Cegedim SA: 2009 Results

PARIS--(Marketwire - April 13, 2010) -

Cegedim: a pertinent all-around strategy combined with a solid economic model

Paris, April 13, 2010 - Cegedim, a global technology and services company in the healthcare field, announces an operating profit from ordinary activities of EUR 112 million for 2009 on revenue of EUR 874 million, or a margin of 12.8%, up from 11.4% in 2008.

Marked by the arrival of new shareholder FSI, this year saw the end of significant financial risks stemming from the acquisition of US competitor Dendrite.

Strengthened by a unique positioning based on an innovative, exclusive product offering paired with high-quality services, Cegedim finished the year with impressive operating results, a record level of cash flow, and a robust financial position.

Because of its flexibility and the good balance between its various activities and regions, the Group is looking forward to 2010 with confidence and plans to further strengthen its leading presence in the global healthcare market. Furthermore, the board of directors has proposed resuming dividend payments.

+-------------------------+-------+-------+-------+-------+--------+
|                         |  2009 |       |       |  2008 |  D     |
+-------------------------+-------+-------+-------+-------+--------+
|                         |  EUR M|      %|  EUR M|      %|        |
+-------------------------+-------+-------+-------+-------+--------+
|Revenues                 |  874.1|       |  848.6|       |   +3.0%|
+-------------------------+-------+-------+-------+-------+--------+
|EBITDA from ordinary     |  177.8|       |  164.5|       |   +8.1%|
|activities               |       |       |       |       |        |
+-------------------------+-------+-------+-------+-------+--------+
|Net depreciation         |   66.3|       |   67.9|       |   -2.3%|
+-------------------------+-------+-------+-------+-------+--------+
|Operating profit from    |  111.5|  12.8%|   96.6|  11.4%|  +15.4%|
|ordinary activities      |       |       |       |       |        |
+-------------------------+-------+-------+-------+-------+--------+
|Other exceptional        |   11.7|       |    6.5|       |  +80.6%|
|operating                |       |       |       |       |        |
|revenues/expenses        |       |       |       |       |        |
+-------------------------+-------+-------+-------+-------+--------+
|Operating profit         |   99.8|  11,4%|   90.2|  10.6%|  +10.6%|
+-------------------------+-------+-------+-------+-------+--------+
|Net financial debt       |   40.3|       |   43.6|       |   -7.6%|
|expenses                 |       |       |       |       |        |
+-------------------------+-------+-------+-------+-------+--------+
|Tax expenses             |    5.0|       |   13.0|       |       -|
+-------------------------+-------+-------+-------+-------+--------+
|Share of earnings from   |   -0.4|       |    0.1|       |       -|
|equity method companies  |       |       |       |       |        |
+-------------------------+-------+-------+-------+-------+--------+
|Consolidated net income  |   54.8|       |   33.5|       |  +63.7%|
+-------------------------+-------+-------+-------+-------+--------+
|Group share              |   54.7|       |   33.7|       |  +62.6%|
+-------------------------+-------+-------+-------+-------+--------+

Performances have improved substantially

Consolidated 2009 revenues came to EUR 874 million, up 4.3% year on year in organic* terms and 3.0% on a reported basis.

Given the significant improvement in Group businesses, the operating margin rose to 11.4% from 10.6% in 2008, and the operating margin from ordinary activities climbed to 12.8% from 11.4% a year earlier.

Operating profit rose 11% to EUR 99.8 million. This performance is the result of the Group's strong capacity for innovation, restructuring measures, and numerous commercial successes.

Following the May 2007 acquisition of Dendrite, Cegedim implemented a variety of measures to properly integrate Dendrite's activities and to optimize the results expected from the acquisition. These measures cost EUR 15.7 million in 2009 and were accounted for under the operating result.

Under IFRS standards, a portion of these costs, EUR 11.7 million, was isolated in the operating result as a non-recurring item, thus generating an operating result from ordinary activities. To permit uniform measurement of margins, the Group takes into account all exceptional charges (IFRS and non-IFRS), resulting in the use of a restated operating result. This restated operating result is also used to determine the ratios for testing compliance with certain debt covenants.

The restated operating result amounts to EUR 116 million, giving a margin of 13.2% against 12.4% in 2008.

* comparable structure and exchange rates

Consolidated margin by sector

+-------------------------+----------+-------+-----------+-----------+
|Margin in %              |    2009  |       |    2008   |           |
+-------------------------+----------+-------+-----------+-----------+
|                         | Ordinary |Restated  Ordinary |  Restated |
+-------------------------+----------+-------+-----------+-----------+
|                         |          |      #|           |          #|
+-------------------------+----------+-------+-----------+-----------+
|CRM and strategic data   |     12.4%|  12.9%|      11.3%|      12.9%|
+-------------------------+----------+-------+-----------+-----------+
| Healthcare professionals|     13.5%|  13.9%|      13.8%|      14.0%|
+-------------------------+----------+-------+-----------+-----------+
| Insurance and services8%|     12.6%|  13.1%|       6.2%|       6,2%|
+-------------------------+----------+-------+-----------+-----------+
|Group                    |     12.8%|  13.2%|      11.4%|      12.4%|
+-------------------------+----------+-------+-----------+-----------+

* restated in accordance with bank documents and certified by the Statutory Auditors

- CRM and strategic data

This sector generated 2009 revenues of EUR 487 million.

Operating result from ordinary activities was EUR 60.2 million, resulting in a margin of 12.4%, compared with 11.3% in 2008. The significant margin increase is principally attributable to the Americas and Asia, evidence that the Dendrite acquisition has been a complete success operationally. The mixed year-end at the "strategic data" division, on the other hand, hurt margin growth. Nevertheless, this division continues to enhance its leadership, particularly with longitudinal patient studies. Following a year of investment, the Group expects a recovery, with a new process automation model tailored to pharmaceutical companies' evolving needs.

Lastly, the Group continues to stay a step ahead of its clients' needs in a changing market, meaning it has numerous sources of future growth:

o Emerging countries: these dynamic markets offer the greatest promise for future growth. For example, the Group is investing in OneKey in China to lay the groundwork for the market of tomorrow.

o Expanding the geographic reach of existing offerings: Compliance, Sample Management Solutions, and more.

o Enriching the product portfolio: Business Intelligence, etc.

o Expanding into other healthcare markets: veterinary, equipment, nutrition, and so on.

All of these ingredients, combined with the most recent round of synergies and R&D optimization, make the Group confident that it will continue to improve its margins in the years ahead.

The restated* margin amounted to 12.9%.

- Healthcare professionals

The sector's 2009 revenues amounted to EUR 271 million.

Operating profit from ordinary activities came to EUR 36.7 million, giving an operating margin from ordinary activities of 13.5%, down very slightly compared with 2008.

This slight dip is attributable to the economic conditions facing pharmacies in France, which affected software and promotional information activities. By contrast, the Group saw fine performances from software publishing for doctors and paramedics in France, pharmacists and doctors in the UK, and the Banque Claude Bernard database for assistance with prescribing and issuing medication.

Throughout 2009, the Group continued to strengthen international synergies among the varies entities in this sector, particularly at the technical level, in order to maintain its technological lead and the quality of its services.

Sector performance was also driven by the Cegelease business whose effective policy of divesting contracts which exceptionally increased sales without hurting margins and without significantly affecting the Group's balance sheet.

This sector's performance is all the more admirable in that Cegelease contributed 40% of revenues but at a margin below the sector average.

The restated* margin came to 13.9%.

- Insurance and services

The sector generated 2009 revenues of EUR 116 million.

Operating result from ordinary activities came to EUR 14.6 million, giving a margin of 12.6%, up from 6.2% in 2008. The two-fold increase in margin was due overwhelmingly to the strong commercial success of various data flow management platforms.

The success of software packages designed for insurance companies and mutual insurers, including the new Activ'Infinite offering, and the relevance of a business model based on highly recurring revenues also helped boost margins.

It is also worth noting the strong development of the Cegedim SRH, an expert in outsourced payroll and HR management services.

The restated* margin came to 13.1%.

Net profit

Attributable net profit amounted to EUR 54.8 million, a 64% increase over 2008. This result incorporates a 7.6% drop in the debt expenses and a drop in tax expenses.

EPS rose 61% year on year to EUR 5.8. It is worth noting that the number of shares used for this calculation is the weighted average number of common shares in issuance over the period, i.e. 9,480,237 shares at December 31, 2009, and 9,331,449 shares at December 31, 2008.

A solid economic model

Cegedim also laid the groundwork for the future in 2009 with a EUR 180.5 million capital increase and welcomed the French Strategic Investment Fund (FSI) as a shareholder.

The Group's key ratios attest to its financial health. It has a robust balance sheet position, with share capital representing 35% of total assets.

Net financial debt stood at EUR 395.1 million, or 0.8x shareholders' equity, compared with EUR 594.4 million and 2.5x in 2008. As a result, Group net financial debt has dropped by EUR 199 million due to the cash generated by business activities and the capital increase carried out to finance acquisitions. Net financial debt represents 2.2x 2009 EBITDA from ordinary activities.

Investments under the acquisition policy amounted to EUR 13 million and included FMC (Belgium), Nomi (Nordic countries), HMSL (UK), Next Software (Tunisia) and PGI (France). The recently acquired SK&A (USA) will be integrated starting on January 1, 2010.

Cash flow before the cost of net financial debt and tax charges rose 10.6% compared with 2008 to EUR 171 million, i.e. a margin of 20%.

Resuming dividend payments

At the June 8, 2010, shareholders' meeting, Cegedim will propose a dividend of EUR 1.00 per share. This corresponds to a payout rate of 26% of 2009 consolidated attributable net profit, in line with Cegedim's distribution policy.

This decision is proof of the Group's confidence in Cegedim's soundness and will enable shareholders to participate in the company's success.

2010 Outlook

Cegedim is emerging from 2009 stronger and expects revenue growth of around 5% in 2010.

Financial calendar

The Group will hold an investor presentation at 11:30 a.m. tomorrow, April 14, in its auditorium at 17, Rue de l'Ancienne Mairie, in Boulogne- Billancourt.

April 14-22, 2010

- European Roadshow

May 6, 2010, after the market closes

- Q1 revenues announcement

Early June 2010

- US Roadshow

August 5, 2010

- H1 revenues announcement

September 23, 2010

- H1 results announcement

November 15, 2010

- Q3 revenues announcement

Additional information

The board of directors met in the presence of the Statutory Auditors on April 12, 2010, to close the consolidated financial statements for financial year 2009. Audit procedures were carried out, and the audit report certifying Cegedim's consolidated and parent company financial statements as of December 31, 2009, is in the process of being written.

The financial information presented in this press release is taken from Cegedim's consolidated financial statements and will be available in complete form on the website www.cegedim.fr/finance on April 23, 2010.

Significant post-closing transactions and events

On January 7, 2010, the Group acquired US company SK&A Information Services Inc., a leading supplier of healthcare data. This acquisition will enable Cegedim to enrich and strengthen its OneKey offering in that country. Founded 26 years ago, SK&A has amassed and maintains a database containing targeted information on more than 2 million healthcare professionals, including over 800,000 who prescribe medication. This is the only database of prescribing physicians and other professionals working in the US healthcare field. 100% of email addresses have been verified by phone contact. The acquired businesses generate annual revenues of around $15 million. This transaction was financed by internal financing.

Under the terms of the agreement between the two parties, all other conditions of the acquisition are confidential.

Appendices

Consolidated income statement (in thousands of euros)

+-------------------------+-----------+-----------+
|                         |    2009   |    2008   |
+-------------------------+-----------+-----------+
|Revenues                 |    874,072|    848,577|
+-------------------------+-----------+-----------+
|Capitalized production   |     32,631|     33,502|
+-------------------------+-----------+-----------+
|Purchases used           |   -104,565|    -84,825|
+-------------------------+-----------+-----------+
|External expenses        |   -208,642|   -229,152|
+-------------------------+-----------+-----------+
|Taxes                    |    -12,561|    -12,281|
+-------------------------+-----------+-----------+
|Payroll costs            |   -401,496|   -394,643|
+-------------------------+-----------+-----------+
|Depreciation expenses    |    -66,328|    -67,864|
+-------------------------+-----------+-----------+
|Allocations to and       |     -1,406|     -2,154|
|reversals of provisions  |           |           |
+-------------------------+-----------+-----------+
|Change in inventories of |       -900|        440|
|products in progress and |           |           |
|finished products        |           |           |
+-------------------------+-----------+-----------+
|Other operating expenses |        726|      5,037|
+-------------------------+-----------+-----------+
|Operating profit from    |    111,530|     96,637|
|ordinary business        |           |           |
+-------------------------+-----------+-----------+
|Other non current income |    -11,697|     -6,478|
|and expenses from        |           |           |
|operations               |           |           |
+-------------------------+-----------+-----------+
|Operating profit         |     99,833|     90,159|
+-------------------------+-----------+-----------+
|Income from cash and cash|      1,429|     11,570|
|equivalents              |           |           |
+-------------------------+-----------+-----------+
|Gross cost of financial  |    -34,705|    -51,135|
|debt                     |           |           |
+-------------------------+-----------+-----------+
|Other financial income   |     -7,033|     -4,053|
|and expenses             |           |           |
+-------------------------+-----------+-----------+
|Net cost of financial    |    -40,309|    -43,618|
|debt                     |           |           |
+-------------------------+-----------+-----------+
|Income taxes             |     -9,950|     -7,823|
+-------------------------+-----------+-----------+
|Deferred taxes on profits|      4,901|     -5,171|
+-------------------------+-----------+-----------+
|Tax expense              |     -5,048|    -12,994|
+-------------------------+-----------+-----------+
|Share of net earnings of |        357|        -60|
|equity method companies  |           |           |
+-------------------------+-----------+-----------+
|Consolidated net profit  |     54,833|     33,487|
+-------------------------+-----------+-----------+
|Group share              |     54,719|     33,662|
+-------------------------+-----------+-----------+
|Minority interests       |        114|       -175|
+-------------------------+-----------+-----------+
|Number of shares excl.   |  9,480,237|  9,331,449|
|treasury stock           |           |           |
+-------------------------+-----------+-----------+
|Earnings per share (EUR) |        5.8|        3.6|
+-------------------------+-----------+-----------+
|Diluting instruments     |       none|       none|
+-------------------------+-----------+-----------+
|Diluted earnings per     |        5.8|        3.6|
|share (EUR)              |           |           |
+-------------------------+-----------+-----------+

Balance sheet (in thousands of euros)

+-------------------------+-----------+-----------+
|ASSETS                   |    2009   |    2008   |
+-------------------------+-----------+-----------+
|Goodwill on acquisition  |    613,342|    613,709|
+-------------------------+-----------+-----------+
|Development costs        |     57,644|     44,446|
+-------------------------+-----------+-----------+
|Trademarks, patents      |    104,810|    109,519|
+-------------------------+-----------+-----------+
|Other intangible assets  |     63,192|     55,611|
+-------------------------+-----------+-----------+
|Intangible assets        |    225,646|    209,576|
+-------------------------+-----------+-----------+
|Property                 |        417|        507|
+-------------------------+-----------+-----------+
|Buildings                |      6,225|      3,547|
+-------------------------+-----------+-----------+
|Plant, machinery and     |     24,377|     28,477|
|equipment                |           |           |
+-------------------------+-----------+-----------+
|Other tangible assets    |     13,969|     19,340|
+-------------------------+-----------+-----------+
|Construction work in     |        234|      2,830|
|progress                 |           |           |
+-------------------------+-----------+-----------+
|Tangible assets          |     45,221|     54,701|
+-------------------------+-----------+-----------+
|Equity investments       |        302|        225|
+-------------------------+-----------+-----------+
|Loans                    |        551|        858|
+-------------------------+-----------+-----------+
|Other long-term          |      8,030|      6,069|
|investments              |           |           |
+-------------------------+-----------+-----------+
|Financial assets --      |      8,883|      7,152|
|excepted Equity share in |           |           |
|equity method companies  |           |           |
+-------------------------+-----------+-----------+
|Equity share in equity   |      7,173|      7,300|
|method companies         |           |           |
+-------------------------+-----------+-----------+
|Government - Deferred tax|     33,350|     36,603|
+-------------------------+-----------+-----------+
|Accounts receivable:     |     15,282|      9,175|
|long-term portion        |           |           |
+-------------------------+-----------+-----------+
|Other receivables:       |        983|      2,760|
|long-term portion        |           |           |
+-------------------------+-----------+-----------+
|Non-current assets       |    949,881|    940,976|
+-------------------------+-----------+-----------+
|Services in progress     |        200|        958|
+-------------------------+-----------+-----------+
|Goods                    |     10,956|     11,358|
+-------------------------+-----------+-----------+
|Advances and deposits    |      1,172|      1,142|
|received on orders       |           |           |
+-------------------------+-----------+-----------+
|Accounts receivable:     |    210,502|    198,950|
|short term portion       |           |           |
+-------------------------+-----------+-----------+
|Unpaid, called capital   |          0|          0|
+-------------------------+-----------+-----------+
|Other receivables: short |     18,413|     30,733|
|term portion             |           |           |
+-------------------------+-----------+-----------+
|Cash equivalents         |     30,630|     22,433|
+-------------------------+-----------+-----------+
|Cash                     |     90,739|     71,068|
+-------------------------+-----------+-----------+
|Prepaid expenses         |     15,847|     18,998|
+-------------------------+-----------+-----------+
|Current assets           |    378,461|    355,640|
+-------------------------+-----------+-----------+
|Grand total              |  1,328,341|  1,296,616|
+-------------------------+-----------+-----------+

+-------------------------+-----------+-----------+
|LIABILITIES              |    2009   |    2008   |
+-------------------------+-----------+-----------+
|Share capital            |     13,337|      8,891|
+-------------------------+-----------+-----------+
|Issue premium            |    185,562|     14,981|
+-------------------------+-----------+-----------+
|Group reserves           |    249,732|    213,570|
+-------------------------+-----------+-----------+
|Group translation        |       -238|       -238|
|reserves                 |           |           |
+-------------------------+-----------+-----------+
|Group translation        |    -37,844|    -29,698|
|gains/losses             |           |           |
+-------------------------+-----------+-----------+
|Group earnings           |     54,719|     33,661|
+-------------------------+-----------+-----------+
|Shareholders' equity,    |    465,267|    241,167|
|Group share              |           |           |
+-------------------------+-----------+-----------+
|Minority interests       |        609|      1 056|
|(reserves)               |           |           |
+-------------------------+-----------+-----------+
|Minority interests       |        114|       -174|
|(earnings)               |           |           |
+-------------------------+-----------+-----------+
|Minority interests       |        724|        882|
+-------------------------+-----------+-----------+
|Shareholders' equity     |    465,991|    242,049|
+-------------------------+-----------+-----------+
|Long-term financial      |    391,408|    585,327|
|liabilities              |           |           |
+-------------------------+-----------+-----------+
|Long-term financial      |     16,517|     22,525|
|instruments              |           |           |
+-------------------------+-----------+-----------+
|Deferred tax liabilities |     51,394|     55,946|
+-------------------------+-----------+-----------+
|Non-current provisions   |     21,517|     18,753|
+-------------------------+-----------+-----------+
|Other non-current        |      9,550|     19,822|
|liabilities              |           |           |
+-------------------------+-----------+-----------+
|Non-current liabilities  |    490,386|    702,373|
+-------------------------+-----------+-----------+
|Short-term financial     |    133,621|    111,296|
|liabilities              |           |           |
+-------------------------+-----------+-----------+
|Short-term financial     |          0|      1,706|
|instruments              |           |           |
+-------------------------+-----------+-----------+
|Accounts payable and     |     73,604|     63,131|
|related accounts         |           |           |
+-------------------------+-----------+-----------+
|Tax and social           |    113,705|    115,762|
|liabilities              |           |           |
+-------------------------+-----------+-----------+
|Provisions               |      7,133|      6,234|
+-------------------------+-----------+-----------+
|Other current liabilities|     43,902|     54,065|
+-------------------------+-----------+-----------+
|Current liabilities      |    371,965|    352,194|
+-------------------------+-----------+-----------+
|Grand total              |  1,328,341|  1,296,616|
+-------------------------+-----------+-----------+

Consolidated cash flow statement (in thousands of euros)

+-------------------------+----------+----------+
|                         |    2009  |    2008  |
+-------------------------+----------+----------+
|Consolidated net earnings|    54,833|    33,487|
+-------------------------+----------+----------+
|Share of earnings from   |      -357|        60|
|equity method companies  |          |          |
+-------------------------+----------+----------+
|Depreciation and         |    70,190|    70,334|
|provisions               |          |          |
+-------------------------+----------+----------+
|Capital gains or losses  |       996|    -5,924|
|on disposals             |          |          |
+-------------------------+----------+----------+
|Cash flow after net      |   125,662|    97,957|
|financial debt expense   |          |          |
|and taxes                |          |          |
+-------------------------+----------+----------+
|Cost of net financial    |    40,309|    43,618|
|debt                     |          |          |
+-------------------------+----------+----------+
|Tax expense              |     5,048|    12,994|
+-------------------------+----------+----------+
|Operating cash flow      |   171,019|   154,569|
|before net financial debt|          |          |
|expense and taxes        |          |          |
+-------------------------+----------+----------+
|Tax paid                 |    -4,305|    -7,823|
+-------------------------+----------+----------+
|Plus : change in working |      -199|    20,132|
|capital requirements of  |          |          |
|operations               |          |          |
+-------------------------+----------+----------+
|Net cash generated by    |   166,515|   166,878|
|operating activities (A) |          |          |
+-------------------------+----------+----------+
|Acquisitions of          |   -37,744|   -49,408|
|intangible fixed assets  |          |          |
+-------------------------+----------+----------+
|Acquisitions of tangible |   -26,382|   -51,026|
|fixed assets             |          |          |
+-------------------------+----------+----------+
|Acquisitions of financial|    -2,917|    -1,763|
|assets                   |          |          |
+-------------------------+----------+----------+
|Disposals of tangible and|     4,809|     7,348|
|intangible fixed assets  |          |          |
+-------------------------+----------+----------+
|Disposals of financial   |        75|     1,338|
|assets                   |          |          |
+-------------------------+----------+----------+
|Impact of changes in     |   -11,989|    -8,164|
|consolidation scope      |          |          |
+-------------------------+----------+----------+
|Dividends received from  |       486|       383|
|equity methods companies |          |          |
+-------------------------+----------+----------+
|Net cash flows generated |   -73,662|  -101,292|
|by investment operations |          |          |
|(B)                      |          |          |
+-------------------------+----------+----------+
|Dividends paid to parent |         0|    -8,398|
|company shareholders     |          |          |
+-------------------------+----------+----------+
|Dividends paid to the    |      -231|      -255|
|minority interests of    |          |          |
|consolidated companies   |          |          |
+-------------------------+----------+----------+
|Increase in cash capital |   174,700|         0|
+-------------------------+----------+----------+
|Loans issues             |     3,761|     2,901|
+-------------------------+----------+----------+
|Loans repaid             |  -201,998|   -14,721|
+-------------------------+----------+----------+
|Financial interest paid  |   -31,460|   -44,416|
+-------------------------+----------+----------+
|Other income and expenses|    -5,748|    12,062|
|paid or received         |          |          |
+-------------------------+----------+----------+
|Net cash flows generated |   -60,976|   -52,827|
|by financial operations  |          |          |
|©                      |          |          |
+-------------------------+----------+----------+
|Change in cash (A+B+C)   |    31,877|    12,759|
+-------------------------+----------+----------+
|Opening cash position    |    70,254|    57,772|
+-------------------------+----------+----------+
|Closing cash position    |   102,338|    70,254|
+-------------------------+----------+----------+
|Impact of changes in     |      -207|       277|
|foreign currency exchange|          |          |
|rates                    |          |          |
+-------------------------+----------+----------+

About Cegedim: Founded in 1969, Cegedim is a global technology and services company specializing in the healthcare field. Cegedim supplies services, technological tools, specialized software, data flow management services and databases. Its offerings are targeted notably at healthcare industries, life sciences companies, healthcare professionals and insurance companies. The world leader in life sciences CRM, Cegedim is also one of the leading suppliers of strategic healthcare industry data. Cegedim employs 8,600 people in more than 80 countries and generated revenue of EUR 874 million in 2009. Cegedim SA is listed in Paris (EURONEXT: CGM). To learn more, please visit: www.cegedim.com

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