Ladies and gentlemen, thank you for standing by. I'm Moritz, your Chorus Call operator. Welcome, and thank you for joining today's CompuGroup Medical Investor and Analyst call. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question and answer session. Questions are possible for those participants dialed in via telephone. If you would like to ask a question, you may press Star followed by one on your touchtone telephone. Press the star key followed by zero for operator assistance. I would now like to turn the conference over to Corporate Vice President, Investor Relations, Claudia Thomé. Please go ahead.
Good morning, everyone, and welcome to the CompuGroup Medical Investor and Analyst conference call for the fourth quarter and the preliminary full year results 2022. It's great to have you with us, whether you have dialed in via phone or are following the webcast. You will find all the relevant information such as the presentation, the quarterly statement, and the press release, which we published early this morning on our website. We're going to start with the presentation by the spokesman for the Managing Directors and CFO, Michael Rauch, followed by the Q&A session. Before we start, as always, some housekeeping remarks. Let me remind you on our safe harbor statement, which is shown at the beginning of the slide presentation and is valid for the entire call. Thank you very much for your patience. Now let's start. I hand over to Michael Rauch. Michael, over to you.
Thank you, Claudia. Good morning and a warm welcome to all of you. Before I start, let me please express our heartfelt compassion regarding the earthquake tragedy that occurred in Turkey and Syria. As of now, we can confirm that all of our company employees in Turkey are safe and business operations are not affected. We keep our fingers crossed that the international support wave is going to bring relief to the people in need. Having said this, let's kick off the presentation and we move into 2022. Looking back into 2022, for CompuGroup Medical, the year started already actually in December 2021 with a cyberattack. Publishing of the annual report on April 7th, 2022, in time, took a show of strength by the whole team.
The Russian attack on Ukraine triggered not only human tragedies, but also macroeconomic challenges, including supply chain issues. We streamlined the board of managing directors post the departure of Dirk Wössner, and we took an important milestone in our data business with the acquisition of Insight Health, the largest acquisition for the year 2022. In the second half of the year, CompuGroup Medical switched gears towards margin expansion, which is a key focus for us for the current year 2023. In December, after two years of substantial personnel onboarding, we finished another important project successfully. With the go live of the HR Workday tool, we are now in a better position to manage our most important resource more efficiently, our employees and the team of CompuGroup Medical, who delivered along many dimensions last year.
We introduced a new level of customer centricity with our Doctors First campaign and focused on R&D for our next generation technology to support our existing customers and to win new customers, which we did. We strengthened our portfolio with several acquisitions besides Insight Health, adding to our data business and the U.S. laboratory information systems. To foster our company culture, we defined corporate values for the whole company and rolled them out to the whole team. With all these milestones achieved, we, the whole CompuGroup Medical team, are ready to also deliver on our promise for further revenue growth and significant EBITDA expansion in 2023. In 2022, we delivered another record year. With revenues of EUR 1.13 billion and an adjusted EBITDA of EUR 234 million, we have set two new records in the history of CompuGroup Medical.
This is a result of a double-digit revenue growth supported by an organic growth rate of 4.1% and of 6.3% if you adjust for the Telematikinfrastruktur connector software upgrade in 2021. Taking a long-term view, we've shown an excellent growth track record too. A revenue CAGR, Compound Annual Growth Rate, of more than 15%, supported by many successful and strategy-supportive M&A activities and almost doubling the number of our employees to now more than 9,000 employees represents a strong growth development. It's not only an M&A growth story. By focusing on our core competencies, supporting healthcare practitioners and the digitalization in the healthcare sector, we took organic growth to a new level.
From 2015 till 2019, CompuGroup Medical grew between 0% and 3% organically if you exclude the one-off spikes from telematics infrastructure. We decided to build up resources for higher organic growth and managed to increase the level of our organic growth significantly. 2022 was the third consecutive year of an organic growth rate well above the historical level, despite the challenging overall condition over the past year as mentioned. We will continue to outperform. Supporting our customers, focusing on helping them to grow with ever more digitized processes, tools, solutions, decision support analytics, as well as embracing the future with a winning mindset. We are the leading medical software company. This ambition is underlined by an excellent position of strength to realize growth opportunities with leading market positions in Europe and in the U.S.
We've added significant scope during the past years and have seen increasing market relevance of CompuGroup Medical. This position is based on and will be propelled through our five major growth drivers to benefit from digitization momentum and unleash the next stage towards our midterm ambitions. Our investments are bearing fruits, especially in the AIS segment, where we enhance our existing products and services with new modules and functions to push the digitization in the ambulatory sector on a new level. In addition, we deliver on ongoing governmental initiatives. Following the successful integration of eMDs, CGM US successfully built the basis for further growth in 2022. Going forward, we will focus on the rollout of eMEDIX and RCM solutions to push our margin development and use our high potential of cross-selling.
Our hospital business will be a major contributor on our growth path, where we benefit from our new G3 platform and governmental programs such as the Hospital Future Act. I will give you an update on the expected revenue related to these initiatives in a couple of minutes. With the Telematikinfrastruktur, we continue to upgrade the backbone connection of all German healthcare practitioners for the benefit of the patients. We will drive further digitization, efficiency, and security initiatives in the pharmacy information system segment for the benefit of our pharmacy customers and their patients. In 2022, we were able to take a massive step forward in our innovative data business. Supported by our AIS and PCS segments, our already powerful data lake has been taken to a new level with the acquisition of Insight Health.
With all these growth drivers, we are well prepared for the future. Looking back at the last year, where we delivered on our updated guidance, let me just walk you through. Group revenues have grown by 10% year-over-year and by more than 4% organically. Adjusted for the connector software update PTV4 in 2021, we saw an organic growth of more than 6% and thus in line with our midterm targets. I already mentioned our record-adjusted EBITDA in line with the latest guidance. Our adjusted earnings per share came out with EUR 1.80 at the midpoint of our guidance range. After an accelerated catch-up in the fourth quarter, free cash flow came out at the upper end of the updated guidance, and I will go into more detail later.
Let's take a closer look at the segment performance against 2022 guidance. First of all of our operating segments posted revenues above last year's level, and two of them exceeded our own expectations. Our biggest segment, AIS, grew by 6% to EUR 502 million, which is slightly above the midpoint of our guided range. Excluding acquisitions and FX effects, organic growth stood at 1% against high comps in 2021, where we rolled out additional modules like the e-health record, the KIM modules, and vaccination certificates. HIS grew by 8% reported and 3% organically to EUR 277 million, which is slightly below our full year guidance. For this year, we are all set for strong organic growth in this segment, underlined by an excellent order intake last year.
Both CHS and PCS segments exceeded the guidance range with an attractive growth rate, also organically. Let me now go into more detail regarding the segments, and I will start with our flagship, the AIS segment, which is driving the digitization in doctors' practices across Europe and in the U.S.. In 2022, we strengthened the basis for further growth. With the reorganization Doctors First, we focus our entire AIS DACH organization on customer centricity. This allows us to support our existing and future customers to benefit from tailored offerings and enables us to more consequently pursue market trends like larger practices, where we are already winning large tender projects over the last year. On the margin side, we took a first step for the expected expansion.
With the rollout of eMEDIX starting in the second half of 2022 and the planned replacement of a third-party provider in the U.S., we will unleash even more efficiency in the future. To summarize the development in the AIS segment, an excellent development, both from a market and from a result view, gives us confidence for future growth and margin rebound. After having shown a 27% CAGR since 2019, our hospital business is well prepared for further growth. The Hospital Future Act, the large governmental initiative in Germany to drive digitization modernization in hospitals, is keeping our HIS colleagues busy and excited. At the beginning of last year, we informed you that we received confirmed orders relating to the Hospital Future Act of more than EUR 25 million.
At the end of last year, we reached around EUR 90 million order intake. Based on the latest projections, we now raise, I say again, we now raise our expected revenue target from a total of EUR 50 million-EUR 80 million to now EUR 90 million-EUR 110 million over the next couple of years from this initiative. A clear proof point of the high market relevance of our CompuGroup Medical clinical product. The future is not only dependent on one governmental initiative. We've seen a powerful business outside of Germany, particularly in Spain and Poland, and a growing order intake in the countries we operate in. We've invested significantly in the hospital business over the past couple of years.
No different in 2022 was a spike in the first quarter, deliberately investing in the success of larger client projects and with revenues postponed from Q4 2022 into 2023, with a dissatisfying EBITDA margin. Going forward, we are well prepared to turn the remarkable order intake into revenue growth acceleration and thus expect an overproportionate EBITDA contribution already in 2023. In our consumer health management information system segment, we delivered a double-digit revenue CAGR over the past couple of years with an attractive adjusted EBITDA, recently impacted by our investments to build the foundation for sustainable growth in the future. We achieved major milestones on our path towards the goal of becoming a leading European provider of data solutions. We entered a new market with the acquisition of a 20% stake of the Italian company New Line.
This is a starting point for an internationalization of our data business, and we are really excited about the steps we took in building up new opportunities. There's a clear market demand for our solutions from healthcare providers, pharmaceutical companies, insurances, and other healthcare constituents. Also, the second important pillar within our CHS segment, the telematics infrastructure business, delivered. Despite the delayed connector software upgrade now expected within the first half of this year, the TI business showed a strong performance in 2022. The connector hardware exchange achieved the expected ramp-up in Q4, and we're confident to exchange the planned roughly 30,000 connectors until spring this year. Our PCS segment has recorded an excellent performance exceeding our guidance range for 2022.
Even against a very strong prior year of 2021, revenues went up again with our colleagues from Italy delivering a substantial revenue growth on top of an already high 2022. The margin has seen step-up due to efficient cost management in both countries, Germany and Italy. Not only the segments are well prepared for 2023 delivery, but also the cost development is on the right track. With our investment initiative started in December 2020, we ramped up personnel expenses massively. Organic growth of personnel expenses, meaning adjusted for acquisitions and FX effects, has been high in 2021. It lessened in the first half of 2022. It has been brought down significantly in Q3 and Q4 of 2022.
Having invested for future sustainable growth in the past two years, we will noticeably drive profitability from this year onwards. The free cash flow development during 2022 has been influenced by phasing of cash contributions from growth projects like TI, Hospital Future Act, and Ségur in France. In addition, free cash flow was impacted by payments resulting from management changes and restructuring. This led to an adjustment of our guidance after the third quarter 2022. During Q4 2022, the free cash flow showed the anticipated ramp up and ended the year at EUR 69 million at the upper end of the adjusted guidance of EUR 40 million-EUR 70 million. We are confident to bring free cash flow back to the three-digit million amount until the end of 2023.
Net debt at the end of 2022 was around EUR 60 million higher compared to end of 2021, leading to a leverage of 3.1 times EBITDA. Please let me highlight that more than 80% of net debt is protected against interest rate hikes through caps and swaps. CompuGroup Medical is crisis-resilient financed at attractive conditions, and our financial firepower remains strong. Beside the EUR 400 million term loan and the EUR 600 million revolving credit facility, we also have access to the EUR 200 million credit line of the European Investment Bank. With this, let me conclude the review of 2022, and now let's look to 2023. This year, it's time to deliver. 2023 is the year of overproportionate bottom-line growth.
We will, of course, continue to grow our top line, and we certainly want to deliver overproportionate growth in EBITDA. Based on the feedback from investors and analysts, we've simplified our company guidance. For 2023, we expect an organic growth rate of around 5% on group revenues in line with our midterm targets. The adjusted EBITDA is expected to deliver a significant step-up to a range of EUR 260 million-EUR 300 million. For the adjusted earnings per share, we forecast an increase by 10%. The share of recurring revenues is anticipated between 60% and 70% compared to our total revenues, and the free cash flow is expected to ramp up to more than EUR 100 million. Coming to segments.
On a segment basis, we expect the ambulatory segment to grow organically in the mid-single digit percent area, the hospital segment in a mid to high single digit % area, and the CHS is expected to show an organic growth rate of low to mid-single digit. The pharmacy segment is supposed to grow organically in the low single digit percent area in 2023. These targets are another major step on our path towards our midterm targets. We already brought our organic growth to a new level, and we want to achieve a compound annual growth rate of around 5% until the year 2025. At the same time, we increase the quality of our revenues, taking the share of recurring revenues to more than 70%.
We are going to deliver in 2023, strong margin progress towards our target of 27% in 2025. We have a strong customer base, a fantastic product portfolio, an excellent market position, and great growth opportunities, which we will tackle with our strong team. We are ready for an exciting year, 2023, in which we are fulfilling our mission every day. We are creating the future of e-health. With that, I want to thank you for your interest and look forward to your questions. Operator, please open the Q&A session.
Ladies and gentlemen, at this time, we will begin the question and answer session. If you would like to ask a question, you may press star followed by one on your touch-tone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you're using speaker equipment today, please lift the handset before making your selections. Anyone with a question may press star followed by one at this time. One moment for the first question, please. The first question comes from Laura Metayer from Morgan Stanley. Please go ahead.
Good morning, Michael. Thank you for the presentation. I have two questions today, please. The first one is on the EBITDA guidance. If I apply a 6% stated growth to your 2022 revenues, the EBITDA guidance implies a 21.7%-25% margin range. Just wanted to check if that is the correct approach when thinking about your margin ambitions for 2023. I also understand the moving parts is the staff costs. Could you please comment on what you expect there? The second question is, could you please give us a bit more color on the CHS 2023 guidance? What is your expectation on TI versus the data business? The data business has been impacted by the macro, just wanted to check what you think the trajectory will be for 2023. Thank you.
Question. Yeah, am I on? Perfect. Thank you, Laura. Let me start with the first question regarding the EBITDA. You mentioned a stated growth rate of about 6%. We guide organic growth rate based on the feedback we've received because very difficult to forecast in these days what the exchange rate is going to do. If we take the spillover impact from the large acquisition Insight Health, which has an impact here into account, four months are still inorganic, then probably 6% is a good way to calculate that, just to confirm. Now, in terms of what is moving that range from EUR 260 million to EUR 300 million, you mentioned staff cost on the input cost side, that could be one.
For us, the question is when do we realize projects? Wanna give you concrete examples. As you know, we are pursuing many governmental initiatives. One, for instance, the Hospital Future Act. The realization of the revenue is for us an unknown. The cost base is there. The same, for instance, with the Ségur de la Santé project in France, where we are forecasting it to happen in 2023 or in early 2024.
Those are all unknowns, that's why, learning from the year 2022, where we had a very narrow range of EBITDA of only EUR 20 million and now having grown in size again to be now a company with more than EUR 1.1 billion in sales, we figured it is smart to say, okay, the lower part of the range is EUR 260 million, which is substantially above what we achieved in 2022. The upper part of the range is EUR 300 million, which would be bang on the 25%, as you mentioned. The second question was regarding the split in CHS segment on growth guidance for TI and for data business. TI is very difficult for us to forecast.
We said earlier that we are going to deliver by an exchange of around 30,000 connectors by the end of spring this year. There is a question of what will happen regarding next software upgrades on the TI side, which for us is very difficult to forecast. That's why our guidance range on the CHS side will be more concrete as we move along the year. On data, our ambition is, as you know, on a long-term basis, to grow around 8%-12%, and that's what we're still sticking with.
Thank you.
The next question comes from Knut Woller from Baader Bank. Please go ahead.
Yeah, thank you. Michael, just a quick question on the connector replacement cycle. Can you share with us, I mean, you gave the indication of the of the 30,000 replacements by spring. Can you share with us what the backlog is that you still have to work up in H1? Also, I know you're just providing guidance for the full year, but just from a, from a directional perspective, looking at the comps in H1, margin-wise, they have been relatively low. Keeping in mind that you still should have some tailwind from the connector replacement, also the software update expected in H1, is it then fair to assume that we should see better margins already, noticeably, better margins in H1 and also noticeably improving operating cash flow in H1, year-over-year?
Is that a fair way to look at the, at the seasonality of 2023? Thank you.
Thank you, Knut. I want to start with your second question, and I want to be very affirmative. The way you phrased that, I can confirm that's also our assumption. We want to see a margin step of a significant one already in the first half of 2023, and we also are going to see a rebound in the operating and free cash flow. On your first question regarding the Telematikinfrastruktur, 30,000 is what we want to have exchanged by end of spring. As you know, those are the majority of the connectors that had been delivered first time in 2017 and 2018. We had basically a spread over the years until 2020, when the last connectors were delivered for the pharmacies.
The timing of the connector exchange is something which for us is going along. If we can convince our customers to go in an earlier exchange mode, we might see throughout the year of 2023, more connector exchanges to come, and we will update you as we go along every quarter.
Thank you, Michael. Just a quick follow-up on looking at the 30,000 target. I understand the uncertainty whether whether customers might go for the software update, whether it's the physical replacement and the timing of the later ones. Just looking at the 30,000 to be replaced until spring, what still of this quantity has to be replaced? Where we know that it has to be a physical replacement. What is the backlog you still have to work on?
Sorry for jumping in. I should have been more precise. I can give you already number of weeks changed in 2022, around 20,000 by end of 2022. Basically around 10,000 will need to be exchanged until spring.
Excellent, Michael. Thanks very much.
The next question comes from Andreas Wolf, from Warburg Research. Please go ahead.
Hi, good morning. Congratulations on the quarter. I have the following questions. The first one is relating to the SAP partnership. Could you shed some light on the opportunity that lies ahead of you? There are market estimates saying that SAP generated roughly EUR 80 million of revenues in the hospital software business, and there are also significantly higher estimates. Could you share your thoughts on the business opportunity here? Second question is also related to HIS. Could you also elaborate on the phasing of the roughly EUR 100 million that you're expecting here? I would expect it is likely to lean towards 2024, maybe even the end of 2024. There were media reports on the connector. Obviously, there is a software-based update plan for 2025 or the next.
The third generation, I should say, is supposed to be software-based. Could you also elaborate on the positioning of CompuGroup for a software-based connector, i.e. would you see yourself basically in the same position as for the second-generation connector? Or would there be another tender which might change market structures? Could you maybe also share your thoughts regarding the price of such a software-based connector? That would be helpful. Thank you.
Thank you, Andreas. Lots of heavyweight questions. Let's start with the two hospital questions. The first one was addressing the partnership which we announced with SAP. I cannot go into any details here, as you will understand. However, I wanna gauge a little bit expectations here. What we clearly see on the hospital side is we see a trend for further consolidation, and we see the need for significant digitization in the hospital space. I think we are uniquely positioned, let me repeat that, uniquely positioned by having invested, as so far as we know, the only one in a complete suite of new third-generation technology with our clinical software. That allows us, over time, to win project after project. That's what we also want to go into, and going after the former SAP customer base.
The second question was also addressed on the hospital side because you ask, okay, the Hospital Future Act, how shall we think about that in terms of timing? I think I briefly alluded to that when saying in answering the first question of Laura regarding what drives the 260-300 EBITDA. It comes a lot from when can we recognize the revenue here with the Hospital Future Act projects. I wouldn't go so far as you said to say that the majority of the revenues only start in 2024. Of course, who are we basically to judge on how quickly our clients are prepared to go into that.
We are standing here, are operating, are ready to implement as many projects as our clients would like to do with us. The last question was one on the telematics infrastructure. For everybody, you know that probably this is the last time that we see a hardware connector exchange. The Gematik, the German Society here for Governing the Telematics Infrastructure, has announced that they wanna go into a software connector mode. They are all parties basically developing high speed connectors, are thinking about telematics infrastructure offering as a service. The new name of the game is the TI 2.0 software connector structure. The specifications have not been fully defined yet. The discussion is ongoing.
Your question was, how is the reimbursement going to affect from a revenue and from an EBITDA perspective us? That's still speculation because the gematik Society proclaimed that they're going decide on how people are reimbursed probably in summer 2023. As of right now, we don't have any indication how this is going to go out. One thing is for sure, wherever there's an opportunity with a governmental initiative in the e-health space, CompuGroup is here to help and to benefit from that.
Okay, thank you, Michael. Do I have any information regarding potential impact on market structure, i.e. would there be further tenders or would basically any provider be able to provide their respective products as with the hardware product?
We cannot comment on any further insights here. Potentially the party to address would be gematik here, Andreas.
Okay, thank you.
The next question comes from Florian Treisch from Kepler Cheuvreux. Please go ahead.
Yes. Thank you very much for taking my question. Thanks for the presentation. I think you missed to mention the major driver for 2023 in my view, which is announced price increases. You have been verbally more aggressive on it, and you have not yet mentioned it in the presentation. Maybe can you again quantify the revenue impact for 2023? To build up on that, if my calculation is right, 3%-4% organic growth from pricing, plus around 2% growth from the TI software update, as you are now expecting in H1 2023, I think we are pretty much at above 5% organic for the full fiscal year, all before HIS growth and all the other factors.
Are you just conservative here, or do you really are afraid of large impact from revenue recognition of larger projects, as you have hinted in the presentation? The second part would be, can you deep dive a bit into the HIS segment? You have only been EBITDA breakeven in Q4, which is completely out of the normal kind of seasonality. Can you quantify the impacts here? Can you also say what you expect for 23, i.e. a clearly weaker margin than you are used to be because of investments, or do you expect a fast recovery in margin? Thank you.
Okay, Florian, I wanna start with the first one. Indeed, we should have banged the drum stronger that we, of course, did substantial price increases. That's a fair point from you. We take it almost as natural because we have implemented the price increases, and the price increases will indeed help us to also underline that we are very confident to achieve 5% organic sales growth as we have guided here. Now, in terms of the makeup volume growth and price increases, we didn't disclose that, but the majority of the price increases, as you know, come onto our recurring revenues, particularly here in the AIS and PCS segment.
There have been also some comments out there, and we also did comment on that when we released our third quarter financials regarding what we had intended here as price increases to implement. As January is now coming into the books, we are very positive on what we see of price increase implementations here. Yes, that is, for us, a positive. We, of course, need also the price increases to cover inflationary impacts, as we have always commented on.
The second question you asked was regarding the telematics infrastructure connected with the organic sales growth, that you said, "Okay, don't you have headwind here, sorry, tailwind, in a sense of the connector upgrade?" Yes, the connector upgrade is in, but the connector upgrade, as I just said, if we had 20,000 in 2022 and 10,000 in 2023, it would rather be headwind than tailwind. For the software upgrade, you're right. The software upgrade will then be there to compensate what we basically kind of see on the connector exchange. By and large, that should be a wash, but not an extra support here on the organic growth rate. Your question was, in general, okay, what are we going to see throughout the year 2023?
I think I confirmed when Knut was asking that we are going to expect a stronger operating cash flow performance and a good margin development versus last year in the first half, and that's clearly what I still would confirm.
Okay, thank you.
The next question comes from Martin Jungfleisch from BNP Paribas Exane. Please go ahead.
Three questions, please. The first one is from the U.S.. If you can provide some color on the performance in the US in the fourth quarter and what your expectations are for this year. Of course, on the margin side, when you would expect the benefits from the insourcing of the RCM solution to kick in. The second question is on the employee side. I saw that the number of employees were down in the fourth quarter by around 100 people. Were there any layoffs in some units? The other question is on the free cash flow guidance. What is your expected CapEx and capitalized R&D this year? There was no guidance on this. Would you expect capitalized R&D down, or is this another year of investments?
Of course, what's your expected impact is from the interest, rate hike post the hedges? Thank you.
All right. Thank you for the questions. Martin, I'll start with the U.S. business. I think I was the one commenting early on when I started here at CompuGroup Medical in August 2019, that we had been looking into the performance from a profitability standpoint of our U.S. business. Particularly with the integration of eMDs and our strong development in the U.S. lab business, we managed to bring up profitability from kind of like a 0% level to the high mid-teens level. We see that as a very positive development, and we want to see another profitability jump also in 2023, which is supporting our overall margin expectation. The second question was regarding the situation for the headcount. It is indeed true that in absolute, our headcount went down. This has nothing to do with layoffs.
We have just a normal fluctuation. What we count as headcount also is, the trainees, the interns, and here we see movements as well as also we see it in the low labor countries, for instance, in India. Let me remind everybody, we have a workforce of more than 1,000 people working for us in India, and those are seasonal fluctuations. Nothing to worry about. On the contrary, it moves in the right direction. In essence, as there's more talk about artificial intelligence, optimization, we also see opportunities for us to keeping our workforce stable despite growing our revenue line significantly. Last point was on the CapEx side. Yeah, overall CapEx, including, the capitalization of own software development, we expect to be, if nothing unusual happens, on the same level.
With regard to the capitalization for R&D projects, I can confirm and be very certain about that we don't see any spike up versus the 2022 level.
On the interest impact post the hedges?
Very good point. Very good point. I don't want to shy away from that one. I forgot. On the interest one, thanks for reminding me. We said that about 80% is covered by caps and by swaps. That means the current level which we see right now in terms of the hikes for the European Central Bank and also for the U.S. is already above that what we have covered and anchored ourselves in. You would see in the other income, comprehensive income, a positive effect.
Okay. That's that. Thank you.
The next question comes from Thomas Angermann from UBS Asset Management. Please go ahead.
Hi. Good morning. Hi, Michael. Thanks for taking my questions. Just that one question to hospital. Can you give an overview about the segmentation in terms of size of your client base in hospitals? The background is this proposal of this new reimbursement policy by the Ministry of Health, which seems especially the smaller hospitals might get into major problems. Could that impact your growth there, or is there a risk that maybe you get delayed payments or they do not adopt new software or whatever, or maybe you have no big exposure to the smaller houses?
Thank you, Thomas, for the question. Indeed, the Capital Markets Day is always a moment in time when we give a little bit of color. At the last Capital Markets Day, my colleague, Hannes Reichl, he explained that we are well exposed to larger hospitals and, you know, our large projects which we have been pursuing very successfully, particularly on university clinics. We also have mid-size hospitals and some smaller hospitals. It is not for us a worry point.
why it's not a worry point? Do you think finally they will change?
You asked for the split of the exposure and our exposure is not so much tailored towards the smaller hospitals. That was your driving question, right?
Yeah. It seems also some of the more medium-sized could get problems. It depends a bit, but have you done the analysis or do you get already feedback from your sales guys or how. At the end it might not only be a question of size, but of course, the smaller ones are more exposed, but it could be also some of the medium ones.
Rest assured that we are, with our third generation clinical software, well positioned and are in close contact with our clients and see that market very positive.
Many thanks.
We have one more question from Wolfgang Specht from Berenberg. Please go ahead.
Yes. Hello, good morning. One clarification on R&D expenses. Did I understand you right that you rather do not expect it to rise as a percent of revenues, but the overall figure could still increase after the step-ups we've seen in 2021 and 2022? The second one on exceptional for restructuring, that has not been a figure in the last year, but in 2022. Just to get a better understanding of the bridge from adjusted to reported EBITDA, do you also expect restructuring expenses to play an important role in 2023? Could you give us an insight where, let's say, the leaving money for Mr. Wössner was focused on restructuring expenses or on other non-operating?
Wolfgang, many thanks. Let me start with the first question on the R&D side. We didn't give a specific guidance regarding cash R&D expenditure. The one question that was addressed here on the call was how much do we capitalize on self-developed software. Here I said, I expect that CapEx portion to be not higher than what we saw in 2022. Overall, we want to bring our R&D expenses into a good balance so that we can really improve our margins. Let me also make one point very clear. I said, we create the future of e-health, which means we are the leading medical software company, and we will always take the liberty to decide if we find successful projects which are going to help us in the long term to invest in those projects.
Let me, however, also put a notion of caution in. We confirm EUR 260 million-EUR 300 million EBITDA at the same time. I think that gives you a way to gauge on how we think about our R&D expenditures and the projects we go for. The other questions were more detailed regarding the adjustments, and you asked specifically regarding the line restructuring, what was put into restructuring. That was the cost which we mentioned in the August call for the second quarter, where we had put our Doctors First restructuring into that line, and we don't foresee any further restructuring activity to continue. Then you ask for the question, what is in the line other as adjustments?
Yes, they are the cash expenditures in, not the options, but the cash expenditures in for the departure of Dirk Wössner. For the first quarter of 2022 and for the fourth quarter of 2021, the IT incident-related cost.
Okay, thanks a lot.
Okay, everyone. Since we do not have any further questions, we thank you for dialing in today. As always, Investor Relations is available, please don't hesitate to contact Frederick or myself via phone or email if you have further questions. With that, thanks again for attending and we wish you a great day. Bye-bye.
Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for joining and have a pleasant day.