Cegedim SA: revenue growth continues

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Full year Financial Information at March 31, 2018
IFRS – Regulated Information – Not Audited
Cegedim: revenue growth continuesRevenues grew 2.6% like for like over the full yearBusiness model transformation moving forward
Boulogne-Billancourt, France, April 26, 2018, after the market closeCegedim, an innovative technology and services company, posted consolidated Q1 2018 revenues from continuing activities of €111.9 million, up 1.8% on a reported basis and 2.6% like for like compared with the same period in 2017.The application of the new IFRS 15 accounting standard has no material impact on Group revenue.Cegedim's business model transformation is progressing according to plan. As a result, the Insurance, HR and e-services division continued to post robust growth in the first quarter of 2018, while Healthcare professionals division revenues fell ahead of new product launches in the UK and US.As a reminder, the Group's first-quarter and third-quarter revenue figures are typically slightly lower than what it generates in the second quarter and especially the fourth quarter.Revenue trends by divisionFirst quarter 2018In the first quarter of 2018, Cegedim posted consolidated revenues from continuing activities of €111.9 million, up 1.8% on a reported basis. Excluding an unfavorable currency translation effect of 0.8%, revenues rose 2.6%. There was virtually no impact from acquisitions or disposals in this quarter.The unfavorable currency translation effect of €0.9 million, or 0.8%, was chiefly due to the €0.5 million negative impact of the US dollar, which represents 2.6% of Group revenues, and the €0.3 million negative impact of the pound sterling, which represents 9.8% of revenues.In like-for-like terms, Health insurance, HR and e-services division revenues rose by 6.4%, and Healthcare professionals division revenues declined by 3.5%.Analysis of business trends by divisionHealth insurance, HR and e-servicesThe division's Q1 2018 revenues came to €72.9 million, up 6.3% on a reported basis. Currency translation had a negative impact of 0.1%. There were no acquisitions or divestments. Like-for-like revenues rose 6.4% over the period.
The Health insurance, HR and e-services division represented 65.1% of consolidated revenues, compared with 62.4% over the same period a year earlier.
The businesses that made the biggest contributions to growth were Cegedim SRH (HR management solutions), Cegedim e-business (digitalization and data exchange), sales statistics for pharmaceutical products, and the computerization of health insurance companies in the UK. This performance was partially offset by the impact of switching the health insurance company computerization activity over to a SaaS model in France, and by the timing of C-MEDIA campaigns (ad space in pharmacies and health & wellness shops).Healthcare professionalsThe division's Q1 2018 revenues came to €38.0 million, down 5.7% on a reported basis. Currency translation had a negative impact of 2.1%. There was virtually no impact from acquisitions or divestments. Like-for-like revenues fell 3.5% over the period.
The Healthcare professionals division represented 34.0% of consolidated revenues from continuing activities, compared with 36.7% over the same period a year earlier.
The division was negatively affected by doctor computerization activities in the UK, the US and Spain ahead of new product launches. This impact was partly offset by computerization activities for doctors and allied health professionals in France. The stability of the pharmacy computerization business in France is particularly noteworthy.Corporate and othersThe division's Q1 2018 revenues came to €1.0 million, down 6.5% on a reported basis and like for like. There was no currency impact and no acquisitions or divestments.
The Corporate and others division represented 0.9% of consolidated revenues from continuing activities compared with 1.0% over the same period a year earlier
HighlightsApart 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.Sale of Cegedim shares held by BpifranceBpifrance Participations sold 1,682,146 Cegedim shares via an accelerated bookbuilding process to French and international institutional investors at a price of €35 per share on February 13, 2018. In the context of the transaction, the shareholders' agreement dated October 28, 2009, between Mr. Jean-Claude Labrune, FCB (the family holding company controlled by Mr. Labrune), and Bpifrance – as well as the concert between the parties – has been terminated. Following the sale, Cegedim's free float increased to 44% of capital (vs. 32% before the transaction).Completed disposal of the Cegelease and EurofarmatOn February 28, 2018, Cegedim announced that it had completed the disposal of Cegelease and Eurofarmat to FRANFINANCE of the Société Générale Group for an amount of €57.5 million plus reimbursement of the shareholder's loan account, which amounted to €13 million. Of this amount, Cegedim used €30 million to pay down its debt.The parties have decided that Cegelease and the Cegedim Group will continue to collaborate in France under their current terms as part of a six-year collaboration agreement. Acquisition of Rue de la Paye in FranceOn March 30, 2018, Cegedim acquired French company Rue de la Paye via its Cegedim SRH subsidiary. The deal will enable the Group to market digital payroll solutions to 2 million SMEs and small businesses in France, including – importantly – thousands of healthcare professionals that are already Cegedim Group clients.Rue de la Paye's 2017 revenues were equivalent to around 1% of Group 2017 revenues, and it earned a profit. It began contributing to the Group's consolidation scope in April 2018.TaxOn February 21, 2018, Cegedim S.A. received notice that French tax authorities would perform an audit of its accounts covering the period January 1, 2015, to December 31, 2016.Significant post-closing transactions and eventsTo the best of the company's knowledge, there were no events or changes after the accounts were closed that would materially alter the Group's financial situation.OutlookCautiously optimistic for 2018Building on the efforts that it executed with success in 2017, Cegedim continues to pursue its strategy of focusing on organic growth, fueled by a policy of sustained innovation.For 2018 the Group targets a moderate organic revenue and EBITDA margin growth. The Group does not issuing any earnings estimates or forecasts.Potential impact of BrexitIn 2017, the UK accounted for 10.9% of consolidated Group revenues from continuing activities and 14.0% of consolidated Group EBIT.Cegedim deals in local currency in the UK, as it does in every country where it is present. Thus, Brexit is unlikely to have a material impact on Group EBIT.With regard to healthcare policy, the Group has not identified any major European programs at work in the UK and expects UK policy to be only marginally affected by Brexit.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 2 points 4.2, “Risk factors and insurance”, and 5.5, “Outlook”, of the 2017 Registration Document filed with the AMF on March 29, 2018, under number D.18-0219. Additional informationRevenue figures for Q1 2018 have not been audited by the Statutory Auditors.Financial calendar, H1 2018AppendicesBreakdown of revenues from continuing activities by quarter and divisionQ1 2018FY 2017Breakdown of revenues from continuing activities by geographic zone and divisionAt March 31, 2017Breakdown of revenues from continuing activities by currency and divisionAt March 31, 2017Application of IFRS 5On December 14, 2017, Cegedim announced that it had signed a contract for the definitive sale of its Cegelease and Eurofarmat businesses. The deal was finalized on February 28, 2018. As a result, the consolidated 2017 and Q1 2018 financial statements are presented according to IFRS 5, “Non-current assets held for sale and discontinued”. IFRS 5 governs the accounting treatment for non-current assets held for sale.In practice, their contribution to each line of Cegedim's consolidated income statement (before minority interests) is combined into the “Net profit from activities sold or held for sale” line, and the group share of their net profit is excluded from Cegedim's adjusted net profit. Earlier periods have also been restated so that the information presented is comparable.The table below shows the impact of the restatement:Glossary

AttachmentCegedim_Revenue_1Q2018_ENG.pdf

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Jasmine Petters

Jasmine Petters

Jasmine hails from the city of Nizams, Hyderabad, and is currently pursuing her M.D. from there only. She is an internet wizard and has keen passion in All Things tech. She is a regular Comment contributor for The Daily Telescope and writes a Web column, in which she covers war, sports, and everything in between.
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