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

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%)
EBITDA55.4 12.7%68.3 15.1%(18.9%)
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 expenses0.4(2.4)n.m.
Share of earnings in equity-accounted affiliates0.10.1+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 € million2ndQuarter2ndQuarter2ndQuarter
 2013 20122013 20122013 2012
CRM and strategic data110.0 126.16.9 13.910.9 20.8
Healthcare professionals74.575.89.516.114.921.1
Insurance and services39.937.16.77.610.110.7
Cegedim224.4 239.123.2 37.635.9 52.6
 Revenue EBIT for recurring operations EBITDA
in € millionH1H1H1
 2013 20122013 20122013 2012
CRM and strategic data214.6 237.2(2.0) 4.39.5 17.9
Healthcare professionals145.6143.116.523.827.734.6
Insurance and services77.072.911.49.618.215.8
Cegedim437.2 453.325.9 37.655.4 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.

2ndquarter 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 costs37,14826,408
Other intangible fixed assets 181,285 183,714
Intangible fixed assets218,434210,122
Other tangible fixed assets30,10833,343
Construction work in progress 82 2,192
Tangible fixed assets35,76441,690
Equity investments531544
Other long-term investments 10,836 11,445
Long-term investments - excluding equity shares in equity method companies13,29213,906
Equity shares in equity method companies8,2248,143
Government - Deferred tax63,13057,855
Accounts receivable : Long-term portion17,34415,909
Other receivables : Long-term portion 725 726
Non-current assets972,694962,078
Services in progress203188
Advances and deposits received on orders1,105971
Accounts receivable : Short-term portion215,141215,223
Other receivables : Short-term portion30,38538,696
Cash equivalents3,8123,862
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 premium185,562185,561
Group reserves214,768297,712
Group exchange reserves(238)(238)
Group exchange gains/losses14,64913,736
Group earnings (12,826) (85,351)
Shareholders' equity, Group share415,251424,757
Minority interests (reserves)415418
Minority interests (earnings) 2 89
Minority interests 416 507
Shareholders' equity415,667425,263
Long-term financial liabilities518,607457,103
Long-term financial instruments9,37513,207
Deferred tax liabilities14,10313,617
Non-current provisions30,12029,615
Other non-current liabilities 3,396 3,562
Non-current liabilities575,601517,104
Short-term financial liabilities51,11172,609
Short-term financial instruments2213
Accounts payable and related accounts105,55891,092
Tax and social liabilities105,469123,872
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 production22,60124,817
Purchases used(57,184)(56,719)
External expenses(113,539)(114,598)
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 products8348
Other operating income and expenses(248)(570)
Depreciation expenses (29,448) (30,714)
Operating income from recurring operations25,94937,586
Impairment of goodwill on acquisition-(115,000)
Non-recurrent income and expenses(4,048)
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