equity, Group share

424,757

515,737

Minority interests (reserves)

418

407

Minority interests (earnings)

89

90

Minority interests

507

497

Shareholders' equity

425,263

516,234

Long-term financial liabilities

457,103

483,744

Long-term financial instruments

13,207

14,094

Deferred tax liabilities

13,617

12,862

Non-current provisions

29,615

25,154

Other non-current liabilities

3,562

7,142

Non-current liabilities

517,104

542,996

Short-term financial liabilities

72,609

51,871

Short-term financial instruments

13

27

Accounts payable and related accounts

91,092

92,079

Tax and social liabilities

123,872

119,517

Provisions

4,533

5,075

Other current liabilities

53,810

65,516

Current liabilities

345,930

334,085

Total Liabilities

1,288,297

1,393,316

  • Income statement

In thousand of euros

12/31/2012

12/31/2011

Revenue

921,773

911,463

Other operating activities revenue

-

-

Capitalized production

48,419

47,137

Purchases used

-111,513

-105,648

External expenses

-234,734

-240,184

Taxes

-14,658

-15,101

Payroll costs

-449,821

-442,231

Allocations to and reversals of provisions

-5,424

-3,886

Change in inventories of products in progress and finished products

-125

101

Other operating income and expenses

-276

-1,224

EBITDA

153,642

150,428

Depreciation expenses

-63,522

-66,523

Operating income from continuing operations

90,120

83,905

Impairment of goodwill

-115,000

-

Exceptional operating income and expenses

-9,886

-7,983

Other exceptional operating income and expenses

-124,886

-7,983

Operating income

-34,766

75,922

Income from cash and cash equivalents

727

5,487

Gross cost of financial debt

-33,750

-36,433

Other financial income and expenses

-11,096