| PRESS RELEASE |
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
Cegedim generated 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
| 2023 | 2022 | Change | |||
| (in €m) | (in %) | (in €m) | (in %) | (in %) | |
| Revenues | 616.0 | 100.0% | 555.2 | 100.0% | 10.9% |
| EBITDA(1) | 108.8 | 17.7% | 96.2 | 17.3% | 13.1% |
| Depreciation & amortization | -77.2 | -12.5% | -70.5 | -12.7% | 9.4% |
| Recurring operating income(1) | 31.7 | 5.1% | 25.7 | 4.6% | 23.4% |
| Other non-recurring operating income and expenses(1) | -11.7 | -1.9% | 0.8 | 0.1% | - |
| Operating income | 20.0 | 3.2% | 26.5 | 4.8% | -24.6% |
| Financial result | -11.9 | -1.9% | -8.8 | -1.6% | -35.2% |
| Total tax | -14.8 | -2.4% | -4.6 | -0.8% | -222.0% |
| Net profit attributable to owners of the parent | -7.4 | -1.2% | 13.6 | 2.5% | -154.4% |
| Earnings per share (in euros) | -0.5 | - | 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.
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 million in 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 | Change 2023 / 2022 | |||
| in millions of euros | 2023 | 2022 | ||
| 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.
| 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 | |
Annexes
Consolidated financial statements at December 31, 2023
- Assets at December 31, 2023
| In thousands of euros | 12/31/2023 | 12/31/2022 |
| Goodwill | 199,787 | 198,761 |
| Development costs | 1,562 | 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 | 45,829 | 39,467 |
| Advances and non-current assets in progress | 831 | 133 |
| Rights of use | 89,718 | 88,988 |
| Tangible fixed assets | 138,582 | 131,004 |
| Equity investments | 0 | 1 |
| Loans | 15,332 | 15,642 |
| Other long-term investments | 5,230 | 5,053 |
| Long-term investments - excluding equity shares in equity method companies | 20,563 | 20,696 |
| Equity shares in equity method companies | 9,725 | 9,655 |
| Deferred tax assets | 19,747 | 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 | 22,082 | 19,370 |
| Current assets | 329,146 | 300,406 |
| Total assets | 924,068 | 889,915 |
Liabilities and equity at December 31, 2023
| In thousands of euros | 12/31/2023 | 12/31/2022 |
| Share capital | 13,337 | 13,337 |
| Consolidated retained earnings | 282,521 | 271,344 |
| Group exchange gains/losses | -12,275 | -13,141 |
| Group earnings | -7,407 | 13,624 |
| Shareholders' equity, Group share | 276,175 | 285,164 |
| Minority interest | 18,381 | 18,971 |
| Shareholders' equity | 294,556 | 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 | 235 | 247 |
| Tax and social security liabilities | 121,371 | 112,341 |
| Non-current provisions | 1,730 | 2,172 |
| Other current liabilities | 120,212 | 96,832 |
| Current liabilities | 323,077 | 287,071 |
| Total liabilities | 924,068 | 889,915 |
- Income statement as of December 31, 2023
| In thousands of euros | 12/31/2023 | 12/31/2022 |
| Revenues | 615,995 | 555,209 |
| Purchases used | -28,547 | -26,559 |
| External expenses | -138,544 | -119,913 |
| Taxes | -5,352 | -6,259 |
| Payroll costs | -331,748 | -303,577 |
| Impairment of trade receivables and other receivables and on contract assets | -2,444 | -298 |
| Allowances to and reversals of provisions | -2,714 | -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) | 31,670 | 25,673 |
| Non-recurring operating income and expenses | -11,687 | 820 |
| Other non-recurring operating income and expenses(1) | -11,687 | 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
| In thousands of euros | 12/31/2023 | 12/31/2022 |
| Consolidated net profit | -7,937 | 12,079 |
| Share of profit (loss) from affiliates | -561 | -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 | -1,036 | -2,619 |
| Disposals of property, plant, and equipment and of intangible assets | 2,598 | 2,099 |
| Disposals of long-term investments | 805 | 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 | 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 | 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 | -6,861 | -4,758 |
| Net cash flow used in financing activities | -31,071 | -33,889 |
| Change in net cash excluding currency impact | -8,444 | 32,417 |
| Impact of changes in foreign currency exchange rates | -503 | -1,024 |
| Change in net cash | -8,947 | 31,393 |
| Opening cash | 55,553 | 24,159 |
| Closing cash | 46,606 | 55,553 |
- Financial covenants
| In thousands of euros | 12/31/2023 | Criterion |
| Net debt(*) | 92,156 | |
| EBITDA | 88,479 | |
| Leverage ratio | 1.04 | < 2.5 |
| In thousands of euros | 12/31/2023 | Criterion |
| 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.
