First-half financial information at June 30, 2020 IFRS –
Regulated information – Audited
Cegedim: First half impacted by the health crisis,
rebound in activity expected in the second half
- Revenue decreased by 3.9%
- Recurring operating income (1) declined by 50.1%
- Target is for nearly stable FY 2020 revenue and recurring
operating income(1)
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Boulogne-Billancourt, France, September 24, 2020, after
the market close
Cegedim, an innovative
technology and services company, posted consolidated, H1 2020
revenues of €236.2 million, down 3.9% on a reported basis and 2.5%
like for like compared with the same period in 2019. Recurring
operating income(1) came to
€6.3 million, down 50.1% year on year.
In like-for-like terms, revenue decreased at
both operational divisions. The Health insurance, HR and e-services
division revenue declined by 2.7% and Healthcare professionals
division revenue, by 2.2%.
Recurring operating income(1) declined at the
Health insurance, HR and e-services division by €6.6 million but
was virtually stable at a the Healthcare professionals division and
Corporate and others division.
Income statement summary
|
H1 2019 |
H1 2020 |
Chg. |
|
€m |
% |
€m |
% |
% |
Revenues |
245.8 |
100.0% |
236.2 |
100.0% |
(3.9)% |
EBITDA(1) |
45.5 |
18.5% |
38.2 |
16.2% |
(15.9)% |
Depreciation & amortization |
(32.8) |
(13.4)% |
(31.9) |
(13.5)% |
(2.7)% |
Recurring operating income(1) |
12.6 |
5.1% |
6.3 |
2.7% |
(50.1)% |
Other non-recurring operating income and expenses(1) |
(16.3) |
(6.6)% |
(6.2) |
(2.6)% |
(62.1)% |
Operating income |
(3.6) |
(1.5)% |
0.1 |
0.1% |
n.m. |
Cost of net financial debt |
(4.5) |
(1.8)% |
(4.6) |
(1.9)% |
+2.4% |
Tax expenses |
(2.1) |
(0.8)% |
(0.2) |
(0.1)% |
(89.8)% |
Consolidated net profit |
|
|
|
|
|
Profit attributable to the owners of the
parent |
(10.2) |
(4.1)% |
(4.7) |
(2.0)% |
(54.2)% |
Recurring EPS |
(0.4) |
( |
(0.2) |
( |
(49.0)% |
EPS |
(0.7) |
|
(0.3) |
( |
(54.1)% |
(1) See the 2020 Interim Financial Report, Chapter 3 “Condensed
consolidated interim financial statements”, Section 3.6, Note 2 on
Alternative performance indicators and Note 6 “Segment
reporting”.
Consolidated revenue decreased
by €9.6 million, or 3.9%, to €236.2 million in H1 2020, compared to
€245.8 million for H1 2019. Currencies had virtually no impact and,
excluding an unfavorable scope impact of 1.4pp, revenues fell 2.5%.
Recurring operating income(1)
decreased by €6.3 million, or 50.1%, to €6.3 million in H1 2020,
compared with €12.6 million in H1 2019. The June 2020 figure
represented 2.7% of revenue, compared with 5.1% in June 2019.
Depreciation and amortization
expenses decreased by €0.9 million, or 2.7%, to €31.9
million in H1 2020, compared with €32.8 million in H1
2019.
EBITDA(1)
decreased by €7.2 million, or 15.9%, to €38.2 million in H1 2020,
compared with €45.5 million in H1 2019. EBITDA represented 16.2% of
consolidated revenue in H1 2020, compared with 18.5% in H1
2019.
Other non-recurring operating income and
expenses(1) amounted to a charge of €6.2 million in H1
2020 compared with a charge of €16.3 million in H1 2019. Most of
the yoy decrease are attributable to “Provisions for intangible
asset obsolescence”. The 2020 figure is largely attributable to a
€4.3 million impairment for certain intangible assets of the UK
doctor software business stemming from previous acquisitions, and
much of the 2019 figure is attributable to the sale of nearly all
of the business activities of Pulse Systems Inc, which resulted in
a €14.9 million charge.
Cost of net financial debt
remained relatively stable at €4.6 million in H1 2020, compared
with €4.5 million in H1 2019. This stability reflects the
debt structure and reduced use of the revolving credit facility
(RCF).
Tax came to a charge of €0.2
million in H1 2020 compared with a charge of €2.1 million in H1
2019, down €1.9 million or 89.8%. This change was principally the
result of a decrease in taxes at the Group level and from a
positive adjustment in deferred tax assets.
As a result, consolidated net
profit came to a loss of €4.6 million in H1 2020 compared
with a loss of €10.2 million in H1 2019. Recurring net
profit per share came to a loss of €0.2 in H1 2020
compared to a loss of €0.4 in H1 2019. Earnings per
share were a loss of €0.3 in H1 2020 compared with a loss
of €0.7 a year earlier.
Analysis of business trends by division
·Key figures by division
|
|
Revenues |
|
Recurring Operating Income(1) |
In € million |
|
H1 2019 |
H1 2020 |
|
H1 2019 |
H1 2020 |
Health insurance,
HR and e-services |
|
162.5 |
160.3 |
|
34.5 |
32.5 |
Healthcare
professionals |
|
81.6 |
74.1 |
|
5.3 |
2.5 |
Corporate and
others |
|
1.7 |
1.7 |
|
(2.7) |
(2.0) |
Cegedim |
|
245.8 |
236.2 |
|
37.1 |
33.1 |
·Health insurance, HR and
e-services
In the first half of 2020, the Health insurance,
HR and e-services division reported revenues of
€160.3 million, down 1.3% on a reported basis and 2.7% like-for
like. Currencies had virtually no impact and the acquisitions of
Cosytec and NetEDI made a positive contribution of 1.4pp.
Recurring operating income(1) decreased by €6.6
million, or 61.3%, to €4.1 million in H1 2020 compared to €10.7
million in H1 2019. The H1 2020 figure represented 2.6% of revenue,
compared with 6.6% in H1 2019.
Business was negatively affected by the pandemic
across the board. BPO volumes dipped temporarily. Project-based
activities were affected because implementation was delayed until
the second half. C-Media (conventional and digital signage
solutions for pharmacies) suspended all activity for one month
because advertisers postponed their marketing spending.
·Healthcare professionals
In the first half of 2020, the Healthcare
professionals division reported revenues of €74.1
million, down 9.1% on a reported basis and 2.2% like-for like.
Currency translation had a negative impact of 0.1% and acquisitions
and disposals had a negative impact of 6.8%, chiefly due to the
sale of nearly all of the business activities of Pulse Systems Inc.
in the US in August 2019. Recurring operating
income(1) increased by €0.1 million, or 2.7%, to €3.0
million in H1 2020 compared to €2.9 million in H1 2019. The H1 2020
figure represented 4.1% of revenue, compared with 3.6% in H1
2019.
This increase in recurring operating income(1)
is chiefly attributable to the sale of nearly all of the business
activities of Pulse Systems Inc. in August 2019 (which generated a
€2.8 million recurring operating loss in H1 2019), to the virtual
stability of the division’s recurring business, and to growth at:
RESIP (BCB medication database), RM Ingénierie (allied health
professional computerization in France), and the doctor software
business in the UK. This performance was partially offset by costs
at Maiia (online appointment scheduling and telemedicine), whose
strong H1 growth will have a positive impact starting in the second
half.
·Corporate and others
In the first half of 2020, the Corporate and
others division reported revenues of €1.7 million, stable on a
reported basis and like-for like. Currencies and acquisitions had
no impact. Recurring operating income(1) was relatively stable at a
€0.9 million loss over H1 2020, compared with a €1.0 million loss
in H1 2019.
Balance sheet structure
The consolidated total balance
sheet amounted to €870.0 million at June 30, 2020, a €61.4
million or 7.6% increase over December 31, 2019. This increase is
mainly attributable to the €55.7 million increase in receivables
linked to outsourced management contracts in the health insurance
sector.
Goodwill amounted to €186.0
million at June 30, 2020, compared with €192.7 million at December
31, 2019. This €6.7 million decrease, or 3.5%, was the result of
assigning €4.1 million of goodwill from 2019 acquisitions to other
identifiable assets, and of a €2.6 million currency impact.
Goodwill represented 21.4% of the total balance sheet at June 30,
2020, compared with 23.8% at December 31, 2019.
Cash and equivalents came to
€26.1 million at June 30, 2020, a €2.9 million decrease compared to
December 31, 2019. This decrease is chiefly attributable to the
€2.6 million drop in prepaid income at the health insurance BPO
business.
Equity decreased by €10.3
million, or 5.1%, to €191.0 million at June 30, 2020, compared with
€201.2 million at December 31, 2019.
Total net financial
liabilities(1) amounted to €176.1 million, down €4.4
million compared with 6 months ago. Total net financial
liabilities(1) represented 92.2% of equity at June 30, 2020,
compared with 89.7% at December 31, 2019.
Cash flow after cost of net financial
debt and taxes increased by €55.6 million to an inflow of
€50.7 million at June 30, 2020, compared with an outflow of €4.9
million at December 31, 2019. The improvement in WCR is
attributable to a €15 million boost from the postponement of
social charges and rent payments as a result of efforts to mitigate
the impacts of the Covid-19 crisis, the termination of non-recourse
factoring agreements in December 2019 (€14.9 million impact at
June 30, 2019), and the fluctuation in advances paid by client at
the health Insurance BPO business.
Highlights
Apart from the items cited below, 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.
·TaxOn February 21, 2018,
Cegedim SA received official notice that the French tax authorities
planned to perform an audit of its financial statements for the
period from January 1, 2015, to December 31, 2016. After
consultation with its lawyers and based on ample precedent, the
Group believes that the adjustment is unwarranted. By appealing the
case, we were able to obtain tax relief that brings the maximum
possible amount of back taxes owed at June 30, 2020, to
€8.5 million (vs. €9 million). Regarding the other points of
disagreement, the Group has decided to explore its options for
recourse before requesting an appeal. Cegedim still believes that
there is not enough risk with respect to past deferred tax assets
or to tax loss carryforwards recorded on its balance sheet as of
June 30, 2020, (corresponding to €20 million of deferred tax) to
jeopardize their valuation.
Significant post-closing transactions and
events
No significant events occurred between June 30,
2020, and September 24, 2020, when the Board of Directors
authorized the condensed consolidated interim financial statements
for issue.
Outlook
The Group has a solid business model, a robust
financial situation with a reasonable amount of leverage(1), no
debt maturing before October 2024, an undrawn €65 million revolving
credit facility, and an unused €11 million overdraft facility on
the date this report was published.
First-half revenues fell 2.5% like for like, and
recurring operating profit fell 50.1%.
The Group operates predominantly in the
healthcare sector and expects business at its two operating
divisions to rebound in H2 2020, with a return to organic growth in
revenue and recurring operating income.
Consequently, relative to 2019, Cegedim is
looking for nearly stable FY 2020 revenue and recurring operating
income. These targets may need to be revised if the Covid-19 crisis
causes a severe tightening of public health restrictions after the
first-half accounts are published.
The Group does not expect any material
acquisitions in 2020 and does not provide earnings estimates or
forecasts.
Additional information
The Audit Committee met on September 23, 2020.
The Board of Directors, chaired by Jean-Claude Labrune, approved
the consolidated interim financial statements for 2020 at its
meeting on September 24, 2020. The audit of the financial
statements has been completed. The audit report has been issued.
The 2020 Interim Financial Report will be available in a few days’
time on our website and on Cegedim IR, the Group’s financial
communications app.
2020 Financial calendar
|
September 25 at 10:00 amOctober
28 after the closeDecember 15 (time
t.b.a.) |
Analyst meeting (SFAF) in SFAF’s officesThird-quarter 2020
revenuesCegedim’s Investor Day |
|
|
The
H1-2020 earnings presentation is available at:
- The website:
https://www.cegedim.com/finance/documentation/Pages/presentations.aspx
- The Group’s financial communications app, Cegedim IR. To
download the app, visit:
http://www.cegedim.fr/finance/profil/Pages/CegedimIR.aspx.
|
Annex 1: Financial statements as of June 30,
2020
·Assets as June 30, 2020
In thousands of euros |
06/30/2020 |
12/31/2019 |
Goodwill on acquisition |
186,026 |
192,740 |
Development costs |
46,208 |
21,960 |
Other intangible fixed assets |
117,730 |
135,579 |
Intangible fixed assets |
163,938 |
157,540 |
Property |
544 |
544 |
Buildings |
2,670 |
2,960 |
Other tangible fixed assets |
30,638 |
30,960 |
Right-of-use assets |
68,870 |
64,537 |
Fixed assets in progress & Advances and deposits on tangible
fixed assets |
21 |
163 |
Tangible fixed assets |
102,744 |
99,164 |
Equity investments |
1,182 |
1,214 |
Loans |
15,317 |
14,017 |
Other long-term investments |
5,545 |
4,546 |
Long-term investments – excluding equity shares in equity
method companies |
22,045 |
19,777 |
Equity shares in equity method companies |
15,639 |
15,080 |
Deferred tax asset |
32,207 |
31,750 |
Accounts receivable: long-term portion |
- |
- |
Other receivables: long-term portion |
- |
- |
Long-term financial instruments |
266 |
387 |
Prepaid expenses: long-term portion |
319 |
390 |
Non-current assets |
523,184 |
516,828 |
Services in progress |
- |
- |
Goods |
4,829 |
4,434 |
Advances and deposits received on orders |
248 |
208 |
Accounts receivables: short-term portion |
139,516 |
143,986 |
Other receivables: short-term portion |
161,432 |
101,684 |
Short-term financial instruments |
1 |
1 |
Cash equivalents |
0 |
0 |
Cash |
26,120 |
29,059 |
Prepaid expenses: short-term portion |
14,697 |
12,414 |
Current assets |
346,844 |
291,785 |
Total Assets |
870,027 |
808,613 |
At June 30, 2020, the Group’s cash position was
positively impacted by €11 million, compared with a negative impact
of €32.2 million at December 31, 2019, because prepaid income in
the health insurance BPO activity was classified as “other current
receivables” to reflect the special terms of some contracts.
·Liabilities and shareholders’ equity as
of June 30, 2020
In thousands of euros |
06/30/2020 |
12/31/2019 |
Share capital |
13,337 |
13,337 |
Group reserves |
188,159 |
186,526 |
Group exchange gains/losses |
-6,031 |
-1,480 |
Group earnings |
-4,667 |
2,697 |
Shareholders’ equity, Group share |
190,798 |
201,080 |
Minority interests |
192 |
167 |
Shareholders’ equity |
190,990 |
201,247 |
Long-term financial liabilities |
196,319 |
195,694 |
Non-current lease liabilities |
56,425 |
52,413 |
Long-term financial instruments |
397 |
627 |
Deferred tax liabilities |
8,900 |
8,009 |
Retirement commitments |
33,958 |
32,250 |
Non-current provisions |
1,906 |
1,855 |
Other non-current liabilities |
- |
- |
Non-current liabilities |
297,905 |
290,847 |
Short-term financial liabilities |
5,950 |
13,961 |
Current lease liabilities |
14,186 |
13,507 |
Short-term financial instruments |
2 |
2 |
Accounts payable and related accounts |
47,702 |
50,644 |
Tax and social liabilities |
102,205 |
91,593 |
Provisions |
4,207 |
5,513 |
Other current liabilities |
206,881 |
141,299 |
Current liabilities |
381,132 |
316,519 |
Total Liabilities |
870,027 |
808,613 |
·Income statement as of June 30,
2020
In thousands of euros |
06/30/2020 |
06/30/2019 |
Revenue |
236,199 |
245,795 |
Purchased used |
(12,039) |
(15,260) |
External expenses |
(51,909) |
(55,693) |
Taxes |
(5,097) |
(4,425) |
Payroll costs |
(127,901) |
(124,640) |
Impairment on account receivables and other receivables and on
contract assets |
(2,102) |
(38) |
Allocations to and reversals of provisions |
(706) |
(1,332) |
Change in inventories of products in progress and finished
products |
- |
(79) |
Other operating income and expenses |
146 |
(282) |
Income of equity-accounted affiliates |
1,656 |
1,426 |
EBITDA(1) |
38,247 |
45,472 |
Depreciation expenses other than right-of-use assets |
(24,259) |
(25,078) |
Depreciation expenses of right-of-use assets |
(7,684) |
(7,750) |
Recurring operating income before special
items(1) |
6,305 |
12,643 |
Depreciation of goodwill |
- |
(2,500) |
Non-recurring income and expenses(1) |
(6,167) |
(13,784) |
Other non-recurring operating income and
expenses(1) |
(6,167) |
(16,284) |
Operating income |
138 |
(3,640) |
Income from cash and cash equivalents |
35 |
52 |
Gross cost of financial debt |
(4,266) |
(4,387) |
Other financial income and expenses |
(335) |
(125) |
Cost of net financial debt |
(4,566) |
(4,460) |
Income taxes |
(516) |
(1,914) |
Deferred taxes |
304 |
(168) |
Total taxes |
(212) |
(2,082) |
Share of profit (loss) for the period of equity method
companies |
0 |
(8) |
Consolidated profit (loss) for the period |
(4,640) |
(10,190) |
Consolidated net income (loss) attributable to owners of
the parent |
(4,667) |
(10,180) |
Income from of equity-accounted affiliates |
26 |
10 |
Average number of shares excluding treasury stock |
13,826,606 |
13,853,244 |
Current earnings per share (in euros) |
(0.2) |
(0.4) |
Earnings per share (in euros) |
(0.3) |
(0.7) |
Dilutive instruments |
None |
None |
Earning for recurring operation per share (in
euros) |
(0.3) |
(0.7) |
(1) See in the 2020 Interim Financial Report,
Chapter 3 “Condensed consolidated interim financial statements”,
Section 3.6, Note 2 on Alternative performance indicators and Note
6 “Segment reporting”.
·Consolidated cash flow statement as of
June 30, 2020
In thousands of euros |
06/30/2020 |
06/30/2019 |
Consolidated profit (loss) for the period |
(4,641) |
(10,190) |
Share of earnings from equity method companies |
(1,656) |
(1,417) |
Depreciation and provisions |
36,425 |
48,220 |
Capital gains or losses on disposals |
(253) |
(25) |
Cash flow after cost of net financial debt and
taxes |
29,875 |
36,588 |
Cost of net financial debt |
4,566 |
4,460 |
Tax expenses |
212 |
2,082 |
Operating cash flow before cost of net financial debt and
taxes |
34,653 |
43,130 |
Tax paid |
(2,140) |
(473) |
Change in working capital requirements for operations:
requirement |
- |
(47,584) |
Change in working capital requirements for operations: surplus |
18,138 |
- |
Cash flow generated from operating activities after tax
paid and change in working capital requirements (a) |
50,651 |
(4,927) |
Acquisitions of intangible assets |
(27,848) |
(26,066) |
Acquisitions of tangible assets |
(5,009) |
(4,880) |
Acquisitions of long-term investments |
(980) |
391 |
Disposals of tangible and intangible assets |
332 |
51 |
Disposals of long-term investments |
27 |
- |
Change in loans made and cash advances |
(1,309) |
555 |
Impact of changes in consolidation scope(1) |
- |
(10,922) |
Dividends received |
79 |
97 |
Net cash flows generated by investment operations
(b) |
(34,708) |
(40,773) |
Dividends paid to shareholders of the parent company |
- |
- |
Dividends paid to the equity-accounted affiliates |
- |
|
Capital increase for cash |
- |
|
Loans issued |
- |
- |
Loans repaid |
(9,834) |
(354) |
Repayment of lease liabilities |
(7,521) |
(7,017) |
Interest paid on loans |
(262) |
(245) |
Other financial income received |
75 |
52 |
Other financial expenses paid |
(1,190) |
(1,766) |
Net cash flows generated by financing operations
(c) |
(18,731) |
(9,330) |
Change in cash before impact of change in foreign currency
exchange rates (a+b+c) |
(2,788) |
(55,030) |
Impact of changes in foreign currency exchange rates |
(154) |
96 |
Change in cash |
(2,943) |
(54,934) |
Opening cash |
29,059 |
81,088 |
Closing cash |
26,116 |
26,154 |
BPO (Business Process Outsourcing): BPO is
the contracting of non-core business activities and functions to a
third-party provider. Cegedim provides BPO services for human
resources, Revenue Cycle Management in the US and management
services for insurance companies, provident institutions and mutual
insurers.Business model transformation: Cegedim
decided in fall 2015 to switch all of its offerings over to SaaS
format, to develop a complete BPO offering, and to materially
increase its R&D efforts. This is reflected in the Group’s
revamped business model. The change has altered the Group's revenue
recognition and negatively affected short-term
profitability.Corporate and others: This division
encompasses the activities the Group performs as the parent company
of a listed entity, as well as the support it provides to the three
operating divisions.Operating margin: Operating
margin is defined as the ratio of Operating Income on
revenue.Recurring operating margin: Recurring
operating margin is defined as the ratio of recurring operating
income to revenue.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. |
|
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.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.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.Life-for-like data (LFL): At
constant scope and exchange rates.Net cash: Net
cash is defined as cash and cash equivalent minus
overdraft.Operating expenses: Operating expenses
is defined as purchases used, external expenses and payroll
costs. |
|
|
|
Glossary
Disclaimer: This press release is available in French and
in English. In the event of any difference between the two
versions, the original French version takes precedence. This press
release may contain inside information. It was sent to Cegedim’s
authorized distributor on September 24, 2020, no earlier than 5:45
pm Paris time. The figures cited above include
guidance on Cegedim’s future financial performances. This
forward-looking information is based on the opinions and
assumptions of the Group’s senior management at the time this press
release is issued and naturally entails risks and uncertainty. For
more information on the risks facing Cegedim, please refer to
Chapter 7 “Risk management”, point 7.2, “Risk factors”, and Chapter
3 “Overview of the financial year” point 3.6 “Outlook”, of the 2019
Universal Registration Document filled with the AMF on March 31,
2020 under number D.20-0218. |
About Cegedim: Founded in 1969, Cegedim is an innovative technology
and services company in the field of digital data flow management
for healthcare ecosystems and B2B, and a business software
publisher for healthcare and insurance professionals. Cegedim
employs almost 5,000 people in more than 10 countries and generated
revenue in excess of €500 million in 2019. Cegedim SA is listed in
Paris (EURONEXT: CGM).To learn more, please visit:
www.cegedim.comAnd follow Cegedim on Twitter: @CegedimGroup,
LinkedIn and Facebook. |
Aude
BalleydierCegedim Media Relations and
Communications ManagerTel.: +33 (0)1 49 09 68
81aude.balleydier@cegedim.com |
Jan Eryk
UmiastowskiCegedimChief Investment
Officerand head of Investor RelationsTel.: +33 (0)1 49 09 33
36janeryk.umiastowski@cegedim.com |
Céline
Pardo & Irène SemerarosuPRRelations
MédiasTel.: +33 (0)6 52 08 13
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