Cegedim: Improvement on Profitability on the First Quarter
Cegedim: Improvement on Profitability on the First Quarter
- Full impact of the Performance Improvement Plan
- EBITDA up to more than 24%
- The Group reiterates its full-year targets
PARIS--(BUSINESS WIRE)-- Regulatory News:
Cegedim, a global technology and services company specializing in the healthcare field, posted consolidated first quarter 2013 revenues of €212.9 million, down 0.6% on a reported basis and up 0.1% like for like*, and EBITDA of €19.5 million, up 24.2% compared with the first quarter of 2012. EBITDA margin was 9.1% compared with 7.3% a year earlier.
Operational charges, defined as Revenue minus EBITDA, decreased by €5.1 million. It is noteworthy that all operating expenses (purchases used, external expenses and payroll costs) decreased as well as amount of capitalized R&D.
Organic growth at the Healthcare Professionals and Insurance and services divisions offset a decline at the CRM and strategic data division, while EBITDA growth came from CRM and strategic data and Insurance and services divisions.
This is the direct consequence of the implementation, in 2011 and 2012, of the Performance Improvement Plan for which the full year effect is particularly felt in the first quarter of this year.
- Simplified income statement
|Operating income from recurring operations||2.8||1.3%||0.0||0.0%||-|
|Exceptional operating income / expenses||(1.1)||(1.5)||(25.4)%|
|Net cost of financial debt||(21.6)||(11.3)||91.9%|
|Share of earnings in equity-accounted affiliates||0.5||0.4||17.6%|
|Profit attributable to the owners of the parent||(15.4)||(7.2)%||-9.0||(4.2)%|
* at constant scope and exchange rates
Cegedim generated consolidated first quarter 2013 revenues of €212.9 million, down 0.6% on a reported basis and up 0.1% like for like* compared with the same period a year earlier. Acquisitions and divestments had a positive impact of 0.1%, and currencies provided a negative impact of 0.9%.
The implementation of the Performance Improvement Plan in 2011 and 2012 generated a €5.1 million decrease in operational charges, which are defined as Revenue minus EBITDA. This decrease was chiefly the result of a €4.1 million decrease in payroll costs including €0.7 million under the CICE1. Purchases used and external costs declined too, as well as the amount of capitalized R&D. Thus, EBITDA increased by 24.2% to €19.5 million. The margin came to 9.1% for the first quarter of 2013 against 7.3% in 2012.
Depreciation expenses increased by 6.4% following the amortization of certain R&D projects. The major part of costs related to the implementation of the Performance improvement Plan was taken in 2011 and 2012, thus non-recurrent income and expenses went down by 25.4%.
Operating income from recurring operations was €2.8 million, an increase of €2.8 million compared to the first quarter of 2012. The margin went from 0.0% to 1.3%. This increase was the result of a stronger operating income from recurring operations in the Healthcare professionals and Insurance and services divisions, and decline in the CRM and strategic data division.
Cost of financial debt amounted to €21.6 million compared to €11.3 million a year earlier. It is principally due to an exceptional event: the redemption last March of part of the bond maturing in 2015.
Tax expense increased by 21.8% mainly due to the conversion effect (dollar-euro) on differed taxes.
The consolidated loss attributable to the owners of the parent came to €15.4 million compared with €9.0 million a year earlier and earnings per share were negative €1.2 compared with a negative €0.7 on the same period in 2012.
Analysis of business trends by division
- Key figures by division
EBIT for recurring
|in € million||1st Quarter||1st Quarter||1st Quarter|
|CRM and strategic data||104.6||111.1||-8.9||-9.6||-1.4||-2.9|
|Insurance and services||37.2||35.8||4.7||1.9||8.1||5.1|
- CRM and Strategic Data
The division Q1 2013 revenues came to €104.6 million, down 5.8% on a reported basis. Currencies and changes in scope (April 2012 Pharmapost disposal) had negative impacts of respectively 1.4% and 1.4% on revenues. Like-for-like* revenues fell 3.0% over the period.
The CRM and strategic data division represented 49% of consolidated Group revenues, compared with 52% in the year-earlier period.
While the revenue in this division decreased by €6.5 million, the operational charges decreased by €7.9 million partly because of the implementation of the Performance Improvement Plan in 2011 and 2012. Thus, EBITDA increased by 49.6%. Depreciation expenses increased by 10.3% following the amortization of certain R&D projects. Operating income from continuing operations amounted to a loss of €8.9 million against a loss of €9.6 million for the first quarter of 2012.
Growth in emerging countries has continued. Revenues were less impacted in 2013 by drug patent expiration and competition from generic drugs. However, the Group has noted slower order intake for market research.
Compliance offers should benefit from the « Transparency » decree recently issued in France mandating the release of reports from October 1st, 2013.
The Group's ongoing investment strategy will allow it to launch even more new products and services over the coming months.
1« Crédit d'Impôt pour la Compétitivité et l'Emploi » Tax Credit for Competitiveness and Employment
- Healthcare Professionals
The division Q1 2013 revenues came to €71.0 million, up 5.6% on a reported basis. The ASP Line acquisition boosted revenues by 2.7%, whereas currencies had a negative impact of 0.5%. Like-for-like* revenues rose 3.3% over the period.
The Healthcare professionals division represented 33% of the Group's consolidated revenues, compared with 31% in the year-earlier period.
The division is benefitting from healthy growth in business related to software for healthcare professionals. The development of performance-based pay for physicians in France and the marketing of hosting solutions dedicated to physicians in the UK were particularly good for the Group.
At the same time, Simply Vitale, the mobile practice management tool for healthcare professionals comprising a large touch-screen tablet, a SESAM-Vitale card reader and a scanner, is an ongoing commercial success. The package has more than 650 clients (mostly nurses) after just four months on the market.
These factors allowed the operating income from recurring operations of CHS (Cegedim Healthcare Software) to increase. This increase is driven by the activities of computerization of physicians and physiotherapists in France and of pharmacists in the UK.
Following an exceptional Q1 2012, Cegelease has continued to grow, albeit less briskly.
Operating income from recurring operations came to €6.9 million, a 0.7% increase over the year-earlier period.
- Insurance and Services
The division Q1 2013 revenues came to €37.2 million, up 3.8% on a reported basis and 3.9% like for like*. Currencies had little impact and there were no acquisitions or divestments.
The Insurance and services division represented 18% of consolidated Group revenues, compared with 17% in the year-earlier period.
The insurance unit's Activ' Infinite solution was chosen to manage third-party payer aspects of health and provident insurance policies for France's second-largest social welfare institution. This contract strengthens the Group's role as the industry's benchmark supplier to large clients and the market leader.
The division is also partnering with Harmonie Mutuelle to implement its SEPA procedure for managing direct debit mandates signed by policyholders and collecting payments under the conditions stipulated by the new regulation.
Lastly, Moneo Applicam, a specialist in electronic payment solutions, chose Cegedim and its GIS (Global Information Services) platform to digitize client invoices related to its new Moneo Resto smartcard restaurant voucher service.
In addition, the division continues to benefit from double-digit growth in its Cegedim SRH, outsourced payroll and HR management activities.
Operating income from recurring operations came to €4.7 million, a 143.8% increase over the year-earlier period. As a result, the margin from recurring operations was 12.7%, compared with 5.4% a year earlier. This increase was primarily due to the growth in online third-party payer management services, e-business and Cegedim SRH activities.
Cegedim's total consolidated balance sheet at March 31st, 2013, was €1,301 million, a €12.9 million increase compared with the end of 2012. The increase is chiefly attributable to €14.3 million increase in goodwill due to a more favorable currency exchange rate (euro-dollar). They came to €628.0 million and now represent 48.3% of total asset.
Cash and cash equivalents came to €47.7 million up to €4.2 million mainly due to the March debt refinancing.
Shareholders' equity remained stable at €424.8 million and now represents 32.6% of total assets.
Net debt came to €489.1 million at March 31st, compared with €486.3 million at end-2012. This €2.9 million increase is lower than the costs incurred for the March refinancing.
Before the cost of net financial debt and taxes, operating cash flow was €18.8 million at the end of the first quarter of 2013, an €5.4 million increase compared with the first quarter of 2012. The level of gearing remains stable at 1.1 between the first quarter of 2013 and the end of December 2012.
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.
As a result, the structure of debt at March 31st, 2013 was as follows:
- €168.6 million bond debt at 7.00% maturing July 27th, 2015;
- €300 million bond debt at 6.75% maturing April 1st, 2020;
- €80 million revolving credit expiring June 10th, 2016, not drawn as of 31st, March 2013;
- Overdraft facility.
When the operation was announced on March 11th, 2013, rating agency Standard and Poor's placed Cegedim's B rating on "credit watch positive".
Significant post-closing transactions and events
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.
It should be noted that the operating margin for the first quarter does not reflect the higher annual margin, due to the activities seasonality.
For 2013, barring any significant changes in market trends, the Group reiterates its targets:
- Revenue growth of around 2% as a result of stability at the CRM and strategic data division and growth of around 5% at the Healthcare professionals and Insurance and services divisions.
- A 50 basis point increase in the operating margin from recurring operations.
The Group will hold a conference call on June 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.
A presentation of Cegedim 2013 Q1 Results will also be available on the website: http://www.cegedim.com/finance/documentation/Pages/presentations.aspx
France: +33 (0)1 70 48 01 66
US : +1212 444 0895
UK and others: +44 (0)20 7784 1036
June 6, 2013 at 10:00 am
- Shareholder's Meeting - Auditorium Cegedim 17 rue de l'Ancienne Mairie (Boulogne Billancourt)
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
The Audit Committee met on May 31th, 2013. The Board of Directors met on June 4th, 2013, to review Q1 2013 consolidated financial statements.
The quarterly financial report, including management discussion and analysis, is available in the Finance section of Cegedim's website:
- In French:
- In English:
- Balance sheet
|In thousands of euros||03/31/2013||12/31/2012|
|Goodwill on acquisition||628,026||613,727|
|Other intangible fixed assets||186,255||183,714|
|Intangible fixed assets||212,771||210,122|
|Other tangible fixed assets||33,956||33,343|
|Construction work in progress||326||2,192|
|Tangible fixed assets||40,127||41,690|
|Other long-term investments||11,790||11,445|
|Long-term investments - excluding equity shares in equity method companies||14,234||13,906|
|Equity shares in equity method companies||8,600||8,143|
|Government - Deferred tax||58,299||57,855|
|Accounts receivable : Long-term portion||16,480||15,909|
|Other receivables : Long-term portion||949||726|
|Services in progress||286||188|
|Advances and deposits received on orders||862||971|
|Accounts receivable : Short-term portion||199,111||215,223|
|Other receivables : Short-term portion||43,320||38,696|
Equity and Liabilities
|In thousands of euros||03/31/2013||12/31/2012|
|Group exchange reserves||(238)||(238)|
|Group exchange gains/losses||26,797||13,736|
|Shareholders' equity, Group share||424,283||424,757|
|Minority interests (reserves)||507||418|
|Minority interests (earnings)||10||89|
|Long-term financial liabilities||509,433||457,103|
|Long-term financial instruments||11,839||13,207|
|Deferred tax liabilities||14,074||13,617|
|Other non-current liabilities||3,488||3,562|
|Short-term financial liabilities||27,368||72,609|
|Short-term financial instruments||52||13|
|Accounts payable and related accounts||88,768||91,092|
|Tax and social liabilities||116,432||123,872|
|Other current liabilities||70,427||53,810|
- Income statement
|In thousands of euros||03/31/2013||03/31/2012|
|Other operating activities revenue||-||-|
|Allocations to and reversals of provisions||(2,356)||(1,442)|
|Change in inventories of products in progress and finished products||92||(117)|
|Other operating income and expenses||0||(329)|
|Operating income from continuing operations||2,758||(34)|
|Exceptional operating income and expenses||(1,101)||(1,476)|
|Other exceptional operating income and expenses||(1,101)||(1,476)|
|Income from cash and cash equivalents||116||275|
|Gross cost of financial debt||(18,571)||(8,482)|
|Other financial income and expenses||(3,155)||(3,055)|
|Cost of net financial debt||(21,610)||(11,262)|
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