PRESS RELEASE

from CEGEDIM (EPA:CGM)

Cegedim Full year 2023 results: Revenue and recurring operating income both up

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PRESS RELEASE  

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Quarterly financial information as of December 31, 2023

IFRS - Regulated information - Audited

Full year 2023 results: Revenue and recurring operating income both up 

•       2023 revenues rose 10.9% to €616.0 million

•       Recurring operating income(1) rose 23.4% to €31.7 million

Boulogne-Billancourt, France, March 27, 2024, after the market close

Cegedimgenerated consolidated revenues of €616.0 million in 2023, an increase of 10.9% as reported and 10.8% like for like(2) compared with the previous year, and recurring operating income(1) came to €31.7 million, a 23.4% increase.  Consolidated income statement 

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Revenues

2023

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(in €m)

(in %)

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(in %)

(in €m)

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616.0

image

555.2

100.0%

10.9%

EBITDA(1)

108.8

image

96.2

17.3%

13.1%

Depreciation & amortization

-77.2

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-70.5

-12.7%

9.4%

Recurring operating income(1)

31.7

image

25.7

4.6%

23.4%

Other non-recurring operating income and expenses(1)

-11.7

image

0.8

0.1%

-

Operating income

20.0

image

26.5

4.8%

-24.6%

Financial result

-11.9

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-8.8

-1.6%

-35.2%

Total tax

-14.8

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-4.6

-0.8%

-222.0%

Net profit attributable to owners of the parent

-7.4

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13.6

2.5%

-154.4%

Earnings per share (in euros)

-0.5

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1.0

-

-150%

Consolidated revenues: rose €61 million, or +10.9%, to €616.0 million in 2023 compared with €555.2 million in 2022. The positive scope effect of €1.7 million, or 0.3%, was attributable to the full-year consolidation in Cegedim’s accounts of acquisitions MesDocteurs, Laponi, Sedia, and Clinityx. The positive currency impact was €0.8 million, or 0.1%.

Like-for-like(2) revenue increased 10.8% over the period.

Recurring operating income(1): rose €6.0 million in 2023 to €31.7 million compared with €25.7 million in 2022. It amounted to 5.1% of 2023 revenue compared with 4.6% in 2022. The increase was chiefly the result of improved earnings at Cegedim Santé and international businesses, as well as BPO offerings in insurance and the excellent performance of Human Resources activities. The foundation of our historical activities remains very solid, both in digital marketing and in flows digitalization for businesses and healthcare, featuring investments in innovation.

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(1)         Alternative performance indicator See pages 110-111 of the 2022 Universal Registration Document.

(2)         At constant scope and exchange rates.

 

 

     

image              Cegedim                                                                                                                                                                                          

137 rue d’Aguesseau, 92100 Boulogne-Billancourt

Tel.: +33 (0)1 49 09 22 00 www.cegedim.fr

              SA with capital of €13,336,506.43                                                                                                                                                                                                                                       

              SIREN 350 422 622                                                                                                                                                                                                                                                               

              R. C. S. Nanterre B 350 422 622                                                                                                                                                                                                                         Page 1

 

Other non-recurring operating income and expenses(1): amounted to an expense of €11.7 million in 2023 compared with an income of €0.8 million in 2022. The group wrote down nearly €9 million in assets in the UK in 2023, notably owing to its recent decision to refocus its doctor software business exclusively on Scotland. In 2022, Cegedim Group received proceeds from selling a minority stake.

Depreciation and amortization expenses: rose €6.7 million in 2023. Amortization of R&D investments rose €2.3 million year on year, and capex amortization rose €2.8 million as a result of investments in the operations of cegedim.cloud and C-Media.

EBITDA: the €12.6 million increase between 2022 and 2023 was the result of a stabilization in personnel costs and supplies relative to the pace of revenue growth, in spite of higher external expenses related to launching the Allianz contract.

Financial result: came to -€11.9 million, down €3.1 million compared with 2022 owing to higher interest expense on borrowings with floating interest rates.

Total tax: came to a charge of €14.8 millionin 2023, up €10.2 million compared with 2022, notably due to a €12.3 million accounting adjustment to previously recognized deferred tax assets. The adjustment had no cash impact and was intended to reflect recent developments in judicial precedent that led the Group to measure its potential unrealized gain more conservatively.

Analysis of business trends by division

in millions of euros

Total

Software & Services

Flow

Data & Marketing

BPO

Cloud & Support

Revenue

2022

555.2

302.0

90.6

106.9

53.0

2.8

2023

616.0

326.6

95.9

114.9

71.5

7.1

Change

10.9%

8.2%

5.9%

7.5%

34.9%

154.0%

Recurring operating income(1)

2022

25.7

-4.9

13.1

17.9

3.0

-3.4

2023

31.7

4.2

12.1

15.9

4.0

-4.5

Change

23.4%

185.5%

-7.3%

-11.3%

33.0%

-30.5%

Recurring operating margin

2022

4.6%

-1.6%

14.4%

16.8%

5.6%

-122.5%

2023

5.1%

1.3%

12.6%

13.9%

5.5%

-62.9%

•       Software & Services: 2023 revenues rose 8.2%, driven by good performances at Cegedim Santé (+10% over the FY), HR solutions (+19%), pharmacy solutions in France (+8%), and international businesses in the UK and Spain (+7%). 

Recurring operating income (REBIT) amounted to €4.2 million in 2023, a €9 million increase compared with a €4.9 million loss in 2022.  

Of the increase, nearly €5 million was attributable to robust sales at Cegedim Santé combined with good hiring management after the company beefed up its sales, operating support, and R&D teams in 2022.  

International businesses accounted for €3.8 million of the performance, boosted by a strong recovery in Pharmacy solutions in the UK, where restructuring efforts are starting to pay off, and very brisk business at the Activus subsidiary (insurance for expatriate employees).  

At the remaining software and services entities in France, results were very satisfactory in HR and pharmacy software, offsetting a drop in project-based business in the Insurance segment. 

 

Software & Services

in millions of euros

2022

Change 

2023 / 2022

2023

Revenues

326.6

302.0

24.6

8.2%

Cegedim Santé

76.6

69.6

7.0

10.1%

Insurance, HR, Pharmacies, and other services

197.6

183.5

14.1

7.7%

International businesses

52.5

48.9

3.5

7.2%

Recurring operating income

4.2

-4.9

9.0

185.5%

Cegedim Santé

-2.9

-7.8

4.9

62.5%

Insurance, HR, Pharmacies, and other services

14.7

14.3

0.4

3.0%

International businesses

-7.6

-11.4

3.8

33.1%

•       Flow: Revenues rose 5.9%, led by process digitalization in electronic data flows, whose French and international businesses grew 7.4%. Over the same period, Third-party payer systems posted 3.7% growth.  

The €1 million drop in recurring operating income was due mainly to investments in earning digitalization platform partner (PDP) certification ahead of the electronic invoicing reform that will become mandatory in France starting in 2026. The Third-party payer business posted a slight increase in recurring operating income.

•       Data & Marketing: Marketing and Data activities made positive contributions of respectively 10.7% and 5.1% to the division’s revenue growth compared with 2022.  

The division’s recurring operating income dropped 11.3% compared with 2022 due to international Data businesses, which lost ground in 2023, and the startup of Clinityx’s new Magellan business, which is expected to generate its first revenues in 2024. The Marketing division saw a 4.4% increase in recurring operating income. 

•       BPO: the division’s revenues grew 34.9% year on year in 2023. It was particularly buoyed by services managed on behalf of health and personal protection insurers, which jumped more than 55.3% owing to the start of the new contract with Allianz on April 1, 2023. Revenues from services management on behalf of HR departments rose

             3.4%.                

The division’s recurring operating income climbed 33%, bolstered mainly by outsourcing for HR departments, which is riding a wave of management process automation. Sales to insurers posted positive recurring operating income, up slightly, despite the costs of launching the Allianz contract.

•       Cloud & Support: Revenues rose €4.3 million in 2023, chiefly because all of the Group’s cloud businesses have been moved to this division (some were previously housed in Software & Services).

2023 recurring operating income was a €4.5 million loss, €1.1 million higher than the loss in 2022. The increase was notably the result of increased depreciation and amortization expenses borne by cegedim.cloud, which stem from the investments made in the Group’s shared IT infrastructure.

 

Highlights

To the best of the company’s knowledge, there were no events or changes during 2023 that would materially alter the Group’s financial situation.

•       Acquisition of a majority stake in Phealing

On November 30, 2023, Cegedim acquired a majority stake in Phealing, a start-up specializing in secure prescription drug delivery. Phealing’s offer, based around its advanced artificial intelligence engine, caters to a key concern for pharmacies: double checking prescription medication, which means verifying at the time the prescription is filled that the medicine matches the patient’s prescription, physical profile, and illness. Phealing was consolidated in the Group’s accounts starting on December 31, 2023, meaning only its balance sheet is reflected.

•       Tax

Cegedim S.A. has been audited twice since 2018, giving rise to reassessments of the company’s use of tax loss carryforwards disputed by the tax authorities. After consultation with its lawyers and based on the applicable tax law and ample precedent, Cegedim S.A. believes that the tax authorities’ proposed reassessment is unwarranted. As a result, the company has appealed the decision and continues to explore its options for contesting the reassessment.

To be in full compliance, Cegedim S.A. has already paid a total of €23 million (incl. €10.9 million in February 2024) to cover reassessments of tax losses used up to 2022. The corresponding entry for these payments is not the taxes line of the income statement, but rather the tax receivables line of the balance sheet, as we expect these sums to be repaid once the dispute has been favorably resolved. Furthermore the Company continues to recognize a deferred tax asset for the remaining disputed tax losses that it believes it will still be able to use, i.e. €7.7 million on the consolidated balance sheet at December 31, 2023 (a decrease of €12.3 million year on year after taking into account recent judicial precedent, which led to a more conservative measurement of unrealized potential gains). 

Cegedim S.A. continues to use the remaining disputed tax loss carryforwards. In the event of an unfavorable ruling, based on the tax losses used until December 31, 2023, Cegedim S.A. would have to book a tax loss of €27 million in its P&L, of which it has already paid €23 million, and to cancel €7.7 million in deferred tax assets, a P&L loss which would not entail any cash outflow.

In the fourth quarter of 2023, Cegedim S.A. appealed the dispute to the administrative court, an effort which could take several years.

 

Significant transactions and events post December 31, 2023

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.

•       Acquisition of Visiodent

On February 15, 2024, Cegedim Santé acquired Visiodent, a leading French publisher of management software for dental practices and health clinics. Visiodent launched the market’s first 100% SaaS solution, Veasy, at a time when it was significantly expanding its organization. Its users now include the country’s largest nation-wide networks of health clinics, both cooperative and privately owned, as well as several thousand dental surgeons in private practice. Visiodent generated revenue of c.€10 million in 2023 and will begin contributing to Cegedim Group’s consolidation scope on March 1, 2024. Post the acquisition, Cegedim is in compliance with all of its covenants and financing contracts.

 

•       Euris litigation

Cegedim, jointly with IQVIA (formerly IMS Health), is being sued by Euris for unfair competition. Cegedim has asked the court to dismiss the case against the Company. On December 17, 2018, the Paris Commercial Court granted Cegedim’s request, which IQVIA then appealed. On December 8, 2021, the Court of Appeals upheld the judgement in favor of Cegedim. The case was appealed to the Supreme Court, and in a ruling on March 20, 2024, the court overturned the Court of Appeals judgement that had exonerated Cegedim. As a result, the case has been sent back to the Paris Court of Appeals with a different set of judges.

After consulting its external legal counsel, the Group decided not to set aside any provisions.

•       War in Ukraine

The Group does not do business in Russia or Ukraine and has no assets exposed to those countries.

 

Outlook 

Based on the currently available information, the Group expects 2024 like-for-like revenue(2) growth to be in the range of 5-8% relative to 2023. Recurring operating income should continue to improve, following a similar trajectory as in 2023.  

These targets are not forecasts and may need to be revised if there is a significant worsening of geopolitical, macroeconomic, or monetary risks.

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The Audit Committee met on March 25, 2024. The Board of Directors, chaired by Jean-Claude Labrune, met on April 27, 2024. It approved the consolidated financial statements at December 31, 2023, and will ask the Shareholders’ Meeting to approve the accounts for the year 2023. The consolidated accounts have been audited. The statutory auditors’ report will be issued once the formalities required for submission of the Universal Registration Document have been completed. 

The Universal Registration Document will be available in a few days’ time, in French and in English, on our website.

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(2) At constant scope and exchange rates.

 

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WEBCAST ON MARCH 27, 2024, AT 6:15 PM (PARIS TIME)

The webcast is available at: www.cegedim.fr/webcast

The fiscal 2023 results presentation is available on the website: 

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

 

2024 financial calendar

2024

March 28 at 10:00 am

April 25 after the close

June 14 at 9:30 am

July 25 after the close

September 26 after the close

SFAF meeting - Cegedim auditorium in Boulogne Billancourt

Q1 2024 revenues

Shareholders’ meeting

H1 2024 revenues

First-half 2024 results

 

Financial calendar: https://www.cegedim.fr/finance/agenda/Pages/default.aspx

 

 

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 March 27, 2024, no earlier than 5:45 pm Paris time.

The figures cited in this press release include guidance on Cegedim's future financial performance targets. 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”, section 7.2, “Risk factors and insurance”, and Chapter 3, “Overview of the financial year”, section 3.6, “Outlook”, of the 2022 Universal Registration Document filled with the AMF on April 12, 2023.

About Cegedim:

Founded in 1969, Cegedim is an innovative technology and services group 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 more than 6,500 people in more than 10 countries and generated revenue of €616 million in 2023. 

Cegedim SA is listed in Paris (EURONEXT: CGM).

To learn more please visit: www.cegedim.fr

And follow Cegedim on Twitter @CegedimGroup,LinkedIn,and Facebook.

 

 

 

Aude Balleydier

Cegedim

Media Relations  and Communications Manager

Tel.: +33 (0)1 49 09 68 81 aude.balleydier@cegedim.fr

Damien Buffet

Cegedim

Head of Financial Communication

Tel.: +33 (0)7 64 63 55 73 damien.buffet@cegedim.com

Céline Pardo 

Becoming

Media Relations

Tel.: +33 (0)6 52 08 13 66 cegedim@becoming-group.com

 

Follow Cegedim:

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Annexes

Consolidated financial statements at December 31, 2023

                              •       Assets at December 31, 2023

image

image

image

Goodwill 

Development costs

               199,787                      1,562  

                     198,761  

                         3,081

Other intangible fixed assets

               192,616  

                     185,004 

Intangible non-current assets

               194,178  

                     188,085 

Land

                      544  

                            544 

Buildings

                   1,660  

                         1,872 

Other property, plant, and equipment

Advances and non-current assets in progress

Rights of use

                 45,829                         831                    89,718  

                       39,467 

                            133

                       88,988

Tangible fixed assets

               138,582  

                     131,004 

Equity investments

                          0  

                                1 

Loans

Other long-term investments

Long-term investments – excluding equity shares in equity method companies

Equity shares in equity method companies

Deferred tax assets

                 15,332                      5,230  

                 20,563  

                 9,725  

                 19,747  

                       15,642 

                         5,053 

 

20,696 

                         9,655

                       30,385 

Prepaid expenses: long-term portion

                         -  

                                0 

Non-current assets

               594,922  

                     589,509 

Goods

                   5,498  

                         6,495 

Advances and deposits received on orders

                   3,703  

                            177 

Accounts receivables: short-term portion

               175,199  

                     151,757 

Other receivables: short-term portion

                 59,563  

                       50,497 

Current tax credits

                 16,495  

                       16,557 

Cash equivalents

                          0  

                                0 

Cash

                 46,606  

                       55,553

Prepaid expenses: short-term portion

Current assets

                 22,082  

                       19,370 

image               329,146  

                     300,406 

Total assets

image               924,068  

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Liabilities and equity at December 31, 2023

image

image

image

Share capital 

Consolidated retained earnings

             13,337 

           282,521 

                        13,337

                      271,344

Group exchange gains/losses

-12,275 

-13,141

Group earnings

-7,407 

                        13,624

Shareholders’ equity, Group share

Minority interest

Shareholders’ equity

           276,175 

             18,381 

           294,556 

                      285,164

                        18,971

                      304,135

Short-term financial liabilities

           188,546 

                      188,913

Current lease liabilities

             78,761 

                        75,907

Deferred tax liabilities

               5,600 

                          6,137

Post-employment benefit obligations

             31,007 

                        25,397

Non-current provisions

               2,521 

                          2,355

Non-current liabilities

           306,435 

                      298,709

Short-term financial liabilities

               3,006 

                          3,854

Current lease liabilities

             14,789 

                        15,916

Trade payables and related accounts

             61,734 

                        55,709

Current tax liabilities

Tax and social security liabilities 

Non-current provisions

                  235  

           121,371                 1,730 

247

                      112,341

                          2,172

Other current liabilities

           120,212 

                        96,832

Current liabilities

           323,077 

           924,068 

                      287,071

Total liabilities

                      889,915

                 

Income statement as of December 31, 2023

image

image

image

Revenues 

Purchases used

        615,995  

-28,547

555,209

-26,559

External expenses

-138,544

-119,913

Taxes

-5,352

-6,259

Payroll costs

Impairment of trade receivables and other receivables and on contract assets

Allowances to and reversals of provisions 

-331,748

-2,444

-2,714

-303,577

-298

-4,609

Other operating expenses

431

-8

Share of profit (loss) from affiliates on the income statement

1,757

2,216

EBITDA(1)

108,834

96,202

Depreciation expenses other than right-of-use assets 

-59,471

-53,302

Depreciation expenses of right-of-use assets

-17,693

-17,228

Recurring operating income(1)

Non-recurring operating income and expenses

Other non-recurring operating income and expenses(1)

31,670

-11,687 -11,687

25,673

820

820 

Operating income

19,983

26,492 

Income from cash and cash equivalents 

475

114 

Cost of gross financial debt

-11,742

-8,949 

Other financial income and expenses

-614

45 

Net financial income (expense)

-11,881

 -8,790 

Income taxes

-4,509

-5,882 

Deferred tax

-10,336

1,272 

Tax

-14,845

 -4,610 

Share of profit (loss) from affiliates   

-1,195

-1,013 

Consolidated net profit

-7,937

12,079

Group share 

-7,407

13,624

Income from equity-accounted affiliates

531

 -1,545

Average number of shares excluding treasury stock

13,610,429

13,658,348

Earnings per share (in euros)

-0.5

1.0

 

(1) Alternative performance indicator 

 

                         

Cash flow statement as of December 31, 2023

image

image12/31/2023

image12/31/2022

Consolidated net profit

Share of profit (loss) from affiliates

-7,937  -561 

12,079

-1,203

Depreciation and amortization expenses and provisions 

84,010 

83,090

Capital gains or losses on disposals of operating assets 

-1,817 

-31

Cash flow after cost of net financial debt and taxes

73,695 

93,935

Cost of net financial debt

11,881 

8,791

Tax expenses

14,844 

4,609

Operating cash flow before cost of net financial debt and taxes

100,420 

107,335

Tax paid

-4,233 

-21,309

Change in working capital requirement: Requirement

0

0

Change in working capital requirement: Release

1,736 

450

Cash flow generated from operating activities after tax paid and change in working capital requirements  

97,923  

86,476

Acquisitions of intangible fixed assets

-53,538 

-58,554

Acquisitions of tangible fixed assets

-21,952 

-17,582

Acquisitions of long-term investments

Disposals of property, plant, and equipment and of intangible assets

Disposals of long-term investments

-1,036 

2,598  805 

-2,619

2,099

1,636

Change in deposits received or paid

84 

-717

Impact of changes in consolidation scope

-3,371 

52,483

Dividends received from outside the Group

1,114 

3,084

Net cash flow used in investing activities  

-75,296  

 -20,170

Capital increase

0

Dividends paid to minority shareholders of consolidated cos.

-2 

-95

Dividends paid to shareholders of the parent company

-0 

-6,831

Debt issuance

0

Debt repayments

-263 

-85

Employee profit sharing 

-65 

81

Repayment of lease liabilities

-19,796 

-19,036

Interest paid on loans

-5,050 

-4,949

Other financial income received

966 

1,784

Other financial expenses paid 

Net cash flow used in financing activities  

Change in net cash excluding currency impact  

-6,861  

-31,071 

-4,758

-33,889 32,417

image

Impact of changes in foreign currency exchange rates

image

-1,024

Change in net cash  

image

31,393

Opening cash

Closing cash

image

24,159

55,553

46,606

 

                         •      Financial covenants

imageIn thousands of euros

image12/31/2023

imageCriterion

Net debt(*) 

92,156

EBITDA

88,479

Leverage ratio

1.04

< 2.5

image

image12/31/2023

imageCriterion

Interest expense 

5,328

EBITDA

88,479

Interest cover ratio

16.61

> 4.5

(*) excluding employee profit sharing liabilities, the FCB loan, and IFRS 16 liabilities    

 

The Group complied with all these covenants as of December 31, 2023, and there is no foreseeable risk of default.

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