Okay, I think we can start now our presentation. Thank you, everyone, for attending this meeting. I hope everyone can see well my screen. Pierre, do you confirm that it's okay? Okay. So we are very pleased to announce the full year 2023 earnings from Cegedim tonight. So the big picture: as you know, the revenue for the full year were EUR 616 million, growing EUR 60.8 million compared to 2022, a growth of 10.9% that we already announced in January. EBITDA for the full year has been EUR 108.8 million, growing EUR 12.6 million compared to 2022, a growth of 13.1%. The recurring operating income is EUR 31.7 million, growing EUR 6 million, which is 23% growth. Non-recurring operating items were a loss of EUR 11.7 million in 2023 compared to a gain of EUR 0.8 million last year.
We'll go into more details later on, but it's mainly due to our withdrawal from the UK market for doctors. Sorry, obviously there's a problem with the presentation not going down. Sorry. Oops. Sorry. Sorry for this inconvenience. Okay. Hope this gets better. Okay. Sorry. So the non-recurring items were a loss of EUR 11.7 million compared to a gain of EUR 0.8 million last year. Net profit settled at a loss. It's actually a net loss of EUR 7.9 million. We'll see later on what happened. And operating free cash flow is growing EUR 11.4 million to EUR 97.9 million, a growth of 13.2%. And the net debt is around EUR 145 million, growing just 5.6% this year.
During this year, the only acquisition we made was a major stakeholding in Phealing that we already talked about in November, an autonomous tool for advanced control of drug dispensing, which saves time for the pharmacy teams. We can discuss it later, but I think you already saw that. So let's dive into the P&L for this year that we already had a glimpse at at the beginning. So as you say, as you know, the growth was 10.9% last year, almost 61% growth, out of which there's been the Ségur scheme effect, as well as the Allianz effect, which was a big part of it, was a chunk of it. We can see that the external expenses grew faster than the revenue.
It's because mainly of the Allianz contract, for which we had external contractors costing in these external expenses, as well as buildings for the new employees coming up from Allianz. And also a component of it is the cost of software services, which went a bit higher this year, external cost. The employees' cost grew 9.3% this year, which is slower than our full sales, our full activity this year. We are quite happy with that, even more because it could have been even better because as we are withdrawing from the UK, actually from England, Wales, and Northern Ireland, we are not capitalizing wages R&D. We are quite happy with this trend. The EBITDA is EUR 108.8 million, growing from EUR 96.2 million. It's a margin of EBITDA of 17.7%.
The recurring operating income is EUR 31.7 million, just before that, depreciation amortization grew slower than the sales, even though it's a 6.7% growth in D&A, resulting in a recurring operating income of 31.7% in growth of EUR 6 million, which is 23.4% growth. It's a recurring operating income margin of 5.1% this year compared to a 4.6% in growth. The non-recurring operating income and expenses, so as I said, it's an expense of 11.7% compared to a gain of 0.8% last year. Almost EUR 10 million out of this is due to the impairment in the UK because of the withdrawal from In Practice in England, Wales, and Northern Ireland. So there were some R&D expenses that were already accounted, and now we need to impair, especially there.
Last year we had a slight gain because we sold, as you remember, a stake in Gateway. It was a gain of EUR 16 million. So the operating income this year is EUR 20 million compared to 26.5% last year. Financial results went slightly higher. It's mainly because we have some variable costs, variable interest costs in the debt. And the total tax, I think you read the release, the French release. So I'm going to tell you exactly what happened. So it went from -4.6% to 14.8%. It's actually because Cegedim still has a significant amount of unused tax losses. We therefore calculate the tax gain that is possible and show it as a deferred tax asset on the consolidated balance sheet. We have EUR 7.7 million in deferred tax assets at the end of 2023, and we had EUR 20 million at the end of 2022.
It's actually because the downward revision stemmed from Marucchi's estimate of the further gains we still hope to make due to recent tax case law. Sorry. So this is non-cash for EUR 12.3 million in this total tax. So it's a bit complex to explain. So you have a lot of explanation in the press release, and I'm also available later on by email to give you some more details around this. All in all, the consolidated net profit is a loss of EUR 7.9 million compared to a gain of EUR 12.1 million last year. In this slide, we discussed the payroll costs. As I mentioned earlier, it went up 9.3%, so slower than the sales of the company last year. The headcount went up 509 people. It's very interesting to note that out of these 509 people, 238 people are for the Allianz contract.
It's almost 50% of these recruitments. In these 238, almost 190 people are in France, so are onshore. It means that out of the Allianz contract, we recruited more offshore than onshore. Regarding the R&D investment, it's worth noting that the capitalized R&D went up 2.9% last year, a bit slower than the previous years. It's because we have less R&D capitalized, especially in the UK. The D&A went up last year from 70.5% to 77.2%. You can see in the other costs going from 16.8% to 19.5% a rise in the price of IT equipment, everything resulting from the impact and recurring operating income of capitalized R&D and D&A R&D usually is a gain. Last year, it's an impact, a negative impact on the recurring operating income of EUR 1.9 million.
This may explain, actually, why we're a bit lower than what we expected on the recurring operating income, is that we have this impact, which is negative this year. Regarding free cash flow, you can see that the acquisition of intangible assets were a bit lower this year. It's because we bought less software licenses than last year. Also, we capitalized less R&D. And the acquisition of tangible assets went from EUR 17.6 million to EUR 22 million. This is due to investments in IT hardware and also our branch, our division, C-Media, investing in some products to support its growth, especially screens for pharmacies. The next slide is on financing. Not much to say compared to last year. RCF is going maturity in 2024, in October this year. So we are working on this.
Regarding the debt covenant, we are quite comfortable with the leverage and the interest cover of the covenants. We are still quite low compared to what is expected on leverage and quite superior to the interest cover which is due. On the balance sheet, we see what you can see here on the balance sheet is like the shareholder equity went down. It's because of the net loss this year. Not much to say about it that we haven't discussed yet. This is for your information. Now, I suggest that we go more into details on the various divisions that represent Cegedim. So the first division is the software and services division. The first one that we introduced. So it's 53% of the sales. In 2023, there should be a little bug over there. It was EUR 326.6 million in revenues, EUR 4.2 million in recurring operating income.
So compared to last year, which was a loss operating income, which was minus EUR 4.9 million, we go to a profit of EUR 4.2 million in recurring operating income this year, supported by the turnaround at Cegedim Santé that went from higher to higher sales and also a good management of payroll this year. We had to invest a lot in payroll last year, and now we have a good cost, and the market is going well. So we are happy with that. On the subdivision international activities also, last year it was a loss at the recurring operating income of EUR 11.4 million. Now it's a loss of EUR 7.6 million, growing about almost EUR 4 million euros, getting better about almost EUR 4 million euros.
We are quite happy with the division. It's especially due to the pharmacists in the UK, which have done a very good year this year. Very good exercise. And we are starting to harvest the fruits of the restructuring of 2022. So now we are going we're happy with that. Also, a small activity called Activus. It's insurance for expatriates that went a very good year last year. All in all, the division grew up by 8.2% in sales and went from a loss of 1.9% to a gain of 4.2% in recurring operating income in 2023, showing a good turnaround that we hope is sustainable, we think is sustainable.
Second division, the division that you know about is the flow division. So as you know from January, the growth was 5.9%. And they have the e-business and the third-party payers subdivision over there. We had the recurring operating income going down EUR 1 million this year compared to 2022. So it's 12.1% compared to 13.1%. This is due to e-business is doing well, but you know there was a postponement of the regulation in France regarding dematerialization. So it meant that some clients had to postpone or were eager to postpone also their buying of the solution. And for the third-party payments, there's a basis comparison with the fact that Allianz, part of the contract of Allianz is going down to the BPO division that we'll see later on. And it's a division with some fixed costs.
So it meant that it was a bit tougher on their recurring operating income this year for this division, which is 15.6% of the total group sales. And so as I mentioned, it's EUR 12.1 million in recurring operating income this year. Next is the data and marketing division, which amounts to almost 90% of the group revenue with two divisions. So the data division and the marketing division, the whole division went up 7.5% this year with data growing 5.1% and marketing growing 10.7%. Regarding the recurring operating income, it was EUR 17.9 million last year. It's 15.9% this year. So it's going down 11.3%. This is mainly due to some investment for the startup of the international data activity.
And also, we had a Clinityx, which is that you may have heard on the SNDS data that we'll have had less production this year, and then we hope to have more production last year. So that was the data and marketing division. Last but not least, the BPO division. So as we mentioned in January, it's a growth of almost 35% in sales this year, going from 53%-71.5%, especially in the insurance, because of the startup of the contract with Allianz that started during the year. So went a growth of 55% this year. And the HR BPO also had a good growth of 3.4% this year. And we are very happy with the recurring operating income that went from EUR 3 million to EUR 4 million this year. So it's plus EUR 1 million.
Especially the HR activity were very positive this year because of the, I would say, our knowledge of the market, the automation also that benefits a lot. And in some way, one could say that we are working better and better. Also, on the BPO insurance, some other contract than Allianz, we were quite happy with what developed this year. It's what happened this year. Sorry. So that was a dive into the various division of the company regarding their revenues and recurring operating incomes. I think it's worth getting a look at the outlook we can have for the year, especially that you know that the revenue we anticipate a growth range between 5%-8%. And we also anticipate an increase in the recurring operating income for 2024.
We hope it will be in the same path regarding the recurring operating income as it had been this year in relative terms. We are happy to, actually, sorry, happy. Sorry. It's what we would like to. If things are getting well, maybe having a recurring operating income such as the one in 2021. The last word, maybe, because it's getting more and more important also for you, it's the CSR challenges that Cegedim is facing. We have put a few challenges that we have and working also on our carbon footprint and trajectory for the future, which is important for us. Here is a slide of how CSR is embedded in the Cegedim business from down to up and top down in the two ways. There are a few external ratings.
But if you are interested in the CSR, I think you can also have this information. And now the last slide is about the financial calendar. So I was happy to present this. Maybe we can go to a Q&A, a quick Q&A session so that we can dive into more details on some issues that you may have. Please to ask your question. Can you raise the hand so that I can give you the speech, the floor, and to answer your question? Okay. Thank you, Eric. I'm going to give you the okay, Eric, you can ask your question, please.
And do you hear me?
Yes, very well.
Okay. Yes. My first question is about the depreciation of the goodwill in Great Britain. It means that you are going to go out of the business for medicines in Great Britain?
So regarding the doctors in Great Britain, it's actually we had the renegotiation timeframe now. We had some price conditions that were not met. So we will withdraw from; we will focus on Scotland, which is very important to note. We'll progressively withdraw from England, Wales, and Northern Ireland. It will take us three years to go out of this. We do not unplug from one day to another. We need to accompany the doctors that used our solution. It will be on the three-year time frame.
The doctors are on the international business. Doctors are losing more than the loss you mentioned because you said that the pharmacists are going well in Great Britain.
Yes. Sorry. Yes. Yeah. It was especially so in the UK, not only do we address the doctors, but we also address the pharmacists. And the pharmacy has two different businesses, as you know. And so the pharmacists had suffered a few years before because of the especially on the fact that goods went out of the market. And now we had some restructuring, and now it's bearing fruits. On the doctors, it's another scheme. It's another market. And so yes, it will be beneficial to us to get out of this England, Wales, and Northern Ireland.
We can.
Yes.
We can assume that the loss of the doctors is still around EUR 10 million.
Yeah. You wanted to speak.
Do you hear me?
Yes.
Yes. Okay. The plan is to break even in three years in their business of software for doctors in Great Britain. So coming from roughly EUR 10 million loss to zero in three years.
Okay. And my second question is about data and marketing. We have a decrease in the operating profit. You said that that was due to a start in international data. Can you give us an idea of the amount it occurs?
The main loss comes from the startup Clinityx. Clinityx is working on the data coming from the national health French system and making studies for hospitals and pharmaceutical companies. This is really a startup. The decrease in the profits from last year to the 2023 year to the year 2023 comes mainly from Clinityx. The losses of the international business is roughly less than EUR 1 million. This is, in fact, an investment due to the fact that we are acquiring data from other software providers than Cegedim providers, specifically in Germany and in Italy. This is a fixed cost that we have to suffer. By signing contracts and having more and more revenue, we plan to be break-even in 2025.
The last part is about Visiodent.
Yes.
You bought Visiodent during the beginning of the year, if I remember well.
Exact.
You go to Visiodent through Cegedim Santé, I think.
Exact. Yes.
The amount of the transaction is.
It's secret. The seller do not want us to show it. Nevertheless.
We will see it.
You will see it in the next presentation, but we have accepted not to disclose this price for the time being. So this is a EUR 10 million revenue company. EBITDA is positive, not far from EUR 2 million. And this is a very positive acquisition for us because it brings to us the dentist software business that we never had. And we needed to have this brick specifically for the Centre de Santé. I don't know, Damien, do you know how can we explain?
Health services centers, I would say. It's a center where you can have a doctor, a dentist, and various professionals that develop well in France, especially.
Visiodent has 500 centres de santé as clients. We have roughly the same amount of centres de santé. This is 1,000 on a market of 2,500. We know that this market will double in the next 3 years. So having this new brick, this new software makes our position on the market much more efficient.
Okay. And about the profit level for 2024, you think that it could be we can reach you said that it.
Yeah, EUR 40 million.
40 million?
Yeah. Because the first division, which is the division where we have the biggest losses, all those losses are more or less becoming positive because we are really working on that. And the decision we took at the end of last year to go out from the Northern Ireland, Wales, and England market for software for doctors, the reason for that is that all the computation we could make on the contract we could have signed with the different NHS were loss-making. Those contracts with the NHS are very long-term contracts. So once we have signed a contract, we cannot go out easily. So that's the reason why we have announced to them that we didn't want to go on.
Thank you. I will let people asking questions. Thank you very much.
Thank you.
Thank you, Eric, for your question. Are there other questions?
So there is a question about SRH, which is the payroll business. This is a double-digit growth still.
Also, there's a question about how much Phealing contributes to the growth at the software and services division.
It's zero. Well, it's a very small amount. This is a startup too.
Regarding the headcounts, if we are planning to add people to the extent as in the past, as you can see this year, most of half of it was due to the Allianz contract. If you take this out, it's a slowdown in this.
Yes. And then we will go on to hire people because we are growing. But of course, we have to put apart the 283 people coming from Allianz. Those people, they will remain equal. Stable. I don't know how to say.
Yeah, stable.
Stable.
Stable. Stable. It's good.
Maybe I can make a comment on the revenue growth. Last year, the revenue coming from Ségur is subsidies coming from the health authorities to push software providers to develop some specific functions for their software. Last year, it was EUR 7 million split between the doctors' software in France and the pharmacy software in France. This will not be renewed in 2024. So somehow, we are starting with minus EUR 7 million. We are also starting with a decrease in terms of revenue on the doctor software in England, Wales, and Northern Ireland. But then we have an addition of one quarter on the big Allianz contract, which is roughly EUR 6 million. So if we take those three events, we start the year with a decrease. And that's the reason why our expectation is that we are going to have a growth between 5%-8%, 6%-8%.
But meanwhile, since we are working hard on reducing the losses and transforming the loss-making business into profit-making business, we are confident in the fact that we are going to have a growth in terms of the EBIT, which will allow us to be confident in the fact that we will reach our target of roughly EUR 40 million in 2024. For 2025, there is a big difference in the sense that Ségur is coming back. There is a second wave for doctors. And there is the first wave for kinesiotherapists, kinesiotherapists, and nurses. And spread on 2025 and the beginning of 2026, sorry. We expect an increase of revenue of roughly EUR 20 million, 20-30. So it gives an idea of what is the midterm evolution for Cegedim Group.
Thank you very much, Pierre, for that. Amadou, you raised the hand. Yes, the floor is yours.
Hello. Can you hear me?
Yes, very well.
Wonderful. So in the past, you've mostly used your clouds yourself. And you've seen interest from other parties. Do you expect that the cloud will be opened to more parties? And do you expect more revenue from your cloud business?
Yes. Yes. But this is a marginal business. I think last year, we made roughly EUR 7 million in the pure cloud for direct third-party clients. So this will grow because we are, it's a way for us to have a benchmark in terms of cost and efficiency. So this will grow, but this is not a very big figure, you see, a very big revenue.
All right. Considering your CBS units, which you've created, I think, in 2023, what is your plan to drive your revenue forward in this division?
Yeah. So CBS is the merger of the payroll business and the e-business. Those two businesses are double-digit growth. The specificity of those two businesses is that they are not totally dedicated to healthcare clients. Their main clients are non-healthcare. And that's part of the reason why we have organized this new business unit. But this is really a double-digit. And this is a business which will have a growth in terms of EBIT due to the fact that the regulation about dematerialization of invoices will come in two years in France. I think there is now the regulation which is in place in Germany, where we have a subsidiary. And we have a fast growth in the UK in this area. So this is one of the best growths we will have in the future in Cegedim Group.
Since this business is not for your, let's say, original customers and to the healthcare sector, would you consider, let's say, an IPO or spinoff of this division?
No, today we are not. Today we are not. This division is strongly using the Cloud Cegedim organization. So all businesses are using the Cloud organization. But we do not plan to sell or to make an IPO on this part. This is really an internal reorganization. But it has not been made with the target of putting this business on the market today.
Today. All right. But you would be open for external capital in Cegedim Santé and maybe the pharmacy division also?
So Cegedim Santé, we made an increase of capital in 2022. It was EUR 65 million for 18% of the company, Cegedim Santé. This is due to the fact that at the end of 2021, we have decided to invest a lot in this business. If you look at my screen, you will see Maiia. Cegedim Santé is the editor of Maiia. Maiia is the competitor of Doctolib. So we have decided to invest a lot. We have recruited a lot of people. We have made a lot of R&D. We knew that it would have a negative impact on the group results in 2022 and 2023. And that's the reason why we have looked for external cash, external capital. Our plan for this business is to double the revenue. Today, we are making EUR 75 million.
We feel that in five years, we will be at 150, and it will be a highly profitable business. But you see that the reason why we have looked for external funds is really because we had decided to invest a lot, and we felt that Cegedim was not able to autofinance this development. As long as in all the businesses, we feel that they are autosufficient for.
Self-sufficient.
Self-sufficient to finance their development. We are not looking for external funds.
You are also not looking for external funds in your data business?
No.
It seems like there is quite a lot of interest in, let's say, artificial intelligence. One could imagine that this would be a great benefactor, right? You've got tremendous amounts of data, which could be utilized here.
Yes. We are really investing there. But this is profit-making, and we are using the profits to develop those artificial intelligence software. We are working a lot on having some modules to help doctors to make diagnoses, find some way to detect some very rare illness. We are working a lot with Institut Gustave Roussy here in Paris, which is an institution very top for cancer. So there is a lot of potential due to the using of those techniques to analyze data coming from doctors and pharmacists. We know that, and we invest in that. Although today, we cannot say that we are making a lot of revenue on this, we know that it will come in the future.
Are you open to partnerships there and collaboration with, let's say, external developers, other companies?
Well, the main cooperation we have is that we buy data to other software providers. That's it.
All right. Thanks a lot.
We know that for some clients, we are just selling raw data, you see? And then those clients are using specific companies who are making the studies on the data we have transferred to them. We know that. This is not a business we have no specific partner on this, but we know that a lot of companies are working on the data we are providing.
Maybe one last question from me. When you talk about other players using the data, what is the main utility they use the data for? Is it for market intelligence?
Mainly in pharmaceutical companies. Our data are mainly used for them to have a view of their market. Some of the companies have their own analysts' team, and some of the companies of our clients are using external companies to analyze the data.
We are talking about medicine being sold, or is it more on the market, right?
No. We are talking of medicine, but we are also talking about all the products that are sold in a pharmacy, you see? So it can be cosmetics.
Wide range of products that you have in the pharmacy. You can also have hardware, and you have cosmetics. Not only medicine. You can have OTC.
Not only medicine. Yeah.
Thanks a lot for answering my questions. That's all from me.
You're welcome.
Thank you, Amadou. We had a question regarding the other non-recurring operating expenses at the U.K. doctor business for 2024. The question is whether we will have the same amount next year on other non-recurring expenses. I think we had a big chunk of the impairment this year. We'll still be, as I mentioned with Pierre, for the next three years over there. So we still have to present.
Yeah. But we won't have any, well, unless there are new problems coming. But today, we do not plan to have any impairment. We have computed the impairment in 2023 in order not to have to make more impairments in the future. We will go on amortizing the capitalized R&D made on this department. But this will be amortization. This won't be impairment. And as I said before, the target is to be at zero EBIT on this business software for doctors in the U.K. at the end of next third year.
Okay. Do we have some more questions?
There is a question about ChatGPT.
ChatGPT and chatbots.
Yeah. Yeah. So I spoke about artificial intelligence for cancer doctors and so on. But we are also developing internal tools to improve the efficiency of our BPO teams. The BPO business is that we are managing a lot of information coming from the clients of our clients. In insurance, for instance, we are managing the dossier of 25 million French people. And those people, they always have questions. So they send email. They use chatbot. And so we are developing tools so that we can analyze the questions. And then we can put the right person in front of the question to give the good answer. So it's another way to use those techniques.
Okay. I think we had one last question from Amadou. You have the floor. I think you just have to turn on your mic, Amadou. Or maybe it was not ready.
Oh, I think it's okay.
Sorry.
It's the answer I've just given.
Okay. Great. To my knowledge here, we have no more questions written or asked with a raised hand. If there's one last one. Okay. If not, we will now thank you for attending this presentation. Hope you have found the whole information you wanted to hear about Cegedim. We will see you for the first quarter sales in April in a month from now. Thanks a lot for attending this presentation. Have a good evening. See you next. Thanks a lot, Pierre, for attending also and sharing the question from our fellow investors.
Thank you very much.
Thank you.
Bye-bye.
Bye-bye.
Bye.
Bye.