FY 2020 Results Paris Stock Exchange:CGM
11 min readQuarterly financial information as of December 31, 2020
IFRS – Regulated information – Audited
FY 2020 results: Cegedim’s business model admirably resilient
- 2020 revenue virtually stable like for like
- Recurring operating income1 up 12% to €41 million
Boulogne-Billancourt, France, March 18, 2021, after the market close
Cegedim generated consolidated FY 2020 revenues of €496.9 million, a decrease of 1.4% as reported and 0.2% like for like compared with the previous year. Recurring operating income rose 11.8% as reported to €41.5 million.
“Amid tough conditions, the Group showed its resilience, with 2020 revenues virtually stable like for like and recurring operating income up 12%. After the first lockdown, revenues returned to like-for-like growth of 1.9% in the third quarter, and the recovery picked up speed in the fourth quarter with growth of 2.3%2. The reason for the resilience is our unique position within the healthcare ecosystem, our recurring businesses and sustained investment in innovation. We are confident we can top our 2020 performance,” said Laurent Labrune, Cegedim Group Deputy Managing Director.
Consolidated income statement
| 2020 | 2019 | Change | |||
| €m | % | €m | % | % | |
| Revenue | 496.9 | 100.0% | 503.7 | 100.0% | (1.4)% |
| EBITDA(1) | 103.9 | 20.9% | 101.2 | 20.1% | +2.6% |
| Depreciation & amortization | (62.5) | 12.6% | (64.2) | 12.7% | (2.6)% |
| Recurring operating income(1) | 41.5 | 8.3% | 37.1 | 7.4% | +11.8% |
| Other non-recurring operating income and expenses (1) | (19.9) | 4.0% | (21.0) | 4.2% | (5.2)% |
| Operating income | 21.5 | 4.3% | 16.1 | 3.2% | +33.9% |
| Cost of net financial debt | (8.6) | 1.7% | (8.6) | 1.7% | +0.8% |
| Tax | (2.0) | 0.4% | (4.8) | 1.0% | (59.2)% |
| Net profit attributable to the owners of the parent | 10.8 | 2.2% | 2.7 | 0.5% | +301.7% |
| Recurring earnings per share(1) in euros | 1.4 | – | 0.4 | – | +245.1% |
| Earnings per share in euros | 0.8 | – | 0.2 | – | +302.6% |
The Audit Committee met on March 17, 2021, and the Board of Directors—chaired by Jean-Claude Labrune—met on March 18, 2021, to approve the 2020 financial statements. All of the consolidated financial statement audit procedures have been performed. The certification report will be issued once the procedures required for filing the Universal Registration Document have been completed. The Universal Registration Document will be available soon in French and in English on our website and on the Cegedim IR mobile app.
Consolidated revenues fell €6.8 million, or 1.4%, to €496.9 million in 2020, compared with €503.7 million in 2019. Excluding an unfavorable currency translation impact of 0.2pp and an unfavorable scope effect of 1.0pp, revenues were virtually stable, down 0.2%.
The €5.2 million hit from scope effects, or 1.0pp, 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.
Bridge from reported to LFL revenues
| in millions of euros | ||
| Consolidated Group revenue at December 31, 2019 | 503.7 | |
| Impact of acquisitions and disposals | (5.2) | |
| Currency impacts | (0.8) | |
| Revenue excl. impacts at December 31, 2019 | 497.7 | |
| Software & Services contribution | (2.1) | |
| Flow contribution | (2.9) | |
| Data & Marketing contribution | +2.1 | |
| BPO contribution | +1.9 | |
| Corporate and others contribution | +0.2 | |
| Consolidated Group revenue at December 31, 2020 | 496.9 |
Recurring operating income(1) rose €4.4 million, or 11.8%, to €41.5 million in 2020, compared with €37.1 million in 2019. It amounted to 8.3% of revenue in 2020 compared with 7.4% in 2019. This performance was attributable to improved performances at the Software and Services and BPO divisions, and to reduced spending on travel, receptions, and marketing.
Depreciation and amortization expenses fell €1.7 million, or 2.6%, to €62.5 million in 2020, compared with €64.2 million in 2019. The main reason for the decline was the decrease in R&D amortization over the period owing to earlier impairments taken on certain software.
EBITDA(1) rose €2.7 million, or 2.6%, to €103.9 million in 2020, compared with €101.2 million in 2019. It amounted to 20.9% of revenue in 2020 compared with 20.1% in 2019.
Other non-recurring operating income and expenses(1) amounted to a €19.9 million charge, compared with a €21.0 million charge in 2019. The 2020 level was chiefly the result of impairments of intangible assets related to certain software business, notably on products for doctors in the UK and Belgium.
Cost of net financial debt was virtually stable at €8.6 million. The virtual stability is due to the fact that the Group’s borrowings are almost entire at fixed interest rates.
Tax amounted to a charge of €2.0 million in 2020 compared with a charge of €4.8 million in 2019, a decrease of €2.9 million, or 59.2%. This trend is the result of a decrease in income tax combined with a strong increase in deferred tax assets.
Consolidated net profit attributable to the owners of the parent came to €10.8 million in 2020 compared with €2.7 million in 2019. Recurring net profit per share came to €1.4 in 2020 compared with €0.4 a year earlier. Earnings per share were €0.8 in 2020 compared with €0.4 in 2019.
Analysis of business trends by division
Always looking for ways to improve its financial communication, the Group will now be reporting its results by business activity (divisions: Software & Services, Flow, Data & Marketing, and BPO) rather than by client segment (sectors: Health insurance, HR and e-services, and Healthcare professionals).. To help you analyze these revenue and recurring operating income(1) figures, we have provided in the annex a breakdown of revenues and recurring operating income(1) by sector, as well as a grid comparing the sector and division figures.
·Software & Services
| In millions of euros | 2020 | 2019 | Change |
| Revenue | 277.2 | 286.9 | (3.4)% | Like for like: (0.7)% |
| Recurring operating income(1) | 23.5 | 19.4 | +21.1% |
| Margin | 8.5% | 6.8% | +171bp |
The Sofware & services business, which is highly recurring overall, received a boost from the launch of a teleconsultation solution, Maiia Téléconsultation, which experienced strong growth due to the Covid-19 pandemic. As a reminder, the teleconsultation offering was supplied to clients free of charge in the first half of 2020.
However, the strong showing in software and services for the medical profession and HR management was more than offset by weakness in project activities and change management, notably in the health insurance sector. The start of certain projects was postponed from 2020 to 2021.
Highly recurring business and the sale of Pulse Systems Inc assets enabled a significant increase in recurring operating income(1).
·Flow
| In millions of euros | 2020 | 2019 | Change |
| Revenue | 79.4 | 80.6 | (1.5)% | Like for like: (3.6)% |
| Recurring operating income(1) | 10.4 | 12.3 | (16.0)% |
| Margin | 13.0% | 15.3% | (225)bp |
The Flow business was negatively affected by the Covid-19 pandemic, which caused many in France to make fewer doctor visits during lockdowns, thus diminishing health flows. Some of our clients decided to postpone projects from 2020 to 2021. However, the decline was partly offset by a very good performance in the invoice and process digitalization activity. The Flow division has substantial fixed costs, which explains the decline in recurring operating income(1).
·Data & Marketing
| In millions of euros | 2020 | 2019 | Change |
| Revenue | 87.8 | 85.8 | +2.4% | Like for like: +2.4% |
| Recurring operating income(1) | 11.4 | 10.7 | +6.6% |
| Margin | 13.0% | 12.5% | +51bp |
The Data activities experienced strong growth as a result of the pandemic. On the other hand, during the first lockdown of 2020, the pandemic had a detrimental impact on advertising business revenues from pharmacies in France, which were closed for around a month. Even so, the Data & Marketing division’s recurring operating income(1) rose thanks to the Data business.
·BPO
| In millions of euros | 2020 | 2019 | Change |
| Revenue | 48.9 | 47.1 | +3.9% | Like for like: +3.9% |
| Recurring operating income(1) | (0.2) | (2.6) | (91.7)% |
| Margin | (0.5)% | (5.6)% | +58bp |
The BPO division benefited from the start of a new contract in the fourth quarter of 2019, which more than offset the decrease in French residents’ use of healthcare during the Covid-19 lockdowns. At the same time, process improvements made it possible for recurring operating income(1) to reach breakeven.
·Corporate and others
2020 revenues rose 6.3% to €3.6 million and recurring operating income(1) was a €3.6 million loss, compared with a €2.7 million loss a year earlier.
Highlights
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.
·Tax
On February 21, 2018, Cegedim SA received official notice that the French tax authorities planned to perform an audit of its financial statements for the period from January 1, 2015, to December 31, 2016. After consultation with its lawyers and based on ample precedent, the Group believes that the adjustment is unwarranted and continues to explore its options to appeal the decision. The maximum tax liability Cegedim faces as a result of the current audit is €13.7 million at December 31, 2020. Cegedim still believes that there is not enough risk with respect to this amount or to tax loss carryforwards recorded on its consolidated balance sheet (corresponding to €20 million) to jeopardize their valuation.
·Acquisition of a minority stake in Clamae
Cegedim has acquired a minority stake of 34% in the Clamae Group via a €6 million reserved capital increase. Clamae has a subsidiary that specializes in innovative payment systems made possible under the EU’s PSD2 framework. The technologies Clamae has developed will be put to good use in nearly all of Cegedim Group’s products and services (health insurance products, data management and digitization, and apps for healthcare professionals).
Significant transactions and events post December 31, 2020
To the best of the company’s knowledge, there were no post-closing events or changes that would materially alter the Group’s financial situation.
Outlook
For 2021, the Group expects like-for-like revenue growth of c.2% and recurring operating income(1) growth of c.4%.
The Group does not expect to make any significant acquisitions in 2021. And lastly, the group does not provide earnings estimates or forecasts.
Financial calendar
| 2021 | April 27 after the close
June 17 July 27 after the close September 16 after the close September 17 October 28 after the close |
Q1 2021 revenues
Shareholders’ meeting Q2 2021 revenues H1 2021 results SFAF meeting Q3 2021 revenues |
| 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 and was sent to Cegedim’s authorized distributor on March 18, 2021, 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 2019 Universal Registration Document filled with the AMF on March 31, 2020 under number D.20-0218.
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| About Cegedim: Founded in 1969, Cegedim is an innovative technology and services company 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 5,300 people in more than 10 countries and generated revenue of nearly €500 million in 2020. 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. |
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| Aude Balleydier Cegedim Media Relations and Communications Manager Tel.: +33 (0)1 49 09 68 81 [email protected] |
Jan Eryk Umiatowski Cegedim Chief Investment and Investor Relations Officer Tel.: +33 (0)1 49 09 33 36 [email protected] |
Céline Pardo suPR Media Relations Tel.: +33 (0)6 52 08 13 66 +33 (0)6 80 80 83 97 [email protected] |
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Annexes
Division profiles:
Software & Services division: comprises all of the Group’s software offerings in all formats (licenses, SaaS, online) as well as hosting (HDS certified for health data) and IT facilities management. Cegedim targets:
- health and personal protection insurance (France and the UK),
- HR departments (France),
- independent pharmacies, as well as chains and consortiums (France, Romania, and the UK),
- doctors and health centers (France, the UK, Belgium, Spain, and Italy),
- allied health professionals: physical therapists, nurses, speech therapists, orthoptists, podiatrists, midwives, etc. (France).
Flow division: comprises third-party health payment management (France), contract to pay and management process digitization (orders, invoices, etc.), probative value storage, and EDI (France, the UK, and Germany). This business has service centers in France, Romania, and Morocco.
Data & Marketing division: comprises
- data for health authorities, healthcare professionals, researchers, the healthcare industry and its partners in France, Italy, Germany, Spain, Romania, and the UK;
- print and digital advertising in pharmacies and health & wellness shops in France;
- digital marketing to doctors;
- healthcare product distribution.
BPO division: comprises business process outsourcing activities in France for supplemental health insurers (managing reimbursement, among other things); personal protection insurers, and HR departments. This division has service centers in France and Romania.
Revenue trends by sector
| 12 months | |||||
| in millions of euros | 2020 | 2019 | LFL change | Reported chg. | |
| Health insurance, HR and e-services | 341.8 | 340.5 | -0.2% | +0.4% | |
| Healthcare professionals | 151.5 | 159.8 | -0.1% | -5.2% | |
| Corporate and others | 3.6 | 3.4 | +6.3% | +6.3% | |
| Cegedim | 496.9 | 503.7 | -0.2% | -1.4% | |
Revenue comparison, sector vs. division
| 2020 | ||||
| in millions of euros | Health insurance, HR and e-services | Healthcare professionals | Total | |
| Software & services | 125.7 | 151.5 | 277.2 | |
| Flow | 79.4 | 0 | 79.4 | |
| Data & Marketing | 87.8 | 0 | 87.8 | |
| BPO | 48.9 | 0 | 48.9 | |
| Corporate and others | 0 | 0 | 3.6 | |
| Cegedim | 341.8 | 151.5 | 496.9 | |
Recurring operating income(1) by sector
| 12 months | |||
| in millions of euros | 2020 | 2019 | |
| Health insurance, HR and e-services | 32.5 | 34.5 | |
| Healthcare professionals | 12.6 | 5.3 | |
| Corporate and others | -3.6 | -2.7 | |
| Cegedim | 41.5 | 37.1 | |
Recurring operating income(1) comparison, sector vs. division
| 2020 | ||||
| in millions of euros | Health insurance, HR and e-services | Healthcare professionals | Total | |
| Software & services | 10.9 | 12.6 | 23.5 | |
| Flow | 10.4 | – | 10.4 | |
| Data & Marketing | 11.4 | – | 11,4 | |
| BPO | (0.2) | – | (0.2) | |
| Corporate and others | – | – | (3.6) | |
| Cegedim | 32.5 | 12.6 | 41.5 | |
Consolidated financial statements at December 31, 2020
·Assets at December 31, 2020
| In € thousands | 12/31/2020 | 12/31/2019 |
| Goodwill | 186,036 | 192,740 |
| Development costs | 3,873 | 21,960 |
| Other intangible fixed assets | 159,144 | 135,579 |
| Intangible fixed assets | 163,017 | 157,540 |
| Property | 544 | 544 |
| Buildings | 2,319 | 2,960 |
| Other tangible fixed assets | 31,835 | 30,960 |
| Right-of-use assets | 0 | 64,537 |
| Fixed assets in progress & Advances and deposits on tangible fixed assets | 75,606 | 163 |
| Tangible fixed assets | 110,305 | 99,164 |
| Equity investments | 1,182 | 1,214 |
| Loans | 14,618 | 14,017 |
| Other long-term investments | 4,730 | 4,546 |
| Long-term investments – excluding equity shares in equity method companies | 20,530 | 19,777 |
| Equity shares in equity method companies | 21,479 | 15,080 |
| Deferred tax asset | 33,202 | 31,750 |
| Accounts receivable: long-term portion | – | |
| Long-term financial instruments | 44 | 387 |
| Prepaid expenses: long-term portion | 249 | 390 |
| Non-current assets | 534,862 | 516,828 |
| Services in progress | – | |
| Goods | 3,814 | 4,434 |
| Advances and deposits received on orders | 501 | 208 |
| Accounts receivables: short-term portion | 134,650 | 143,986 |
| Other receivables: short-term portion | 193,690 | 101,684 |
| Short-term financial instruments | 1 | 1 |
| Cash equivalents | 0 | 0 |
| Cash | 24,734 | 29,059 |
| Prepaid expenses: short-term portion | 13,103 | 12,414 |
| Current assets | 370,493 | 291,785 |
| Total Assets | 905,355 | 808,613 |
·Liabilities and equity at December 31, 2020
| In € thousands | 12/31/2020 | 12/31/2019 |
| Share capital | 13,337 | 13,337 |
| Group reserves | 188,524 | 186,526 |
| Group exchange gains/losses | (5,040) | (1,480) |
| Group earnings | 10,835 | 2,697 |
| Shareholders’ equity, Group share | 207,655 | 201,080 |
| Non-controlling interests | 248 | 167 |
| Shareholders’ equity | 207,902 | 201,247 |
| Long-term financial liabilities | 186,278 | 195,694 |
| Non-current lease liabilities | 62,331 | 52,413 |
| Long-term financial instruments | 65 | 627 |
| Deferred tax liabilities | 7,599 | 8,009 |
| Retirement commitments | 35,281 | 32,250 |
| Non-current provisions | 2,575 | 1,855 |
| Other non-current liabilities | – | |
| Non-current liabilities | 294,130 | 290,847 |
| Short-term financial liabilities | 2,606 | 13,961 |
| Current lease liabilities | 15,244 | 13,507 |
| Short-term financial instruments | 1 | 2 |
| Accounts payable and related accounts | 43,214 | 50,644 |
| Tax and social liabilities | 108,718 | 91,593 |
| Provisions | 3,045 | 5,513 |
| Other current liabilities | 230,495 | 141,299 |
| Current liabilities | 403,323 | 316,519 |
| Total Liabilities | 905,355 | 808,613 |
·Income statement at December 31, 2020
| In millions of euros | 12/31/2020 | 12/31/2019 |
| Revenue | 496,939 | 503,745 |
| Purchases used | (25,491) | (28,406) |
| External expenses | (100,491) | (115,344) |
| Taxes | (7,904) | (7,319) |
| Payroll costs | (256,219) | (249,736) |
| Impairment on account receivables and other receivables and on contract assets | (1,871) | (800) |
| Allocations to and reversals of provisions | (3,442) | (2,674) |
| Change in inventories of products in progress and finished products | 0 | (79) |
| Other operating income and expenses | (66) | (576) |
| Income of equity-accounted affiliates | 2,459 | 2,437 |
| EBITDA(1) | 103,915 | 101,248 |
| Depreciation expenses other than right-of-use assets | (46,518) | (48,399) |
| Depreciation expenses of right-of-use assets | (15,939) | (15,753) |
| Recurring operating income(1) | 41,457 | 37,096 |
| Depreciation of goodwill | (2,800) | |
| Non-recurring income and expenses(1) | (19,915) | (18,204) |
| Other non-recurring operating income and expenses(1) | (19,915) | (21,004) |
| Operating income | 21,543 | 16,092 |
| Income from cash and cash equivalents | 75 | 93 |
| Gross cost of financial debt | (8,547) | (8,805) |
| Other financial income and expenses | (171) | 140 |
| Cost of net financial debt | (8,642) | (8,572) |
| Income taxes | (4,973) | (5,824) |
| Deferred taxes | 3,007 | 1,003 |
| Total taxes | (1,966) | (4,821) |
| Share of profit (loss) for the period of equity method companies | (18) | (8) |
| Consolidated profit (loss) for the period | 10,916 | 2,691 |
| Consolidated net income (loss) attributable to owners of the parent | 10,835 | 2,697 |
| Income from equity-accounted affiliates | (81) | (6) |
| Average number of shares excluding treasury stock | 13,824,493 | 13,856,173 |
| Recurring earnings per share (in euros) | 1.4 | 0.4 |
| Earnings per share (in euros) | 0.8 | 0.2 |
(1) See Annex 3: Alternative performance indicators
·Cash flow statement at December 31, 2020
| In € thousands | 12/31/2020 | 12/31/2019 |
| Consolidated profit (loss) for the period | 10,916 | 2,691 |
| Share of earnings from equity method companies | (2,441) | (2,429) |
| Amortization and provision charges | 77,481 | 53,681 |
| Capital gains or losses on disposals | 1,641 | 28,570 |
| Cash flow after cost of net financial debt and taxes | 87,597 | 82,513 |
| Cost of net financial debt | 8,642 | 8,572 |
| Tax expenses | 1,966 | 4,821 |
| Operating cash flow before cost of net financial debt and taxes | 98,205 | 95,906 |
| Tax paid | (6,337) | (2,190) |
| Change in working capital requirements for operations: requirement(1) | (64,455) | |
| Change in working capital requirements for operations: surplus | 18,513 | – |
| Cash flow generated from operating activities after tax paid and change in working capital requirements (a) | 110,381 | 29,260 |
| Acquisitions of intangible assets | (54,607) | (50,665) |
| Acquisitions of tangible assets | (19,920) | (11,704) |
| Acquisitions of long-term investments | (980) | ( |
| Disposals of tangible and intangible assets | 11,024 | 8,321 |
| Disposals of long-term investments | 40 | 261 |
| Change in loans made and cash advances | (753) | 894 |
| Impact of changes in consolidation scope(1) | (6,094) | (25,378) |
| Dividends received | 2,032 | 1,883 |
| Net cash flows generated by investment operations (b) | (69,259) | (76,389) |
| Dividends paid to shareholders of the parent company | (1) | (1) |
| Loans issued | 20,000 | |
| Loans repaid | (21,151) | (913) |
| Repayment of lease liabilities | (16,119) | (16,307) |
| Interest paid on loans | (5,280) | (5,237) |
| Other financial income received | 1,030 | 897 |
| Other financial expenses paid | (3,674) | (3,593) |
| Net cash flows generated by financing operations (c) | (45,195) | (5,154) |
| Change in cash before impact of change in foreign currency exchange rates (a+b+c) | (4,072) | (52,282) |
| Impact of changes in foreign currency exchange rates | (252) | 253 |
| Change in cash | (4,325) | (52,029) |
| Opening cash | 29,059 | 81,088 |
| Closing cash | 24,734 | 29,059 |
1 Alternative performance indicator. See pages 113-114 of the 2019 Universal Registration Document.
2 Like for like.
- Cegedim_Results_FY2020_ENG
