CompuGroup Medical with a record quarter 

With the financial report published today, CompuGroup Medical (CGM) looks back on the strongest quarter in the company's history. The Koblenz-based company, one of the leading providers of eHealth solutions worldwide, is also entirely on schedule for the first nine months of the year, whereby the prolonged coronavirus pandemic and the corresponding measures restrict visibility with regard to future economic development. At the same time, the company is benefiting from the ongoing digitization of the healthcare system, which has seen a significant boost in the wake of the pandemic. For example, trend-setting decisions such as the Hospital Future Act (Krankenhauszukunftsgesetz, KHZG), through which several billion euros are to be made available to hospitals, should further accelerate digitization. With the acquisition of parts of the Cerner product portfolio in the field of Hospital Information Systems in Germany and Spain, which was completed on July 1, 2020, CompuGroup Medical is excellently positioned to make these opportunities available to customers.

"The months that lie behind us have impressively demonstrated that our decades of global efforts to digitize the healthcare system pay off," emphasizes Frank Gotthardt, founder and CEO of CompuGroup Medical. “With the next important steps in the Telematics Infrastructure and the Hospital Future Act - to name just two important measures from Germany - many millions of people will benefit from a modern, efficient and safe healthcare system. We will rigorously carry on our consistent growth course, continue to invest consistently in software and product development and thus play a leading and decisive role in shaping future developments."

Michael Rauch, Chief Financial Officer (CFO), adds: “In addition to a very strong free cash flow, we are particularly pleased in this record quarter about the very positive development of our hospital segment, which has shown an impressive increase both organically and as a result of acquisitions, and about the positive revenue and profit effects from the Telematics Infrastructure rollout in the medical and pharmacy business. In the short term, we are currently living in a time characterized by uncertainty, but the business development of the last few months and the global, unprecedented acceleration in the digitization of health systems encourage us to further increase innovation investments for future growth."

Group: Strong revenue growth and improved margin

In the third quarter, revenues rose by 30 % (organic: 17 %) to the record value of EUR 231.3 million (previous year: EUR 177.9 million). The adjusted Group EBITDA sits at EUR 67.1 million compared to EUR 47.3 million in the previous year's quarter. The adjusted margin, at 29 % (previous year: 27 %), is somewhat higher than in the same quarter of the previous year. In the third quarter, CGM generated a consolidated profit of EUR 34.9 million, which is clearly above the previous year's quarter (EUR 18.1 million). The adjusted profit per share (diluted) was EUR 0.71, which is also significantly above the previous year's value (EUR 0.51). For the first nine months of 2020, this means growth in consolidated revenues of 10 % to EUR 594.3 million (previous year: EUR 539.7 million) with an adjusted Group EBITDA of EUR 155.2 million (previous year: EUR 141.5 million).

The free cash flow was EUR 31.8 million and thus significantly above the value from the same quarter of the previous year (EUR 2.8 million). The investments (CAPEX), at EUR 10.2 million, were below the previous year's value (EUR 14.7 million). The net debt as of the reporting date on September 30, 2020 sank when compared with December 31, 2019 by EUR 172.9 million to EUR 294.0 million. As of September 30, 2020, CompuGroup Medical employed around 6,300 employees and thus approx. 700 more than at the end of 2019, of which approx. 400 were as a result of acquisitions.

CompuGroup Medical confirms the already raised guidance for revenues and adjusted EBITDA from August 6, 2020. For the year 2020, revenues in the range of EUR 820 million to EUR 860 million are still expected. The adjusted EBITDA is forecast to be within the region of EUR 205 million to EUR 220 million. However, the guidance for the 2020 fiscal year is still subject to greater uncertainty than usual due to the ongoing coronavirus pandemic.

Segments: Clearly positive business development across all segments

In the Ambulatory Information Systems (AIS) segment, the approval of KoCoBox MED+ as the first e-health connector in Germany and the associated software upgrade for around 56,000 medical and dental practices have led to a significant growth in revenues of 19 % to EUR 128.7 million (previous year: EUR 108.0 million), whereby organic revenues have increased from EUR 106.8 million to EUR 124.9 million by 17 %. In addition, CGM KIM was the first specialist service to be approved for the important application of KIM (Kommunikation im Medizinwesen - communication in medicine). The adjusted EBITDA increased to EUR 60.2 million (previous year: EUR 39.5 million).

Business in the Pharmacy Information Systems (PCS) segment was significantly shaped by the rollout of the Telematics Infrastructure in pharmacies in Germany in the third quarter, in addition to good operational business development. Revenues increased by 26 % to EUR 34.9 million (previous year: EUR 27.7 million), organic revenues rose equally to EUR 34.7 million (previous year: EUR 27.5 million). EBITDA increased by 30 % to EUR 8.6 million (previous year: EUR 6.6 million).

The Hospital Information Systems (HIS) segment developed particularly strong in the past quarter. In addition to the newly acquired parts of Cerner's IT healthcare portfolio, the other business areas of the segment also showed strong overall development. Services in connection with the introduction of the Telematics Infrastructure and the “Nökis” rollout in Lower Austria also contributed to the positive development of segment revenues. Overall, revenues in this segment improved by 80 % to EUR 56.1 million (previous year: EUR 31.2 million). The organic revenue growth of 10 % is based on particularly good development in the hospital business in the DACH region and Poland. The adjusted EBITDA amounted to EUR 7.7 million (previous year: EUR 3.1 million) with an operating margin of 14 % (previous year: 10 %).

The Consumer & Health Management Information Systems (CHS) segment increased revenues by 5 % to EUR 11.6 million (previous year: EUR 11.0 million), whereby the organic revenues could be increased by 10 % to EUR 12.1 million (previous year: EUR 11.0 million). The positive revenue development is mainly due to the German Intermedix division. The CGM LIFE division was able to add upon its previous positive development in the third quarter of 2020. The adjusted EBITDA amounted to EUR 1.9 million and was EUR 2.0 million below previous year's figure mainly due to increased development expenses.