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Cegedim: Significant Improvement in Profitability in Q1 2015Regulatory News: Cegedim, a technology and services company committed to innovation, posted consolidated first quarter 2015 revenues excluding activities held for sale of €121.3 million, up 7.0% on a reported basis and 4.9% like for like compared with the same period in 2014. EBIT from continuing activities before special items amounted to €8.2 million, up 76.3%. Thus, the EBIT margin from continuing activities before special items came to 6.8% in the first quarter of 2015, compared with 4.1% a year earlier. Cegedim announced on April 1, 2015, that it had completed of the disposal of its CRM and Strategic Data division to IMS Health for a selling price of €396 million1. Consequently, its first quarter 2015 Financial Statements are reported in compliance with IFRS 5, which separates out non-current Assets Held for Sale. Including activities held for sale, consolidated revenue came to €234.9 million in first quarter 2015, up 9.3% on a reported basis and 5.8% like for like compared with the same period a year earlier. EBIT before special items amounted to €16.7 million, up €14.4 million. Thus, the EBIT margin before special items came to 7.5% in Q1 2015, compared with 1.1% a year earlier. Rating agency S&P upgraded its rating for Cegedim on April 13, 2015, to BB- with a positive outlook. As of its first quarter 2015 earnings release, Cegedim is raising its growth rate outlook for consolidated EBIT from continuing activities before special items from 5.0% to 10.0%. This follows the upward revision to its revenue outlook on April 28, 2015.
In the first quarter of 2015, revenues from continuing activities came to €121.3 million, up 4.9% on a like-for-like basis compared with the year-earlier period. Acquisitions had virtually no impact, and currencies had a positive impact of 2.1%, thus revenue increased by 7.0% on a reported basis. Group revenue including activities held for sale amounted to €223.0 million, up 9.3% on a reported basis and 5.8% like for like. The like-for-like decline at the Healthcare Professionals division was more than offset by increases at the Health Insurance, HR and e-services and Cegelease divisions. EBITDA increased by €5.5 million to €19.1 million; the margin came to 15.8% at the end of March 2015 compared to 12.0% at the end of March 2014. This EBITDA trend was attributable to drops at the Healthcare professionals and Cegelease divisions being more than offset by EBITDA improvements at the Health Insurance, HR and e-services and at the Activities not allocated. Special items at the end of March 2015 amounted to a charge of €1.5 million, compared with a charge of €0.6 million one year earlier. The cost of financial debt decreased by €3.2 million, from €10.1 million for the first three months of 2014 to €6.9 million for the first three months of 2015. This decrease reflects the increase in income from cash and cash equivalents and in currency translation, partially offset by an increase in debt interest payments. Tax expense increased slightly by €0.3 million, from a charge of €0.5 million at the end of March 2014 to a charge of €0.7 million at the end of March 2015. This relative stability mainly reflects stability in income taxes and a decrease of deferred taxes. Consolidated net profit from continuing activities amounted to a loss of €1.8 million, compared with a €6.1 million loss a year earlier. This improvement in consolidated net loss reflected the trends in revenue, EBIT, special items, cost of net financial debt and tax expense based on the factors set out above. The loss per share from continuing activities before special items was €0.0 at the end of March 2015, compared with a €0.4 loss at the end of March 2014. Analysis of business trends by division
Revenue by division differs slightly from that published on April 28 owing to the restatement of revenues generated by continuing activities with activities held for sale. The divisions Technology and Reconciliation have been renamed respectively Health Insurance, HR and e-services and Activities not allocated to reflect to the best the extent of their offerings.
The division's first-quarter 2015 revenues came to €54.0 million, up 8.4% on a reported basis and 8.4% like for like. Currencies had virtually no impact, and there were no acquisitions or divestments. The Health Insurance, HR and e-services division represented 44.5% of the Group's consolidated revenues from continuing activities, compared with 43.9% a year earlier. EBITDA came to €8.4 million, up €3.9 million. Thus, the margin came to 15.5% compared to 8.9% a year earlier. EBIT before special items came to €4.5 million, up €3.6 million. Thus, the margin came to 8.3% compared to 1.8% a year earlier. This increase was among other attributable to RNP, the specialist in window dressing for French pharmacists; the Cegedim e-business electronic invoicing activity, and the Health Insurance activities.
In the first quarter of 2015, the division's revenues amounted to €37.2 million, up 0.8% on a reported basis. The SoCall acquisition and currencies had positive impacts of respectively 0.1% and 6.3%. Like-for-like revenues were down 5.7% over the period. The Healthcare Professionals division represented 30.7% of the Group's consolidated revenues from continuing activities, compared with 32.6% in the year-earlier period. EBITDA came to €6.5 million, down €0.5 million. Thus, the margin came to 17.5% compared to 19.0% a year earlier. EBIT before special items came to €3.7 million, down €0.9 million. Thus, the margin came to 9.9% compared to 12.3% a year earlier. The decrease in EBITDA mainly reflects the impact of a temporary delay in billing UK physicians and the business environment for US physicians. This decrease was partially offset better profitability in the computerization of doctors in France and Spain, French and UK drug database operations and, lastly, the computerization of nurses and physical therapists in France.
The division's first-quarter 2015 revenues came to €29.3 million, up 13.2% both on a reported basis and like for like. There were no acquisitions or divestments, and there was no currency impact. The Cegelease division represented 24.1% of the Group's consolidated revenues from continuing activities, compared with 22.8% a year earlier. EBITDA came to €3.8 million, down €0.1 million. Thus, the margin came to 12.8% compared to 15.2% a year earlier. EBIT before special items came to €0.1 million, down €1.2 million. Thus, the margin came to 0.3% compared to 5.0% a year earlier. This relative stability in EBITDA was mainly due to the increase in self-financed contracts. It should be noted that over the duration of the contract, self-financed contracts have a higher positive impact on margins than do resold contracts.
The division's first-quarter 2015 revenues came to €0.8 million, relatively stable compared to the same period last year. Currencies had virtually no impact and there were no acquisitions or divestments. The Activities not allocated represented 0.7% of the Group's consolidated revenues from continuing activities, about the same as a year earlier. EBITDA came to a profit of €0.5 million, up €2.2 million. EBIT before special items was a virtually negligible loss, up €2.0 million. This favorable EBITDA trend reflects cost-containment efforts.
In the first quarter of 2015, the division's revenues came to €104.1 million, up 11.8% on a reported basis. Currencies had a positive impact of 5.0%. There were no acquisitions or divestments. Like-for-like revenues increased 6.8% over the period. EBITDA came to €8.5 million, up €4.1 million. Thus, the margin came to 8.2% compared to 4.7% a year earlier. EBIT before special items came to €8.5 million, up €10.9 million. Thus, the margin came to 8.2% compared to (2.5)% a year earlier. Assets held for sale amounted to €690.9 million at the end of March 2015. This represented 55.3% of total assets. Liabilities associated with assets held for sale amounted to €193.6 million at the end of March 2015. This represented 15.5% of Total Liabilities & Shareholders' Equity. Financial resources The consolidated total balance sheet amounted to €1,249.8 million at March 31, 2015, an 8.8% increase over December 31, 2014. Goodwill on acquisition was €180.8 million at March 31, 2015, compared with €175.4 million at the end of 2014. This increase is chiefly attributable to the appreciation of some foreign currencies against the euro, mainly that of the US dollar and pound sterling, whose movements amounted to respectively €3.5 million and €2.2 million. Goodwill on acquisition represented 14.5% of the total balance sheet on March 31, 2015, compared to 15.3% in December 2014. Cash and cash equivalents came to €18.8 million at March 31, 2015, down €25.2 million compared with December 31, 2014. This decline reflects the direct impact of interest payments on the bond maturing in 2020 and the reduced use of bank overdrafts. Shareholders' equity increased by €88.8 million to €306.9 million at March 31, 2015, compared to €218.1 million at the end of 2014. This increase stems from the €81.8 million improvement in Group foreign exchange gains. Total shareholders' equity came to 19.0% of total assets at the end of December 2014, compared to 24.6% at the end of March 2015. Net debt came to €519.5 million at the end of March 2015, up €15.3 million compared with the end of 2014. It should be noted that following the disposal of the CRM and Strategic Data division to IMS Health on April 1, 2015, pro forma net debt, adjusted for €396 million of proceeds, represents 37.5% of shareholders equity as of March 31, 2015. Before the cost of net financial debt and taxes, operating cash flow was €24.3 million at the end of March 2015, an increase of €7.3 million compared with the end of December 2014. 1st quarter highlights 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
On April 1, 2015, Cegedim announced that it had completed the disposal of its CRM and Strategic Data division to IMS Health. The estimated selling price, determined in accordance with October 2014 agreements, amounts to €396 million. This estimated amount is subject to joint review on the basis of the accounts at March 31, 2015, to be prepared within 90 business days.
Following the announcement of the transaction, rating agency Standard and Poor's upgraded Cegedim's rating to BB-, with positive outlook, on April 13, 2015. Apart from the items cited above, to the best of the company's knowledge, there were no post-closing events or changes that would materially alter the Group's financial situation. Outlook For 2015, Cegedim expects consolidated revenue from continuing activities to grow by 2.5%, like for like. Cegedim is raising its growth rate outlook for consolidated EBIT from continuing activities before special items from 5.0% to 10.0%. The Group does not anticipate any significant acquisitions for 2015 and does not disclose profit projections or estimates. Financial calendar
July 28, 2015 (after the stock market closes)
September 28, 2015 (after the stock market closes)
September 29, 2015
October 27, 2015 (after the stock market closes)
November 26, 2015 (after the stock market closes)
Additional Information Complete financial information and a presentation on Cegedim's first quarter earnings are available on our website: www.cegedim.com/finance. This information is also available on Cegedim IR, the Group's financial communications app for smartphones and iOS and Android tablets. To download the app, visit: http://www.cegedim.fr/finance/profil/Pages/CegedimIR.aspx. Appendices
Assets
Liabilities
Income statement
Consolidated cash flow statement
1 This estimated amount is subject to joint review on the basis of the accounts at March 31, 2015, to be prepared within 90 business days. View source version on businesswire.com: http://www.businesswire.com/news/home/20150527006218/en/ |