DGAP-News: CompuGroup Medical with a strong start to the year

- Group revenues up 5 % to EUR 183 million

- High demand for solutions to support in the COVID-19 pandemic

- Adjusted return on sales of 24 % despite increased R&D investment

- High free cash flow and debt reduction

- Guidance for the full year unchanged

Koblenz. CompuGroup Medical SE (CGM) recorded strong overall business development in the first quarter of 2020. In a market environment that was significantly influenced by uncertainties associated with the COVID-19 pandemic from March onwards, the company continued on its course for growth and investment. There has been particularly high demand for solutions that support doctors, hospitals and pharmacies in the COVID-19 pandemic. The establishment of new testing and diagnostic capacities at Corona outpatient clinics and in test centers created additional demand for medical information systems and other eHealth solutions.

Surveys suggest digitization in the healthcare system will continue to be of much greater importance for service providers and citizens in the future. For example, according to a recent survey by the bitkom digital association, the number of citizens in favor of video consultations has more than doubled to 66 %. CGM is currently offering the CLICKDOC VIDEOCONSULTATION platform in Germany and in other countries, such as France, Italy and the USA, mostly free of charge, to reduce the health risks for medical personnel during the pandemic. Over 80,000 new customers have registered in the first two months.

In the first quarter, the company also expanded its own competencies through targeted acquisitions. In January, CGM acquired Italian software provider, H&S Qualità nel Software S.p.A., which specializes in telemedicine, patient telemonitoring and ambient assisted living (AAL) for the elderly. In February, CGM announced it would acquire leading hospital information systems in Germany and Spain, as well as other software solutions, from the Cerner Corporation. The transaction is expected to be completed at the beginning of the third quarter of 2020 and has not yet been included in the 2020 guidance.

Frank Gotthardt, Chairman and CEO: "We can fully demonstrate our strengths in our multilateral efforts to curb the COVID 19 pandemic. Many people are, in particular, becoming immediately aware of the benefits of digitization. The enormous increase in demand for our video consultation in the shortest time possible, for example, makes it clear that digital solutions for the health system have great potential. That is why we are consistently continuing with our investment course. In terms of operations, we had a good start to the year and assume that despite the current economic impact of COVID-19, we can achieve our targets for the full year."

Due to several one-off effects, the first quarter 2020 results are not comparable to the prior year first quarter results. The first half of last year was characterized by high one-off revenues for TI components by general practitioners. At the same time, the beginning of 2020 is marked by uncertainties with regard to the COVID-19 pandemic, the effects of which, on the timing of the further rollout of the Telematics Infrastructure (TI) in Germany, cannot yet be conclusively assessed.

Group: CompuGroup Medical continues on course for growth in the COVID-19 environment

Overall, CGM was on course financially in the first quarter. The operational business success was not affected by the security measures to curb the COVID-19 pandemic. The company increased group revenues by 5 % to EUR 183.1 million (previous year: EUR 175.2 million). Organically - i.e. adjusted for consolidation effects - it rose by 2 %. Without taking into account the particularly strong one-off revenues in the Telematics Infrastructure in the first half of 2019, organic revenues grew a respectable 8 %. Recurring revenues increased from 64 % to 67 % within the Group. This development was primarily driven by strong growth in software maintenance in the Ambulatory Information Systems (AIS) segment.

Adjusted Group EBITDA decreased from EUR 49.9 million (pro-forma) in the first quarter of 2020 to EUR 43.5 million. The adjusted operating margin of 24 % (previous year: 28 %) continues to be at a good level and above the expectations announced for the first quarter as part of the annual guidance. Excluding the loss of income from non-recurring TI revenues in the previous year and excluding the one-off revenue in the prior-year quarter for a revaluation of the initial consolidation of newly acquired companies with an effect on income, adjusted EBITDA in the first quarter would even have increased slightly year-on-year. Below the line, CGM generated a consolidated profit of EUR 12.8 million in the first quarter (previous year: EUR 20.5 million). Adjusted earnings per share (diluted) amounted to EUR 0.34 (previous year: EUR 0.47).

The company increased its investments (CAPEX) significantly in the reporting period by 29 % to EUR 14.7 million (previous year: EUR 11.4 million). Adjusted free cash flow reached EUR 53.3 million, coming close to the highest levels in the prior year of EUR 57.6 million, influenced by special effects. Accordingly, net debt was reduced by EUR 38,6 million in the first quarter, with the inclusion of IFRS 16 liabilities, from EUR 466,9 million as of December 31, 2019 to EUR 428,3 million as of March 31, 2020. As of March 31, 2020, the company employed 5,795 people, 487 more than at the end of the prior-year quarter.

The Group remains committed to its guidance for the full year. For the year 2020, revenues in the range of EUR 765 million up to EUR 815 million are expected. Adjusted EBITDA is forecasted to be in a range of EUR 195 million up to EUR 215 million.

From today's perspective, possible risks to revenues, earnings and financial strength resulting from COVID-19 have not given CGM a reason to revise the guidance. However, due to the ongoing Corona pandemic, the guidance is more uncertain than usual. In the medium-term, CGM sees significantly greater growth opportunities as a result of the enormous increase in sustainable willingness to use telehealth solutions in the healthcare system due to the pandemic.

Segments: All segments with positive business development

The Ambulatory Information Systems (AIS) segment increased revenues by 3 % to EUR 109.2 million (previous year: EUR 106.2 million). The share of recurring revenues increased from 70 % in the prior-year quarter to 74 %. Due to the strong performance of the Telematics Infrastructure in the first quarter of 2019, revenues were organically slightly below the prior year's level. Without taking this effect into account, segment revenues grew organically by 10 %. The segment generated an adjusted EBITDA of EUR 34.1 million (previous year: EUR 39.1 million). Operating margin was 31 %, compared to the 37 % in the same quarter of the previous year, which was particularly high due to one-off income.

In the Pharmacy Information Systems (PCS) segment, revenues improved by 6 % to EUR 29.6 million (previous year: EUR 27.8 million). The share of recurring revenues remained stable at 65 %. Organic revenues grew by around 5 %. Adjusted EBITDA was EUR 8.9 million (previous year: EUR 8.4 million) with an operating margin of 30 % (previous year: 30 %).

The Hospital Information Systems (HIS) segment increased revenues significantly by 8 % to EUR 33.7 million (previous year: EUR 31.0 million). Here, the proportion of recurring revenues increased from 63 % to 65 %. Organic revenue grew by 6 %. Adjusted EBITDA was EUR 4.3 million after EUR 5.8 million in the prior-year quarter. This equated to an operating margin of 13 % (previous year: 19 %).

The Consumer & Health Management Information Systems (CHS) segment increased revenues by 8 % to EUR 10.8 million (previous year: EUR 10.0 million). Organic growth was at 11 %. Adjusted EBITDA of EUR 2.1 million was slightly below the previous year's figure (EUR 2.4 million), which benefited from one-time effects resulting from the IFRS 3 accounting standard. The operating margin was 19 % (previous year: 24 %).

The complete quarterly report is available on the company's website www.cgm.com under Investor Relations.

About CompuGroup Medical SE
CompuGroup Medical is one of the leading eHealth companies in the world. With a revenue base of EUR 746 million in 2019, its software products are designed to support all medical and organizational activities in doctors' offices, pharmacies, laboratories and hospitals. Its information services for all parties involved in the healthcare system and its web-based personal health records contribute towards safer and more efficient healthcare. CompuGroup Medical's services are based on a unique customer base of more than 1 million users, including doctors, dentists, pharmacists and other health professionals in inpatient and outpatient facilities. With locations in 18 countries and products in 56 countries worldwide, CompuGroup Medical is the eHealth company with one of the highest coverages among eHealth service providers. Approximately 5,800 highly qualified employees support customers with innovative solutions for the steadily growing demands of the healthcare system.

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