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TMCNet:  2011: a Transitional Year for Cegedim - Renewed Growth Expected in 2012

[April 02, 2012]

2011: a Transitional Year for Cegedim - Renewed Growth Expected in 2012

PARIS --(Business Wire)--

Regulatory News:

Cegedim, a global technology and services company specializing in the healthcare field, consolidated 2011 revenue of €911.5 million and an operating income from continuing operations of €83.9 million.

Amid tough conditions, Cegedim's revenue and operating income experienced a decline. This decline was offset by the Group's diverse business portfolio, client base and geographical presence, combined with solid sales momentum.

In 2012, the Group's sustained innovation efforts over the past three years gave rise to a successful platform for SaaS (News - Alert) offerings (CDF - Cegedim Dynamic Framework), which is based on a pioneering original architecture. It will be gradually rolled out in support of the Group's many applications, starting with software for pharmacists in the UK.

The ongoing sales momentum, innovative new product launches and Performance Improvement Plan will have a positive impact on Group operating income from continuing operations starting in the second half of 2012.

  • Simplified income statement


                     
    2011   2010  

?

   

€m

 

%

 

€m

 

%

   
 

 

 

 

 

 

 

 

 
Revenue   911.5   100%   926.7   100%   -1.6%
EBITDA from continuing operations 150.4 16.5% 174.8 18.9% -13.9%
Depreciation -66.5 -66.8 -0.4%
Operating income from continuing operations   83.9   9.2%   108.0   11.7%   -22.3%
Dendrite brand discontinuation - -104.0 n.m.
Exceptional operating income / expenses -8.0 -10.8 -26.0%
Operating income   75.9   8.3%   -6.8   n.m.   n.m.
Net cost of financial debt -37.7 -34.3 +9.9%
Tax expenses -6.6 +24.0 n.m.
Share of earnings in equity-accounted affiliates 1.0 0.9 +15.2%.
Consolidated profit   32.7   3.6%   -16.2       n.m.
Profit attributable to the owners of the parent   32.6   3.6%   -16.3       n.m.

* at constant scope and exchange rates

Cegedim generated consolidated revenue of €911.5 million, down 1.6% on a reported basis and 2.8% like for like compared with 2010. Acquisitions boosted revenue by 1.7% and currencies had a negative impact of 0.6%.

Operating income from continuing operations was €83.9 million, down 22.3% compared with 2010. This drop was the result of higher personnel costs in the first half and weaker sales in the second half. As a result, the operating margin from continuing operations came to 9.2%, versus 11.7% a year earlier. We note that execution of the Performance Improvement Plan helped cut personnel costs by 4% between the first and second half of 2011.

The cost of financial debt rose from €34.3 million to €37.7 million, a 9.9% increase. The effective tax rate came to 17.2%.

The Group's consolidated net profit came to €32.6 million, and EPS amounted to €2.3 compared with a €1.2 loss a year earlier due to the impact of discontinuing the Dendrite brand.

The Group global presence and its diversification of activities allowed it to limit the negative impacts from crises, geopolitical events and natural disasters that occurred throughout the world in 2011.

Analysis of business trends by sector

  • CRM and strategic data

Sector revenue for 2011 was €510.6 million, down 3.0% on a reported basis. Acquisitions boosted revenue by 0.2%, whereas currencies had a negative impact of 0.9%. Like-for-like* revenue fell 2.3% over the period.

Sector operating income from continuing operations was €33.6 million, down €17.6 million compared with 2010. As a result, the operating margin from continuing operations was 6.6%, compared with 9.7% a year earlier. But it is important to note that the margin improved tremendously in the second half of 2011: to 10.2% from 2.8% in the first half.

This speedy recovery was made possible by the salutary effects of stabilizing the number of Cegedim solution users worldwide, and by making implementation tools fully reliable.

The sector is also being driven by

  • The growth in emerging country business (14% of revenue);
  • The development of compliance solutions in response to the Sunshine Act in the US and similar regulations which extend in Europe;
  • The global healthcare professionals database, Cegedim's core CRM offering, OneKey, cleared the threshold of 8 million healthcare professionals in early 2012;
  • The new version of the Mobile Intelligence offering for iPad, scheduled for launch in the second half of 2012.
  • Healthcare professionals

Sector revenue came to €259.8 million in 2011, down 4.1% on a reported basis. Acquisitions (Pulse (News - Alert) in the US and Pharmec in Romania) boosted revenue by 2.6%, but currencies had a negative impact of 0.3%. Like-for-like* revenue fell 6.5% over the period.

Sector operating income from continuing operations was €29.3 million, down €7.5 million compared with 2010. As a result, the operating margin from continuing operations was 11.3%, down from 13.6% a year earlier.

Most of the drop in Healthcare professional sector revenue was due to the significant decline in activity at Cegelease and RNP (-12%), in part compensated by the increase at the Cegedim Healthcare Software division (+4%), the margin follows the same path.

Cegedim should benefit from:

  • The development of the Performance-based pay policy for doctors around the world;
  • The launch in January 2012 of monLogicielMedical.com, the Group's fully web-based medical software;
  • Pulse's business increased in the US;
  • From the expected recovery of RNP and Cegelease business.
  • Insurance and services

Sector 2011 revenue amounted to €141.0 million, up 9.2% on a reported basis. Acquisitions boosted revenue by 6.2%, and currencies had a positive impact of 0.1%. Like-for-like* revenue rose 2.9% over the period.

Sector operating income from continuing operations was €21.0 million, up €1.1 million compared with 2010. As a result, the operating margin from continuing operations was 14.9%, versus 15.4% a year earlier.

Strong growth in this sector was driven by the positive trends in online services management in third-party payer platforms.

Future growth is ensured by expanding these offerings to hospitals and dentists, following the success with eye care professionals in 2011.

Financial resources

Cegedim's total consolidated balance sheet at December 31, 2011, amounted to €1.393 billion, up slightly compared with the end of 2010. The balance sheet structure is robust; share capital increased by 7.5% and now represents 37% of total assets. This trend is chiefly the result of a €48.9 million increase in consolidated net profit.

Due to EUR/USD currency impacts, acquisition goodwill amounted to €725 million compared with €711 million at end-2010. It is stable at 52% of the total balance sheet.

Cash and equivalents (€73.1 million) exceed the value of short-term financial debt (€49.9 million).

Net financial debt comes to €453.3 million, compared with €461.6 million at end-2010. This €8.3 million decrease is the result of a €14.3 million drop in gross debt, partially offset by a €6 million decrease in cash.

Before the cost of net financial debt and taxes, cash flow was €140 million, down 13% compared with end-2010. The level of gearing improved to 0.9 from 1.1 at end-June 2011 and 1.0 at end-December 2010. The Group was in compliance with all of its bank covenants at end-2011.

2011 highlights

  • Acquisition in Romania of Pharmec (around €1 million of revenue)
  • Refinancing the bank credit used in the May 2007 acquisition of Dendrite
  • Maturity of the FCB loan (FCB, company owned by the Labrune family) extended by two years

Significant post-closing transactions and events

To the best of the company's knowledge, there have been no post-closing events or changes that would materially alter the Group's financial situation.

Outlook

Over the coming months, Cegedim will benefit from:

  • The launch of innovative new products;
  • The increasing use of performance-based pay policies for doctors, particularly in France;
  • The sales momentum that began in 2011 for the CRM, Compliance and OneKey offerings;
  • The revolution in the control of online rights in the health insurance sector;
  • Continued progress, internally, on the Performance Improvement Plan.

These factors will boost the Group's consolidated revenue and EBITDA starting in the second half of 2012.

Financial calendar

 

The Group will hold a conference call on April 3rd, 2012, 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.

Cegedim's annual results presentation is available at:

http://www.cegedim.com/finance/documentation/Pages/presentations.aspx

 

Contact numbers:

 

+33 1 72 10 50 80
+33 1 72 10 50 81
+49 302 21 51 00 68
+44 203 428 1111
12122577611

 

France
France
Germany
UK
USA

 

Access code:
35957892#

April 3, 2012 - 11:30 am

  • SFAF meeting

May 3, 2012 (after the stock market closes)

  • 2012 Q1 Revenue release

August 1st 2012 (after the stock market closes)

  • 2012 Q2 Revenue release

September 19, 2012 (after the stock market closes)

  • 2012 HY Results release

September 20, 2012

  • SFAF Meeting

November 8, 2012 (after the stock market closes)

  • 2012 Q2 Revenue release

Additional information

The Audit Committee met on March 30th, 2012. The Board of Directors and the Auditors met on April 2nd, 2012, to approve 2011 consolidated financial statements. Audit procedures have been performed and the 2011 Full-year statutory auditors' report on the financial statements is forthcoming.

The financial information presented in this press release comes from Cegedim Full-year consolidated financial statements and is fully available on the 2011 Reference Document at www.cegedim.com/finance as of April 5, 2012.

A presentation of Cegedim 2011 Full-year results will also be available on the website:

  • In English :

http://www.cegedim.com/finance/documentation/Pages/presentations.aspx

  • In French :

http://www.cegedim.fr/finance/documentation/Pages/presentations.aspx

The transcription (in French and English) of the April 3rd, 2012, results presentation for analysts by Jean-Claude Labrune and Pierre Marucchi will also be available on the website shortly.

To stay informed, subscribe to our twitter feed: http://twitter.com/CegedimGroup#

Appendices

  • Balance sheet

Assets

         
In thousand of euros   12/31/2011   12/31/2010**
Goodwill on acquisition   725,058   711,089
Development costs 24,446 48,093
Trademarks, patents - -
Other intangible fixed assets   167,002   121,932
Intangible fixed assets 191,448 170,025
Property 409 430
Buildings 5,147 5,540
Other tangible fixed assets 35,958 36,929
Construction work in progress   2,594   261
Tangible fixed assets 44,108 43,160
Equity investments 443 299
Loans 1,400 1,004
Other long-term investments   9,637   8,017
Long-term investments - excluding equity shares in equity method companies 11,480 9,320
Equity shares in equity method companies 7,645 7,276
Government - Deferred tax 48,093 49,317
Accounts receivable : Long-term portion 14,498 16,685
Other receivables : Long-term portion   651   722
Non-current assets 1,042,982 1,007,594
Services in progress 305 298
Goods 10,274 10,428
Advances and deposits received on orders 1,151 1,250
Accounts receivable : Short-term portion 222,350 233,446
Unpaid, called-up capital - -
Other receivables : Short-term portion 25,778 25,702
Cash equivalents 14,041 13,238
Cash 59,087 65,916
Prepaid expenses   17,347   19,151
Current assets   350,334   369,429
Total assets   1,393,316   1,377,023

**: The comparative financial statements presented at 12/31/2010 were drawn up by retrospectively applying the equity method for actuarial differences relating to provisions for pensions and similar obligations.

Equity and Liabilities

         
In thousand of euros   12/31/2011   12/31/2010**
Share capital   13,337   13,337
Issue premium 185,562 185,562
Group reserves 263,439 291,153
Group exchange reserves -238 -238
Group exchange gains/losses 21,058 6,356
Group earnings 32,580 -16,349
Investment subsidies - -
Regulated provisions   -   -
Shareholders' equity, Group share 515,737 479,820
Minority interests (reserves) 407 384
Minority interests (earnings)   90   102
Minority interests   497   486
Shareholders' equity 516,234 480,306
Long-term financial liabilities 483,744 489,280
Long-term financial instruments 14,094 13,334
Deferred tax liabilities 12,862 13,466
Non-current provisions 25,154 26,481
Other non-current liabilities   7,142   29,890
Non-current liabilities 542,996 572,451
Short-term financial liabilities 51,871 60,667
Short-term financial instruments 27 -
Accounts payable and related accounts 92,079 74,789
Tax and social liabilities 119,517 125,780
Provisions 5,075 6,066
Other current liabilities   65,516   56,963
Current liabilities   334,085   324,266
Total Liabilities   1,393,316   1,377,023

**: The comparative financial statements presented at 12/31/2010 were drawn up by retrospectively applying the equity method for actuarial differences relating to provisions for pensions and similar obligations.

  • Income statement
         
In thousand of euros   12/31/2011   12/31/2010**
Revenue   911,463   926,674
Other operating activities revenue - -
Capitalized production 47,137 40,188
Purchases used -105,648 -110,887
External expenses -240,184 -225,586
Taxes -15,101 -14,660
Payroll costs -442,231 -435,579
Allocations to and reversals of provisions -3,886 -4,088
Change in inventories of products in progress and finished products 101 94
Other operating income and expenses   -1,224   -1,371
EBITDA 150,428 174,786
Depreciation expenses   -66,523   -66,807
Operating income from continuing operations 83,905 107,979
Drop of Dendrite trademark - -104,009
Exceptional operating income and expenses   -7,983   -10,792
Other exceptional operating income and expenses   -7,983   -114,801
Operating income 75,922 -6,822
Income from cash and cash equivalents 5,487 961
Gross cost of financial debt -36,433 -30,450
Other financial income and expenses   -6,723   -4,793
Cost of net financial debt -37,669 -34,282
Income taxes -21,216 -20,189
Deferred taxes   14,642   44,186
Total taxes -6,574 23,997
Share of profit (loss) for the period of equity method companies   991   860
Consolidated profit (loss) for the period 32,670 -16,247
Attributable To Owners Of The Parent (A) 32,580 -16,349
Minority interests 90 102
Average number of shares excluding treasury stock (B)   13,955,940   13,965,092
Earnings Per Share (in euros) (A/B) 2.3 -1.2
Dilutive instruments néant néant
Diluted Earnings Per Share (in euros) 2.3 -1.2
Earnings Per Share from continuing operations (in euros)   2.8   4.1

** The comparative financial statements presented at 12/31/2010 were drawn up by retrospectively applying the equity method for actuarial differences relating to provisions for pensions and similar obligations.

  • Consolidated cash flow statement
         
In thousand of euros   12/31/2011   12/31/2010**
Consolidated profit (loss) for the period   32,670   -16,247
Share of earnings from equity method companies -991 -860
Depreciation and provisions 63,733 167,894
Capital gains or losses on disposals   415   -437
Cash flow after cost of net financial debt and taxes 95,827 150,350
Cost of net financial debt. 37,669 34,282
Tax expenses   6,574   -23,997
Operating cash flow before cost of net financial debt and taxes 140,070 160,635
Tax paid -19,776 -15,264
Change in working capital requirements for operations   21,249   -11,503
Cash flow generated from operating activities after tax paid and change in working capital requirements (A) 141,543 133,868
Acquisitions of intangible assets -50,538 -45,511
Acquisitions of tangible assets -29,644 -27,783
Acquisitions of long-term investments -2,084 -
Disposals of tangible and intangible assets 2,083 4,155
Disposals of long-term investments - 683
Impact of changes in consolidation scope -1,422 -56,291
Dividends received from equity method companies   662   759
Net cash flows generated by investment operations (B) -80,943 -123,988
Dividends paid to parent company shareholders -13,953 -13,959
Dividends paid to the minority interests of consolidated companies -72 -75
Capital increase through cash contribution - -
Loans issued 200,000 303,147
Loans repaid -222,558 -303,704
Interest paid on loans -32,300 -18,734
Other financial income and expenses paid or received   1,050   -6,310
Net cash flows generated by financing operations (C) -67,833 -39,635
Change In Cash without impact of change in foreign currency exchange rates (A + B + C) -7,233 -29,755
Impact of changes in foreign currency exchange rates 931 5,449
Change in cash -6,302 -24,306
Opening cash 78,032 102,338
Closing cash   71,730   78,032

** The comparative financial statements presented at 12/31/2010 were drawn up by retrospectively applying the equity method for actuarial differences relating to provisions for pensions and similar obligations.

  • Glossary

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.

Revenue at constant exchange rate: when changes in revenue at constant exchange rate are referred to, it means that the impact of exchange rate fluctuations has been excluded. The term, "at constant exchange rate" covers the fluctuation resulting from applying the exchange rates for the preceding period to the current fiscal year, all other factors remaining equal.

Revenue on a like-for-like basis: the effect of changes in scope is corrected by restating the sales for the previous period as follows:

• by removing the portion of sales originating in the entity or the rights acquired for a period identical to the period during which they were held to the current period;

• similarly, when an entity is transferred, the sales for the portion in question in the previous period are eliminated;

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.

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.

EBIT: Earnings Before Interest and Taxes. EBIT corresponds to the net revenue minus operating expenses (such as salaries, social charges, materials, energy, research, services, external services, advertising, etc.). It is the operating income for the Cegedim Group.

 

EBIT from continuing operations: this is EBIT restated to take account of non-current items, such as losses on tangible and intangible assets, restructuring, etc. It corresponds to the operating income from continuing operations for the Cegedim Group.

EBITDA: Earnings before interest, taxes, depreciation and amortization. EBITDA is the term used when amortization or depreciation and revaluations are not taken into account. "D" stands for depreciation of tangible assets (such as buildings, machines or vehicles), while "A" stands for amortization of intangible assets (such as patents, licenses and goodwill). It corresponds to the gross operating earnings for the Cegedim Group.

EBITDA from continuing operations: this is EBITDA restated to take account of non-current items, such as losses on tangible and intangible assets, restructuring, etc. It corresponds to the gross operating earnings from continuing operations for the Cegedim Group.

Net Financial Debt: this represents the Company's net debt (non-current and current financial debt, bank loans, debt restated at amortized cost and interest on loans) net of cash and cash equivalents and excluding revaluation of debt derivatives.

Net bank debt: this represents net financial debt less Cegedim's subordinated debt to FCB.

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.

Operating margin: Defined as the ratio of EBIT/revenue.

Operating margin from continuing operations: defined as the ratio of EBIT from continuing operations/revenue.

About Cegedim:  

Founded in 1969, Cegedim is a global technology and services company specializing in the healthcare field. Cegedim supplies services, technological tools, specialized software, data flow management services and databases. Its offerings are targeted notably at healthcare industries, life sciences companies, healthcare professionals and insurance companies. The world leader in life sciences CRM, Cegedim is also one of the leading suppliers of strategic healthcare industry data. Cegedim employs 8,200 people in more than 80 countries and generated revenue of €911 million in 2011. Cegedim SA is listed in Paris (EURONEXT: CGM).

To learn more, please visit: www.cegedim.com

Public company with share capital of 13,336,506.43 euros
Trade and Commercial Register: Nanterre B 350 422 622
www.cegedim.com


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