Cegedim: Sustained Growth in Q1 2015

Regulatory News:

Cegedim, a technology and services company committed to innovation, posted consolidated first quarter 2015 revenues excluding activities held for sale of €119.3 million, up 7.0% on a reported basis and 4.8% like-for-like compared with the same period in 2014. All divisions contributed positively to the reported growth.

Cegedim announced on April 1, 2015, the completion of the disposal of its CRM and Strategic Data division to IMS Health for a selling price of €396 million¹. Consequently, the first quarter 2015 Financial Statements are reported in compliance with IFRS 5 that separately classifies - Non-current Assets Held for Sale and Discontinued Operations.

Following this disposal, in order to provide more relevant information on its divisions that more closely reflects its new internal reporting, Cegedim will now report financial information for the following divisions: Technologies, Healthcare Professionals, Cegelease, and Reconciliation.

The main changes are the following:

• The Cegelease activity has been separated out to reflect its specific business model;
• The digital promotional activities have been transferred from the Healthcare Professionals division to the Technologies division, and the former Insurance and services division is now folded into the Technologies division;
• Finally, the Reconciliation division now encompasses only the activities the Group performs as the parent company of a listed entity, as well as the support it provides to the three operating divisions. The GERS activities have been transferred in to the Technologies division.

Rating agency S&P upgraded its rating for Cegedim on April 13, 2015, to BB- with a positive outlook.

As of its first quarter 2015 revenue release, Cegedim now expects consolidated revenue from continuing activities to grow by 2.5% like-for-like, against 1.0% previously.

¹ This estimated amount is subject to joint review on the basis of the accounts at March 31, 2015, to be prepared within 90 business days.

• The change in revenues per division for the 1^st quarter is as follows:

In the first quarter of 2015, revenues from continuing activities came to €119.3 million, up 4.8% on a like-for-like basis compared with the year-earlier period. Acquisitions had virtually no impact and currencies had a positive impact of 2.1%, thus revenue increased by 7.0% on a reported basis. Group revenue including activities held for sale amounted to €225.0 million, up 9.2% on a reported basis and 5.8% like-for-like.

The like-for-like decline at the Healthcare Professionals division was more than offset by an increase at the Technologies and Cegelease divisions.

Analysis of business trends by division

• Technologies

The division’s first-quarter 2015 revenues came to €53.8 million, up 8.6% on a reported basis and 8.5% like-for-like. Currencies had virtually no impact and there were no acquisitions or divestments.

The Technologies division represented 45.1% of the Group’s consolidated revenues from continuing activities, compared with 44.5% a year earlier.

This increase was chiefly attributable to double-digit growth at RNP, the specialist in window dressing for French pharmacists; at Cegedim SRH, provider of human resources management solutions, which continues to record many commercial successes; and in the third-party payer data processing segment of Cegedim Assurances.

Finally, the electronic invoicing activity of the Cegedim e-business entity continues to grow, driven among other things by the rebound of the Cegedim Global Payments activity, which was penalized last year by the transition from a perpetual license offer to an SaaS offering.

• Healthcare Professionals

In the first quarter of 2015, the division’s revenues amounted to €36.1 million, up 0.3% on a reported basis. The SoCall acquisition and currencies had positive impacts of respectively 0.1% and 6.5%. Like-for-like revenues were down 6.3% over the period.

The Healthcare Professionals division represented 30.3% of the Group’s consolidated revenues from continuing activities, compared with 32.3% in the year-earlier period.

This like-for-like decrease mainly reflects the changes in sales model used for offers aimed at French pharmacists. Indeed, the rental model, under which revenues are recognized at Cegelease, is now favored over direct license sales, under which revenues are recognized at Alliadis (Healthcare Professionals division). We also note a cyclical effect on offers to US physicians and a temporary delay in the billing of UK physicians.

As in the fourth quarter of 2014, this decline was partially offset by growth in the computerization of doctors in France, Belgium, Spain and Romania, and of pharmacies in the UK, as well as at drug database operations in France and the UK. Lastly, the computerization of nurses and physical therapists in France continued its double-digit growth.

• Cegelease

The division’s first-quarter 2015 revenues came to €28.9 million, up 13.4% both on a reported basis and like for like. There were no acquisitions or divestments and no currencies impact.

The Cegelease division represented 24.3% of the Group’s consolidated revenues from continuing activities, compared with 22.9% a year earlier.

This increase mainly reflects the significant recovery in the computerization of French pharmacies and the positive impact from the initial sales involving new partners in optics and in dental in the second half of 2014.

• Reconciliation

The division’s first-quarter 2015 revenues came to €0.3 million, up 10.3% both on a reported basis and like–for-like. Currencies had virtually no impact and there were no acquisitions or divestments.

The Reconciliation division represented 0.3% of the Group’s consolidated revenues from continuing activities, as of a year earlier.

• Activities held for sale (division "CRM and Strategic Data”)

In the first quarter of 2015, the division’s revenues came to €103.7 million, up 12.0% on a reported basis. Currencies had a positive impact of 5.0%. There were no acquisitions or divestments. Like-for-like revenues increased 7.0% over the period.

1^st quarter highlights

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.

Significant post-closing transactions and events

• Disposal of the "CRM and Strategic Data” division to IMS Health

On April 1, 2015, Cegedim announced the completion of the disposal of its CRM and Strategic Data division to IMS Health. The estimated selling price, determined in accordance with October 2014 agreements, amounts to €396 million. This estimated amount is subject to joint review on the basis of the accounts at March 31, 2015, to be prepared within 90 business days.

• S&P has upgraded Cegedim’s rating to BB- with positive outlook

Following the announcement of the transaction, rating agency Standard and Poor’s upgraded Cegedim’s rating to BB-, with positive outlook, on April 13, 2015.

Apart from the items cited above, 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 2015, Cegedim now expects consolidated revenue from continuing activities to record like-for-like growth of 2.5%, compared with a 1.0% increase before. The Group will adjust its forecast growth rate for EBIT before special items from continuing activities after the first-quarter earnings release on May 27, 2015. Please note that the Group currently anticipates growth in consolidated EBIT before special items from continuing activities of more than 5%.

The Group does not anticipate any significant acquisitions for 2015 and does not disclose profit projections or estimates.

Financial calendar

The Group will hold a conference call on April 28, 2015, 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.

A presentation of Cegedim 2015 Q1 Revenue will also be available on the website: http://www.cegedim.com/finance/documentation/Pages/presentations.aspx

Additional Information

Complete financial information and a presentation on Cegedim’s first quarter revenues are available on our website: www.cegedim.com/finance.

This information is also available on Cegedim IR, the Group’s financial communications app for smartphones and iOS and Android tablets. To download the app, visit: http://www.cegedim.fr/finance/profil/Pages/CegedimIR.aspx.

Appendices

• Revenues by division and by quarter:

Year 2015

Year 2014

• Revenues from continuing activities, breakdown by geographic zone as of Q1 2015

• Revenue from continuing activities, breakdown by currency as of Q1 2015

• Glossary