Cegedim: order intake postponed from Q2 until later in 2013

Cegedim: order intake postponed from Q2 until later in 2013

Half-yearly Financial Information as of June 30, 2013

IFRS - Regulated Information - Not audited

  • Revenues fell in the second quarter after a resilient 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 continuing 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.

L-F-L growth at the Insurance and services division, combined with stability at the Healthcare professionals division, partly offset the CRM and strategic data division's decline.

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 drop in H1 revenues will have a negative impact on EBITDA for the period. However, both revenues and EBITDA are expected to see year-on-year growth in the second half. Thus, for 2013, the Group now forecasts stable revenues and reiterates its target of a 50 basis point improvement in the operating margin from continuing operations.

Amid these tough conditions, Cegedim continues to prioritize innovation and debt reduction and has maintained its cost-containment efforts.

  • The change in revenues per division for the first half is as follows:

€ thousands

HY 2013

HY 2012

HY 2013/2012 change

Reported

L-f-L*

CRM and strategic data

214,626

237,197

(9.5%)

(7.0%)

Healthcare professionals

145,561

143,145

1.7%

(0.1%)

Insurance and services

77,042

72,932

5.6%

5.6%

Group

437,229

453,274

(3.5%)

(2.8%)

H1 2013 Lf-L* growth came to -2.8%. Overall, the divestment of Pharmapost and acquisition of ASP Line made a positive contribution of 0.4%, while currencies had a negative impact of 1.1%.

  • The change in revenues per division for the second quarter is as follows:

€ thousands

2nd quarter 2013

2nd quarter 2012

Q2 2013/2012 change

Reported

L-f-L*

CRM and strategic data

109,985

126,105

(12.8%)

(10.6%)

Healthcare professionals

74,528

75,848

(1.7%)

(3.0%)

Insurance and services

39,850

37,115

7.4%

7.4%

Group

224,363

239,068

(6.2%)

(5.4%)

In the second quarter of 2013, Cegedim posted consolidated revenues of €224.4 million, down 6.2% on a reported basis and 5.4% Lf-L* compared with the same period in 2012. Overall, the divestment of Pharmapost and acquisition of ASP Line made a positive contribution of 0.6%, while currencies had a negative impact of 1.3%.

Analysis of business trends by division

  • 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 53% 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.

The CRM activity continues to feel the impact of the changing pharmaceutical company business model. However, this development did allow for significant growth in the sales of OneKey offerings over the first half. Growth continues in emerging countries, particularly in China and in Russia.

"Compliance" offerings 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.

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 and making up lost ground in market research.

  • 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 fell 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.

Management expects to make up lost ground in the second half and meet its full-year 2013 targets.

  • Insurance and services

The division had Q2 2013 revenues of €39.8 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 15% 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. For example, 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).

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

Financial resources - 2nd quarter highlights

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.

Outlook

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 now expects stable revenues and reiterates its target of a 50 basis point improvement in the operating margin from continuing operations for 2013.

Financial calendar

The Group will hold a conference call on July 30th, 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 Revenue will also be available on the website:


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

Contact numbers:

France: +33 (0)1 76 77 22 31

US : +1646 254 3366

UK and others: +44 (0)20 3427 1900

Access code:

8817352

September 19, 2013 (after the stock market closes)

  • 2013 HY Results release

September 20, 2013

  • SFAF Meeting for 2013 HY Results

November 28, 2013 (after the stock market closes)

  • 2013 Q3 Revenue and Results release

Additional information

Complete financial information is available on our website: www.cegedim.com/finance.

A presentation on Cegedim's second quarter revenues is also available on the website.

Appendices

  • Revenues by division and by quarter#:

# Figures rounded to the nearest unit

* at constant scope and exchange rates

Year 2013

€ thousands

Q1

Q2

Q3

Q4

Total

CRM and strategic data

104,641

109,985

214,626

Healthcare professionals

71,032

74,528

145,561

Insurance and services

37,192

39,850

77,042

Group

212,865

224,363

437,229

Year2012

€ thousands

Q1

Q2

Q3

Q4

Total

CRM and strategic data

111,092

126,105

111,112

139,836

488,145

Healthcare professionals

67,296

75,848

62,623

76,828

282,595

Insurance and services

35,817

37,115

33,848

44,253

151,033

Group

214,205

239,068

207,584

260,916

921,773

  • By division and geographic zone, the distribution of revenues for the 1sthalf of 2013 is as follows:

France

EMEA ex France

Americas

APAC

CRM and strategic data

32%

36%

24%

9%

Healthcare professionals

70%

26%

3%

0%

Insurance and services

100%

0%

0%

0%

Group

57%

26%

13%

4%

  • By division and currency, the distribution of revenues for 1sthalf of 2013 is as follows:

Euro

USD

GBP

Others

CRM and strategic data

50%

20%

5%

25%

Healthcare professionals

72%

3%

24%

0%

Insurance and services

99%

-

-

1%

Group

66%

11%

10%

13%

  • Glossary

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.

Revenue at constant exchange rate: when changes in revenue at constant exchange rate are referred to, it means that the impact of exchange rate fluctuations has been excluded. The term, "at constant exchange rate" covers the fluctuation resulting from applying the exchange rates for the preceding period to the current fiscal year, all other factors remaining equal.


Revenue on a like-for-like basis: the effect of changes in scope is corrected by restating the sales for the previous period as follows:

• by removing the portion of sales originating in the entity or the rights acquired for a period identical to the period during which they were held to the current period;

• similarly, when an entity is transferred, the sales for the portion in question in the previous period are eliminated;

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.

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.

EBIT: Earnings Before Interest and Taxes. EBIT corresponds to the net revenue minus operating expenses (such as salaries, social charges, materials, energy, research, services, external services, advertising, etc.). It is the operating income for the Cegedim Group.

EBIT from continuing operations: this is EBIT restated to take account of non-current items, such as losses on tangible and intangible assets, restructuring, etc. It corresponds to the operating income from continuing operations for the Cegedim group.

EBITDA: Earnings before interest, taxes, depreciation and amortization. EBITDA is the term used when amortization or depreciation and revaluations are not taken into account. "D" stands for depreciation of tangible assets (such as buildings, machines or vehicles), while "A" stands for amortization of intangible assets (such as patents, licenses and goodwill). The EBITDA is restated to take account of non-current items, such as losses on tangible and intangible assets, restructuring, etc. It corresponds to the gross operating earnings from continuing operations for the Cegedim Group.


Net Financial Debt: this represents the Company's net debt (non-current and current financial debt, bank loans, debt restated at amortized cost and interest on loans) net of cash and cash equivalents and excluding revaluation of debt derivatives.

Net bank debt: this represents net financial debt less Cegedim's subordinated debt to FCB.

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.

Operating margin: Defined as the ratio of EBIT/revenue.

Operating margin from continuing operations: defined as the ratio of EBIT from continuing operations/revenue

About Cegedim:

Founded in 1969, Cegedim is a global technology and services company specializing in the healthcare field. Cegedim supplies services, technological tools, specialized software, data flow management services and databases. Its offerings are targeted notably at healthcare industries, life sciences companies, healthcare professionals and insurance companies. The world leader in life sciences CRM, Cegedim is also one of the leading suppliers of strategic healthcare industry data. Cegedim employs 8,100 people in more than 80 countries and generated revenue of €922 million in 2012. Cegedim SA is listed in Paris (EURONEXT: CGM).

To learn more, please visit: www.cegedim.com

And follow Cegedim on Twitter: @CegedimGroup



Cegedim
Media Relations
Aude BALLEYDIER, +33 (0)1 49 09 68 81
aude.balleydier@cegedim.fr
or
Investor Relations
Jan Eryk UMIASTOWSKI, +33 (0)1 49 09 33 36
Chief investment Officer
investor.relations@cegedim.fr
or
PrPa Agency
Press Relations
Guillaume DE CHAMISSO, +33 (0)1 77 35 60 99
guillaume.dechamisso@prpa.fr

KEYWORDS: Europe France

INDUSTRY KEYWORDS:

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