Earnings call transcript: Cegedim reports 6.3% growth in 2024 revenue

Cegedim (EPA:CGDM) (Ticker: CGM) reported a robust financial performance for the full year 2024, with revenue reaching €654.5 million, marking a 6.3% growth. According to InvestingPro analysis, the company maintains a "GREAT" financial health score of 3.11, and its current stock price suggests slight undervaluation. The company highlighted its strategic focus on digital transformation and efficiency improvements, despite challenges in certain market segments. Revenue for the fourth quarter was €178.7 million, reflecting a 7.2% increase. Cegedim’s strong performance in insurance and HR software contributed significantly to these results.

Key Takeaways

• Full year 2024 revenue grew by 6.3%, reaching €654.5 million.
• The new MAIA software suite was launched for healthcare professionals in France.
• The company is restructuring its UK operations and focusing on cost-cutting.
• Cegedim’s 2025 revenue guidance anticipates organic growth of approximately 5%.

Company Performance

Cegedim demonstrated solid growth across all divisions in 2024, with a particular emphasis on digital transformation and healthcare technology solutions. The company’s strategic initiatives, such as the launch of the MAIA software suite and the acquisition of Viseodin, are expected to bolster its market position. However, challenges persist in the pharmacy software market, and the company is taking steps to address these through restructuring and efficiency improvements.

Financial Highlights

• Full Year Revenue: €654.5 million (6.3% growth)
• Q4 Revenue: €178.7 million (7.2% growth)
• Like-for-like growth: 4.7% for the full year, 5.9% for Q4

Outlook & Guidance

Cegedim has provided guidance for 2025, forecasting organic revenue growth of approximately 5% and total revenue growth of 1-2%. The company aims to achieve an EBIT margin of around 5.5-6.2%, with a strong focus on cost-cutting and margin improvement. For deeper insights into Cegedim’s growth potential and detailed financial analysis, InvestingPro subscribers can access comprehensive research reports and expert projections. An Investor Day is planned for the end of 2024 to further communicate strategic plans.

Executive Commentary

Cegedim executives emphasized the company’s focus on efficiency and margin improvement. "We are focused on efficiency and margin for 2025," stated Pierre, a financial executive. Another executive highlighted the company’s commitment to cost-cutting and improving the EBIT margin, indicating a strategic shift towards profitability and shareholder value creation.

Risks and Challenges

• Market challenges in the pharmacy software segment.
• The impact of restructuring in the UK operations.
• Potential delays in digital invoicing regulation, now postponed to 2026.
• The need to maintain competitive positioning amid rapid technological changes.

Q&A

During the earnings call, analysts raised questions about the UK market exit and its financial implications. Cegedim executives provided clarification on the profitability of different business segments and discussed the impact of the in-practice system bankruptcy on the company’s financials. For a complete analysis of Cegedim’s financial health and future prospects, including exclusive ProTips and detailed metrics, visit InvestingPro, where you’ll find our comprehensive Pro Research Report, part of our coverage of over 1,400 top stocks.

Full transcript - Cougar Metals NL (CGM) Q4 2024:

Presenter/Moderator, Cegedim: Thanks a lot for attending this presentation. We will show you the full year 2024 revenue and Q4 revenue for Seije Dime. So the full year revenue was €654,500,000 for CEGEDIM. It’s a 6.3% growth reported. It is worth noting that all the division contributed to this annual growth.

On the like for like basis, the growth was 4.7%. Also on Q4, we generated €178,700,000 which is a 7.2% growth reported and 5.9% like for like growth. And it’s also worth noting that other division contributed to the reported and like for like growth in Q4. It’s especially interesting to see that this Q4 was had the same growth as Q1. But in Q1, we had the Allianz (ETR:ALVG) contract effect.

So it’s been a very good Q4. Also during this year, most of you have followed us and you remember that we acquired Viseodin in February. Also in December, we decided to voluntary place in practice system under administration. And these are the 2 main significant events for the scope for the revenue in 2024. So as I mentioned just previously, the Q4 revenue was 178 point €7,000,000 It’s mainly like for like growth, 5.9 percent, slight structure impact due to integration mainly to the integration of Viseotan this year and also a slight security impact.

You can see that all the division contributed to the growth with more than 5% growth on Q4, resulting in this €178,700,000 revenue in Q4. And for the full year, as we saw before, the like for like growth was 4.7%. The structure impact is mainly due to the integration of Viseodong also and also a favorable currency impact due to appreciation of the sterling pound. All the division contributed to the reported annual growth. So it’s a 6.3% reported growth.

And then we’ll deep dive into all of the division and see that like for like the growth was a bit different compared with the reported growth. So let’s start with our first division, the software and services division. So the revenue generated this year was €307,800,000 It’s a 1.8% reported growth. It’s a decrease of 1.2 percent like for like. But you can see now that we have 3 subdivisions you are you know about.

So you have Segedime Sante. So you can see a difference between the reported growth and the like for like growth. So the reported growth was 4.8% at Segedime Saulte, thanks to the integration of VISIO DON this year. And the slowdown of 7 0.1% is mainly due to the Secur Dordle Sante impact. As most of you remember, we had sales of €5,000,000 generated by this convention in 2023 subsidies, sorry, in 2023 that negatively affected the like for like growth in 2024.

If you were to retreat from that, then Cedadie de Santa would have had like for like growth. The 2nd subdivision, which is insurance, HR, pharmacist and other activities, reported a 2% growth, 1.9% like for like. Inside these subdivisions, we have various performances. Insurance and the HR software performed very well this year. For the pharmacist, pharmacy software in France, it was a bit more difficult this year for two main reasons that we already elaborated about.

Last year, pharmacists also had the Segue de la Sante for €2,000,000 which we didn’t have this year. So it impacted negatively for the pharmacy software. Also, at the pharmacist, like our competitors, we noticed that the equipment sales were lower this year. But there’s a reason that in 2023, with the Segue de la Sante and the update of the software, pharmacists had to change their equipment. And so that we have a negative comparison effect also on this one for this year.

All in is subdivision, so it’s a growth of 2%, 1.9% like for like. International activities. So the decline is 3% reported in like for like. It’s mainly due to the UK physician software software for our physicians, sorry. We remember that at the beginning of the year, we decided to refocus our in practice system subsidiary on the Scottish market, taking the decision to leave England and Northern Ireland and Wales.

And by the end of the year, on December 10, we decided to voluntary place it under administration. So you can see that also in December, we had only 9 days of business compared to 20 days. So it impacted also negatively. The UK pharmacist and software and insurance were pretty good. And also, we had a good momentum in Spain and Romania.

So international activities was, as I mentioned before, mainly impacted by our decision on the U. K. Efficient software this year. On the second, maybe just I forget to mention that in Q4, we generated 80 €100,000, 5.9 percent reported and positive also like for like growth, showing that Q4 was way better than the previous quarters. Our second division, the Flow division, enjoyed a very good year.

We generated €100,300,000 with the division. It’s a 7.3% growth reported, 7.2% like for like. On the Q4, the growth was 12% reported, 11.7 percent like for like, at €7,000,000 also the best Q1 of the year. As you know, and Eric, as you can see also, this division has 2 sub segments. The E Business Decision the division, sorry, experienced growth in these two segments, the first one being invoicing and purchasing and the second one is health care flow.

It’s worth noting that as some of you know, the French regulation about digitization of invoicing was postponed in 2026, even though we were able to experience some growth, less than expected, but some growth too. So it was very good. And also on the health care flow, our offering for the hospital performed very well this year. On the 2nd subdivision, the 3rd party payer division activity, we experienced very strong growth of 9.9% this year, which is mainly due a strong growth in demand for its fraud and long term illness detection offerings that boosted the growth this year. Overall, the Flow division experienced a solid growth of 7.3% reported 7.2% like for like.

The sub division is data and marketing. As you can see, the division was able to report a 9.6% growth this year, generating a revenue of €125,900,000 and on Q4, was able to generate €38,400,000 a 7.1% growth reported and like for like. So there are 2 subdivisions, which experienced different growth this year. First, the data business experienced a growth of 1.6% this year. The first and second half growth was way better than first half.

We were able to adapt to our customer demand and generate this growth, especially in France. On the marketing side, we had a very stellar growth of 19.9%, sorry, reported in like for like, which validates the sound digital strategy of the division. And also, it was bolstered by special ad campaigns during the European games, which were enabled us to post this very strong growth. So all in, for the data and marketing division, the growth was 9.6% this year, sorry. On the BPO division, we were able to generate €82,700,000 a 15.8% growth reported in like for like.

On Q4, it was €21,200,000 7.8 percent growth reported in like for like. So as I mentioned earlier, we have the insurance BPO, which benefited from a comparison effect on the Q1 due to the starting of the Allianz contract on April 1, 2023. And so it allowed us to generate the 20.2% growth in ’twenty four in the insurance BPO. And on the 2nd division of the BPO is the business services BPO, which is bolstered by compliance offering and the acquisition also of new customer. And it generated a growth of 5.5% this year.

Overall, it’s a growth of 15.8% for the year on the BPO division. The 5th division is the Cloud and Support. So it generated €7,800,000 this year, 11.3% reported and like for like. It’s has been a very good growth this year. It’s due to this broad range of services back on its severance cloud.

I think it’s worth noting that at the end of the year, it earned the ANSI security visa for Secnem cloud certification. As you know, maybe you don’t know, but ANSI is the national agency for information system security. So we believe it will be a plus in the years to come for the server and cloud solution offered by the cloud and support division. Also, so that was the 5 division sales and revenues for the year and the quarter, last quarter. So we stick to our guidance regarding the recurring operating income that we expect to increase on the full year basis.

And these are the next steps we have. So on March 27, we have the full year results. On 28, we’ll have the SRAF meeting. And Q1 will be in April 24, our shareholder general meeting on June 30th, and then after in July, the first half and in September, the first half results. So, thank you for listening to us.

And now we are open to the question that you may have. Please raise your hand on the side and I can give you the floor or by chat if you can. So I think Gabriel, you have a question. I’m giving you the floor. Gabriel, I think you can talk, but I can’t hear you.

Gabriel? Okay. So meanwhile, maybe you have a problem with your microphone. Okay, I’m going to try with Amadou.

Amadou, Analyst/Questioner: Thank you. Can you hear me?

Presenter/Moderator, Cegedim: Yes, we can hear you. Gabriel, we will talk with you later. Sorry. Yes, Edu, please go on.

Amadou, Analyst/Questioner: So you mentioned that E and PS is under voluntary insolvency, but you mentioned that you are only leaving Wales and England. I’m wondering about Scotland. So you were the, I think, sole operator for the pharma there. Can we expect that you kept Scotland? And afterwards, another one for me, please.

Presenter/Moderator, Cegedim: No. So, no to your question, sorry, Madhu. No, we don’t expect us to stay in Scotland. It’s the whole subsidiary in practice system, which is under administration. So it means that we won’t stay in any geography for the UK physician software.

Right.

Eric, Analyst/Questioner: Software (ETR:SOWGn).

Amadou, Analyst/Questioner: Right. A follow-up to this. And then because of the loss of your pharmacy revenue, are you expecting downward pressure on your data business?

Presenter/Moderator, Cegedim: Pierre, do you want to answer this one? In the UK

Pierre, Financial Executive, Cegedim: or in France? The question is In the UK. So in fact, in the UK, the data we are collecting are collecting not from pharmacists but from doctors. Since we are going to stop all our software businesses for doctors, We have signed contracts with the competitors. The main competitors is Emmis.

Emmis is the leader in the UK for software doctors. So we are we would go on the data business in the UK, thanks to the fact that we have a specific contract with this company, Tennis. Have I answered the question? Yes? Yes.

I’ve seen some question about the effect of the in practice system stop. So, the losses if we compute the losses of this company and if we take the fact that we had some common services between the software for doctors and the software for pharmacists. We can expect for next year free cash flow and EBIT of plus €5,000,000 meaning that we are going to save, I don’t know how to say it exactly, to save €5,000,000 loss. Is my answer clear?

Amadou, Analyst/Questioner: Absolutely, very satisfactory. And one last one and then I’m leaving the floor to others. You maybe like to give us some indication about current headcount. Are you still increasing it sharply or are you lowering your efforts here?

Pierre, Financial Executive, Cegedim: No. We are really focused on the fact that we are not going to increase headcounts. And in fact, due to the in practice system bankruptcy, the headcounts are going to be flat or to decrease. But we will have the same kind of effect on the revenues because we start the 2025 year somehow with minus €14,000,000 in terms of revenue. So the growth for 2025 will be very low due to the fact that we are starting almost with minus 2% due to this interactive system stop.

Presenter/Moderator, Cegedim: I think you solved your problem with your mic. So, please, I think you can talk.

Gabriel, Analyst/Questioner: Yes. Can you hear me?

Presenter/Moderator, Cegedim: Yes. Perfect.

Gabriel, Analyst/Questioner: Yes. Just two questions on my side. The first one is, can you give us more color on the top line for 2025, if we can expect like 5% or a range? No.

Pierre, Financial Executive, Cegedim: No? No? If I depending if in life or

Gabriel, Analyst/Questioner: In organic

Pierre, Financial Executive, Cegedim: I mean, we will publish probably a revenue of plus 1% or plus 2%.

Gabriel, Analyst/Questioner: Okay. In organic, do you provide?

Pierre, Financial Executive, Cegedim: In non moment, in Excluding the Yes. So if we exclude in practice system, then we will be at plus 5. Okay. So plus 5 minuteus 2 is probably the maximum we can have.

Gabriel, Analyst/Questioner: Okay. Okay. And can you give us a range for EBIT margin in 2024?

Pierre, Financial Executive, Cegedim: Well, we are still on what we said achievements before. So we will not reach the level in terms of absolute value. We will not reach the amount we had before COVID. But, we are in the middle between the Like 6%,

Gabriel, Analyst/Questioner: something like that in EBIT margin.

Pierre, Financial Executive, Cegedim: Yes. Okay. A bit less.

Presenter/Moderator, Cegedim: Thank you, Gabriel.

Pierre, Financial Executive, Cegedim: No, it will be less, that’s 6.2 percent. Let

Presenter/Moderator, Cegedim: me No, it’s just like 20 bps

Gabriel, Analyst/Questioner: or something like that, a range like that.

Pierre, Financial Executive, Cegedim: It could be more 5.5%.

Presenter/Moderator, Cegedim: Okay. Thank you. Around.

Pierre, Financial Executive, Cegedim: We will have an effect, the impact system bankruptcy will have an effect on the accounts that it will be non recurring costs and non cash costs.

Eric, Analyst/Questioner: Hi. Do you hear me?

Pierre, Financial Executive, Cegedim: Yes. I will.

Eric, Analyst/Questioner: I want to make it clear. In fact, you say that the business you are leaving is €14,000,000

Pierre, Financial Executive, Cegedim: in 2024. The

Eric, Analyst/Questioner: loss is €5,000,000

Pierre, Financial Executive, Cegedim: No. In fact, the loss is a bit bigger than that. But the fact that we are cutting an existing organization, part of the loss will be transferred to the Segedime Rx business, which is software for pharmacist. So Seguidim Rx will next year become loss making due to this cutting of the organization.

Eric, Analyst/Questioner: And what is the amount transferred

Pierre, Financial Executive, Cegedim: to Sigismarics income? It will be not far from €2,000,000 2 €1,000,000

Eric, Analyst/Questioner: 2 €1,000,000. Okay. Just in terms of consolidation, you are not taking this business as a discontinued business?

Pierre, Financial Executive, Cegedim: No, no. So it will be in the accounts until December 9.

Eric, Analyst/Questioner: So your 5.5% EBIT margin is with this loss?

Gabriel, Analyst/Questioner: Yes.

Eric, Analyst/Questioner: Okay. So when we speak about 2025, we have we let this loss out and we have a growth of 5%. If we don’t take in account the EUR 14,000,000 of sales, that’s right?

Presenter/Moderator, Cegedim: Yes. We will say EUR 5,000,000 due to to the fact that in practice, it won’t be in the accounts anymore and we have not the sales neither in 2025, yes.

Eric, Analyst/Questioner: But we are suggesting the RX becoming a plus.

Pierre, Financial Executive, Cegedim: Yes. But it’s true that we are going to save €5,000,000 losses compared to the 24 year.

Eric, Analyst/Questioner: In consolidated, it’s €5,000,000, that’s the net amount?

Pierre, Financial Executive, Cegedim: Yes, exactly.

Eric, Analyst/Questioner: Okay. Including the loss of the remarried transfer?

Pierre, Financial Executive, Cegedim: Yes, including that.

Eric, Analyst/Questioner: Okay. So that’s and that means that the growth we can have, in 2025, the growth of the business of BPO Well, in terms of profitability, I mean.

Pierre, Financial Executive, Cegedim: In terms of profits?

Presenter/Moderator, Cegedim: It’s

Pierre, Financial Executive, Cegedim: a bit less yes, it might be better. But remember that on the Allianz contract, the 3 1st years are loss making. So I would say that it’s 2026 that we should see a big improvement into the PPO profits.

Eric, Analyst/Questioner: It’s more than 26.

Pierre, Financial Executive, Cegedim: Yes, because next year, it will improve, it will

Eric, Analyst/Questioner: be better, but it will

Pierre, Financial Executive, Cegedim: not be Allianz will be still last week.

Eric, Analyst/Questioner: Weak. Okay.

Pierre, Financial Executive, Cegedim: And Allianz is losing the Allianz contract, it’s almost €1,000,000 loss per quarter?

Eric, Analyst/Questioner: Still today, yes, 20.20. Yes. It’s 1,000 per quarter.

Pierre, Financial Executive, Cegedim: Yes. But it is exactly in the business sense we had negotiated with the clients.

Eric, Analyst/Questioner: And you think that it could be breakeven in 2025? No, it’s too early? And end of ’twenty five, it will become profitable. Okay. And I don’t want to ask too many questions, but I have some dedicated question.

I have seen that some people have bought stock shares at the end of the year. Can you tell us a little more about what happened with

Pierre, Financial Executive, Cegedim: So we have created a company, which the name of it is croissants de billefranche. And it’s how do we say innovation? It’s a company of 25

Presenter/Moderator, Cegedim: managers. Managers of the company. Yes.

Pierre, Financial Executive, Cegedim: Okay. And we are it’s a level operation. So the 25 people has put €1,200,000 in the capital and the family office, the brand family office, we will make a loan of €1,200,000 So we are going to, we are on the way because we have started to create, to buy and to have a €2,400,000 portfolio of selective shares. And the expectation is that the share price will grow until end of 2,030.

Eric, Analyst/Questioner: And there is it’s done right now, this

Pierre, Financial Executive, Cegedim: The company exists. If you go on the site, like papers or Societe Pointe Com, you can see the status on that.

Eric, Analyst/Questioner: I mean, the expectation of buying the stocks is done? [SPEAKER FABIENNE

Pierre, Financial Executive, Cegedim: LECORVAISIER:] No, no, it’s not finished. It’s part of it is done. But of course, we have some periods where we are not allowed to buy anything. So that’s the reason why everything is not bought.

Eric, Analyst/Questioner: Okay.

Pierre, Financial Executive, Cegedim: And then On the top of that, the family, the La Bruin family is also trying to buy shares.

Eric, Analyst/Questioner: We can have an idea of the total amount I have. I did not compute the total amount of shares bought by the holding of Jean Claude Labrun. It’s on the year 2024, it’s you can have you have an idea of the amount of shares both, no?

Presenter/Moderator, Cegedim: Daniel? The total amount in euros is about €3,000,000 I don’t have the total amount of shares in itself. I can tell you just later on.

Eric, Analyst/Questioner: That’s on Les Jean Claude Laboyne holding, that’s been Yes. Yes. Thank you very much.

Gabriel, Analyst/Questioner: Yes. I think it’s like 4% of the capital, of the total capital of Cedede. That’s like that.

Presenter/Moderator, Cegedim: Yes. It’s been opportunistic. We had some questions on the chat. I think we answered most of them regarding the focus on the profitability of the Group. So, as you have understood that the operation within practice system is part of this strategy.

And you some of you asked whether we’re going to focus on efficiency. So as Pierre mentioned earlier, yes, we’re going to focus on efficiency and margin for 2025.

Pierre, Financial Executive, Cegedim: There is a question about if SmartRx, the unique company loss making? Unfortunately, no, because SegedimeRx in the UK will be loss making in 2025 due to the in practice bankruptcy. And we are focused on the data international business, which is loss making and that we think that in at the end of 2025, it should be profitable, but only at the end of 2025.

Eric, Analyst/Questioner: And we can have an idea of the amount of the loss of the year?

Pierre, Financial Executive, Cegedim: That’s international? No, it’s a A small amount? It’s a small amount. Well, it’s a small amount. It’s €2,000,000 So it’s not that small, but it’s going to be improved.

Eric, Analyst/Questioner: It’s €2,000,000 loss for Daka International. Yes. It’s €2,000,000 also for Sejedim Rx

Pierre, Financial Executive, Cegedim: England? Yes.

Eric, Analyst/Questioner: And it’s more for Sejedim Rx France?

Pierre, Financial Executive, Cegedim: Yes. Segerim Harris, we will work a lot on the plan to reduce this loss.

Eric, Analyst/Questioner: And we can say how much for 2020?

Pierre, Financial Executive, Cegedim: Well, I know it’s too early because we are preparing a plan, but we cannot say.

Eric, Analyst/Questioner: And in GLOBALIE, I have seen that Sealy DIM target of the growth in the comments. In fact, if we exclude England, CEDIM SANTE gets the target of growth you forecast?

Presenter/Moderator, Cegedim: You mean CEDIM SANTE in England? Sejodim, the group Sejodim, yes. The organic decrease in sales at in practice system is about this little gap between the 4.7% like for like growth and the 5% we had mentioned earlier.

Eric, Analyst/Questioner: Yes. Okay. And in terms of profitability, it could be a little better because you have less loss on the end of the in terms of converting profit, you have less loss on December?

Pierre, Financial Executive, Cegedim: Yes, on 2 weeks. Yes.

Eric, Analyst/Questioner: In 2 weeks. And basically, marketing is doing well. So I think it’s quite good for profitability.

Pierre, Financial Executive, Cegedim: Yes. Okay. The thing is, as you have seen probably on the result at the end of the 1st semester, we have reduced the duration of amortization of our R and D. So in the past, we had a big gap between the amount of R and D capitalized and the amortization, okay? And this is really reduced.

So on the EBIT, what you say is that we should have a much better result. It is compensated by this effect. That is to say that EBITDA is going to be to have a growth bigger than EBIT, just due to this accounting effect on the fact that we have amortization of R and D, which is growing much more than the growth of the group.

Eric, Analyst/Questioner: Okay. Thank you.

Presenter/Moderator, Cegedim: Thank you, Eric. I think, Mark, you had some questions. So the floor is yours.

Mark, Analyst/Questioner: Thank you very much. It’s going to be very interesting to read the results when you do publish them because there seem to be a lot of moving parts again this year. Just to try and understand on the UK, could you describe what’s left in the UK in terms of pharmacy, Rx, etcetera? What is the run rate sales? I understood this 14,000,000 dollars is what’s stopping.

I understand as well we’re going to go from a small profit to a $2,000,000 loss, adopting part of the cost base of the doctors. But could you do a quick description of what is left in the UK When Scotland will be fully exited for the doctor software? And what is the path to profitability of the UK, I. E. The cost base that’s been inherited from the bits that you’re exiting?

When will that be turned around to profitability for the rest of the UK operation? Thank you.

Pierre, Financial Executive, Cegedim: So in the UK, we have Actavis (NYSE:AGN). Actavis is the company which is providing software assistance to insurance company. This is profitable. We have net EDI, which is a company which has businesses in the dematerialization area. This is profitable.

And then we will have Sejeuner Marix, which will become loss making next year. Overall, this will be €35,000,000 of revenue, Daniel? Do you have the figures exactly? Yes. I don’t have with the

Presenter/Moderator, Cegedim: pharmacist and the activist, yes.

Eric, Analyst/Questioner: Yes? What’s the amount of activist?

Pierre, Financial Executive, Cegedim: I don’t know if we give it, Louis?

Eric, Analyst/Questioner: But an idea of the size of each part is the main part is Segment Imariq or in details, I mean?

Mark, Analyst/Questioner: And then, just to understand the path to profitability of Rx. In other words, you’ve inherited this extra cost base on a business that was slightly profitable. What is the outlook for Rx in the UK?

Pierre, Financial Executive, Cegedim: We are going to make some restructuring and some organization reorganization in order to make the company in a profitable situation, but probably for the year ’twenty six because today we are really working a lot with the administrator for in practice system, and we will manage the Seguinimarex situation afterwards. Okay. But, clearly, we have seen that some companies in the UK are going to make some proposals to the administrator to buy or to go on with the business software for doctors, specifically for Sculptor, because in Sculptor, 50% of the doctors are using our software. And so we think that there will be some solution for this business to go on. I don’t know what will be the financial conditions for it.

And so, we are answering a lot of questions and we are working a lot with the administration and the NHS in order to be sure that those doctors will go on using their software.

Mark, Analyst/Questioner: And with that high market share, does that mean that that business in Scotland is profitable? I’m sorry, or I would rephrase that actually would have a positive

Presenter/Moderator, Cegedim: value if purchased by competitors?

Pierre, Financial Executive, Cegedim: Well, it could be possible that they may offer some value. For us, it was not profitable, because the competition we made that it would be profitable once we would have almost all the market. As you may remember, the competitor, Emmis, it’s Scotland, was not referenced by the NHS. So we were the unique player having the authorization to for doctors in Scotland. The problem is that to change software for doctors is not that easy.

So although the NHS wanted us to be the unique player, it was very difficult to have those transfer from MS to our software. And that’s the reason why we thought we came to the conclusion that we will not be able to become profitable on the short term. That’s the reason why we have decided to put the company under administration.

Mark, Analyst/Questioner: Okay. That’s very clear. And so I can understand that in the UK, you’re going to become profitable for RX, as you said, in 2026. Yes. 2 other businesses are already profitable.

The UK will be profitable in overall in 2026? Yes.

Pierre, Financial Executive, Cegedim: Yes.

Mark, Analyst/Questioner: And final question on the UK. Can you just remind us the total negative cash and non cash impact on the P and L of exiting the UK in 2024 and 2025?

Pierre, Financial Executive, Cegedim: It’s a non cash non recurring cost, non cash, and it would be more than €20,000,000 Meaning that’s probably the net profit of the sales in group will be not far from 0.

Gabriel, Analyst/Questioner: Thank you very much.

Presenter/Moderator, Cegedim: Thank you, Mark.

Pierre, Financial Executive, Cegedim: We have There is a question about Compu Group and the fact that a lot of companies are selling their business to private equity. So just what I can say, it is that it is not at all in the mind of the level of subsidy today to make such an operation. That

Presenter/Moderator, Cegedim: answers many questions that you have. We understand you’re asking those questions for sure. There have been a question on whether we will launch MAIA for doctors in France and whether we would offer it throughout Europe. So we can say that we launched MAIA in France, but not the plan is not to get through throughout in Europe. We speak to

Pierre, Financial Executive, Cegedim: our geographies for the moment. The Maya, our objective, our target is that okay, Maya is for is a suite I can’t remember it, suite for GCL.

Presenter/Moderator, Cegedim: Software

Pierre, Financial Executive, Cegedim: suite, I guess. So, it manage agenda, but it also manage the The practice of the doctor. The practice of the doctors, the practice of the nurse, of the kidney therapist. The therapy is not Yes. It’s not going to go outside France.

Presenter/Moderator, Cegedim: I hope it answers your question, Benedicte. For revenue, we saw that. And a remark from Diego Salvador that you want us to, at some point, give some more information on strategic update. I can tell you that on the staff meeting that we have for the annual result, usually on the next day of the results, we elaborate a bit more on the various divisions. Also, we took good note of this will, and we will organize most probably an Investor Day or something by the end of the year.

And I think I’m just going through all the questions. We talked about 2025, but the UK, Compu Group, you just entered that, Maya, SmartRx. The last question is not selling the business in an option. How will you create shareholder value? I guess we created through a focus on margin and cash flow generation.

Those are the main points we are that will be the focus for the next years.

Pierre, Financial Executive, Cegedim: Yes, cost cutting and improving the EBIT margin.

Presenter/Moderator, Cegedim: Okay. Marc, I think you have a last question. You can talk Marc. I think you raised your hand. I don’t know if it’s something.

Mark, Analyst/Questioner: Well, I firstly wanted to put my both hands together and applaud you for saying that your focus is on the capital. That’s very good. Okay. And no, so that was a positive reaction, but my question I was, I really wanted to ask is, can you just remind us what’s happening to the balance sheet in 2024? It seems that debt picked up a little bit in the first half of the year, if I remember well.

What should we expect in the second half? And what are the trends we’re likely to see in the year 2025?

Pierre, Financial Executive, Cegedim: Thanks. Fabienne?

Presenter/Moderator, Cegedim: We want to elaborate on the balance sheet. Maybe we’ll see it at the results. We had the so we had the debt renewal in July. Do you have anything you want to indicate, Pierre? But I think we’ll see it on the full year results.

We’ll have the details

Mark, Analyst/Questioner: I just wanted to have a rough idea, not in the individual part of the gross debt, but globally together, the net debt level seems to have picked up. Do we see that continuing in the second half of the year? And what’s likely to happen in 2025?

Pierre, Financial Executive, Cegedim: No, no. We have the net debt has decreased during the second half. It is always the same because second half is always much better in terms of profits than first half. So there are no indication on the fact that it should be worse. And next year, since we are focused on improving the profits, we are on the way to reduce our debts progressively for the next year.

So, no problem on the debt side.

Presenter/Moderator, Cegedim: So, I think we went through all the questions you had, whether you would raise your hand or put it on the chat. That’s you, 5 seconds if you have one last question. Well, I think we Erik, final question.

Pierre, Financial Executive, Cegedim: 2024, you have free cash flow for the full year

Eric, Analyst/Questioner: or not?

Pierre, Financial Executive, Cegedim: It’s too early to say. We will tell you the level of results. We have

Eric, Analyst/Questioner: Because the main impact are

Pierre, Financial Executive, Cegedim: We have acquired the Viseordon. Yes. I see. And then we have this bankruptcy of in practice system. So we have no cash program.

But to what will be the result, the exact result of the Tableau, Tableau 3 Cash

Presenter/Moderator, Cegedim: flow statement?

Pierre, Financial Executive, Cegedim: Cash flow statement, it’s hard to relate for us to say.

Eric, Analyst/Questioner: So in fact, my question is more, I don’t understand how it works, the bankruptcy of E and S. And it costs

Pierre, Financial Executive, Cegedim: No, the bankruptcy itself, no. No. It’s only all the No, no cash.

Presenter/Moderator, Cegedim: Yes.

Eric, Analyst/Questioner: Okay. So the

Pierre, Financial Executive, Cegedim: At least if we have the chance to have an acquirer at high price, then we could even receive some cash because the way it works is that if there is an acquisition at certain level, the administrator after having paid all the suppliers, the debts, then if there is a surplus, it will be for us. But in our accounts, we don’t take this. So it could be a good news if it happens. Thank you.

Presenter/Moderator, Cegedim: So I guess we went through all the questions now. Thanks. Thank you all of you for attending the presentation. So we’ll next, we’ll see you on March 27 for the annual results presentation and on the 28th with the SRAF meeting, which will happen at our location in Boulogne. Thank you very much.

I wish you good night. Thank you very much.

Pierre, Financial Executive, Cegedim: Thank you. Bye bye.

Presenter/Moderator, Cegedim: Thank you for attending. See you later. Bye.

Mark, Analyst/Questioner: Thank you. Bye.

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