Cegedim (CGM) Q2 2024 TU earnings summary

Executive summary

• First half 2024 revenue reached €319 million, up 6.0% reported and 4.6% like-for-like, driven by digitization, marketing, and cloud operations, with the integration of Visiodent from March 1st contributing to structural growth.

• Growth was achieved despite a challenging comparison with 2023's Ségur public health investments and a slowdown in international business in Q2.

Financial highlights

• Revenue increased by €18.0 million year-over-year, with organic growth of €13.8 million, a structural impact of €3.7 million, and a currency impact of €0.5 million.

• Q2 organic growth was 3.3%.

• Software & Services division grew 1% reported, but was down 1.7% like-for-like; Cegedim Santé down 11.5% like-for-like due to prior year subsidies, but improving sequentially.

• Flow division up 5.8% reported, e-business flows up 7.6%, third-party payment up 3.1%.

• Data & Marketing up 8% reported, marketing up 20% on strong pharmacy media, data slightly down.

• BPO up 21.6% reported, insurance BPO up 29.5%, business services BPO up 5.1%; Allianz contract setup phase impacting EBIT.

• Cloud & Support up 14.5% reported, driven by robust demand for cloud products and services.

Outlook and guidance

• Full-year like-for-like revenue growth guidance maintained at 5%-8%.

• Recurring operating income expected to increase for the year.

• Guidance may be revised if geopolitical, macroeconomic, or currency risks worsen.

• Management remains confident in EBITDA targets despite cautious sales outlook due to lower hardware sales.