Cegedim: Like-for-like revenues fell 2.5% in the first half of 2020
Quarterly financial information as of June 30, 2020
Cegedim: Like-for-like revenues fell 2.5% in the first half of 2020.
Boulogne-Billancourt, France, July 28, 2020, after the market close
Cegedim, an innovative technology and services company, generated consolidated Q2 revenues of €114.7 million in 2020, a decrease of 9.4% as reported and 8.0% like for like compared with the same period in 2019. After posting growth in the first quarter, Cegedim generated consolidated H1 revenues of €236.2 million in 2020, a decrease of 3.9% as reported and 2.5% like for like compared with the same period in 2019.
·Second quarter of 2020
Cegedim’s Q2-20 consolidated revenues came to €114.7 million, down 9.4% as reported. Excluding an unfavorable currency translation impact of 0.2pp and an unfavorable scope effect of 1.2pp, revenues fell 8.0%.
The unfavorable currency translation impact of €0.2 million, or 0.2pp was mainly attributable to appreciation of the pound sterling, which represents 11.2% of Group revenues, against the euro.
The €1.6 million hit from scope effects, or 1.2pp, was chiefly due to the sale of nearly all of the business activities of Pulse Systems Inc. in the US in August 2019, which was partly offset by the acquisitions of Cosytec in France in July 2019 and NetEDI in the UK in August 2019.
On a like-for-like basis, Health insurance, HR and e-services division revenues fell 8.1%, and those of the Healthcare professionals division, 7.9%.
·First half 2020
Cegedim’s H1 2020 consolidated revenues came to €236.2 million, down 3.9% as reported. Currencies had virtually no impact. Excluding an unfavorable scope impact of 1.4pp, revenues fell 2.5%.
The €3.4 million hit from scope effects, or 1.4pp, was chiefly due to the sale of nearly all of the business activities of Pulse Systems Inc. in the US in August 2019, which was partly offset by the acquisitions of Cosytec in France in July 2019 and NetEDI in the UK in August 2019.
Health insurance, HR and e-services division revenues fell 2.7% like for like, and those of the Healthcare professionals division, 2.2%.
Faced with the covid-19 pandemic—and its impact on the European economy—the Group has activated its business continuity plans and is closely following the situation’s impact on its business activities. Work-from-home arrangements were activated in every country during the lockdown period. We were able to continue operating under satisfactory conditions, with no service interruptions, although volumes did decline in some activities, actions in the field were cancelled or postponed, and sales efforts generally slowed during the lockdown. Employees were encouraged to take paid leave during the period. The use of partial unemployment, which affected a limited number of teams, ended at the close of the first half.
Analysis of business trends by division
·Health insurance, HR and e-services
After growing in the first quarter, the division’s reported revenues fell 6.7% in the second quarter of 2020 to €77.7 million. Like-for-like revenues fell 8.1% over the second quarter. Thus, the division’s reported revenues fell 1.3% in the first half of 2020 to €160.3 million. Like-for-like revenues fell 2.7% over the period.
The H1 performance was chiefly attributable to the drop in second-quarter business at Cegedim-Media (communication solutions for pharmacies, including digital solutions) and from the decreased volume of third-party healthcare payments. That performance was partly offset by the expansion of health insurance sector BPO activities and business growth at Cegedim SRH (HR management solutions), Cegedim e-business (document and process digitization), and Cegedim Health Data (healthcare sector data and analytics).
The acquisitions of NetEDI and Cosytec made a positive contribution to Group consolidated revenue of 1.4pp to second quarter and first half 2020 growth. Currencies had virtually no impact on second quarter and first half 2020 figures.
After growing in the first quarter, the division’s reported revenues fell 14.8% in the second quarter of 2020 to €36.2 million. Currency translation had a positive impact of 0.4 percentage points. Divestments had a negative impact of 6.5 percentage points. Like-for-like revenues fell 7.9%. Thus, the division’s reported revenues fell 9.1% in the first half of 2020 to €74.1 million. Currency translation had a positive impact of 0.1 percentage points. Divestments had a negative impact of 6.8 percentage points. Like-for-like revenues fell 2.2%.
The 6.5pp hit from scope effects in the second quarter, or €2.8 million, and the 6.8pp hit in the first half, or €5.6 million, was chiefly due to the sale of nearly all of the business activities of Pulse Systems Inc. in August 2019.
The first half performance reflects growth in the first quarter offset by the negative second-quarter impact of lockdowns on activity related to pharmacy businesses in France and the UK. The appointment scheduling and teleconsultation business, Maiia, has experienced very brisk growth, as have RESIP (BCB medication database) and RM Ingénierie (allied health professional computerization in France).
· Corporate and others
The division’s reported revenues rose 4.2% both as reported and like for like in the second quarter of 2020, to€0.9 million. Currencies and acquisitions had no impact. The division’s reported revenues rose 0.3% as reported and like for like in the first half of 2020, to €1.7 million.
With the exception of the covid-19 pandemic discussed above, to the best of the company’s knowledge, there were no events or changes during the first half of 2020 that would materially alter the Group’s financial situation.
Significant transactions and events post June 30, 2020
With the exception of the covid-19 pandemic discussed above, to the best of the company’s knowledge, there were no events or changes after the closing on June 30, 2020, that would materially alter the Group’s financial situation.
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 €55 million revolving credit facility, and an unused €24 million overdraft facility.
Because the Group operates overwhelmingly in the healthcare sector and expects activity to catch back up—particularly in third-party payments and at C-Media—Cegedim is looking for relatively stable revenues in full-year 2020 relative to 2019. This outlook may need adjustment if health conditions in Europe significantly deteriorate in the second half of 2020.
The Group does not expect any material acquisitions in the second half of 2020 and does not provide earnings estimates or forecasts.
Second-quarter 2020 revenue figures have not been audited by the Statutory Auditors. The presentation can be found:
- On the website: https://www.cegedim.fr/finance/documentation/Pages/presentations.aspx
- And on the Cegedim IR smartphone app: https://www.cegedim.fr/finance/profil/Pages/CegedimIR.aspx
Please note that the H1 2020 earnings announcement has been postponed until Thursday, September 24, 2020.
(1) Leverage is equal to EBITDA(2) divided by net debt(2)
EBITDA is equivalent to recurring operating income plus net depreciation and amortization expenses.
Recurring operating income is defined as the difference between operating income and other non-recurring operating income and expenses.
“Other non-recurring operating income and expenses” may include impairment of tangible assets, goodwill, and other intangible assets, gains or losses on disposals of non-current assets, restructuring costs, and costs relating to workforce adaptation measures.
Net financial debt comprises gross borrowings, including accrued interest and debt restatement at amortized cost less cash and cash equivalents.
Breakdown of revenue by quarter and division
Breakdown of revenue by geographic zone and division
·As of June 30, 2020
Breakdown of revenue by currency and division
·As of June 30, 2020
Revenue trends by division